Financial Times reports that UK hedge funds saw upwards of $40 billion in redemptions last month. This is the highest monthly level of hedge fund redemptions in the UK since figures were first compiled in 1990. Even worse for funds and their investors, hedge funds lost more than $100 billion in AUM from lost market value.
One manager of a large hedge fund said: "Any hedge fund that says they didn't get hit by massive redemptions at the end of September is lying."
Read the full article
Hedge Fund Information, Hedge Fund Performance, Hedge Fund Lists, Hedge Fund Jobs, Hedge Fund Returns,regulation of Hedge Funds Hedge Fund Performance, and Fund of Funds, and Fund of Hedge Funds
11.17.2008
Hedge Fund, Pershing Square, Discusses Market Outlook
William Ackman, founder of hedge fund Pershing Square admits to making certain mistakes, explains the current deleveraging, and gives his market outlook:
Here are some excerpts from Ackman's letter to investors:
"These are extraordinary times particularly for active participants in the capital markets. While I do not normally choose to write about macro and regulatory events, I thought it would be useful for you to understand how we think about recent events and their impact on our portfolio."
"We are currently witnessing the greatest deleveraging event in history. What began as a credit bubble bursting has now spread to the equity markets as... market participants have been forced to liquidate assets by their counterparties, leverage providers, redeeming clients, and as a result of downgrades, other debts or other commitments that need to be funded. "
"As a fund which is generally substantially more long than short, we have also suffered large mark-to-market declines in our long investments."
"When, you might ask, will the selling end?... Unlike the deleveraging that takes place when banks and other financial institutions sell assets to meet regulatory requirements, which is typically a longer term process, the forced deleveraging that is now taking place in the equity markets is being implemented largely by the prime brokerage firms and margin account managers at broker dealers around the world. Prime brokers are not known to be laggardly in their approach to liquidating an account that no longer meets margin requirements. This is likely to be even more true in the current environment. As such, it may be reasonable to conclude that the forced liquidation that is now taking place may not be a prolonged process. "
Read the full article:
Here are some excerpts from Ackman's letter to investors:
"These are extraordinary times particularly for active participants in the capital markets. While I do not normally choose to write about macro and regulatory events, I thought it would be useful for you to understand how we think about recent events and their impact on our portfolio."
"We are currently witnessing the greatest deleveraging event in history. What began as a credit bubble bursting has now spread to the equity markets as... market participants have been forced to liquidate assets by their counterparties, leverage providers, redeeming clients, and as a result of downgrades, other debts or other commitments that need to be funded. "
"As a fund which is generally substantially more long than short, we have also suffered large mark-to-market declines in our long investments."
"When, you might ask, will the selling end?... Unlike the deleveraging that takes place when banks and other financial institutions sell assets to meet regulatory requirements, which is typically a longer term process, the forced deleveraging that is now taking place in the equity markets is being implemented largely by the prime brokerage firms and margin account managers at broker dealers around the world. Prime brokers are not known to be laggardly in their approach to liquidating an account that no longer meets margin requirements. This is likely to be even more true in the current environment. As such, it may be reasonable to conclude that the forced liquidation that is now taking place may not be a prolonged process. "
Read the full article:
Breaking News: SEC Files Insider Trading Charges Against Mark Cuban
The SEC is filing insider trading charges against Mark Cuban in relation to his sales of 600,000 shares of Mamma.com, Bloomberg reports.
11.16.2008
Hedge Fund Managers Sees Investing Opportunities Despite Markets
Michael Cuggino, fund manager at the San Francisco based hedge fund Permanent Portfolio Family of Funds, sees opportunities for hedge funds in the current environment. He likes energy, technology, real estate, and certain commodities like copper. Of course, none of these sectors has performed particularly well of late. Mr. Cuggino's fund is down 14.8% this year. The fund has also been buying Treasuries and gold to lessen the impact of declining equity markets. With respect to energy companies, Cuggino likes Chevron, ConocoPhillips, and BP.
Hedge Funds Down in October, but Whallop the S&P 500
The Hennessee Index declined 5.5% in October, while the The Greenwich Hedge Fund Index was down 5.1% and 14% for the year. Yet despite the last couple months of poor hedge fund returns, these losses pail in comparison with the S&P 500 which is down more than 35% on the year and was down 16% in October, three times as much as the hedge fund indeces.
Hedge Fund Registration Discussed in Senate
The US Senate again began discussing the possibility of greater hedge fund regulations including broader registration requirements. Sen. Chuck Grassley, R-Iowa argued that hedge fund clients include pensions and other retirement funds, not just "fat cat" investors.
Read the full story:
Read the full story:
Fortress Redemptions Reach $4.5 billion for First Three Quarters
Fortress redemption requests totaled $4.5 billion for the first three quarters of this year. Fortress' assets under management ended the period at $34.4 billion. Redemptions for Fortress come amidst poor performance in several of their hedge funds including the Drawbridge Global Macro Fund which is down more than 13% on the year.
For more on hedge fund redemptions:
For more on hedge fund redemptions:
11.14.2008
Congress Shows Hedge Funds Some Love
The Waxman Witch Trial came to an abrupt halt as major hedge fund managers appeared before Congress. Though they were briefly asked about the systemic risks posed by hedge funds, Congressional members, Democrat and Republican, seemed to buy the argument that hedge funds pose far less systemic risk than the mainstream financial community.
Those managers present for the hearings were George Soros, Renaissance Technologies' Jim Simon, John Paulson Philip Falcone of Harbinger Capital and Ken Griffin of Citadel.
Another issue at stake was carried interest- A share of any profits that the general partners of private equity and hedge funds receive as compensation, despite not contributing any initial funds. This method of compensation seeks to motivate the general partner (fund manager) to work toward improving the fund's performance. Soros and Simons agreed that carried interest should be taxes as ordinary income, while Paulson, Falcone, and Griffin disagreed.
The hedge fund managers also supported more transparency, as long as that transparency applied only to regulators and not in " In the New York Times."
Democrat Jim Cooper noted, "The headline of this hearing is definitely Paulson vs. Paulson."
Those managers present for the hearings were George Soros, Renaissance Technologies' Jim Simon, John Paulson Philip Falcone of Harbinger Capital and Ken Griffin of Citadel.
Another issue at stake was carried interest- A share of any profits that the general partners of private equity and hedge funds receive as compensation, despite not contributing any initial funds. This method of compensation seeks to motivate the general partner (fund manager) to work toward improving the fund's performance. Soros and Simons agreed that carried interest should be taxes as ordinary income, while Paulson, Falcone, and Griffin disagreed.
The hedge fund managers also supported more transparency, as long as that transparency applied only to regulators and not in " In the New York Times."
Democrat Jim Cooper noted, "The headline of this hearing is definitely Paulson vs. Paulson."
That seemed to be taking it too far for John Paulson who said, "I in no way want to be critical of Secretary Paulson," he said. "He's done a great deal for this country. He's willing to change his positions when the circumstances change."
I must say that while hedge funds are not primarily responsible for the current crisis, the sytemic risk posed by hedge funds is very real and should not be taken lightly.11.13.2008
Philip Falcone: Hedge Funds Not as Levered as Banks
Philip A. Falcone, Managing Director of Harbinger Capital Partners, testified in front of a Henry Waxman led congressional hearing just a few minutes ago. One of his most interesting quotes was roughly “I suspect the industry (hedge funds) in general is not nearly as levered as some of the banking institutions.”
Soros Testifies Before Congress
Soros says hedge fund assets (AUM) will decrease 50-70% in Congressional testimony. Says hedge funds need to be regulated and that excessive deregulation has created losses. Regulators should reactivate margin requirements.
Soros Testifies Before Congress
Soros says hedge fund assets (AUM) will decrease 50-70% in Congressional testimony. Says hedge funds need to be regulated and that excessive deregulation has created losses. Regulators should reactivate margin requirements.
11.12.2008
Hedge Fund up 162% YTD
BlueGold Capital is up 29.5% in October bringing its 2008 gains to 162% as of the end of October 2008. In a month in which the average hedge fund was down more than 5% and more than 10% for the year, BlueGold Capital's returns are all the more astonishing. BlueGold Capital is a commodity derivatives hedge fund.
Och-Ziff Capital Management Firm Profile
Och Ziff Capital Management Profile
Och Ziff Capital Management Group is a multi-strategy hedge fund founded in 1994 by Daniel Och along with the Ziff Family. Och was formerly with Goldman Sachs. Some of Och-Ziff’s hedge fund strategies include merger and convertible arbitrage, restructuring, distressed securities, and real estate investments and also manages private equity funds. Och-Ziff has $30 billion in assets under management for 700 clients and employs more than 135 professionals. Och Ziff Capital Management has offices in New York and abroad in London, Tokyo, Beijing, Hong Kong, and Bangalore.
In 2007 Och-Ziff (OZM) went public listing shares for $32.00. As of November 11, 2008, shares were trading for $4.50.
From the Och-Ziff Capital Management Website:
“Our investment philosophy focuses on opportunities for long-term value creation through steady, consistent performance with limited use of leverage. We base our investment decisions on detailed, research-based analysis and thorough due diligence. Our investment processes are designed to incorporate risk management into every investment decision, using both quantitative and qualitative approaches. Risk management has been a core element of our business since inception and remains a critical part of our investment process today.”
Och Ziff AUM: $30 billion
Och Ziff Employees: 135
Key Och-Ziff Capital Management Key Employees:
CEO and Executive Managing Director: Daniel Och
Executive Managing Director and CFO:Joel Frank
Executive Managing Director: Joel Frank
Website: www.ozcap.com
Och-Ziff Capital Management Addresses:
Och-Ziff Capital Management Group
9 West 57th Street
39th Floor
New York, New York 10019
USA
Och-Ziff Management Europe Limited
7 Clifford Street
1st Floor
London W1S 2FT
England
Och-Ziff Capital Management Hong Kong Limited
Cheung Kong Center, Suite 2003A
2 Queens Road Central
Hong Kong
Och-Ziff Japan Limited
27/F Shiroyama Trust Tower 3-1
Toranomon 4-chome, Minato-ku
Tokyo 105-6027
Japan
Och-Ziff India Private Limited
#58, 2nd Floor, 100 Ft. Road
Indirangar, Defence Colony
Bangalore 560 038
India
Och-Ziff Consulting (Beijing) Company Limited
Room 5, 35th Floor, Capital Tower
No 6 Jia Jianguomenwai Avenue Tower A and B
Chao Yang District
Beijing 100022
People's Republic of China
Och Ziff Phone:
212-790-0000
Och Ziff Capital Management Group is a multi-strategy hedge fund founded in 1994 by Daniel Och along with the Ziff Family. Och was formerly with Goldman Sachs. Some of Och-Ziff’s hedge fund strategies include merger and convertible arbitrage, restructuring, distressed securities, and real estate investments and also manages private equity funds. Och-Ziff has $30 billion in assets under management for 700 clients and employs more than 135 professionals. Och Ziff Capital Management has offices in New York and abroad in London, Tokyo, Beijing, Hong Kong, and Bangalore.
