Citadel Investment Group Investors

Citadel Seeks to Regain Investors' Trust After Steep Losses

The story of Citadel's Kenneth Griffin is a great illustration of the obstacles facing hedge funds. Last year, during the financial crisis Griffin's hedge fund lost $8 billion of his investors money and now he is in the difficult position of having to regain their trust. Citadel Investment Group's larger hedge funds lost 55%, much higher than the average 19% decline. Those losses led investors to try to leave the fund but in the case of Citadel's largest funds, Kensington and Wellington, investors were denied redemptions. Many other hedge funds are in Mr. Griffin's situation, having to persuade wary investors that he can make up for the heavy losses suffered in the financial crisis.

In a September interview in his Chicago office, Mr. Griffin expressed exasperation at investors' desire to keep dissecting last year's disaster, comparing their fascination with people's inability to look away from a car crash. "I've told the story of 2008 many times," he said.

Citadel's biggest mistake last year, Mr. Griffin said, was putting too much faith in regulators' ability to deal with the global meltdown.

Mr. Griffin's predicament reflects broader troubles at hedge funds world-wide. For much of the decade, hedge funds ranked among the hottest investments. But these largely secretive, complex investments, heavily reliant on borrowed money, were hammered in 2008 by the crisis in the world financial system.

But a parade of frauds, the insider-trading allegations swirling around Galleon Management and the weak economy have kept big clients (pension funds, endowments, the super-rich) from plowing in more money. Hedge funds crave new investments to make up for losses and withdrawals they've suffered. Source

Related to:Citadel Investment Group Investors

Tags: Citadel Investment Group Investors, Citadel Investment Group losses, Kenneth Griffin, hedge fund losses, hedge funds, investors, financial crisis, manager kenneth griffin

Link to This Resource: Citadel Investment Group Investors

http://richard-wilson.blogspot.com/2009/11/citadel-investment-group-investors.html

Hedge Funds Gold Update

Big Hedge Funds Investing More and More in Gold

Earlier this year we reported the trend of hedge funds investing in gold (see this story). Hedge funds are concerned that government efforts to stabilize the economy will have a weakening effect on U.S. and European currencies. In economic uncertainty, gold is often seen as a safe and profitable investment. John Paulson is preparing to launch a gold fund in January and his hedge fund firm has become the largest holder of SPDR Gold Shares exchange-traded fund. Paulson is not alone, as the principal of Alpha Capital Management observes, "I can't remember in 20 years so many respected investors focused on a single strategy."

The Federal Reserve, headed by Ben Bernanke, responded [to the financial crisis] by slashing interest rates to almost zero and spending more than $1 trillion buying long-term U.S. Treasury bonds and mortgage-backed securities and other debts from collapsed housing giants Fannie Mae and Freddie Mac.

That stabilized the economy, but some leading hedge-fund managers worry about the long-term consequences of this so-called quantitative easing and are using gold to protect themselves.
"The Fed is making loans collateralized by toxic waste and has now begun a policy called 'quantitative easing'—a fancy term for 'printing money,' " Greenlight's Mr. Einhorn wrote in a January letter to investors.

Printing so much new money weighs on the value of the U.S. dollar, which could fuel rapid inflation. In such an environment, the solidity of gold could shine.
Source

Related to: Hedge Funds Gold Update

Tags: hedge funds gold, hedge fund investing in gold, hedge fund gold investors, hedge fund managers, currency, currency value, gold investment

Link to This Resource: Hedge Funds Gold Update

http://richard-wilson.blogspot.com/2009/11/hedge-funds-gold-update.html

Future of Offshore Hedge Funds

Future of Offshore Hedge Funds After the Financial Crisis

With a wave of new regulations aimed at the hedge fund industry, it's hard to predict what the state of the industry will be in a couple years. I found an interesting article discussing specifically the future of offshore hedge funds. It is likely that the regulation will include not only European or American funds but also cover managers or investors operating offshore, so offshore hedge funds are worrying over the new legislation as much as any other firm.

“In the future, offshore funds and funds in general will differ from the kind of funds we’ve seen in the market up to this point,” says Simon Schilder, a partner with law firm Ogier in the British Virgin Islands. “How they differ will very much depend on how things end up playing out [in the regulatory environment]. What is for certain, though, is the continuing role of offshore funds and their importance in both the fund industry and the broader financial community.”

Says Schilder: “In this brave new world, transparency is the key, particularly tax transparency. The OECD has made entering into tax information exchange agreements the criterion according to which jurisdictions are white-listed, grey-listed or black-listed. The BVI is a white-listed jurisdiction with 15 Tieas currently in place. We recognise that the criteria for being white-listed will change, and the BVI continues to discuss further Tieas with OECD member states.”

“The lessons learned will influence how funds are structured in the future,” Schilder says. “One example is the use of gates, which enable managers to control how much money is coming out on any given redemption day and which can be structured on a class-by-class basis or for the fund as a whole.” Read whole article here.

Related to: Future of offshore hedge funds

Tags: future of offshore hedge funds, hedge fund restructuring, future of hedge funds, hedge funds, hedge fund offshore, hedge funds, crisis

Link to This Resource: Future of Offshore Hedge Funds

http://richard-wilson.blogspot.com/2009/11/future-of-offshore-hedge-funds.html

SKAR Development Formula by Richard Wilson

SKAR Development Formula

There is a formula that I have used over the past 7 years to help me build my resume, career, and now my own small business, that is the SKAR Formula. This is not a way to shortcut the hard work it takes to be successful, but rather a map as to where invest your energy to increase the results you get in return for your investment.

SKAR Development Formula

Specialized Knowledge + Authority positioning + tangible Results = huge growth opportunities and faster development within your career or business.

Definitions

Specialized Knowledge = Specific knowledge that is practical, functional and very niche specific to the area within you work or the skill or ability you rely on to perform well. Specialized knowledge exists whether you are an airplane pilot, hedge fund analyst, or third party marketer. The difference between having specialized knowledge or not could mean the difference between spending 18 months to complete a task or project or being able to development strong client relationships and complete the same task in just 3 months. It lets you identify more opportunities, move more quickly on them, and execute with efficiency when once multiplied over several years puts you within a different league of competition. Some ideas on how you can further develop your specialized knowledge include:

Read two books/month for the next two years on the area of specialized knowledge which is going to benefit your business or career most.
Subscribe to 3 of the best newsletters from blogs or experts in your industry which are NOT re-hashed press releases and garbage news. You learn close to nothing from reading the news - read insights, analyses and white papers within these newsletters instead. There are at least 2-3 valuable free newsletters in each industry.
Complete a niche training and certification program specific to your area of specialized knowledge. Having a third party verify that you have obtained a certain level of specialized knowledge is ALWAYS going to be more credible than, I like to read books and email newsletters, here is what I have read lately. Seek out an online certification program and start one within 6 months, this will force you to read and learn more within your niche.
Write one article a week on your thoughts, best practices, and lessons learned within your niche area of practice. Write anonymously by creating a free blog at Blogger.com and start synthesizing what you are learning and combining other ideas to create your own original concepts (such as this blog post).

Authority Positioning = Creating structures around your firm or self so that your knowledge and abilities are communicated in a way that positions you as an authority in your niche area. Ideally this area lines up 1-to-1 with your area of specialized knowledge and it can be the result of gathering this knowledge. Two professionals can hold the same knowledge though, while one write 5 books and completes over 50 press interviews a year the other may be an arm chair critic with a small group of 5-7 consulting clients. The more well positioned professional will reap rewards from new opportunities coming towards him instead of the other way around. I was a competitive swimmer earlier in my life and the best book I read on swimming was called "Swimming Downhill" it was a way to swim so that your body is tilted forward and you literally cut continually downwards into the water. If you get Authority Positioning right it will be like you are swimming downhill. Jeffrey Gitomer is a great study of authority positioning, he started writing 8 pages a day when he was 46 years old, now in his fifties he has over 10 best selling books, and charges more than Colin Powell for speeches - the real important detail though is he NEVER cold calls anyone and never scrambles for new business. His phone literally rings off the hook with new opportunities, clients, and join venture partnerships due to his positioning, he is swimming down a steep hill.

