Hedge Fund Video Library | 30+ Free Videos on Hedge Funds by Richard Wilson

Currency Hedge Funds

Currency Hedge Funds

Currency Funds May Face Investor Backlash After 2011

Hedge fund investors are gradually moving away from currency funds in response to poor returns from currency-focused strategies in the last year.  Toward the end of 2011, investors withdrew money from smaller currency and placed their capital with larger funds, but most currency funds suffered some losses last year with the debt crisis and large fluctuation between different currency values.
In the final months of 2011, hedge-fund investors withdrew from smaller hedge funds, which are more likely to be currency specialists, and plowed money into bigger funds that invest across many markets. The net outflow from funds managing between $250 million and $500 million was $989 million in the fourth quarter, while funds that oversee over $5 billion saw an inflow of $6.8 billion, according to Hedge Fund Research Inc. 
Last year was tough for hedge funds of all shapes and sizes, particularly the summer months. Europe's sovereign debt crisis and the political battle over reducing U.S. debt made markets hard to predict. Prices of financial assets tended to move in lockstep, making it hard for money managers to diversify. 
The HFR data suggest some investors may have moved cash from smaller specialist funds to bigger, more mainstream funds after the third quarter's turmoil, most likely because bigger funds often make investments across markets and are perceived as sturdier. 
"In a risk-averse environment, people are more inclined to invest in generalist managers," said Kenneth Heinz, president of HFR. Source

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Hedge Funds Greek Bonds

Hedge Funds Greek Bonds

Hedge Funds Look to Unload Stockpile of Greek Bonds

While some hedge funds with large amounts of Greek debt have turned to the courts to turn a profit on Greek debt after news of a probable haircut, other hedge funds are simply trying to exit the position selling off Greek debt as fast as possible.  This is according to traders and brokers, many hedge funds bought Greek debt (some $5.2 billion worth) last month but now they are trying to offload those bonds ahead of their March 20 maturity date.
Hedge funds that in the last month or so have purchased an estimated 4 billion euros ($5.2 billion) of beaten down Greek bonds that mature on March 20 are now trying to unload their positions, according to brokers and traders. 
That is because it is becoming clear to one and all that Greece — under pressure from its financial backers — is preparing to impose a broad-based haircut that would hit all investors with a loss of 50 percent or more, whether they agree to the deal or not. 
The problem is that while buying the bonds over the last few months was easy, as many European banks were unloading their positions, getting out now is proving to be near impossible. Liquidity has dried up and investors are avoiding Greek paper as if it were the plague. 
The poor outlook for early maturing Greek bonds was compounded on Wednesday when Christine Lagarde, managing director of the International Monetary Fund, said the public sector might have to participate in a restructuring deal with private sector creditors. Source

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The Costs of Starting a Hedge Fund

Costs of Starting a Hedge Fund

The Costs and Compliance of Starting a Hedge Fund

I recently came across the following video interview with Ingrid Pierce, a partner at Walkers, a law firm specializing in starting a hedge fund.  Ms. Pierce speaks on the costs and compliance of starting a hedge fund, such as registration costs and the costs of keeping up with regulations and compliance.  The time it takes to start a hedge fund is a big factor that Ms. Pierce advises her clients to factor into their decision, as it often takes a longer time to start a hedge fund than people expect.  Also, she talks about factors such as hiring a fund administrator and different investor classes. If you are reading this via RSS or email, please follow this link to view the video.



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Hedge Fund Redemption Requests

Hedge Fund Redemption Requests

Hedge Funds See Record-Low Redemption Requests

Hedge fund redemption requests fell to record-lows as investors decided to keep their money with their current managers.  Two factors have been attributed to this trend: first, the improving market conditions and investor sentiment; second, the seasonal drop in asset reallocation, according to GlobeOp.
Redemption requests by hedge fund clients have fallen to the lowest monthly level on record as improving market sentiment combined with a typical seasonal lull in asset re-allocation, data shows. 
The GlobeOp Forward Redemption Indicator, a monthly snapshot of clients giving notice to withdraw their cash as a percentage of GlobeOp's assets under administration, measured 1.85 percent in the January report, down from 4.58 percent in the December report, which shows requests to redeem funds in January, which is typically a period of heavy re-allocation. 
That is the lowest recorded since the January report in 2008, when GlobeOp began compiling the index. 
January report notifications were also substantially lower than the same time last year, when requests stood at 2.79 percent. 
"It's more to do with a reallocation of investments. People take money out in January and redeploy it in February and March," GlobeOp Financial Services (GO.L) Chief Executive Hans Hufschmid said. Source

