We heard of new launches from Marc Lasry, Saguenay Capital, Tosca, Jermyn Capital, A to B, Volathon, Investcorp, Duet A. M., Chirin Capital, SGAM AI, Tacticus Capital, Cabal, Carmague, Synergy, Seven Trust, Gruss A.M. and ZCM Capital.
Lahde Capital closed two funds, Powe Capital's Modulus Europe had to be liquidated and French hedge fund ADI was forced to close five of its funds due to Lehman losses.
On the M&A scene, Banque Privee Edmond de Rothschild and Standard Chartered collaborated in alternative investments, Singapore’s Fullerton and China’s Bosera formed an investment partnership and Australian asset manager Select took ownership of an advisory business in New Zealand.
The press reported that the prime brokerage model was questionable, following Lehman’s collapse and Morgan Stanley’s heavy loss of assets; the industry would change as managers were rethinking their exposure and banks were thinking twice about lending against complex securities.
Hedge funds were still struggling with the crisis last week; they adjusted their trading models following the US government's ban on short selling hundreds of financial stocks; they raised cash in the rally, waiting for the bail out; they were seen as scapegoats as long-only managers panicked; Eurekahedge reported that few of them were actually earning performance fees; they continued to be hit by arbitrage disruption, by new regulations, deleveraging and redemptions problems.
Those new regulations, however, forced them to revamp strategies and some concentrated on OTC derivatives; Citigroup reported that hedge funds had moved $600bln into cash and $100bln in simple money market funds. Indeed, some funds found myriad ways to bet on a falling market, such as shorting proxies for the financial sector, shorting bonds, or buying index options. Funds wished for the reinstatement of the ‘uptick’ rule, which is preferable to a complete ban of short-selling.
In the UK, hedge funds defended short-selling with data showing low short-sale volume, as they saw very strong public criticism rising against them.
It was also claimed that the era of the hedge fund was over; that hedge fund managers faced staff defections as bonuses looked shaky and that asset backed securities lured hedge funds.
The financial crisis continued its havoc: although Asian stocks followed Friday’s rallies in the US and European markets (following news of the rescue plan), it was claimed that stock markets were out of sync with the crisis. Last week was focused on the US rescue plan through a $700bln fund to buy toxic assets from financial institutions: Treasury secretary H. Paulson urged a quick, clean rescue legislation, and the Fed’s chairman B. Bernanke argued that global markets were under ‘extraordinary stress’ to encourage the US Congress to vote on the bail-out fund. Congress balked and talks ended in chaos.
High-profiles financiers such as Jack Welch and Buffet approved of the rescue. Pimco’s Gross even offered the Treasury a helping hand. George Soros suggested an alternative, saying acquiring equity would be better and John Paulson said the rescue plan had to make shareholders pay.
Meanwhile, the Fed continued keeping banks afloat as the money market crisis deepened. As did the Bank of England, the European Central Bank and the Swiss National Bank.
The FBI started its investigations into 26 instances of potential fraud at Fannie, Freddie, Lehman and AIG.
Goldman Sachs and Morgan Stanley became regulated, thus becoming bank holding firms, signalling the end of the Wall Street model. Morgan Stanley signed a letter of intent pursuing strategic alliance with Mitsubishi UFJ Financial Group. Buffett......................
Source:
http://www.opalesque.com/AMB2008/47306Review_of_hedge_fund_launches_closures_trends.html
Posts
No comments:
Post a Comment