Richard Wilson's Background

My name is Richard Wilson and my background is in capital raising and working with hedge fund managers. My career in the industry started in 2002 when I completed a project completing leading indicator trading research for a German-based hedge fund. My job was to analyze the correlation and relationship between the currencies and commodities of Japan, New Zealand and Australia. It was through this first project that I began to learn about how hedge funds operate and invest on a macro level. After that I worked in risk management and capital raising consulting roles for several years and then moved to Boston to work for a third party marketing firm, a capital raising group serving fund of hedge fund managers, hedge funds, and long only optimization shops. Within this role I grew from raising less than $100k/week to raising $2-4M/week on average and I picked up techniques and methods which work through making mistakes myself, watching others, reading about sales best practices.

In June of 2008 I decided to step back and stop raising capital hands-on and start helping other managers raise capital. Here is why:

In a third party marketing role I can raise capital directly for 2-4 fund managers at any one time but I am asked for help from literally thousands of managers each year. Serving just a handful of those when many needed help did not seem like the right answer.
My websites on hedge funds, capital raising, and family offices were now getting over 8,000 pageviews a day and I was getting over 150 emails each day from site visitors
I had learned a lot through my trial and error and previous consulting work, and I wanted to develop a platform through which to share that knowledge.

The result was the creation of a line of tools and resources to help train professionals and assist managers in raising capital on a broad scale. Our team created the first online training and certification program exclusively for hedge funds - the Certified Hedge Fund Professional (CHP) Designation Program. We then came out with our investor database products, where we provide contact details for valuable investor types to fund managers. During this process our blogs and websites continued to grow in popularity and membership within our free-to-join Hedge Fund Group grew to 30,000 members. This led us to develop 14 additional hedge fund industry tools and resources as a premium membership option for the Hedge Fund Group, these were released through our new website: Hedge Fund Premium.com.

Our organization now meets face-to-face with over 350 hedge fund managers a year, we receive well over 2 million visitors to our websites each year, and we provide hedge fund training, capital raising tools, and solutions to over 1,500 clients each year.

Each winter I move to Brazil for 2-4 months to meet with fund managers, hold networking events and create new capital raising tools. I will be staying in Sao Paulo, Brazil during most of my visit and if you would like to meet with us for lunch, a networking event, or to discuss your capital raising efforts please let us know. Our goal is to constantly collect feedback on capital raising challenges of fund managers so that we can continue to develop methods, tools, techniques and resources to help double our client's capital raising results.

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Onshore Versions of Hedge Funds

Hedge Funds Planning to Launch Onshore Versions

We've been reporting on the changes to the European hedge fund industry and the latest development comes from Hedge Fund Intelligence which reports that over half of European hedge funds are planning to set up regulated onshore versions of their strategies or have already established these onshore funds. In a survey of 650 houses, one fifth of European hedge fund managers have launched or are in the process of starting a Ucits III mutual fund and another third are thinking about opening one.

A series of high-profile managers, such as Brevan Howard, Man Group and Marshall Wace have unveiled Ucits funds since 2007, allowing them to raise funds from small investors and institutions that prefer the relative safety of regulated vehicles. Industry sources suggest about 100 such vehicles have been launched to date.

“Considering the flexibility Ucits III offers, we’re forecasting that [this] trend will continue,” said Damian Alexander of HFI. Of the Ucits hedge funds HFI is aware of, a third are long/short equity funds, one-sixth equity market neutral or quantitative and 11 per cent managed futures. Source

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Alternative Assets Internship

Applying for an Internship at an Alternative Assets Firm

Below is a guest post by Theo O'Brien of Private Equity Blogger.com on landing an internship or job in private equity and hedge funds. Also see our collection of hedge fund career resources here.

About a year ago, I published a post here asking for interns to help with the private equity blog, the Private Equity Investment Group networking association, writing the free private equity e-book, and similar projects. Many people, mainly MBA students and recent graduates, responded with strong interest in landing a private equity internship.

Most respondents were seeking an internship with a private equity or venture capital firm and I noticed that almost every e-mailed answer was different, varying from a two sentence note with a rough resume attached to a very lengthy memo with a cover letter and resume. As the majority of respondents were mistakenly under the impression they were applying for an internship with a private equity firm, this gives me a good opportunity to provide some advice on applying for an internship or paid position at a buyout shop.