Publish your own newsletter or blog - even if you only publish something once every 2 weeks, having it and building it over time is what is important.
Interview one professional each month for your own blog or newsletter, tell them that you can't compensate them but as your website becomes more popular they may get some exposure and they can have a copy of the recorded phone call transcript, Mp3 file or document which you type up. Interviewing experts is a shortcut to gaining specialized knowledge and authority positioning quick. Simply telling others that you have interviewed 20 of the top experts in the industry and overall you found A & B and most surprisingly C is very powerful. Note, the strong you have fulfilled your work in building specialized knowledge the more willing these experts will be to connect with you and the more pointed and refined your questions will be. Ever done an interview with a journalist who has never worked in your field? Not always fun or fulfilling to answer the basics which can be looked up on Google in 3 seconds.
Take what you have written within your own newsletter or blog and self-publish a book, with 60-80 pages of single spaced text anyone can do this for $15 at Lulu.com. Very simple, no more excuses that you do not have a book deal. I got my second big investment marketing contract partially because I had a self-published book in hand and someone gave me a chance based on my dedication to the niche. The book positions you as an authority.
Create a 1 page PDF list of all of your past clients. This can show depth, experience, and respect that others have given you by paying for your services and time in the past.
Speak at conferences. It is relatively easy to land speaking spots at conference, networking events and seminars. Lots of professionals are looking for others with unique ideas and lessons to share, and again teaching what specialized knowledge you have gained helps you connect and synthesize these ideas. If you are speaking to a crowd you are within an authority position and when you mention your speaking it adds credibility because others have stopped their business days and invested their valuable time to listen to what you had to say.

Tangible Results: The importance of showing real tangible results cannot be over-stated. Finding ways to do this within service businesses, the fund management industry, or within certain areas of extreme confidentiality is challenging. Some types of tangible results that can be shared include:

An actual printed out version of part of the service or end result of the product or service
Video or text (not as good) testimonials from past and current clients, the more specific to the immediate need or concern of your potential client or employer the better...the more numerous the testimonials the better.
The first 15-20% of the product or your service given away for free on a trial basis. $1 first month trial, 4 weeks of free work or time so we can prove our worth to you, etc.
Diverse and numerous case studies of past clients or employers, this proves that you work with firms with various needs and have found solutions for them, it allows the reader of these case studies to imagine you solving their problem
A little tip, quick take away or lesson within your sales letter or website which provides the potential client with immediate benefit. This proves that you have the goods, are an authority and do have their best interests in mind.

Another related topic that I don't have space to go into here is that underlying all three of these items are having the right habits. Habits have been shown to form 96% of what we do every single day. We tend to eat the same things, walk the same way, watch the same shows, and read the same types of books. As the quote goes, "first you form your habits, and then your habits form you." What business habits are you forming? What elements of the SKAR formula are you using each week? When you read this type of advice are you thinking "I already know this stuff" or "how good am I at that, and where could I improve?"

Related to SKAR Development Formula

Tags: SKAR Formula, Richard Wilson's SKAR Formula, SKAR Development Formula, Business Growth Formula, SKAR growth formula for service companies

Link to This Resource: SKAR Development Formula by Richard Wilson

http://richard-wilson.blogspot.com/2009/11/skar-development-formula-by-richard.html

More Free Hedge Fund Resources & Reports: 60,000 Downloads of the Free Hedge Fund Blog Book To Date

Free Hedge Fund Resources

We gave away around 10,000 copies of our e-book before we started tracking the downloads, and since tracking started we have had 60,000 downloads of the Hedge Fund Blog Book.

The book has served its first purpose, to land a book deal with Wiley to write a "real" book on hedge funds. As I complete that project we are gearing up to completely re-do and expand this free e-book resource. The next version will have decided sections to capital raising, starting a fund, growing a career in the industry, etc.

Since we know another 60,000 professionals will probably download this next version of the e-book we really can invest our time in making this resource worth hundreds of dollars to help benefit readers and help us grow more relationships. Please feel free to suggest anything that would specifically help you build your hedge fund, business, or career.

If you are one of the professionals who has downloaded this book could you tell us what didn't work? What was bad about the book? What we could do a better job on this next time around? Should it be in audio form as well? Please send your input in to Richard at Richard@HedgeFundGroup.org.

Related to More Free Hedge Fund Resources

Tags: The most popular book on hedge funds, #1 book on hedge funds, how can I learn more about hedge fund managers, what should I read to get a basic understanding of the hedge fund industry?

Link to This Resource: More Free Hedge Fund Resources & Reports: 60,000 Downloads of the Free Hedge Fund Blog Book To Date

http://richard-wilson.blogspot.com/2009/11/more-free-hedge-fund-resources-reports.html

Private Equity Hedge Fund Secondaries

Hedge Fund Secondary Market

Private Equity Looks to Buy Illiquid Hedge Fund Stakes

Private equity firms are among the potential investors in the hedge fund secondaries market. Some hedge fund investors are still worried about liquidity after being stuck with illiquid hedge fund investments during the financial crisis. Now that the hedge fund industry and markets are recovering, buyout firms and other buyers are looking to purchase stakes in hedge funds. The hedge fund secondaries market has expanded to several billion dollars a year and there are still a lot of investors interested in selling.

Some niche firms are buying these stakes at discounted prices, willing to wait months or years until a fund winds up, hoping they've picked up a bargain when they are finally paid out. Campbell said the firm regularly spoke to around six such funds, as well as other buyers.

The market has developed after the turmoil of 2008, when many funds were unable to meet requests to return client money and instead limited or suspended redemptions. Worst affected were funds which had loaded up on illiquid assets such as debt in struggling sectors or certain emerging markets assets.
The price buyers are willing to pay has risen this year, Campbell said, reflecting improvement in the industry as a whole as investors return and performance has picked up.

A large overhang of stock remains, but new buyers such as niche private equity firms are entering the market and, after doing their homework, are prepared to hold the acquired stakes until a fund winds up, Campbell said. Source

Read about the differences between hedge funds and private equity here.

Related to: Private Equity Hedge Fund Secondaries

Tags: Private equity hedge fund secondaries, hedge fund secondary market, hedge funds market, selling stakes, shares, investors, illiquidity

Link to This Resource: Private Equity Hedge Fund Secondaries

http://richard-wilson.blogspot.com/2009/11/private-equity-hedge-fund-secondaries.html

What should very quickly growing hedge funds of $100M+ invest their money in as they grow?

$100M Hedge Fund Investments

Many of the hedge funds who contact us with over $100M in assets are looking to re-invest, protect and continue their growth. Last week I completed an interview with Lance Baraker and William Katts from TradeStation Prime Services on where large funds should be re-investing their money. The full interview will be published within my upcoming book on hedge funds but here in an excerpt now:

"This may be over simplified but the what is most important to a hedge fund as they grow is investing in talent. This is extremely important when implementing systems. Goods systems are only as good as the ability for them to be functional.

The biggest complaint I hear from the bigger hedge funds is the fact they are over staffed with people that perform the same job Redundancy can escalate expenses. Also the proper use of derivatives can increase alpha and decrease risk . Having an experienced derivatives trader is paramount..his ability to generate alpha and help a fund manage risk is one of the key additions when the resources are available. With the attrition of the trading floors and the advanced technology in risk systems the price for a talented person with proper risk tools becomes much more cost effective and an absolute must as a fund walks up the ladder" - William Katts, TradeStation Prime Services

Related to Hedge Fund Re-Investments

Tags: What should very quickly growing hedge funds of $100M+ invest their money in as they grow?, what should a fast growing hedge fund re-invest their money in, what are large hedge funds investing in right now

Link to This Resource: What should very quickly growing hedge funds of $100M+ invest their money in as they grow?

http://richard-wilson.blogspot.com/2009/11/what-should-very-quickly-growing-hedge.html

Hermitage Capital Lawyer

Hedge Fund's Lawyer Dies in Moscow Jail

More troubling news in the dispute between Michael Browder's Hermitage Capital and Russia: the hedge fund's lawyer has died in a Moscow jail. The attorney was advising Hermitage Capital in its four year battle with the Russian Federation over allegations of theft and fraud when he was arrested and put in jail. Sergey Magnitskiy was refused bail and was detained for a year without trial. According to Hermitage, he was not allowed to speak with his children or wife for the whole detention.

The lawyer, a father of two, had written a 40-page complaint describing a serious medical condition that developed during his time in prison, but received no response, Hermitage said.

Hermitage has filed law suits and sent letters to Russian anti-corruption authorities, naming top-ranked officials and their role in the alleged tax scam. Browder's Russian visa was revoked in 2005 despite his company having once been the country's largest foreign investor.

The Russian interior ministry is seeking to have Browder returned to Russia for questioning. The executive was placed on the ministry's international wanted list on charges of tax evasion.

According to the fund, criminals used a network of corrupt lawyers, police and judges to fake transactions making it appear that three profit-making Hermitage subsidiaries had turned a profit into losses – for which they demanded a tax rebate. The new owners of the stolen companies received Russia's biggest ever rebate within two days, Hermitage says. Source

Related to: Hermitage Capital Russia

Tags: hermitage capital, hermitage capital management, hedge fund lawyer, hermitage capital lawyer, Sergey Magnitskiy, Moscow jail, hedge fund trial, Russia Hermitage Capital

Link to This Resource: Hermitage Capital Lawyer

http://richard-wilson.blogspot.com/2009/11/hermitage-capital-lawyer.html

Open Position: Hedge Fund Marketing & Portfolio Management

Hedge Fund Marketing and Portfolio Management

Paragon Capital is a Park Avenue New York City based private investment fund which has produced a 45% compound annual return over the past 4 years, ranking in the top 1% of all hedge funds. The fund was the private investment vehicle for a wealthy investor which generated excellent returns. Over time family and friends asked to have Paragon manage their money. We now have $20 million in assets under management with a good percentage contributed by the CEO. Paragon has recently launched a companion offshore fund. The firm is ready to begin an aggressive marketing campaign to raise $100 million over the next two years. We expect these funds to come from HNW individuals, family offices, and other institutional investors.