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Hedge Funds Sue Greece

Hedge Funds May Sue Greece

Hedge Funds Look to Sue Greece over Bond Payments

Among the many solutions discussed by the hedge funds looking to prevent a Greek debt restructuring was an interesting, although not very feasible solution: sue Greece in the European Court of Human Rights.  This highlights the lengths at which these funds might go to ensure bond payments from Greece.  Greece is considering legislation that would force private bondholders to suffer losses, not including its largest bondholder: the European Central Bank.
The novel approach would have the funds arguing in the European Court of Human Rights that Greece had violated bondholder rights, though that could be a multiyear project with no guarantee of a payoff. And it would not be likely to produce sympathy for these funds, which many blame for the lack of progress so far in the negotiations over restructuring Greece’s debts. 
The tactic has emerged in conversations with lawyers and hedge funds as it became clear that Greece was considering passing legislation to force all private bondholders to take losses, while exempting the European Central Bank, which is the largest institutional holder of Greek bonds with 50 billion euros or so. 
Legal experts suggest that the investors may have a case because if Greece changes the terms of its bonds so that investors receive less than they are owed, that could be viewed as a property rights violation — and in Europe, property rights are human rights. Source

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Relative Arbitrage Investors

Macro Relative Arbitrage Investors 

Hedge Fund Investors Look to Macro and Relative Arbitrage

Hedge fund investors continued to place their money with hedge fund managers in the final quarter of 2011, despite a relatively volatile year for hedge funds and the markets in general.  After surpassing the $2 trillion milestone in Q1, assets fell below that mark as the year progressed only to finish at $2.01 trillion.  Hedge fund investors focused most of their money on macro and relative arbitrage investors, withdrawing from equity funds in Q4.
After a shaky start to the year, investors contributed more money in the fourth-quarter to their favorite hedge fund managers, according to a yearly review released today by Hedge Fund Research Inc. The report found that: 
Total capital invested in the hedge fund industry regained the $2 trillion milestone.
The industry originally eclipsed $2 trillion in assets under management in the first-quarter, then peaked at $2.04 trillion at mid-year before declining to $1.97 trillion to end a volatile third-quarter. 
Total hedge fund AUM finished the year at $2.01 trillion, as Q4 performance gains offset a nominal net capital outflow of $127 million. 
For the full-year 2011, investors allocated $70 billion of net new capital to hedge funds.
HFR’s report termed it “a volatile performance year.” 
The HFRI Fund Weighted Composite Index declined by 5% percent, only the third calendar year decline since 1990.  Source

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Hedge Fund Greek Debt

Hedge Fund Greek Debt

Hedge Funds May Prevent Greek Debt Restructuring Deal

Reports suggest that five hedge funds threaten to upend the Greek debt talks.  The funds--reportedly New York's York Capital Management, Marathon Asset Management and Och-Ziff Capital Management Group, Florida's GreyLock Asset Management and Europe's Vega Asset Management--could prevent a restructuring deal for Greece unless they are guaranteed a "significant profit" on Greek bonds they purchased.
New York's York Capital Management, Marathon Asset Management and Och-Ziff Capital Management Group, Florida's GreyLock Asset Management and Europe's Vega Asset Management vowed to prevent a restructuring deal from going through if they were not guaranteed a significant profit on Greek bonds they bought at distressed prices, sources familiar with the talks told the British newspaper The Independent. 
The deal must go through this month or Greece could default as early as March, economists and policymakers said. 
With default pressure mounting and a European finance ministers' summit set for Monday, Greek and international officials signaled Tuesday they would yield to the bank and hedge fund demands to secure a bond deal this week, the British newspaper The Daily Telegraph reported.
Charles Dallara, managing director of Washington's Institute of International Finance, a bank lobby that represents private-sector bond holders, was in Athens Wednesday to try to agree on a deal before the Monday summit.Read more

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2012 Market Data Industry Outlook - 4 Major Trends all Leading to the Cloud

2012 Market Data Industry Outlook

4 Major Trends all Leading to the Cloud

By Peter Curley of Xignite.


