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Starbucks Hedge Funds

Starbucks Hedge Funds

Starbucks CEO Blames Hedge Funds for Commodity Prices

It's been a good week for Starbucks CEO Howard Schultz, as his company posted a 20% increase in second quarter profits.  Still, Starbucks might take a hit as the price of coffee and other commodities hits impressive heights.  As the coffee price hits a 34 year high of $3 per pound, Schultz explains hedge funds role in the rising price of commodities.
Q: How are you dealing with soaring coffee prices?


I think everyone in the food business is quite concerned about rising commodity costs and specifically for us, coffee. Especially when I know for a fact there's no supply problem. 
Q: It's all about speculation you've been quoted saying?
Well I just gave a key note address at the National Coffee Association in New Orleans about a month ago. I met one-on-one with key suppliers. There wasn't one supplier that indicated to me that there was any supply issue. So we're living at a time right now where financial speculation index funds, hedge funds have created a rush of very, very high prices. And not only coffee, corn, sugar, cotton and obviously oil, and unfortunately it has to hit the consumer. We're working very hard not to put us in a situation where there's going to be pain for the customer.

Q: So you're holding back passing it on to the customer?
We are. We've also told the Street that regardless of where coffee prices go, we'll be able to navigate through this in 2012 but it's challenging. Source

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New York Hedge Fund Industry

New York Hedge Fund Industry

New York Still Dominates the Hedge Fund Industry

The latest estimates reinforce a bit of common knowledge: New York is the home of the hedge fund industry. Second place belongs to London, but the city only manages about half of what New York City hedge funds controls.
New York manages by far the most hedge fund assets compared with other cities in the world, with London in a distant second place, according to research from TheCityUK.

In a report on the global hedge fund industry, TheCityUK states that 41 percent of hedge fund assets were managed out of New York during 2010, compared with 19 percent in London.

If you look only at larger hedge funds – those with more than $1 bn under management – the gap is even bigger, with New York looking after 45 percent of assets and London only 14 percent.

‘The US is by far the leading location for management of hedge fund assets, with more than two thirds of the total,’ the report states.  Source

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Longtop Financial Technologies Hedge Funds

Longtop Financial Technologies Hedge Funds

Hedge Funds with Stakes in Longtop Financial Technologies

The last couple of days have not been kind to Longtop Financial Technologies, or its hedge fund investors. The firm's stock has fallen an incredible 25% in the last few days since Citron Research put out a report alleging that Longtop Financial Technologies' financial statements were fraudulent. Seven hedge funds may have been hurt by this as they held large positions in the firm at the end of 2010.
1. Lee Ainslie’s Maverick Capital: $142 Million invested at the end of December

2. Chase Coleman’s Tiger Global Management: $94 Million invested at the end of December.

3. Stephen Mandel’s Lone Pine Capital: $76 Million invested at the end of December.

4. Eric Mindich’s Eton Park Capital: $72 Million invested at the end of December.

5. Miguel Nogales’ Generation Investment Management: $31 Million invested at the end of December.

6. Phill Gross’ and Robert Atchinson’s Adage Capital: $19 Million invested at the end of December.

7. J Kevin Kenny Jr’s Emerging Sovereign Group: $13 Million invested at the end of December.

Source

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Hedge Funds GOP

Hedge Funds GOP

Hedge Fund Managers Shift Allegiance to Republicans

Hedge funds are switching their allegiance to Republicans from Democrats. Back in 2008, hedge funds bet big on Barack Obama and the Democrats and it paid off. But now, hedge funds are switching over to the GOP.
Daniel Loeb, founder of Third Point LLC, was one of the biggest Obama fund-raisers in 2008, rounding up $200,000 for him, according to campaign-finance records. In the decade prior, Mr. Loeb and his wife donated $250,000 to Democrats and less than $10,000 to Republicans.

But since Mr. Obama's inauguration, Mr. Loeb has given $468,000 to Republican candidates and the GOP, and just $8,000 to Democrats. Hedge-fund kings have feelings, too, and the president appears to have hurt them.