Given the small size of the fund, we are looking for someone who can wear many hats ranging from raising capital from investors to assisting in the portfolio management of the fund. Compensation will depend on the level of experience of the candidate. We will entertain candidates ranging from interns with a small level of experience to candidates with 20 years experience and near partner status who can bring in our next $50 million.

We offer an relaxed work environment focused on making money and having fun.

Please send CV/resume within the body of an email.

Contact info: Alan Donenfeld at Alan@ParagonLP.com. Email only please.

Related to: Hedge Fund Marketing & Portfolio Management

Tags: Hedge Fund Marketing and portfolio management, hedge fund marketing job, Position in hedge fund marketing and sales, how can I find open hedge fund marketing jobs, marketing jobs for hedge funds

Link to This Resource: Open Position: Hedge Fund Marketing & Portfolio Management

http://richard-wilson.blogspot.com/2009/11/open-position-hedge-fund-marketing.html

Hedge Funds Investor Portfolio

Hedge Funds to Take Bigger Role in Investors' Portfolio

The majority of surveyed wealth managers and institutional investors said that hedge funds will be important or more important as traditional investments in the next five years. The industry has been performing very well in 2009 but investors still noted their fears of low liquidity and a lack of transparency in the industry.

Nearly 60 percent of all financial advisers who help wealthy people invest their money and institutional investors said they expect hedge funds to be as important to much more important as traditional investments over the next five years.

Currently 34 percent of the financial advisers think that these loosely regulated portfolios will be as important as their traditional cousins, up from 27 percent last year, the survey from research firm Morningstar and magazine Barron's found.

"Institutions and advisers continue to view alternative investments optimistically, despite their questionable performance, correlation, and liquidity during last year's global downturn as well as the high-profile scandals that rocked the hedge fund industry," said Steve Deutsch, director of the pension, endowment, and foundation database at Morningstar. Source

Related to: Hedge funds investor portfolio

Tags: hedge fund investor portfolio, hedge fund investor, hedge funds, hedge fund managers, hedge fund investor concerns, wealth management

Link to This Resource: Hedge Funds Investor Portfolio

http://richard-wilson.blogspot.com/2009/11/hedge-funds-investor-portfolio.html

Prime Broker Rankings

Financial Crisis Shakes Up Prime Broker Rankings

The financial crisis has shaken up the prime brokerage houses on Wall Street. Prime brokers are also fighting for hedge fund clients, hoping to get a piece of the reviving industry. In the crisis, hedge funds moved away from Morgan Stanley and Goldman Sachs and put their money with seemingly more stable brokers, Credit Suisse (CSGN.VX), Deutsche Bank (DBKGn.DE) and JPMorgan Chase & Co.

Goldman and Morgan Stanley quickly righted this year as markets snapped back, yet the second-tier players have no intention of giving up their newly won premier status, according to a series of interviews with Wall Street's top prime brokerage executives.

"You had an industry that changed at a glacial pace for 20 years go through two years of rapid change," said Barry Bausano, a Deutsche Bank co-head of global prime finance. "Over the past few months, the cement has set."

Behind every hedge fund is at least one prime broker, which lends cash and securities as well as provides custody and other services. It is a high-margin business, one that will generate an estimated $8 billion this year and $10 billion next year, according to the research firm Tabb Group. Source

Related to: Prime Broker Rankings

Tags: prime broker, prime broker rankings, prime brokerage hedge fund, hedge funds prime broken, hedge funds and prime brokerage, hedge funds money

Link to This Resource: Prime Broker Rankings

http://richard-wilson.blogspot.com/2009/11/prime-broker-rankings.html

Paulson and Co. Q3 2009

Paulson & Co. Q3 2009

John Paulson's Hedge Fund Buys Citi Drops Goldman

John Paulson's hedge fund trades attract a lot of attention because of his ability to profit in downturns. Last year, Paulson made about $2 billion largely by betting that the housing market would crash and this year he has been taking big stakes in struggling banks. In Q2 2009, it was revealed that Paulson was purchasing significant shares of Bank of America and his fund's latest filing shows that he has bought 300 million shares of Citigroup.

In addition to his investment in partly government-owned banks, it's also interesting to see the stocks that Paulson has sold. Last quarter, Paulson sold his entire stake in Goldman Sachs and also sold shares in JPMorgan Chase & Co.

“If you are guided by what happened to these companies, you would have to think Citigroup is the most problematical of the major banks,” said Warren Marcus, who ran the bank research department at Salomon Brothers Inc. during the 1970s. “Maybe there is a perception that Citi over time has got a better upside than some of the others.”

Armel Leslie, a spokesman for Paulson & Co., declined to comment on the holdings. The firm has about $29 billion under management that it invests in four strategies: merger arbitrage, event-driven trading, credit and financial services.

Paulson ranked second in fund-manager earnings last year, according to Institutional Investor’s Alpha Magazine. His Credit Opportunities Fund soared almost sixfold in 2007 through wagers that subprime mortgages would sour. He started the Paulson Recovery Fund in 2008 to invest in financial firms hurt by mortgage writedowns. Source

Related to: Paulson and Co. Q3 2009

Tags: Paulson and Co. Q3 2009, Paulson bets, John Paulson manager, hedge fund stakes, Paulson hedge fund holdings, q3 filings, sec, paulson hedge fund investments, paulson banks, banking

Link to This Resource: Paulson and Co. Q3 2009

http://richard-wilson.blogspot.com/2009/11/paulson-and-co-q3-2009.html

Hedge Funds Lobbying

Hedge Funds Lobbying of EU May Cause Backlash

According to the New York Times, the lobbying effort by hedge funds against impending regulation by the European Union has created a backlash. While influential politicians and London hedge funds may have succeeded in softening the regulation, the lobbying may have turned the public against hedge funds. A expert on financial regulation and head of the Center for European Policy Studies recently warned, “There is a danger that this lobbying is backfiring against the industry."

Interest groups representing hedge funds, private equity and other investment companies have campaigned vociferously against E.U. efforts to make fund managers register, disclose information about their businesses and fees and limit their use of debt. They have especially resisted attempts to bar hedge funds that operate from tax havens like the Cayman Islands from marketing investment products throughout the E.U., accusing Brussels of protectionism.

Sweden, which holds the rotating E.U. presidency through the end of the year, has sought to soften the original proposals to meet British objections. But the Swedes’ latest compromise text would impose policies on fund managers’ remuneration similar to those that the Group of 20 countries agreed to for bankers.

But lawmakers and most governments are unlikely to be moved by threats by hedge fund managers that they might decamp to Switzerland to escape tougher E.U. regulation. Some hedge fund managers are already moving from London to Geneva, but industry insiders say the shift is driven by tax increases in London. Source

Related to: Hedge Funds Lobbying

Tags: hedge funds lobbying, eu regulation, european union, laws, hedge funds in the UK, London, hedge fund managers, EU hedge fund regulation

Link to This Resource: Hedge Funds Lobbying

http://richard-wilson.blogspot.com/2009/11/hedge-funds-lobbying.html

How to Write a Hedge Fund Resume

How to Create a Hedge Fund Resume

I did a quick interview with a WSJ sponsored career website called Fins a few weeks ago on how to write a solid resume for the hedge fund industry. I haven't published much here on hedge fund careers lately so I though this resume building piece may be helpful to some, here is an excerpt and link:

Getting your resume to the top of the pile at a hedge fund can be tricky -- many are small elite firms that see a slew of top candidates. But taking the time to perfect your resume can yield great rewards. For one, there are fewer gatekeepers at hedge funds. Hedge fund firms are sometimes only a handful of employees, so your resume can potentially grab the attention of a hiring manager right away, says Richard Wilson, a hedge fund trainer and consultant who is the president of the Hedge Fund Group, a professional trade association.

Below are a few tips to help you craft that perfect hedge fund resume. Also, check out an example of the perfect hedge fund resume, before and after.

Customization

With so many different hedge funds employing various investing strategies (and focusing on specific areas), it's important to find out exactly how you can apply your skills. For example, if you're applying to a biotech-focused hedge fund, highlight your science degree or specific experience in the field. If one hedge fund uses shorting make sure to point out your own shorting experience in a resume. Don't use broad terms in hopes of not alienating potential employers, says Barry Emen, founder of MJE Advisors, a recruiting firm in Florham Park, N.J., who works with hedge funds. "Go after the niche you're in -- you can't just decide that you'll do anything for anyone," says Emen.

