Hedge Funds 01 (Aug 08 - Nov 15)

[kennynah]

thanks mm....

[winston]

Sparx to Miss 2011 Asset Target on Market Rout, CEO Abe Says By Tomoko Yamazaki and Komaki Ito

Jan. 26 (Bloomberg) -- Sparx Group Co., Asia’s biggest hedge-fund manager, will miss its asset management target of 5 trillion yen ($57 billion) by March 2011 because of redemptions and losses amid the global market rout.

The firm has cut costs to counter the biggest market losses since the Great Depression, an effort that hasn’t prevented its total assets under management shrinking to 753 billion yen as of Dec. 31 on a preliminary basis, or about a third of the peak of 2 trillion yen in August 2006.

“Realistically, it’s going to be extremely tough” to meet the target, Shuhei Abe, the chief executive officer of the Tokyo- based firm, said in an interview on Jan. 23. “There is still room to cut more costs, while we also have to prepare for other unexpected events going forward.”

The firm, whose shares hit a record low last week, hasn’t ruled out additional voluntary retirement packages to reduce costs, Abe, 54, said. Sparx in November said it would close its London-based Sparx Asset Management International Ltd. and retreat from the U.S. market, except for mutual-funds, cutting fixed annual costs to 7.8 billion yen from 10.2 billion yen.

The company in October cut executive compensation, reviewed salaries and asked about 20 staff to take voluntary retirement.

On a parent basis, Sparx aims to raise its assets under management to 600 billion yen, which is the break-even point, Abe said. Parent assets under management stood at 438.1 billion yen as of Dec. 31.

‘Very Difficult Time’

Sparx had a loss of 1.15 billion yen in the six months ended Sept. 30, from a profit of 113 million yen a year earlier. It plans to release its third-quarter earnings on Feb. 10.

“Redemptions have peaked, but it doesn’t change the fact we still face very difficult times,” Abe said.

As the California Public Employees’ Retirement System, known as Calpers, dissolved a fund that it operated with Sparx last year, the fund manager has sought new overseas investors, including sovereign wealth funds in the Middle East, Abe said.

“Middle Eastern sovereign wealth funds are very important source of capital for us,” Abe said. “They are looking for investment opportunities in alternative energy and Japan has yet to provide its technology to those nations.”

Sparx will seek investment opportunities in energy, environment and agricultural businesses where Japan has strengths, Abe said, declining to name specific companies.

Shares

Sparx declined 1.2 percent to 10,250 yen on the Jasdaq exchange, as of the 11:00 a.m. break in Tokyo.

The stock on Jan. 16 slid to 9,770 yen, the lowest since listing in December 2001. The stock has fallen more than 70 percent in the past year, compared with the 43 percent drop in the benchmark Topix index.

Sparx was ranked by Alpha magazine as Asia’s largest hedge- fund manager at the end of March last year.

Hedge funds are private, largely unregulated pools of capital whose managers can buy or sell any assets, bet on falling as well as rising asset prices and participate substantially in profits from money invested.

[winston]

Meltdown takes heavy toll on regional hedge funds

The number of hedge funds focused in the mainland, Hong Kong and Taiwan fell 23 percent since March, as record stock market slumps pummeled performances, said HedgeFund.Net.

The number of so-called single-strategy funds included in the HFN China Average index declined to 48 from 62, the New York- based industry performance data provider said. Hedge fund assets primarily invested in the region shrank by more than a third to US$14.9 billion (HK$116.22 billion) in the year to September, after quadrupling between the end of 2005 and September 2007, it added. This came as Hong Kong- listed China stocks suffered the steepest fall in 14 years in 2008.

This drop reflects rising liquidations from the hardest-hit funds. The HFN China Average index finished 2008 down almost 35 percent. Fourteen of the remaining funds in the index dropped at least 50 percent, with the worst-performer retreating 95 percent, HedgeFund.Net said.

Only four of the surviving funds posted positive returns for the year. BLOOMBERG

[winston]

Yes, I quite like the Principles-Based regulations than Rules-Based regulations.

Example: If you tell your staff that they can spend a max of Sin$300 per person when entertaining a client, the bill would always come in close to the maximum. However, when you tell him that he would be monitored based on reasonableness without a cap, the bills is always lower...

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Prince Andrew says Madoff 'couldn't happen' in Britain

LONDON: Prince Andrew, Britain's special representative for international trade and investment, told the Financial Times on Friday that the alleged fraud by US financier Bernard Madoff could never happen in London.

"Madoff couldn't happen in London. It could never get to that scale," the Duke of York – Queen Elizabeth II's third child – told the FT from the World Economic Forum in Davos.

He said Britain's principles-based regulatory system – where companies have to follow broad principles, rather than the rules-based approach in the United States where they are told exactly what they can and cannot do – meant something like that would have been spotted a lot earlier.

The prince said London was well-regulated, despite recent financial crises, saying: "There are failings in the regulatory system but that's less to do with the regulations themselves than the application of the regulations."

Madoff, a former chairman of the Nasdaq stock market, was arrested last month after allegedly confessing to a 50-billion-dollar pyramid fraud.

- AFP/so

[kennynah]

this is a digression...

if you are keen to learn the nomenclatures of the royals and nobles..eg... emperor, prince, grand duke, duke, margrave, count, viscount, baron, earl, etc...

here's the link... http://www.heraldica.org/topics/odegard/titlefaq.htm

[winston]

Ackman’s Target Fund Falls 40.1 Percent in January (Update1) By Katherine Burton

Feb. 6 (Bloomberg) -- William Ackman’s hedge fund that invests solely in Target Corp. fell 40.1 percent in January, bringing the loss since inception to 89.5 percent, according to a letter sent to investors.

