By Simon Kerr For a long period I was unable to carry on reading SEI’s fifth annual global survey of institutional hedge fund investors beyond this summary point: “RISK MANAGEMENT IS A WORK IN PROGRESS. Only one in five of those we polled agreed that “most hedge funds do a good job of risk management.” […] Read more »
Hedge Funds to Step Up In LBO Market in Europe
Just like the private equity business, Leveraged Buy Out (LBO) activity is usually subject to a cycle related to that of the stock market with a lag. On top of that in Europe there used to be laid a secular growth in LBO volume, and a long-term trend towards a wider variety of buy-out financing […] Read more »
A Response from Con Keating to "The Truth About Hedge Fund Risk"
This blog brought home many basic truths. However, I would like to emphasise a few points. The question of volatility being inadequate as a measure of risk is the first. If we are to succeed in understanding financial risk we need to distinguish between symmetric and asymmetric risk. Symmetric risk – or volatility when returns […] Read more »
The Truth About Hedge Fund Risk
Article contributed by Charles T. Hage Need for Truth The hedge fund industry is seriously short on how it treats the subject of risk. The industry has been confusing investors by defining risk poorly and applying it post‐facto to returns. Especially in times when challenging economic and financial conditions call for high standards of professionalism […] Read more »
Millennium Capital Leads the Large US Managers in Europe
One of the consequences of the Credit Crunch of 2008/9 was a scaling back by hedge fund managers – they cut their gross, they restricted redemptions, and, in managing their companies through a traumatic period for the industry, the larger managers often reduced headcount or closed their offices in Asia and London. When there were […] Read more »
The Big Hedge Fund Stories from 2011
Although individual news items can have can have historical significance (such as story 1 below) the effort here is more to point to the themes and trends at work in the hedge fund industry last year. Here are my top stories for 2011: Bruce Kovner 1. Big Name Retirements – two of the best known […] Read more »
Translations of a Due Diligence Meeting for a Hedge Fund
A well prepared due diligence meeting has a subtext. The following translations will help hedge fund managers understand from where their interrogators (and potential investors) are coming. Do you have any plans to add any employees? (Do you plan to re-model your house in the near future or are you going to back the growth […] Read more »
Hedge Fund Returns Are Path Dependent – As 2011 Illustrates
One of the things that is attempted on this website is to look at market action to help explain, or comprehend hedge fund returns. For example, two years ago a commentary was distributed on the significance of the quality factor in explaining returns in 2009 (see this article), and the impact of high correlation this […] Read more »
Winton’s Futures Fund is primus inter pares
David Harding There has been a lot of comment in the hedge fund industry on the asset gathering of Winton Capital this year. David Harding’s firm has attracted inflows of over $7bn in 2011, which equates to over 10% of the whole industry’s capital inflows. This is a remarkable market share of the growth for […] Read more »
Hedge Funds Positioning to Benefit from Euro Banks Spitting out Assets
“The Economist” (19th November 2011 edition) has just written about the market for assets being spat out of European banks. The article is reproduced below. For my part I see the market for leveraged loans in Europe becoming very attractive to buyers who know how to be selective, with, unlike the bank asset story, an […] Read more »