In 2011 the cloud finally went from an unproven curiosity to an accepted mainstream technology solution. In 2012 we will witness the deepening penetration of the cloud into the consciousness of multiple industries.  The market data industry is an interesting case in point because the major industry trends are all pointing to the rapid adoption of an on-demand cloud-based market data solution.

Let’s review each of these trends individually to understand how important the cloud will be for the market data industry in 2012:

1. Market Data Supplier Economics

The suppliers of market data are in a state of flux. On one hand, the cost of business is soaring with the new technology resources required to support sky-rocketing message rates, microsecond execution, and new regulation. On the other hand, the exchanges are experiencing sluggish revenue growth. Traditionally exchanges had four distinct sources of revenue: 1.) execution; 2.) listings; 3.) clearing; and 4.) market data. Of these, only market data is growing, while the others have either completely dried up or are not likely to be a significant source of revenue in the future.  The exchanges have responded to these unfavorable economics with a wave of consolidation in an attempt to reduce costs but the health of the industry depends on growing the revenue side of the equation. The exchanges understand that their best revenue strategy is to distribute their most valuable asset, market data, direct to consumers. This strategy has already seen success with the exchanges offering direct feeds, co-location, and other services to their low-latency clients.

In 2012 we will see more exchanges begin to focus on the largely untapped segment of consumers who need market data, such as historical trade and quote data, but are not latency sensitive. This is potentially a huge revenue source for the exchanges and is ideally suited to the on-demand market data cloud. Forward-thinking exchanges such as CME DataCloud, Direct Edge EdgeBook Cloud, and NASDAQ Data-On-Demand, have already moved in this direction, but 2012 will be the year that many more exchanges embrace the market data cloud to sell directly to consumers.

(Read more about how the exchanges are embracing the cloud in our recent blog post - Cloud Strategy for Exchanges and Financial Markets.)

2. Market Data Consumer Economics

As with the suppliers of market data, consumers are also facing an uncertain future. For many consumers, particularly in the financial services industry, the whole process of data management has become overwhelming. The old model of bringing all market data in-house, so that it can be accessed quickly, is under considerable pressure. There is now simply too much data to do this cost-effectively. Another related issue is time to implementation. With intense competition, many investment firms require immediate access to global and multi-asset class market data. Unfortunately, the traditional method of having a vendor add a feed can be a very slow process. Investment firms require a much more nimble solution that allows them to quickly access discrete data sets.

In 2012 we’ll see more firms conclude that not all data should be brought in-house. This change in mindset will lead firms to become much more discerning about what data should be stored locally, and what data should be retrieved on an ad-hoc basis from a market data cloud.

3. Proliferation of Mobile Devices

It is clear that we are in the midst of a technological sea change as the world moves from an Internet that is tethered to desktop PCs, to one that can be accessed from anywhere, through a wide array of always-on smartphones and tablets. Many experts predict that by 2014 mobile Internet usage will overtake desktop Internet usage. Already in late 2011 we saw mobile-based local search overtake PC-based search. The mobile Internet revolution will affect the market data industry greatly as apps and websites designed specifically for these devices demand more and more market data. An on-demand market data cloud is ideally suited for this mobile revolution because mobile apps typically require only discrete on-demand data sets and app developers are not inclined to build their own data management infrastructures. In 2012 the market data industry will experience a huge uptick in demand from theses mobile devices.

(Read more about the proliferation of mobile devices as it relates to the buy-side The 3 Phase Evolution of Buys-Side Mobile Apps.)

4. Regulation

Regulation is always a factor in any discussion on trends in the market data industry. 2012 will be no exception, particularly because many of the regulations that were proposed in direct response to the financial crisis of 2008, will either be implemented, or will be at a point in the approval process where we will have a better sense of their likely impact. The main thrust of new regulations such as Dodd-Frank, the Volcker Rule, and Basel III, is to manage systemic risk and to force transparency across the financial services industry. All of the important industry players will be significantly impacted including the exchanges, the buy-side and the sell-side.  Complying with these new regulations will involve onerous and costly reporting requirements. These regulatory requests for data will serve to accelerate the adoption of on-demand cloud-based market data solutions because many of the players simply do not have the resources necessary to comply with these and future regulations. It is also likely that regulators themselves will favor cloud-based market data because it will promote industry best practices and transparency.