"I am sure, if we are really nice and stay quiet, everything will be alright and the president will become more centrist and that all his tough talk is just words," Mr. Loeb wrote in an email about four months ago expressing frustration with the president's posture toward Wall Street. "I mean, he really loves us and when he beats us, he doesn't mean it." The email, sent to eight friends, was widely circulated on Wall Street.

Mr. Loeb is part of a shift in political allegiance within the world of hedge funds that also includes such big names as Steven Cohen's SAC Capital Advisors and Kenneth Griffin's Citadel Investment Group. Managers and employees of hedge funds directed a majority of their contributions to the GOP in the 2009-2010 election season, a pattern not seen since 1996, when the industry was much smaller. Source

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Japan Pension Funds

Japan Pension Funds

Japan Pension Funds Allocating More to Alternatives

Japanese pension funds are allocating more capital to alternative investments. The country's pension funds are cutting back on domestic bonds and stocks while boosting allocations to hedge funds and private equity.
Japanese pension funds plan to increase investments in alternative assets and pare their holdings of domestic bonds and stocks this fiscal year to diversify portfolios and bolster returns, a survey showed.

Thirty-two percent of 119 Japanese pension funds aim to increase investment in assets such as hedge funds in the year ending March 2012, according to a survey by JPMorgan Chase & Co.'s Tokyo-based asset management unit. They also plan to keep investing in emerging-market stocks and bonds, it showed.

Japanese pensions, which have traditionally invested mainly in bonds, are seeking other assets to maintain steady returns and fund retiree benefits in a country where more than one in five people are over 65. The 10-year Japanese government bond yield is hovering around 1.2%, while the Nikkei 225 Stock Average is about a quarter of its 1989 peak.

"We're expecting further diversification to continue going forward among pension funds' investment strategies," Hidenori Suzuki, head of the strategic advisory group at JPMorgan Asset Management (Japan), said at a briefing in Tokyo today to announce the survey's findings. "The trend to lower domestic bond holdings is rather new."  Source


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Japan and Hedge Funds 2011

Japan and Hedge Funds 2011

Japan Disaster Causes Hedge Funds to Lose Big in March

The earthquake and tsunami in Japan created a lot of turmoil in the markets and hedge fund managers' portfolios were hurt by the instability. As one hedge fund professional described it "“We just got whacked. Japan was a double hit—killing our longs and our shorts."
But for many hedge fund traders who take bets on economic trends around the world, March was the cruelest they can remember.
“We just got whacked. Japan was a double hit—killing our longs and our shorts,” a young hedge funder said at a beer garden in Manhattan’s meatpacking district.
One of the most popular positions for many global macro hedge fund managers was shorting clean energy companies—especially solar companies—and ETFs associated with clean energy indexes. On December 1, Bloomberg reported that seventeen percent of the freely traded shares of the 35 U.S. stocks in the WilderHill New Energy Index were sold short. Many expect that this only increased in January and February.
Similarly, many hedge fund investors believed that uranium was due for a boost—thanks in part to rising cost of oil.
source

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Hedge Funds Managers 2011

Hedge Funds Managers 2011

Hedge Funds Managers Turn Optimistic About 2011

Hedge fund managers are growing more confidant on the outlook for 2011, according to a recent survey. Hedge fund managers responded to a Rothstein Kass survey that they were optimistic about new investment opportunities. Managers also expect institutional investors like pension funds to contribute more money to hedge funds.
At the same time, however, managers expect more people to chase investment dollars as institutions like pension funds are ready to add a flood of money.

"We see an optimism that is a growing theme among the survey participants," Howard Altman, Rothstein Kass' co-CEO, said in an interview. "At the same time the surge in capital from institutions and since late 2010 the emergence of seed capital is also an important theme," he added.

Rothstein Kass surveyed 313 managers on the Internet in January and will release its findings on Wednesday. Reuters obtained a draft of the report.

Three years after the worst financial crisis in recent memory, hedge funds have rebounded from 2008's deep losses and 2010's tepid returns with hopes of finding a better investing environment ahead.