In 2007 Och-Ziff (OZM) went public listing shares for $32.00. As of November 11, 2008, shares were trading for $4.50.
From the Och-Ziff Capital Management Website:
“Our investment philosophy focuses on opportunities for long-term value creation through steady, consistent performance with limited use of leverage. We base our investment decisions on detailed, research-based analysis and thorough due diligence. Our investment processes are designed to incorporate risk management into every investment decision, using both quantitative and qualitative approaches. Risk management has been a core element of our business since inception and remains a critical part of our investment process today.”
Och Ziff AUM: $30 billion
Och Ziff Employees: 135
Key Och-Ziff Capital Management Key Employees:
CEO and Executive Managing Director: Daniel Och
Executive Managing Director and CFO:Joel Frank
Executive Managing Director: Joel Frank
Website: www.ozcap.com
Och-Ziff Capital Management Addresses:
Och-Ziff Capital Management Group
9 West 57th Street
39th Floor
New York, New York 10019
USA
Och-Ziff Management Europe Limited
7 Clifford Street
1st Floor
London W1S 2FT
England
Och-Ziff Capital Management Hong Kong Limited
Cheung Kong Center, Suite 2003A
2 Queens Road Central
Hong Kong
Och-Ziff Japan Limited
27/F Shiroyama Trust Tower 3-1
Toranomon 4-chome, Minato-ku
Tokyo 105-6027
Japan
Och-Ziff India Private Limited
#58, 2nd Floor, 100 Ft. Road
Indirangar, Defence Colony
Bangalore 560 038
India
Och-Ziff Consulting (Beijing) Company Limited
Room 5, 35th Floor, Capital Tower
No 6 Jia Jianguomenwai Avenue Tower A and B
Chao Yang District
Beijing 100022
People's Republic of China
Och Ziff Phone:
212-790-0000
Renaissance Technologies Firm Profile
Renaissance Technologies Profile
Renaissance Technologies is a hedge fund founded in 1982 by James Simons. Renaissance is known for using advanced scientific and technological techniques to execute rapid trades in liquid securities. These quantitative trading methods rely on looking for inconsistencies is historical price data. Renaissance employs hundreds of non-financial specialists including physicists, mathematicians, and astrophysicists, to help develop their hedge fund trading programs. Renaissance Technologies employs over 300 people and has more than $30 billion AUM.
Beginning in 1989, Renaissance Technologies’ Medallion Fund has averaged a 35% annual return, and is said to be one of the most successful funds in history. Because of its success, Renaissance charges a management fee of up to 5% and an incentive fee of more than 40 % in some cases. This is a far higher hedge fund fee structure than the 2/20 industry standard.
In September, 2008 Renaissance wrote a letter to the SEC discouraging them from forcing institutional investors to disclose their short positions, arguing that disclosure would force investors to alter their trading artificially just to avoid disclosure.
Renaissance has offices in Long Island, New York, San Francisco, London and Milan
Renaissance AUM: 30 billion
Renaissance Employees: 300
Key Renaissance People:
Founder, Director, CEO: Jim Simons
Chief Operating Officer: Stephen Daffron
Head, Futures Research: Robert Lourie
Vice President of Research: Henry Laufer
Rennaissance Technologies Addresses:
New York
Renaissance Technologies LLC
800 Third Avenue
New York, NY 10022
USA
Long Island
Renaissance Technologies LLC
600 Route 25A
East Setauket, NY 11733
USA
San Francisco
Renaissance Technologies LLC
Pier 5, The Embarcadero, Suite 101
San Francisco, CA 94111
USA
London
Renaissance Institutional Management (UK) Limited
25 Hanover Square
London W1S 1JF
ENGLAND
Milan
Renaissance Institutional Management (UK) Limited
Via del Lauro, 7
20121 - Milano
ITALY
Renaissance Phone:
(212) 486-6780
Renaissance Technologies is a hedge fund founded in 1982 by James Simons. Renaissance is known for using advanced scientific and technological techniques to execute rapid trades in liquid securities. These quantitative trading methods rely on looking for inconsistencies is historical price data. Renaissance employs hundreds of non-financial specialists including physicists, mathematicians, and astrophysicists, to help develop their hedge fund trading programs. Renaissance Technologies employs over 300 people and has more than $30 billion AUM.
Beginning in 1989, Renaissance Technologies’ Medallion Fund has averaged a 35% annual return, and is said to be one of the most successful funds in history. Because of its success, Renaissance charges a management fee of up to 5% and an incentive fee of more than 40 % in some cases. This is a far higher hedge fund fee structure than the 2/20 industry standard.
In September, 2008 Renaissance wrote a letter to the SEC discouraging them from forcing institutional investors to disclose their short positions, arguing that disclosure would force investors to alter their trading artificially just to avoid disclosure.
Renaissance has offices in Long Island, New York, San Francisco, London and Milan
Renaissance AUM: 30 billion
Renaissance Employees: 300
Key Renaissance People:
Founder, Director, CEO: Jim Simons
Chief Operating Officer: Stephen Daffron
Head, Futures Research: Robert Lourie
Vice President of Research: Henry Laufer
Rennaissance Technologies Addresses:
New York
Renaissance Technologies LLC
800 Third Avenue
New York, NY 10022
USA
Long Island
Renaissance Technologies LLC
600 Route 25A
East Setauket, NY 11733
USA
San Francisco
Renaissance Technologies LLC
Pier 5, The Embarcadero, Suite 101
San Francisco, CA 94111
USA
London
Renaissance Institutional Management (UK) Limited
25 Hanover Square
London W1S 1JF
ENGLAND
Milan
Renaissance Institutional Management (UK) Limited
Via del Lauro, 7
20121 - Milano
ITALY
Renaissance Phone:
(212) 486-6780
Hennessee Hedge Fund Index down 5.52% for October
The Hennessee Hedge Fund Index was down 5.5% in October, less than other hedge fund indeces had predicted. The Barclay Hedge Fund Index, which tracks a slightly different basket, was earlier looking for a 6% + decline in October.
The 5.5% drop in October, was actually a slowing in the pace of declines. The Heennessee Hedge Fund Index was down more than 6.2% in September and is now down more than 15% ytd.
Ironically, the biggest declines were in hedge fund strategies that are typically viewed as being more market neutral such as convertible arbitrage (though this strategy can be highly correlated if managers are net long convertibles) which lost more than 10% in October. The smallest declines came from merger arbitrage (down less than 1%) and the international index (down 4%). The long-short index was down more than 5% for the second straight month, again bringing into question why long-short hedge fund managers have returns that are so highly correlated with long only portfolios.
The 5.5% drop in October, was actually a slowing in the pace of declines. The Heennessee Hedge Fund Index was down more than 6.2% in September and is now down more than 15% ytd.
Ironically, the biggest declines were in hedge fund strategies that are typically viewed as being more market neutral such as convertible arbitrage (though this strategy can be highly correlated if managers are net long convertibles) which lost more than 10% in October. The smallest declines came from merger arbitrage (down less than 1%) and the international index (down 4%). The long-short index was down more than 5% for the second straight month, again bringing into question why long-short hedge fund managers have returns that are so highly correlated with long only portfolios.
Myron Scholes' Platinum Grove Asset Management Halts Withdrawals.
Platinum Grove Asset Management, the hedge-fund firm co-founded by Nobel laureate Myron Scholes, temporarily stopped investor withdrawals from its biggest fund after it lost 29 percent in the first half of October.
With hedge funds down 20% this year on average, Nobel laureate Myron Sholes' hedge fund Platinum Grove Asset Management, is temporarily stopping withdrawals from its largest hedge fund after losing almost 30% in the first part of October alone.
Ironically, Scholes, who won the Nobel prize for economics in 1997, was also a key part of Long-Term Capital Management, one of the largest hedge funds to ever collapse. Platinum Grove managed $4.8 billion as of the end of Aug.
On Friday, Platinum Grove Asset Management released a statement" "Platinum Grove will use this period to consult with its investors and counterparties, determine their future intentions and manage the assets of the fund accordingly."
With hedge funds down 20% this year on average, Nobel laureate Myron Sholes' hedge fund Platinum Grove Asset Management, is temporarily stopping withdrawals from its largest hedge fund after losing almost 30% in the first part of October alone.
Ironically, Scholes, who won the Nobel prize for economics in 1997, was also a key part of Long-Term Capital Management, one of the largest hedge funds to ever collapse. Platinum Grove managed $4.8 billion as of the end of Aug.
On Friday, Platinum Grove Asset Management released a statement" "Platinum Grove will use this period to consult with its investors and counterparties, determine their future intentions and manage the assets of the fund accordingly."
11.11.2008
Largest Hedge Fund Failures in History
Here is a list of some of the largest hedge fund failures in history:
Amaranth Advisors- was an American hedge fund managing about US$9 billion in assets. In 2006, it collapsed after losing nearly $6 billion in a single week on natural gas futures. Amaranth's failure was the largest hedge fund collapse in history.
Long-Term Capital Management - Long-Term Capital Management was a hedge fund founded by John Meriwether in 1994 which collapsed in early 2000 after the Russian financial crisis. Meriwether's fund hired some of the brightest minds, including nobel laureates.
Wood River Capital Management- Founded by John Whittier, Wood River closed in 2005 after Whittier was accused of defrauding investors and was said to have had relatively little investment experience. They were later sued by Lehman and others for failing to pay for services.
Bayou Group- Founded by Samuel Israel in 1996, The Bayou Group was a hedge fund with nearly half a billion in assets, but investors accused Israel of fraud. Investors were promised the fund would grow nearly 20 fold in 10 years.
MotherRock - Founded in 2004, MotherRock had $450 million in assets in 2006 when it began having poor returns climaxing in a brutal June where it lost 26% and promptly shut down.
And surely after the poor returns hedge fund indeces showed in Sept and Oct of 2008, there are more hedge fund failures to come.
Amaranth Advisors- was an American hedge fund managing about US$9 billion in assets. In 2006, it collapsed after losing nearly $6 billion in a single week on natural gas futures. Amaranth's failure was the largest hedge fund collapse in history.
Long-Term Capital Management - Long-Term Capital Management was a hedge fund founded by John Meriwether in 1994 which collapsed in early 2000 after the Russian financial crisis. Meriwether's fund hired some of the brightest minds, including nobel laureates.
Wood River Capital Management- Founded by John Whittier, Wood River closed in 2005 after Whittier was accused of defrauding investors and was said to have had relatively little investment experience. They were later sued by Lehman and others for failing to pay for services.
