|
MORE CONTENT AND RESOURCES ARE COMING ::: PLEASE CHECK BACK SOON... |
|
New Website Content: |
|||||||
|
|
|
|
|
|
|
||
|
Markets News |
||||
|
News Archives |
|
|
|
Market News |
|
January'08 Articles: |
|
InterContinental CTO Sells Shares The chief technology officer and a senior vice president of securities exchange InterContinental Exchange Inc. sold 23,623 shares of common stock under a prearranged trading plan, according to Securities and Exchange Commission filings Tuesday. In Form 4s filed with the SEC, Edwin D. Marcial reported selling the shares Friday for $134.15 to $139.25 apiece. The stock sale was conducted under a prearranged 10b5-1 trading plan which allows a company insider to set up a program in advance for such transactions and proceed with them even if he or she comes into possession of material non-public information. Insiders file Form 4s with the SEC to report transactions in their companies' shares. Open market purchases and sales must be reported within two business days of the transaction |
|
MGEX hits new volume records on wheat price surge The Minneapolis Grain Exchange says the MGEX made a number of new daily volume records on Friday, January 18. The MGEX has seen a substantial jump in trade volume recently thanks to its hard red spring wheat futures pit, which has made several new record highs over the last few weeks as traders try to ensure enough HRS acreage to meet demand. The most recent record high is in the March 2008 HRS contract at $12.24 and 3/4, surpassing Friday's then-record top of $11.96 and 3/4. For most of the past year, wheat futures in general, both the U.S. and abroad, have surged due to historically tight supplies and crop weather issues in many prime world wheat growing areas. Friday's electronic trade volume at the MGEX was 5,373 contracts, up 113 from the previous high set on November 28, 2007. Total daily volume also established a new record for the month of January at 14,295 contracts. In a statement from the MGEX, President and CEO Mark G. Bagan said "While we're in uncharted territories for our traditional market participants, the volatility is bringing new players to the market, which translates into new opportunities for all. There is increasing interest in the commodity markets from other investors." The rise in interest for futures has carried over into the MGEX options market. As of Friday, January options volume is at 4,236 contracts, just short of the all time record of 4,596 set in January 1994. That's a difference of only 360 contracts; the average daily options volume thus far this month is 326 contracts. |
|
CME Group to cross-equity invest in Brazilian Mercantile & Futures Exchange CME Group Inc. Wednesday said it will buy a 10% equity stake in the Brazilian Mercantile & Futures Exchange (BM&F), and the BM&F will buy about 1.19 million CME common shares. The exchanges also plan to enter into an order routing agreement in which CME would connect its Globex electronic distribution network to BM&F and the Brazilian exchange would connect its distribution network to Globex for order routing for electronic trading of products on both exchanges |
|
F&C Unveils Stat. Arb. Hedge Fund F&C Alternative Investment has unveiled a European long/short fund, its third hedge fund offering in the past year. The new fund, F&C Zircon, is a systemic equity fund focusing on statistical arbitrage. The vehicle is listed on the Irish Stock Exchange and is managed by Darren Jordan and Phil Robinson, who joined F&C from their own partnership, which ran a strategy similar to Zircon’s. Zircon is offered in both euro and U.S. dollar share classes, with a minimum investment requirement of €500,000 (US$726,100). It is aimed at institutional investors and is domiciled in the Cayman Islands. Within the past year, F&C AI, the single-strategy hedge fund division of F&C Asset Management, has also launched fixed-income and foreign exchange volatility, forward-rate bias trading hedge funds. |
|
Apex Fund Services planning to set up operations Apex Fund Services is to establish operations in Bahrain in a move that strengthens the kingdom as the regional financial centre. The company has been granted a licence to operate in the kingdom, the Central Bank of Bahrain announced yesterday. Apex is a privately-owned provider of fund administration and related services to offshore funds and companies. Headquartered in Bermuda and established in 2003, it is one of the world's fastest growing fund administrators, with $5.5 billion of assets under its administration and nine offices around the world. "Bahrain is a leading financial centre in the Middle East, which offers the necessary infrastructure, regulatory framework and cost-effective environment needed for us to continue to provide the highest-level of service to our clients across the Gulf," said Apex managing director Peter Hughes. "Being the first regulated fund administrator in Dubai, it was only logical for us to expand our presence in the Gulf by opening an office in Bahrain." "We are very pleased to welcome such a dynamic and growing business as Apex Fund Services to Bahrain," said Economic Development Board chief executive Shaikh Mohammed bin Essa Al Khalifa. |
|
MFS Pressured by U.S. Hedge Fund to Sell Assets, Review Reports MFS Ltd. is under pressure to sell assets as U.S. hedge fund Fortress Investment Group LLC demands repayment of a A$150 million ($130 million) loan, the Australian Financial Review reported, without citing anyone. Fortress is due to be repaid at the end of February after agreeing to an extension from December, the newspaper said. There is a clause in the loan agreement which says the funds are due immediately if MFS' market value falls below a specified level, the review said without detailing the level. |
|
Monte Cristo Launches Special-Situations Hedge Fund .K.-based Monte Cristo Capital this month seeded a new special-situations hedge fund that will make tactical investments in global macro and distressed events. The firm invested about US$3 million in the Monte Cristo Special Situations Fund. Bruce Goodwin, head of trading at Monte Cristo, said the time is right for such a “broad-brushed” fund because of global dislocations in markets and a rise in distressed valuations. “We’ll do any types of trading across asset classes,” he said. “It’s a global macro fund, but we’ll throw in distressed investing as well if we find things that make sense. We have a background in investing in distressed illiquid markets and we’re bringing in a portfolio manager on May 1 to invest in more developed markets and liquid investments.” Goodwin added that the fund is currently taking tactical positions in the volatile commodities and foreign exchange markets but those positions can change from month to month depending on new opportunities that may arise. The Monte Cristo fund charges a 25% management fee and a 20% incentive fee with a 5% hurdle and a US$100,000 minimum investment requirement Monte Cristo, which was founded in 2005, currently manages a US$33 million long-only emerging markets fund. |
|
Hedge funds see big gains in distressed investing Distressed asset investing, which has been in the doldrums for years, is making a comeback among hedge funds, which predict the strategy could be a top performer in several years, investment managers told a hedge fund gathering on Tuesday. "Distressed, distressed and more distressed," said Bruce Richards, chief executive officer of the $10.7 billion hedge fund firm Marathon Asset Management, when asked about his best investment idea at the GAIM 2008 conference in Boca Raton, Florida. "It's the greatest time we've seen since 1990," Richards said referring to the savings and loan crisis that left many financial institutions insolvent and forced a government bailout. Richards said distressed investing is "a trillion dollar-plus opportunity" that has been caused by the meltdown in the credit markets. In a panel discussion at the Global Alternative Investment Management Forum, Richards predicted that 162 mid-sized companies affected by the subprime lending meltdown would be forced into bankruptcy or restructurings in the next 18 months. His firm is reinforcing its loan workout expertise and "vulture" lending group to gain large stakes in such companies, and recently purchased a residential loan workout service called Marix in Phoenix, Arizona. |
|
Bayou funds co-founder gets 51 months The co-founder of several of Bayou Management LLC's hedge funds was sentenced to more than four years in prison Tuesday for a scheme to defraud investors. U.S. District Judge Colleen McMahon in Manhattan sentenced James G. Marquez, 59 to 51 months in prison, to be followed by two years of supervised release. He also was ordered to pay nearly $6.26 million in restitution. "I made the terrible choice to take the easy way out when things started going wrong at Bayou," Marquez said. "My actions and inactions directly injured investors of Bayou." Marquez, who left Bayou in 2001, pleaded guilty to a conspiracy charge in December 2006. He had faced 51 months to 60 months in prison under federal sentencing guidelines. Prosecutors had alleged that Marquez conspired with Samuel Israel III, the Stamford, Conn., hedge-fund firm's ex-chief executive, and Daniel Marino, its former chief financial officer, between 1996 and October 2001, to induce investors to contribute to Bayou funds by misrepresenting that the money-losing funds were highly profitable. |
|
Resources Fund latest Ermitage fund of hedge funds to reach USD100m Jersey-based alternative investment manager Ermitage Group has announced that its specialist Resources Fund has benefited from ongoing attractive performance and increasing investor interest in commodities to become the latest Ermitage fund of hedge funds to reach USD100m in assets under management. The Resources Fund, which had assets of some USD110m at the beginning of the year, employs an active management approach to target superior risk-adjusted performance to passive long-only commodity indices - and avoid some of the structural pitfalls of index tracking for commodity exposure. The fund's management process ensures flexibility is available to access the high potential areas of niche strategies and early-stage managers, and offers investors diversification across global markets, sectors, styles and themes. The Resources Fund joins Ermitage's two new funds for 2007, the European Multi Strategy Fund and Global Long Short Fund, in attracting post-launch investment that has seen assets under management surpass USD100m for each fund. 'We believe ongoing positive demand/supply fundamentals will create future opportunities for commodity investments to deliver absolute returns and diversification benefits to investors,' says Ermitage chief investment officer Jonathan Wauton. |
|
European Hedge Funds Issue Disclosure Guides A group of Europe's largest hedge-fund managers issued voluntary best-practice standards that could prompt greater disclosure from the funds, ahead of a similar effort in the U.S. Amid increasing political scrutiny of the hedge-fund industry, the move is an attempt to head off calls for greater regulation by providing investors and banks with more information about the risks hedge funds take and how the funds value their assets. However, voluntary standards likely won't go far enough for some politicians, who are expected to continue calling for statutory regulation. Such calls are particularly prominent in Europe, where activist funds have helped |
|
