Hedge Funds 01 (Aug 08 - Nov 15)

[winston]

Asia Hedge Funds Face a Year of Attrition By Netty Ismail and Bei Hu

Asia’s hedge-fund industry is set to shrink in 2012, after a year in which growth stagnated, performance faltered and managers struggled to raise capital.

There were 123 Asian hedge funds that closed in the first 10 months of 2011, compared with 125 in all of 2010 and a record 184 in 2008 when the collapse of Lehman Brothers Holdings Inc. (LEH) roiled markets, according to Singapore-based data provider Eurekahedge Pte.

Artradis Fund Management Pte, once Singapore’s biggest hedge fund, shut, while managers returning money to investors included CoreVest Partners and Kilometre Capital Management Ltd.

Asia’s hedge funds are dwindling as most managers haven’t made money as a business or for investors, said Peter Douglas, principal of Singapore-based GFIA Pte. Hedge funds in the region manage $125 billion, lower than the peak of $176 billion in 2007, according to Eurekahedge.

Asian hedge funds lost (EHFI38) on average 8.7 percent in 2011 through November, their second-worst (EHFI38) year on record, according to Eurekahedge.

The MSCI Asia Pacific Index (MXAP) declined 17 percent during the same period amid concern that the European sovereign- debt crisis would lead to a global slowdown.

Difficult Climate

Asian hedge fund startups also slowed. There were 122 new hedge funds in the region last year through October, compared with 183 in all of 2010, according to Eurekahedge.

Institutional allocations have preferred bigger managers. Most of the $18.2 billion in capital inflows since the second half of 2009 went to larger funds, Eurekahedge said in a report in October.

Money is also flowing to the Asian desks of global hedge funds. Global-mandated funds accounted for 19 percent of the assets in Asia’s hedge-fund industry as of August, compared with 12 percent in 2007, according to Eurekahedge.


http://www.bloomberg.com/news/2012-01-0 ... -2008.html

[winston]

Exclusive: Former Goldman trader Sze's Asia hedge fund down by Nishant Kumar

HONG KONG (Reuters) - A hedge fund set up by former Goldman Sachs <GS.N> trader Morgan Sze -- the biggest launched in Asia in 2011 -- lost 6.8 percent last year, two sources with direct knowledge of the matter told Reuters, as it was rattled by a sharp drop in Chinese shares.

The Hong Kong-based multi-strategy hedge fund, Azentus, which can invest globally but focuses mainly on companies related to Asia, had a blockbuster start with assets of about $1 billion on April 1 last year and now manages $1.9 billion. Its performance is keenly watched in the regional industry.

By comparison, the Eurekahedge Asia Multi-Strategy index was down 4.9 percent between April and December last year, while regional hedge funds lost about 9 percent during the period.

Azentus had a good first six months up until the last week of September when it lost money big time, primarily from its exposure to China, one of the sources said.

Chinese shares as measured by the MSCI China Index <.dMICN00000PUS> plunged 20 percent last year on fears of a global downturn, accounting scandals at U.S.-listed Chinese firms and a mountain of local government debt, raising worries on the health of Chinese banks.

The hedge fund had a light exposure to China's 'A' shares and most of its losses came from investments in the Chinese stocks listed in the United States, the source said.

Azentus's Chief Operating Officer Roger Denby-Jones declined to comment. The sources were not authorized to speak to media.

U.S.-listed Chinese firms such as Baidu Inc <BIDU.O>, Sohu.com <SOHU.O> and SINA Corp <SINA.O> plunged between 27 percent and 41 percent in September.

Started by Sze, former head of Goldman's Principal Strategies group, Azentus Capital Management was one of the biggest hedge funds to launch since the onset of the credit crisis and one of the most high-profile in Asia.

The fund lost 1.4 percent in December and 1.7 percent a month earlier and is headed into 2012 with about 120 percent gross exposure, one of the sources said. Gross exposure refers to the sum of long and short positions of a hedge fund.

FORGETTABLE YEAR

Hedge funds globally recorded one of their worst annual performances ever in 2011, with the average fund down 4.8 percent, according to data from Hedge Fund Research.

This marks only the third calendar year since HFR began measuring industry-wide performance in 1990 that hedge funds have finished in the red.

Some of the high-profile names in the global industry stumbled, with John Paulson losing more than half of the capital in one of his firm's biggest funds last year.

Source: Reuters US Online Report Business News

[winston]

Hedge Funds to Draw $80 Billion in 2012, Most in Five Years, Barclays Says By Bei Hu

Investors may add about $80 billion of new capital to hedge funds globally this year, the most since 2007, Barclays Plc (BARC) said in a report.

About 56 percent of investors surveyed by Barclays plan to increase such investments in the coming year, more than seven times the number that plan to reduce their allocations, the U.K. bank said in an e-mailed statement dated Jan. 13. Endowments, foundations, private banks and public pensions will most likely be the sources of new capital to the industry, it said.

