Hedge Fund Hedge Fund 2010

Hedge Fund Hedge Fund 2010

Happy New Year!

To all our regular readers of Hedge Fund Hedge Fund blogspot.com, may the year 2010 turn out better than 2009.

Thanks for visiting Hedge Fund Hedge Fund.

Hedge Fund Hedge Fund

Hedge Fund Gain

Hedge Fund Gain

According to Reuters, the $1.4 trillion hedge fund industry made gains in July 2009 when assets rosed 2.42% in July. This came on the back of record losses and redemptions.

On average, hedge fund gain was 12.17% year on year as at end July 2009.

The hedge fund gain was still less than Standard & Poor's 7.4% rise in July. Yet somehow this hedge fund gain is still good news for the hedge fund industry because it continued a five-month gain. Investors withdrew $152 billion in the last three months of 2008, an all time record of redemption.

Many hedge fund gains rode on the back of stock market rally. Sentiment is high on expectations of better returns from new funds from pension funds and endowments in the months ahead.

Thanks for visiting Hedge Fund Hedge Fund.

Hedge Funds Coming To Singapore

Hedge Funds Coming To Singapore

Source: The Business Times, Author: OH BOON PING, 14/8/2009

In the past three months alone, hedge fund managers told Business Times, they have seen a spike in the number of on-site visits from investors and requests for due diligence on individual securities.

Meanwhile, an Asian dedicated fund of funds recently won a US$400 million Asian mandate which is expected to find its way into the assets of single managers, sources told BT.

'I had met seven fund representatives from the States and one from Australia over the past three weeks, and they were interested in our fund's expertise in S and H shares,' said Moh Tze Yang of A3 Capital Group. 'We have not had previous business dealings with Western funds, save for several long-term European partners.'

Gavin Tan, chief operating officer of Singapore-based Paddington Asset Management, sees new demand from US investors, while John Tilney of UK-based hedge fund Armajaro pointed to 'the innate strength of Asian economies' as a big talking point among commodity players.

'Where in the past Asia had been a footnote, now China and India are seen as the engine to pull the world out of recession, and US investors are forced to understand and invest in the region,' Mr Tan added.

According to Alternative Investment Management Association (AIMA), over 30 new funds have already been launched this year, with a couple in excess of US$100 million at launch.

'The pipeline of investors looks strong, with a steady stream of global allocators interviewing Asian managers over recent months, suggesting a strong appetite to invest later in the year after completing assessment and due diligence,' said council member Peter Douglas.

Western investors appear eager to ride on the Asia equity story, and are prepared to take on more risk to reap the potentially high asset returns here.
This is in contrast to early this year, when managers of funds of hedge funds were sitting on cash weightings of 35-40 per cent, while single managers were on similarly high cash levels.

The surge in interest has come with Asian bourses posting sharp rallies of late driven by a surge of liquidity in the market. Asian stocks recently punched to a near 11-month high, on the strength of resource-related shares.

Meanwhile, figures from Hedge Fund Research show that net outflow in Asia ex-Japan slowed to US$1 billion in Q2 from US$2.1 billion three months earlier, while the size of the funds' assets under management also steadily rose from US$26.9 billion at end-2008 to US$29.2 billion in the second quarter of this year.

Although the recent market rally in Asia could have been a consequence of single hedge funds deploying their cash and raising their long positions, funds of funds, however, stayed very much out of it.

That appears to be changing now, even though observers urge caution, citing a possible correction in the coming months.

'Western hedge fund managers who are coming here now to make a quick buck may find themselves caught at the back end of the rally,' said Mr Moh.

Plus, fundamentals are still weak while valuations remain unattractive in some markets. For example, Shanghai trades at a price-earnings multiple of about 25 times, while Hong Kong is about 18 times. Such pricing may be deemed expensive as underlying financials have substantially weakened from the pre-2007 levels.

'We believe, however, that funds with a longer- term view stand to benefit as the long-term trend will be positive with fluctuations in between,' said Mr Moh.
Also, the growing interest in Asia-focused funds could add new buzz to the Singapore financial landscape, which has increasingly seen more hedge fund set-ups here.
To date, there are 159 players here - up from 133 in 2006, while the size of assets under management (AUM) has grown to US$14.6 billion from US$12.4 billion three years ago.

As a regional base for hedge funds, Singapore continues to lead in Asia, with Hong Kong being the only real competitor.

'My sense is that Singapore is making real headway, given the easier regulatory environment for hedge fund start-ups than Hong Kong,' said Mr Tan.
Compared with Hong Kong, Singapore is also a cheaper place to do business as rental costs and staff costs are lower.

There is also availability of human resource talent - skills are readily available for front- and back-office operations - while the increased volatility of the last few years has convinced investors looking for Asian exposure of the need to have managers and analysts 'on the ground' in Asia.

Plus, recent tax and secrecy issues in Switzerland have resulted in assets flowing to Singapore as an alternative place for wealth management - all of which means more hedge funds may set up operations here.

'Ten years ago, Asian hedge fund mandates were often managed from London or New York; now, this is an exception. To compete properly, the fund will have to have operations in Asia and this too will be good for the industry in Singapore,' said Mr Tan.

Thanks for reading 'Hedge Funds Coming To Singapore' and visiting Hedge Fund Hedge Fund.

Hedge Fund-like Funds

Hedge-Fund-like Funds

In The Sunday Times of 16 August 2009, senior correspondent Lorna Tan featured a fund available to retail clients a hedge fund like fund for investors to consider.

What hedge-fund-like fund was she referring to? It is called Fulcrum Portfolio by New Independent. This hedge-fund-like fund gives investor access to more than 1600 exchange traded funds ETFs traded on 22 exchanges around the world.

It is considered like a hedge fund because the fund allows the managers to go long and short on exchange traded funds to avoid singe-stock risks and achieve some degree of diversification.

'Going short' refers to the strategy of using inverse exchange=traded funds ETFs to make money from a declining asset value. Inverse ETFs rise in value when underlying asset value falls.

Investors with S$1 million to spare, can access this hedge-fund-like fund through a discretionary wrap account. Those with S$100,000 can use the alternative advisory wrap account to invest in this hedge fund like fund.

The fund's target annual return is about 10 percent in Singapore Dollars. The annual management fee is 1 per cent to 1.65 per cent. The performance fee is 15% of portfolio returns, subject to certain conditions.

This fund has features of investing in a hedge fund. It is supposed to come with more control, transparency and lower costs because the underlying instruments are lower-cost ETFs sourced globally.

This hedge fund like fund is not accessible to the mass market because of the high minimum investment sums. It also carries potential currency risks as the hedge fund like fund is denominated in US dollars.

Thanks for visiting Hedge Fund Hedge Fund.