Hedge Funds 01 (Aug 08 - Nov 15)

[winston]

Asian hedge funds return 4.1 pct in Apr- Eurekahedge

SINGAPORE, May 21 (Reuters) - Asian hedge funds chalked up investment gains for a second consecutive month in April, rising 4.08 percent on average from a month ago, according to data compiled by hedge-fund tracker Eurekahedge.

The positive returns in April and March followed monthly losses in January and February and brought Asian hedge funds' gains to 4.16 percent in the four months to April 30, Eurekahedge said in a report on Thursday.

Asian hedge funds performed better than their counterparts in North America and Europe, which returned 3.62 percent and 3.79 percent in April, respectively.

But they lagged the main MSCI Asia ex-Japan stock index <.MIAPJ0000PUS>, which rose 15 percent in April and was up 14 percent in the four months to April 30.

Eurekahedge also said in its report that hedge funds globally saw net outflows of $25.1 billion in April, leaving the industry with assets of around $1.3 trillion.

[winston]

John Burbank's Passport Capital Adds Massive Gold Stake: 13F Filing Q1 2009

This is the 1st Quarter 2009 edition of our ongoing hedge fund portfolio tracking series. Before reading this update, make sure you check out the Hedge Fund 13F filings series preface.

http://www.marketfolly.com/2009/06/john ... -adds.html

[millionairemind]

After the fiasco at LTCM, I am surrpised ppe. still give him money to manage???

Meriwether Said to Shut JWM Hedge Fund After Losses (Update1)
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By Katherine Burton and Saijel Kishan

July 8 (Bloomberg) -- John Meriwether, who roiled global markets when Long-Term Capital Management LP collapsed in 1998, plans to shut his current hedge fund, according to a person familiar with the matter.

JWM Partners LLC is closing its main Relative Value Opportunity II fund after losing 44 percent from September 2007 to February 2009. Meriwether, credited with generating billions of dollars of revenue at the former Salomon Brothers in the 1980s through so-called relative value trades, returned an average of 1.46 percent a year with his new fund since opening in 1999, compared with 2.4 percent for the Credit Suisse/Tremont Hedge Fixed-Income Arbitrage Index.
http://www.bloomberg.com/apps/news?pid= ... QBxVSIpVuA

[winston]

Man Group investors pull out $1.4 billion By Laurence Fletcher

LONDON (Reuters) - Man Group (EMG.L), the world's biggest listed hedge fund firm, said investors have continued to withdraw their money although private investor sales have picked up, as flows in the battered industry slowly improve.

Investors pulled out a net $1.4 billion in the three months to June, the firm said, helping push assets down to $43.3 billion.

However, the company, which saw net withdrawals from both institutions and private investors in the six months to March, had net inflows of $1.9 billion from private investors countered by net outflows of $3.3 billion from institutions in the three months to June.

Man Group said gross redemptions from private investors were "considerably lower" than in the previous two quarters.

So far in the current quarter to September, a spokesman said Man has paid out $1.8 billion in institutional outflows.

The shares were up 0.9 percent at 241.5 pence at 0742 GMT (3:42 a.m. EDT), slightly outpacing gains in the FTSE 100.

UBS analyst Carolyn Dorrett said in a note that private investor sales were helped by three product launches based on its AHL managed futures strategy in April.

Funds under management at end-June were $43.3 billion, down from $44 billion at the end of May, and were helped by positive currency movements.

Private investors have generally been quicker than institutions to pull their money from the $1.3 trillion hedge fund industry and slower to return.

At last month's GAIM conference in Monaco speakers said the immediate outlook for flows was tough, although institutional investors could re-enter the market before the end of the year. In May chief executive Peter Clarke said he expected redemption requests from institutional investors to "shift significantly downwards from here." In the year to March the company saw net outflows of $2.1 billion.

"Man's financial strength and investment breadth means we are well placed to grow market share," Clarke said in the statement.

[winston]

Asian hedge funds returned 1.79 pct in June -Eurekahedge

* Japanese hedge funds returned 2.14 percent
* Investors switch from fund-of-funds to single hedge funds

SINGAPORE, July 22 (Reuters) - Asian hedge funds were up a fourth straight month in June, rising an estimated 1.79 percent, on the strength of gains in Chinese and Japanese stocks, hedge-fund tracker Eurekahedge said.

The positive returns in June, which is based on preliminary data, brought gains since the start of 2009 to 13.96 percent.

Japan hedge funds gained 2.14 percent, North American funds edged up 0.60 percent, European funds lost 0.15 percent and Latin American funds returned 1.19 percent, the Singapore-based firm said in a statement on Wednesday.

Eurekahedge publishes a series of indices on a monthly basis, measuring the returns of hedge funds by region and investment strategy. The firm has a database of over 7,900 hedge funds.

(website: www.eurekahedge.com/indices/hedgefundindices.asp)

According to the Singapore firm, hedge funds globally attracted net inflows of over $6 billion for a second consecutive month in June, indicating a turnaround in investor appetite for such investments.

In a report to clients, Eurekahedge said investors in fund-of-hedge-funds have started putting money directly into single hedge funds in the hope of getting better returns at lower costs.

"This opinion is based mainly on continuous, significant outflows from funds-of-funds even while hedge funds are attracting capital," the firm said.