2012 will certainly be a year to watch for the market data industry and the adoption of the on-demand market data cloud model.  We can expect to see the 4 major trends outlined above to all converge to make this the year of the market data cloud.

This guest post was submitted by Peter Curley of Xignite a hedge fund market and reference data provider.

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Hedge Fund Investors 2012

Hedge Fund Investors 2012

1/6 of Investors to Move their Money from Current Manager

One sixth of the current hedge fund investors who participated in a recent Barclay's survey are less than satisfied with their current manager and expect to move their money next year to a different manager. The expected large shift in assets illustrates the challenges that many hedge funds will have in preventing in convincing their investors that performance will be better in 2012 and that they should keep their money invested with their current manager.
Hedge fund investors are likely to move almost a sixth of their cash into the hands of different managers in 2012, a report on Friday showed, as firms in the $2 trillion sector grapple with winning back the confidence of clients hurt by losses in 2011.

The report, conducted by Barclays (BARC.L) Capital, expects investors will move around $300 billion of assets from one strategy to another, or between different managers in the same strategy, next year.

Investors will also put some $80 billion of new money into the industry, according to the report, titled 'The Money Trail'.

This would constitute the largest annual net flow of assets into hedge funds since the financial crisis, but is still less than half the $195 billion investors ploughed into the industry in 2007, the report showed. Source

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Brevan Howard Top Hedge Fund

Brevan Howard Top Hedge Fund

Brevan Howard Lands in Top 100 Hedge Funds 4 Times

Brevan Howard has become a monster in the hedge fund space, perhaps the best evidence of this is the fact that four Brevan Howard hedge funds appeared in the Bloomberg Markets list of the top 100 best-performing hedge funds of 2011.  Bloomberg did a nice piece on Brevan Howard and how Alan Howard has steered that firm toward consistent success in the industry.
Today, the co-founder of the $32.6 billion hedge-fund juggernaut Brevan Howard Asset Management LLP still makes it his business to keep out of harm’s way. From Howard’s trading desk in Geneva, former colleagues say, he obsesses daily about fat- tail risks, black swans or the mere possibility that his economic outlook may be wrong.

In 2011, Howard’s risk aversion served him well. The $26.4 billion Brevan Howard Master Fund Ltd. returned a solid 10.8 percent for the 10 months ended Oct. 31, ranking the fund No. 20 in the Bloomberg Markets ranking of the 100 best-performing hedge funds.

The firm had three other funds on the large-fund list: the $1.7 billion Brevan Howard Asia Master Fund Ltd., at No. 31 with a 7.2 percent return; the $1.3 billion Brevan Howard Multi- Strategy Master Fund Ltd., tied at No. 43 with a 5.5 percent return; and the $2 billion Credit Catalysts Master Fund Ltd., tied for No. 74 with a 3.2 percent return. Source

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Hedge Funds Bonus 2011

Hedge Funds Bonus 2011

Hedge Funds Predict Year-End 2011 Bonuses to Decline

Hedge funds are banking on smaller year-end bonuses for 2011 despite a slight increase in compensation for the year.  It was a less than stellar year for many hedge funds, with just 16% of those surveyed in a recent compensation report saying their fund had double-digit performance, compared to 45% the previous year.
The 2012 Hedge Fund Compensation Report is based on data collected directly from hundreds of hedge fund managers and employees during October and November 2011. 
It revealed that average reported cash compensation for staff in the industry for 2011 was $311,000, just slightly higher than the previous year's compensation. 
However, those surveyed said they expected bonuses to be down for 2011, given a substantial decrease in year-on-year performance. Only 16% of respondents reported double-digit returns for their fund for the year to the date of the survey, compared with 45% the previous year. 
According to a UK-based headhunter, most hedge fund employees are likely to be told the amount of their bonus this month, and will be paid it in February or March, on the condition that none of it has been deferred.  Source

