Durrant Capital Management, LP | Hedge Fund Bio

Durrant Capital Management

Durrant Capital Management, LP | Bio

The following piece on Durrant Capital Management, LP is being published as part of our Hedge Fund Tracker Tool, our daily effort to track hedge funds in the industry.

Resource #1 (11.3.08) San Francisco-based Durant Capital Management reportedly plans to launch its Japan Absolute Return Fund this quarter, focusing on large-cap stocks in the land of the Rising Sun.

The fund will employ a fundamental model-driven strategy and is run by David Stewart, a former portfolio manager of the Everest Capital Japan Opportunities Fund, a US$120 million Japan equity long/short hedge fund that invested in large-cap Japanese equities and derivatives. Source

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Four Elements Capital Management | Hedge Fund Tracker Profile

Four Elements Capital

Four Elements Capital Management, LP | Bio

The following piece on Four Elements Capital Management, LP is being published as part of our Hedge Fund Tracker Tool, our daily effort to track hedge funds in the industry.

Resource #1: (11.3.08) Five commodity specialists from JPMorgan Chase and BNP Paribas are leaving London to start Four Elements Capital Management in Singapore.

The team is led by Lionel Semonin, previously a managing director for BNP’s global commodity investor group. Prior to the French bank, Semonin spent 10 years at JPMorgan Chase. He is joined by Bertrand Egsbaek, Leila Kuhlenthal, Marion Lefevre and Lei Shen. Read more...

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Eucalyptus Investment Funds of Hedge Fund Tracker Profile

Eucalyptus Investment

Eucalyptus Investment Funds Tracker Bio

The following piece on Eucalyptus Investment Funds is being published as part of our Hedge Fund Tracker Tool, our daily effort to track hedge funds in the industry.

Resource #1: (11.2.08) Eucalyptus Investment has launched a fund of hedge funds that takes a laid-back approach to thematic investing in underlying managers.

According to the Zurich, Switzerland-based firm, the Eucalyptus Relax Fund uses a macro approach to invest and identify what it believes will be the most lucrative investment themes over the coming years. The fund boasts a roster of between 10 and 20 underlying managers in the commodities, infrastructure, emerging markets, healthcare, new technologies and energies spaces.

Relax also employs a systematic trading model that buys exchange-traded funds when share prices are rising and takes short positions to generate positive returns when stock markets are falling.

In it first two months of trading, the fund is up 1.78%. It actually enjoyed a strong September, gaining 3.2% while most hedge funds were posting losses.

The firm said the two big waves that had a large impact on the fund in September were the dramatic sell-off of clean technology stocks and the huge drop in the Russian stock market. Read More...

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Halloween 2008 | Scariest One Yet

Halloween 2008

Halloween 2008 | Scariest One Yet

2008 is proving to be the hardest market which hedge funds have faced since the first hedge fund was formed half a century ago.

The top 5 scariest things about the current financial crisis and the state of the hedge fund industry:
  1. Hedge fund gating clauses, lock-up periods and other agreements screen the true level of hedge fund redemptions. Is it hard to know how much capital is waiting to leave the industry.
  2. While I don't believe it, Soros could be right. The hedge fund industry could shrink by over 50% and it could take 5-7 years to climb out of that hole as an industry.
  3. I have not ran an analysis of this yet, but I seem to be seeing more frequent cases of hedge fund fraud. The media loves to highlight these rare cases, the last thing the industry needs is for these cases to become less rare.
  4. This financial crisis has come at a time when some headway was being made by a few hedge fund managers and industry association groups towards lessening hedge fund regulation, specifically on marketing regulations here in the US. The crisis may have negated some of those efforts for the time being.
  5. Even the most intelligent, well-informed, most sophisticated, well diversified and nimble trading managers in the world have been hit hard over the past 2 months.
To review some of the industry news which has come out on specific hedge fund managers please see these Hedge Fund Tracker Profiles:

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Childrens Investment Fund | Hedge Fund Notes Updated

Childrens Investment Fund

Childrens Investment Fund | Hedge Fund Notes

Just a quick note to let you know we have updated the Hedge Fund Tracker profile for the Children's Investment Fund.

