Opalesque

A roundup of last week’s hedge fund launches, closures, index performance, trends, regulatory, legal and financial events pertaining to the alternative investments world.

Last week, we heard of fund launches from PCE Investors (liquid macro); FX Concepts (currency UCITS); Minsen, Shangya, Huiding Zixia (domestic China); Ospraie (equity + commodity); Differential Investment Partners; Rydex SGI (L/S commodity); Thames River (Africa); Sabre (managed futures); and Blacksquare (UCITs FoFs).

As for start-ups, a former Morgan Stanley team set up a company under the umbrella of Dutch global macro fund Worldview to focus on strategic asset allocation for institutional clients; a former AIG manager launched VOC Capital in London to offer commodities futures absolute return strategies; the Active Trader Forum hedge fund hotel has started providing desks for jobless NY traders; and Ronnie Wu, CIO of Penjing Asset Management Ltd is to start a pool of money dedicated to seeding new hedge funds.

JWM Partners closed its Relative Value Opportunity II fund and JWM’s London chief Adrian Eterovic is planning a new fund.

- The Credit Suisse Alternative Index Replication indices were flat in June but positive YTD;
- Newedge CTA Index -1.77%, -4.51% YTD, Short-Term Traders Index -0.37%, -0.89% YTD;
- HFRX Absolute Return Index -1.19% (est.), -2.57% YTD;
- Hennessee’s main index +0.64%, +11.74% YTD;
- HFRI Fund Weighted Composite Index +0.13% (est.), +9.41% YTD;
- Absolute Return Composite index returns +0.40% (est.), +6.30% YTD;
- Credit Suisse/Tremont Hedge Fund Index +0.48% (est.), +7.23% YTD;
- Eurekahedge Hedge Fund index -0.02% (est.), +9.38% YTD, asset inflows of $4bn (+0.3%) to $1.33tn;
- HedgeFund.net’s index +0.28%, +9.23% YTD, assets +0.38%, but -8% in 2009;
- Barclay Hedge Fund Index +0.63% (est.), +11.18% YTD, Barclay CTA Index -0.81% (est.), -0.74% YTD;
- And all four hedge fund strategies published by Dow Jones Hedge Fund Indexes posted positive returns in June.

Full story: http://www.opalesque.com/AMW/48/Review_of_hedge_fund_launches_closures_trends48.html

PCE Investors Limited, an alternative investment manager representing total assets under management of more than $1.3bn, announced today that it has launched the Gyldmark Liquid Macro Fund. Gyldmark will provide investors with exposure to a pure macro strategy by minimizing other risk factors including illiquidity of investments, lack of disclosure and redemption restrictions as well as credit, counterparty, operational and fraud risk.

Gyldmark will integrate three factors: macro fundamentals (business cycle dynamics, structural economic, social and technological shifts, government policy impact and geopolitics), market themes (commentary, research and professional press, investor perceptions and flows, and key market drivers), and technical conditions (price action, momentum and emerging trends, investor positioning and sentiment data, and stop loss and target levels), in order to identify investment opportunities. Gyldmark will invest in exchange-traded instruments, highly liquid foreign currencies and major government bond markets.

Led by an experienced team of individuals with a proven track record of delivering uncorrelated returns; Mahmood Noorani, Chief Investment Officer; Alastair Hollingdale, Portfolio Manager and George Hatjoullis, Strategist; will provide an in depth marco-economic and policy understanding drawn from their successful history of building and managing trading businesses.

Mr Noorani, formerly with BlueCrest Capital, added: “It was the events of 2008 that convinced us that now is the right time for what we want to do. Our relationship with PCE presents us with an opportunity to achieve our goals.”

Legal counsel to the fund are Dechert and Walkers. Administration is provided by PNC Global Investment Servicing and auditors are Grant Thornton.

