Hedge Funds 01 (Aug 08 - Nov 15)

[winston]

Short-Term Trading Helps Singaporean Fund Manager Beat Rivals
Tomoko Yamazaki & Netty Ismail

More Asian Hedge Funds Closing Shop; Feb 21, 2012
Asian Hedge Fund Shuts Down as Assets Fall; Jan 9, 2012


Yong 40, is the envy of Asia’s hedge-fund world, where he outperformed all managers last year. His Dymon Asia Capital (Singapore), started in 2008 with $100 million from Paul Tudor Jones’s Tudor Investment, has expanded to $2.85 billion, including $2.5 billion in its main macro fund.

The next challenge for Yong, who learned to trade at firms including Goldman Sachs Group and Citadel is to avoid the investment slump and client defections that are common among Asian hedge funds that grow quickly after posting a year or two of strong returns. Instead, he seeks to emulate Jones, who has posted average gains of 20 percent a year since 1986.

“It has been our experience that undisciplined managers easily become victims of their own success,” said Peter Rup, chief investment officer of New York-based Artemis Wealth Advisors, which invests in hedge funds for clients.

“We have found that the sweet spot in size is in the range of $1 billion to $5 billion, with caps in place to limit fund size at those levels, irrespective of investor demand.”

The Dymon Asia Macro Fund — which seeks to profit on macroeconomic trends by wagering on bonds, currencies, stocks and commodities — has stopped taking new money to focus on its investments.

The fund returned more than 20 percent after fees in 2011, the most in Asia and seventh worldwide among hedge funds with assets of more than $1 billion, according to data compiled by Bloomberg.

Yong’s fund made money by short-term trading in the days following Japan’s March 11, 2011, earthquake, helping his fund gain 8 percent that month, Yong said. The fund covered its short positions on March 14, the first day of trading after the quake, and went long the Nikkei 225 index futures four days after the quake, he said. The benchmark Nikkei 225 Stock Average plunged 6.2 percent on March 14, 2011.

Being long Chinese yuan for six months through August and turning long US dollar and short equities in September as Greece’s debt problems deepened, also contributed. The MSCI World Index fell 8.9 percent in September..

Asia-focused hedge funds lost an average of 8.4 percent last year, according to Eurekahedge. Global investors pulled $1.04 billion from the region’s hedge funds in the fourth quarter, the first net withdrawals since the first quarter of 2010, according to Chicago-based Hedge Fund Research.

Total estimated capital invested with Asian hedge funds was $82.1 billion at the end of 2011, Hedge Fund Research said.

Twenty years ago, Yong was serving his compulsory military service, becoming operations officer of the 24th Battalion of the Singapore Artillery. Back in civilian life, he went on to study as an undergraduate at Singapore’s Nanyang Technological University, getting first class honors in banking and finance.

Yong attributes much of his success to Paul Tudor Jones, who declined to comment for this article.

Like Jones — who runs the Robin Hood Foundation, a charity he started in 1988 with the goal of eradicating poverty in New York — Yong plans to give away a significant portion of his wealth.

He has set up the Yong Hon Kong Foundation, named after his father, that will help children from challenging family backgrounds and people who “fall through the cracks” of Singapore’s social safety nets.

http://www.thejakartaglobe.com/business ... als/508542

[winston]

Hedge Fund Industry is now US$2t industry

Source: CNBC

[winston]

Asia hedge fund Orvent shuts -sources

HONG KONG, May 23 (Reuters) - Singapore-based Orvent Asset Management has shut its $130 million event-driven hedge fund after its Swedish seed capital investor Brummer & Partners pulled out at the end of April, two sources with direct knowledge of the matter said.

Stockholm-based Brummer, one of Europe's largest hedge funds, managing about $14 billion, backed Scott Collison, a former portfolio manager at Millennium Management in Singapore, in starting the fund on January 1, 2011.

Collison and Brummer spokesman Jacob Lannero declined to comment.


