Public Hedge Fund Mangers
Public Hedge Fund Managers Vary in ReportingThere is widespread pressure coming from regulators and investors for hedge funds to provide regular reports and increase transparency. This push to report the performance of hedge funds is even greater on public hedge fund managers, but of the public hedge fund managers in the U.S., the reporting of performance varies significantly. There are only three U.S. public companies that manage hedge funds and each reports its funds' performance in different ways from monthly reports, to quarterly, to never.
Since Och-Ziff Capital Management Group (OZM) is the best at regularly reporting, offering monthly updates on how each of its four main hedge funds are performing. Fortress Investment Group (FIG) has started to provide quarterly reports after the Securities and Exchange Commission pushed the firm.
The Blackstone Group (BX) has resisted the SEC thusfar arguing that fund performance does not have to be reported and that it is not important anyway. Nearly half of Blackstone's AUM is in hedge funds, hedge fund of funds or other investment in alternative assets. The rest of the firm's assets are in long-term private equity and real estate funds.
Hedge funds, after suffering their worst year on record in 2008, were up an average of around 9% this year through June 30, according to Hedge Fund Research. Stocks of the three publicly traded managers, after suffering along with the rest of the industry last year, have seen good stock performance lately. Fortress' stock has nearly tripled so far this year, although it's still under $3 and is down 70% from a year ago. Och-Ziff's stock is up almost 60% this year to more than $8, but it's off about 50% from a year ago. Blackstone's is up around 35% year-to-date, to almost $9, but is down more than 40% from a year ago.
The question, of course, is whether Blackstone is obliged to report performance in its hedge funds - which include the GSO Capital Partners credit hedge fund - or whether that is information that, as Blackstone has said, isn't "meaningful."
To investors, it just might be.
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