Top 50 Hedge Funds 2009

Below is a list of the Top 50 Hedge Funds for 2009. (Based on 2009 YTD Performance):

Fund	Country of Domicile	2009 YTD Return
GJ Investment Funds	USA	594.00%
LaGrange Special Situations Yield	Cayman Islands	457%
CKP Masters Aggressive Program	Switzerland	257%
LaGrange Capital Partners	USA	218%
Gaia Resources Fund	Cayman Islands	215%
Group G Investments	British Virgin Islands	202%
BTR Global Energy Fund	Cayman Islands	193%
RAB Northwest Warrant Fund	Cayman Islands	192%
Russian Prosperity B	Cayman Islands	189%
Russian Prosperity C	Cayman Islands	187%
Constellation Fund Equities	USA	186%
Russian Prosperity A	Cayman Islands	184%
Prosperity Cub	Cayman Islands	181%
Senvest Partners	Cayman Islands	179%
MMA Multigestion Emergents	France	176%
Vltava Sicav	Malta	173%
Troika Russia Fund	Cyprus	168%
Dynamic Power Hedge	Cana	160%
Kaltchuga Fund	British Virgin Islands	161%
Loyola Capital Partners	USA	158%
Salida Multi Strategy	USA	156%
AUK Capital Partners	USA	154%
Loyola Capital Fund	USA	154%
FAMA Brazil Challenger Equity	Cayman Islands	150%
Gerbino Gold Group	USA	147%
Victoire Selection Brazil	Cayman Islands	147%
Polo Fund	Cayman Islands	143%
Olesen Capital	USA	142%
ALphaNorth Partners Fund	Canada	142%
UFG Russia Alternative Fund	Cayman Islands	142%
GFTC New Value Trust	Canada	141%
Thunder Silver Partners	USA	140%
The Prosperity Quest Fund	Cayman Islands	140%
Zhongyuan Licai Hongli Longying Trust	China	137%
Golden China Fund	Cayman Islands	137%
Front Street Candian Energy Fund	Canada	136%
Ocean Star Fund	China	136%
Southridge Partners	USA	136%
Andromeda Global Credit	USA	135%
Golden China US Fund	Cayman Islands	135%
Investcorp Silverback Arbitrage	USA	135%
Barnegat Fund	Bermuda	132%
Concise Capital Offshore Fund	Cayman Islands	132%
Meridian Glb Gold & Resources	British Virgin Islands	130%
Elevated Value Focus	USA	127%
Thunder Gold Partners	USA	127%
FPP Yellow Tiger China Fund	Cayman Islands	126%
India Synthetic Warrant Fund	Guernsey	125%
Skopos Fund	Cayman Islands	124%
CAAM Invest	Luxembourg	124%

You will notice that most of the best performing hedge funds in 2009 are commodity and emerging markets funds.

Number of New Hedge Fund Launches Rises

After a slow year, the pace of new hedge fund launches is beginning to take off.

"It's a promising environment for new hedge funds," said Alex Ehrlich, the global head of Morgan Stanley's prime services business. "Money is coming in from seasoned investors, many of whom are preparing to redeploy capital."

In 2008, more than twice as many hedge funds liquidated as opened.

Here is a list of some new hedge fund launches in 2009/2010 (also includes established companies launching new funds):
Beacon Light Capital
RoundKeep Capital Advisors
Roc Capital Management
Ambit Capital
QuantZ Capital Management
Theory Capital Management
Flintlock Capital Asset Management
Black River Asset Managment
Van Hulzen Asset Management
Raffi Capital Management
SLP Capital
Esplanade Capital
Sugarloaf Rock Capital
Tidewater Capital
Harrier Hawk Management
Raven Rock Capital
Mudrick Capital

Hedge Fund Jobs Poised to Recover

Hedge Fund Jobs Poised to Bounce Back after Rough 2009:
After a slow summer, hedge fund jobs are poised to bounce back. This is according to the 2009 Hedge Fund Employment Report.

The report also details a number of other interesting facts about hedge fund jobs:

• Unsurprisingly, New York, Connecticut, and Massachusetts are the best states for getting hedge fund jobs.
• Greenwich, Boston, San Francisco, and New York are the best cities for getting hedge fund jobs.
• 2010 should have improved conditions for getting a hedge fund relative to 2009.

