Disaster recovery plan: how to avoid business

From Geneva-based Hedge Fund Appraisal’s October Hedge Fund Due Diligence Bulletin: Investors in hedge funds are doubly suffering this year. They harshly realized that losses are not only coming from wrong investment bets but can also emerge from operational risks. In most cases, investors were unaware of their exposure to these types of “hidden” risks. Recent events have brought to light the risk linked to the fund’s relationship with their counterparty. If we look at the deep discount at which trade some closed-ended funds of hedge funds,......................

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Disaster recovery plan: how to avoid business...

Hedge Funds News:

1. Ron Pollack, who is re-launching short-biased..
2. Hedge funds handle systemic risk.....

Hedge funds handle systemic risk.....

Opalesque London: Alexander Ineichen, managing director at UBS’ Alternative Investment Solutions (Switzerland), author of ‘Absolute Returns: The Risk and Opportunities of Hedge Fund Investing’, ‘Asymmetric Returns: The Future of Active Asset Management’ (Wiley Finance) and of UBS ‘In search of Alpha’ publications, gave a talk on risk management at the Hedge 2008 conference in London last week.

Risk management has been in the spotlight lately as some ponder on its true efficiency whereas others assert it has been successful – especially in the hedge funds arena. But all, managers, regulators and institutions alike, agree it deserves a fresh look. Deloitte & Touche recently issued a white paper (“Risk Management in the Age of Structured Products”) that started: “We believe it is time to take a fresh look at the risk management capabilities of financial institutions and the processes in place to support financial risk management”. Risk management should be viewed “not as a drag on strategy, but as an integral part of a strategic discussion where decision makers look at risk and return collectively.” (securitiesindustry.com)

Risk is really about failure and non-survival
“The good news is that hedge funds have done better than most other investments,” Ineichen started.

Whereas the standard definition of risk involves volatility and tracking of risk, it has become apparent that it should now include ‘non-survival’. Drawing from the biological failures analogy, Ineichen concluded that it was really failure and non-survival that mattered: ‘The Iron Law of Failure appears to extend from the world of biology into human activities, into social and economic organizations. The precise mathematical relationship which describes the link between the frequency and size of the extinction of companies, for example, is virtually i......................

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Hedge funds handle systemic risk.....


News in Hedge Fund:

Disaster recovery plan: how to avoid business..
Ron Pollack, who is re-launching short-biased..

Forum Asset Management fund....

Opalesque has learned that New York-based firm Forum Asset Management, which oversees four emerging markets funds has posted September returns of:

Forum Absolute Return Fund +9.50% (+23.24% YTD)
Forum Global Opportunities Fund +2.54% (+25.73 YTD)
Forum Asset Based Investment Fund +0.87% (+9.52% YTD)
Forum Hard Assets Fund +0.97% (+10.84%)

The firm’s investment philosophy believes the best opportunities often lie in niches where there are inherent inefficiencies to exploit and places a high value on returns which are uncorrelated to the traditional markets.

Top performing Absolute Return Fund
The Absolute Return Fund, which led performance for September utilizes a long/short credit strategy which is focused on the global emerging markets. The Fund, which was launched in 1999 has invested opportunistically through such global emerging market events such as the Russian Crisis, Ecuador Defaults, Argentina Defaults, and Brazil Near Defaults (among......................

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Forum Asset Management fund....


News in Hedge Funds:

1. Hedge funds handle systemic risk much better...
2. Disaster recovery plan: how to avoid business...

Troubled Asset `Belief` Program

This article was authored by Shahriar Shahida, CIO at Constellation Capital Management LLC, New York:

During the past three weeks since Congress passed TARP, the levered loan and high yield indices have fallen over 7%; the AAA tranche of the 2007 sub prime mortgage indices are down over 19%; and the SP 500 index is down over 22%.

The question that begs to be asked is why? Wasn’t TARP supposed to provide a huge boost to confidence and help stabilize all of these markets? If TARP was achieving its objectives, would investors across asset classes and the globe continue their indiscriminate selling?

Clearly, the markets do not believe that the largest banks and investment banks will use any of $250 billion newly infused TARP capital to extend new loans anytime soon.

Frankly, who can blame the bankers? Why would anyone in h......................

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http://www.opalesque.com/AMB2008/48032Troubled_Asset_Program.html

Prof. Richard Werner: Crisis started with speculative credit creation.....

Opalesque London: Professor Richard Werner is director of the Centre for Banking, Finance and Sustainable Development at the University of Southampton (UK), CEO at Southampton-based Providence Asset Management, and author of ‘New Paradigm in Macro-economics’ (2005, Palgrave MacMillan). He gave his version of the current crisis at the Hedge 2008 conference in London last week.

The current financial crisis is not new
Even though significant breakdowns in inter-bank market are rare and the extent of the problem is great, the fundamental cause and the solutions are not new. It can be traced back 5000 years. However “this crisis is different,” said Prof. Werner.

His opinion is mirrored by others:
“There’s never been anything this pervasive, this challenging to the structure,” former Bear Stearns chair Ace Greenberg had told MoneyNews.com. The huge number of securitized mortgages distinguished the current financial crisis from its predecessors. Mortgage-backed securities created a credit problem that spread nationwide before infecting Europe and Asia.

Gerry Kramer wrote in NaplesNews.com that this crisis was different because, first, the last 25 years had been a period of vast financial innovation in world capital markets; second, gross interbank financial transactions and contracts in the US alone had totalled trillions of dollars; third, the financial world had also become inextricably intertwined; and fourth, the US economy had become addicted to credit.

Indeed, we now have complex financial products. The achievements of the free financial markets until AD 2007 include sub-prime mortgages, securitisation and ABS, credit derivatives, SIVs, SPCs. We also have highly-rated financial products that combine the above and highly-leveraged hedge fund strategies that combine the above. This time, the game of financial engineering may be over.

The specialness of banks
Money is actually extremely difficult to define, said Prof. Werner. But it can be done so when considering where the supply comes from – this is where bank play a special role. Banks are a monopoly power when compared to other financial institutions; they are not just mere financial intermediaries.

Schumpeter (1912) said that banks were the central settlement system of the economy, as they operated “a huge system of credits and debits, of claims and debts, by which capitalist society carries on its daily business of production and consumption.” Thus it is “more useful to start from the credit transactions and look upon capitalist finance as a clearing system that cancels claims and debts and carries forward the differences – so that money payments come in only as a special case without any fundamental importance.” In other words, credit is the key.

Banks act as accountants of the economy and have the ability to individually create credit – out of nothing. “This is how MOST of our money is created – out of nothing,” Prof. Werner added.

Good and bad credit creation
The credit market is rationed by banks and supply-determined. “There will always be demand for credit,” he said. As credit is created, its quantity is the key budget constraint on activity and thus determines growth, asset prices and should be used for policy.

Prof. Werner proposed that in the standard equation of exchange (money supply = nom. GDP), ‘money’ should be replaced by ‘credit’ and that we should distinguish between credit used for real economy transactions and credit used for financial transactions. Unproductive credit creation should be avoided and productive credit creation should be the focus, as credit flows are the source of boom and bust cycles.

The types of speculative credit creation include margin loans, loans to non-bank financial institutions, credit for real estate speculation, loans to SIVs, to hedge funds, to PE funds, for M&A and direct financial investments by banks.

Bubbles and crisis
A bubble economy arises when the proportion of financial credit creation rises, which creates capital gains from speculation and bolsters balance sheets. This is when we have the myth of the continually rising asset price.

Banking crisis and debt deflation arise when the creation of speculative credit suddenly drops, which is usually triggered by central banks. This is when the vicious cycle starts. Past banking crisis due to speculative credit creation occurred in the US (1920), Scandinavia (1980s), Japan (1980s), Asia (1990s). And this side of the century, we saw property bubbles in the UK, the US, Ireland and Spain.