Highlight Designations

Even if you don't have a top-tier MBA, designations like the Chartered Financial Analyst or Certified Hedge Fund Professional can help your resume standout. The certifications help show that you're motivated to work in hedge funds and that you are eager to keep learning and can do so easily. source

Related to How to Create a Hedge Fund Resume

Tags: How to create a hedge fund resume, hedge fund resume examples, how to write a hedge fund resume, how to write a resume for the hedge fund industry, hedge fund manager resumes

Link to This Resource: How to Write a Hedge Fund Resume

http://richard-wilson.blogspot.com/2009/11/how-to-write-hedge-fund-resume.html

Video Production For Hedge Funds

Video Production

In 2010 we will be shooting over 100 hours of video and we are looking for subscribers to our blog who have video production facilities and some experience in the hedge fund industry to help us create more video content. If you have the resources, 5 hours/week and the interest please email us to see how we could work together.

Thanks for the support and loyalty in visiting our website.

Tags: Hedge fund video production, videos for hedge funds, hedge fund video

Link to This Resource: Video Production For Hedge Funds

http://richard-wilson.blogspot.com/2009/11/video-production-for-hedge-funds.html

Hedge Fund Replication

Hedge Fund Replicas: An Alternative to Real Hedge Funds?

A recent study found that most hedge fund replication ETFs outperformed hedge funds during the financial crisis, leading some to wonder if these "hedge fund copycats" are a better alternative for the smaller investor. Here is a video interview with Reuters' columnist talking about hedge fund replicas. He talks about some of the benefits but holds off from saying that these funds offer a real alternative to hedge funds (e-mail subscribers can watch the video here.) :

Related to: Hedge Fund Replication

Tags: hedge funds, hedge fund replication, hedge funds, hedge fund replica, hedge fund copycat, hedge funds investments, hedge funds alternatives

Link to This Resource: Hedge Fund Replication

http://richard-wilson.blogspot.com/2009/11/hedge-fund-replication.html

Hedge Funds October 2009

6th Straight Month of Inflows, Performance Falls in October

For the sixth straight month, hedge funds had inflows in October but another streak came to an end as hedge fund performance gains fell slightly last month. Inflows were $14.2 billion in October, an increase from the previous month. Hedge fund assets have grown by 1.8% in this year with an estimated current asset level of $1.967 trillion, just shy of the two trillion dollar mark.

Despite the 0.4% drop in Hedgefund.net's key industry reading, it said funds on average remain on pace to return nearly 20% this year, which would be their best showing since 2003.

October saw investors most active in equity-related strategies, pushing inflows up 1.6%. Merger arbitrage led primary strategies, increasing 2.8%.

On a performance basis, the emerging market index was among the gainers last month with a 2% advance, putting the year's gains at 39%. Funds investing in Russia led the way in October, followed by China and Brazil.

Hedge funds have been rebounding from their worst-ever year in 2008. Funds on average lost about 20% last year, though that was far less than the decline for major stock averages. Source

Related to: Hedge Funds October 2009

Tags: Hedge Funds october, hedge funds in october, hedge fund performance, hedge fund data, hedge fund report, hedge fund assets, hedge fund assets level, hedge funds assets under management

Link to This Resource: Hedge Funds October 2009

http://richard-wilson.blogspot.com/2009/11/hedge-funds-october-2009.html

Is Goldman Sachs Paying out $650,000 Per Employee in 2009 A Good Thing?

Goldman Sachs Compensation Structure

My response to the story below: Amen. Long live capitalism and rewarding those firms which actually do outproduce and do well over time...in an era of bailouts due to poorly ran companies and leveraged risk at the expense of tax payers I actually find Goldman's cash machine refreshing.

THE boss of Goldman Sachs yesterday defended the bank’s pay policies, insisting his staff were paid more because they were “among the most productive in the world”.

Lloyd Blankfein, Goldman’s chair and chief executive, also rejected calls to break up the bank and said the firm was easier to manage than its larger rivals.

“I often hear references to higher compensation at Goldman,” Blankfein told a banker’s conference in New York.

“What people fail to mention is that net income generated per head is a multiple of our peer average. The people of Goldman Sachs are among the most productive in the world.” source

Related to Goldman Sachs Compensation Interview

Tags: Goldman Sachs Compensation Structure, how much do goldman Sachs employees get paid, compensation levels at Goldman Sachs, Goldman Sachs Investment Banking Jobs

Link to This Resource: Is Goldman Sachs Paying out $650,000 Per Employee in 2009 A Good Thing?

http://richard-wilson.blogspot.com/2009/11/is-goldman-sachs-paying-out-650000-per.html

Hedge Fund Managers Not Guilty

Hedge Fund Managers Found Not Guilty of Fraud

A jury has acquitted two Bear Stearns hedge fund managers today. The managers were accused of misleading investors about the subprime mortgage meltdown and financial crisis, supposedly costing investors $1.5 billion. The Brooklyn jury ruled in favor of the defendants, Ralph Cioffi and Matthew Tannin, in a case that could discourage the expected government prosecutions of hedge fund managers and financial professionals.

Ralph Cioffi, 53, and Matthew Tannin, 48, were acquitted of all charges on the second day of deliberations by a jury in U.S. District Court in Brooklyn, New York. Cioffi and Tannin left the courthouse with their smiling wives and relatives, some of them crying tears of relief.

Cioffi and Tannin managed two funds, crammed with subprime mortgage-backed securities, that lost institutional and individual investors a total of $1.6 billion when the funds collapsed in mid-2007 at an early phase of the Wall Street market meltdown.

The jury on Tuesday acquitted both men of conspiracy, securities fraud and wire fraud -- charges brought in a June 2008 indictment. Cioffi was acquitted of an additional charge of insider trading.

"The government clearly will need to rethink whether and when to assert criminal responsibility in connection with the financial meltdown," said Jacob Frenkel, former SEC enforcement lawyer and now a law firm partner. Source

Related to: Hedge Fund Managers Not Guilty

Tags: Hedge Fund Managers Not Guilty, hedge fund managers, fraud, conspiracy, hedge fund, legal, justice, hedge fund not guilty, hedge fund trial, prosecution, prosecute, federal

Link to This Resource: Hedge Fund Managers Not Guilty

http://richard-wilson.blogspot.com/2009/11/hedge-fund-managers-not-guilty.html

Hedge Funds Invest in Australia

Hedge Funds Fill Funding Gap For Australian Companies

Australian companies are getting some help from hedge funds as banks are still reluctant to lend. KPMG estimates that Australian companies have some $200 billion of syndicated loans due to mature in the next four years. But a funding gap still exists even with increased investments by hedge funds.

Australian non-financial companies sold A$2.39 billion ($2.2 billion) of bonds in the nine months to September and face an “onerous” task refinancing their maturing debt, Fitch Ratings said an Oct. 7 report. Hedge fund assets may top the previous $2 trillion high by the end of next year as double- digit average returns lure investors, Barry Bausano, Deutsche Bank AG’s global co-head of prime finance, forecast this month.

Hedge funds are focusing on companies needing between A$25 million and A$75 million and may be able to fill a funding void borrowers can’t meet with bank loans or share sales, according to Heathcote.

“Companies would be better prepared by investigating all options and not necessarily going down the typically more expensive equity route,” he said.

Australian businesses raised A$120 billion from equity sales between July 2008 and September 2009, Belinda Gibson, commissioner at the nation’s securities regulator, said at a conference yesterday. Source

Related to: Hedge Funds Invest in Australia

Tags: hedge funds in Australia, hedge funds Australia, hedge funds, investing in Australia, hedge funds funding, lending, banks, bank lenders, finance

Link to This Resource: Hedge Funds Invest in Australia

http://richard-wilson.blogspot.com/2009/11/hedge-funds-invest-in-australia.html

When to Start a Hedge Fund

Matthew Lynn: May be Right Time to Start a Hedge Fund

Matthew Lynn has written an interesting commentary for Bloomberg on hedge funds start-ups. Hedge funds have been in hot water after recent arrests and the industry's dismal performance in the recession so it may be surprising that Lynn writes, "It may be time to quit that safe job and start a hedge fund." He gives three justifications for this optimism:

First, you need to begin a fund when equity markets are cheap or fairly valued. The 20 percent fee that hedge funds typically charge only kicks in when the fund is in profit. It is only possible to make big money if you start the fund when the markets aren’t in a bubble. If you launch near the peak, you’ll be underwater for years, unless you start a short-selling fund.

Second, the “carry trade” is back. You can borrow money cheaply in the U.S. and the U.K., then reinvest the money in higher-yielding currencies and assets. For much of the last decade, the hedge funds were doing that with the Japanese yen. Now they can do it with the dollar and the pound as well.