Bayou Group- Founded by Samuel Israel in 1996, The Bayou Group was a hedge fund with nearly half a billion in assets, but investors accused Israel of fraud. Investors were promised the fund would grow nearly 20 fold in 10 years.
MotherRock - Founded in 2004, MotherRock had $450 million in assets in 2006 when it began having poor returns climaxing in a brutal June where it lost 26% and promptly shut down.
And surely after the poor returns hedge fund indeces showed in Sept and Oct of 2008, there are more hedge fund failures to come.
Fortress Investment Group Firm Profile
Fortress Investment Group Profile
Fortress Investment Group is a New York based private equity and hedge fund founded in 1998 by Wesley Edensas an asset-based investment management firm. As of September 2006, Fortress managed $29.6 billion in hedge fund and private equity investments. Fortress also manages two publicly traded investment companies; Newcastle Investment Corporation and Eurocastle Investment Limited.
Fortress was co-founded by Wesley Edens, Robert Kauffman, of UBS and Randal A. Nardone, also of UBS. Fortress quickly expanded from private equity into hedge funds and real estate. In 2007 Fortress Investment Group went public, amid much scrutiny, under the stock symbol FIG, following the lead of The Blackstone Group. The stock traded above $30 in April of 2007, shortly after their IPO. As of November 11, 2008 FIG shares were trading at $3.20 indicating a market capitalization for Fortress Group of only $1.3 billion.
Some of Fortress Group’s hedge funds include:
The Drawbridge Global Macro Funds which apply macroeconomic fundamental, market momentum and technical analyses to identify profitable strategies.
The Drawbridge Special Opportunities Funds are designed to purchase investments in the United States, Western Europe and the Pacific focusing on asset-backed products.
The Fortress Partners Funds are designed to replicate university endowments.
Key Fortress People:
Wesley R. Edens: Chief Executive Officer and Chairman of the Board of Directors
Peter L. Briger, Jr.: President and Director
Robert I. Kauffman: President – Europe and Director
Randal A. Nardone: Chief Operating Officer and Director
Michael E. Novogratz: President and
Fredric B. Garonzik: Director
Daniel N. Bass: Chief Financial Officer
Michele I. Cohen: Managing Director, Human Resources
Fortress Investment Group AUM (2008): $35 billion
Fortress Investment Group Employees: 700
Fortress Invest Group Address:
Fortress Investment Group
Fortress Capital Finance III (A) LLC
1345 Avenue of the Americas, 46th Floor
New York, NY 10105 USA
Fortress Phone:
212 798 6100
Fortress Investment Group is a New York based private equity and hedge fund founded in 1998 by Wesley Edensas an asset-based investment management firm. As of September 2006, Fortress managed $29.6 billion in hedge fund and private equity investments. Fortress also manages two publicly traded investment companies; Newcastle Investment Corporation and Eurocastle Investment Limited.
Fortress was co-founded by Wesley Edens, Robert Kauffman, of UBS and Randal A. Nardone, also of UBS. Fortress quickly expanded from private equity into hedge funds and real estate. In 2007 Fortress Investment Group went public, amid much scrutiny, under the stock symbol FIG, following the lead of The Blackstone Group. The stock traded above $30 in April of 2007, shortly after their IPO. As of November 11, 2008 FIG shares were trading at $3.20 indicating a market capitalization for Fortress Group of only $1.3 billion.
Some of Fortress Group’s hedge funds include:
The Drawbridge Global Macro Funds which apply macroeconomic fundamental, market momentum and technical analyses to identify profitable strategies.
The Drawbridge Special Opportunities Funds are designed to purchase investments in the United States, Western Europe and the Pacific focusing on asset-backed products.
The Fortress Partners Funds are designed to replicate university endowments.
Key Fortress People:
Wesley R. Edens: Chief Executive Officer and Chairman of the Board of Directors
Peter L. Briger, Jr.: President and Director
Robert I. Kauffman: President – Europe and Director
Randal A. Nardone: Chief Operating Officer and Director
Michael E. Novogratz: President and
Fredric B. Garonzik: Director
Daniel N. Bass: Chief Financial Officer
Michele I. Cohen: Managing Director, Human Resources
Fortress Investment Group AUM (2008): $35 billion
Fortress Investment Group Employees: 700
Fortress Invest Group Address:
Fortress Investment Group
Fortress Capital Finance III (A) LLC
1345 Avenue of the Americas, 46th Floor
New York, NY 10105 USA
Fortress Phone:
212 798 6100
Bridgewater Associates Firm Profile
Bridgewater Associates
Bridgewater Associates is a global investment manager that manages approximately $150 billion in assets with about $45 billion invested in the firm' hedge fund strategy. This strategy is labeled "Pure Alpha," Bridgewater is one of the largest hedge funds in the worl. Bridgewater manages portfolios for more than 300 clients from the United States and 19 other countries. Most of Bridgewater’s clients are institutional investors including banks, governments, and pensions. Bridgewater has 650 employees and is based in Westport, Connecticut.
Some of Bridgewater’s hedge fund innovations of the last 30 years include currency overlay management in the 1980s, the separation of alpha and beta in the 1990s and inflation-linked bond management in the mid 1990s.
Bridgewater’s key investment offering is “pure alpha” which incorporates all of their proprietary trading strategies into one diversified fund. These strategies include currency, fixed income, equity and commodity trading.
Bridgewater Associates’ Founder, CIO, and President Ray Dalio on Bridgewater employees:
People who work at Bridgewater have been selected because they have been high achievers (i.e. exceeded the standards of the general population). Obviously, everyone here has high standards for their own achievement, but it is not likely that individuals hold themselves to standards that they might not be able to achieve. The philosophy of Bridgewater is such that individuals are held to the highest possible standards, and the goal is to get people to achieve far beyond their previous standards and expectations. You have to understand that Bridgewater is not about plodding along at some kind of moderate standard; it is about working like hell to reach a standard that is extraordinarily high, and then getting the satisfaction that comes with that kind of super-achievement.
Bridgewater Associates AUM: $45 billion
Bridgewater Employees: 650
Key Bridgewater People:
CEO: Ray Dalio
Bridgewater Address:
Bridgewater Associates
One Glendinning Place
Westport, CT 06880
Bridgewater Associates Phone:
203.226.3030
Bridgewater Associates is a global investment manager that manages approximately $150 billion in assets with about $45 billion invested in the firm' hedge fund strategy. This strategy is labeled "Pure Alpha," Bridgewater is one of the largest hedge funds in the worl. Bridgewater manages portfolios for more than 300 clients from the United States and 19 other countries. Most of Bridgewater’s clients are institutional investors including banks, governments, and pensions. Bridgewater has 650 employees and is based in Westport, Connecticut.
Some of Bridgewater’s hedge fund innovations of the last 30 years include currency overlay management in the 1980s, the separation of alpha and beta in the 1990s and inflation-linked bond management in the mid 1990s.
Bridgewater’s key investment offering is “pure alpha” which incorporates all of their proprietary trading strategies into one diversified fund. These strategies include currency, fixed income, equity and commodity trading.
Bridgewater Associates’ Founder, CIO, and President Ray Dalio on Bridgewater employees:
People who work at Bridgewater have been selected because they have been high achievers (i.e. exceeded the standards of the general population). Obviously, everyone here has high standards for their own achievement, but it is not likely that individuals hold themselves to standards that they might not be able to achieve. The philosophy of Bridgewater is such that individuals are held to the highest possible standards, and the goal is to get people to achieve far beyond their previous standards and expectations. You have to understand that Bridgewater is not about plodding along at some kind of moderate standard; it is about working like hell to reach a standard that is extraordinarily high, and then getting the satisfaction that comes with that kind of super-achievement.
Bridgewater Associates AUM: $45 billion
Bridgewater Employees: 650
Key Bridgewater People:
CEO: Ray Dalio
Bridgewater Address:
Bridgewater Associates
One Glendinning Place
Westport, CT 06880
Bridgewater Associates Phone:
203.226.3030
Citadel Investment Group Firm Profile
Citadel Investment Group Firm Profile
Citadel Investment Group is a hedge fund founded by high-profile trader Kenneth Griffin and based in Chicago, IL. Citadel has more than $12 billion in assets under management (AUM) and is one of the largest hedge funds in the US and the 11th largest hedge fund in the world. Fortune reported in 2007 that Citadel’s trading made up as much as 3% of the daily trading volume in major exchanges in New York, London, and Tokyo.
Citadel has 1,200 employees worldwide and opened a $300 million office building in downtown Chicago. Citadel also has offices in New York, San Francisco, Hong Kong, Bermuda and London.
Citadel founder Ken Griffin is one of the wor ld’s most well known hedge fund managers. A billionaire, Fortune noted “He's got the trophy home, obviously, and is married to a very attractive woman, the former Anne Dias. The company he founded and runs, Citadel Investment Group, has around $13 billion in assets and is one of the largest and most powerful funds in the world.” Griffin is believed to want to expand Citadel into a more diversified financial firm.
Ken Griffin on his firm: "Visionary organizations don't chase the impossible; they focus on extending their reach to achieve the possible. We don't let up in the face of challenge, and we don't call it a day when an answer isn't readily at hand. Relentless effort, relying on our teammates and colleagues, and remaining open to unconventional solutions are the keys to the Citadel approach."
From Citadel Website:
Citadel attracts top talent who possess tremendous intellectual curiosity, innovative ideas and a relentless commitment to execution. We bring together intellectual capital from the fields of trading, technology, research, medicine, meteorology, and engineering -- all to solve complex problems and have an impact on the global capital markets.
Citadel AUM: $12 billion
Citadel Employees: 1200
Key Citadel People:
President and CEO: Ken Griffin
Director of Global Recruiting: Darcy Zulpo
Chief Information Officer: Tom Miglis
COO & CFO: Gerald Beeson
Citadel’s Website:
www.citadelgroup.com
Citadel Address:
131 S Dearborn St # 3200
Chicago, IL 60603
Citadel Phone:
(312) 395-2100
Citadel Investment Group is a hedge fund founded by high-profile trader Kenneth Griffin and based in Chicago, IL. Citadel has more than $12 billion in assets under management (AUM) and is one of the largest hedge funds in the US and the 11th largest hedge fund in the world. Fortune reported in 2007 that Citadel’s trading made up as much as 3% of the daily trading volume in major exchanges in New York, London, and Tokyo.
Citadel has 1,200 employees worldwide and opened a $300 million office building in downtown Chicago. Citadel also has offices in New York, San Francisco, Hong Kong, Bermuda and London.