Source: Reuters

[winston]

Ex-Lehman trader to shut $120 million Asia hedge fund By Nishant Kumar

HONG KONG (Reuters) - Former Lehman Brothers trader Allan Bedwick is shutting his $120 million Asia-based global macro hedge fund after a two-and-a-half-year struggle to boost assets, fund documents obtained by Reuters showed.

Hong Kong-based Bedwick's fund is Asia's latest hedge fund victim of the global economic woes as fears of a worsening euro zone debt crisis, and slowing growth drive investors toward the safety of large and well-established funds.

His Sequence Fundamental Macro Fund is currently returning capital to investors and will shut by the end of June, according to a letter to investors seen by Reuters.

Bedwick declined to comment.

Macro hedge funds focus on major economic trends and events and bet anywhere they see value, including stocks, bonds, currencies, commodities and derivatives markets.

Bedwick's fund gained 0.1 percent in the first three months of 2012 versus a 1.9 percent gain in the Eurekahedge global macro hedge fund index. The fund reported a 3.1 percent gain in 2011, outperforming a 1.2 percent drop in the index.

Bedwick headed global macro trading at Lehman Brothers and later at Nomura Holdings after the Japanese company bought Lehman's Asia and European businesses.

The fund, earlier known as OGI Global Macro Fund, started in October 2009 in Japan. Bedwick moved to Hong Kong following the earthquake in Japan last year and changed his firm's name to Sequence Asset Management earlier this year.

INDUSTRY ASSETS DOWN

The closure extends a growing list of hedge funds shutting down in Asia, putting pressure on an industry which is now about $50 billion below its peak assets of $176 billion hit in December 2007.

More than 140 Asia-focused hedge funds shut down last year, while 38 have closed so far in 2012, industry tracker Eurekahedge estimates.

This year's closures include Novatera Capital, which managed about $90 million in a long/short hedge fund, and Orvent Asset which shut its $130 million event-driven hedge fund after its Swedish seed capital investor pulled out at the end of April.

TIG Advisors also liquidated its 15-year-old, $210 million global emerging markets hedge fund earlier this year.

Doric Capital, one of Hong Kong's oldest hedge fund firms founded by former Man Group Plc executive Michael Nock, and Thaddeus Capital Management also shut hedge funds recently.

Other closures include Boyer Allan Investment Management, Singapore-based RSR Capital, Britain-based Wessex and Singapore-based Komodo Capital.

http://www.reuters.com/article/2012/06/ ... 4I20120604

[winston]

How to Invest Like the Super-Rich

A new exchange-traded fund (ETF) has just been launched that tries to replicate equity hedge fund performance.

The ETF is the Global X Top Guru Holdings Index ETF (NYSE: GURU).

GURU has just launched, so it has very limited history. However, back testing reveals the GURU ETF would have climbed roughly 30% annually during the past three years, beating the S&P 500′s 22% average yearly gain.

The ETF invests in the single largest holdings of 68 top hedge funds, including John Paulson’s Paulson & Co., Bill Ackman’s Pershing Square Capital Management, David Tepper’s Appaloosa Management, David Einhorn’s Greenlight Capital and Daniel Loeb’s Third Point.

http://www.yolohub.com/featured/how-to- ... super-rich

[winston]

Asian hedge funds ditch short-selling for long-only game By Nishant Kumar

HONG KONG, June 26 (Reuters) - Some of Asia's oldest hedge funds are ditching short-selling, as investors pull out of the strategy on concerns that bearish bets are failing to pay off and not worth the hefty fees they bring.

The move from the traditional hedge fund structure to long only investing is part of the growing shake-out of Asia's $124 billion industry, and is a potential blow to the investment banks supporting the sector.

Nearly 40 percent of hedge fund assets in Asia are still parked with long/short managers who aim to make money in any kind of market, by betting both for and against publicly traded companies. Funds that combine long and short investing command twice the fee of a long-only, non-benchmark fund.

But few Asian funds are seen as having the stomach or the expertise to put on effective bearish bets.

The strategy can be profitable, but a failed short bet can be very damaging, especially in a volatile market like Asia.