Shanghai stocks <.SSEC> gained 12 percent in June, while Japanese stocks <.N225> rose around 4.6 percent.

[winston]

Porter Stansberry: Why hedge funds will always fail
By Porter Stansberry in the S&A Digest:

"Maybe what we should have done was not bought it," said Steve Feinberg, co-founder of hedge fund Cerberus Capital Management, in regard to his firm's ill-fated 2007, $7 billion purchase of Chrysler. Longtime readers will recall my sarcastic quarterly letters from the "chairman" of General Motors from exactly the same period.

Using the satiric voice of the "chairman," I explained a serious fact: GM couldn't afford the $5 billion in interest it owed on its debts each year. And as its credit rating fell, its interest expenses would rise, resulting, inevitably, in a bankruptcy filing.

Although you had to be able to read financial statements to determine these facts, it didn't take much more than common sense to realize a company that hadn't earned enough money to pay the interest on its debts since 1992 and had added to its debt pile in 19 of the last 20 years probably wasn't going to make it.

Here's the incredible part: Chrysler's debt load was even larger. It would have to earn $10 billion a year, just to pay the interest on its obligations.

With the Cerberus-Chrysler story in the back of your mind... allow me to share two secrets I know to be true about hedge funds.

First, they are all destined to fail. And second, the entire industry consumes capital. Thus, while you might make money on a given fund, in total, hedge-fund investors are destined to lose money.

Why? Hedge funds are doomed by the Peter Principle. The Peter Principle, you'll recall, is that in the corporate world people tend to be promoted to the point of incompetence. Someone who is a really good salesman isn't necessarily a good manager. Someone who is a good manager isn't necessarily a good corporate executive. And someone who is a good corporate executive isn't necessarily a good CEO. But nobody knows where they'll top out in ability before it's too late. The same thing is true with hedge funds - with catastrophic financial consequences.

In the case of Cerberus, Steve Feinberg was a great distressed (junk) bond investor. Michael Milken trained him. He has an unbelievably high I.Q. and beat almost anyone in chess - blindfolded. This gave him a valuable edge in the debt market and attracted a large and powerful group of investors.

They promoted Feinberg, in terms of capital and influence, into the top rung of the hedge-fund world - where he failed miserably. He reached his Peter level. And his investors lost $6 billion last year. While I don't know it for a fact, my guess is that's more money than Cerberus earned, in total, to date.

Here's how it happens: These fund managers pile their gains up and reinvest their capital in their next big trade. But... sooner or later they reach a level of capital under management that requires them to move into new areas. And eventually, they blow up.

I know of only one hedge-fund manager who cashed out of his entire fund near the top in 2007. Only one.

[winston]

Asia hedge funds gained 4.15 pct in July - report

* Asia hedge funds up 18.76 pct in 2009
* Global hedge fund assets up for third straight month

SINGAPORE, Aug 19 (Reuters) - Asia-focused hedge funds posted positive returns for a fifth straight month in July, gaining an estimated 4.15 percent on the back of a rise in regional stock markets, hedge-fund tracker Eurekahedge said on Wednesday.

Asia-themed funds have gained 18.76 percent on average since the start of this year, recouping a large part of the 20.74 percent loss in 2008, the Singapore-based research firm said in a statement.

Japan hedge funds returned 0.74 percent, North American funds rose 1.99 percent, while European funds were up 2.01 percent.

Overall, hedge funds around the world registered an average gain of 2.25 percent in July for a seven-month return of 12.02 percent.

Eurekahedge publishes a series of indices on a monthly basis, measuring the returns of hedge funds by region and investment strategies. The firm has a database of over 8,000 hedge funds.

(website: www.eurekahedge.com/indices/hedgefundindices.asp) Eurekahedge said hedge funds assets globally rose for a third consecutive month, rising nearly $11 billion in July to $1.35 trillion.

The gains were due primarily to investment returns of about $8.5 billion, while net inflows were around $2.1 billion as fresh subscriptions of $15 billion was offset by $12.9 billion in redemptions.

[winston]

Cerberus clients overwhelmingly want out: report

BOSTON (Reuters) - Cerberus Capital Management has been swamped with redemption requests with the Wall Street Journal reporting that investors are asking to pull out $5.5 billion or 71 percent of assets from its hedge funds.

Cerberus last month tried to entice investors into staying with the firm, but found that its clients overwhelmingly wanted to leave, the newspaper reported.

"We have been surprised by this response," Cerberus chief Stephen Feinberg and co-founder William Richter wrote in a letter delivered to clients late on Thursday, according to the newspaper.

A spokesman for the firm was not immediately available for comment.

The bulk of investors elected to put their money into a fund that will liquidate hard-to-sell assets over time.

The news comes as several prominent hedge fund managers have closed their funds and as investors are less willing to leave their money locked up in potentially risky hedge funds.

Last year, when the average hedge fund lost 19 percent, Partners lost 24.5 percent on investments.

[winston]

Stats of the week: 6

Number of "substantive complaints" the SEC received regarding Bernie Madoff's Ponzi scheme from 1992 to his confession last year.

An oversight committee just reported "a thorough and competent investigation or examination was never performed" in response

[kennynah]

why are hedge funds called "hedge" funds? why not just call it "investment funds"?