Very informative. You can read the full report here.

Corzine and TPG-Axon - Casino Connection?

New Jersey Governor Jon Corzine's investment in hedge fund TPG-Axon is accused of being a conflict of interest. The charges relate to TPG-Axon's parent, multi billion dollar private equity firm, Texas Pacific Group.

There is plenty of information available on the web with regard to the actual allegations, but since little useful information is provided we will provide a little background.

Texas Pacific Group

Contact Info (Primary):

301 Commerce Street, Suite 3300

Fort Worth, TX 76102
(817) 871-4000 phone

(817) 871-4010 fax

www.tpg.com

Firm Type: Private Equity

AUM: $45 billion

Key People:

• Founding Partner: David Bonderman

• Founding Partner: James G. (Jim) Coulter

• Partner, Operations: Richard W. (Dick) Boyce

Principal Competitors: Kohlberg Kravis Roberts & Co.; Hicks, Muse, Tate & Furst Incorporated; Clayton, Dubilier & Rice, Inc.

Other Info: TPG is headquartered in Fort Worth, TX and San Francisco, CA. The firm also has offices in 8 countries. Texas Pacific Group's largest private equity fund is TPG Partners VI, an almost $20 billion global buyout fund launched in 2008.

TPG-Axon Capital Management

Contact Info:

888 Seventh Avenue, Floor 38

New York, NY 10106-3899

(212) 479-2000 phone

Firm Type: Hedge Fund

Founded: 2005

2009 AUM: $10.7 billion

Key People:

• Dinakar Singh - Founder and CEO
• 31 Employees

Other Info: TPG-Axon is a global macro hedge funds ranks as the 25th largest US hedge fund by assets under managerment as of August 2009.

Largest Holdings (as of June 30, 2009):

Hewlett Packard - $429 million

Pepsico - $312 million

Oracle - $304 million

Microsoft - $278 million

JP Morgan - $277 million

2001 Interview with Madoff Betrayed Fraud

Suspicious 2001 Interview with Madoff
We have often heard that there were a good many financial professionals who were suspicious of Madoff's hedge fund, based on the low volatility and almost complete lack of a month with negative returns. However, in an interview Madoff gave in 2001, there were many clues, certainly in retrospect, that something was amiss.

Here are a few quotes from that article by MarHedge in May of 2001 that are certainly interesting in hindsight:

"Those who question the consistency of the returns, though not necessarily the ability to generate the gross and net returns reported, include current and former traders, other money managers, consultants, quantitative analysts and fund-of-funds executives, many of whom are familiar with the so-called splitstrike conversion strategy used to manage the assets."

"What is striking to most observers is not so much the annual returns—which, though consider somewhat high for the strategy, could be attributed to the firm’s market making and trade execution capabilities—but the ability to provide such smooth returns with so little volatility."

"The best known entity using a similar strategy, a publicly traded mutual fund dating from 1978 called Gateway, has experienced far greater volatility and lower returns during the same period."

"And in a face-to-face interview and several telephone interviews, Madoff sounds and appears genuinely amused by the interest and attention aimed at an asset management strategy designed to generate conservative, low risk returns that he notes are nowhere near the top results of well-known fund managers on an absolute return basis."

"The apparent lack of volatility in the performance of the fund, Madoff says, is an illusion based on a review of the monthly and annual returns. On an intraday, intraweek and intramonth basis, he says, 'the volatility is all over the place,' with the fund down by as much as 1%."

"But as whole, the split-strike conversion strategy is designed to work best in bull markets and, Madoff points out, until recently 'we’ve really been in a bull market since ‘82, so this has been a good period to do this kind of stuff.'"

"As for the specifics of how the firm manages risk and limits the market impact of moving so much capital in and out of positions, Madoff responds first by saying, 'I’m not interested in educating the world on our strategy, and I won’t get into the nuances of how we manage risk.'"

"He won’t reveal how much capital is required to be deployed at any given time to maintain the strategy’s return characteristics, but does say that 'the goal is to be 100% invested.”

"Indeed, says Madoff, the firm itself has received numerous buyout offers but has so far refused any entreaties because he and the many members of his immediate and extended family who work there continue to enjoy what they do and the independence it allows and have no desire to work for someone else."