What’s new with the current crisis?
Thanks to securitisation and credit derivatives, banks acquired a greater appetite for speculative credit creation, for greater risk (which was largely underestimated) and for direct financial speculation. So “the sheer scale is new,” he said.

Also, the US scrapped the Glass Steagall Act of 1933 which meant banking and securities speculation could once again mixed together. Basel II also gave an incentive for banks to engage in direct financial speculation.

Responsible parties: central banks
The creation of bubbles can be prevented by monitoring and targeting speculative credit creation – which is something that central banks used to do. But after t......................

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http://www.opalesque.com/AMB2008/48028Richard_Werner_Crisis_started_with_speculative.html

As deleveraging continues to wreak havoc in equities....

Opalesque New York: The weeks leading up to the US Presidential election have not seen a traditional “October Surprise”, perhaps because the harsh realities of the snowballing credit crisis kept its grip on the nation’s attention. Merrill Lynch’s “Hedge Fund Monitor” research piece summed up October’s vicious market cycle attributing much of the rout to hedge funds and other investors being forced to sell stock due to the “self perpetuating margin call” of deleveraging and investor redemptions.

Penso Capital’s Global Crisis Strategy, which was launched in February 2008, saw its highest fund performance in the month of September (according to hedge fund databases) as it captured the profits on the bearish view it took on Europe (see previous Opalesque story here). But as that risk/reward profile has changed, the New York-based team is now looking to the declines and volatility in equities which has presented new targets of opportunity.

“Option-like equities happen very rarely, when a stock price gets to a point where it trades like an option.” Principal Steve Gross explained to Opalesque.

Gross cites Morgan Stanley as an example of such pricing. The firm has seen price swings from $67......................

Source:
http://www.opalesque.com/AMB2008/48019As_deleveraging_continues_to_wreak_havoc_in.html

Castlestone Management`s UCITS Commodity Funds...

Castlestone Management announced that Friends Provident International has added the Aliquot Commodity (UCITS) Fund and the Aliquot Agriculture (UCITS) Fund to its fund range this month, following strong demand from investors for access to this market.

“We are delighted to be further strengthening our relationship with Friends Provident International,” explains Angus Murray, founder and joint chief executive of Castlestone Management. “We are now able to offer investors direct exposure to commodities, where previously the only exposure available was limited to through listed equities.” …

The Aliquot Commodity (UCITS) Fund and The Aliquot Agriculture (UCITS) Fund
Many commodity funds invest only in the stocks of companies, such as mining operations, farming consortiums or oil corporations. This means they are highly correlated with equity indexes and are vulnerable to the same corporate risk, while offering limited exposure to the price moves within traded commodities. The Aliquot Commodity (UCITS) Fund and The Aliquot Agriculture (UCITS) Fund, however, offer direct exposure to commodity prices, with no corporate equity exposure in the portfolio.

Commodities, why now?
The sharp drop in commodity prices means many commodities, for example platinum, aluminium and wheat......................

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Castlestone Management`s UCITS Commodity Funds...

Africa not totally immune from tumultuous market....

While the Eurekahedge Emerging Markets Hedge Fund Index went down 7.13% in September and -16.13% YTD, some African funds are actually not doing too badly.

2 out of Scipion`s 3 funds are up YTD
Scipion Alpha Seeker Fund was down 9.37% in September and up 21.61% YTD. To obtain absolute returns, and to outperform the benchmark (MSCI EM Index), Scipion Alpha Seeker Fund is an actively managed portfolio of shares covering the African continent, excluding South Africa and Egypt as those markets are more correlated to other traditional emerging markets than the rest of the continent.

The manager commented; “the prices that we are now seeing have not been seen since 2006, and clearly there are now good opportunities to enter at basement price level. Some stocks, particularly in the banking sector however, do have more room to fall, and consequently we are reviewing our sector allocation, as well as our country allocation where we feel the currency is highly vulnerable to foreign exchange pressure and where it cannot be efficiently hedged.”

Scipion Commodity Trade Finance Fund was up 0.23% in September, 5.14% YTD. The fund finances the cross border trade of goods and services, both to and from Africa. The manager said that September had seen a degree of deleveraging of the fund as the end of the coffee season was coming, with end buyers repaying stocks financed by the fund. Draw-downs to finance stock in Africa for the new season will only materialise towards the (fast approaching) end of the year.

Scipion African Opportunities Fund SPC is a Cayman domiciled Segregated Portfolio Company offering different share classes all focusing on Africa. The fund was down 15.66% in September, -29.53% YTD. Scipion Capital has offices in Londo......................

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Africa not totally immune from tumultuous market....

The benefits of permanent capital: Scalae Management up 30 % ....

Opalesque New York: New York-based Scalae Management, which was founded by Joseph Filicetti in July 2002, runs the CL Diversified Fund which trades a portfolio of futures across 65 markets. Filicetti recently spoke with Opalesque about the benefits the CL Diversified Fund has had, through the backing of its seeding partner, Trinidad-based Colonial Life Insurance Company.

History
Colonial Life Insurance, which is a multi-billion dollar corporation with a business driven through insurance, financial services, beverages and petrochemicals, first reached out to Filicetti and Scalae when they were looking to open a US based capital markets group and launch a hedge fund. With $20m in seed capital from Colonial Life, Filicetti launched the CL Diversified fund, and his firm Scalae became the trading advisor to that fund.

The CL Fund has since grown to $30m and has been beneficial to both Colonial Life and Scalae. On CL’s part they have seen a return on their investment and as the fund grows, will see additional return streams as a fund partner. For Scalae, it has meant an infrastructure which most $30m funds could not afford so early in their existence, including a team of 4 people, offices in midtown Manhattan and “a relationship which gives us a great deal of staying power,” Filicetti said.

Strategy
Permanent capital was very important during the early evolution of the CL Diversified trade strategy because it allowed the team to adapt methodologies to react to changing markets. The portfolio invests across 65 markets and is divided into four sectors (fixed income, foreign exchange, equities, and commodities) all of which receive equal weighting and are re-balanced every month to maintain those weightings.

“Because we view the world probabilistically, and don’t know where any returns will ......................

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The benefits of permanent capital: Scalae Management up 30 % ....

Roubini: we are paying the consequences....

Bear Roubini
Economist and founder of rgemonitor.com Nouriel Roubini showed no mercy on his audience: “The tsunami of defaults is only just starting,” he said. Hundreds of hedge funds will go bust. We are reaching a point when systemic danger becomes larger rather than smaller – we are at panic point, under the falling knife. “I would not be surprised if some Western stock markets were to close for a few days".

There will be severe recession in the U.S. and in Europe and this will be the worst in decades. $600bln minimum would be needed to save credit markets. Financial markets are becoming completely “dysfunctional”.

To illustrate the systemic collapse, even a small country such as Iceland (who borrowed 12 times its GDP’s worth) can have significant effect on the world economy. Emerging economies are on the tipping point too.

Everyone has been in favour of financial innovation which has lead to more complexity in the markets and more systemic risk; now we are paying the consequences.

“The only light at the end of the tunnel is that it will come after the financial train wreck. That’s my only assessment,” he said. Roubini also warned about future geopolitical consequences and the beginning of the decline of the American empire… he did work for the White House Council of Economic Advisors and for the U.S. Treasury Department after all.

Fair Value: misunderstood concept
Fair value is the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. Bernanke has recently remarked on fair value, saying that we “need to make a distinction between fire-sale prices and hold-to-maturity prices.”