Adding to the challenges is that Asia has varying short-selling rules and certain countries that bar the practice.

While the long-only bias has been a factor in Asia for years, analysts tracking the sector say last year's losses coupled with the current market volatility presents Asia's hedge funds with a stark and immediate choice: shut down, cut fees or convert to long-only.

Tantallon Capital, which managed $1.7 billion at its peak, will give up shorting from next month. Others such as Indea Capital, which once held $750 million in its hedge fund, and ARN Investment Partners, are shutting down their long/short equity funds and have decided to focus on long-only products.

The shift from long/short will also cut leverage and stock lending opportunities for prime brokers such as Goldman Sachs and Morgan Stanley that service hedge funds.

Long/short hedge funds are a major contributor to prime brokerage industry revenues and banks' fee pools.

"Investors are increasingly seeking alternatives to hedge funds, and are looking for intelligent ways to access Asian growth," said Peter Douglas, founder of hedge fund consultancy GFIA.

"Long-only unconstrained strategies are a natural beneficiary of these trends." Long-only funds that can invest in a broad range of stocks, such as Singapore-based Arisaig and the Asia Landmark Fund of fund firm New Silk Road Investment, are hitting all-time peak assets, even as Asia's hedge fund industry remains nearly $50 billion below its pre-crisis assets of $176 billion.

Assets in long/short funds have halved to about $47 billion over the past four-and-a-half years. Of the 47 Asian hedge funds that have shut this year, 33 are long/short funds, according to industry tracker Eurekahedge.

Source: Reuters

[winston]

Asia Hedge Funds Put Returns Ahead of Cash as Demand Scarce By Tomoko Yamazaki and Bei Hu

Ueli Wick, a former Credit Suisse Group AG banker who in June began running his own Singapore hedge fund, says he isn’t bothering to court investors right away. Instead, he wants to focus on performance.

“It’s not that easy to go out with a good story and just raise money like that,” said Wick, 41, who founded Baruna Asset Management Pte with $15 million of his own money and some from family and friends.

“People just want to see more proof and tangible numbers because they’ve just been too disappointed with hedge funds and are extremely skeptical. To get big money, I need to deliver first.”

Asian startups gathered $1.39 billion in the first five months of 2012, 51 percent less than the same period in 2011 and a 69 percent decline from five years ago, according to Eurekahedge Pte.

Of the 317 Asia- focused hedge-fund startups since the beginning of 2009, about 74 percent have failed to boost assets “significantly” and 56 have been liquidated, according to Eurekahedge, a Singapore- based research firm

http://www.bloomberg.com/news/2012-07-2 ... d-off.html

[winston]

Dont beat yourself up too much if you are losing money. The "experts" also cannot get it right consistently ...


British hedge fund Man Group logs interim net loss

British hedge fund manager Man Group on Tuesday, revealed a first-half net loss of $164 million (135 million euros), blaming "turbulent" financial markets and economic uncertainty.

The loss after tax, suffered in the six months to the end of June, compared with a net profit of $70 million in the first half of 2011, Man Group said in a statement.

Total funds under management dived almost ten percent to $52.7 billion at the end of June from $58.4 billion at the end of December.

"Against a turbulent market and economic background, Man's funds under management have declined," said chief executive Peter Clarke.

"The result is a marked decline in underlying profitability."

Clarke unveiled another round of cost-cutting measures to save the group $100 million over the next 18 months and steer it back to profit.


Source: AFP European Edition

[winston]

The "Smart Money" Could Push Stocks Much Higher From Here By Frank Curzio

The talking heads say: It's time to take profits in stocks!

They believe the market is rising in anticipation of more stimulus from the Federal Reserve and Europe. They're calling the recent rally "fake."

Technical analysts I talk to are also negative. They see a short-term pullback as sentiment indicators turn negative and the market's fear index (the "VIX") sits at super-low levels.

As my friend and colleague Jeff Clark pointed out recently, the last time the VIX traded at these levels was just before the market peaked in late March. Less than three months later, the S&P 500 index fell 9%.