Third, the determination of central banks to reignite the global economy by flooding the markets with printed money is creating asset bubbles everywhere. They are popping up so fast, and so obviously, even former Federal Reserve Chairman Alan Greenspan could spot them. You can take your pick from the Australian dollar, emerging-markets equities, or gold. Source

Related to: When to Start a Hedge Fund

Tags: start a hedge fund, hedge fund startup, when to start a hedge fund, launch a hedge fund, launches, new hedge funds, hedge fund startups 2009

Link to This Resource: When to Start a Hedge Fund

http://richard-wilson.blogspot.com/2009/11/when-to-start-hedge-fund.html

Senate Hedge Fund Bill

Senate Introduces Bill Requiring Hedge Funds to Register

Senate Banking Committee Chairman Christopher Dodd has unveiled a bill regulating the financial industry that would force advisers or hedge funds and other private fund managers to register with the Securities and Exchange Commission. This follows a similar House bill revealed which recently passed the House Financial Services Committee (see this article).

The bill would impose new record-keeping and disclosure requirements for private advisers to help regulators patrol for potential risks that private funds may pose to the marketplace.

Investment advisers of hedge funds with $100 million or more in assets would be subject to federal regulation under the bill. That threshold would increase the number of advisers subject to state supervision by 28%, according to a bill summary.

The House Financial Services Committee approved similar provisions last month.
The hedge-fund-registration requirement in Mr. Dodd's bill includes some exemptions for advisers of venture-capital funds and those that advise private-equity funds. The commission is called upon to define who specifically is exempted within six months after enactment. Source

Related to: Senate Hedge Fund Bill

Tags: Senate Hedge Fund Bill, hedge funds bill, hedge fund senate bill, house bill, regulation of hedge fund industry, securities and exchange commission

Link to This Resource: Senate Hedge Fund Bill

http://richard-wilson.blogspot.com/2009/11/senate-hedge-fund-bill.html

Hedge Funds Moving to Luxembourg

Many Funds Moving Onshore Could Choose Luxembourg

Hedge funds are expected to relocate in the wake of some high-profile financial scandals which have investors demanding greater liquidity and less counterparty risk. This has persuaded some hedge funds to move onshore to European cities, although impending taxes could drive most of the migration to Switzerland as reported here.

One country which has drawn interest from hedge fund managers is Luxembourg. The benefits of moving to Luxembourg include a multi-lingual workforce (primarily Luxembourgish, French and German), superb fund services, extensive investor protection and adequate regulation.

"It's more the Madoff effect than the legislation effect, funds now want to come onshore, not be dependent on the offshore market," said Martin Kloeck, a director at Zurich-based fund manager Signina Capital, which manages $600 million.

"Asset managers get the Luxembourg-regulated tag, so why wait to see what new laws might tell us to do?" said Kloeck, whose company is already moving funds to Luxembourg from Cayman.

It is already drawing funds from offshore centres as major asset managers like Brevan Howard and Marshall Wace register eligible funds onshore in regulated structures like UCITS III or Specialised Investment Fund (SIF) to broaden European appeal.

"It is much easier to sell UCITS- or SIF-compliant funds, they are liquid, the strategies are transparent and they provide solid investor protection," said Salvatore Imperatore, of investment advisory Pareto Capital International. Source

Also read the Luxembourg Hedge Fund Report

Related to: Hedge Funds Luxembourg

Tags:

Link to This Resource: Hedge Funds Moving to Luxembourg

http://richard-wilson.blogspot.com/2009/11/hedge-funds-moving-to-luxembourg.html

October Hedge Fund Index

Hennessee Hedge Fund Index Falls 0.05% in October

The Hennessee Hedge Fund Index fell 0.05% in October, but remains up 20% year-to-date. Hedge funds included in the index also outperformed the S&P and Nasdaq last month which fell by 2% and 3.6%, respectively. Yet the Hedge Fund Index posted a worse performance than the Dow Jones Industrial Average's flat performance in October.

Hennessee cofounder Charles Gradante said that the markets' liquidity-driven rally showed signs of weakness after seven months of positive gains. "We need to see earnings growth for the rally to be sustainable," he said.

The fixed-income index had the biggest gain among the sectors tracked by Hennessee, posting a 4.2% rise. The health-care and biotech index saw the biggest decline, 3%, followed by the short-biased index and the financial equities index, which fell 2.8% and 2.5% respectively.

Cofounder Lee Hennessee said a dichotomy exists between "funds that are defensively positioned, anticipating a market correction, and those that want to participate in a potential fourth-quarter rally."

Hedge funds have been rebounding from their worst-ever year in 2008. Funds on average lost about 20% last year, though that was far less than the decline for major stock averages. Source

Related to: Hennessee Hedge Fund Index

Tags: hennessee hedge fund index, hedge funds index, hedge fund returns, hedge funds down, hedge funds rally, equity market, s&p 500, Dow Jones Industrial Average, Nasdaq

Link to This Resource: October Hedge Fund Index

http://richard-wilson.blogspot.com/2009/11/october-hedge-fund-index.html

Hedge Funds Target Transparency Liquidity and Fraud

Transparency Liquidity and Fraud

A study just came out from the TABB Group showing a growing trend in the use of managed accounts. Hedge fund managers particularly are looking for ways in which they can increase transparency and liquidity while decreasing the chance that someone within their firm will commit some sort of act of fraud. Here is a quote from the story and link to it:

The focus on transparency, liquidity and flexibility are the primary drivers of the increased interest in managed accounts. TABB Group estimates assets in the industry invested through managed accounts will reach $790 billion by 2011, up from $468 billion in 2009. source

Related to Hedge Funds Target Transparency, Liquidity & Fraud

Tags: hedge fund liquidity levels, hedge fund manager transparency, how can I increase the transparency of my hedge fund, average hedge fund liquidity levels, hedge fund fraud prevention measures

Link to This Resource: Hedge Funds Target Transparency Liquidity and Fraud

http://richard-wilson.blogspot.com/2009/11/hedge-funds-target-transparency.html

Insider Trading Charges

14 People Charged in Hedge Fund-Related Insider Trading

The hedge fund industry's image took a blow when fourteen individuals were accused of insider trading by federal prosecutors. Stacy-Marie Ishmae has been following the case for the Financial Times and gave a good overview in a recent interview. Here is the transcript from the audio interview discussing the insider trading charges, if you would like to download the audio visit this website.

JUDY WOODRUFF: The world of hedge funds was rocked again today with new charges of insider trading. Fourteen people, including money managers, lawyers and investors, were singled out by federal prosecutors. Seven of the defendants allegedly offered tips on impending takeovers. Those tips, in turn, were passed on with pre-paid cell phones, fake names and secret meetings.

The latest charges are connected with the criminal case against billionaire and hedge fund manager Raj Rajaratnam, the founder of the Galleon Group fund, which is now being liquidated. He was among six hedge fund managers and corporate executives arrested on insider trading last month, allegedly reaping more than $20 million in illegal profits.

The U.S. attorney in Manhattan said today that the latest charges were a wakeup call to Wall Street.

PREET BHARARA, U.S. attorney, Southern District of New York: This investigation goes to the very heart of fair play in the business world. We are not just talking about aggressive hedge fund traders who are trying to get an edge. Someone had to give them that illegal edge. And it takes two to tango. As we allege in these complaints and the previous ones, those someones were unscrupulous insiders with connections to some of the best-known companies in the world. The casual betrayal of corporate secrets by insiders threatens the integrity of our markets and victimizes the companies they owed a duty to honestly represent.

JUDY WOODRUFF: And for more about these insider trading cases, we turn to Stacy-Marie Ishmael, a reporter and markets blogger for "The Financial Times." Thank you for joining us.

So, briefly, what is it that prosecutors did today?

STACY-MARIE ISHMAEL, "The Financial Times": Thanks for having me. Well, what happened this morning is that there were a series of new charges filed by the FBI and the Department of Justice against some characters that hadn't previously been named in this case. There were also eight arrests. Seven of those were in New York, and one of them was on the West Coast.

'A motley crew'

JUDY WOODRUFF: And who exactly are these people who were charged and what were they -- precisely were they charged with?

STACY-MARIE ISHMAEL: Well, it's a bit of a motley crew, actually. It's not just guys at hedge funds, although, you know, they were certainly represented. You also had two attorneys, individuals from other firms on Wall Street. You know, so, the focus has really moved away from just being concentrated on hedge funds. And the charges are slightly different person to person. But what is consistent is that prosecutors are saying, each of these individuals either provided by information that allowed people to make trades based on information that wasn't available to anybody else, or they acted on that information and executed trades and profited from that.

JUDY WOODRUFF: Are you getting a bigger-picture sense of what the investigators think was going on here?

STACY-MARIE ISHMAEL: Well, I mean, it's interesting. At this stage, what we know, you know, looking back to the initial allegations against Mr. Rajaratnam, is that they have been concerned about the activities of hedge funds and, you know, their dealings with Wall Street insiders. They have said, we think this sector, there's a lot going on that, you know, is against what the regulations prescribe, essentially. And what we have seen now is that they have moved away from just targeting the people who were just making money on those trades, and to the people who were providing the information that allowed them to make money on that trade. So, they have really shifted the focus away from what -- you know, what you would consider the center, and more on kind of the infrastructure that allowed this type of activity to take place.