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Hedge Funds IMF

Hedge Funds IMF

Hedge Funds Spar with IMF over Greek Debt

A proposed IMF plan to swap Greek bonds and thus relieve some of the debt burden for Greece has run into a wall: hedge funds.  Hedge funds have built up a strong position on the Greek bonds and several are reportedly unwilling to agree to a solution that would involve a bonds swap.  However, if a deal does not materialize in time, Greece stands to lose out on its second bail-out package.
Bondholders need to give up some 100 billion euros ($130 billion) of their investment in the planned bond swap, drawn up in October, but many hedge funds plan to stay out of it. 
They either prefer letting the country go under, which would trigger the credit insurance they have bought, or hope to get paid out in full if enough others sign up. That puts them in direct conflict with the IMF, which wants to force Greece's cost of financing down to an affordable level. 
"The play is purely 'they'll be forced to pay me'. Greece will want to avoid a wider default. so if it managed to restructure 80 percent of the deal and pay the rest that's still better," said Gabriel Sterne at securities firm Exotix. 
Without a deal, the IMF, the European Union and the European Central Bank -- the so-called troika of official lenders -- will not pay out a second bail-out package Greece needs to survive.
EU Economic and Monetary Affairs Commissioner Olli Rehn said on Tuesday that negotiators were "about to finalize shortly". But time is running out. Source

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Hedge Funds Bullish Oil

Hedge Funds Bullish Oil

Hedge Funds Back to Being Bullish on Oil

Hedge funds are resuming bullish bets on the price of oil amid instability in the Middle East--particularly growing tension with Iran--and expected rising US demand.  A worsening dispute with Iran and signs of a recovering US economy have led many hedge funds to bet on a increase in the price of oil.  The shift comes after hedge funds largely exited the oil market in the final months of 2011.
Hedge funds that exited oil markets late last year have begun boosting bullish bets as tensions with Iran and reports of U.S. economic growth sent crude to the highest price since May.

The funds increased bullish positions 4.1 percent in the week ended Jan. 3, according to the Commodity Futures Trading Commission's Commitments of Traders report. Open interest advanced 3.5 percent, rising for a second week after falling in December to the lowest since May 2007, according to the CFTC.

While the 8.4 percent increase in oil last year marked the smallest annual move since 2006, the swing proved too much for some money managers as Europe's sovereign debt crisis pushed prices down to $75.67 a barrel before rising to $103 as Iran threatened to block the Strait of Hormuz. Clive Capital LLP's $4 billion commodity hedge fund told clients in November that they moved to cash because commodities had become too volatile, according to two people with direct knowledge of the firm's performance.
Read more

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Hedge Funds Performance 2011

Hedge Funds Performance

Hedge Funds Performance Falls Further in End of 2011

Hedge funds suffered another off month in 2011, as December performance dipped 0.9%.  The total performance of the The Bloomberg Aggregate Hedge Fund Index was -4.9%, worse than the S&P Index.  Hedge fund strategies hit particularly hard were long/short and macro.
Hedge funds sank almost 5% last year amidst market volatility and the European sovereign debt crisis.

The Bloomberg Aggregate Hedge Fund Index ended 2011 down 4.9% after a 0.9% decline in December. By contrast, the Standard & Poor's 500 Index ended the year essentially flat.

Most of the industry's losses were suffered in September, when the Bloomberg index fell 4.7%.
Among major hedge fund strategies, long/short equity funds suffered the worst December, falling 1.6% to end the year down 6%. For the year, macro funds did even worse, losing 6.5% despite a 0.3% jump last month. Multistrategy funds lost 1.1% in December and 2.9% in 2011. Source

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Hedge Funds Malta

Hedge Funds Malta

Malta Successfully Luring Hedge Funds to Its Attractive Shores

It's hard to make the case for spending all your time working in, say, Connecticut, when you could be working from Malta.  At least for a collection of hedge funds, it has been too tempting to resist moving their offices to Malta, a Southern European country known mostly for its spectacular beaches and warm weather, but perhaps even more importantly to hedge fund managers, it is a European Union member at a time when the EU has taken up new initiatives to monitor and regulate hedge funds.