To view the update please see the profile created for this group here: Children's Investment Fund Management TCI

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HedgeFundBlogger.com Important Changes


HedgeFundBlogger.com | Kaizen

First off thank you for the support from everything, the emails, story submissions, linked resources and offers of help are appreciated. We hope to continue to build out our unique hedge fund tools, tracking services, marketing resources and career tips each week over the next few years. We will publish a hedge fund horse races post sometime in the next week showing how much traffic our site gets compared to others in the industry.

We are making several changes to HedgeFundBlogger.com. Once thing that many visitors have asked for in the past are comment forms available below posts such as this. We have tried this in the past and have received too many spam submissions. We are now trying it out again with a new spam filter.

Please feel free to post comments on any of the articles you now read on the site and we will do our best to publish anything value-adding to the conversation. Your own opinion, insight and resources are all encouraged.

For example do you have any feedback for us? How could we improve the site? Please comment below. If you are viewing this post on the front page of HedgeFundBlogger.com you may have to click on the title of the blog post to view this entry as a single post before being able to post your comment. - Thank you in advance.

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Investment Designation | Training on Hedge Funds

CHP Designation

CHP Investment Designation | Update

A class of over 60 participants are currently preparing for the CHP Level 1 Exam next month. The Certified Hedge Fund Professional (CHP) Designation Program continues to grow despite the recent financial crisis. Our team is seeing an increased interest from participants considering the CHP Designation as the hedge fund industry job market becomes more competitive. We are also being contacted by many hedge fund managers who are looking to ensure they have a broad foundation of knowledge on which to run their business.

There are currently over 50 hedge funds and fund of hedge funds which have agreed to join our Advisory Board and over 1,500 individuals who have signed up to learn more about the CHP Designation through our Email Alerts.

The Hedge Fund Group (HFG) is preparing to open registration again on January 15th, 2009 to the first 200 participants who register for the program. The new website for the designation will be available shortly. For now information on the program can be found here: CHP Overview.

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Raising New Hedge Fund Capital During the Crisis

Raising New Capital

Raising New Capital During the Crisis

(http://HedgeFundBlogger.com) While many firms are hurting performance-wise I have spoken with over a dozen in the past 3 weeks still pushing capital raising efforts forward and showing positive performance so far for the year.

Many managers are referring to this as a Darwinian process of weeding out those funds which did not have strong risk controls in place. To be fair I think most funds had consistently applied risk controls in place to weather "regular" market volatility and fluctuations and not movements which associate the time with the great depression.

The hedge fund industry is not going away. When Soros mentions that the industry could shrink by 50% he fails to add in that most of that same capital will jump right back into other hedge funds or alternative investments within 3-5 months. There are many funds which will come out of this very strong. For some hedge fund managers this could be a great opportunity to move from the $300M-$500M range to the $1-2B under management realm where they may be considered for more institutional allocations. Here is a short article excerpt on a few hedge funds which are still raising capital.

Like most of their hedge fund brethren, Steven Cohen, David Einhorn and Paul Singer are facing redemptions. Unlike other hedge funds, however, they are able to replace it.

Faced with investors withdrawing big chunks of change, the high-profile hedge fund trio have reopened funds long closed to new investors and have raised billions of new dollars to replace the unhappy investors heading for the doors. Singer’s Elliott Management Corp. has raised $3 billion in the third quarter, and plans to raise another $1 billion, Bloomberg News reports.

Of course, it’s easier to raise new money when you are making money, as is Elliott, which has returned about 6% this year. Likewise, Brevan Howard Asset Management’s Brevan Howard Macro Fund, which is up 17% this year, has more inflows than outflows, according to Bloomberg. Read More...

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Citadel Group Hedge Fund Update

Citadel Group

Citadel Investment Group, Inc. | Update

Just a quick note that we have just updated Citadel Investment Group's Hedge Fund Tracker Tool profile with two additional updates

View the updated profile now by clicking on this link: Citadel Investment Group LLC.

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Maryland State Retirement & Pension System

Maryland Retirement & Pension

Maryland State Retirement & Pension System

A short piece of upbeat news here to even out the barrage of negative news stories:

The $34 billion State Retirement and Pension System of Maryland has reportedly increased its alternatives portfolio from 15% to 35% while decreasing its equities and fixed-income exposure.