I have reviewed a lot of internship applications and here are some common problems or things to avoid:

Check grammar and spelling: Here is a common mistake that I'm always surprised to see because it is so easy to fix. If you really want a position, why not spend an extra fifteen minutes reviewing the application to fix obvious grammar and spelling errors? I know that managers often interpret this as either the applicant has a poor attention to detail (a critical and valued skill in private equity) or the applicant is simply lazy and does not want the job as much as someone who put in the extra effort to have a well-edited application. In such a competitive job market, this kind of mistake could mean the difference between you getting the job and the other person who went the extra mile.
Don't Mass E-mail: I can tell when I receive a mass e-mail and when it is an e-mail for a specific job opening. Private equity employers can tell the difference too. If it doesn't sound forced, it may be good to include a comment that shows you have been following the firm and know something about it. If the firm invests primarily in a specific industry you can say something like, "I believe that my previous work experience in the energy sector would be very valuable to Example Buyout Firm because your firm has a long history of investing in this industry.
Be Professional Not Funny: I believe that humor rarely works in the introduction to a potential boss. It's not that the manager or recruiter lacks a sense of humor, it's just too risky that a little joke with not translate well over e-mail or you will simply look unprofessional. I have received e-mails about the internship that were intended to be humorous but came off weird or annoying, such as one memorable e-mail that began, “READ THIS MOST IMPORTANT EMAIL FROM YOUR FAVORITE PERSON.” Having never met the person, it was misleading and overall off-putting. This is not to say that you should be uptight when interviewing or communicating with a potential employer, but always maintain a professional attitude. Once you get the job and get to know your coworkers better you can relax more; there is a time and place for humor.
Missing Attachment or Information: This is a common problem that I see, applicants will e-mail an incomplete e-mail missing vital information or documents. For example, I have received an e-mail with no name and I have been sent an application where the person referred to a resume that was not included. These are simple understandable mistakes (I often forget attachments) but in such an important e-mail it's worth reviewing to make sure everything is included and then having a friend or colleague double-check.
Not Too Long, Not Too Short: Private equity partners and recruiters are extremely busy so they prefer a concise and direct e-mail. When applying for a job, I would suggest a cover letter explaining what position you are applying for, why you would like the job, and what qualifications you have. Then a easy-to-read resume attachment. Too often applicants will write excessively long e-mails or a one sentence note.

Here are some suggestions to have a great e-mail or letter application for an internship and full-time position.

Double check: As I have noted, it is worth the extra effort to review and revise your writing. A well-written and carefully checked communication will often put you above other candidates.
Get Feedback: If you are applying for an internship or job in private equity, it's a safe bet you have a few great resources you've overlooked. Most applicants for a full-time position have already worked in finance or a related field and hopefully you have kept a good relationship with your former boss and colleagues. If you left on good terms why not run your resume and cover letter past your old coworkers to see if they would add or omit anything. If you're applying for an internship you can ask a former employer, family member, friend, or professor to review your application.
Highlight Your Strengths: Often I see applicants note their weaknesses rather than strengths. An e-mail will typically go something like, "I know that I do not have the same academic qualifications as other candidates but..." While it's important to be aware of the weaknesses in your resume, leave it there. The employer will see these shortfalls, if he cares, and there is no reason to remind him of what you lack. Usually the example sentence will continue "...but I do have the following qualities..." I would remove the first part of the sentence and focus on your strengths exclusively.
Be Persistent: I always have to add a reminder that success in business and life comes with persistence. If you don't land your dream job move on to other opportunities or review your efforts and make improvements. Private equity is a tough market, you have to be tough too.

This post is not a guarantee that you will land a private equity internship or job but a well-written e-mail or letter is the first step in getting to the interview, then it's all you. I hope this was helpful.

Also see five career mistakes to avoid, our variety of helpful hedge fund career resources and how to write an alternative assets resume

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Hedge Funds Stock Market

Hedge Funds Investing More in Stock Market

Hedge funds invested heavily in the stock market during the third quarter of 2009. This represents hedge funds' biggest appetite for stock market risk in two years and may signal a broader recovery of the financial industry. Goldman Sachs' most recent Hedge Fund Trend Monitor found that hedge funds amassed just over $600 billion of long equity positions and with an estimated $363 billion in short positions, net long exposure increased to 40%. This is the "most bullish level" since December 2007, according to Goldman's analysis.