Greenspan Put Is Dead. Long Live Greenspan Put With guns blazing and surprise on its side, the Federal Reserve cut its benchmark interest rate by 75 basis points to 3.5 percent early yesterday following a two- day rout in Asian and European stock markets. U.S. financial markets were closed Monday for a national holiday, but with Dow futures down more than 500 points in electronic trading, the Fed had a taste of things to come when the U.S. market reopened yesterday. Now, far be it from me to imply a causal relationship between the global plunge in equity prices and the Fed's aggressive action. But if it wasn't the stock market, what else impelled Fed policy makers to take emergency action one week before a regularly scheduled meeting? Yesterday's cut is both the biggest since the Fed started targeting the overnight rate in the mid-1980s and the closest to a meeting, according to Tom Gallagher and Andy Laperriere of the ISI Group in Washington. In a statement, the Fed said it took action ``in view of a weakening of the economic outlook and increasing downside risks to growth.'' (Translation: We changed our forecast, and the odds of going down are going up.) The Fed's stable of economists must have noticed the increased odds of a slump as reflected in the ``U.S. Recession '08'' contract on Intrade.com, an online site where individuals can bet on financial markets and current events. The contract, which will pay $10 if the U.S. goes into recession this year, traded at a lifetime high of $7.75 yesterday. The Fed cited additional reasons for its action, none of which will disabuse observers of the notion that the stock market forced its hand. |
|
Fed Cuts Rate 0.75 Percentage Point in Emergency Move The Federal Reserve cut the benchmark interest rate by three quarters of a percentage point, its first emergency reduction since 2001, after stock markets tumbled from Hong Kong to London amid increasing signs of a U.S. recession. The central bank cut the target overnight lending rate to 3.5 percent from 4.25 percent, the Federal Open Market Committee said in a statement in Washington. Policy makers weren't scheduled to gather until next week. It's the biggest single reduction since the Fed began using the rate as the principal tool of monetary policy around 1990. ``Broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households,'' the Fed said in a statement in Washington. The FOMC took the action ``in view of a weakening of the economic outlook and increasing downside risks to growth.'' Policy makers set aside concerns about inflation to lower borrowing costs for the fourth time since September after retail sales fell, the unemployment rate climbed and global stocks slumped. Chairman Ben S. Bernanke shifted the Fed's stance to a more aggressive approach in remarks this month citing a need for ``decisive and timely'' action. The dollar slid and Treasury securities rallied after the announcement. Stocks retreated as some investors questioned whether the Fed would be able to avert a recession, and then recouped more than half the losses. The Standard & Poor's 500 Index fell 1.1 percent to 1,310.50 in New York, the fifth straight drop, extending its decline to 11 percent this year. |
|
CME Group Chief Operating Officer Bryan T. Durkin Exercises Options, Sells Shares The chief operating officer of CME Group Inc., which operates the Chicago Mercantile Exchange, exercised options for and sold 1,500 shares of common stock under a prearranged trading plan, according to a Securities and Exchange Commission filing. In a Form 4 filed with the SEC Thursday, Bryan T. Durkin reported he exercised the options Tuesday for $144 to $403.92 apiece and then sold them all the same day for $616.75 apiece. The stock sale was conducted under a prearranged 10b5-1 trading plan which allows a company insider to set up a program in advance for such transactions and proceed with them even if he or she comes into possession of material non-public information. |
|
NYSE Euronext's deal for the Amex reshapes ETFs The owner of the New York Stock Exchange said last week that it would acquire the Amex, which was once known as the Curb Exchange because trading in shares of smaller companies took place on the street outside the NYSE. Of course, trading at the Amex long ago moved indoors, and the storied exchange with modest roots going back to the 1800s has resided at 86 Trinity Place in Lower Manhattan for several decades. The deal is valued at $260 million in stock plus the proceeds from the expected sale of the headquarters. Although the Amex lists smaller stocks and has an options business, the transaction makes NYSE Euronext the preeminent player in ETFs -- index funds that trade like individual securities -- and also removes a competitor for new listings. NYSE Euronext has moved all of its 240 ETF listings to the NYSE Arca platform. By purchasing the Amex, NYSE Arca stands to pick up the 380 ETFs, with about $250 billion in total assets, that call the Amex home. |
|
NYSE Euronext, partner launch CO2 exchange Transatlantic exchange NYSE Euronext and Caisse des Depots said on Tuesday they had started a carbon emission rights exchange, called BLUENEXT. The two companies said in a statement that BLUENEXT, of which NYSE Euronext holds 60 percent and Caisse des Depots the remainder, as of Tuesday operates a spot market in CO2 emission allowances. |
|
F&C launches systematic European long/short trading hedge fund F&C Alternative Investments, the single strategy hedge fund division of F&C Asset Management, has expanded its range of products with the launch of F&C Zircon, a systematic European long/short equity trading fund. F&C Zircon is the third new hedge fund from F&C in 12 months following the launches of the F&C Tourmaline Fund, a fixed-income strategy, and the F&C Garnet Fund, a forex volatility and forward-rate bias trading fund. The F&C Zircon Fund is co-managed by Darren Jordan and Phil Robinson who have worked together for 10 years. The team joined F&C Alternative Investments last summer after four years running a partnership that developed and traded a similar systematic strategy to F&C Zircon. Previously Jordan and Robinson ran a four-strong pan-European equity proprietary trading desk at ABN Amro that focused on special situations and long/short trading. Both began their careers at HSBC Investment Bank, where Robinson spent five years in equity derivative sales before working on a market neutral hedge fund and Jordan spent 12 years gaining experience in equity and fixed-income derivatives on a sales trading desk. Investing within the Euro First 300 Index, F&C Zircon has a particular emphasis on the statistical arbitrage of pairs of stocks, taking long and short positions on two stocks in the same sector to create a diversified portfolio of long and short positions and try to capture excessive and unwarranted short-term dispersions between pairs of stocks. |
|
Laven Partners to launch fund of hedge funds Investment management consultancy Laven Partners plans to launch a "best ideas" fund that will invest with a range of boutique hedge fund managers, it said Reuters on Monday. The portfolio, which is likely to be called the Laven Funds Multi-Strategy fund, will be launched on March 1. It will invest in around 10 hedge funds, most of which will have less than two years' track record. "Having come across so many good managers, we were asked why we don't do a best ideas fund ... It's based on fund manager talent," Managing Director Jerome de Lavenere Lussan said in an interview. "It's easier for our clients to go for a multi-strategy fund than invest in one fund." Funds of hedge funds have remained popular with investors in recent months, despite the onset of the credit crisis, because of the diversification they offer and exposure to strategies able to make money in all market conditions. De Lavenere Lussan said he hoped to launch the fund with $50 million (26 million pounds) in assets. Funds that will go into the new portfolio include the Hinde Gold fund; Vermont, a specialist in asset-backed lending; and some currency funds, he said. |
|
Risk tops the agenda for UK funds With the effects of 2007's credit crunch making themselves felt in the equity markets, the UK's pension funds are looking at ways to reduce risk and volatility. Heather Dale reports from London The recent credit crisis has led to a general reassessment of risk and how UK pension funds should structure their portfolios to de-risk going forward, according to experts. It seems UK pension funds have a high level of uncertainty as to how deep the implications of the credit crisis will be and how long it will go on for. John Hastings, a partner at consultancy firm Hymans Robertson, said: “It is still the case that pension funds have a lot of assets in equities and clearly what happens to the equity markets has an impact on pension fund funding levels.” David McCourt, policy adviser: investment and governance at the UK’s National Association of Pension Funds (NAPF), noted as part of de-risking there was now a move away from equities, however, it was not a wholesale move because there were not enough bonds available. “Pension funds are competing against insurance companies for bonds like index-linked Gilts,” said McCourt. McCourt added there had been some interesting strategies around liability driven investing (LDI), saying consultants and asset managers were coming up with new and interesting ways to use these strategies. Paul Gibney, investment partner, Lane Clark and Peacock (LC&P), commented: “You are seeing people diversify to reduce volatility and you are seeing people invest in bonds and swaps to reduce inflation and interest rate risk, for a better match against the liabilities.” |
|
Matrix launches fund of hedge funds Matrix is to launch a new fund of hedge funds - the Matrix Emerging Markets Index Fund - that will aim to replicate the diversification and volatility qualities of the Eurekahedge Emerging Markets Index. The initial offer period opens on 28 January and will close on 20 February. The new fund is designed to allow participation in the upside of emerging markets, whilst reducing downside risk. The Matrix Emerging Markets Index Fund is being managed by Maxam Capital Management LLC. It will be managed according to a strict rule based methodology and will have approximately 40 underlying hedge funds, creating a portfolio that will be broadly diversified across all the emerging market regions and also across asset classes. Over the period from the beginning of 2000 to the end of November 2007, the predicted launch portfolio of the new fund, back tested, would have provided total returns of 305 per cent but with a maximum drawdown of only 9.71 per cent. Commenting on the new fund, Bridget Guerin, managing director of Matrix Money Management, said: "This fund has been specifically designed to offer lower volatility exposure to emerging market regions. "The portfolio will consist of around 40 Underlying hedge funds heavily diversified across the Far East, Eastern Europe, Latin America and the Middle East and will include equities, debt, distressed securities and currency managers. The managers in the portfolio will be able to hedge out risk via short exposure and other techniques. The fund is being managed by Maxam Capital Management LLC, the managers of our existing Matrix Max Fund." |
|