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Hedge Funds Sports Teams

Hedge Funds Sports Teams

The Ultimate Hedge Fund Buy: A Professional Sports Team

Hedge fund managers make a name for themselves with solid performance and winning portfolios, but how do they fare when they purchase professional sports teams. The pro sports team has become the ultimate status symbol for hedge fund managers as a fun investment that can be highly profitable. Although hedge fund managers often back winning teams (like the championship Boston Celtics or Red Sox) the teams often make out better than the owners, according to a recent article in BusinessWeek.
John W. Henry, founder of futures trader John W. Henry & Co., became the principal owner of the Boston Red Sox in 2002. Two years later the team won its first World Series in 86 years. Three years after that it chalked up a second championship. While the Sox were winning, the firm's assets were dwindling, falling to $319 million as of Apr. 15 from a peak of $3.4 billion in 2005.

James Pallotta, a Boston-based hedge fund manager who at his peak oversaw more than $11 billion, bought part of the Boston Celtics in December 2002. Six years later the basketball team won the National Basketball Assn. championship. In June 2009, following two years of losses, he closed his Raptor Global hedge funds.

The trend hasn't gone unnoticed by hedge fund investors. "Owning a team can be a function of ego, it is very high-profile, and it could prove to be a distraction," says Brad R. Balter, head of Boston-based Balter Capital Management, which farms out money to hedge funds. "As an investor, I have to consider that." Words to bear in mind for Steven A. Cohen, the billionaire hedge fund manager who is bidding for a minority stake in the New York Mets.  Source

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Hedge Funds Technologies

Hedge Funds Technologies

Hedge Funds Changing the Way They Use Technology

With increased regulators coming soon and investors demanding more transparency, hedge funds are relying on technologies to help them manage, protect and more effectively use data. Increased regulation has motivated the back and middle office of hedge funds to archive emails and text messages.
According to the survey, the “vast majority” of front office employees get their market data from Bloomberg, 43% use multiple vendors for analytics, and the most widely used OMS/BMS was BNY ConvergEx’s Eze (In 2006, BNY ConvergEx Group acquired Eze Castle Software, one of four spinoffs from the Eze Castle “family” of companies, another of which was Eze Castle Integration.)

Investor scrutiny and the Dodd-Frank Act are combining to encourage middle and back office adoption of email and instant messaging archiving.

According to the survey, Advent is the most popular portfolio accounting vendor among middle and back office respondents, although the market is diverse.

Respondents also use a broad range of solutions for risk management, although 19% cited either Microsoft Excel or a proprietary in-house system.  Source

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Hedge Fund Redemption Index

Hedge Fund Redemption Index

Hedge Fund Redemption Index Falls 2.45%

Hedge funds have seen less exit requests over the last month. According to the GlobeOp Forward Redemption index, investors seem to be satisfied with their hedge funds. The redemption index fell 2.45% from March 20 to April 15.
Contradicting a reputation for fleeing funds at the first sign of market trouble, the newly-launched Forward Redemption Indicator showed hedge fund investors were broadly sticking to allocations and even cancelling older requests to pull out cash.

The GlobeOp index -- which tracks the volume of clients globally giving advance notice to withdraw money as a percentage of GlobeOp's assets under administration -- fell to 2.45 percent in a snapshot taken on April 15, 0.81 percent lower than the last reading taken on March 20.

"The indicator is near its all-time low when measured over the past three years and reflects continued improvement in investor confidence," Hans Hufschmid, chief executive officer of GlobeOp Financial Services, said.