Stocks are up over 10% from their June lows and trading near four-year highs. So they could be in for a much-needed breather.

But one important indicator suggests this pullback may be short-lived…

According to investment firm Goldman Sachs, the recent surge in stocks has caught most "smart money" investors off-guard.

"Smart money" is a term used to describe hedge-fund activity. Most hedge-fund managers have a history of beating the major indexes. A recent study performed by accounting giant KPMG says hedge funds have outperformed the markets over the past 17 years (1994 to 2011).

However, only 11% of hedge funds have outperformed the S&P 500 year-to-date. More important, Goldman Sachs also says the net long exposure for hedge funds right now is 43% – down from 49% last quarter. That's a low number, considering some of the positive data we've seen reported recently…

Over the past two months, the U.S. economy has taken a dramatic upturn. The employment report for July was super-strong. Retail sales turned higher for the first time in three months. In fact, it was the first time since July 2005 that every segment within the retail sector turned upward. Plus, housing prices in most major markets are finally moving higher.

These positive economic indicators may not seem like a big deal to most investors. But these same indicators began turning positive late last year. Once it was clear the U.S. was not headed for recession, the S&P 500 surged 30% over the next six months.

If these trends continue, "smart money" investors – again, with 43% net long exposure right now – will have to rotate into stocks.

Remember… hedge-fund managers get paid based on performance. If we have another strong jobs number and housing prices continue to rise, these funds will have to buy stocks to catch up to their benchmark.

Goldman estimates there is roughly $1.2 trillion of gross equity positions within the 699 hedge funds the firm analyzed. The average year-to-date gain is just 5%… well short of the S&P 500's 12%.

Based on low net long exposure and the fact that hedge funds are significantly underperforming the markets, we could see a lot of "smart money" flow into stocks from now until the end of the year.


Source: Growth Stock Wire

[winston]

Hong Kong start-ups lift Asia hedge fund industry - survey

* Hedge fund assets in HK grow by $6.5 bln to $47.1 bln
* Asian industry adds $3.5 bln, in line with portfolio gains
* Hedge fund industry in Singapore, Japan shrinks

HONG KONG, Sept 21 (Reuters) - Asia-focused hedge funds slightly increased the value of the assets they manage to $144 billion in the first half of the year, helped by a few large start-ups in Hong Kong even as the industry in Singapore and Japan shrank.

Assets rose 2.5 percent, or $3.5 billion, as of the end of June compared with six months ago, a survey by industry tracker AsiaHedge showed on Friday. That was in line with the 2.4 percent return seen in the Asian hedge funds measured by the fund tracker.

The Asian fund industry is struggling to improve returns as the slowing global economy and European debt crisis weigh on stock markets around the world.

"The modest growth comes from a combination of inflows into some of the bigger launches of the past two years and existing managers as well as from a lack of significant redemptions from investors, who are holding their fire despite some lacklustre returns - at least for now," said Aradhna Dayal, head of Asia for HedgeFund Intelligence in Hong Kong.

Start-ups in Hong Kong such as Asia Research & Capital Management and Tybourne Capital Management raised millions of dollars in the first half.

That helped boost the overall assets held by hedge funds in the city by $6.5 billion to a record $47.1 billion, according to the survey by AsiaHedge, which is part of U.K.-based HedgeFund Intelligence.

Assets under funds in Singapore fell by just over $1 billion to $19.8 billion in the first half, while those in Japan saw assets plunge by 41 percent to $5.72 billion, the survey showed.

"Unless Asian managers can bring in the same outlier returns that attracted investors to Asia in the first place, there is a possibility that we will see capital flow back to the recovering U.S. or to Europe, which appears to offer considerable value-driven investment opportunities at present," Dayal said.

The number of hedge funds in Asia rose to 816 from 788 at the end of 2011.

About 78 percent of the Asia-Pacific hedge fund industry assets are now managed from Asia, a major change from the past when a majority of the assets were managed out of the United States and London.


Source: Reuters