Citadel founder Ken Griffin is one of the wor ld’s most well known hedge fund managers. A billionaire, Fortune noted “He's got the trophy home, obviously, and is married to a very attractive woman, the former Anne Dias. The company he founded and runs, Citadel Investment Group, has around $13 billion in assets and is one of the largest and most powerful funds in the world.” Griffin is believed to want to expand Citadel into a more diversified financial firm.
Ken Griffin on his firm: "Visionary organizations don't chase the impossible; they focus on extending their reach to achieve the possible. We don't let up in the face of challenge, and we don't call it a day when an answer isn't readily at hand. Relentless effort, relying on our teammates and colleagues, and remaining open to unconventional solutions are the keys to the Citadel approach."
From Citadel Website:
Citadel attracts top talent who possess tremendous intellectual curiosity, innovative ideas and a relentless commitment to execution. We bring together intellectual capital from the fields of trading, technology, research, medicine, meteorology, and engineering -- all to solve complex problems and have an impact on the global capital markets.
Citadel AUM: $12 billion
Citadel Employees: 1200
Key Citadel People:
President and CEO: Ken Griffin
Director of Global Recruiting: Darcy Zulpo
Chief Information Officer: Tom Miglis
COO & CFO: Gerald Beeson
Citadel’s Website:
www.citadelgroup.com
Citadel Address:
131 S Dearborn St # 3200
Chicago, IL 60603
Citadel Phone:
(312) 395-2100
Farallon Capital Management Firm Profile
Farallon Capital Management LLC
Farallon Capital Management is a US-based capital management firm that manages funds on behalf of institutions and individuals with significant capital. Based in San Francisco CA, the hedge fund was founded by Thomas F. Steyer in 1986. As of late 2008 it had approximately 150 employees. It is the second largest US hedge fund ranked by assets under management ($36b).
While it invests in all asset classes, a large quantity of its investments are in risk arbitrage restructuring, and recapitalization. Investments include debt and equity securities, direct investments in private companies, and real estate. Farallon's real estate investments span the United States, Europe, Latin America and India.
Farallon Capital Management’s institutional investors are primarily college endowments and foundations. Farallon invests globally, focusing on developed and emerging markets alike.
From Farallon Website: “Farallon places a priority on the preservation of capital, while seeking to achieve extraordinary risk-adjusted returns in each of its investment disciplines. It manages risk through rigorous research, including consultation with industry, legal and regulatory advisors. Farallon also seeks to build strong relationships with the management of the companies in which we invest.”
Farallon Capital AUM:
$36 billion
Managing Members of Farallon Capital Management:
Thomas F. Steyer, Stephen L. Millham, William F. Duhamel, Andrew J.M. Spokes, Alice Evarts, Jason E. Moment, Richard B. Fried, Ashish Pant, Monica R. Landry, Rajiv A. Patel, Douglas M. MacMahon, Greg Swart, William F. Mellin, Mark C. Wehrly
Farallon Capital Website:
www.faralloncapital.com
Farallon Address:
Farallon Capital Management
1 Maritime Plz # 2100
San Francisco, CA 94111
Farallon Phone:
(415) 421-2132
Farallon Capital Management is a US-based capital management firm that manages funds on behalf of institutions and individuals with significant capital. Based in San Francisco CA, the hedge fund was founded by Thomas F. Steyer in 1986. As of late 2008 it had approximately 150 employees. It is the second largest US hedge fund ranked by assets under management ($36b).
While it invests in all asset classes, a large quantity of its investments are in risk arbitrage restructuring, and recapitalization. Investments include debt and equity securities, direct investments in private companies, and real estate. Farallon's real estate investments span the United States, Europe, Latin America and India.
Farallon Capital Management’s institutional investors are primarily college endowments and foundations. Farallon invests globally, focusing on developed and emerging markets alike.
From Farallon Website: “Farallon places a priority on the preservation of capital, while seeking to achieve extraordinary risk-adjusted returns in each of its investment disciplines. It manages risk through rigorous research, including consultation with industry, legal and regulatory advisors. Farallon also seeks to build strong relationships with the management of the companies in which we invest.”
Farallon Capital AUM:
$36 billion
Managing Members of Farallon Capital Management:
Thomas F. Steyer, Stephen L. Millham, William F. Duhamel, Andrew J.M. Spokes, Alice Evarts, Jason E. Moment, Richard B. Fried, Ashish Pant, Monica R. Landry, Rajiv A. Patel, Douglas M. MacMahon, Greg Swart, William F. Mellin, Mark C. Wehrly
Farallon Capital Website:
www.faralloncapital.com
Farallon Address:
Farallon Capital Management
1 Maritime Plz # 2100
San Francisco, CA 94111
Farallon Phone:
(415) 421-2132
Hedge Fund Manager Says Redemption Fears are Overblown
Barton Biggs of Hedge Fund Traxis Partners says fears of massive withdrawals from hedge funds are overblown. Biggs credits hedge funds' good collective performance during the bear market of 2002-2003. By last year the hedge fund industry managed $1.9 trillion worldwide. But this year hedge funds have performed poorly as a group, leading to questions about investors' willingness to leave assets in underperforming funds. This is particularly true for market-neutral and other supposedly low-risk and uncorrelated hedge fund strategies. Now these trading strategies are highly correlated to the broader markets and mired in volatility. However, Biggs feels fears of hedge fund redemptions are likely overblown.
Read the full article:
Read the full article:
Getting a Hedge Fund Sales Job
Hedge fund managers look for different characteristics in hedge fund sales reps as opposed to hedge fund analysts. Hedge fund managers are not looking for such strong analytical skills in their sales reps, but rather tenacity, sales experience, loyalty to your employer, and strong financial and hedge fund knowledge to be able to professionally communicate with hedge fund managers.
For more on hedge fund jobs:
For more on hedge fund jobs:
Steps to Getting a Hedge Fund Job
FinAlternatives has released 5 steps to getting a hedge fund job. To summarize:
1. READ - Get up to speed on the hedge fund industry. Read hedge fund industry publications. You may also want to read several hedge fund books including Hedge Funds for Dummies, The Alternative Asset Handbook and others.
2. PICK YOUR POSITION - There are 3 basic entry level hedge fund jobs - hedge fund analyst, hedge fund trader, or sales. An analyst is the most common starting place, but define your roll and start networking with hedge fund people.
3. NETWORK - Network with hedge fund professionals through the internet message boards. Networking with the Chartered Financial Analyst chapters can be a great way to meet hedge fund employees. If you have done your homework (steps 1 +2) some of these contacts may be willing to or give you advice on getting a job in the hedge fund industry.
4. INTERNSHIPS - See our section on hedge fund internships. If you do get a hedge fund internship work your butt off and over-deliver and don't take up too much of the hedge fund manager's time.
5. RESUMES - Some factors that hedge funds look at include:
1. READ - Get up to speed on the hedge fund industry. Read hedge fund industry publications. You may also want to read several hedge fund books including Hedge Funds for Dummies, The Alternative Asset Handbook and others.
2. PICK YOUR POSITION - There are 3 basic entry level hedge fund jobs - hedge fund analyst, hedge fund trader, or sales. An analyst is the most common starting place, but define your roll and start networking with hedge fund people.
3. NETWORK - Network with hedge fund professionals through the internet message boards. Networking with the Chartered Financial Analyst chapters can be a great way to meet hedge fund employees. If you have done your homework (steps 1 +2) some of these contacts may be willing to or give you advice on getting a job in the hedge fund industry.
4. INTERNSHIPS - See our section on hedge fund internships. If you do get a hedge fund internship work your butt off and over-deliver and don't take up too much of the hedge fund manager's time.
5. RESUMES - Some factors that hedge funds look at include:
• CFA Designations
• Equity analyst, trading or sales experience
• Loyalty, passion, humility and hunger
• Quantitative and/or modeling experience
• Strong Educational background – Ivy League, MBA, Quant-focused PhDs
• High-quality name experience
• The desire for a high commission/bonus structure payout system
You may also want to consider getting a hedge fund list. This way you can contact hedge funds directly. This is particularly useful in the current economy. You can find some inexpensive lists (as opposed to the $5000+ Barclay's and other firms charge):
GLG Freezing Asets in Long-Short Hedge Fund
European hedge fund GLG partners, is limiting client withdrawals to its $2.9 billion GLG European Long-Short Fund. The fund claims this is to prevent selling assets at depressed prices. This action, or inaction, comes after GLG took similar steps with its emerging markets fund earlier this year. GLG manages $19 billion.
Read the full hedge fund article
Read the full hedge fund article
New Poll Shows Investors Shunning Hedge Funds
More than half of financial advisors to high net worth investors expect hedge funds to become less important in their clients' portfolios. Among institutional clients, 37% said they expect hedge funds to become less or somewhat less important.
Hedge funds as an asset class seem to be going through the same issues as broader markets.
Hedge funds as an asset class seem to be going through the same issues as broader markets.
11.10.2008
Motley Fool Launches Quasi- Hedge Fund
The Motley Fool has launched a service called Motley Fool Pro with what they claim are hedge fund like strategies including options trading. Here is an excerpt from their sales page.
- Do you love stocks, but are also interested in options, ETFs, and other advanced hedge strategies?
- Do you value the levelheadedness of The Motley Fool, but would sometimes like to kick it up a notch?
Unfortunately for you, due to what they call "overwhelming demand", they are not taking enrolling new members. You just might be better off.
More Pain for Clarium Capital
Clarium Capital faces more pain in October losing more than 18%. They had bet on expanding yields, but instead the market contracted. Clarium Capital is now negative for the year after being up as much as 27%. Jana Partners and Passport Capital also had difficult months with Passport's fund down an amazing 38% in October and 44% for the year.
Read the full article:
Read the full article:
Hedging The Black Swan" Nassim Taleb
In early2007 I read the Black Swan, by Nassim Taleb. It was a fascinating book that really helps define the way you look at risk. It is a sort of counterpoint to Peter Bernstein's Against the Gods. His prior book, Fooled by Randmoness is just as illuminating. Taleb argues that unlikely scenarios are undervalued. In other words, those scenarios that have not occured before are almost completely discounted in the present. This gives a smart trader an opportunity to make small bets on a huge range of unlikely outcomes very cheaply. If even a few of these bets come true the payoff can be enormous. Picture the hedge fund that bought out of the money put options on the S&P when the DIA ( an etf representing the DOW) was near $130 in the beginning of the year. Puts November DIA 100 put would have cost just dimes. When the DIA ETF hit $85 in early November those puts would have been worth maybe 100x what you paid for them. Betting on hundreds of unlikely events is bound to pay off in the long-run, but you may suffer losses for years before hitting the jackpot. For a hedge fund manager this strategy may be a difficult, particularly preventing redemptions after three or four losing years. That big payday may come with very few assets.
Finally, after many difficult years, Nassim's hedge fund, Universa has finally been getting its time in the sun this year.