To give you an idea of the hedge fund migration to the country: Malta's prime minister
recently fretted that there weren't enough local accountants and financial analysts to keep up with the rising need. 
Erik Nelson was working in Stamford, Connecticut, as a research analyst at FMG USA LLC, the U.S. arm of FMG, a fund of funds specializing in emerging and frontier markets, when his bosses called him into a meeting in September 2009.

They had recently moved FMG’s corporate headquarters to Malta from Bermuda and now they wanted Nelson, 27 at the time, to head up the new office. “I’ll have to think about it,” Nelson replied. Then he went home and tried to find Malta on a map.

Three months later, the young American touched down on the rocky, sun-drenched island in the middle of the Mediterranean Sea, joining a wave of hedge-fund executives washing up on Malta’s shores, lured by low taxes, cheap labor and a coveted address inside the European Union, Bloomberg Markets magazine reports in its February issue. Read more.

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Asia Hedge Funds Shrink

Asia Hedge Funds Shrink

Number of Asia Hedge Funds Expected to Shrink Further

Asia hedge funds have struggled since the onset of the recession, with hundreds of closures since 2008.  While the number of funds that have closed shop has declined since a record 184 in 2008, the industry has been shrinking and is expected to contract further in 2012.
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. 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.

“2012 will be the year of major attrition,” said Douglas, whose firm advises investors seeking to allocate money to hedge funds and runs a wealth-management business. “People’s stamina will increasingly give out; regardless of your commitment and personal wealth, the number of years that you can go pursuing your dream without any kind of compensation is a stretch.”

Asian hedge funds lost on average 8.7 percent in 2011 through November, their second-worst year on record, according to Eurekahedge. The MSCI Asia Pacific Index declined 17 percent during the same period amid concern that the European sovereign- debt crisis would lead to a global slowdown. Source

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Hedge Funds Euro

Hedge Funds Euro

Hedge Funds Boosting Bets Against Ailing Euro

Hedge funds have added pressure to the struggling European common currency, boosting bets that it will further decline in value against other currencies.  The Euro has laid waste to many hedge funds' performance last year that bet on the currency's fall but were surprised as the Euro remained stubbornly strong through much of the European debt turmoil (although the Euro was still the worst performing major currency last year).
Hedge funds beefed up their bets against the euro to a record level in the last week of 2011, increasing pressure on the embattled European common currency as it enters the most testing year of its history.

Many hedge funds lost money betting against the euro for much of last year, as the currency remained unexpectedly strong despite the continent’s worsening financial crisis, according to a report in the Financial Times.

However, the euro suffered a poor November and December and ended the year as the worst performing major currency, sinking to a 10-year low against the yen and a one-year low versus the greenback. Source

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Hedge Funds Housing Rebound

Hedge Funds Housing Rebound

Hedge Funds Betting on Coming Housing Rebound

As the sub-prime mortgage crisis emerged, several savvy hedge fund investors made a lot of money betting that the housing bubble would burst.  Now, some hedge funds are betting that housing is going to rebound soon and are positioning their funds to gain from the realization of that prediction.
Big money is starting to wager on housing.
Hedge funds run by Caxton Associates LP, SAC Capital Advisors LP, Avenue Capital and Blackstone Group LP have been buying housing-related investments, betting on a rebound. And formerly bearish research firm Zelman & Associates now predicts a housing pickup, as does Goldman Sachs Group Inc.
Other investors seem to be making the same bet. Shares of home builders are up 30% since the end of the third quarter, as measured by the Dow Jones index tracking those shares, topping a nearly 10.5% gain for the Standard & Poor's 500.  Source

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http://richard-wilson.blogspot.com/2011/12/hedge-funds-housing-rebound.html