There have been various amendments and clarifications on fair value accounting from the U.S. and the U.K. accounting bodies, as well as confusions within the financial industry and misunderstandings from the press. Max Ziff of London’s Holihan Lokey, an investment banking services firm, sought to clarify the matter and put forward the following conclusions:

- Illiquid assets are both a threat and an opportunity.
- Either way, appropriate valuing procedures are critical.
- The trends towards institutional investments will only reinforce this.
- A return to cost accounting is not a solution for banks or investment funds.
- FAS 157-3 is a constructive step forward but remains a stop gap.
- For hedge funds, the debate is not just about accounting but also about how the hedge fund structure adjusts going forward.
- When it comes to disclosure, think “full” and then some.
- Use volatility as the best indicator and when mark-to-m......................

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Roubini: we are paying the consequences....

Experienced Investor Fund - Gibraltar’s....

This is the second of six Gibraltar focussed articles by Rolf Majcen, Managing Director, FTC Capital GmbH, Austria, www.ftc.at (first article: Source).

Experienced Investor Funds (EIFs) are Gibraltar’s premier vehicle for alternative investments. Legal basis are the Financial Services (Experienced Investor Funds) Regulations 2005. The strength of the EIF-regime is that it is internationally competitive while maintaining the level of regulation. It offers a fast-track procedure that enables funds to be swiftly and easily set up which brings Gibraltar into line with jurisdictions such as the Cayman Islands or the BVI.

Definition of an “experienced investor”
EIFs are open to investors who are considered to be “experienced”; for instance, a person meets the requirement that is a professional asset manager or a person with net assets in excess of Euro 1 Mio. The term “experienced investor” is also fulfilled if a participant invests a minimum of Euro 100.000, which makes it easier to subscribe shares of an EIF.

Flexibility
There are no investment or borrowing restrictions imposed on an EIF, nor is there any limitation on the number of investors such a fund may have. There is no obligation for an EIF to publish the NAV and it does not have to meet any requirements in respect of minimum net assets. There is no need to have an authorised “fund-promoter”.

EIFs are primarily established as open-ended or closed-ended investment companies; Unit Trusts, partnerships or funds in contractual form as well as Protected Cell Companies (PCC) are also possible. The private company has got an interesting special feature, even when compared to other international centres, because it does not limit the number of its members (50 according to Gibraltarian law) for a company that is an EIF and also allows the public distribution of shares to a certain degree.

EIFs are capable of being established in Gibraltar within a matter of days
The regulatory regime has placed the burden of compliance, due diligence and o......................

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Experienced Investor Fund - Gibraltar’s....

Oak Hill Advisors appoints former Lehman team of Goran V Puljic.....

Oak Hill Advisors, L.P. announced today that Goran V. Puljic, T.K. Narayan and Scott W. Snell have joined the firm's structured products group to focus on investment opportunities in the credit markets. The team joined Oak Hill Advisors from Lehman Brothers Inc., where they managed approximately $2 billion in structured credit assets, through both third party fund vehicles and proprietary capital within Lehman Brothers Private Equity. Their appointment enhances the investment capabilities of Oak Hill Advisors' structured products group that is currently led by Jason Serrano, who joined earlier this year from The Blackstone Group. Goran Puljic and Jason Serrano will co-lead this effort...

In his role at Oak Hill Advisors as Managing Director and Co-Head of the Structured Products Group, Mr. Puljic brings valuable experience with regards to......................

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Oak Hill Advisors appoints former Lehman team of Goran V Puljic.....

$7bln NIR Group aims for stronger capital base through fund restructuring...

Opalesque New York: Opalesque had the opportunity to speak with Corey Ribotsky, Managing Member and Head Portfolio Manager at NIR Group about both the launch of the firm's Haverstock Fund as well as give the team the chance to address the media reports of this week which have inaccurately described investor redemptions at the firm.

Two themes which thread through almost every news story we see about the hedge fund industry are "cash is king" and "opportunity abounds". The $7bln NIR Group is one example of the way funds have had to react during the current market turmoil and address both the liquidity needs which are resenting opportunity at the investment end, but decreasing assets at the investor end.

Restructuring to address liquidity needs of investors
NIR Group told Opalesque that reports of redemptions from the AJW Family of Funds have been mischaracterized.

The Funds, which have returned +8% YTD are asset based lending strategies and the management team, looking to secure committed capital has made the decision to balance an increased lockup period (3 years or quarterly with 90 days notice) with a decrease in fees (from 2%/20% to 1%/15%).

NIR confirmed that there have been a small number of redemptions by investors seeking to meet their own liquidity concerns.

NIR also confirmed that AJW's decade old redemption schedule has been altered to reflect the new liquidity constraints of the current market environment. It has always been the firm's policy to limit each allocation in size to a very small ......................

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$7bln NIR Group aims for stronger capital base through fund restructuring...

Investors, regulators support hedge funds....

nvestors: we still believe in hedge funds
Bob Discolo, of AIG Global Investments, said two third of AIG's selection is manager-driven, one third strategies. A lot of hedge funds will go out of business, but there are a lot of brilliant managers and that is the most important part about hedge funds.

Michel Malo, of Qu?bec's Caisse de D?p?t et Placement said he also concentrates a lot more on managers. The pension fund is more discerning now and it will even look at managers who had had draw-downs, so long as those draw-downs are within what is expected. It has more than 30% of assets in alternatives. Hedge funds are not responsible for what is happening, he said.

Pranay Gupta, of Pearl Group, said that the best part of a portfolio is still alternatives. Hedge funds who have had big draw-downs will have trouble marketing themselves going forwards, and emphasis on strategy selection may increase.

Graham Thouret, of Diversified Global A.M., said he still thought that hedge funds were one of the best diversification in asset classes. "We are focused on accessing or even originate new strategies that are uncorrelated, like re-insurance." Risk adjusted returns have gone down, as hedge funds have grown more mature.

Gloom, Boom and Doom: the Fed has no intention of pursuing a tight-money policy
The charismatic, Swiss-German author of 'Tomorrow's Gold' and other books, and founder of The Gloom, Boom and Doom report, Dr Marc Faber, talked at length about the crisis and put forward the following conclusions:

- It is quite likely that the current synchronised global economic boom and universal, all the encompassing asset bubble, will lead to a colossal bust.
- Central bankers have become hostage to inflated asset markets. Tight money will be difficult to implement.
- Expansionary Monetary (which caused the credit crisis in the first place) are the wrong medicine to solve the current problems.
- However, the market participants may from time to time bring about tight monetary conditions by curtailing the availability of credit.
- As L.von Mises observed: "the dearth of credit which marks the crisis is caused not by a contraction but by the abstention of further credit expansion."
- Rolling inflation, stagflation, deflation may succeed each other in rapid sequences. In real terms, equities would not seem to be attractive.
- Secular uptrend in commodity prices is still intact. Sharp corrections should be expected.
- Along with rising commodity prices, inflation and interest rates are likely to increase over the next few years.
- Resource nationalism and resource-driven geopolitics will increase international tensions further.

Finding alpha in emerging markets: not the best time
Adrian Mowat, of JP Morgan Securities (Asia Pacific) said that those emerging economies which had build reserves and gone through economic reforms during the good years would be the most resilient, like China, which is predicted to have a 30% deficit, as well as Mexico and Taiwan, which governments have articulated counter-cyclical policies. Brazil is attractive, but in the long run. He is bearish on Russia, India and Korea. He expects the Baltic States and Central Europe might suffer from a domino effect, Russia to transfer more of its economic power to the Kremlin, and to do some "colonisation" through forex. The current period does not offer many alpha opportunities, as equity prices (and everything else) are driven down but the next stage will offer more opportunities. "We shall see more back-to-basics and back-home in the world," he said.

Larry Brainard, chief economist at Trusted Sources Research, believes that China's growth will hold but profit will not. Brazil's Central Bank is quite effective and it......................

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Investors, regulators support hedge funds....

BlackRock releases 3Q results with 14% drop in 3Q profits....

Opalesque New York: "These are the best of times and worst of times" was how a somber, but optimistic Laurence Fink, Chairman and Chief Executive of BlackRock started the third quarter earnings call with investors. Posting a -14.7% drop in third quarter profits Fink told investors that the losses were felt across all asset classes.