The decline in Pershing Square IV fund was about four times that of Target shares in January because Ackman made his bet using options rather than owning the underlying stock, which tumbled 9.6 percent. Ackman said he will personally add another $25 million to the fund, and employees and board members will put up more cash.

“While PSIV and Target stock have declined materially, we still believe our fundamental investment case for Target stock will ultimately be realized, although not within the original timeframe we had initially estimated,” he wrote in the letter dated Feb. 5.

Ackman, 42, an activist investor, has pushed management of Minneapolis-based Target to place the land under its stores into a real estate investment trust that would lease the property back to the retailer. The company could then sell part of the REIT to the public, raising an estimated $5.1 billion. Target management has rejected the proposal.

Fund Restructured

At the end of January, Ackman restructured the fund’s portfolio using longer-dated options that expire in January 2011. If the share price rises to at least $65 in the next two years from its current level of about $33, the fund’s value could jump by four times, Ackman said. If the stock is below $35 in two years, investors will likely be wiped out.

Investors will be allowed to take money out of the Target fund if they notify New York-based Pershing Square Capital Management LP by Feb. 11, the letter said.

How much investors will get back depends on how many clients ask to leave, and whether the fund, which started in 2007 with $2 billion, attracts new investment.

“It’s going to be hard to defend his reputation when he’s down that much,” said Brad Balter, head of Boston-based Balter Capital Management LLC, who farms out money to hedge funds.

Ackman estimated in the letter that clients who want to exit could get back as little as 15 percent of their money. Ackman declined to comment.

Ackman’s main fund, Pershing Square International Ltd., declined 12 percent last year, losing money on consumer and retail stocks including Target and Borders Group Inc. and making money betting against bond insurers including MBIA Inc.

[iam802]

Ackman’s Target Fund Falls 40.1 Percent in January (Update1) By Katherine Burton

Feb. 6 (Bloomberg) -- William Ackman’s hedge fund that invests solely in Target Corp. fell 40.1 percent in January, bringing the loss since inception to 89.5 percent,[/b] according to a letter sent to investors.

...

Why do people want to put money in a fund that invests solely in 'Target' (or one company , it is one company..., right??)

Am I missing something here? Can't people just buy the stock themselves?

[winston]

Any news on the Hedge Funds redemption for Apr 1 ? The deadline is Feb 15.

My impression is that Hedge Funds redemption is not as bad as expected unlike the last quarter.

[winston]

UBS sees 35 pct drop in hedge fund assets from peak

SINGAPORE, Feb 17 (Reuters) - Global assets of hedge funds may drop to $1.2 trillion by the end of the first quarter, down 35 percent from 2007 as the number of managers decline and funds rely less on strategies that use leverage, a UBS executive said on Tuesday.

"We are gonna see a reduction in hedge fund assets, we are gonna see decline in the number of hedge funds, we are gonna see some strategies that will not work in this environment," Timothy Bell, global head of hedge funds advisory at UBS Wealth Management, told reporters in Singapore.

Hedge funds had assets worth $1.9 billion at the end of 2007, which peaked at $1.93 trillion in the middle of 2008, according to data from Chicago-based Hedge Fund Research. These assets dropped to $1.4 trillion at the end of 2008.

Investors pulled $155 billion out of hedge funds last year, punishing the once hot asset class for delivering its worst-ever returns of nearly 21 percent, data shows. [ID:nN21474179] Bell said investors could benefit from contraction in the industry because there would be less capital and better managers chasing opportunities that could drive absolute return, as well as less focus on investments that rely on heavy borrowings.

Macro strategies on economic outlook, managed futures and the traditional long or short strategies would be in focus, he said.

Bell said investors could see better terms for less liquid strategies such as arbitrage and distressed debt.

The HFR Fund of Funds Composite Index dropped 20.68 percent in 2008, the industry's worst ever losses, hit by declining stock markets, sharp volatility in oil markets, the collapse of Lehman and temporary restrictions on short selling.

Hedge funds started the year with small gains, outperforming a declining stock market in January.

[millionairemind]

published February 18, 2009

Hedge funds could be US$192b poorer

(SINGAPORE) Hedge-fund assets will likely drop by about US$192 billion this quarter after the industry's record losses last year, according to estimates by UBS.

Global assets will likely fall to US$1.215 trillion in the first quarter, said Timothy Bell, London-based head of hedge funds advisory at UBS's wealth management unit. Hedge fund investors withdrew a record US$152 billion in the fourth quarter, pushing industry assets to US$1.407 trillion at the end of 2008, according to Hedge Fund Research Inc.

'That trend is going to keep going certainly till the end of this first quarter,' Mr Bell said here yesterday. 'Trust will be re-established by mid-year, provided the hedge fund industry does what it's meant to do; January was a shining example of the lack of correlation.' Hedge funds had an average return of 0.4 per cent in January, compared with an 8.6 per cent plunge in the Standard & Poor's 500 Index.

Investments by hedge funds lost about 19 per cent last year, according to the Chicago-based Hedge Fund Research, the most since it began tracking data in 1990. Assets peaked at US$1.93 trillion in June.

'The compound growth rate in 2005 to 2007 was 35 per cent per annum,' Mr Bell said. 'If you extrapolate that over 10 years it can get to US$26 trillion; it can't keep growing at the rate.'

Still, the industry will likely emerge stronger this year with less competition after hedge fund assets and banks' proprietary trading desks shrank, Mr Bell said.

'You've got less capital and better trading opportunities,' Mr Bell said. 'You're seeing systemic risks being reduced' after governments injected liquidity into the system.

Hedge fund strategies such as equity and macro, which typically invests in highly liquid markets such as currencies and bonds, will gain in popularity, Mr Bell said. -- Bloomberg