Hedge Funds Commodities Rally

Hedge Funds Commodities Rally

Most Hedge Funds Miss Big Commodities Rally

Hedge funds reportedly trimmed their bullish commodities bets significantly before the biggest rally in the sector in 10 weeks.  The missed rally further hurts returns by hedge funds which have, on average, had a rough time predicting the frequent swings in the market this year.
Hedge funds reduced bets on higher commodity prices to the lowest level since 2009 just as raw materials headed for their biggest weekly rally in two months. 
Money managers cut their combined net-long position across 18 U.S. futures and options by 15 percent to 454,512 contracts in the week ended Dec. 20, the lowest since March 2009, data from the Commodity Futures Trading Commission show. The Standard & Poor's GSCI gauge of 24 commodities climbed 4.5 percent last week, erasing this year's declines and pushing the index toward its third consecutive annual advance. 
While the S&P GSCI is 15 percent below the 32-month high reached in April, prices gained last week on signs the U.S. economy is proving resilient. Durable-goods orders rose in November by the most in four months, and jobless claims unexpectedly fell to the lowest in more than three years. Concern that shortages will emerge in commodities from copper to crude oil spurred Goldman Sachs Group Inc. to stick with a bullish outlook this month even as funds cut their holdings. Source

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Tags: hedge funds, rally, hedge funds commodities, hedge funds commodity, hedge fund commodities, hedge funds commodities rally

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David Einhorn Green Mountain Coffee

David Einhorn Green Mountain Coffee

Inside Look at David Einhorn Current "Big Short"

David Einhorn has been very vocal with his criticism of Green Mountain Coffee Roasters.  Mr. Einhorn's hedge fund, Greenlight Capital, has established itself as a top hedge fund and so when Einhorn declared that his fund was shorting the company its share price took a steep dive and eventually led to an audit committee review.  Einhorn has since denounced the findings of the review as a "whitewash," and recently spoke to Reuters.
In an exclusive interview with Reuters, Einhorn said he still doubts sales figures and spending plans at the company, which saw its stock soar to $110 in August on the rapid growth of its individual coffee servings or K-cups. When Einhorn revealed in October that he had been building a short position in shares of the company for weeks, the stock tanked and it effectively turned things around for his $8 billion (5 billion pounds) Greenlight Capital fund this year.

"I think everything we said in the presentation is right now as it was then -- and in many cases even more so," said the 43-year-old manager, who runs one of $2 trillion hedge fund industry's better-known long/short funds and also is an accomplished poker player.

In the interview with Reuters, Einhorn blasted the company's audit committee for conducting a "whitewash" review of the concerns he raised in an October 17 presentation entitled, "GAAP-uccino." That presentation hit Green Mountain like a tidal wave, and has sliced the stock's value in half to around $46 as of Tuesday trading. Source

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Tags: david einhorn, david einhorn Green Mountain Coffee Roasters, Green Mountain Coffee Roasters, David Einhorn Hedge Fund, Hedge Funds

Link to This Resource: David Einhorn Green Mountain Coffee

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Commodities Trading

Commodities Trading

Commodities Traders Leave Banks to Start Hedge Funds

Many banks are making cuts either to meet new compliance and regulation requirements or simply to eek out a profit at a tough time for the sector.  For many commodities traders this has meant redundancies or even eliminating the entire commodities group for the bank.  Some traders have responded by forming their own hedge funds.  Are they sorry to leave banking behind?  According to one new hedge fund manager, "I can't say there's anything I miss about banking. I have more freedom."
Traders in energy, metals and agriculture are opening or joining hedge funds after leaving financial firms that cut more than 233,000 jobs this year, data compiled by Bloomberg show. Departures of commodity traders from banks probably rose 10 percent this year, according to Commodity Search Partners Ltd., a Brighton, England-based recruiter. Pay for that group will drop 24 percent on average, estimates Options Group, a New York- based recruitment firm.

Financial firms are losing people as U.S. and European regulators seek to limit holdings across raw materials and ban so-called proprietary trading that uses shareholders' cash. Slowing economic growth and Europe's deepening debt crisis may crimp earnings and limit compensation for traders.

“Banks are particularly vulnerable at the moment to losing people,” said Peter Henry, New York-based head of front-office search at Commodity Search Partners, which recruits about 40 commodity traders each year. “Increasing regulations are forcing banks to defer more pay in stock as opposed to cash as well as constraining the traders' ability to trade.”  source

Related to: Hedge Fund Update

Tags: hedge funds, commodities trading, commodities trader, hedge funds startup, starting a hedge fund, hedge fund startup, hedge fund start up, hedge fund launch, commodities hedge funds