Fairfield Greenwich To Market Hedge, Private Equity Funds Fairfield Greenwich Group, a $16 billion New York-based hedge fund, has formed a new business unit dedicated to the marketing and distribution of external hedge funds and private equity funds. The new unit, which is called Fairfield Capital Partners, currently has mandates that include three multi-billion dollar funds, whose strategies include systematic trading, activist investing, and discretionary global long/short. “Our firm has one of the largest dedicated hedge fund sales teams in the industry and an extensive global investor network which continues to grow,” said Matt Brown, partner and head of the Fairfield Capital Partners team. “We therefore believe FGG will be an attractive marketing and distribution partner for many of the industry’s leading managers.” Fairfield was founded in 1983 and has offices in New York, London, Madrid, Spain and Bermuda. |
|
Hedge Funds New Star, RAB Roughed Up A pair of prominent British hedge funds are feeling the January chill. Both RAB Capital and New Star Asset Management had bad news about profit and performance last year. London-based New Star said the troubles related to the credit crunch had impacted its 2007 profit, performance and assets under management. The firm’s assets under management fell 6.5% in the second half to £23.1 billion (US$45.2 billion), as most of its hedge funds, “badly positioned” for credit market troubles, trailed their rivals. Worse still for the firm, it said in a statement that it is “not optimistic” about this year, and warned that investors should expect further redemptions, especially by European clients in its European funds. Further withdrawals would probably lead to a “significantly lower” operating profit in 2007. Investors quickly responded, as New Star’s share price plummeted 31% on the news. It is down almost 80% from its July high. RAB Capital confirmed that its pre-tax profits rose less than 2% in 2007, adding that its performance troubles of the fourth quarter have continued into the early going of 2008. The firm’s Europe fund is down more than 6% in the first few weeks of the year, while its Special Situations and Energy funds are down as much as 3% each, RAB said on Friday. Still, Michael Alen-Buckley, the firm’s executive chairman, said RAB was “in good shape for 2008” and is still considering opening a U.S. office, as well as others. |
|
CalPERS harbors hedge fund hope Russell Read, chief investment officer of $253.6 billion California Public Employees’ Retirement System, hints that hedge funds might play a bigger role in the fund’s future. “There are four ways that hedge funds can be useful for investment programs: being viewed as a stand-alone asset class; being used in an alpha-beta separation program; as part of portable alpha strategies; as a substitute for traditional investment classes,” Mr. Read said in an interview at CalPERS’ Sacramento headquarters. Mr. Read said staff’s current project is “setting the stage, thinking about which of these four ways of using hedge funds — perhaps in combination — we should use. So the discussion about portable alpha doesn’t represent that we’re going down a specific path. It represents how we might expand to use hedge funds productively in the future.” CalPERS officials have suggested hedge funds could be used to improve performance within the fund’s lackluster global equities program. In a staff memo to the board, officials discussed overhauling the global equities program, including eliminating managers who failed to produce alpha and possible adoption of a portable-alpha program, powered by hedge funds |
|
Bank of Japan meets amid global uncertainty Japan's central bank began a policy meeting Monday with analysts expecting it will hold off on raising super-low interest rates amid worries that both the domestic and US economies are slowing down. The Bank of Japan started the two-day meeting amid moves by the world's other major central banks to ease borrowing costs due to financial market turmoil over the US subprime loan crisis. The central bank is seen as likely to leave rates on hold at 0.5 percent, where they have been since February last year. The rate is the lowest among the world's major economies. "It will be very unlikely for the central bank to raise rates at least within this year," said Hiromichi Shirakawa, chief economist for Credit Suisse in Tokyo. "The focus rather will be whether the bank will have to move to lower the rates," he added. BoJ governor Toshihiko Fukui has warned that the Japanese economy is due to slow down in the near term due to stagnant investment in the housing industry after a tightening of regulations to protect against earthquakes. Fukui has said that the economy will pick up soon thereafter to post a modest expansion, but warned of effects of a slowdown in the United States, one of Japan's key export market. |
|
EEX/Eurex: New Daily Record In EUA Futures On Friday, 18 January 2008, a new daily record was achieved in trading of EUA futures on the market for emission allowances operated by European Energy Exchange AG (EEX) and Eurex AG: 301,000 EUAs were traded. In January, a total of 2,081,000 EUAs has already been traded. Since 5 December 2007, EEX and Eurex have offered their customers trading of CO2 emission allowances (EUA futures) via a joint platform. 10 new trading participants were connected in the framework of the co-operation, while another eight are in the process of licensing. This means a total of 110 trading participants have now been licensed for trading in EUA futures on EEX. Since the launch of the co-operation on 5 December 2007, more than 3 million EUA futures have been traded. Moreover, the trading participants also benefit from the development of the spreads – the differences between the buying and the selling rate. On average, these have fallen to 5 to 9 cents. Peter Reitz, member of the managing board of Eurex, commented: “The increasing trade volumes show that our co-operation is generating its first successes. The high degree of interest on the part of our trading participants, in particular from the USA, confirms the attractiveness of the market for the trading participants from the financial market.” Maik Neubauer, member of the managing board of EEX, added: “The development of the spreads shows that we do not have to shrink from the comparison with other markets.” In order to promote trading, since the start of the co-operation, EEX has reduced the trading fee for exchange transactions in emission products to EUR 0.001 per t of CO2. Moreover, the exchange also charges a fee of 0.001 per t of CO2 for the registration of OTC transactions on EEX. The price reduction is valid until the end of March 2008. |
|
The purchase, which has been approved by both companies’ boards of directors, will boost NYSE Euronext’s scale in US options, exchange traded funds (ETFs), closed-end funds, structured products and cash equities. NYSE Euronext said the £50m saving it expects within two years of closing the deal will come from sharing technology, datacentre services and staff, as well as consolidating professional and contract services and vendors. Amex will also will relocate its traders to the Nyse's trading floor. In a briefing with media and analysts, NYSE Euronext president and co-COO Duncan Niederauer said it was too early to specify how those savings would be generated "prior to the closing of the deal", but said he intended to provide more details "in the coming weeks and months." The exchange said the deal would give it a second US option exchange licence and make it the third largest player in the US options marketplace. NYSE Euronext will pay $260m (£130m) in NYSE Euronext common stock for the Amex, while Amex members will also be entitled to receive additional shares of NYSE Euronext common stock based on the net proceeds from the expected sale of Amex’s lower Manhattan headquarters. Larry Leibowitz, head of global technology and US trading for NYSE Euronext, said the bourse intends to provide tools to help the Amex traders to "do their job even better". Under its Arca model, NYSE Euronext runs a trading floor alongside electronic trading. Leibowitz said NYSE Euronext intended to extend this model to Amex. "I think we have shown in the Arca options model that we can combine a floor that is vibrant and profitable and sustain the floor community at the same time as an electronic market." |
|
ICE Named 2007 Derivatives Exchange of the Year by Risk Magazine IntercontinentalExchange , a leading operator of global exchanges and over-the-counter (OTC) markets, has just been named Derivatives Exchange of the Year for 2007 by Risk Magazine. An editorial panel at Risk, the world's leading financial risk management magazine, selected ICE and winners of its other annual awards. Among the factors considered were strengths in innovation, infrastructure, systems and organization, client service and risk management. Jeffrey Sprecher, ICE Chairman and Chief Executive Officer, said: "We are honored to achieve this distinguished recognition from Risk. Last year was momentous for ICE as we transformed the company from a leading energy futures exchange and over-the-counter market to a global derivatives marketplace with a comprehensive product offering that includes energy, soft commodities and other agricultural products, equity indexes, foreign exchange and chemicals." The Risk article announcing the award quoted Sprecher on the challenges of integration: "Integration of all our acquisitions over the year into ICE has required a huge amount of effort behind the scenes, but it appeared seamless to the outside world. All those involved have had to adapt quickly, and overall it has been a great success." The article also mentioned ICE's license negotiated in 2007 to offer exclusive access to the Russell Investment Group's line of U.S. equity indexes, beginning in September 2008; enhancements to the speed of the trading platform; relocation of the primary data center to Chicago; and trading volume records. ICE also earned the Derivatives Exchange of the Year title from Risk for 2005. |
|
Stark Says Growth Will Hold Up, ECB Ready to Act European Central Bank Executive Board member Juergen Stark said the bank still expects the economy to expand around 2 percent this year and remains ready to raise interest rates to counter inflation. ``We're sticking to our assessment that, based on current data, growth will be around potential in 2008,'' Stark said in an interview in Viernheim, Germany, today. ``I want to repeat that we have said that we will do what is needed to avoid so-called second-round effects. We are ready to act.'' ECB President Jean-Claude Trichet threatened to raise rates on Jan. 10 if unions push through bigger wage demands to compensate for faster inflation. Since then, several ECB policy makers have expressed concern that economic growth may slow more markedly as the U.S. economy teeters on the brink of recession. European stocks plunged the most today since the Sept. 11 terrorist attacks in 2001. ``Many more days like today and the ECB will have to consider cutting rates,'' said James Nixon, an economist at Societe Generale in London. ``The ECB's official line is looking increasingly out of kilter with what's happening on the ground.'' Stark said while risks to the growth outlook ``are pointing downward,'' even a more pronounced slowdown wouldn't necessarily damp inflation |
|
Protean Unveils Hedge Fund Fraud Insurance For Investors Amid a spate of allegations of fraud at hedge funds, a London-based firm has launched fraud insurance for investors. Protean Investment Risks, a newly-formed company, from Monday is offering its Protean insurance product to wealthy individuals and institutions to protect their hedge-fund portfolios from any misrepresentation of assets, theft or other type of fraud by hedge-fund employees or directors. Nathan Sewell, Protean’s founder and managing director, said the idea for the product came after he was approached by a private hedge fund investor who had been the victim of fraud at Lancer Management Group. Greenwich, CT.-based Lancer Management collapsed in 2003 and the manager of its funds was charged by the U.S. Securities and Exchange Commission of defrauding hundreds of investors. |