According to Reuters analysts had expected earnings of $1.88 per share as BlackRock's final quarter numbers fell to $1.62 per share.

$66m loss in seed and co-investments in hedge funds
Third quarter 2008 non-operating expense, net of non-controlling interests, was $119 million compared to non-operating income, net of non-controlling interests of $47 million in third quarter 2007. The $119 million non-operating expense, net of non-controlling interests, includes losses of $66 million from seed and co-investments in hedge funds/funds of hedge funds (including the impact of distressed credit products), $13 million from real estate products and $39 million related to assets associated with certain deferred compensation plans....

Source:
http://www.opalesque.com/AMB2008/47866Altesque_Events_presents_2008_Hedge_Fund.html

CMA Global Hedge introduces redemption facility and.....

CMA Advisors, a Zurich-based fund of hedge funds business, floated its fund of hedge funds on the London Stock Exchange in the summer 2006 to create a separate investment company called CMA Global Hedge. In July 2006, CMA Global Hedge PCC said it had raised $402 million from its IPO. This was the second-biggest stock market flotation by a financial services company in the UK so far that year after Standard Life (then Goldman Sachs immediately followed suite and raised $507m for a new vehicle called Goldman Sachs Dynamic Opportunities.)

We heard a couple of months ago that CMA Global Hedge had lost almost 7% of its value in the first half of 2008, "nearly three times the 2.5% average loss across the fund of hedge funds sector" (efinancialnews.com). In September, the fund's USD share class lost 9.43% (est.), it has further lost 8.92% (est.) so far in October and is now down 23.30% (e......................

Source:
http://www.opalesque.com/AMB2008/47845CMA_Global_Hedge_introduces_redemption_facility_and.html

New firm Four Elements Capital moves to Singapore....

Lionel Semonin, previously Managing Director for BNP Paribas's global Commodity Investor Group, has decided to launch Four Elements Capital Management Pte Ltd and is being joined by Bertrand Egsbaek, Leila Kuhlenthal, Marion LeFevre and Lei Shen.

The team, previously based in London, are relocating to Singapore and are looking to meet with investors to discuss their first fund.

The Four Elements team plans for the Earth Element Fund to be a commodity strategy based on both fundamental and quantitative analysis. This investment process has been developed using the teams experience and will be syste......................

Source:
http://www.opalesque.com/AMB2008/47843New_firm_Four_Elements_Capital_moves_to.html

Roundtable: Nordic Hedge Fund Leaders say hedge funds a stabilizing force, confident on further growth but warn over "race to ever shorter liquidity..

Stockholm, October 21st 2008 -- Opalesque, the world's largest subscription-based publisher covering the alternative investment industry, has just launched the ninth issue of its groundbreaking Roundtable Series, the Opalesque Nordic Roundtable (download here: http://www.opalesque.com/index.php?act=static&and=RoundtableNORDIC).



Some of the Nordic hedge funds and CTAs have track records that go back to 1991. There are more than 200 hedge funds registered or run out of the Nordic region, adopted early by Nordic institutions and pension funds.



The Opalesque Nordic Roundtable was sponsored by DnB NOR Asset Management and took place on September 22nd 2008 in their Stockholm office. For this Roundtable, Opalesque united the following Nordic Alternatives Leaders:





l Martin Estlander, CEO, Estlander & Rönnlund

l Kent Janer, Partner, Portfolio Manager, Brummer & Partners AB

l Svante Bergstrom, Managing Director, Fund Manager, Brummer & Partners AB

l Peter C. Warren, CIO, WarrenWicklund Asset Management

l Lars Lovgren, Head of Hedge Funds, DnB NOR Asset Management

l Dr. Patrik Säfvenblad, Head of Hedge Fund Research, DnB NOR Asset Management

l Magnus Nilsson, Partner, Öhman Group

l Dennis Johansson, Partner, RAM Rational Asset Management





The purpose of the Opalesque Roundtable Series is to provide a catalogue of intelligence on the world's most important hedge fund centres and introduce you to some relevant local players of each jurisdiction. New York, London, Geneva, Singapore, Hong Kong, Tokyo, Sydney, and Auckland are already covered (see the Roundtable archive on the Opalesque website). In this Roundtable Script, you will learn:





l A bit of history: How have the Nordic markets have achieved this degree of sophistication in financial markets, trading and hedge funds?

l How is the Nordic hedge fund community standing up against their international peers in both in absolute and risk-adjusted returns?

l How do Nordic institutions view hedge funds?

l How does regulation vary from country to country?

l What are the advantages of running a hedge fund from the Nordic region?

l What is "ATM Risk"?

l An in-depth discussion on liquidity: Why are large investors concerned on hedge funds' race to ever shorter liquidity terms?

l Why hedge funds have been a stabilizing force in the current market turmoil

l How will the region further evolve? What funds and strategies are being developed?





The Opalesque Nordic Roundtable can be downloaded here:

http://www.opalesque.com/index.php?act=static&and=RoundtableNORDIC

All other previously published Opalesque Roundtable Scripts can be accessed here:

http://www.opalesque.com/index.php?act=archiveRT



About Opalesque:



In 2003, with the publication of its daily Alternative Market Briefing, Opalesque successfully launched an information revolution in the hedge fund media space: "Opalesque changed the world by bringing transparency where there was opacity and by delivering an accurate professional reporting service." - Nigel Blanchard, Culross. This hybrid financial news service, which combines proprietary industry news stories and filtered third party reports, has been credited by many industry insiders with delivering precise, accurate, and vital information to a notoriously guarded audience.



Each week, Opalesque publications are read by more than 500,000 industry professionals in over 100 countries. Opalesque is the only daily hedge fund publisher which is actually read by the elite managers themselves (http://www.opalesque.com/op_testimonials.html).



About Opalesque Publications:



Alternative Market Briefing is a daily newsletter on the global hedge fund industry, highly praised for its completeness and timely delivery of the most important daily news for professionals dealing with hedge funds. Alternative Market Briefing offers both a quick overview and in-depth coverage. Subscribers can also access the industry’s largest news archive (29,000+ articles) on hedge funds and related topics.



A SQUARE is the first web publication, globally, that is dedicated exclusively to alternative investments. A SQUARE's weekly selections feature unique investment opportunities that bear virtually no correlation to the main stream hedge fund strategies and/or distinguish themselves by virtue of their "alternative" motive – for instance, social or behavioral strategies or those focused on natural resources or sustainable/environment-related investing.



With its "research that reveals" approach, fast facts and investment oriented analysis, A SQUARE offers diversification and complementary ideas for private, high net-worth and institutional investors, pension funds and endowments, portfolio and hedge fund managers.



Technical Research Briefing delivers a global perspective/overview on all major markets, including equity indices, fixed Income, currencies, and commodities. Opalesque Technical Research is unique compared to most available research which is fundamental in nature and not technically (chart) oriented.



Sovereign Wealth Funds Briefing offers a quick and complete overview on the actions and issues relating to Sovereign Wealth Funds, who rank now amongst the most important and observed participants in the international capital markets.

Commodities Briefing is a free, daily publication covering the global commodities markets. The Opalesque Commodities Briefings follow the popular Opalesque “Briefing” format and offer a quick and complete oversight on commodities and commodity-related news and research in 26 detailed categories.



The daily Real Estate Briefings offer a quick and complete oversight on real estate, important news related to that sector as well as commentaries and research in 28 detailed categories. The service can be subscribed as daily email newsletter or by RSS feed.



The Opalesque Roundtable Series unites some of the leading hedge fund managers and their investors from specific global hedge fund centers, sharing unique insights on the specific idiosyncrasies and
developments as well as issues and advantages of their jurisdiction.