Finally, after many difficult years, Nassim's hedge fund, Universa has finally been getting its time in the sun this year.
Exit Strategies: Questions About Hedge Fund Redemptions.
The recent poor performance of hedge funds has many investors curious about their ability to withdraw assets from under-performing hedge funds. Only the lack of regulation and wide variety of redemption polices has some investors confused. Fund managers also sometimes face the difficult task of selling somewhat illiquid assets to meet investor redemptions.
Unlike mutual funds which are governed by the SEC including the Securities Act of 1933, the Investment Company Act of 1940, the Securities Exchange Act of 1934 and the Investment Advisers Act. Hedge funds are usually not required to be SEC registered though the managers do have certain fiduciary duties.
Some of the common hedge fund redemption provisions include a "lock up" period, typically of 1-4 years, in which redemptions are not permitted except with manager consent. Some funds have a "gate" which limits the total amount of redemptions the fund will pay at any redemption period, maybe 20% of total assets. Hedge fund managers may also take reserves to pay for future liabilities. Lastlyhedge funds differ in the frequency of withdrawal periods.
Read the full article:
Unlike mutual funds which are governed by the SEC including the Securities Act of 1933, the Investment Company Act of 1940, the Securities Exchange Act of 1934 and the Investment Advisers Act. Hedge funds are usually not required to be SEC registered though the managers do have certain fiduciary duties.
Some of the common hedge fund redemption provisions include a "lock up" period, typically of 1-4 years, in which redemptions are not permitted except with manager consent. Some funds have a "gate" which limits the total amount of redemptions the fund will pay at any redemption period, maybe 20% of total assets. Hedge fund managers may also take reserves to pay for future liabilities. Lastlyhedge funds differ in the frequency of withdrawal periods.
Read the full article:
Citadel Investment Group Fund down 30% Through October 2008
Citadel Investment Group's largest hedge fund was down 30% for the 08 year through September amid losses on corporate debt, stocks, and convertibles. Citadel founder Ken Griffin expects volatility to continue to rock the market in the months ahead. Griffin admits not being pessimistic enough about the economic and market outlook. Citadel plans to launch additional single-strategy hedge funds including a macro fund, convertible fund, and a fixed income hedge fund.
Read the full article:
Read the full article:
Best and Worst Months for Hedge Fund Returns
December is the best month for hedge fund performance since 1997. Between 1997 and 2008, the Barclay Hedge Fund Index averaged 2.14% in December compared with a .95% average monthly gain over the time period. The worst month for hedge fund returns was August, with an average return of -.14%, the only month with a negative return.
The best season for hedge fund returns has been the fall, averaging 4.64%. The worst season for hedge fund returns has been the summer, averaging only .84%.
Average Hedge Fund Returns by Season/Quarter 1997-2008
Winter (Q1) Spring(Q2) Summer (Q3) Fall (Q4)
3.16% 2.89% .84% 21.4%
Average Monthly Hedge Fund Returns 1997-2008
J F M A M J J A S O N D
The best season for hedge fund returns has been the fall, averaging 4.64%. The worst season for hedge fund returns has been the summer, averaging only .84%.
Average Hedge Fund Returns by Season/Quarter 1997-2008
Winter (Q1) Spring(Q2) Summer (Q3) Fall (Q4)
3.16% 2.89% .84% 21.4%
Average Monthly Hedge Fund Returns 1997-2008
J F M A M J J A S O N D
| 1.2% | 1.2% | 0.7% | 1.1% | 0.8% | 1.0% | 0.3% | -0.1% | 0.7% | 0.9% | 1.4% | 2.1% |
Is the Middle East the New Hedge Fund Mecca?
Amid falling prices in most emerging and developed markets, Middle East markets with their low correlation to most other markets are poised to be the next stop for dollars on the move. Middle East oriented Hedge funds are poised to grow their assets as investors search for new sources of stability. Even large private equity managers were present in Dubai to discuss the potential for the region. Participants at the conference included Henry Kravis of KKR, Blackstone Group co-founder Stephen Schwarzman and Carlyle Group co-founder David Rubenstein. Rubenstein's firm just opened an office in Dubai.
Hedge funds and private equity firms are not the only ones bullish on the Middle East. Merrill Lynch (to be B of A) CEO John Thain is intent on building up the firms trading, investment banking, and wealth management capabilities and has applied for licenses in Kuwait and Qatar.
Of course, growth in the region is underpinned by rising commodity prices. As we have recently seen, lofty commodity prices are unsustainable during a period of Global slowing. Nonetheless, hedge funds, private equity, and a variety of financials will continue to look for the next growth region now that the emerging market bubble has so impressively crashed.
Hedge funds and private equity firms are not the only ones bullish on the Middle East. Merrill Lynch (to be B of A) CEO John Thain is intent on building up the firms trading, investment banking, and wealth management capabilities and has applied for licenses in Kuwait and Qatar.
Of course, growth in the region is underpinned by rising commodity prices. As we have recently seen, lofty commodity prices are unsustainable during a period of Global slowing. Nonetheless, hedge funds, private equity, and a variety of financials will continue to look for the next growth region now that the emerging market bubble has so impressively crashed.
Hedge Fund Redemptions Rise amid Poor Performance
Hedge fund redemptions continue to rise amid the ongoing market turmoil and poor hedge fund performance. Harbinger Capital Partners Fund dropped 5% in October. Clarium Capital Management dropped 18% in the month and Ken Griffin, founder of Chicago-based Citadel, lost more than 20% in his Kensington and Wellington funds.
Read the full article:
Read the full article:
Farallon Capital Management Posts Huge Losses
San Francisco's largest hedge fund, Farallon Capital Management's biggest hedge fund fell 24 percent this year through October which essentially ensures its first annual loss. The firm manages over $30 billion and has been selling stocks and other positions to meet investor redemptions after raising $750 million earlier this year to buy distressed securities.
Hedge Fund Directories
There are a number of hedge fund directories available to both investors and job seekers.
Investors should consider BarclayHedge for hedge fund and hedge funds of funds directories.
Job seekers should consider HedgeFundJobList.com for cheaper hedge fund lists.
Investors should consider BarclayHedge for hedge fund and hedge funds of funds directories.
Job seekers should consider HedgeFundJobList.com for cheaper hedge fund lists.
Hedge Fund Performance Fees Down in 2008
Hedge Fund Perfomance Fees Down
From BusinessWeek
One of the hallmarks of a hedge fund is the performance fee. Along with a 1% to 2% management fee levied on assets, hedge funds typically keep 20% of the profits generated each year as payment. That fee structure creates serious incentive for portfolio managers to generate positive returns. If they can't, investors only have to pay the management fee until the fund's returns are back in the black
That's the theory, anyway. But in practice, hedge funds have an easy way out of the arrangement if it looks like they won't be able to earn positive returns above a pre-set "high-water mark" in the coming year. They simply shut down the fund. Assets are liquidated, the money returned to investors.
"If all they get is the management fee, why work?" observes Tom Taulli, an author and investment banker with Instream Partners in San Francisco. "What's the motivation?"
The managers are then free to spend some time "on the beach" (as the industry describes such downtime). Or, better yet, from their perspective, they can open a new flavor of hedge fund and invite the former investors to sign on. By doing so, they effectively set the clock back to zero and can start collecting performance fees on gains without having to work their way back up to break-even.
But it's not such a great deal for investors. "In some instances, after investors have paid a performance fee on the upside, they don't get the benefit of not having to pay one in the get-back-to-even mode," says Lee Schultheis, chief investment strategist of Alpha Hedged Strategies (ALPHX ), a mutual fund that uses investment plays typical of hedge funds. Even worse, they may pay the steep fee one year only to see all those gains erased and the fund shut down the next year.
This dynamic has always been part of the hedge-fund world but is more in evidence this year as more hedge funds close down operations. That doesn't mean every hedge fund that shuts down is engaging in this behavior. In fact, it's impossible to know who's doing it and who isn't. But as more institutional investors look to hedge funds to goose the puny returns available elsewhere, the interest in hedge-fund activity continues to increase.
READY FOR STORMS. Marin Capital Partners in San Rafael, Calif., and London-based Bailey Coates generated headlines in June by closing billion-dollar hedge funds. Many more smaller funds, particularly in the first and second quarter of this year, liquidated after certain strategies (such as convertible-bond arbitrage) stopped working, says Peter Rajsingh, executive vice-president at vFinance Investments, which operates several portfolios made up of hedge funds.
Some hedge funds are now modifying the incentive fee and high-water mark so that they earn a reduced incentive fee during the time they make back the money they lost, says Ron Geffner, an attorney for hedge funds at Sadis & Goldberg in New York. For example, the fund manager would get 10% of recouped losses, and 20% above the high-water mark. That would theoretically provide enough income and incentive to keep the fund going.
This new fee structure is an improvement for investors, says Geffner. But ideally, the firm should have enough capital so that it can afford to weather a temporary drawdown in returns.
MANY NEWBIES. "This is a normal metamorphosis among new funds," says Bradley Ziff, a director at risk-management firm Mercer Oliver Wyman in New York. At the large, established hedge funds with which he deals, Ziff says, he does not see fund managers closing up shop following a poor performance only to resurface at a new fund soon afterward.
But because more than 6,000 hedge funds exist today, up from 2,500 10 years ago, the customary weeding-out process -- an estimated 10% to 15% of new funds each year -- means more funds are closing this year than in the past, says Adam Zoia, managing partner of Glocap Search, a hedge-fund recruiting firm in New York. Hennessee Group LLC, an adviser to hedge-fund investors, found in its annual survey of 800 of the largest funds that in 2004 the attrition rate was 5.3%, higher than the 4.96% six-year average. The firm doesn't have figures for this year.
Hedge funds that close usually have little choice, says Rajsingh. Negative results can trigger massive redemptions. Management fees should cover the firm's operating costs, giving it breathing room while it improves performance. But if the asset base shrinks enough, there may not be enough cash left to run the firm.
PAY HEED. Funds that are "under water" face the added risk that their best traders and analysts will be plucked to go work for another firm where they stand a chance of earning performance fees, says Zoia. That could leave a hedge fund bereft of talent.
In such cases, shutting down a poorly performing fund and returning assets is often the best outcome for investors, since they can then invest their capital in a more promising venue, says Schultheis. In the worst case, the manager of a money-losing hedge fund may be tempted to change strategies midstream or take much more risk in hopes of getting returns back above water. "Shutting down the fund may be better than having that happen," he notes.
The bottom line is that investors need to pay close attention to fee structures before investing in a hedge fund. Even more important: Seek out experienced managers who have not only a strong track record but who "have proven their ability to manage in volatile times," says Ziff. In the high-fee, low-oversight world of hedge funds, caveat emptor applies now more than ever.