|
MCX starts trading in carbon credit futures The Multi Commodity Exchange of India goes live with carbon credit futures trading effective from Monday, Joseph Massey, deputy managing director, told Reuters on Monday. "Carbon credit futures have been allowed for trading under section 15 of Forward Contracts (Regulation) Act 1952," a senior official with the regulator, Forward Markets Commission, who declined to be identified, said. |
|
Hedge funds make dash for the land as investors dig for hidden value Suddenly, farming is sexy — for investors, anyway. Pergam Finance, a Paris-based hedge fund with $1 billion (£511 million) in assets, is about to double the size of Campos Orientales, a fund that buys farms in Argentina and Uruguay, with a $60 million to $80 million fundraising. Deborah Rockabrand, of Pergam, said that she had a list of wealthy investors — “a lot of individuals disillusioned with traditional financial assets”. The rich are scouring neglected and fringe markets for signs of hidden value as they pull their cash out of shares and bonds. Many funds are looking at agriculture, such as Blackrock, the hedge fund that has merged with Merrill Lynch, which has launched a £100 million vehicle. Most of Blackrock’s fund will be in agricultural commodity futures, such as wheat, but a significant slice will be devoted to buying farms. |
|
GSO founders strike gold as Blackstone buys fund Former Credit Suisse First Boston traders make a mint as their start-up nets $930m. Last year was not easy for hedge funds and alternative investments. Just ask Goldman Sachs or the managers of macro-funds, which barely kept their heads above water. Even the best US investors, such as Edward Lampert, who is accustomed to an annual income of more than $1bn, stumbled. UK funds appear to be going bust or suspending normal redemptions every other week. But there were exceptions. Two close friends who run hedge funds were celebrating that they had achieved returns in various asset categories of about 20% last year. How did they do it? One said: “Quite simply, trying to grind out a point or two every month was hard and often not interesting work. You couldn’t afford to make any mistakes.” The other said: “It was like being on a treadmill but the bids for ABN Amro gave us a wonderful start and on New Year’s Eve, we raised a glass to RBS chief executive Sir Fred Goodwin for not backing out.” With credit markets continuing in turmoil, the smart money on Wall Street is well aware that profit opportunities abound. Investors have seen Citigroup, UBS, Morgan Stanley and Bear Stearns fall down black holes, but the professionals want to know: who was on the other side of those trades? Cast your mind back more than two years when Lehman Brothers and Morgan Stanley, in particular, were buying minority stakes in some of the best known hedge funds. I found this strategy confusing. Were Lehman and Morgan Stanley not good enough to compete with those funds using their internal resources? They were paying premium prices to firms that were big clients and to whom the banks often acted as prime broker. I never received a satisfactory answer about the rationale for buying into hedge funds but as investments, some proved satisfactory. The demand for exceptional asset management talent continues. Just look at the $930m cash and shares that the Blackstone Group is paying for New York-based GSO Capital Partners. What exactly is GSO Capital Partners? Is it a hedge fund in any conventional sense or an alternative investment fund? GSO Capital describes itself as a leveraged finance specialist. No wonder Blackstone wants its expertise, if only to keep its own deal momentum going. GSO Capital is considered special and I am surprised that Kohlberg Kravis Roberts, which has flotation plans, didn’t throw its hat into the GSO ring. However, we might be sure Henry Kravis and George Roberts looked at the numbers. The mastermind behind GSO is former Credit Suisse executive Bennett Goodman, who has become a trading legend on Wall Street. His co-founders are Doug Ostrover and Tripp Smith, who worked with Goodman at investment bank Donaldson, Lufkin & Jenrette and the former Credit Suisse First Boston. |
|
Morningstar sees 2 per cent gains for hedge funds in fourth quarter Overall hedge funds gained 14.13 per cent over the full year, according to Morningstar hedge fund analyst Nadia Van Dalen, despite the impact of the credit crunch in the second half of the year, notably in August and November, that prevented funds from building significantly on earlier gains. Emerging markets equity hedge funds were the clear winners in 2007 with a 32 per cent annual return in US dollars, according to Morningstar, but the MSCI Emerging Markets Index outperformed the average hedge fund by more than 4 percentage points over the year. The data provider says that while emerging markets hedge funds on average best the index in November, they failed fully capture the sector's upside in September and October. With a 16 per cent gain, global equity funds were the second-best performing category, returning about 9 percentage points more than their benchmark, the MSCI World Index and also outperforming the index in the fourth quarter. Morningstar says US equity hedge funds posted a modest 0.3 per cent gain for the fourth quarter with but substantially outpaced the S&P 500 over both three and 12 months, while US equity small-cap funds gained 0.8 per cent in the fourth quarter and 13.6 per cent for the year, compared with a 1.6 decline for the Russell 2000 small-cap equity index. European equity funds returned 14.1 per cent in 2007, including 0.3 per cent in the fourth quarter, while developed Asia funds declined 2 per cent over the quarter but finished up 6 per cent for the year. Short equity hedge funds took advantage of equity market turmoil to gain 6.2 per cent in the fourth quarter, rescuing full-year returns that ended up 7.8 per cent. |
|
NYSE 'entering new era' with Amex on board A US exchange analyst has backed NYSE Euronext's $260m (€178m) bid to acquire loss-making rival the American Stock Exchange, arguing the deal represents "a new opportunity for the NYSE" and a valuable addition to its growing options businessThe deal, announced last night, followed weeks of speculation that the largest US equities market was set to maker an offer for the third-ranked US stock exchange in its latest bid to pile pressure on Nasdaq, its main domestic trading rival. Larry Tabb, founder and chief executive of consultancy Tabb Group, said: "The acquisition of the American Exchange by NYSE Euronext represents the end of one of the largest lost opportunities and disappointments on the exchange front as well as the beginning of a new opportunity for the NYSE." Tabb detailed five key opportunities presented by the merger, ranging from new products, including options and exchange-traded funds, to cost synergies. He said: "NYSE is trying to expand its listed-options business through Archipelago, so I would not be surprised if it quickly moved to migrate the options flow and its Amex market makers over to Arca Options – again, taking out cost and leveraging the existing infrastructure." NYSE Arca Options, the options arm of NYSE Euronext, has gained the most in market share after introducing a new fee structure at the start of last year, when a pilot scheme enabling brokers to trade options in penny increments was also introduced. Duncan Niederauer, chief executive of NYSE Euronext, said: “We believe the options market structure will bifurcate with a directed model alongside more serous trading in pennies and we will have a solid position in both types of market.” Tabb argued the addition of market makers will make the overall Arca Options offering much stronger, while the deal is also attractive to the Big Board as it presents new opportunities in the expanding ETF market. Tabb said the acquisition will allow NYSE to "develop a full court press in underwriting and trading ETF and new products that can possibly leverage options, stocks and ETFs". He added: "ETFs are changing the way that the world invests, and for Amex to develop these products and to lose them to Nasdaq and the NYSE is just a crime. The one thing that has kept the Amex from failing earlier has been their ability to create products. Hopefully, the NYSE will water, care, feed and better support this aspect of the business." A merger also presents cost synergies from merging the exchanges' neighbouring trading floors, Tabb argued. He said: "The NYSE has just shuttered three trading floors and has technologists fully versed in Amex-based technologies. NYSE Euronext will probably first consolidate trading floors and technology infrastructures, which should be fairly straightforward and eliminate significant cost." Under the deal, Amex’s floor operations will relocate to the NYSE trading floor and migrate to the transatlantic exchange’s technology. NYSE Euronext expects to make cost savings of $100m two years after closing the deal from consolidation of technology, data centres and staff. NYSE Euronext is paying for the acquisition in stock while Amex members will be entitled to receive additional shares from the proceeds of the expected sale of Amex’s lower Manhattan headquarters. |
|
Societe Generale CDS wider on news of trader fraud The cost of insuring Societe Generale debt rose on Thursday after the bank said it had uncovered a fraud by one of its traders that would have a 4.9-billion-euro ($7.16 billion) negative impact on the group. Five-year senior credit default swaps on Societe Generale were at 100 basis points by 0725 GMT, traders said, 10 to 20 basis points wider than late Wednesday. Five-year subordinated credit default swaps on the bank rose 15 basis points to 150 basis points, one of the traders said. The move wider was capped by a rally in the broader market, driven by hopes for a U.S. rescue plan for bond insurers, with spreads on other financial names moving tighter. "The market's feeling a bit stronger today," said a second trader. |
|
Market falls hit hedge funds but throw up bargains Hedge funds with geared wrong-way bets in hot areas such as commodities and emerging markets are feeling the squeeze from market falls, but some top managers are using this opportunity to pick up stocks they like on the cheap. Growing fears the U.S. will slip into recession led to widespread falls in stock, credit and commodity markets on Monday and Tuesday. Hedge funds entering 2008 with a long bias in areas such as soft commodities and emerging markets raced to unwind positions, with pressure coming from prime brokers keen to reduce their leverage. "I think everyone now is shrinking positions. If you are long you are clearly in big trouble as a hedge fund," Neptune fund manager Rob Burnett said on Tuesday. "All the crowded trades are coming back -- long emerging markets, long grains -- they are all coming back on this deleveraging." Russia's RTS index .IRTS fell 1.6 percent on Tuesday, having lost 7.4 percent on Monday, while Indian shares fell as much as 12.9 percent on Tuesday before ending down 4.97 percent. Meanwhile, oil sank to a six-week low and commodities such as corn, soybeans and wheat traded sharply lower on Tuesday. "Many directional long-short managers who went into this year with a long bias, I think some of them are definitely having problems," one fund of hedge funds manager, who requested anonymity, told Reuters. |