The plan’s alternatives book includes private equity, real return and absolute return managers. Mansco Perry, chief investment officer, has said that the plan will hire managers to fill out the mandate but did not specify a timetable for the searches. Read more...

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Hedge Fund Marketing Campaigns | Managing Exposure

Marketing Campaigns

Hedge Fund Marketing Campaigns

(http://HedgeFundBlogger.com) There was a recent conference in NYC which I was unable to attend on hedge fund marketing, public relations and regulations. At this event a panel discussed how the media often portrays hedge funds, why this happens and what hedge fund managers can do to help the situation. The professionals who attended the event are very knowledgeable and experienced, I'm sorry I couldn't be there. Here is an excerpt from an article discussing the meeting:

Hedge funds are a popular scapegoat for the ongoing financial Armageddon. But are they the real culprits or just easy targets for a misinformed press?

A group of industry insiders recently gathered at a conference in New York to address the issue of hedge funds’ unpopularity and how portfolio managers can better manage their reputations in the news media, while at the same time satisfy regulators that they are not marketing to unqualified investors.

One manager who is familiar with the intensity of the media’s spotlight is Phil Goldstein of Bulldog Investors. Goldstein, who successfully challenged the Securities and Exchange Commission’s hedge fund registration rule, said, “I don’t think anybody is saying, ‘Gee, if all of these hedge funds had registered, we wouldn’t be in this economic crisis.’”

Goldstein said that the media is quick to blame hedge funds whenever something goes wrong in the market such as the skyrocketing prices of oil over the summer. “But now that prices are coming down, I don’t hear anybody saying hedge funds have done a good job bringing down the price of oil,” he added.

Hedge fund public relations strategist Mitch Ackles said he gets a lot of calls from media outlets looking to point the finger at hedge funds every time there’s some market hiccup or movement in a specific stock.

“Clearly they weren’t [a great systematic risk] in this recent situation but it is the lack of understanding, which is fed because of the lack of information,” said Ackles. “And the lack of information is caused by the fear people have of communicating; they don’t want to be perceived as soliciting in any capacity. If hedge funds are able to communicate and open up the kimono a little bit, people might have a greater understanding and blame them a little less.” Read more...

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Hedge Fund Fight Night | Charity Fundraiser

Hedge Fund Fight Night

Hedge Fund Fight Night | Charity Fundraiser

(http://HedgeFundBlogger.com) I had to read this headline twice before I believed it:

At 5-foot-4 and 48 years, Nissim ``The Miracle'' Tse is the shortest and oldest of 34 boxers signed up for this year's Hong Kong Hedge Fund Fight Nite.

Calling himself ``a financial warrior,'' Tse likens boxing to his daytime job as a co-founder and head of trading for Hong Kong-based Pi Investment Management Ltd., a unit of London hedge fund manager RAB Capital Plc.

``It's mental, it's physical, it's crazy, it's stressful,'' Tse said in an interview. ``But it all happens very quickly, just like you are managing a hedge fund.''

The annual charity fight tonight, in its second year, takes place amid the most severe financial crisis since the 1930s and with the hedge fund industry bracing for its biggest annual loss since Hedge Fund Research Inc. started to keep data in 1990. The fight night aims to raise HK$1 million ($129,000) to repair children's facial deformities and combat crime and juvenile delinquency in low-income and immigrant communities. The event beat the same target last year.

The world's largest banks and securities firms have been saddled with more than $670 billion of losses and writedowns, with the crisis costing more than 149,000 financial industry jobs globally, according to data compiled by Bloomberg.

``This is the worst bear market I hope I will see in a lifetime,'' added Tse, a 20-year hedge fund veteran who practices karate and plays golf and tennis.

All the more reason for a diversion, according to the fighters.

Graham ``The Real Deal'' McNeill, a 35-year-old partner at EC Harris LLP, said ``therapeutic'' lunchtime sessions were a release. ``You completely forget about the rigors of the morning and focus on not getting your head knocked off,'' he said. Read more...