London-based PCE realises investor value through a range of strategies managed by experienced and skilled investment professionals. PCE operates its funds through a partnership ethos whereby portfolio managers are afforded independent investment creativity, as well as economies of scale, the benefits of strong central business leadership and operational excellence. PCE Investors is part of the SW1 Capital company.

http://www.opalesque.com/53261/Hedge_fund_platform_PCE_Investors_launches_Gyldmark261.html

One of U.S. Treasury Secretary Timothy Geithner’s initiative, called the Public-Private Investment Program, or PPIP, has lost momentum, reported the Wall Street Journal on Monday, as big banks are worried about having to sell at fire-sale prices while small banks fear they would be shut out. Potential buyers balk at the risk of doing business with the government, concerned that politicians might demonize them for making big profits (coverage).

On March 23, 2009, the FDIC, the Federal Reserve and the U.S. Treasury announced the Public-Private Investment Program for Legacy Assets – which is designed to provide liquidity for toxic assets on the balance sheets of financial institutions. It is part of the Troubled Asset Relief Program (TARP) as implemented by Geithner. The major stock market indexes in the U.S. rallied on the day of the announcement.

PPIP has two parts, addressing both the legacy loans (which has since been postponed) and legacy securities (which is apparently still going ahead). The funds are meant to come from TARP monies, private investors, and from loans from the Federal Reserve’s Term Asset Lending Facility (TALF).

Large banks, which had positive revenues in Q1-2009 (some say partly due to the relaxation of the mark-to-market rules of FAS 157) and managed to raise significant capital through sales and share offerings, do not seem overly keen on participating.

Earlier this month, BlackRock, Franklin Templeton Investments, Invesco, PIMCO and Western Asset Management were reportedly among the candidates to run funds for the legacy securities portion of the PPIP. Blackrock last month claimed in a release: “the PPIP is one of the most important initiatives recently launched by the government and one that should, over time, help stabilize the banking system.” Bloomberg.com has just confirmed that the Treasury Department was set to name 8 to 10 asset managers for the PPIP this week . Once the asset managers have signed deals with Treasury, they each will be expected to raise at least $500m of private capital within 12 weeks.

Read full article here: http://www.opalesque.com/53173/New_York_Roundtable_HF_managers_are_afraid173.html

The full 33 page Opalesque NY Roundtable can be downloaded here for free (select Roundtable subscription):  http://www.opalesque.com/RT/RoundtableNY2009.html

The first quarter of 2009 saw the launch of 109 new hedge funds, according to research by HFR. With liquidity constraints and feelings of trepidation about re-entering the space still plaguing most hedge fund investors many of these launches were of small funds. In fact, less than a handful of the hedge fund launches listed on industry databases were targeted to open with over $100m in assets under management.

For Full Story: http://www.opalesque.com/52944/service_platforms_brokeradministrator944.html

The dismal performance of hedge funds in 2008 left many investors shocked as their hedge fund investments proved to be much more correlated to the markets (and to their other investments) than they had previously thought possible. Because of this, investors are likely to conduct more extensive due diligence to determine if their hedge fund investments are providing true diversification going forward.

Full Story : http://www.opalesque.com/52885/Kellner_DiLeo_launches_new_fund_focusing_on885.html

In Part One of this series on hedge fund administrators, we questioned if third party administrators had become a necessity in today’s hedge fund industry . In Part Two of this series we will take a look at the legal accountability hedge fund administrators may or may not have in the case of hedge fund fraud.

Full Story : http://www.opalesque.com/52883/Part_Two_Investors_may_demand883.html

By the Opalesque Team: Greenwoods Asset Management, a China equity fund house based in Hong Kong, reported that its Golden China Fund, an equity Long/short fund focusing exclusively on China equities (H, B, and A shares, and ADRs) using bottom-up stock picking through thorough fundamental research, had returned 52.15% YTD (as of May 28, 2009, before fees), vs. 24.67% for the H-share index and 23.02% for the MSCI China Free Index. The fund has annualised 32.25% from July-04 to May-09.

Full Story:  http://www.opalesque.com/52557/Greenwoods_Better_than_expected_PMI_indicates_economic557.html