Link to This Resource: Commodities Trading

http://richard-wilson.blogspot.com/2011/12/commodities-trading.html

Hedge Funds China Growth

Hedge Funds China Growth

Hedge Funds Growing Wary of China's Economic Growth

China has been the subject of largely positive economic coverage for the past years, as the country's dazzling growth grabbed hold of many investors hoping to profit off the boom.  However, hedge fund investors are taking a second look at the country, wondering if it might be too good to be true as several economic indicators have suggested that China's impressive growth may be coming to a halt--or at least, slowing significantly.
The past few weeks have seen China loom large in the nightmares of many hedge fund managers still smarting from a less-than glory-filled 2011. Concerns are rising for the global outlook over the increasingly negative economic signals emanating from the country. 
As the Emerging Sovereign Group, a $1bn hedge fund backed by Julian Robertson and half owned by Carlyle, one of the world’s biggest private equity groups, told its clients in a recent note: “[we have a] gathering sense that the next act of this rolling global debt crisis may well play out in the East.” 
Take the most obvious barometer. The Shanghai Composite has been locked into a steady downward trajectory since April that has seen it shed over 27 per cent of its value since then. 
ESG sent a team for a two week “deep-dive research trip” to China in October, an investor told the Financial Times. Source

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Tags: Hedge Funds China Growth, hedge funds in china, hedge funds China, Hedge funds Chinese, hedge fund in China, hedge fund managers in China

Link to This Resource: Hedge Funds China Growth

http://richard-wilson.blogspot.com/2011/12/hedge-funds-china-growth.html

Julian Roberts Hedge Funds

Julian Roberts Hedge Funds

Veteran Manager Julian Roberts Talks Hedge Funds Today

Hedge fund veteran Julian Roberts gave his take on the current state of the hedge fund industry.  He highlighted one problem he sees today: too many hedge funds create too much competition among managers. However, he is very optimistic of the hedge fund industry saying "it's still the best way to run money."  If you are reading this via RSS or email, please click here to watch the video.



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Tags: Julian Roberts Hedge Funds, Julian Roberts Hedge Fund, Julian Roberts Hedge Fund Manager, Who is Julian Roberts, Julian Roberts Quantitative Easing, Julian Roberts Federal Reserve, Julian Roberts Hedge Fund Industry

Link to This Resource: Julian Roberts Hedge Funds

http://richard-wilson.blogspot.com/2011/12/julian-roberts-hedge-funds.html

Hedge Funds Stock Picks

Hedge Funds Stock Picks

Top 12 Stock Picks from Hedge Fund Managers

It's always interesting to hear from hedge fund managers what their top picks are for the coming months.  Seeking Alpha has looked through the recent quarterly filings of some hedge funds to see what their top stock picks are based on new positions by funds.  Here are the top 5:
Microsoft (MSFT) was popular with several hedge fund managers in the third quarter. Leon Cooperman initiated a new position in the company of 1.36 million shares, while both George Soros and Donald Yacktman increased their positions in the applications software company. 
Google (GOOG) was a favorite pick for George Soros in the third quarter. He initiated a small holding of 1126 shares, and he wasn’t the only hedge fund manager buying. Julian Robertson, John Griffin and Jean-Marie Eveillard each increased their holdings in GOOG in the third quarter. 
Walt Disney (DIS) was on the list for both Mason Hawkins and Ray Dalio. Hawkins upped his position in the company by 29%, while Dalio nearly tripled his stake in the children’s entertainment company. 
Tyco International (TYC) was a new position for George Soros and Lee Ainslie during the third quarter, with Soros opening a small 6,000-share position in the diversified machinery company and Ainslie coming in at 2.8 million shares. Jean-Marie Eveillard was keen on TYC in the third quarter as well. He upped his position by 56.34%. 
Northrop Grumman (NOC), the aerospace and defense company, was on the radar for several big hedge fund managers in the third quarter. Joel Greenblatt, Jean-Marie Eveillard and Ray Dalio each increased their positions in the company by 156%, 49% and 116%, respectively.  Source

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Tags: hedge funds, hedge fund stock picks, hedge fund managers stock tips, hedge funds stocks, hedge fund top stocks, George Soros, Ray Dalio, hedge fund managers favorite stocks

Link to This Resource: Hedge Funds Stock Picks

http://richard-wilson.blogspot.com/2011/12/hedge-funds-stock-picks.html
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