GlobeOp's data covers around $159 billion of hedge fund assets under administration, or around 8 to 10 percent of the global hedge fund industry.  Source

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Hedge Funds Assets Under Management

Hedge Funds Assets Under Management

Hedge Funds Hit Record with $2 Trillion AUM

Hedge funds reached a new milestone in what has been an impressive couple of years since the lows of the financial crisis. The hedge fund industry now oversees a total of $2.02 trillion, according to Hedge Fund Research. The previous record was $1.93 trillion.
Fueled by fresh investor demand, these loosely regulated portfolios now manage $2.02 trillion, marking an all-time high for the industry, data released on Tuesday by Hedge Fund Research (HFR) show.
The previous record for assets was $1.93 trillion and was reached in the second quarter of 2008.
Investors added $32 billion in new money during the first three months of 2011, sending the biggest amount of new dollars to hedge funds since the third quarter of 2007, HFR said.
For hedge funds the news signals the industry appears to have recovered from the 2008 financial crisis when the average fund lost 19 percent and many managers lost significantly more.  Source

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Latin American Hedge Funds

Latin American Hedge Funds

Latin American Hedge Funds Hold Firm on Fees

Hedge funds in Latin America seem to have found the cure to pressure from investors to lower fees: good performance. Investors in Latin American hedge funds are exerting less pressure on managers to slash fees than their American and European counterparts.
Investors in Latin American funds have largely abided with the industry norm of the so-called "2-and-20" fee structure, where managers charge 2% of assets as management fees and 20% of profits as incentive fees.

"Although in 2009 Latin American start-up funds did lower their fees in line with investor demands, the average performance fees of funds launched in 2010 are back at 20%," Eurekahedge said.

Latin American funds charged 1.95% as management fees and 20% on performance gains last year, on average. In contrast, Asia-focused hedge funds charged an average 1.56% and 19.22%, respectively, and global funds charged 1.59% and 18.91%, on average.

Latin American funds' resilience on fees was largely due to stable performance throughout the past decade. And the region is becoming increasingly attractive to investors in light of recent events.

"Geopolitically, Latin America seems to be safe, especially with all the crises in the Middle East and the unfortunate incident with Japan," said Victor Hugo Rodriguez, president and chief executive of third-party marketer LatAm Alternatives. He was recently appointed one of five directors of Hedge Fund Association's new Latin American chapter. Source

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Hedge Fund Formation Services

Hedge Fund Formation Services


FundForm LLC is a provider of hedge fund formation services, providing you with templates that can be used to legally form your hedge fund without spending $20,000 on expensive attorneys.

FundForm's comprehensive hedge fund formation package comes with all of the legal templates you need to form your fund along with step-by-step instructions explaining every step.  By working with FundForm you can start your hedge fund faster, significantly reduce your startup costs, and your satisfaction is 100% guaranteed.

Learn more at: http://FundForm.com

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Hedge Funds Investors Assets

Hedge Funds Investors Assets

Investors Allocating More and More Money to Hedge Funds

Hedge funds are raking in the money as the industry seeks to further woo investors. Total hedge fund assets are closing in on $2 trillion and are likely to pass their peak in 2008.  The good-will from investors has trickled down to smaller hedge funds, too. 
Total hedge-fund assets are approaching $2 trillion and are soon expected to surpass their peak in early 2008, according to industry analysts. Even start-ups and smaller funds, which were shunned by many investors in the wake of the crisis, are benefiting.

The resurrection of hedge funds, which invest money for wealthy individuals, pension funds and other large investors, marks yet another sign that the effects of the financial crisis are receding.

The industry suffered its worst year on record in 2008, with the average fund losing 19%, according to Hedge Fund Research Inc. Those losses, coupled with client withdrawals and the liquidation of some funds, cut the industry's size by roughly one-quarter.

The industry had been clawing its way back since early 2009. Hedge funds pulled in $55.5 billion in net new money in 2010, the most since 2007, according to Hedge Fund Research. Figures for this year's first quarter also are expected to be robust. Source

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UCITS III Listed Fund of Hedge Funds

UCITS Listed Funds of Hedge Funds

UCITS III Funds Bested Listed Funds of Hedge Funds

UCITS III funds have out-performed closed-end funds of hedge funds.  Investors have given strong preference to UCITS III funds over listed funds of hedge funds that charge an added layer of fees. 
A spate of wind-ups, two layers of fees and the arrival of competitive Ucits III funds are driving investors away from listed funds of hedge funds. The gravitational pull has become so strong that the sector is largely the preserve of arbitrageurs who are keen to “play” the sharp discounts the funds of hedge funds carry (their shares still trade at a 10-15 per cent discount to their net asset value) to make a quick profit, a clutch of industry watchers claim.
And as the variety of Ucits III funds – which make hedge fund strategies more accessible – multiplies, the utility of conventional closed-ended funds of hedge funds will diminish even more, argues Simon Elliott, head of investment trust research with Winterflood Securities.
“It’s not clear that investors still want listed funds of hedge funds,” says Mr Elliott. “We’re seeing that side of the market continue to contract. A few funds have already died and a few more will go this year.” Source