"Similarly, he adds, another firm could duplicate the strategy in an attempt to get similar results, but its returns would likely be unmatched because 'you need the physical plant and a large operation' to do it with equal success. However, many Wall Street firms, he says, do use the strategy in their proprietary trading activities, but they don’t devote more capital to such operations because their return on capital is better used in other operations."

"Madoff, who believes that he deserves 'some credibility as a trader for 40 years,” says: “The strategy is the strategy and the returns are the returns.' He suggests that those who believe there is something more to it and seeking an answer beyond that are wasting their time."

Those are chilling quotes knowing what we do now.

Read the full article here

World's Most Stable Hedge Funds

Below is a list of the most stable hedge funds in the world. The majority of hedge funds meeting the criteria are fixed income / arbitrage funds. The stability rating is based on 5 year returns, 5 year standard deviation of returns, and worst 3 mo. returns. All funds below had positive cumulative 5 year returns and had returns of no worse than -2% in the fund's worst 3 mo. period. Of course, just because a fund has stable, positive returns, does not necessarily indicate it is a safe investment. Recall that Bernard Madoff Securities posted positive monthly returns for 10 straight years with very low volatility. Had Madoff's fund still been active, it would have rated at or near the top of this list.

Most Stable Hedge Funds:

Fund Name	Firm Name	City	State	Stability Rating	Fund Type
Fletcher Income Arbitrage Fund	Fletcher Asset Management	New York	NY	99.45	Debt Arbitrage
Talisman Partners	Envision Capital Management	Scottsdale	AZ	99.35	Distressed Debt
Coast Enhanced Income Fund II	Coast Asset Management	Santa Monica	CA	99.15	Debt Arbitrage
Equity Income Partners	Envision Capital Management	Scottsdale	AZ	98.91	Debt/Fixed Income
AlphaBridge Fixed Income Fund	AlphaBridge	Greenwich	CT	98.69	Fixed Income
YA Global Investors	Yorkville Advisors	Jersey City	NJ	98.22	Debt Arbitrage
FAMA Sniper	FAMA Investors	Grand Cayman	GT	97.99	Emerging Markets
Kassirer Market Neutral		Toronto	ON	97.8	Convertible Arbitrage
DB Equilibria Japan Fund USD	DB Advisors	New York	NY	97.63	Absolute Return
Glazer Offshore Fund	Glazer Capital Management	New York	NY	97.38	Merger Arbitrage
Blackthorn Fund	Blackthhorn Group	Overland Park	KS	97.2	Multi Strategy
Durban Capital	Durban Capital	New York	NY	97.02	Equity Arbitrage
Loch Capital I	Loch Capital	Boston	MA	96.84	Equity
Tuscan Investments	Tuscan Group	San Francisco	CA	96.63	Equity
Winbeldon Fund	Weston Capital	Westport	CT	96.4	Global Equity
Gabelli Associates	Gabelli	Rye	NY	96.22	Equity
Blue Rock Capital Fund	Blue Rock Advisors	Minneapolis	MN	96.05	Fund of Funds
Culross Arbitrage Fund	Culross Global Management	London	UK	95.83	Fund of Funds
MKP Opportunity Offshore	MKP Capital	New York	NY	95.64	Debt Arbitrage
Haberman Value Fund	Haberman Capital	New York	NY	95.45	Equity
AlphaGen Capella Fund Limited	Gartmore Investment Services	Frankfurt	Germany	95.26	Equity
Mac Sentinel Cdn Managed Yield	Mackenzie Investments	Toronto	ON	95.01	Equity Arbitrage
Dexia Double Alpha	Dexia Asset Management	Paris	France	94.81	Fixed Income
Aktie-Ansvar Graal	AktieAnsvar	Stockholm	Sweden	94.68	Equity
BBVA & Partners Eq Arbitrage		Madrid	Spain	94.5	Equity

The above chart is based on our proprietary formula for hedge fund stability. The formula is based on 5 year returns, 5 year standard deviation of returns, and worst 3 mo. period as well as return/volatility ratio. Stable hedge funds do not necessarily indicate safety of investments. The above figures are subject to error and should not be used for making investment decisions under any circumstances.