From BusinessWeek
One of the hallmarks of a hedge fund is the performance fee. Along with a 1% to 2% management fee levied on assets, hedge funds typically keep 20% of the profits generated each year as payment. That fee structure creates serious incentive for portfolio managers to generate positive returns. If they can't, investors only have to pay the management fee until the fund's returns are back in the black
That's the theory, anyway. But in practice, hedge funds have an easy way out of the arrangement if it looks like they won't be able to earn positive returns above a pre-set "high-water mark" in the coming year. They simply shut down the fund. Assets are liquidated, the money returned to investors.
"If all they get is the management fee, why work?" observes Tom Taulli, an author and investment banker with Instream Partners in San Francisco. "What's the motivation?"
The managers are then free to spend some time "on the beach" (as the industry describes such downtime). Or, better yet, from their perspective, they can open a new flavor of hedge fund and invite the former investors to sign on. By doing so, they effectively set the clock back to zero and can start collecting performance fees on gains without having to work their way back up to break-even.
But it's not such a great deal for investors. "In some instances, after investors have paid a performance fee on the upside, they don't get the benefit of not having to pay one in the get-back-to-even mode," says Lee Schultheis, chief investment strategist of Alpha Hedged Strategies (ALPHX ), a mutual fund that uses investment plays typical of hedge funds. Even worse, they may pay the steep fee one year only to see all those gains erased and the fund shut down the next year.
This dynamic has always been part of the hedge-fund world but is more in evidence this year as more hedge funds close down operations. That doesn't mean every hedge fund that shuts down is engaging in this behavior. In fact, it's impossible to know who's doing it and who isn't. But as more institutional investors look to hedge funds to goose the puny returns available elsewhere, the interest in hedge-fund activity continues to increase.
READY FOR STORMS. Marin Capital Partners in San Rafael, Calif., and London-based Bailey Coates generated headlines in June by closing billion-dollar hedge funds. Many more smaller funds, particularly in the first and second quarter of this year, liquidated after certain strategies (such as convertible-bond arbitrage) stopped working, says Peter Rajsingh, executive vice-president at vFinance Investments, which operates several portfolios made up of hedge funds.
Some hedge funds are now modifying the incentive fee and high-water mark so that they earn a reduced incentive fee during the time they make back the money they lost, says Ron Geffner, an attorney for hedge funds at Sadis & Goldberg in New York. For example, the fund manager would get 10% of recouped losses, and 20% above the high-water mark. That would theoretically provide enough income and incentive to keep the fund going.
This new fee structure is an improvement for investors, says Geffner. But ideally, the firm should have enough capital so that it can afford to weather a temporary drawdown in returns.
MANY NEWBIES. "This is a normal metamorphosis among new funds," says Bradley Ziff, a director at risk-management firm Mercer Oliver Wyman in New York. At the large, established hedge funds with which he deals, Ziff says, he does not see fund managers closing up shop following a poor performance only to resurface at a new fund soon afterward.
But because more than 6,000 hedge funds exist today, up from 2,500 10 years ago, the customary weeding-out process -- an estimated 10% to 15% of new funds each year -- means more funds are closing this year than in the past, says Adam Zoia, managing partner of Glocap Search, a hedge-fund recruiting firm in New York. Hennessee Group LLC, an adviser to hedge-fund investors, found in its annual survey of 800 of the largest funds that in 2004 the attrition rate was 5.3%, higher than the 4.96% six-year average. The firm doesn't have figures for this year.
Hedge funds that close usually have little choice, says Rajsingh. Negative results can trigger massive redemptions. Management fees should cover the firm's operating costs, giving it breathing room while it improves performance. But if the asset base shrinks enough, there may not be enough cash left to run the firm.
PAY HEED. Funds that are "under water" face the added risk that their best traders and analysts will be plucked to go work for another firm where they stand a chance of earning performance fees, says Zoia. That could leave a hedge fund bereft of talent.
In such cases, shutting down a poorly performing fund and returning assets is often the best outcome for investors, since they can then invest their capital in a more promising venue, says Schultheis. In the worst case, the manager of a money-losing hedge fund may be tempted to change strategies midstream or take much more risk in hopes of getting returns back above water. "Shutting down the fund may be better than having that happen," he notes.
The bottom line is that investors need to pay close attention to fee structures before investing in a hedge fund. Even more important: Seek out experienced managers who have not only a strong track record but who "have proven their ability to manage in volatile times," says Ziff. In the high-fee, low-oversight world of hedge funds, caveat emptor applies now more than ever.
Hedge Fund Performance Fees
These fees are both expressed on an annual basis.
Consider a portfolio whose benchmark is cash (this is the norm for hedge funds). In one particular year, the benchmark return is 5%, and the portfolio gives a gross return of 20%. The base fee would be 2%. The performance fee would be 20% of the portfolio's active return. 20% of 15% is 3%. Therefore, the total fee for this portfolio in the specified year would be 5%.
Why should performance fees be calculated on the gross outperformance, when the investor can never obtain the gross performance (because they will at least be paying the base fee of 2%)? Under this arrangement, the fee calculation involves "double dipping". Specifically, the performance fee is being charged on 2% of the gross return that the investor will be paying as a base fee. One way of avoiding this "double dipping" is by subtracting the base fee from the gross return before calculating the performance fee. Some canny investment managers allow the investor to choose between (for example) 2+20 with double-dipping, or 2+24 without double-dipping. This is a smart tactic, because it gives the investor some feeling that they are controlling the fee level. However, whichever way you slice it, this is a very high level of fees to pay.
Top 10 Highest Earning Hedge Fund Managers
Top 10 Highest Earning Hedge Fund Managers in 2007
1. John Paulson (Paulson & Co.)- 2007 Earnings: $3 billion
2. Philip Falcone (Harbinger Capital Partners)- 2007 Earnings:$2 billion
3. Jim Simons (Rennaissance Technologies)- 2007 Earnings: $1 billion
4. Steven Cohen (SAC Capital Partners)- 2007 Earnings: $1 billion
5. Ken Griffin (Citadel Investment Group)- 2007 Earnings: $ 1 billion
6. Chris Hohn (The Children's Investment Fund Management)- 2007 Earnings: $800 million
7.Noam Gottesman(GLG Partners)- 2007 Earnings: $700 million
8. Alan Howard (Brevan Howard Asset Management)- 2007 Earnings: $700 million
9. Pierre Lagrange (GLG Partners)- 2007 Earnings: $700 million
10. Paul Tudor Jones (Tudor Investment Corp.) $700 million
1. John Paulson (Paulson & Co.)- 2007 Earnings: $3 billion
2. Philip Falcone (Harbinger Capital Partners)- 2007 Earnings:$2 billion
3. Jim Simons (Rennaissance Technologies)- 2007 Earnings: $1 billion
4. Steven Cohen (SAC Capital Partners)- 2007 Earnings: $1 billion
5. Ken Griffin (Citadel Investment Group)- 2007 Earnings: $ 1 billion
6. Chris Hohn (The Children's Investment Fund Management)- 2007 Earnings: $800 million
7.Noam Gottesman(GLG Partners)- 2007 Earnings: $700 million
8. Alan Howard (Brevan Howard Asset Management)- 2007 Earnings: $700 million
9. Pierre Lagrange (GLG Partners)- 2007 Earnings: $700 million
10. Paul Tudor Jones (Tudor Investment Corp.) $700 million
Top Returning Hedge Funds in US
Fund Name (mil) Strategy Average Return 2007 YTD* Company Name/Location (bil)
1 RAB Special Situations
2 The Children’s Investment Fund
3 Highland CDO Opportunity
4 BTR Global Opportunity
5 SR Phoenicia
6 Atticus European
7 Gradient Europe Fund
8 Polar Capital Paragon Absolute Return
9 Paulson Enhanced Partners
10 Firebird Global
11 Passport Offshore-Global Strategy
12 Tiger Asia Overseas
13 Millennium Global High Yield
14 Pershing Square
15 Libra Fund
16 Third Point Ultra
17 JK Navigator
18 Sprott Opportunities
19 Horseman Global-Class
20 Riverside Wisdom World
21 The Blenheim Fund
22 Tontine Overseas
23 Zweig-DiMenna Int’l
24 Bay Harbour Partners
25 Prism Partners
26 The Lucerne Capital Offshore Fund
27 Spinnaker Global Strategic
28 Bay Resource Partners
29 JLF Offshore Fund
30 Tell Fund
31 Everest Capital Global
32 MaxQ Fund
33 Tantallon Fund
34 Parvus European Absolute Opportunities
35 Miura Global Master Fund
36 Kinetics Partners
37 Clarium
38 Boyer Allan Pacific
39 Wexford Spectrum,
40 Matterhorn Palmyra
41 Lagrange Capital Partners
42 Platinum Partners Value Arbitrage
43 Concentric European Fund
44 Third Avenue Global Value
45 Altis Global Futures Portfolio -
46 Vertex Fund
47 Schultze Offshore
48 VR Distressed Assets
49 Harbinger Capital Partners
50 East Side Capital 1,000
1 RAB Special Situations
2 The Children’s Investment Fund
3 Highland CDO Opportunity