JUDY WOODRUFF: Remind us of the difference of what -- clearly, all these firms do a lot of research.

STACY-MARIE ISHMAEL: Yes.

JUDY WOODRUFF: When does research cross the line and become insider trading?

STACY-MARIE ISHMAEL: That's really quite a gray area. What the SEC has tried to establish and the Department of Justice as well is that -- is to draw that line between what's acceptable, what's research, and what's insider trading. And where they have come down on that line is, if these people weren't given these particular facts or particular documents by other individuals who had a duty not to release that information, so, say, a lawyer who was working on a deal or who knew a deal might happen, but who was in breach of client privilege by giving that information out, then you're coming down on the side of insider trading.

Who is Raj Rajaratnam?

JUDY WOODRUFF: So, tell us a little more -- or remind us a little bit more about who Mr. Raj Rajaratnam is, a native of Sri Lanka...

STACY-MARIE ISHMAEL: Yes.

JUDY WOODRUFF: ... billionaire...

STACY-MARIE ISHMAEL: Yes.

JUDY WOODRUFF: ... before all this broke.

STACY-MARIE ISHMAEL: Well, I mean, before it broke, he wasn't exactly a household name, you know, much like other recent major frauds, like, you know, say, Madoff or Sir Allen Stanford. How he's been described has actually been really interesting. We have been told that his personality -- that he had a very big personality, that he could come across as quite arrogant, that, you know, he was a hard-driving boss and that he demanded very much from his traders. But then you're getting the picture that his friends and family say he was very loyal, he was a family man, he was actively involved in the community, and that he did quite a lot of charity work. So, you know, it's really a competing picture.

JUDY WOODRUFF: And remind us what he was charged with. And, by the way, he's on bail now. Is that right?

STACY-MARIE ISHMAEL: He is. He is out on bail. His bail was set at $100 million, which sounds high, but he was allowed to be free on a $20 million bond. So, they didn't actually have to put up the whole of the sum. And what he's been charged with, you know, sort of a range of things, from conspiracy to fraud, all of which center around having access to information that he really shouldn't have had access to, and then using that information to trade in stocks and shares, and profit on those trades.

Integrity issues for Wall Street

JUDY WOODRUFF: We just heard the U.S. attorney in New York make some pretty -- use some pretty strong language.

STACY-MARIE ISHMAEL: Yes.

JUDY WOODRUFF: I mean, he talked about this -- this is an investigation that threatens the integrity of the broader business community. What -- what is he getting at there? This is more than just a narrow thing, it sounds like.

STACY-MARIE ISHMAEL: That's exactly what he's saying. I mean, the analogy here is to a cancer, in a sense. The -- there has been a lot of discussion, particularly among regulators, about the fact that, increasingly, smaller investors -- so, investors who aren't at the big banks, investors who may never have set a foot on Wall Street -- are disadvantaged, you know, by having just a lack of access to this kind of infrastructure. Now, some of that infrastructure is perfectly legitimate. But what -- you know, what the SEC and others are saying is that they worry that these kinds of activities, whether they be done by hedge funds or, you know, facilitated by lawyers, are really undermining the way that markets are supposed to work. They're making markets unfair, essentially.

JUDY WOODRUFF: And, I mean, he used the term, this is a wakeup call for Wall Street.

STACY-MARIE ISHMAEL: Yes. And I think what he's getting at there is, you know, some people on Wall Street may have gotten complacent and they may have felt like, well, nobody's going to come after me; what I'm doing isn't really wrong; I can get away with this. And the message that prosecutors and regulators are sending out is that, no, this is wrong, and you can't get away with it.

JUDY WOODRUFF: And, just quickly, do you have a sense of what happens next in this investigation?

STACY-MARIE ISHMAEL: That is an excellent question. There's a very, very strong sense that, you know, this second wave of arrests and charges today isn't necessarily the end of the story, that, you know, there may be more to come. You know, for instance, you know, going back to a couple weeks ago, when the first set of charges were announced against Mr. Rajaratnam, very shortly after, you saw high-profile people resigning from jobs. You know, it toppled an executive and there was the partner at McKinsey who fainted on his doorstep after having these allegations thrust against him. And we expect that simply because of how big some of these firms were and just the complexity of what was involved, that we're going to see more of the same in the coming weeks.

JUDY WOODRUFF: Stacy-Marie Ishmael with The Financial Times, thank you very much.

STACY-MARIE ISHMAEL: Thank you.

JUDY WOODRUFF: We appreciate it. Source

Related to: Hedge Fund Insider Trading

Tags: hedge fund insider trading, fourteen, Raj Rajaratnam, Galleon Group, insider trading, SEC, securities and exchange commission, hedge funds, fraud, corruption

Link to This Resource: Insider Trading Charges

http://richard-wilson.blogspot.com/2009/11/insider-trading-charges.html

Hedge Funds Sweden

Swedish Plan Removes Leverage Limits for Hedge Funds

The Swedish government recently advocated for some reform of the hedge fund industry but warned against "overzealous" regulation. Now, the Swedish government, which holds the European Union's 6 month alternating presidency, has unveiled a plan that would take away a general limit on hedge funds' leverage. This runs against the EU Directive aimed at reducing leverage used by buyout firms and hedge funds. The Swedish government's compromise is to empower regulators to place limits on leverage "where the stability and integrity of the financial system may be threatened."

These limits "should take into account...the market conditions in which the fund operates," the proposal said. The Swedes' proposal has deleted the passage in the original draft directive that refers to a leverage threshold that "should not be breached at any point in time."

Hedge-fund managers and institutional investors have expressed concern about the original draft of the proposed directive, in particular the permanent limit on leverage. The draft directive referred to a leverage ratio of 2 to 1 -- that is, borrowing as much again as the amount in the fund -- as "high."
Many hedge-fund managers say they need the freedom to borrow more than that in order to make money.

Fixed-income hedge-fund managers used leverage of as much as 7 to 1 in 2006, according to research prepared by economics consultant Charles River Associates and published last month by the FSA, and even this year, when leverage levels are significantly lower, they typically use leverage of more than 2 to 1. Source

Related to: Hedge Funds Sweden

Tags: Swedish hedge funds, hedge funds in Sweden, hedge funds, regulation, regulate private equity and hedge funds, EU directive, directive european union

Link to This Resource: Hedge Funds Sweden

http://richard-wilson.blogspot.com/2009/11/hedge-funds-sweden.html

Commodities Asset Class

Commodities Preferred Asset Class

Poll: Commodities is Preferred Asset Class for Next Year

A global poll by Bloomberg has found that commodities are now the preferred investment during the next year. Bloomberg users were asked which asset class will offer the highest returns and the lowest and the majority voted for commodities; in a July poll, users believed stocks offered the best returns. The change follows a 27% increase in the UBS Bloomberg Constant Maturity Commodity Index and a smaller 17% gain in the S&P 500 Stock Index since that July poll.

Real estate and bonds also switched positions in the ranking of which asset class would offer the lowest returns. In July, 40 percent said real estate would rate last while 29 percent said bonds. This week’s poll showed 40 percent cited bonds and 24 percent real estate.

The poll of investors and analysts on six continents was conducted Oct. 23-27. It was based on interviews with a random sample of 1,452 Bloomberg subscribers, representing decision makers in markets, finance and economics. The poll had a margin of error of plus or minus 2.6 percentage points. Source

Related to: Commodities Top Asset Pick

Tags: commodities, asset class, assets, investor picks, managers, traders, commodities and futures, commodities trading, preferred asset class, bloomberg

Link to This Resource: Commodities Asset Class

http://richard-wilson.blogspot.com/2009/11/commodities-asset-class.html

Hedge Fund Cow Paths

I recently heard Eben Pagan speak in LA at a marketing conference on how business is typically conducted. I was reminded of that talk while I was in Boston last week for our Hedge Fund Premium networking event (which was great).

The streets in Boston were actually old cow paths that the city decided to just pave over to create the roads of the city. The result, is a very complicated maze of one way streets which really only make sense to the most veteran cab drivers. This is not the cows fault they simply walked typically in the direction of least resistance. The point here is that nobody stepped back and looked at where the cows had wandered and asked if there was a better way to get the project done...they simply followed where cows had walked in the past.

Pagan's point in telling this story was that in every business, every form of marketing and even within the hedge fund business there are cow paths everywhere. Are you and your business wandering around on cow paths of what others have done in the past, or are you building a super highway straight towards your goal?

Areas to examine for hedge fund managers could including hiring, capital raising, employee management, performance reporting, transparency, governance, and investor relations. Our team now often steps back and looks at competitors, other industries, and steps to the work we are trying to complete to see if there is a more direct or efficient way of completing it. Hope this story helps.