"The equity market appreciated 16 percent during the quarter, suggesting that hedge fund net exposure increased as a result of active equity buying as well as short covering," Goldman analysts wrote.

Goldman observed that hedge funds, though upping the ante on every sector, in particular raised their net long exposure in financials: to 29 percent from 9 percent in the second quarter and from net short positions last year.

Funds also showed greater interest in information technology and consumer discretionary companies. Industrial companies were the only sector where hedge funds pared their exposure. Source

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Galleon Fund Defense

Galleon Fund Disputes Government's Accusations

Raj Rajaratnam of Galleon Fund is disputing the government's accusations that he participated in insider trading. Mr. Rajaratnam's attorneys also argued that the government misled a judge when obtaining wiretaps.

Billionaire hedge fund operator Raj Rajaratnam's (RAHJ rah-juh-RUHT'-nuhm) lawyers made the arguments in papers filed Tuesday in federal court in Manhattan.

The Sri Lanka-born Rajaratnam is among 20 people charged in a $52 million insider trading case. The portfolio manager for the Galleon Group hedge fund remains free on $100 million bail.

Rajaratnam's lawyers say he based trades on information that was already public. They also say the government misled a judge to surreptitiously tape phone conversations by Rajaratnam and others. Source

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Hedge Funds Frozen Assets

Lehman May Return $11 Bil of Frozen Hedge Fund Assets

Hedge funds have been fighting to regain over $35 billion of hedge fund assets which were frozen following the investment bank's fall last year. Hedge funds are now considering a proposal that would return at least $11 billion of the frozen assets by March. The proposal, put together by PricewaterhouseCoopers [PWC.UL], requires approval by 90% of Lehman's clients.

"This agreement has been negotiated over the last six months and will now allow us to return a further $11 billion or so of trust assets to their rightful owners," Steven Pearson, joint administrator for LBIE and a PricewaterhouseCoopers partner, said in a statement.

Hundreds of hedge funds were left hanging last September when New York-based Lehman filed for bankruptcy. More than $35 billion of assets that they entrusted to Lehman's London unit have been frozen as part of the receivership process.

The proposal, which will be sent to fund managers Tuesday, would return assets to funds and close out positions without the need to post further collateral. LBIE's creditors' committee supports the plan unanimously.

Clients have until Dec. 29 to vote on the plan. PwC hopes to set a deadline for filing claims at the end of February and return assets before the end of March.

Source

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Hedge Funds Bank Capital

Banks Raise 40% of Capital From Hedge Funds This Year

Banks have been looking to anyone for capital to overcome the credit crisis and apparently hedge funds have been one of the largest rescuers. A recent report estimates that hedge funds account for 40% of the capital raised by American and European banks this year, allowing the struggling banks to meet government capital requirements and avoid bankruptcy. This could be a reason for minimizing the regulation expected to fall on the hedge fund industry, as regulators realize the helpful role of hedge funds in rebuilding the financial system.

“We believe some policy makers realize the supportive role providers of risk capital can play,” [a London based analyst] said in the report.

JPMorgan Chase & Co. and Goldman Sachs Group Inc. led 10 of the largest U.S. banks that repaid $68 billion to the U.S. Treasury in June, aided by funds raised in share sales. Paulson & Co., the hedge-fund firm run by billionaire John Paulson, bought a stake this year in Bank of America Corp. and told investors this month that he expects the stock to almost double in the next two years as writedowns ease.

The government’s stress tests, which examined 19 of the largest U.S. financial companies, showed in May that 10 needed to raise capital to survive a longer, more-severe recession. Lenders announced plans over the next month to raise at least $100 billion to fill capital gaps and clear the way for repaying the Treasury’s bailout fund.

Hedge-fund assets may rise to $1.75 trillion by the end of 2010, van Steenis said. The industry now manages $1.53 trillion, according to data from Hedge Fund Research in Chicago. Source

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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

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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

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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.

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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?"

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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.

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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.

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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

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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

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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

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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

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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

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

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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

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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

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