|
High fees could lessen the impact of hedge funds’ foray into retail market Investors’ reluctance to pay high fees could reduce the growing threat hedge fund managers pose to the traditional asset management industry, according to analysts. GLG Partners is making its first foray into retail by advising on Virgin Money’s climate change fund, launched this month. US hedge fund managers Caxton Associates, Renaissance Technologies and Highbridge Capital have launched funds that meet Ucits III European mutual fund requirements, with which the European Commission made it easier for hedge fund managers to offer funds to retail investors by relaxing the restrictions that used to govern open-ended funds, allowing greater use of derivatives, high cash positions and the use of leverage. UK hedge fund manager Lansdowne Partners launched a European long-only fund three years ago and added a UK long-only strategy last year, which has taken about $650m (€437m) in assets. Rivals Odey Asset Management, Thames River Capital, RAB Capital, NewSmith Capital and GLG Partners also run long-only funds and there has been talk of other hedge fund managers examining opportunities in this area. These funds, which feature leverage and the ability to have high cash positions, are not classed as retail products because they do not offer daily liquidity, a vital component for a fund aimed at mainstream investors – but the managers could alter this. The attraction for hedge fund managers is the possibility of diversifying their range of investors. Managers also said that while traditional hedge fund investors might offer large sums, their money moves quickly if performance disappoints, whereas retail investments might be smaller but are regarded as “stickier” in difficult times. But other hedge fund managers said the distribution requirements of seeking a broader range of investors was expensive, and that, in aggregate, retail money can also move rapidly. In addition, hedge fund managers fear that watching an index – a requirement if they manage a relative value fund – would hamper their efforts to generate investment gains. Worse, there are doubts whether products run by hedge fund managers can make money for retail investors when managers’ high fees are taken into account. Long-only retail funds impose management fees of about 1.5%, although this might be lower if the fund also charges a 20% performance fee. The GLG-run Virgin Climate Change Leaders fund charges a performance fee and a 1.75% management fee, similar to the GLG environmental fund on which it is based, but unlike its other retail funds. Marshall Wace, a London-based hedge fund, has launched a market-neutral hedge fund in a Ucits III form that has a retail share class, which charges a 2.5% annual fee and 15% of any absolute performance, although the group is not necessarily seeking to win retail clients. John Chatfeild-Roberts, head of the fund of funds team at Jupiter Merlin, part of UK firm Jupiter Asset Management, said many of these funds offer relative returns but charge a performance fee based on absolute returns. This means the manager will earn performance fees whenever the fund makes a gain, even if it underperforms its benchmark index |
|
Managers confront baffling array of hedge funds Worried about tracking error risk in your portfolio? Do you know your performance attribution with your 130-30 fund? Or its dynamic leverage policy? To enhance your alpha generation, are you long beta or gamma? For portfolio managers looking to expand into the arcane world of hedge funds, those questions may be cropping up on a daily basis as they wrestle with a baffling array of choices in the ballooning world of new investment choices. "It's a lot more work than it used to be," said Dennis Hammond, chief executive of Hammond Associates, a St. Louis consulting firm that advises pension funds and others on investment choices for some $60 billion in assets. "It's all about complexity." At one of the largest gatherings of hedge funds, consultants and investors here this week, participants were confronted with more choices than ever before as they listened to dozens of presentations by hedge fund managers. The industry, which emerged as a cottage industry with some $40 billion in 1990 and has exploded to nearly $2 trillion today, now offers an ever-increasing array of more complex investment strategies in equities, credit, commodities and other securities. And institutions such as pension funds, under pressure to meet liabilities in ever more volatile markets, are under increasing pressure to look beyond traditional long-only fund managers to generate coveted above-market returns that hedge funds often promise. |
|
Prominent hedge funds nurse heavy losses in 2008 Recent stock market drops hurt some of the world's most famous hedge fund managers, who have long attracted money with promises that they could sidestep even the worst conditions. Bruce Kovner's Caxton Alpha Equity fund, Lee Ainslie's Maverick Fund and Leon Cooperman's Omega fund rank among the $2 trillion hedge fund industry's prominent losers in the first days of 2008, according to people who have seen the numbers. The average global hedge fund lost 3 percent through the end of last week, according to Hedge Fund Research data, and that was before global markets plunged on Monday, when indexes fell 7.2 percent in Germany and 7.4 percent in India. U.S. markets were closed on Monday. U.S. hedge funds specializing in stocks were off 5 percent on average through last Friday, according to data from New York-based Hennessee Group, which invests in hedge funds and tracks their performance. "This month is going to be the worst start to the year for hedge funds in a very, very long time," said Charles Gradante, a principal at Hennessee. In fact hedge funds, loosely regulated portfolios that became hugely popular with endowments and pension funds over the last decade on promises to protect against declines, have never lost more than 1 percent in the first month of the year since Hennessee began tracking the data in 1993. Hedge funds, unlike mutual funds, are not required to report returns and the first indication of the industry's performance for the start of 2008 won't be known for at least two weeks. Now 2008 promises to be different at the start, the middle and the end of the year, industry analysts and investors said. They did note that so-called short sellers, who bet exclusively on stocks falling, are having a good year, building on their average 9.6 percent return last year as recorded by Hennessee |
|
Fed Risks Fueling More Bubbles, Davos Economists Say The Federal Reserve, which yesterday announced its first emergency rate cut since 2001, is ignoring history's lessons and risks re-igniting more asset bubbles, economists at the World Economic Forum annual meeting said. The Fed is saying ``we are there to clean up after bubbles first rather than to prevent the danger,'' Stephen Roach, Morgan Stanley's Asia chairman, said in a panel discussion in Davos, Switzerland. ``It's a dangerous, reckless and irresponsible way to run the world's largest economy.'' The Fed cut its benchmark rate by 75 basis points yesterday after stock markets tumbled from Hong Kong to London amid signs of a U.S. recession. The central bank has drawn fire for paying too much attention to economic growth and not enough to asset prices, fueling unsustainable booms in stocks, property and derivatives. Former Fed Chairman Alan Greenspan was criticized for failing to curb the Internet stock boom of the 1990s and for then fueling further bubbles by cutting rates too much to limit the fallout when equities crashed. ``It's good for a central bank to ease when the risks are of a crash in the global economy, but that means you have to have a more systematic approach to asset bubbles,'' said Nouriel Roubini, founder of New York-based Roubini Global Economics LLC. ``If we have a `Greenspan put' or a `Bernanke put,' then we will create over and over again a distortion of excessive debt and leverage.'' |
|
Soros Says U.S. Recession Is `Almost Inevitable' Billionaire investor George Soros said a U.S. recession is all but certain as lenders and investors stop the flow of credit, while the global economy probably will avoid contraction. ``I think it is almost inevitable that the turmoil in the financial markets will affect the real economy,'' Soros, 77, said today in a Bloomberg Television interview at the World Economic Forum in Davos, Switzerland. ``I don't expect a global recession,'' said Soros, founder of New York-based hedge-fund firm Soros Fund Management LLC, which has $17 billion in assets. The U.S. Federal Reserve, which yesterday announced its first emergency rate cut since 2001 in an effort to calm U.S. recession worries, is ``doing the right thing, lowering interest rates,'' just not quickly enough, Soros said. ``I think the Fed is well behind the curve, and has been reacting instead of being proactive,'' he said, adding that the primary blame lies with former Chairman Alan Greenspan. ``Alan Greenspan mishandled it by keeping interest rates too low too long and also ignoring dangers in the housing market,'' Soros said. Soros passed control of his hedge-fund firm to his sons in 2005, about 15 years after he backed away from day-to-day management of the firm to concentrate on philanthropy. He resumed a bigger role in investing last year. The firm's Quantum Endowment Fund returned 32 percent in 2007, thanks to winning bets on currencies and Chinese and Indian stocks. The gain outpaced the 10.4 percent average return of hedge funds globally, according to Chicago-based Hedge Fund Research Inc. Soros made $1 billion in 1992 betting against the pound, forcing the British government to abandon a peg to a basket of European currencies. He was also the biggest financial backer of the failed effort to prevent President George W. Bush from winning a second term. The euro has gained 55 percent against the dollar since Bush entered the White House in January 2001. |
|
NYSE Euronext launches environmental exchange NYSE Euronext has teamed up with Caisse des Dépots, the French state-owned investment house, to expand into the carbon emissions trading market with the launch of a new exchange for environmental products targeting not only Europe but North America and Asia. NYSE Euronext has a 60% stake in the new exchange called BlueNext, while CDC has the remainder. BlueNext will initially offer trading in carbon emissions allowances and credits. In the second quarter of this year, BlueNext plans to establish a futures market with physical delivery to boost liquidity. LCH.Clearnet will provide clearing services for these derivatives products. Serge Harry, a member of NYSE Euronext’s management committee, has been appointed as the chairman of BlueNext and will work with deputy chief executives Thierry Carol and Pierre Ducret, who is also director of banking services at CDC. Carol said: “We have a vision to become the leading platform in Europe, however this year our key to expansion will be the launch of new products across new zones. Carbon emission trading in Asia and North American will be the top of our agenda in 2008. We want to open our markets to everywhere in the world and extend our membership into other markets in the future and by linking up the continents.” In December last year, NYSE Euronext agreed to offload its 34% stake in Powernext, a French exchange for electricity futures and spot carbon trading, as part of its acquisition of the bourse’s emission permit unit Powernext Carbon. In 2005, €9bn of carbon emission credits were traded, according to consultancy Celent, which predicts a surge in volume to €40bn by 2012, and exchanges are keen to get involved by acquiring and establishing their own trading platforms. Last December, Eurex, a European derivatives exchange owned by Deutsche Börse, started offering members trading in emissions derivatives through its systems while OMX acquired one of the largest energy derivatives bourses, Nord Pool. The New York Mercantile Exchange and a group of US firms also registered a plan to launch a new Green Exchange for trading carbon emissions and other environmental products while three Asian exchange are looking to launch carbon trading. In November last year, GFI, the US interdealer derivatives broker launched electronic trading in the over-the-counter market called EnergyMatch brokered by Amerex Brokers. |