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Hedge Funds Lockups

Hedge Funds Lockups

Investors Strongly Favor Hedge Funds with Short Lockups

Hedge funds that have short lockups seem to have curried favor with investors. A recent survey of hedge fund clients, hedge fund clients plan to allocate 90% of new investments in 2011 to hedge funds that agree not to lock up money for more than a year.
Hedge-fund customers plan to allocate 90 percent of new investments in 2011 to firms that agree not to tie up money for more than one year, according to a Goldman Sachs Group Inc. (GS) survey released today. Funds that rely on longer lockup periods so they can buy illiquid assets such as distressed debt will have a harder time attracting cash, said David Solomon, co-head of capital introductions at the New York-based bank.

“Investors have more choices of liquidity terms than they did before the financial crisis,” Solomon said in an interview. “Consequently, hedge funds with less liquid terms are pursuing a diminishing pool of capital.”

The demand for short lockups is a legacy of the 2008 financial crisis, when some hedge funds restricted withdrawals to avoid having to sell assets at a loss. Investors pulled a record $154.4 billion from hedge funds in 2008, according to data from Hedge Fund Research Inc. of Chicago.

Caxton, a New York-based hedge fund with $11 billion in assets, places no limits on how long clients must keep their initial investment with the firm.

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FrontPoint Settlement

FrontPoint Settlement

FrontPoint Partners Offers $33 million in Settlement with SEC

FrontPoint Partners has paid $33 million to settle brought by the Securities and Exchange Commission, but it won't come from investors. As we reported yesterday, former FrontPoint Partners fund manager Joseph F. "Chip" Skowron III has been charged with purchased inside information on a drug that saved him $30 million. In a letter to investors, FrontPoint assured investors that it would not have any financial impact on the firm. 
FrontPoint, meanwhile, agreed to pay $29 million in disgorgement of avoided losses, and $4 million in prejudgment interest, without admitting or denying the allegations, the SEC said in a release. The proposed settlement is subject to court approval, it added.

The SEC said the disgorgement payment was for $30 million in losses avoided by the now dissolved FrontPoint Healthcare Funds when Skowron allegedly sold the funds' holdings of Human Genome Sciences Inc. (HGSI) based on a tip about bad results in a clinical trial.

The payment, FrontPoint said in the letter, will be funded by an amount set aside before FrontPoint was spun off from parent Morgan Stanley (MS). Morgan Stanley still has a minority stake in the hedge fund firm.

The investor letter, signed by Co-Chief Executives Dan Waters and Mike Kelly, said the decision to settle the matter "eliminates any future distractions from our focus on investing," and added that "the alleged conduct of the former portfolio manager is completely contrary to FrontPoint's principles and represents a clear violation of FrontPoint's policy against insider trading."

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Joseph Skowron Insider Trading

Joseph Skowron Insider Trading

Joseph Skowron Alleged to Have Profited from Inside Info

Another hedge fund manager has been charged with profiting off insider information. According to prosecutors, Joseph (Chip) Skowron III, a hedge fund manager at FrontPoint Partners, purchased inside information on a drug that saved him $30 million. The hedge fund industry has struggled with a recent string of insider trading charges.
A hedge-fund manager who was a major donor to John McCain's presidential run bought confidential information about a drug trial that saved him $30 million in investments,  federal prosecutors said Wednesday.
Joseph (Chip) Skowron III, a medical doctor and manager at FrontPoint Partners, faces conspiracy, security fraud and obstruction of justice charges for profiting from inside trading on a failed hepatitis C drug, according to a criminal complaint filed in Manhattan Federal Court.
Skowron, 41, befriended French doctor Yves Benhamou, an infectious-disease expert and consultant for drug maker Human Genome Sciences, at a medical conference in Hawaii, the complaint says.
The two continued to meet at secret locations throughout Europe - a hotel lobby in Barcelona and a hotel bar in Italy - where Skowron handed over secret envelopes stuffed with thousands of dollars in cash, prosecutors say.  Source


