By Simon Kerr, Publisher of Hedge Fund Insight One of the biggest decisions that hedge fund managers in any investment style have to make is how they respond to significant losses, even if they are relative in nature. So think back to the response last year of Paul Tudor Jones in reconfiguring the capital allocations […] Read more »
Borrowing, Shorting and a New Wave of Talent for Hedge Funds
> The International Securities Lending Association held a briefing last week which disclosed some good industry level data on stock/security borrowing: the arrangements that facilitate shorting. One of the effects of the Credit Crunch of 2008/9 was that counterparty risk became a major concern. Who you lend to, the quality of collateral, and documentation related […] Read more »
Proposed EU Short Selling Disclosure Regulations Bad for Large HF Groups and the Market
Proposed short selling disclosure regulations announced in the week before last by the European Commission (EC) are too stringent and threaten market efficiency in a general sense. Specifically, implementation of the regulations as currently drafted would be very damaging for larger hedge fund groups. Shorting and Market Efficiency Hedge funds, along with proprietary trading capital, […] Read more »
Another Year Another Challenge for Funds of Funds
> In 2008 the fund of funds industry had a tough time producing returns for investors because only 30% of hedge funds produced a positive return. For 2009 things were tough for funds of funds as they couldn’t get out of the hedge funds that had let them down by making losses in 2008, because […] Read more »
Information Edge Five – Speed & Selectivity
>Last year I wrote four times* on hedge funds utilising an information edge. The edge has to be exploitable and and through repetition become significant to the return series of the fund. This applies whether it is an edge in understanding (say the ability to extrapolate from few data points or read across from related industries) […] Read more »
The Hedge Fund Registration Act Ensnares Non-US Funds
Up to now overseas-based investment advisors to offshore hedge funds did not have to register with the SEC. It used to be that the American system of fund regulation was based on regulating the products that were sold, rather than the firms carrying out the business. The old form of regulation was about mitigating mis-selling […] Read more »
China Investment Corporation…the next winner is…York Capital
>China Investment Corporation (CIC), the Chinese sovereign wealth fund, currently manages $332bn andlast year invested $58bn. It has been on accelerated path in learning about investing in hedge funds for the last three years. A source close to the CIC suggests that they are about to make their next commitment to a specific hedge fund. The […] Read more »
Hedge Fund Takeovers – Martin Currie and Schroders Acquire
>One of the themes I have written about for 2010 is that of M&A in the hedge fund business. The latest example is that of Martin Currie, the Scotland-based manager, taking over the Sofaer Capital European long/short equity business. So this deal is not for the whole of Sofaer’s hedge fund business, just the European […] Read more »
Fund of Hedge Fund Dis-intermediation – Evidence from Japan
By Simon Kerr Following up on the prospects for funds of hedge funds, which I have covered earlier in the month, I neglected to mention dis-intermediation by investing institutions. This is a natural phase of development for institutional investors of scale. First the institutions use small allocations as a percentage of assets and tap […] Read more »
Clarium Redux – Still Arguing with Markets, Still Losing
By Simon Kerr I am grateful to the website market folly (www.marketfolly.com) for this input on Clarium Capital, the global macro fund manager. Peter Thiel, source:Bloomberg “Even more shocking perhaps is that the downward spiral at Peter Thiel’s hedge fund Clarium Capital has continued. ZeroHedge noted that Clarium lost 6.1% in the first three […] Read more »