4 BTR Global Opportunity
5 SR Phoenicia
6 Atticus European
7 Gradient Europe Fund
8 Polar Capital Paragon Absolute Return
9 Paulson Enhanced Partners
10 Firebird Global
11 Passport Offshore-Global Strategy
12 Tiger Asia Overseas
13 Millennium Global High Yield
14 Pershing Square
15 Libra Fund
16 Third Point Ultra
17 JK Navigator
18 Sprott Opportunities
19 Horseman Global-Class
20 Riverside Wisdom World
21 The Blenheim Fund
22 Tontine Overseas
23 Zweig-DiMenna Int’l
24 Bay Harbour Partners
25 Prism Partners
26 The Lucerne Capital Offshore Fund
27 Spinnaker Global Strategic
28 Bay Resource Partners
29 JLF Offshore Fund
30 Tell Fund
31 Everest Capital Global
32 MaxQ Fund
33 Tantallon Fund
34 Parvus European Absolute Opportunities
35 Miura Global Master Fund
36 Kinetics Partners
37 Clarium
38 Boyer Allan Pacific
39 Wexford Spectrum,
40 Matterhorn Palmyra
41 Lagrange Capital Partners
42 Platinum Partners Value Arbitrage
43 Concentric European Fund
44 Third Avenue Global Value
45 Altis Global Futures Portfolio -
46 Vertex Fund
47 Schultze Offshore
48 VR Distressed Assets
49 Harbinger Capital Partners
50 East Side Capital 1,000
Top Performing US Small Cap Equity Hedge Funds
Top performing US small cap equity hedge funds for the quarter ending Dec 2007
| U.S. small cap equity |
| Sprott Capital |
| Advantage Advisers Xanthus Fund |
| JLF Partners I |
| Lake Street Fund |
| JLF Offshore Fund |
| Advantage Adv. Tech Intern |
| Modern Capital Fund |
| Ardsley Partners Fund II |
| Sprott Opportunities Hedge Class A |
| Porcupine Global Macro Plus Class C |
| AJR International BVI Class A |
| ACL Global Fund |
| Bares Micro-Cap Equity Strategy |
| CastleRock Fund |
| CastleRock Partners |
| The Apogee Fund |
| Advisory Research Micro Cap Value Fund |
| North Star Partners |
| PCM Partners |
| Euronova Smaller Companies Fund-Class 2 |
| Gargoyle Hedged Value QP Fund |
| JK Navigator |
Top Performing US Equity Hedge Funds
Top performing US equity hedge funds for the quarter ending Dec 2007
| U.S. equity |
| West Coast Opportunity Fund |
| CI Trident Global Opportunities |
| Alkeon Growth Partners |
| BP Cap Energy Equity Int'l Holding I |
| Financial Institution Partners |
| GLS 193 Fund |
| Tryphon Fund |
| Dorset Energy Fund |
| Lucas Energy Total Return Partners |
| Highline Capital Partners QP |
| New Castle Market Neutral Fund US |
| Perceptive Life Sciences Fund |
| New Castle Market Neutral Offshore |
| Redstone Investors |
| Fairfield Redstone Fund |
| Vision Opportunity Capital Partners |
| Cambrian Fund Class A |
| Dynamic Power Hedge Class F |
Top Performing Short Equity Hedge Funds
Top performing short equity hedge funds for the quarter ending Dec. 2007
| Short equity |
| Reynard International Partners |
Top Performing Multi-Strategy Hedge Funds
Top performing multi-strategy hedge funds
| Multi-strategy funds |
| Alexandra Global Investment Fund I |
| Agamas Continuum Master Fund |
| All Weather Strategy |
| LIM Asia Arbitrage |
| Valens U.S. Fund |
| AM Investment V Fund Volatility Arbitrage |
| The Catpricorn Fund |
| Millennium International |
| DB Platinum IV Dyn. Alt. Pf. R1C |
| Rock Hill International Partners |
| BSI Multimanager Risk A |
| Investcorp Interlachen Multi-Strat. Fund |
| Opportunity Unique Hedge Sub-Fund |
| Investcorp Silverback Arbitrage Fund |
| Double Black Diamond |
| The Horizon Fund |
| Dexia Mny+ Getec C Acc. |
| Momentum AllWeather Institutional Fund |
| Opus Alternative Fund Diversified GBP |
| Black Diamond Partners |
| Thames River Warrior II A |
Top Performing Global Event Hedge Funds
Top performing global event hedge funds for the quarter ending Dec. 2007
| Global trend funds |
| AIS MAAP Leveraged 2x - 4x Net |
| Quickpool |
| Sunrise Capital Diversified |
| Salem Futures Fund |
| SMN Diversified Futures Fund |
| Altis Master Fund PCC |
| Superfund GCT USD |
| NBC Atrium Futures Tol. Rtn. Banking Pro. |
| NuWave Combined Futures Portfolio 2x |
| EMC Classic Program |
| Superfund GCT EUR |
| The Lynx Fund |
| Eclipse Global Monetary Program |
| Aspect Diversified Fund (USD) |
| Man AHL Diversified Acc. |
| GMO Global Tactical Offshore |
| Winton Futures USD |
| Tiberius Active Commodity OP |
Top Performing Global Non-Event Hedge Funds
Top performing global non-event hedge funds for the quarter ending Dec 2007
| Global non-trend funds |
| Balestra Capital Partners |
| Clarium |
| Quantitative Global Fund (3X) |
| LJM Managed Futures Account |
| GMO US Tactical Opp. Fund |
| AlphaQuest Short Term Fund |
| MLM Macro Peak Partners Offshore |
| Vega Select Opportunities Fund |
| Rogers Raw Materials Fund |
| Wimbledon Fund TT |
| Quantitative Global Program |
| LCM Global Interest Rate HF Agg. Pr. |
| Bridgewater All Weather Fund AUD |
| Maple Leaf Macro Volatility Fund |
| Absolute Plus Mgmt. Hedged Gl Comm |
| Rivoli International Fund EUR |
| DKR Quantitative Strategies Fund |
| Anglian Commodities |
| Pharo Macro Fund |
| DB Noetic Global Diversified Trading |
| Torrey Pines |
| JF Asia Absolute Return Fund USD |
| Weavering Fixed Income |
Top Performing Global Equity Hedge Funds
Top Performing Global Equity Hedge Funds for the quarter ending Dec. 2007
| Global equity |
| The Prospect Fund |
| IKOS Equity Hedge Fund Class Sh. |
| TRF Master Fund (Cayman) |
| SR Global: Int'l Portfolio USD C |
| Lansdowne Global Financials USD N |
| AlphaGen Aldebaran Fund (Class A) |
| Lansdowne Global Financials Fund EURO |
| F&C Sapphire Fund |
| Threadneedle Gl Crescendo EUR |
| BlackRock Small Cap Energy Hedge Fund |
| HedgENERGY Master Fund |
| Wessex Natural Resource Fund |
| Glenrock Global Partners QP |
| Bravura 99 Fund |
| Artemis Global Hedge |
| Dexia L/S Double Alpha C Acc. |
| Warakirri Int'l Hedge Eq. Fund Publish Post |
Top Performing Global Debt Hedge Funds
Top Performing Global Debt Hedge Funds for the quarter ending Dec. 2007
| Global debt |
| HFH ShortPLUS Fund |
| Vantage Global Investment |
| Thames River Global Bond Fund GBP |
| Argo Fund |
| Greylock Global Opportunity Fund |
| QFS Fixed Income Fund |
| SGAM Alternatifs A Acc. |
| Greylock Global Opportunity Fund |
| III Onshore |
| Lazard Emerging Income |
| Lynx Fund I Master Fund |
| NEO MultiEstrategia FIM |
| III Global |
| Palm Beach Finance Partners |
| Alpstar Secured Bank Loan Fund USD |
| HMPF Enhanced QP |
| Alpstar Secured Bank Loan Fund EUR . |
| JB Global Rates Hedge Fund |
| AlphaBridge Fixed Income Fund |
| ALPINEX Long/Short Global Emerging Mkt. |
Top Performing Hedge Fund of Funds
Top Performing Hedge Fund of Funds for the quarter ending Dec. 2007
| Fund of funds | Return |
| Permal U.S. Capital Growth Oppts. A | 19.70% |
| Friedberg Global Macro Hedge Fund | 17.48% |
| Roy G. Niederhoffer (Ireland) II | 12.24% |
| Berens Global Value Fund | 12.23% |
| Whitebox Combined | 9.64% |
| LCF Trading Capital Holdings | 9.49% |
| Tiger Select Opportunity Fund (TSOF) | 8.31% |
| Culross Global Fund B GBP | 7.72% |
| James River Multi-Strategy | 7.50% |
| TS Multi-Strategy Fund | 7.19% |
| Culross Global Fund E EUR | 7.13% |
| Momentum AssetMaster | 7.02% |
| ACL Alternative Fund | 6.55% |
Top Performing European Equity Hedge Funds
Top performing European Equity Hedge Funds for the quarter ending Dec 2007
| Europe equity |
| O.E.I. MAC (US$) |
| Threadneedle UK Crescendo USD |
| Odey European GBP |
| Odey European Euro |
| Lansdowne UK Equity Fund GBP |
| Cazenove European Equity Abs. Rtn. GBP |
| Polar Capital Paragon Fund USD |
| Cazenove Leveraged UK Equity Abs. Rtn. GBP |
| AlphaGen Altai Fund (Class A) |
| Cazenove Leveraged U.K. Equity Abs. Rtn. USD |
| Polaris Prime Europe |
| NewSmith U.K. Hedge Fund GBP |
| Cazenove Leveraged U.K. Equity Abs. Rtn. EUR |
| NewSmith U.K. Hedge Fund USD |
| Ecofin Special Situations Utilities Fund |
| Polaris Prime Europe USD |
| Libra Europe Fund |
| Exane Vauban Fund |
| GLC Gestalt Europe Fund $ |
Top Performing Equity Arbitrage Hedge Funds
Top performing equity arbitrage hedge funds.
| Equity Arbitrage funds |
| GAM Frontier Opp. Equity Hedge USD Open |
| Zacks Mkt. Neutral |
| GAM Frontier Opp. Equity Hedge EUR Open |
| IKOS Equity Hedge Fund |
| CC Asia Advantage Fund |
| Fortis Japanese Equity Long/Short Fund |
| Deephaven Market Neutral Fund |
| Black Diamond Relative Value |
| Titan Global Relative Value Vol. Fund |
| Finvest Primer |
| Titan Global Volatility Fund |
| Venus Arbitrage Fund |
| Talentum Enhanced Fund - USD Class |
| ThinkStrategy Capital Fund A Shares |
| Talentum Enhanced Fund EUR |
| Aletheia Insider Index |
| GLC Gestalt Fund |
| ART B Arbitrage Portfolio - EUR |
| Anaxis Sabre Style Arbitrage Fund - USD |
| Deephaven Market Neutral Fund |
| Titan Relative Value Volatility Fund |
| Orbis Optimal USD |
| Invesco Market Neutral Cash |
| Talentum Activedge Fund - USD Class |
Top Performing Emerging Markets Hedge Funds
Top Performing Emerging Markets Hedge Funds for the quarter ending Dec. 2007.
| Emerging market equity |
| Monsoon India Inflection Fund |
| Helios Strategic Fund |
| Helios Strategic |
| Kazimir Russian Growth Fund |
| Sattva Asia Opportunities |
| Polar Capital Elbrus Fund |
| CC Asia Absolute Return Fund |
| UFG Russia Select Fund |
| Halbis India Alpha Fund |
| Dynamic Power Emerging Markets Fund |
| Firebird New Russia Fund |
| Optima Opportunity Fund |
| PvB CH Russian Prosperity USD |
| Thames River Eastern European USD |
| GLS Offshore Global Opport. |
| Prosperity Cub |
| Firebird Fund |
| Praesidium SA Hedge Fund |
| Troika Russia Fund-U.S. |
| UG Hidden Dragon Undervalued Assets |
| RAB-Northwest Warrant Fund USD |
| Key Global Emerging Markets USD |
| AlphaGen EtaCas Fund (Class A) |
Top Performing Distressed Securities Hedge Funds
Top performing distressed securities hedge funds.