|
Minneapolis Grain Exchange Sets New Daily Volume Records High volatility in the Minneapolis Grain Exchange (MGEX or Exchange) Spring Wheat Futures market produced record volume on Jan. 18, when the Exchange set a new all-time high daily electronic volume record with 5,373 contracts trading. The previous daily electronic record was 5,260 contracts set on Nov. 28, 2007. In addition, the total daily volume of 14,295 contracts exceeded the previous record total daily volume for January, which was 14,108 contracts set on Jan. 19, 2005. Wheat prices have also set new all-time highs with the March ’08 contact closing at $11.94 ¾, the highest price ever for hard red spring wheat futures. “We are seeing unprecedented prices and volatility in the marketplace,” says Mark G. Bagan, President and CEO of the Exchange. “While we’re in uncharted territories for our traditional market participants, the volatility is bringing new players to the market, which translates into new opportunities for all. "There is increasing interest in the commodity markets from other investors.” The high volatility in the futures market is also driving volume in the options market. The MGEX is within striking distance of the previous January options volume record of 4,596 contracts set in 1994. As of Friday, 4,236 options contracts have traded. |
|
MGEX hits new volume records on wheat price surge The Minneapolis Grain Exchange says the MGEX made a number of new daily volume records on Friday, January 18. The MGEX has seen a substantial jump in trade volume recently thanks to its hard red spring wheat futures pit, which has made several new record highs over the last few weeks as traders try to ensure enough HRS acreage to meet demand. The most recent record high is in the March 2008 HRS contract at $12.24 and 3/4, surpassing Friday's then-record top of $11.96 and 3/4. For most of the past year, wheat futures in general, both the U.S. and abroad, have surged due to historically tight supplies and crop weather issues in many prime world wheat growing areas. Friday's electronic trade volume at the MGEX was 5,373 contracts, up 113 from the previous high set on November 28, 2007. Total daily volume also established a new record for the month of January at 14,295 contracts. In a statement from the MGEX, President and CEO Mark G. Bagan said "While we're in uncharted territories for our traditional market participants, the volatility is bringing new players to the market, which translates into new opportunities for all. There is increasing interest in the commodity markets from other investors." The rise in interest for futures has carried over into the MGEX options market. As of Friday, January options volume is at 4,236 contracts, just short of the all time record of 4,596 set in January 1994. That's a difference of only 360 contracts; the average daily options volume thus far this month is 326 contracts. |
|
A senior vice president at electronic commodity market InterContinentalExchange Inc. exercised options for 3,746 shares of common stock under a prearranged trading plan, according to a Securities and Exchange Commission filing Friday. In a Form 4 filed with the SEC, David S. Goone reported he exercised options for the shares Wednesday for $8 to $104.23 apiece and then sold 25,557 of them the same day for $153.81 to $156.76 apiece. The stock sale was conducted under a prearranged 10b5-1 trading plan, which allows a company insider to set up a program in advance for such transactions and proceed with them even if he or she comes into possession of material nonpublic information. |
|
CME Group to cross-equity invest in Brazilian Mercantile & Futures Exchange CME Group Inc. Wednesday said it will buy a 10% equity stake in the Brazilian Mercantile & Futures Exchange (BM&F), and the BM&F will buy about 1.19 million CME common shares. The exchanges also plan to enter into an order routing agreement in which CME would connect its Globex electronic distribution network to BM&F and the Brazilian exchange would connect its distribution network to Globex for order routing for electronic trading of products on both exchanges. CME shares closed at $581 on Tuesday. |
|
Monte Cristo Launches Special-Situations Hedge Fund U.K.-based Monte Cristo Capital this month seeded a new special-situations hedge fund that will make tactical investments in global macro and distressed events. The firm invested about US$3 million in the Monte Cristo Special Situations Fund. Bruce Goodwin, head of trading at Monte Cristo, said the time is right for such a “broad-brushed” fund because of global dislocations in markets and a rise in distressed valuations. “We’ll do any types of trading across asset classes,” he said. “It’s a global macro fund, but we’ll throw in distressed investing as well if we find things that make sense. We have a background in investing in distressed illiquid markets and we’re bringing in a portfolio manager on May 1 to invest in more developed markets and liquid investments.” Goodwin added that the fund is currently taking tactical positions in the volatile commodities and foreign exchange markets but those positions can change from month to month depending on new opportunities that may arise. The Monte Cristo fund charges a 25% management fee and a 20% incentive fee with a 5% hurdle and a US$100,000 minimum investment requirement Monte Cristo, which was founded in 2005, currently manages a US$33 million long-only emerging markets fund. |
|
Bayou funds co-founder gets 51 months The co-founder of several of Bayou Management LLC's hedge funds was sentenced to more than four years in prison Tuesday for a scheme to defraud investors. U.S. District Judge Colleen McMahon in Manhattan sentenced James G. Marquez, 59 to 51 months in prison, to be followed by two years of supervised release. He also was ordered to pay nearly $6.26 million in restitution. "I made the terrible choice to take the easy way out when things started going wrong at Bayou," Marquez said. "My actions and inactions directly injured investors of Bayou." Marquez, who left Bayou in 2001, pleaded guilty to a conspiracy charge in December 2006. He had faced 51 months to 60 months in prison under federal sentencing guidelines. Prosecutors had alleged that Marquez conspired with Samuel Israel III, the Stamford, Conn., hedge-fund firm's ex-chief executive, and Daniel Marino, its former chief financial officer, between 1996 and October 2001, to induce investors to contribute to Bayou funds by misrepresenting that the money-losing funds were highly profitable. |
|
Knight Charges Brit Hedge Funds It's rather ironic that on a day that global markets suffered one of their worst routs since September 11, a group of top British hedge fund managers outlined their plans to improve the way they value their assets, and boost investor confidence in the industry. Sir Andrew Large, who headed the industry-led working group in its six month inquiry, announced plans to set up the Hedge Fund Standards Board, funded by levies from within the industry, to promote and update best practice within the sector. The standards, which will be voluntary, include better disclosure when it comes to the governance of hedge funds, and more independent valuation of assets. The potential conflict of interest between hedge fund managers, who rely on assets doing well, and investors, who want assets valued fairly has become a source of contention with the British market regulator, the Financial Services Authority. The working group is recommending that the valuation should be done either by an independent third party, or if that were not possible, by a separate person in-house. Large said that while peer pressure within the industry would play a part in enforcing the voluntary standards, it was largely up to investors. " It is the investors who can provide the market discipline to ensure these standards are widely adopted,” he said Tuesday. |
|
European Hedge Funds Issue Disclosure Guides A group of Europe's largest hedge-fund managers issued voluntary best-practice standards that could prompt greater disclosure from the funds, ahead of a similar effort in the U.S. Amid increasing political scrutiny of the hedge-fund industry, the move is an attempt to head off calls for greater regulation by providing investors and banks with more information about the risks hedge funds take and how the funds value their assets. |
|
Greenspan Put Is Dead. Long Live Greenspan Put With guns blazing and surprise on its side, the Federal Reserve cut its benchmark interest rate by 75 basis points to 3.5 percent early yesterday following a two- day rout in Asian and European stock markets. U.S. financial markets were closed Monday for a national holiday, but with Dow futures down more than 500 points in electronic trading, the Fed had a taste of things to come when the U.S. market reopened yesterday. Now, far be it from me to imply a causal relationship between the global plunge in equity prices and the Fed's aggressive action. But if it wasn't the stock market, what else impelled Fed policy makers to take emergency action one week before a regularly scheduled meeting? Yesterday's cut is both the biggest since the Fed started targeting the overnight rate in the mid-1980s and the closest to a meeting, according to Tom Gallagher and Andy Laperriere of the ISI Group in Washington. In a statement, the Fed said it took action ``in view of a weakening of the economic outlook and increasing downside risks to growth.'' (Translation: We changed our forecast, and the odds of going down are going up.) The Fed's stable of economists must have noticed the increased odds of a slump as reflected in the ``U.S. Recession '08'' contract on Intrade.com, an online site where individuals can bet on financial markets and current events. The contract, which will pay $10 if the U.S. goes into recession this year, traded at a lifetime high of $7.75 yesterday. The Fed cited additional reasons for its action, none of which will disabuse observers of the notion that the stock market forced its hand.``Broader financial market conditions have continued to deteriorate,'' the Fed said, even in the face of an improvement in short-term financing markets. A worldwide stock market rout would definitely qualify as ``broad.'' Then there was the reference to ``a deepening of the housing contraction as well as some softening in labor markets.'' |
|