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Greenlight Capital Qualified LP

Greenlight Capital Qualified LP

Einhorn's Shorts Drag Down Performance for Greenlight

David Einhorn's shorts brought down Greenlight Capital Qualified's returns during the first quarter of 2011. The hedge fund manager made a number of short bets that failed to pan out including The St. Joe Co (JOE.N) and Moody's Corp (MCO.N). The hedge fund fell 2.9% despite the good performance on the long side of Greenlight's portfolio.
Hedge fund manager David Einhorn is coming up short this year largely because some of the bets he made on stocks falling haven't panned out.

In the first quarter, Einhorn's Greenlight Capital Qualified LP dipped 2.9 percent, compared to an average 2 percent gain for the hedge fund industry.

A Greenlight investor said the New York-based hedge fund firm underperformed because its so-called short positions, where investors bet that the stock price will drop, lost 9.2 percent in value during the period.

By contrast, the fund's bet on stocks and other assets rising in value performed well, increasing 6.7 percent. Part of Einhorn's long portfolio has included gold, the kind you can touch, and bets on BP (BP.L: Quote) and Vodafone Group (VOD.L: Quote). Fund managers will not be releasing their first-quarter holdings until mid-May. Source

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Steve Cohen Mets

Steve Cohen Mets

Steve Cohen Interested in Buying Stake in New York Mets

SAC Capital's manager, Steve Cohen, is known for taking bets so his interest in buying a minority stake in the Mets is not surprising. The New York baseball team is trying to pay down its debts and cover its losses so it's turning to investors to raise $200 million.
Billionaire hedge-fund manager Steve Cohen has joined the bidding for a minority stake in the New York Mets, as the baseball team attempts to raise about $200 million to cover losses and pay down debt, according to people familiar with the matter.

Mr. Cohen, the founder of SAC Capital Advisors LLC whose net worth is estimated by Forbes magazine at $7.3 billion, is a longtime Mets fan who knows its controlling Wilpon family socially. He manages about $12 billion in assets.

A spokesman for the Mets declined to comment. Jonathan Gasthalter, a spokesman for Mr. Cohen's SAC, declined to discuss any bid.

Several other Wall Street financiers also are vying to gain a minority stake in a team with heavy debt, declining attendance, and the cloud of $1 billion in claims against the Wilpons by the trustee for victims of the Bernard Madoff Ponzi scheme.  Source


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Hedge Funds Inflows February

Hedge Funds Inflows February

Hedge Funds Net $34.9 Billion Inflows in February 2011

Last month was a strong one for hedge fund capital raising as institutional investors poured billions into the industry.  Hedge funds netted $34.9 billion in inflows during the month of February.  One estimate places the hedge fund industry total assets at $1.73 trillion now. 
Managers pulled in $34.9 billion on the month, putting industry assets at $1.73 trillion — the highest level since October 2008, in the midst of the global financial crisis, the firms added.
Hedge funds suffered record losses and investor redemptions in 2008, but the industry has clawed its way back, generating steady gains since then.
Institutional investors, especially public pension funds, have been allocating more money to hedge funds because the 2008 crisis left them with huge losses from equity markets and real-estate bets.
While they don’t always manage it, hedge funds try to generate gains no matter what’s happening in securities markets — something known as absolute returns. Source

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Hedge Funds Oil Bets

Hedge Funds Oil Bets

Hedge Funds Raise Bullish Oil Bets to Four-Week High

Hedge funds increased bets that the price of oil would rise. An increase in airstrikes in Libya has evoked concerns about oil production once the conflict is over. 
Hedge funds raised bets on higher crude prices to a four-week high as increased airstrikes in Libya raised concerns about production after the country's conflict ends and the dollar weakened against the euro.