| Distressed securities funds |
| VR Global Partners |
| Valens Offshore Fund |
| Sandler Associates |
| DKR Wolf Point Fund |
| Millennium Global High Yield Fund |
| Brookdale Global Opportunity Fund |
| Gramercy Emerging Markets Fund |
| ASM Asia Recovery Fund |
| American Durham |
| Atalaya Special Opportunities Fund |
| Contrarian Capital Finance |
| Post Distressed Fund |
| International Durham |
| Contrarian Long Short |
| Catalyst Credit Opp. Offshore |
| Marathon Special Opportunity Fund |
| Momentum Debtmaster |
| Schultze Partners |
| Longacre Capital Partners |
| Longacre International |
Top Performing Developed Asia Equity Hedge Funds
Top performing developed asia equity hedge funds for quarter ending Dec 2007.
| Developed Asia equity |
| Ginga Service Sector Fund |
| SR Global: Asian Portfolio USD B |
| Boyer Allan Pacific Partners |
| MQ Absolute Return Strategy Asia |
| LG Asian Plus Fund |
| Hathersage Long Term Currency Program |
| DB Noetic Equity Long/Short Fund |
| AlphaGen Hokuto Fund (Class A) |
| Martin Currie ARF Asia USD |
| Thames River Edo C JPY |
| Absolute Partners Fund Limited |
| Henderson Asia Pacific Abs. Ret. USD |
| Ark. Royal B Class |
| UG Greater China Multi-Strategy Fund |
| SR Global Inc. H Japan |
| Prospect Absolute Return (Hybrid) |
| Tiedemann Falconer LP |
| Henderson Japan Absolute Return USD |
| DB Equilibria Japan Fund USD |
| HT Asian Catalyst Fund |
| Asuka Japanese Eq. L/S Offshore I B USD |
| H3 Japan Fund |
| Investcorp WMG Asia Fund |
Top Performing Debt Arbitrage Hedge Funds
Top performing debt arbitage hedge funds for the quarter ending Dec 2007.
| Debt Arbitrage funds |
| Whitebox Hedged High Yield |
| AAAsgard Fixed Income USD |
| Investcorp Fixed Inc. Rel. Value Fund |
| III Relative Value/Macro |
| JB Diversified Fixed Income Hedge Fund |
| Platinum Grove Contingent Capital Fd. |
| MKP Partners |
| Brookdale International Partners |
| Morley G7 Fixed Income Fund USD |
| Smith Breeden Mortgage Partners |
| Smith Breeden Global Funding |
| Brownstone Partners Catalyst Fund |
| Endeavour Fund I |
| Sanctum Fixed Income |
| Laurus U.S. Fund |
Top Performing Corporate Action Hedge Funds
Top Performing Corporate Action Hedge Funds for the quarter ending Dec 2007:
| Corporate action funds |
| Venus Special Situations Fund |
| Libra Fund |
| Libra Fund |
| Owl Creek II |
| Owl Creek Overseas |
| Doric Focus Fund |
| Halcyon Offshore Asset-Backed Value |
| Marwyn Neptune Fund |
| Argo Global Special Situation Fund |
| Galbraith Global Strategies Offshore |
| RenGen Shares |
| Trophy Hunter Investments |
| PilotRock Investment Partners |
| SYSTEIA EVENT DRIVEN Program |
| North Pole Capital Investments |
| North Pole Capital USD |
| Canyon Value Realization Fund |
| Bay Harbour Partners |
| Canyon Value Realization Cayman A |
| Black Diamond Arbitrage |
| MQ Special Events Fd. Direct |
| KDC Merger Arbitrage Fund |
| Mariner Partners |
| Post Total Return Fund |
| Halcyon Offshore Fund |
Top Performing Arbitrage Hedge Funds
Top Performing Arbitrage Hedge Funds through three months ending Dec 2007.
| Convertible Arbitrage funds |
| AM Investment E Fund Convertible Arbitrage |
| AM Investment D Fd. I (QP) |
| Whitebox Convertible Arbitrage |
| Whitebox Convertible Arbitrage |
| Lionhart Aurora Fund - Optimum Class |
| Lionhart Global App. Global USD |
| Argent Classic Convertible Arbitrage C |
| Navesink Investments |
| IIU Convertible Fund |
| Whitebox Diver Convertible Arbitrage |
| Marathon Global Convertible Fund |
| Zazove Hedged Convertible |
| Fortis Alp Strat. Convertible Arbitrage EUR |
| Zazove Convertible Arbitrage |
| Arpeggio Fund |
| Argent Classic Convertible Arbitrage A, |
| Argent Classic Convertible Arbitrage B |
Top 50 Hedge Funds in US
Below is a list of the top 50 hedge fund groups in the US. These are the largest US hedge funds ranked by assets under management (Jan 07 AUM).
JPMorgan Asset Management New York NY
Goldman Sachs Asset Management New York NY
Bridgewater Associates Westport CT
D. E. Shaw Group New York NY 2
Farallon Capital Management San Francisco CA
Renaissance Technologies Corp. East Setauket NY
Och-Ziff Capital Management New York NY
Cerberus Capital Management New York NY
Barclays Global Investors* San Francisco CA
ESL Investments** Greenwich CT
Citigroup Alternative Investments New York NY
Tudor Investment Corporation Greenwich CT
Caxton Associates New York NY
Atticus Capital New York NY
Campbell & Co. Towson MD
Citadel Investment Group Chicago IL
Moore Capital Management New York NY
Avenue Capital Group New York NY
Perry Capital New York NY
SAC Capital Advisors Stamford CT
Soros Fund Management New York NY
HBK Investments Dallas TX
FX Concepts New York NY
Angelo, Gordon & Co. New York NY
Fairfield Greenwich Group New York NY
Stark Investments* St. Francis WI
Davidson Kempner Advisers** New York NY
Highfields Capital Management Boston MA
Wellington Management Co.** Boston MA
Canyon Capital Advisors Beverly Hills CA
AQR Capital Management Greenwich CT
Fortress Investment Group** New York NY
Maverick Capital New York NY
Duquesne Capital Management** Pittsburgh PA
Millennium Management** New York NY
Adage Capital Management Boston MA
Cantillon Capital Management New York NY
York Capital Management New York NY
Lone Pine Capital Greenwich CT
Black River Asset Management Minnetonka MN
King Street Capital Management New York NY
Baupost Group Boston MA
Bain Capital/Brookside Capital Partners Boston MA
BlackRock New York NY
Pequot Capital Management Westport CT
AllianceBernstein* New York NY
TPG-Axon Capital New York NY
Paulson & Co. New York NY
Elliott Associates Greenwich CT
Grantham, Mayo, Van Otterloo
For more detailed hedge fund lists
JPMorgan Asset Management New York NY
Goldman Sachs Asset Management New York NY
Bridgewater Associates Westport CT
D. E. Shaw Group New York NY 2
Farallon Capital Management San Francisco CA
Renaissance Technologies Corp. East Setauket NY
Och-Ziff Capital Management New York NY
Cerberus Capital Management New York NY
Barclays Global Investors* San Francisco CA
ESL Investments** Greenwich CT
Citigroup Alternative Investments New York NY
Tudor Investment Corporation Greenwich CT
Caxton Associates New York NY
Atticus Capital New York NY
Campbell & Co. Towson MD
Citadel Investment Group Chicago IL
Moore Capital Management New York NY
Avenue Capital Group New York NY
Perry Capital New York NY
SAC Capital Advisors Stamford CT
Soros Fund Management New York NY
HBK Investments Dallas TX
FX Concepts New York NY
Angelo, Gordon & Co. New York NY
Fairfield Greenwich Group New York NY
Stark Investments* St. Francis WI
Davidson Kempner Advisers** New York NY
Highfields Capital Management Boston MA
Wellington Management Co.** Boston MA
Canyon Capital Advisors Beverly Hills CA
AQR Capital Management Greenwich CT
Fortress Investment Group** New York NY
Maverick Capital New York NY
Duquesne Capital Management** Pittsburgh PA
Millennium Management** New York NY
Adage Capital Management Boston MA
Cantillon Capital Management New York NY
York Capital Management New York NY
Lone Pine Capital Greenwich CT
Black River Asset Management Minnetonka MN
King Street Capital Management New York NY
Baupost Group Boston MA
Bain Capital/Brookside Capital Partners Boston MA
BlackRock New York NY
Pequot Capital Management Westport CT
AllianceBernstein* New York NY
TPG-Axon Capital New York NY
Paulson & Co. New York NY
Elliott Associates Greenwich CT
Grantham, Mayo, Van Otterloo
For more detailed hedge fund lists
Hong-Kong Based Hedge Fund Closes
1-Apac Greater China hedge fund who once managed $55 billion is closing its doors. Dr. Ken Lu confirmed today the decision was made to pull the plug after 16% losses this month and assets diminishing to under $10 million.
Very bearish asian stock market returns have been pounding China focused hedge funds this year with more fund closings than openings this year. This is a sharp reversal from last year when almost twice as many hedge funds were opened as were closed.
Read the full article:
Very bearish asian stock market returns have been pounding China focused hedge funds this year with more fund closings than openings this year. This is a sharp reversal from last year when almost twice as many hedge funds were opened as were closed.
Read the full article:
Some Hedge Funds Gaining in Bear Market
Hedge funds, even supposedly market neutral funds are struggling as a group. But not all hedge funds are posting negative returns. Take Bernard Drury and his Drury Capital who's fund is up 60% since January 1. Bernard is a bit of a rarity on Wall Street: a hedge fund manager who is making money instead of losing it. Faced with massive redemptions amid falling returns, many hedge funds have been forced to sell positions including stocks, bonds and other derivatives.
Some of the losers: Kenneth C. Griffinof The Citadel Investment Group and Lee Ainslie of Maverick Capital.
Some of the winners: Conquest Capital Group, R. G. Niederhoffer Capital Management, MKP Capital Management; and the John W. Henry & Company.
Read the full article:
Some of the losers: Kenneth C. Griffinof The Citadel Investment Group and Lee Ainslie of Maverick Capital.
Some of the winners: Conquest Capital Group, R. G. Niederhoffer Capital Management, MKP Capital Management; and the John W. Henry & Company.
Read the full article:
Hedge Fund Managers to Apper Before Congress
After last month grilling Lehman CEO Richard Fuld, the same Congressional leaders has called upon several high-profile hedge fund managers to give testimony to discuss the failures of US financial institutions and the possible role of hedge funds.
Philip Falcone, Kenneth Griffin, John Paulson, James Simons and George Soros on Thursday are expected go before the House Committee on Oversight and Government Reform. They will have several minutes each to make opening remarks, then will field questions from lawmakers, according to a committee spokeswoman.
Read the full article
Philip Falcone, Kenneth Griffin, John Paulson, James Simons and George Soros on Thursday are expected go before the House Committee on Oversight and Government Reform. They will have several minutes each to make opening remarks, then will field questions from lawmakers, according to a committee spokeswoman.
Read the full article
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