Through the series, hedge fund investors looking for new talent, a hedge fund interested in diversifying its investor base, or service providers looking for new clients will all get to know some of the leaders in each hedge fund center and will find invaluable information and intelligence without any travel involved.


For more information, please go to http://www.opalesque.com

Altesque Events presents 2008 Hedge Fund Insider`s Update....

When: Monday, November 10, 2008, from 7.45 am (whole-day event)
Where: The Crowne Plaza Times Square, 1605 Broadway at 49th Street, New York City.

Altesque Events, LLC, formerly Opalesque Global Services, LLC, would like to extend an invitation to you to sign up and attend its 2008 Hedge Fund Insiders� Update.

This is the one conference of the year designed to up......................

Source:
http://www.opalesque.com/AMB2008/47839Altesque_Events_presents_2008_Hedge_Fund.html

Opalesque Sovereign Wealth Funds Briefing....

Opalesque, the world's largest subscription-based publisher covering the alternative investment industry, has just launched its seventh publication, the Opalesque Sovereign Wealth Funds Briefing. This new, daily publication in the popular Opalesque �Briefing� format offers a quick and complete overview on the actions and issues relating to Sovereign Wealth Funds (SWFs). SWFs now rank amongst the most important and most observed participants in the international capital markets.

The Opalesque Sovereign Wealth Funds Briefing service can be subscribed as daily email newsletter or by RSS feed at ww.opalesque.com/SWF_Briefing.

Can you really afford to miss stories like these?

• The Premier League of Sovereign Wealth Funds
• Abu Dhabi�s wealth fund still eyeing Europe, US
• Chinese SWFs may wave investment plans
• China wealth fund to raise stake in Blackstone to 12.5% from 9.9%
• Cooler winds blow from Beijing
• SWFs have their role in crisis
• SWFs seek safety..

Source:
http://www.opalesque.com/AMB2008/47834Opalesque_Sovereign_Wealth_Funds_Briefing_New.html

Porcupine Global Macro Plus Fund.....

Opalesque has learned that Porcupine Global Macro Plus Fund has returned +2.43% for the month of September (16.31% YTD). According to communications with investors, the fund will continue to hold large cash positions and move forward with caution during the current market uncertainties. Additionally the Fund, which previously offered quarterly liquidity will begin in November to offer monthly liquidity (with 20 days notice).

The investment objective of the Fund is to generate positive absolute returns while managing down......................

Source:
http://www.opalesque.com/AMB2008/47815Porcupine_Global_Macro_Plus_Fund_at.html

Porcupine Global Macro Plus Fund at +2.43% in September...

Opalesque has learned that Porcupine Global Macro Plus Fund has returned +2.43% for the month of September (16.31% YTD). According to communications with investors, the fund will continue to hold large cash positions and move forward with caution during the current market uncertainties. Additionally the Fund, which previously offered quarterly liquidity will begin in November to offer monthly liquidity (with 20 days notice).

The investment objective of the Fund is to generate positive absolute returns while managing down......................

Source:
http://www.opalesque.com/AMB2008/47815Porcupine_Global_Macro_Plus_Fund_at.html

Markov Processes’ reverse engineering of hedge fund portfolios with.....

Opalesque New York: Opalesque recently had the chance to speak with Michael Markov, CEO and Director of Research at the U.S. offices of Markov Processes International (MPI) about the firm�s reverse engineering approach to hedge fund analysis as well as their thoughts on hedge fund replication strategies and some of the new ways they are using their data capabilities to increase transparency to clients within the industry.

One of the tests which elite US Navy SEALs must take to be considered expert marksmen requires them to disassemble and reassemble a variety of weapons. In addition to the physical ability to take apart and put together the tools of their profession, they must name each part as they go, while an instructor times them and asks them various probing questions about each part of the weapon and about its function as a whole.

It is perhaps an apt comparison to the requirements of the team at MPI (a team that includes a former lead software engineer with a specialty in robotics and technical cybernetics who designed robots for Russian military and space programs) which disassemble and reassemble portfolios as part of their analysis of a fund�s return streams. In fact, the team is capable of reverse engineering a portfolio to provide in-depth analysis of a fund even when given less than a year of returns to work with and only the most basic information on a fund�s focus of investing.

MPI launched in 1992 with a focus on mutual funds and institutional products. Using the ideas that Nobel Laureate William Sharpe (creator of Sharpe ratio) published, Markov and Mik Kvitchko, MPI Chairman and Chief Technology Officer, wrote the first commercial application to analyze mutual fund products. The program itself received an endorsement from Sharpe . �It is harder to apply the same methodology to hedge funds because they have fewer restrictions, trade frequently, have derivatives, can turn their portfolio on a whim, and do various things which traditional managers cannot do,� Markov explained. However, the collapse of Long Term Capital in 1998 proved to be too intriguing a case study for the team and soon MPI set their sights on the hedge fund industry.

�The key to the analysis is dynamic modeling,� explains Markov. �Most analysis is static and the problem with that is betas are changing all of the time�There are techniques in other sciences, especially in the defense industry where they track moving targets. They are very delicate methodologies.�

Using an international team of mathematicians MPI was able to write a program which could regress a hedge fund from performance backwards to reveal the portfolio�s possible investments.

With only 8 or 9 months of performance numbers they reverse engineered the Long Term Capital portfolio and released a white paper detailing the fund�s collapse. The program itself received several recommendations for the firm�s first hedge fund clients.

More recently, Markov has used the......................

Source:
http://www.opalesque.com/AMB2008/47811Markov_reverse_engineering_of_hedge.html

Quant fund Amplitude returns 14.48% in September....

Opalesque London: Karsten Schroeder, Amplitude Capital�s PM and CEO, talked to Opalesque about the Amplitude strategy and the need for investors to diversify, and include quants in their portfolios � especially as they seem to be doing well in times of crisis.

Quants faring well
The Amplitude strategy returned 14.48% in September and 31.26% YTD and has compounded 28.28% p.a. since its June 2005 inception.

These results mirror the success of many other quant funds: Tudor Investment Corp�s Tensor Tudor was up 21.3% and Jim Simon's flagship Medallion fund up 49% through the end of September, Wealth Bulletin reported. SGAM AI�s quant fund, the Global Volatility Fund, was up 6.17% YTD to August and AM Investment Partners� volatility fund went up 6% in just the month of September - when the S&P500 and Nasdaq Composite Index sunk 5.4% and 7.8%, respectively, reported WSJ. Opalesque yesterday reported on Welton�s CTA fund, the Global Directional Portfolio, which is up 11% YTD. The top 3 performing programs in the AlternativeEdge Short-Term Traders Index (which rose 2.12% in September, 11.3% YTD) were R.G. Niederhoffer Negative Correlation (+17.4% est.), R.G. Niederhoffer Diversified (+14.7% est.) and the Conquest Macro Fund (+8.46% est.). Opalesque has also just received the September performance for the AIMhedge�s systematic fund, which is up 5.07% (almost 39% YTD). But on the other hand the market turmoil and Lehman�s collapse forced the Amsterdam-based quantitative hedge fund HiQ Invest to close out some positions at significant losses.

�Over the last couple of months we have seen big moves in the market which help quant funds to perform well,� noted Karsten Schroeder. �Generally speaking, the bigger the herd mentality in the market, the greed or fear phenomenon � obviously at the moment it is fear � the better these quantitative models can be exploited��

It is true that the short-selling bans on financials did affect some quant funds, but the Amplitude strategy, which aims to take advantage of the market�s volatility, was not. However, the new Amplitude Select fund was affected by the US ban and its launch has therefore been postponed till January 1st (Opalesque exclusive on the Amplitude Select Fund.)

Strategy: systematic managed futures
At the QuantInvest conference in London last month, Peter Keutgens, senior investment consultant at Watson Wyatt, said that the typical 'core' quant processes were value, momentum and others. The current market for quants includes pure value managers (the few remaining quant pioneers and the post TMT generation); 'core' quant managers (long only and 130/30); hedge fund managers (long/short quant strategies); quant screen......................