Funds and other large speculators increased net-long positions, or wagers on rising prices, by 4.5 percent in the seven days ended April 5, according to the Commodity Futures Trading Commission's weekly Commitments of Traders report. Open interest, the number of contracts that haven't been closed or delivered, rose 17 percent this year, the data showed.

Oil rose 4.5 percent last week to $112.79 a barrel on the New York Mercantile Exchange, bringing this year's advance to 23 percent, as NATO escalated its air campaign over Libya. Prices reached a 30-month high as anti-government protests erupted in the Middle East and north Africa, disrupting supplies from Libya and igniting concern the unrest may spread to other oil-producing nations such as Saudi Arabia. Source

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SEC Registration Deadline

SEC Registration Deadline

SEC to Extend Registration Deadline for Hedge Funds

The Securities and Exchange Commission has agreed to give hedge funds and private equity firms a six-month grace period for registering. Registration with the Securities and Exchange Commission is a requirement introduced under the Dodd-Frank Act. Under the Act, hedge funds and private equity firms with more than $150 million in assets or 15+ clients in the US have to register with the regulator.
But in a letter to the President of the North American Securities Administrators Association Inc., SEC Associate Director Robert Plaze said "we expect the Commission will consider extending the date ... until the first quarter of 2012."

While there are initial guidelines on information and operation changes required with the registration, the SEC has yet to issue final rules. Plaze said in the letter the SEC expects to do so "in advance of July 21."

The SEC earlier had said final rules would be submitted in the second quarter, but so far hasn't set out an exact timetable.

The letter also said midsize advisers, with assets between $25 million and $100 million, are likely to get a six-month delay in requirements to register with states. Some of those advisers had previously voluntarily registered with the SEC. Source

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How to Write a Hedge Fund Resume

How to Write a Hedge Fund Resume

Since starting to provide hedge fund resume and career advice in 2006 I have helped many people improve their resume.  We now also provide free resume editing services and career coaching for those completing the Certified Hedge Fund Professional (CHP) designation program.  Because of this I was contacted by a reporter from efinancialcareers a few days ago to discuss hedge fund resume best practices.

The reporter just published this article yesterday which provides some concise advice on how to update your resume to be more effective within this competitive industry.

Here is the link to the full article if you want to read it: http://news.efinancialcareers.com/newsandviews_item/newsItemId-31874

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Hedge Fund March 2011

Hedge Fund March 2011

Hedge Funds Post Gains in March, Lag S&P on the Year

Hedge funds managed to squeak by in March, just barely beating the S&P 500. Still, hedge funds trail the S&P on the year and so far have struggled to replicate the impressive returns of last year.  Hedge funds returned an average of 0.31% and up almost 2% on the year. 
Hedge fund managers eked out tiny gains in March and are up for the year, according to data released on Thursday but the asset class again lagged the broader stock market.

The average hedge fund inched up 0.31 percent in March and is now up 1.99 percent for the year, data from Hedge Fund Research show. The broader Standard & Poor's 500 stock index ended the first three months up 5.43 percent even though it slipped 0.10 percent last month.

In the first two months of 2011, hedge funds climbed 2.08 percent, lagging the Standard & Poor's 5.53 percent rise.

Technology and healthcare-oriented funds were some of the strongest gains, inching up 0.85 in March, HFR reported. But funds that concentrate on energy and basic materials lost 2 percent, and so-called macro funds that make bets on currencies and interest rates slipped 1.71 percent, the HFR numbers showed.  Source

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Hedge Funds Financial Crisis

Hedge Funds Financial Crisis

Hedge Funds Still Feeling the Pain of the Financial Crisis

The hedge fund industry mounted an impressive recovery after the disastrous performance during the financial crisis and recession. Still, many hedge funds are trying to make up for the big losses suffered during that period. Hedge funds, such as the Citadel Group, are still working toward the funds' high water marks, making this year a critical one for the industry.
But despite strong performance, Mr. Griffin has not climbed back from the losses endured during the financial crisis. Citadel’s flagship fund is still 15 percent below its peak, according to people with knowledge of the firm who were not authorized to speak publicly.