Global macro and systematic and volatility funds may be the biggest recipients of new capital as investors look to allocate money to short-term traders with lower correlation to stock markets, it said.

In terms of size of the funds, investors will continue to increasingly put more money into hedge funds with less than $1 billion of assets this year, Barclays said. Smaller funds already doubled their share of the net industry inflows to 18 percent last year over 2010, it said.

“Smaller managers are frequently seen by investors to be more agile in adapting their existing strategies to generate alpha,” said Louis Molinari, head of capital solutions within Barclays’ prime services division.

‘With the greater transparency and better fee and liquidity terms that many new and smaller funds offer, investors continue to gain confidence with investing in this segment of the hedge fund industry.”

The Barclays report was based on interviews and a survey of investors at a symposium in New York with about $4 trillion of assets under management, including $500 billion in hedge funds, or a quarter of industry assets, it said in the statement.


http://www.bloomberg.com/news/2012-01-1 ... -says.html

[winston]

Hedge Fund Loss at Merchant Snaps Seven Gains in ’Ugly Year’: Commodities By Chanyaporn Chanjaroen

Michael Coleman is suspending a three-decade trading career to focus on risk, after a year in which the Merchant Commodity Fund he co-founded lost 30 percent and its assets contracted twice as much.

Assets fell to about $550 million last month, from $1.56 billion at the end of 2010, said Singapore-based Coleman, who gave up trading to become chief risk officer.

The biggest losing bet was in sugar before a 10-month decline ended with winning wagers in oil, fuels, sugar and soybeans, he said. The assets of the hedge fund, started in June 2004 with $10 million, are now traded mostly by co-founder Doug King.

The average fund tracked by the Newedge Commodity Trading Index (NEIXCTI) lost 4.2 percent last year, beating Merchant for only the second time in seven years.

“The problem was that we were wrong,” said Coleman, the 51-year-old son of a plumber from Lancashire in northwest England who graduated from Oxford University in 1982. “The cause of our loss came from a few changes in supply and demand, nothing dramatic. Normally we have seven wins to three losses. Last year, we were down to four wins to six losses.”

Global commodity investments climbed $19 billion to $399 billion last year, according to Barclays Capital, which measures money in exchange-traded products, index swaps and medium-term notes.

Inflows fell to $15 billion from $67 billion in 2010, the weakest since 2002, the bank estimates.

“If you have been in a business for a long time, you have a mechanism of living through what is unpleasant,” Coleman said. “If you get beat 5-0 last week, you’re not so keen to play next week. That’s why it’s important to stop compounding negative as soon as possible.”

http://www.bloomberg.com/news/2012-02-0 ... ities.html

[kennynah]

the evolution of hedge funds

[iam802]

Anyone can setup a hedge fund company.

It is not as regulated. The only difference is the amount of money that is managed.

[winston]

Singapore Judge Signs Off On 3 Degrees Death Warrant

Hedge fund 3 Degrees Asset Management may be on borrowed time.

The Singapore-based firm lost its appeal of an order to close. The hedge fund was found to have improperly channeled money into a company controlled by founder Mohamed Ibrahim.

http://www.finalternatives.com/node/19711

[winston]

UBS trader Satur to start A$500 mln hedge fund-sources

HONG KONG/SYDNEY, Feb 27 (Reuters) - UBS AG's chief investment officer for macro strategic trading in Australia, Gerard Satur, is preparing to spin out of the Swiss bank next month to start his own hedge fund MST Capital, three sources familiar with the matter told Reuters.

Satur, who earlier headed the securities arm of UBS in Australia and the equity trading divisions in the United States, is setting up the macro hedge fund and seeking to raise up to A$ 500 million ($535 million), the sources said.

A UBS spokeswoman declined comment. Satur could not be reached for comment.

The sources declined to be identified as the matter was private.

Source: Reuters

[winston]

No wonder volume is down ...

FBI sees more hedge fund trading probe informants by Grant McCool


NEW YORK (Reuters) - The FBI says it has enough informants lined up to keep its investigations of suspected illegal insider trading at hedge funds going for at least five more years.

In a briefing on Monday with reporters at the New York office of the Federal Bureau of Investigation just blocks away from Wall Street, agents who manage squads of investigators likened the probes to penetrating a secret society.

http://www.newsmeat.com/news/meat.php?a ... &buid=3281

[winston]

From Fast Money, CNBC:-

How have hedge funds fared this year?

Scaramucci said they have lagged behind a bullish market that has raced up 25% in three months.

He said it's been a difficult time for hedge funds and predicted a period of consolidation for them this year.

He said the trades that worked so far for the hedge funds are the reflation trades with a bias toward the euro crisis abating.

He also said the funds are into credit sensitive mortgage-backed seucrities and distressed equities.

Source: The Street