Source:
http://www.opalesque.com/AMB2008/47810Quant_fund_Amplitude_returns_in_September.html

GFIA reports Brazilian hedge funds had reached $40bln in assets in July....

Singapore-based GFIA, the hedge fund consulting firm focused on developing markets, reports in its semi-annual Latin American Hedge Funds Note that as of July 2008 Brazil has grown to represent approximately $40bln of the hedge fund assets investing in Latin America (up from $31bln in 2007).

Expectations of Latin American hedge fund strategy shifts
The first local Latin American hedge funds appeared in Brazil in the mid-1990�s. GFIA identifies an onshore hedge fund industry of 340 funds (managed by 169 different managers) and reports almost half are macro funds, which have seen a decline in performance over the past few years. �Given the scarcity of opportunities in the macro trading space, we believe that macro managers may be forced to reshuffle their business models and �reinvent� themselves,� writes Peter Douglas, Principal at GFIA.

Two strategies which have gained footing in the region are long/short equities and fixed income. Long/short equities is the fastest growing strategy with an increa......................

Source:
http://www.opalesque.com/AMB2008/47800GFIA_reports_Brazilian_hedge_funds_had.html

SEC`s amendment to Reg SHO will increase costs in securities lending market ....

The Securities and Exchange Commission is adopting amendments to Regulation SHO under the Securities Exchange Act of 1934 (�Exchange Act�).

The amendments are intended to further reduce the number of persistent fails to deliver in certain equity securities by eliminating the options market maker exception to the close-out requirement of Regulation SHO. As a result of the amendments, fails to deliver in threshold securities that result from hedging activities by options market makers will no longer be excepted from Regulation SHO�s close-out requirement. The Commission is also providing guidance regarding bona fide market making activities for purposes of the market maker exception to Regulation SHO�s locate requirement. Effective date: October 17, 2008.

Finadium, a Concord, MA-based financial research house, has sent the following comments to Opalesque:

�Effective October 17, the SEC has repealed the options market maker exemption of Reg SHO. This means that when an options market maker shorts an equity, even in support of a bona fide options hedge, they will now be required to borrow a security to cover the short position like any other market participant. This closes out persistent fails. It does not entirely eliminate the options market maker exemption for Reg SHO securities.

- New demand from options market makers will substantially increase costs in the securities lending market, especially at a time when many asset holders are carefully evaluating the risks and benefits of their own lending programs.

- The options on harder to borrow securities often have larger spreads and more profit-making opportunities than highly liquid contracts on indices or large cap names. The loss of these options contracts will reduce a source of margin for options market makers. We expect that larger market makers will weather the storm wh......................

Source:
http://www.opalesque.com/AMB2008/47796amendment_to_Reg_SHO_will_increase.html

as CTA strategies continue to rack up gains...

Opalesque New York: Opalesque recently had the chance to speak with Patrick Welton, co-counder and CEO of Welton Investment Corporation, which manages a $500m global macro and managed futures portfolio. The strategy trades in approximately 100 markets spanning commodities, currencies, interest rates and stock indices. Welton�s Global Directional Portfolio (GDP) was incepted in 2004, has earned an average annual return of +15.44%, gained +0.87% in September, YTD returns of approximately +11%. Welton Investment Corporation is based in Carmel, California.

In Part Two of this piece, Welton discusses some of the concerns investors have expressed regarding the hedge fund industry, and how in the short term redemptions will generate opportunity for a managed futures strategy, and in the long term may be better for the entire industry.

Being uncorrelated to other strategies seems to take on an even stronger level of significance these days. It was reported that redemptions in the hedge fund industry, even if they occur in more modest numbers than anticipated could cripple an already illiquid equities market. Have you seen an increase in attention paid to your strategy as it proves itself to be uncorrelated to these markets?
I just spent a week in New York, and after multiple meetings with different potential clients your first sentence couldn�t be any truer. Being uncorrelated really has taken on a greater level of significance these days.

Many investors are profoundly disappointed right now because they always thought their �alternatives� would perform radically different than their �traditionals.� In other words, they thought they were non-correlated. As the events of 2008 have shown, however, the return drivers of both are often more closely related than many appreciated. For example, if some alternative strategies were initially viewed and benchmarked primarily as just variants of active equity and active credit, the chasm between investor expectations and reality wouldn�t be nearly as wide.

Painful as it�s been, and continues to be, the lessons of 2008 will strengthen the industry. Investors will now be able to revisit their primary purpose of an alternative asset allocation. If that purpose is to truly deliver diversification from their traditional asset holdings then alternative asset allocations will like be repurposed toward the truly uncorrelated strategies such as managed futures and broadly diversified macro that are currently being highlighted for the diversification that they actually deliver....

Source:
http://www.opalesque.com/AMB2008/47781as_CTA_strategies_continue_to_rack_up.html

Review of hedge fund launches....

Hedge Fund News London: A roundup of last week�s hedge fund launches, closures, index performance, trends, regulatory, legal and financial events pertaining the alternative investments world.

Last week, we heard of fund and platform launches from Permal Investment Management Services, SteelTeam, KMK, Compass, Minuteman, Valens Capital and Laurus, Galena, ARCH Financial, Informed Portfolio Management, La Fayette, Russell Investments, Finvest A.M., Arcoda, Swiss-Asia, and CopperTree. Nick Roditi set up Belvedere Investment Partners, an asset manager in London that will focus on Asian investments.

Gartmore stopped its L/S hedge fund launch over the shorting ban and YouGov abandoned its hedge fund plans due to lack of funds.

Threadneedle was said to plan new hedge fund despite collapse of its long/short credit fund; Absolute Capital decided to close two of its hedge funds; Highland Capital also shut two of its funds, and rumors said Tontine Partners was under liquidation. Many funds announced negative results, notably Citadel�s which fell 30%. Watson Wyatt reported that top fund managers had posted the slowest asset growth in five years.

Morningstar Hedge Fund Index dropped 7.87% in September, -13.17% in 3Q, the RBC Hedge 250 Index went down 7.67% (est.), -13.17% YTD, the Credit Suisse/Tremont Hedge Fund Index was down 6.55%, -9.87%YTD, the HFRI Fund Weighted Composite Index collapsed 5.42%, -10.11% YTD, the Scotia Capital Canadian Hedge Fund Index -11.17%, and all Canadian Hedge Watch indices were negative.

While some said that the number of hedge funds could halve in 2009, TABB Group reported that H2-2008 would see 700 to 1,000 funds (15% of the industry) closing, and Morgan Stanley�s CEO John Mack claimed that 30% of hedge funds might disappear. Time Magazine reported that hedge funds had already lost nearly $300bln YTD.

General panic selling saw the share prices of listed hedge fundsfall drastically in recent weeks; as a result, investors in Marshall Wace�s London-listed MW Tops hedge fund were offered the chance to withdraw from the fund at close to its underlying NAV. Another phenomenon was observed in the equity market: hedge funds forced to sell off equities had driven the collapse in equity markets in recent months, with the stocks in which hedge funds held the largest stakes had massively underperformed. It was also noted that hedge funds were under pressure to liquidate positions as banks asked for more collateral, and that they targeted corporate lending as banks were drying up.

Some FoHF houses reweighted their hedge fund exposures, some hedge fund managers moved to cash to ride out the storm while others still saw a great opportunity to invest in affected banks, or in the life insurance settlement industry. It was reported that hedge funds had cut OTC derivative contracts by almost half, and that London funds were shifting billions of dollars to New York banks because of worries about the British bankruptcy regime.