Fed rushes to the rescue, Europe tries to reassure A shock U.S. interest rate cut failed to halt a stock market rout on Tuesday as fears of a U.S. recession forced policymakers in Europe and Japan to issue rapid reassurances about the health of their economies. The Federal Reserve cut its key interest rate by three-quarters of a percentage point to 3.5 percent, its biggest in more than 23 years. But markets paused only momentarily before the selling wave renewed as investors seem fixated on the idea that the U.S. will drag the world economy down. "Incoming information indicates a deepening of the housing contraction as well as some softening in labor markets," the Fed said. Canada's central bank cut too. U.S. Treasury Secretary Henry Paulson said he was confident in the resilience of the U.S. and global economies and welcomed the Fed cut as a helpful move. "This is very constructive and I think it shows this country and the rest of the world that our central bank is nimble and can move quickly in response to market conditions," Paulson said. The White House, rushing to put together a $150 billion stimulus package to prop up an economy ravaged by a housing slump and a mortgage defaults crisis, declined immediate comment on the Fed cut. President George W. Bush was set to meet members of Congress later in the day to discuss the economic rescue package. |
|
Text of Fed Statement on Rate Cut The Federal Reserve's interest rate statement released Tuesday: The Federal Open Market Committee has decided to lower its target for the federal funds rate 75 basis points to 3-1/2 percent. The Committee took this action in view of a weakening of the economic outlook and increasing downside risks to growth. While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households. Moreover, incoming information indicates a deepening of the housing contraction as well as some softening in labor markets. The Committee expects inflation to moderate in coming quarters, but it will be necessary to continue to monitor inflation developments carefully. Appreciable downside risks to growth remain. The Committee will continue to assess the effects of financial and other developments on economic prospects and will act in a timely manner as needed to address those risks. Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Charles L. Evans; Thomas M. Hoenig; Donald L. Kohn; Randall S. Kroszner; Eric S. Rosengren; and Kevin M. Warsh. Voting against was William Poole, who did not believe that current conditions justified policy action before the regularly scheduled meeting next week. Absent and not voting was Frederic S. Mishkin. In a related action, the Board of Governors approved a 75-basis-point decrease in the discount rate to 4 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Chicago and Minneapolis. |
|
Fed Cuts Rate 0.75 Percentage Point in Emergency Move The Federal Reserve cut the benchmark interest rate by three quarters of a percentage point, its first emergency reduction since 2001, after stock markets tumbled from Hong Kong to London amid increasing signs of a U.S. recession. The central bank cut the target overnight lending rate to 3.5 percent from 4.25 percent, the Federal Open Market Committee said in a statement in Washington. Policy makers weren't scheduled to gather until next week. It's the biggest single reduction since the Fed began using the rate as the principal tool of monetary policy around 1990. ``Broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households,'' the Fed said in a statement in Washington. The FOMC took the action ``in view of a weakening of the economic outlook and increasing downside risks to growth.'' Policy makers set aside concerns about inflation to lower borrowing costs for the fourth time since September after retail sales fell, the unemployment rate climbed and global stocks slumped. Chairman Ben S. Bernanke shifted the Fed's stance to a more aggressive approach in remarks this month citing a need for ``decisive and timely'' action. The dollar slid and Treasury securities rallied after the announcement. Stocks retreated as some investors questioned whether the Fed would be able to avert a recession, and then recouped more than half the losses. The Standard & Poor's 500 Index fell 1.1 percent to 1,310.50 in New York, the fifth straight drop, extending its decline to 11 percent this year.Yesterday, almost half of the world's biggest stock indexes fell into a bear market as mounting concern about a U.S. recession dragged down banking and retail shares across Asia, Europe and Latin America. ``The bottom line was that financial conditions were tightening sharply'' and affecting the economic outlook, said former Fed economist Brian Sack, who is now with Macroeconomic Advisers LLC in Washington. ``The view so far has been that they're somewhat behind the curve and needed to adopt a somewhat more aggressive approach.'' |
|
ECB declines comment on US Fed rate cut A spokesman for the European Central Bank declined comment on the US Federal Reserve's announcement that it was cutting its federal funds rate to 3.5 pct from 4.25 pct. 'We have no comment,' a spokesman said. Earlier on today, rumours circulated on the Frankfurt bourse that the US Fed will launch an emergency joint action with other central banks to cut interest rates after stock markets yesterday took their steepest one-day fall since Sept 11, 2001. |
|
NYSE Euronext's deal for the Amex reshapes ETFs The owner of the New York Stock Exchange said last week that it would acquire the Amex, which was once known as the Curb Exchange because trading in shares of smaller companies took place on the street outside the NYSE. Of course, trading at the Amex long ago moved indoors, and the storied exchange with modest roots going back to the 1800s has resided at 86 Trinity Place in Lower Manhattan for several decades. The deal is valued at $260 million in stock plus the proceeds from the expected sale of the headquarters. Although the Amex lists smaller stocks and has an options business, the transaction makes NYSE Euronext the preeminent player in ETFs -- index funds that trade like individual securities -- and also removes a competitor for new listings. NYSE Euronext has moved all of its 240 ETF listings to the NYSE Arca platform. By purchasing the Amex, NYSE Arca stands to pick up the 380 ETFs, with about $250 billion in total assets, that call the Amex home. The Chicago Board Options Exchange has a handful, although it boasts the highly popular PowerShares QQQ Trust NYSE Arca and Nasdaq fiercely compete for ETF trading volume, since unlisted trading privileges enable competitors to trade securities listed on other exchanges. Last year, about 40% of ETF trading was handled at NYSE Arca, said Lisa Dallmer, senior vice president of ETF and indexes. "We're inviting all the Amex-listed ETFs to list on NYSE Arca," Dallmer said in a telephone interview. She said the timing and details of the move will be worked out in consultation with ETF issuers. The Amex was a pioneer in ETFs and has a strong background in product development, although it lost its once-dominant position in ETF trading and was facing rising competition from the NYSE Arca and Nasdaq for new listings. The Amex suffered a blow in 2005 when ETF heavyweight Barclays Global Investors said it would move the listings for virtually all its ETFs to the NYSE. State Street Global Advisors, ProShares, Vanguard Group, Rydex Investments, PowerShares, Claymore and First Trust are among the money managers with ETFs listed on the Amex. Dallmer said NYSE Arca wants the transition to be "minimally disruptive, if at all." She said NYSE Arca has a strong base of experience for moving a mass of ETFs, citing the transfer of a multitude of funds from the Big Board to the Arca platform.ETFs were one of the primary drivers of NYSE Euronext's purchase of the Amex. NYSE Euronext gets the Amex brand and keeps it away from others," said analysts at Deutsche Bank in a research note. They added that the deal also enhances the exchange's position in listings, especially fast-growing ETFs. ETF assets grew about 45% in 2007, to $608 billion from $420 billion. The number of ETFs increased by 270 to a total of 629. ETF volume well more than doubled, with average daily volume climbing to $58 billion, according to research from State Street. "Amex will provide necessary scale to Arca's ETF-listings business," wrote BMO Capital Markets in a report. What's as yet unclear, however, is how the move will affect ETF investors and sponsors. Obviously, you're removing a competitor from the marketplace, which introduces attendant pressures such as less leverage for ETF providers when negotiating listing fees," said Jeff Ptak, Morningstar Inc.'s director of exchange-traded securities analysis. The deal also further reduces the role of specialists in ETF trading, he noted. "But it's not something that should have a major impact on the typical ETF investor," Ptak said. "My own take is that it'll prove to be a bigger deal to the providers than to investors." "The fallout for the ETF industry is you now have one big player essentially for listings, with Nasdaq nibbling around the edges," said Matthew Hougan, editor at IndexUniverse.com. "Less choice is not good historically." |
|
NYSE Euronext's Bluenext carbon market targets N America, Asia expansion UPDATE Bluenext, the European carbon emissions market being launched by NYSE Euronext Inc, has set North America and Asia as prime targets for international expansion, the financial markets group said. Bluenext, 60 pct owned by NYSE Euronext and 40 pct by French state bank Caisse des Depots, will initially operate a spot market in carbon dioxide emissions allowances, to be followed by a market in emission credits as soon as connections to international logs are operational. In the second quarter, it will set up a futures market with physical delivery of allowances and credits, a move that will favour overall market liquidity and depth, NYSE Euronext said. At a press conference to present Bluenext, NYSE Euronext deputy chief executive Jean-Francois Theodore said Bluenext's capital could be opened up to other partners. 'The financial partners we're thinking of are funds or banks,' Theodore said, adding that, in the longer term, Bluenext's capital could be opened to other partners active in the environmental sector. Bluenext aims to be a world leader for trading in environment-related instruments, it said. The new market is based on Powernext Carbon, which NYSE Euronext agreed last month to acquire from electricity trading company Powernext. The deal was coupled with NYSE Euronext's complete withdrawal from Powernext through the sale of its 34 pct interest in the company. |
|
NYSE Euronext, partner launch CO2 exchange Transatlantic exchange NYSE Euronext and Caisse des Depots said on Tuesday they had started a carbon emission rights exchange, called BLUENEXT. The two companies said in a statement that BLUENEXT, of which NYSE Euronext holds 60 percent and Caisse des Depots the remainder, as of Tuesday operates a spot market in CO2 emission allowances. (Reporting by Gilbert Kreijger) |
|
Commodities Hedge Fund Adds Equity Researcher
New
York-based commodities hedge fund shop Juno Mother Earth Asset Management
has expanded its research team with the hire of Alex Gorski.Gorksi, who
will serve as a research analyst focused on commodity-related global
equities and key commodities, joins from investment bank Thomas Weisel
Partners. At Thomas Weisel, which focuses on alternative energy and
natural resources, Gorski was a founding member of the firm’s Indian
subsidiary.“Mr. Gorski’s strong equity research background across key
emerging group sectors, coupled with a proven competency in company and
industry analysis and a solid work ethic, will add significant value as we
intensify our efforts on monitoring and research,” said managing partner
Eugenio Verzili.