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CFA Registration | Exam Registration Deadlines & Fees

CFA Registration

CFA Exam Registration Deadlines & Fees

Similar to registering for the CHP or CAIA designations, when considering CFA registration, one must consider many different aspects that preparing for and taking the CFA examination will entail. The top five considerations one must research are; do I have the necessary time to take this exam; do I have the necessary dedication to complete and pass each Level of the examination; what will be the impact of the examination on my career; is there a better designation to obtain than the CFA for my career; can I afford the CFA examination.

When first pondering if CFA registration is appropriate, time should be the major consideration. To take all three Levels of the CFA examination takes the average test taker over 3 years! Most candidates also fail one section of the CFA examination before the program is completed. That is a big investment of time and energy.

The CFA institute recommends that candidates spend a minimum of 250 hours of study per exam. So over the entire course of study, a test taker can plan to spend more than 750 hours of study. That is equal to studying non-stop for over a month straight. One must evaluate if they are going to be able to balance their current job, social life, and studying for the CFA examination as well.

Another consideration to CFA registration is whether it will have a large impact on one’s career. A financial advisor may not find CFA registration and designation that worthwhile. On the other hand, a financial analyst may find the designation invaluable. This is based entirely on one’s career and what they would like to achieve throughout it.

This leads to another question when considering CFA registration; is there a better or more suitable designation one should obtain. Someone wanting to enter the hedge fund industry as a position other than analyst would be better suited taking the CHP (Certified Hedge Fund Professional). One contemplating entering a career based in alternative investments may wish to pursue the CAIA (Chartered Alternative Investment Analyst).

One of the last things one should consider before CFA registration would be the overall cost. The CFA costs $990 per exam for early registration totaling $2970. When you add in the cost of study courses, supplemental books, and review notes you are looking at around $5000 to $6000 in overall cost. The CAIA costs $1,150 for the first exam and $750 for the second. With books and study material, you are looking at around $4,000. The CHP has a $199 entrance fee and then costs $499 for each exam (totaling $1,197). With books and study material, the total cost is a little more than $2,000. Obviously the cost of CFA registration compared to the other designations is quite significant.

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Pure Capital LP | Hedge Fund Tracker Notes

Pure Capital LP

Pure Capital LP | Hedge Fund Tracker Notes

The following piece on Pure Capital LP is being published as part of our Hedge Fund Tracker Tool, our daily effort to track hedge funds in the industry.

Resource #1: (11.16.08) Pure Capital Limited, a quantitatively-driven hedge fund specializing in “targeted non-correlation” saw strong performance from their “Pure Bespoke” customized portfolio solutions in October – with client account performance ranging from +4% to +10% for the month.

Pure Capital’s year-to-date average performance across all products was +26% at month-end October 2008. Medium term correlation coefficients ranged from -0.15 to -0.80.

"We have a range of quantitative techniques through which we both deconstruct and analyze portfolio performance." Anthony Limbrick, Pure Capital’s Chief Investment Officer said, "Once portfolio performance drivers have been specified, customized portfolio solutions are built using a series of proprietary building blocks, each of which is designed to address specific types of pay-offs". Source

Resource #2: In this time of extreme market moves and poor investment performance, specialist investment manager, Pure Capital, a “targeted non-correlation manager” has been performing nicely, according to sources.

“The bespoke portfolio solutions we have developed for our customers over the last 24 months have been bearing fruit” says founder and Chief Investment Officer Anthony Limbrick. Pure Capital targets European, Asian and Australasian fund of funds and institutional investors, giving clients full position level transparency and daily reporting.

Pure Capital is a quantitatively-driven investment management firm providing low or negatively correlated return profiles for discrete geographical or asset-class benchmarks. However the negative correlation is not at the expense of positive returns through the economic cyble, according to the investment manager.

Pure Capital has a research and advisory subsidiary, Pure Carbon Limited. The research team for the Pure Carbon Trading model comprises Anthony Limbrick (Chief Investment Officer), Daniel Butler, emissions trading expertise, Dr Siva Naguleswaran (Head of Research) and Hamish Limbrick, software developer.

Pure Capital is looking for strategic partners with which to launch their Pure Carbon strategy as both an alternative investment product, and an emission credit risk management solution. Read more...