Da Vinci hedge fund suspended redemptions and Mark Sellers locked redemptions on his energy fund with plans to liquidate later. It was observed that funds of funds were facing unprecedented withdrawals; J.P. Morgan estimated $100bln in redemption requests for FoHFs in the fourth quarter; TrimTabs reported that U.S. hedge fund withdrawals had hit $43bln in September; and Eurekahedge said that the total industry had lost $80bln in Sep 08 (and was down to US$1.8tln).

As hedge funds are pulling their accounts from securities firms, Conifer Securities launched prime brokerage services in response to the migration trends, JPMorgan prime-brokerage reported that hedge fund assets rose by 25%, and Fidelity�s by 40% in the last 12 months.

Despite the financial crisis, Wells Fargo, JPMorgan Chase, State Street reported $2.6bln in profits but Merrill posted a $7.5bln loss and Citigroup posted a 4th straight loss on write-downs. Lending rates between banks in the U.S. and Europe continued to fall, and this was seen as �evidence that credit markets were thawing gradually as central banks pumped more liquidity into the financial system and relaxed rules for banks to obtain credit.�

Morgan Stanley was forced to renegotiate the terms of a planned $9bn cash injection (and 21% stake) from Japan�s Mitsubishi UFG, following a fall in share price. The deal went ahead and the bank� shares subsequently soared. It was said that it would start buying banks.

Investigators revealed that top officials at AIG had known of potential problems in valuing derivative contracts long before these transactions caused the insurer's shareholders severe pain. And New York Attorney General Andrew Cuomo probed the `outrageous` AIG spending. Congressional critics suggested that the former Goldman Sachs CEO Henry Paulson (now Treasury secretary) had been biased in his decision to bail out AIG. Meanwhile, Ambac and other bond insurers worked on a plan to sell troubled assets to the US government, and UK insurers Prudential and Legal & General showed signs of trouble.

Hong Kong legislators blamed regulators of failing to monitor banks that sold billions of dollars worth of Lehman Brothers-backed bonds to more than 40,000 Hong Kongers. Lehman�s hedge fund clients were facing margin calls on frozen assets; the UK FSA allowed trading companies to cancel unsettled Lehman transactions. A judge approved Lehman�s sale of Neuberger and of a stake in R3 Capital Partners; Lehman was said to be looking to unwind derivatives trades.

The U.S. administration, following similar moves by European governments that sent global stock.....

Source:
http://www.opalesque.com/AMB2008/47780Review_of_hedge_fund_launches_closures_trends.html

New Daily Publication Monitors Sovereign Wealth Funds As Influence and Assets Grow

Zurich, October 20th, 2008 -- Opalesque, the world's largest subscription-based publisher covering the alternative investment industry, has just launched its seventh publication, the Opalesque Sovereign Wealth Funds Briefing. This new, daily publication in the popular Opalesque “Briefing” format offers a quick and complete overview on the actions and issues relating to Sovereign Wealth Funds (SWFs). SWFs rank now amongst the most important and most observed participants in the international capital markets. The service can be subscribed as daily email newsletter or by RSS feed at http://www.opalesque.com/SWF_Briefing/.

Can you really afford to miss stories like these?

l The Premier League of Sovereign Wealth Funds

l Abu Dhabi’s wealth fund still eyeing Europe, US

l Chinese SWFs may wave investment plans

l China wealth fund to raise stake in Blackstone to 12.5% from 9.9%

l Cooler winds blow from Beijing

l SWFs have their role in crisis

l SWFs seek safety

l Kuwait sovereign fund eyes Gulf, North Africa buys

l Dubai may need help from Abu Dhabi to fund borrowing

Thanks to the new Opalesque Sovereign Wealth Funds Briefing (http://www.opalesque.com/SWF_Briefing), readers will be able to receive a reliable, daily update on these "800 pound gorillas" of the capital markets.

Large archive already available

The Opalesque Sovereign Wealth Funds Briefing Archive (http://www.opalesque.com/SWF_Briefing/??page_id=398) has already over 500 articles archived and is full searchable. The articles are grouped and can also be accessed through the following categories:

l Alternative Investments

l Asset Allocation

l Compliance/Regulation/Legal

l Ethical/Green Investments

l Fund Management/Administration

l Fund Profile/New Launches

l Investment

l Market

l Performance

l Reserve Currencies

A free service from Opalesque

The new Opalesque Sovereign Wealth Funds Briefing is a daily, free service from Opalesque. The service can be subscribed as daily email newsletter or by RSS feed at http://www.opalesque.com/index.php?act=registration.

About Opalesque:

In 2003, with the publication of its daily Alternative Market Briefing, Opalesque successfully launched an information revolution in the hedge fund media space: "Opalesque changed the world by bringing transparency where there was opacity and by delivering an accurate professional reporting service." - Nigel Blanchard, Culross. This hybrid financial news service, which combines proprietary industry news stories and filtered third party reports, has been credited by many industry insiders with delivering precise, accurate, and vital information to a notoriously guarded audience.

Each week, Opalesque publications are read by more than 500,000 industry professionals in over 100 countries. Opalesque is the only daily hedge fund publisher which is actually read by the elite managers themselves (http://www.opalesque.com/op_testimonials.html).

Altesque Events presents 2008 Hedge Fund Insider`s Update....

When: Monday, November 10, 2008, from 7.45 am (whole-day event)
Where: The Crowne Plaza Times Square, 1605 Broadway at 49th Street, New York City.

Altesque Events, LLC, formerly Opalesque Global Services, LLC, would like to extend an invitation to you to sign up and attend its 2008 Hedge Fund Insiders’ Update.

This is the one conference of the year designed to up......................

Source:
Altesque Events presents 2008 Hedge Fund Insider`s Update....

NWQ Capital opens for business in Perth.....

Australia-based Hatfield Liptak Advisors' October newsletter informed us that, last month, Perth-based hedge fund distributor, NWQ Capital Management, has commenced operations. The firm, founded by Jon Horton, has secured exclusive distribution arrangements with New York based Saguenay Capital and Chicago based Lakeview Partners.

Saguenay offers multi-strategy fund of hedge funds while Lakeview provides fund of hedge funds focussed on shareh......................

Source:
NWQ Capital opens for business in Perth.....

As CTA strategies continue to rack up gains.....

Hedge Fund New York: Opalesque recently had the chance to speak with Patrick Welton, co-counder and CEO of Welton Investment Corporation, which manages a $500m global macro and managed futures portfolio. The strategy trades in approximately 100 markets spanning commodities, currencies, interest rates and stock indices. Welton’s Global Directional Portfolio (GDP) was incepted in 2004, has earned an average annual return of +15.44%, and has spent much of 2008 continuing to prove its strategy with gains of +0.87% in September, more gains in October, and YTD returns of approximately +11%. Welton Investment Corporation specializes in managed futures and global macro strategies and is based in Carmel, California.

In Part One of this piece Welton spoke about how global macro and managed futures overlap and how the foundations of the current macro events will take years to unwind, and provide opportunity to drive returns for years to come.

Can you give us an overview of the strategy and what markets you invest in? The overarching view of our strategy is a core coverage approach to managed futures and diversified global macro return opportunities. Core coverage of these spaces is grounded in diversification -- diversification not only by the markets we trade, but also the types of strategies that are used, how they are applied, the holding periods of the positions, and even the variety of our analysis inputs in viewing a market between fundamental or statistical approaches....

Source:
As CTA strategies continue to rack up gains.....

Altesque Events presents 2008 Hedge Fund Insider`s Update...

When: Monday, November 10, 2008, from 7.45 am (whole-day event)
Where: The Crowne Plaza Times Square, 1605 Broadway at 49th Street, New York City.

Altesque Events, LLC, formerly Opalesque Global Services, LLC, would like to extend an invitation to you to sign up and attend its 2008 Hedge Fund Insiders’ Update.

This is the one conference of the year designed to up......................

Source:
Altesque Events presents 2008 Hedge Fund Insider`s Update...