|
|
F&C launches systematic European long/short trading hedge fund F&C Alternative Investments, the single strategy hedge fund division of F&C Asset Management, has expanded its range of products with the launch of F&C Zircon, a systematic European long/short equity trading fund. F&C Zircon is the third new hedge fund from F&C in 12 months following the launches of the F&C Tourmaline Fund, a fixed-income strategy, and the F&C Garnet Fund, a forex volatility and forward-rate bias trading fund. The F&C Zircon Fund is co-managed by Darren Jordan and Phil Robinson who have worked together for 10 years. The team joined F&C Alternative Investments last summer after four years running a partnership that developed and traded a similar systematic strategy to F&C Zircon. Previously Jordan and Robinson ran a four-strong pan-European equity proprietary trading desk at ABN Amro that focused on special situations and long/short trading. Both began their careers at HSBC Investment Bank, where Robinson spent five years in equity derivative sales before working on a market neutral hedge fund and Jordan spent 12 years gaining experience in equity and fixed-income derivatives on a sales trading desk. Investing within the Euro First 300 Index, F&C Zircon has a particular emphasis on the statistical arbitrage of pairs of stocks, taking long and short positions on two stocks in the same sector to create a diversified portfolio of long and short positions and try to capture excessive and unwarranted short-term dispersions between pairs of stocks. Trade signals are generated by a proprietary model developed by the team overlaid by disciplined risk parameters and a liquidity screen to keep the focus on large and mid-cap stocks. The F&C Zircon Fund, which has a minimum investment level of EUR500,000, has euro and US dollar share classes and is targeted primarily at institutional investors including funds of hedge funds. The fund is domiciled in the Cayman Islands and listed on the Irish Stock Exchange. F&C Asset Management Group is a London Stock Exchange-listed asset manager majority owned by insurer Friends Provident. F&C managed GBP103.5bn at the end of September for institutional, insurance and retail clients and has offices in France, Germany, Ireland, the Netherlands, Portugal, Sweden, Switzerland, the UK and US. |
|
Laven Partners to launch fund of hedge funds Investment management consultancy Laven Partners plans to launch a "best ideas" fund that will invest with a range of boutique hedge fund managers, it said Reuters on Monday. The portfolio, which is likely to be called the Laven Funds Multi-Strategy fund, will be launched on March 1. It will invest in around 10 hedge funds, most of which will have less than two years' track record. "Having come across so many good managers, we were asked why we don't do a best ideas fund ... It's based on fund manager talent," Managing Director Jerome de Lavenere Lussan said in an interview. "It's easier for our clients to go for a multi-strategy fund than invest in one fund." Funds of hedge funds have remained popular with investors in recent months, despite the onset of the credit crisis, because of the diversification they offer and exposure to strategies able to make money in all market conditions. De Lavenere Lussan said he hoped to launch the fund with $50 million (26 million pounds) in assets. Funds that will go into the new portfolio include the Hinde Gold fund; Vermont, a specialist in asset-backed lending; and some currency funds, he said. |
|
Risk tops the agenda for UK funds With the effects of 2007's credit crunch making themselves felt in the equity markets, the UK's pension funds are looking at ways to reduce risk and volatility. Heather Dale reports from London The recent credit crisis has led to a general reassessment of risk and how UK pension funds should structure their portfolios to de-risk going forward, according to experts. It seems UK pension funds have a high level of uncertainty as to how deep the implications of the credit crisis will be and how long it will go on for. John Hastings, a partner at consultancy firm Hymans Robertson, said: “It is still the case that pension funds have a lot of assets in equities and clearly what happens to the equity markets has an impact on pension fund funding levels.” David McCourt, policy adviser: investment and governance at the UK’s National Association of Pension Funds (NAPF), noted as part of de-risking there was now a move away from equities, however, it was not a wholesale move because there were not enough bonds available. “Pension funds are competing against insurance companies for bonds like index-linked Gilts,” said McCourt. McCourt added there had been some interesting strategies around liability driven investing (LDI), saying consultants and asset managers were coming up with new and interesting ways to use these strategies. Paul Gibney, investment partner, Lane Clark and Peacock (LC&P), commented: “You are seeing people diversify to reduce volatility and you are seeing people invest in bonds and swaps to reduce inflation and interest rate risk, for a better match against the liabilities.” Deborah Harris, European head of consultant relations at ABN AMRO Asset Management, said there was a demand from UK pension funds for ‘dynamic asset allocation’ mandates. These are products seeking to generate equity-like returns with bond-like volatility and they typically target a return of cash plus 4% by switching between different asset classes, regions and styles. Harris said she expected to see a further increase in demand for dynamic asset allocation products across pension funds of all sizes. “This will be driven by the ongoing desire to have a diversified portfolio of growth assets to generate returns in excess of cash coupled with the flexibility to move between different asset classes, regions and styles without altering strategic allocations,” said Harris. |
|
Fairfield Greenwich To Market Hedge, Private Equity Funds Fairfield Greenwich Group, a $16 billion New York-based hedge fund, has formed a new business unit dedicated to the marketing and distribution of external hedge funds and private equity funds. The new unit, which is called Fairfield Capital Partners, currently has mandates that include three multi-billion dollar funds, whose strategies include systematic trading, activist investing, and discretionary global long/short. “Our firm has one of the largest dedicated hedge fund sales teams in the industry and an extensive global investor network which continues to grow,” said Matt Brown, partner and head of the Fairfield Capital Partners team. “We therefore believe FGG will be an attractive marketing and distribution partner for many of the industry’s leading managers.” Fairfield was founded in 1983 and has offices in New York, London, Madrid, Spain and Bermuda. |
|
Hedge Funds New Star, RAB Roughed Up A pair of prominent British hedge funds are feeling the January chill. Both RAB Capital and New Star Asset Management had bad news about profit and performance last year. London-based New Star said the troubles related to the credit crunch had impacted its 2007 profit, performance and assets under management. The firm’s assets under management fell 6.5% in the second half to £23.1 billion (US$45.2 billion), as most of its hedge funds, “badly positioned” for credit market troubles, trailed their rivals. Worse still for the firm, it said in a statement that it is “not optimistic” about this year, and warned that investors should expect further redemptions, especially by European clients in its European funds. Further withdrawals would probably lead to a “significantly lower” operating profit in 2007. Investors quickly responded, as New Star’s share price plummeted 31% on the news. It is down almost 80% from its July high. RAB Capital confirmed that its pre-tax profits rose less than 2% in 2007, adding that its performance troubles of the fourth quarter have continued into the early going of 2008. The firm’s Europe fund is down more than 6% in the first few weeks of the year, while its Special Situations and Energy funds are down as much as 3% each, RAB said on Friday. Still, Michael Alen-Buckley, the firm’s executive chairman, said RAB was “in good shape for 2008” and is still considering opening a U.S. office, as well as others. RAB had warned last month that pre-tax earnings last year would be essentially flat at £50 million (US$97.8 million). It blamed a big decline in performance fee income—Special Situations lost 7.6% in Q4, while Energy fell 2.6%. But that was offset somewhat by a 38% jump in assets, to US$7.2 billion. |
|
CalPERS harbors hedge fund hope In just under six years, CalPERS has built a world-class hedge fund portfolio, with $7 billion in assets and an enviable track record. But that’s just the beginning. Russell Read, chief investment officer of $253.6 billion California Public Employees’ Retirement System, hints that hedge funds might play a bigger role in the fund’s future. “There are four ways that hedge funds can be useful for investment programs: being viewed as a stand-alone asset class; being used in an alpha-beta separation program; as part of portable alpha strategies; as a substitute for traditional investment classes,” Mr. Read said in an interview at CalPERS’ Sacramento headquarters. Mr. Read said staff’s current project is “setting the stage, thinking about which of these four ways of using hedge funds — perhaps in combination — we should use. So the discussion about portable alpha doesn’t represent that we’re going down a specific path. It represents how we might expand to use hedge funds productively in the future.” CalPERS officials have suggested hedge funds could be used to improve performance within the fund’s lackluster global equities program. In a staff memo to the board, officials discussed overhauling the global equities program, including eliminating managers who failed to produce alpha and possible adoption of a portable-alpha program, powered by hedge funds (Pensions & Investments, Oct. 15). Mr. Read declined to provide specifics about the hedge fund program, known internally as risk-managed absolute return strategies, deferring to his hedge fund team. Kurt Silberstein, senior portfolio manager, who oversees hedge fund investments and all external global equity managers, declined an interviewrequest. But by trolling public documents, a portrait emerges of a hedge fund portfolio that sources said is poised to invest billions more in the world’s best hedge fund and fund-of-funds managers. As of Dec. 31, the RMARS program invested directly in 27 single and multistrategy hedge funds managed by 24 firms including such brand-name Atticus Global LP, Canyon Value Realization Fund LP, Deephaven Market Neutral LLC, Farallon Capital Offshore Investors Inc. (Class E), O’Connor Glo |