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Porsche 1 Hedge Funds 0 | Porsche Builds Up a Position in Volkswagen

Porsche 1 - Hedge Funds 0

Porsche Secretly Builds Up a Position

In the past Porsche has been compared to hedge funds for its aggressive management of currency risk management. Now it seems they have left a few hedge funds without a chair by secretly building up a 74% stake in Volkswagen.

The sports car giant Porsche has pulled off one of the greatest share killings of all time in a coup that has left some of the world's largest hedge funds nursing combined losses that could total $20bn (£12.6bn).

The vast sum was won and lost in bets on the share price of Volkswagen. While Porsche has been building a secret 74 per cent stake in its rival, the hedge funds have been betting that the shares will fall. The shares soared by 400 per cent in two days, leaving Porsche with a huge profit and the hedge funds – some of which are based in London – with losses that could drive them into bankruptcy.

City traders were stunned by the audacity of Porsche's move, although there is no suggestion that it broke German law or trading regulations.

The sudden rise in Volkswagen's share price – from about €200 to more than €900 – was triggered by the announcement at the weekend of Porsche's share-buying. The hedge funds had short-sold the shares – in effect a bet that they would fall – and so were left huge losses by the rally. Read More...

Here is another piece on this topic from Reuters:

Hedge fund manager David Einhorn's Greenlight Capital suffered heavy losses in his portfolio when German carmaker Volkswagen's shares spiked 82 percent on Tuesday, people familiar with his portfolio said.

The German carmaker briefly zoomed past Exxon Mobil to become the world's biggest company by market value as hedge funds who bet Volkswagen's price would drop further were forced to cover their positions.

Carmaker Porsche Automobil Holding SE (PSHG_p.DE: Quote, Profile, Research, Stock Buzz) surprised the market by announcing it had effectively gained control of 74 percent of Volkswagen's voting shares.

Einhorn's Greenlight Capital L.P. had already lost 16.4 percent in the first nine months of the year, Einhorn told investors in a letter on October 1. He said Porsche was one of nine losers in the portfolio that each cost more than one percent of capital in the quarter. Read more...

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John Devaney | Booed? Apparently Not | His Response Here

John Devaney

John Devaney | Hedge Fund Manager

A few days ago I read an odd article within the New York post on John Devaney and how he was supposedly booed off of stage at a recent conference. Click here to read this article now. This seemed far fetched but I figured anything could happen in today's market environment. Here is an excerpt:

Devaney, who made no friends after his United Capital Markets' flame-out left investors with zero payout, began to speak during a Monday morning discussion at the conference but soon began a rant on why the markets were wrong and he was right.

The crowd began to boo and the microphone was taken away from him, according to several spies in attendance.

This morning Mr. Davaney is claiming that this story has been completely fabricated by a competitor within the industry. I know this happens more often than it should in the investment industry so I'm publishing his letter here:

In response to an inaccurate story published in the New York Post on Sunday, October 26 United Capital Markets, Inc. would like to make the following statement:

To New York Post, Teri Buhl, and your Investor Source:

Most of the content in "Devaney Booed off Stage," which appeared in this past Sunday's (October 26th) New York Post, is completely false. There was no booing, nor did anyone leave the stage. This is totally fabricated. This type of false reporting is compounding problems that the finance industry is having in restoring confidence. Articles of this nature are placing the financial system at more risk by falsely attacking industry participants. We are one of the few dealers in the ABS/MBS community providing liquidity and making an effort to help the markets. The parts about my brokerage firm and asset management firm having troubles in 2007 and this year are true. The rest of your story is inaccurate.

You called me and told me that a hedge fund investor of United Capital Asset Management ("UCAM") is very upset about his losses and does not wish me well. Ms. Buhl, you did not attend the conference. You spoke to a person who called you with the sole intention of trying to malign me and my firm by having you write a negative story. Furthermore, it is absurd that you would consider someone credible who told you that he was plotting to steal artwork from my yacht and who had been drinking.

Normally, I ignore this type of media attention, but as someone who has supported the ABS/MBS conference industry for almost 9 years now, I felt like I wanted to speak out against this attack on myself and importantly, the industry conventions that are integral to transferring information and ultimately to healing our markets.