Maua Investimentos sees decline in Brazilian export volume and domestic investment....

Mauà’s managers gave their insights on the Brazilian economy in their September monthly letter, received by Opalesque.

“The external turbulence has been affecting Brazil via both the channel of exports, and via the channels of lending and expectations. In trade balance, the slowdown in global growth has already been causing a decline in the volume of Brazilian exports – a movement that should intensify over the next few months. Credit is slowing down in response to the decline in global liquidity, which affects external currency credit lines, and increased risk aversion, which leads national banks to step on the brakes when it comes to granting domestic credit.

Faced with this scenario, we believe Brazilian GDP, which should grow 5% in 2008, will slow down to around 3%. The main reason for the decline in growth should be domestic investment, which should decline from the current 16% p.a. to around 4.5%.

Weaker GDP growth in Brazil and the decline in commodities prices in international markets should facilitate the Central Bank’s work in bringing consumer inflation back to the 4.5% target – and this is precisely our forecast for year-end 2009 IPCA inflation, versus the 4.8% we were forecasting up until September. Due to this, we believe the Central Bank should reduce the size of the interest rate hike cycle initiated in April.

The risk in relation to inflation lies primordially in the BRL depreciation in recent months, which already exceeds 35% in nominal terms. However, we believe this movement is exaggerated versus the fundamentals of the domestic econ......................

Source:
Maua Investimentos sees decline in Brazilian export volume and domestic investment....

Conifer Securities launches prime brokerage services in response to industry counterparty migration trends.....

Hedge Fund News New York: U.S.-based Conifer Securities has announced their launch into prime brokerage services, taking aim at those funds hit by the downsizing of prime broker clientele at larger investment banks and a growing trend in small and mid-sized funds to diversify their prime brokerage counterparty risk. The migration trends in the prime brokerage space cover two distinct areas as risk management initiatives sweep through the industry.

“The trend we have seen over the past six months is that the prime brokers are looking at their client list and squeezing the tail to focus on the larger and more profitable clients.” Conifer President and CEO Jack McDonald told Opalesque. “This, coupled with the trend towards counterparty diversification has resulted in a real migration of counterparties.”

The importance of counterparty diversification as an idea gathered steam after the collapse of Bear Stearns, but did not shake the industry until the beginning of October which s......................

Source:
Conifer Securities launches prime brokerage services in response to industry counterparty migration trends.....

Alpha Titans FoF waives performance fees for investments.....

Alpha Titan managers yesterday announced that they were providing investors with additional financial incentives to take advantage of this rare market environment.

For new investments made prior to year-end, performance fees will be waived until the following gains have been made:

- Alpha Titans 1x Share Class: No performance fe......................

Source:
Alpha Titans FoF waives performance fees for investments.....

Attunga thrives with uncorrelated asset classes......

Given the current volatility in global markets, and the fact that Attunga Capital’s investment strategies are largely uncorrelated to these global events, here according to the fund’s managers are the mid-month fund estimates for Oct-08 performance.

Indicative performance (marked-to-market, before fees) for the Attunga Agricultural Trading Fund (featured in ASQUARE) was +6.3%, for the Attunga Enviro Opportunities Fund was +0.2% (featured in A SQUARE Source) and for the Attunga Pow......................

Source:
Attunga thrives with uncorrelated asset classes....

Middle-East faring better than E.M. peers.....

The Middle-East is faring better than its emerging market peers, although the ride is still a bit bumpy. Gulf stock markets tumbled several days in a row last week and the week before that, Kuwait injected cash into the financial system, a move aimed at shoring up confidence in its banks as a deepening global financial crisis caused liquidity to tighten in Gulf states.

The MSCI Frontier Market (which include 6 Middle East countries among 19) index was down 4.27% yesterday, -8.44% MTD and -30.77% YTD.

The MSCI Arabian Market index was up 5.25% yesterday, -4.39% MTD, -32.14% YTD, the GCC Countries index was up 5.44% yesterday, -3.73% MTD, -32.98% YTD.

And the MSCI Emerging Market index is experiencing a bigger decline; it was up 5.99% yesterday, -14.38% MTD and -45.91% YTD.

The Credit Suisse/Tremont Emerging Europe, Middle East and Africa index dropped -19.07% in September and -10.71% in August

Middle-East and North Africa (MENA)’s population amounts to 460m and covers:
- Turkey
- Levant (Syria, Lebanon and Jordan – as well as Palestine and Israel)
- Iraq
- Saudi Arabia, United Arab Emirates
- Other Gulf States (Kuwait, Bahrain, Dubai, Oman, Qatar)
- Yemen
- Egypt
- Other North Africa countries (Morocco, Algeria, Tunisia, Libya).....

Source:
Middle-East faring better than E.M. peers.....

Altesque Events presents 2008 Hedge Fund Insider`s Update.....

When: Monday, November 10, 2008, from 7.45 am (whole-day event)
Where: The Crowne Plaza Times Square, 1605 Broadway at 49th Street, New York City.

Altesque Events, LLC, formerly Opalesque Global Services, LLC, would like to extend an invitation to you to sign up and attend its 2008 Hedge Fund Insiders’ Update.

This is the one conference of the year designed to up......................

Source:
Altesque Events presents 2008 Hedge Fund Insider`s Update.....

Toygar rejoins GEM as head of research...

GEM Global Equities announced that, after having served his 6 months obligatory military period, Toygar Dincer will be joining GEM again as of the end of October 2008. Toygar worked for both Akbank and TEB as an equity analyst before joining GEM in 2005 as deputy head of research. Toygar will now lead GEM’s research effort as Head of Research and will be based in the Istanbul office. GEM lost its head of research and a manager and hired a new investor relations for its Istanbul office earlier this month.....

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Toygar rejoins GEM as head of research...

Ernst and Young New Zealand Absolute Return index ...

The New Zealand Absolute Return Association Inc (NZARA pron: “en-zara”), the organization representing the New Zealand hedge fund, CTA and absolute return equity industry in New Zealand, has recently launched the Ernst and Young New Zealand Absolute Return Index.

The index is narrow, reflecting a small but innovative industry, with initially only seven constituent managers, but represents a cross section of the global industry with global equities, trend-following, long volatility and commodities all represented in the index.

Since inception (data collection started in July 2007), the index has returned over 25%. Year to date in 2008, the index has returned 12.4% with a +3.86% performance in September.

Chairman of NZARA, Anthony Limbrick said “Considering most indices are struggling to post gains on a year-to-date basi......................

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Ernst and Young New Zealand Absolute Return index ...

Swiss family office says investors` current priority is portfolio protection....

Stonehage is one of the biggest independent family offices in the world, with 337 employees of which 125 are in Neuchatel (Switzerland). The firm plans to open an office in Geneva in the spring of 2009.

One of its directors, Frédéric Carbonnier, explained to Swiss paper Le Temps, that during the current turbulences, the aim of his clients – mainly families of international entrepreneurs – was to primarily protect their portfolio. Stonehage’s first task was to redeem from risky positions, stocks and hedge funds with high leverage. “A lot of clients are worried about the solidity of depositary banks,” said Mr. Carbonnier to Le Temps. “The most sensitive ones have moved to other banks or diversified so that they don’t have more than 10% of their assets in any one bank.” Protecting the portfolio entails the purchase of money market funds. Most of his clients’ portfolios, apart from stocks in companies and in real estate, are very liquid.

Unlike Warren Buffet, whose investment horizon is 25 to 30 years, and who is investing right now, most investors will wait until confidence comes back before getting started again. “To do that, a temporary filling-up of interbank markets is necessary,” he said. “G8’s authorities must speak in unity and set up the rules of the game that can recreate trusting exchanges between players. Managing the crisis nationally is not enough. » The consensus must be global.

He suggested that ......................

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Swiss family office says investors` current priority is portfolio protection....