- Richard Wilson

Related to Hedge Fund Cow Paths

Tags: hedge fund cow paths, hedge fund processes, business processes of hedge fund managers, hedge fund managers and how they operate their small businesses

Link to This Resource: Hedge Fund Cow Paths

http://richard-wilson.blogspot.com/2009/11/hedge-fund-cow-paths.html

Hedge Funds Managed Accounts

Hedge Funds Managed Accounts Predicted to Rise 70% by 2011

A research firm predicts that assets in hedge funds' managed accounts will rise almost 70% by 2011. After 2008, investors have expressed increasing concerns over management and performance fees, changing redemption policies, supporting managed accounts, and launching more liquid strategies. Many hedge fund managers are trying to address these concerns in order to bring back investors who withdrew their investments in the last year.

The TABB Group estimates that separately managed accounts will be more popular in the next two years. The group forecasts that assets in the hedge fund industry invested using managed accounts will reach $790 billion by 2011, a big jump from $468 billion in 2009.

Compared to a few years ago, investors have increased their bargaining power over hedge fund managers. There is a limited amount of capital, and investors possess the assets required by hedge funds to survive.

A common way hedge funds are alleviating investor concerns is through separately managed accounts. The number of investor requests has already started to trickle in because of the perceived advantages managed accounts offer, especially regarding transparency and control. But not all hedge fund managers are convinced and will resist managed accounts because they believe the costs outweigh the benefits— due to additional operational and administrative challenges—and threaten the value proposition of the hedge fund infrastructure.

Hedge fund managers are also responding by changing redemption policies. They are shortening lock-up periods and launching new funds with more favorable terms. They are also minimizing the use of gates, yet remain conscious of the fact that meeting the demands of individual investors must not be sacrificed for the well-being of the entire pool of investors. Report available for purchase here.

Related to: Hedge Funds Managed Accounts

Tags: hedge funds managed accounts, managed accounts, separately managed investment accounts, hedge fund managers, investors, 2009, estimates

Link to This Resource: Hedge Funds Managed Accounts

http://richard-wilson.blogspot.com/2009/11/hedge-funds-managed-accounts.html

Asia-Focused Hedge Funds

Asia-Focused Hedge Funds See First Net Inflow Since '08

Hedge funds focused in Asia have finally seen inflows for the first time since Q2 2008. Hedge funds investing in the region returned 9% during the third quarter signalling a possible recovery.

Asia-focused hedge funds saw their first inflows in more than a year during the third quarter as they returned nearly 9% during those three months, according to data released by Hedge Fund Research.

Ken Heinz, president of the data compiler, said the sector displayed "versatility while building on strong year-to-date performance."

Hedge Fund Research said Asia-focused hedge funds had $73.7 billion of assets at the end of the quarter, compared with more than $1 trillion for the industry as a whole. Part of the quarter's gains were the result of $800 million of net new capital, the first gain since the second quarter of last year.

The hedge-fund industry is rebounding from last year's record-bad performance, though the declines paled in comparison to those seen by major stock-market indexes. Source

Related to: Asia-Focused Hedge Funds

Tags: asia focused hedge funds, asia funds, hedge funds investing in Asia, Asia investing, alternative investors in Asia, China hedge funds, Japan hedge funds, Korea hedge funds

Link to This Resource: Asia-Focused Hedge Funds

http://richard-wilson.blogspot.com/2009/11/asia-focused-hedge-funds.html

Hedge Funds Investors War

Hedge Funds and Investors Face a War Over Terms?

Since hedge funds have rallied in 2009, managers may be feeling a bit more ambitious negotiating terms with investors. But institutional investors are challenging this, considering the heavy losses that many hedge funds suffered just a year ago. Some institutional investor predicts "war" between investors and hedge funds.

A key complaint of investors has been that while many of them lost money during the financial crisis, hedge fund managers were still able to rake in millions of dollars in fees. Last year, average hedge fund returns were a minus 19 percent.

"If they want money from us they will have to offer ... alignment of interests. If hedge funds remain arrogant and not humble, I think money will go elsewhere," Philip Read, chairman of the British Coal Staff Superannuation Scheme, said on Tuesday.

"We're increasingly going to gang up against you... Institutional investors are totally disillusioned with funds not delivering what was on the tin," he told the the Hedge 2009 conference in London. Hedge funds typically charge a management fee of 2 percent or sometimes more on assets -- well above the cost of mutual funds -- plus a 20 percent fee on performance, which is often levied on any positive returns not just those that fall above a "hurdle rate", or target agreed with the investor. Source

Related to: Hedge Funds Investors War

Tags: hedge funds investors war, hedge funds limited partner, lpa, investors, investor term sheets, debate, institutional investors

Link to This Resource: Hedge Funds Investors War

http://richard-wilson.blogspot.com/2009/11/hedge-funds-investors-war.html

Launching an Offshore Hedge Fund

Should I Establish an Offshore Hedge Fund?

Brent Gillett, a partner at the Investment Law Group, has contributed a question and answer series covering the establishment of a hedge fund and laws related to hedge funds.

Question: Should I establish an offshore fund?

Answer: Offshore funds are typically created by investment managers with significant prospective investors located outside the United States. They are also attractive to U.S. tax exempt investors as a way to avoid certain taxes. Offshore funds are usually established in Caribbean jurisdictions, although
a European offshore entity may be more appropriate if a significant number of European investors are involved. We can help you determine whether an offshore fund is necessary based on your fund’s needs. Additionally, we can help you determine the proper structure (parallel or master-feeder fund) and the proper offshore jurisdiction (Cayman, BVI, Ireland) based on your fund’s unique characteristics.

Guest author: Brent S. Gillett, partner at the Investment Law Group. To find more information about the Investment Law Group follow this link.

Related to: Launching an Offshore Hedge Fund

Tags: Launching an Offshore Hedge Fund, offshore hedge funds, hedge funds launch, hedge funds, hedge fund managers, questions

Link to This Resource: Launching an Offshore Hedge Fund

http://richard-wilson.blogspot.com/2009/11/launching-offshore-hedge-fund.html

Weekly Liquidity Within Hedge Funds and Fund of Hedge Funds

Weekly Liquidity within Hedge Funds

For those hedge fund managers who are tracking the transparency, liquidity, lock-up period fluctuations of competitors I thought it was interesting to see that HSBC is launching a fund of hedge fund product with weekly liquidity and strict leverage requirements.

HSBC Alternative Investments is joining the UCITS III rush with a new fund of hedge funds.

The bank will launch its Ucits AdvantEdge fund this month. The new vehicle will seek to take advantage of the credit crisis, investing in underlying managers who specialize in discretionary macro, equity-market neutral, managed futures and equity long/short strategies, the Financial Times reports.

But the new fund will also cater to the skittishness of investors in the wake of the financial crisis: It will offer weekly liquidity and features strict limits on leverage, counterparty risk and types of securities traded. source

Related to: Weekly Liquidity from Hedge Funds

Tags: weekly hedge fund liquidity, do hedge funds provide weekly liquidity, hedge fund liquidity terms, terms included within hedge fund agreements, alternative investment liquidity issues

Link to This Resource: Weekly Liquidity Within Hedge Funds and Fund of Hedge Funds

http://richard-wilson.blogspot.com/2009/11/weekly-liquidity-within-hedge-funds-and.html

Phil Duff and Duff Capital Management

Duff Capital Management

Just read with interest that Duff Capital spent a $100M starting their hedge fund...most hedge funds I speak with spend $70k - $1M or at most $3-5M in starting up their fund operations.

"He earned degrees from Harvard University and MIT and then skipped through the ranks at investment bank Morgan Stanley, becoming chief financial officer in 1994, when he was 36. Hedge fund phenom Julian Robertson hired him four years later as chief operating officer at Tiger Management LLC.

Duff struck out on his own in 2000, founding hedge fund firm FrontPoint Partners LLC -- which Duff, a lifelong outdoorsman, named for a mountain-climbing technique used to scale steep ice faces with crampons. Six years later, he sold the company to Morgan Stanley for $400 million. source"

Related to Phil Duff and Duff Capital Management

Tags: Phil Duff and Duff Capital Management, phil duff, duff capital management hedge fund

Link to This Resource: Phil Duff and Duff Capital Management

http://richard-wilson.blogspot.com/2009/11/phil-duff-and-duff-capital-management.html

K1 Hedge Fund Founder Arrested

Founder of Germany's K1 Arrested in Fraud Probe

Helmut Kiener, the founder of K1, has been arrested by German authorities in a large fraud probe concerning a Caribbean-based fund that he managed. Investigators are looking into Kiener over charges of fraud and breach of trust.

According to the arrest warrant, "Barclays and BNP Paribas may have lost millions of dollars in the case, which prosecutors say spanned the Atlantic and featured lavish personal spending on planes, a helicopter and luxury properties."

"There is a suspicion that the 50-year-old suspect did not comply with investment guidelines agreed with an English and a French bank among others and has used several millions in funds contrary to agreements," prosecutors said in a statement.