I might note that beginning in 1999, I started supporting industry conferences, including American Securitization Forum ("ASF"), as well as Information Management Network ("IMN"), with payments now totaling almost $3 million. We have given back a portion of our earnings by paying for sponsorships, entertainment, and dinners in an attempt to increase industry participation. As the ABS industry has expanded, the conferences have grown in attendance from about 300 people in 1999 to a high of 6,000, in recent years. I have offered my own time and effort to appear at almost every conference, twice a year, for 9 years now, serving on boards and committees and also speaking on some 40 panels. You might say that this is a commitment to my industry.

I am sorry for any investor who has lost money in any investment in the past 18 months. It has been a very tough environment for any investor who has been long the bond market in structured finance securities: RMBS, ABS, CMBS, and CDOs. These markets have crashed and the best "AAA" bonds are trading at 50 cents on a dollar and almost everything else at 10 cents or below. This market crash has unfortunately created large losses across a very wide spectrum of institutions and individuals.

All investors are accountable for their investment decisions. You could be at an investment bank, regional bank, prop desk, fund of funds, insurance company, hedge fund, or CDO manager and this still applies. It doesn't matter who you are or what side of the fence you sit on; it is important to realize that if you or your investment committee "pulls the trigger" on investments or strategies that you remain accountable for the results.

I certainly think that I have displayed my accountability to this marketplace and to this industry. I have lost in excess of $100 million of my personal wealth investing in this market sector alongside all others. I was the 2nd largest investor in my hedge fund, managed by UCAM, with approximately 15% ownership. In addition, UCM, my broker/dealer, has also struggled immensely. At the end of 2007, UCM sustained very bad losses that nearly wiped out the firm's equity.

Beyond just being responsible for my personal investments, I continue to attend and participate at the conferences, striving to be part of the solution to the market's severe troubles. Fortunately, I was diversified and did not have all of my net worth in junk bonds. I have sold a huge string of my personal assets in order to recapitalize and continue this market making commitment. Like all financial firms, UCM continues to observe these extraordinary conditions and looks forward to implementing a strategy that will serve our clients while returning us to profitability.

We own almost 100 bonds in UCM and affiliated accounts across almost all sectors of structured finance and have purchased most of this paper this past quarter. Instead of crawling under my desk and hiding from people or feeling sorry for my own losses, I embraced the industry and its challenges by holding my head up high and being proactive about solutions to the marketplace. We are providing value.

This strong commitment is how UCM has traded more than $50 Billion notional of illiquid over-the-counter, mainly non-investment grade, products in 9 years. We have emerged as a leader over this period in secondary markets for all asset backed sectors which have come under distress, including aircraft ABS, CDOs, franchise loans, manufactured housing, subprime, distressed credit cards, second liens, and of course RMBS. Our firm has provided liquidity to countless institutional accounts, buying in competition when many underwriters would not.

This same commitment was given to our asset manager. Our main hedge fund strategy made 49% and 42% returns in 2005 and 2006, respectively. In 2007, the fund was almost wiped out, succumbing to unexpected forces that included in hindsight: the wrong investments, deteriorating fundamentals, REPO lenders seizing collateral, and an avalanche of supply driving down prices and impairing liquidity. In 2008, the fund was seized by lenders and all equity was eliminated.

It takes an honest individual to admit that he was wrong. UCM and UCAM were long in 2007 and were wrong. Any investment other than cash or a short position in fixed income, was the wrong investment. By printing these false stories, the New York Post is greatly compounding the loss of confidence in the marketplace and in these important industry gatherings. This same type of reckless reporting has, in some part, contributed to the demise of other financial firms, like Lehman Brothers, and has further stressed the worldwide financial system.

In February 2009, UCM will turn 10 years old. On this occasion, we might tell our clients and dealer friends, "Be accountable for your investments, hold your head up high and maintain a commitment to your job and your industry. Don't give up."

John Devaney
Chief Executive Officer, United Capital Markets, Inc., United Capital Asset Management LLC

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George Soros Hedge Fund Industry Predictions

George Soros Predictions

George Soros Hedge Fund Predictions

Just a quick note to let you know we have updated the Hedge Fund Tracker profile for George Soros after his recent speech at MIT where he predicted the hedge fund industry to fall from 50-75% from its peak.

To view the updated profile please click here: George Soros

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