Even as the industry reclaims its former swagger, Citadel and hundreds of other hedge funds are struggling to hit their so-called high water marks, their historic highs at which they can begin collecting profits again. The research firm HedgeFund.net estimates that roughly 35 percent of the 2,500 funds that have continuously reported since 2008 have not recovered — with smaller hedge funds dominating the list.

With so many firms yet to make a full comeback, analysts and industry experts anticipate a shake-out in 2011. Troubled funds risk losing top traders or analysts to rivals, or worse, closing down altogether.

“For the folks back in the money again, the industry is in a pretty healthy place,” said William C. Crerend, chief executive of EACM Advisors, a roughly $3 billion firm that invests in hedge funds. “But for the subset for whom that’s not the case, there is a lot riding on this year.” Source


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Morgan Stanley Hedge Funds

Morgan Stanley Hedge Funds

Morgan Stanley Unlikely to Sell Off Hedge Fund Investments

Morgan Stanley has spun off the hedge fund Frontpoint Partners that was completely owned by the investment bank, but the firm is not planning on selling off its hedge fund stakes. Morgan Stanley invested in seven hedge fund firms from 2006-2008 and continues to own minority interests in all of them.

After months of uncertainty surrounding the deal, the hedge fund FrontPoint Partners announced on Tuesday that Morgan Stanley had finished spinning it off.
“As of March 1, 2011, the FrontPoint portfolio managers and senior management team will collectively own a majority of the equity ownership interest in FrontPoint,” FrontPoint’s co-chief executives, Dan Waters and Mike Kelly, said in a letter to investors.  “Morgan Stanley will retain a minority equity ownership.”
Morgan Stanley indicated last summer that it would sell back a majority stake in FrontPoint to its managers, noting that the Dodd-Frank financial regulatory overhaul restricted the bank’s outright ownership of the fund.
The sale was originally planned for the end of 2010, but the transaction was delayed by the arrest of a French doctor who was accused of leaking inside information to a hedge fund, which was later revealed to be FrontPoint. The fund quickly put a portfolio manager for its health care team on leave.  Source



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Hedge Fund Managers Equities

Hedge Fund Managers Equities

Hedge Fund Managers Somewhat Less Bearish on Equities

Hedge fund managers were somewhat more welcoming of equities in March 2011. 36% of hedge fund managers described themselves as being bearish in March, a 4% decline from the month before. Hedge fund managers are still wary of equities given world events. 
“While hedge fund managers remain bearish, hedge fund investors are showering them with fresh cash,” Sol Waksman of BarclayHedge said in a statement.

He added that hedge funds posted their heaviest inflows on record in February, “which probably owes in part to superior performance.”

The Barclay Hedge Fund Index has posted a positive return for seven straight months.

A more bearish tone was set by natural disasters in Japan and growing violence in the Middle East and North Africa.

About a third of hedge fund managers were bearish on 10-year Treasuries, the survey found. At the same time, 16% considered themselves as more bullish about bonds. Both remain around the same levels as three months ago, the study notes. Source


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Pension Funds Hedge Funds

Pension Funds Hedge Funds

Pension Funds Gave $18 Billion in Hedge Funds in 1st Quarter

Pension funds injected $18 billion into the hedge fund industry in the first quarter of 2011.  This represents a multi-billion dollar endorsement from institutional investors.  According to a consultant for Pensions and Investments, institutional investment has returned to pre-2008 levels. 
Pension funds resumed their whole-hearted embrace of hedge funds in the first quarter, pouring $18 billion into the sector.
The combined total of net inflows and pending searches is the highest in four years, Pensions & Investments research shows; hedge funds took in $25 billion in institutional money in the first quarter of 2007.
"Institutional investment is back to pre-2008 levels," Stephen Nesbitt of hedge fund consultant Cliffwater told P&I.
Net institutional hedge fund activity is up 38% from the first quarter of last year, and P&I warned that its figure is likely an underestimate of total activity.  Source

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