The case centres on the K1 Global Sub Trust hedge fund run by Kiener, a psychologist by training who once sold ads for the Yellow Pages in Germany before moving into the financial sector.

Barclays may have lost most of the nearly $220 million (133 million pounds) it invested with the fund, authorities said.

"If Barclays had known of the suspect's plans, it would not have provided the K1 Global Sub Trust any funds for investment between 2006 and 2009," the arrest warrant seen by Reuters says, adding the funds "are mostly lost as far as we now know". Source

Related to: KI Hedge Fund Manager Arrested

Tags: K1, K1 group, K1 foundation, K1 fund, fraud, crime, hedge funds, helmut k1, German hedge funds, Helmut Kiener, Helmut Kiener k1 arrested, arrest

Link to This Resource: K1 Hedge Fund Founder Arrested

http://richard-wilson.blogspot.com/2009/10/k1-hedge-fund-founder-arrested.html

Email Marketing Best Practices

I worked as a risk consultant and capital raiser for 7 years before starting my own firm. During the last few years of those positions I was responsible for raising most assets on an email and phone-based system and I have slowly picked up some tips for capital raising since then. I started my own firm 2 years ago and since then I have sent and received over 800,000 emails. Our business is so email-based that we have been forced to study best practices within this space to improve our efficiency at connecting with potential clients.

Most CEO's don't invest their time or put much importance on managing email communications. One of my favorite quotes by Brian Tracy is that if you want what to have others don't, you have to do what other's don't. If you invest your time in increasing your effectiveness at email marketing you will have an edge over others.

Tonight I'm speaking on email marketing for capital raising. I will be sharing best practices in reaching out to potential and current investors through writing copy and using email marketing best practices. While 99% of those reading this blog will not be able to attend the event we will be posting a recorded video of this discussion to Hedge Fund Premium and sharing some of the tips below within this post:

Email Marketing Best Practices

Understanding Importance of Copy: What is the difference between a $1 and a $100 bill? The message on the paper. The message on your email, the message on your investor letters, the message on everything you write makes the difference between it being worth $1,000 and $100,000. I think that sales copy writing is consistently under-valued and overlooked by business and investment professionals of all types. One of my best tips for email marketing would be to simply not overlook the power of a carefully constructed email marketing campaign or well written piece of communication.
Use the professionals first name within the subject of emails to them - Marketing Sherpa 2008 study showed this increased open rates by 30%, using both the first and last name increased open rates by 22%.
Focus on the Headline: The most important part of any piece of copy is the headline. Often times over email the headline of the email is a slight variation of the subject line, perhaps the subject line minus the person's first name. Focus on fitting a benefit and then the chain reaction of that benefit into the headline if possible. "Double Your Capital Raising Resources to Cultivate More Investors Each Day" We have found that putting the benefit after your firm name is most effective. Just be careful not to promise benefits that are odds with your compliance department.
Focus on the Start: Hook the reader within the first paragraph. Make sure the first paragraph is no longer than 2 sentences and provides a very concise summary as to what will be discussed within the following message. If possible try to fit in both what the benefits will be of hearing this information and what the dangers are of not paying attention to this information. Psychology studies consistently show that professionals are almost twice as likely to listen more closely and take action on information related to a fear or some negative result rather than some potential benefit or positive outcome. This does not mean you should scare clients into working with you, but you should hook readers using framing which mentions the positive as well as negative consequences of not taking action. The recent use of email browsers which let you preview the first 50-150 words of email messages make the start of your email even more important.
Use Professional Email Distribution Services: Use a professional email distribution services such as Aweber, this costs $10/month or less to start using. By using this service your emails will be delivered more often, your campaigns will be more organized and the service will more than pay for itself through saving you and your time valuable time. Make sure that whatever service you use, you consider opt-in confirmation and enable an unsubscription link at the bottom of each email you send.
Automate Relationship Development: Use automated follow up emails. Write a series of 20 educational emails covering industry white papers, industry findings, commonly misunderstood terms, and information about your fund. Once you have qualified an investor, ask for their permission to opt into an email list which will automatically email these professionals once a month for the next 20 months. If you deliver value within each of these 20 emails your further inquiries will be well received. We currently use Aweber to send out automated emails to over 50,000 professionals each month.
Use Stories: Whenever you are writing an email or sales letter try to incorporate a story of some type. How was this product created? How did your career and experience evolve and bring yourself to this point where you have gained this knowledge? If you scroll up to the beginning of this post you will see that I have a short story about my own experience with email marketing which led me to write this article.
Picture & Signature: End your communication with a picture of the professional on your team which is held out as the communicator or leader. Make sure that a real scanned signature and professional picture are included to help readers connect with your team.

Hope these tips help you improve your email marketing campaigns

- Richard Wilson

Related to Email Marketing Best Practices

Tags: email marketing best practices, business email campaign management, email campaigns for small business professionals, investment marketing via email, email marketing tips and strategies

Link to This Resource: Email Marketing Best Practices

http://richard-wilson.blogspot.com/2009/10/email-marketing-best-practices.html

Boston Hedge Fund Event Tonight

Boston Hedge Fund Event

See everyone at the Boston hedge fund event tonight: Boston Hedge Fund Networking Event, Thursday 10.29.09

Related to Boston Hedge Fund Event

Tags: Boston networking events, hedge fund networking events in Boston MA

Link to This Resource: Boston Hedge Fund Event Tonight

http://richard-wilson.blogspot.com/2009/10/boston-hedge-fund-event-tonight.html

Business Investment In Brazil Rising

Business Invested in Brazil Rising

I know of several entrepreneurs, investment banks and hedge funds who are actively investing in Brazil or making plans to do so. Our company has a full time employee based in Brazil and we meet with fund managers within the area. I still believe that Brazil is underestimated within the shadow of China and I believe that Sao Paulo is going to emerge as a top 5 financial center over the next 10 years. Here is a recent article which just came out on Brazil, thank you to the Albourne Village for the tip on this story.

Over the last decade we've gotten used to reading articles about companies with big plans to expand in China: Wal-Mart (WMT), McDonalds (MCD), Starbucks (SBUX), IBM (IBM)... and the list could go on and on.
That will go on for awhile, but you know that for the next sevearl years, especially in the lead-in to 2016, we're going to read A LOT more stories about companies with big ambitions in Brazil.

Spanish banking giant Banco Santander (STD) is thought to have potentially gigantic problems, but for now, they're expanding while other banks are in retreat, and the South American giant is big, juicy target. Source

Related to Investments in Brazil Rising

Tags: Investments in brazil rising, foreign investments made in Brazil, Growth of Sao Pauolo as a financial centers,Brazil as a top ten global economic leader, Brazil investments growing in size

Link to This Resource: Business Investment In Brazil Rising

http://richard-wilson.blogspot.com/2009/10/business-investment-in-brazil-rising.html

Hedge Fund Fight Night

Hedge Fund Fight Night for Charity Held in Hong Kong

Hedge fund managers compete against each other all the time but rarely does it come to actual blows. Then, there's Hedge Fund Fight Night. Yes, it's that time of year again when hedge fund managers and professionals get together in Hong Kong to fight, with all the proceeds going to charity.

An estimated 800 hedge fund professionals will be in the audience October 29th to watch 12 of their colleagues battle in the ring for three, 2 minute rounds. The professionals will also bid on holiday packages benefiting Operation Smile and Operation Breakthrough. The goal of the event is to raise almost $130,000 to "repair children’s facial deformities and combat crime and juvenile delinquency in low-income and immigrant communities."

Tables for 12 cost between HK$18,000 and HK$50,000, and pay for training the fighters and hosting the event, said Robert Derry, IronMonger’s managing director, in an interview. A medical team will be on standby during the bouts.

Aside from Descourtieux, Bruce “Almighty” French of UBS AG, Steve “Dynamite” Davidson from JPMorgan Chase & Co. and Jesse “Happy Feet” Kavanagh of Nomura Holdings Inc. will also fight in the finals. John “Headcount Reduction” Crane of 3A Asia Ltd., a fund of funds, is the oldest fighter at 49.

Boxing and other martial arts are gaining popularity among Hong Kong’s professionals, especially in industries such as trading which thrive on risk, reward endurance and punish mistakes with brutal blows, according to Andrew Wong Kee, managing director at Jab. Wong Kee says the number of Jab’s students have risen 20 percent since September 2008 as more professionals signed up to beat stress. Read full article

Read about last year's Hedge Fund Fight Night

Related to: Hedge Fund Fight Night

Tags: Hedge Fund Fight Night, Hedge Fund Fight Night in Hong Kong, Hedge Fund Fight Night 3, hedge fund martial arts, fighting, competition, managers fight, alternative assets, hedge funds charity

Link to This Resource: Hedge Fund Fight Night

http://richard-wilson.blogspot.com/2009/10/hedge-fund-fight-night.html

Resources

Wikinvest Wire