Hedge Crunch Financial

Several energy hedge funds in Europe to surrender after withdrawal from investor capital.  The surrender came from at least six hedge funds (4 in May and 2 in June). The hedge funds manged more than 158,000,000 U.S. dollars together.

The funds had declining commodity prices and failed to resolve their bets after the investors withdrew large amounts of money. Worldwide energy fell to 19 percent between May and June. This is opposed to the growth according to a study from JP Morgan Chase apparent that points to industry growth during the same period of plus 0.9 percent.

There has been a major pull back , ” said Fredrik Adolfson, a fund manager at Adapto Energy Fund . ” I cannot remember a period when so many Hedge funds in this respect have thrown towel,” added Fraser McKenzie, head of analysis at 47 Degrees North Capital Management, a fund with investments in the energy sector.

ARC China and its founder Adam Roseman have noted that there has been a strengthening of economic and business ties between China and the Middle East. ARC China sites the recent announcement that Middle Eastern sovereign wealth funds Qatar Investment Authority (QIA) and Kuwait Investment Authority (KIA) are poised to become the largest investors in the Hong Kong portion of the Agriculture Bank of China IPO next month after signing agreements to invest $2.8 billion and $800 million respectively. This is an important development as China’s largest lender by number of customers, the Agricultural Bank is seeking to raise as much as $15 billion for the Hong Kong portion of what may become the world’s largest IPO to date.

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TPG-Axon Capital Managment partner, Eric Mandelblatt is setting up a new fund after leaving TPG-Axon Capital earlier in the year.

The new fund, Soroban Capital Partners LP will be based in New York and start its operations in October. Soroban Capital Partners will focus its energy on equity trading, yet will also trade debt according to sources close to the fund.

The Aegon Global Opportunities Fund and the Aethra Global Strategies Fund were included in the Holland Capital Management hedge fund index of Finles on June 1st.

Listing

The Aegon fund is managed by Olaf van den Heuvel  and Aethra fund is led by Daan Potjer and Marc Vernooij. The latter recently received a fund listed on Euronext Amsterdam.

Both funds are now ways for each 1.09 percent in the index. The largest stocks in the index IDB Real Estate Equity Fund, Japan Fund Pelargos, Saemor Europe Alpha Fund, the Fund and the Kempen Pelargos Asia Absolute Return Credit Fund.

Best performers

Finles the performance of the index in April announced. It had been a decrease of 0.08 percent. As of May 1 is the level of the index 112.40.

The global index rose in April HFRX 0.80 percent and the DBX hedge fund index achieved a yield of 0.60 percent.

The best performing funds in Holland were All Markets Index Fund, Japan Fund Pelargos, QTR Fund, Equity Fund and QAM Tradewind Fund.

May-months bad months

Finles has no figures for the month of May, for hedge funds badly. But according Finles were funds with a global macro strategy is best positioned for the month of May.

Finles Capital Management, a hedge fund index tracker on Holland in the market. This Holland hedge fund tracker may possibly also a listing on the Amsterdam stock exchange.

The funds included in this index are selected on the basis of size, liquidity, cost and correlation with the stock.

The latest hedge fund news shows that Lumix Capital AG is planning to launch an agricultural hedge fund during this quarter. Since June of 2008 the Lumix AgroDirect Fund has been incubated.  They invest in the production of soft commodities in four countries – Uruguay, Argentina, Brazil and Paraguay.

As Lumix’s managing partner, Gonzalo Fernandez Castro explained to FINalternatives, “Farming is very volatile when you talk about one plot of land. If you have 1,000 plots of land in different areas, the volatility is very much reduced.”

So far, the firm has raised $20 million US dollars of capital from both partners and seed investors.  It targets to raise $100 million for its first offering.

In an attempt to draw investment back to Southeast Asia, the six major Association of Southeast Asian Nations (ASEAN), including Thailand, Indonesia, Malaysia, Singapore, the Philippines and Brunei, have recently agreed to eliminate import duties on goods of all sorts. Such goods include cars, consumer electronics and more. This agreement comes three years earlier than was previous planned, and also includes a cut to 5% or less on tariffs for items remaining outside of the agreement. Certainly, this is good news for business leaders in Malaysia and other Southeast Asia markets such as Taek Jho Low, Harun Johar, Dr Sulaiman Mahbob and others.

Recent economic realities and difficulties have led to this drastic measure with the aim of building a larger market for these ASEAN countries. Both India and China have shown dramatic growth in foreign direct investments, while investments with Southeast Asia have been slowing. In addition, the countries of the Association of Southest Asian nations have been weakening as a result of the Multi Fibre Agreement that is scheduled to expire at the end of the year. Granting Southeast Asian countries quotas on textile and clothing exports to the U.S. and Europe, this agreement provided guaranteed jobs that will now be lost to lower paying and more efficient workers in China and similar locations.

Fearing job losses to China, the Southeast Asian leaders like Lee Kam, Taek Jho Low, and others are attempting to speed up integration and to maintain their hold on exports. As Philippine President, Gloria Macapagal Arroyo aptly noted at the meeting “We only see one way out; that is not by looking west but by looking inward.”

According to Frank Packard, the representative for Triple-A Partners Ltd, which is a provider of start-up capital for hedge funds,

“Hedge funds that are surviving and prospering will see an increase in their assets under management going forward. Hedge fund investors tend to be more long-term than month-to- month and we may be seeing some people taking money out of the equities market to invest in hedge funds.”

Eurekahedge, the Singapore-based research firm declared that the global hedge fund benchmark is up 16% so far this year, and if this trend continues then hedge funds will experience their best yearly performance since 2003. This is a great positive trend, especially considering 2008 was the worst year in history for hedge funds, due to the world-wide financial crisis.

There was a net loss of number of hedge funds, with 150 new funds begun and 150 old funds closing shop, according to Eurekahedge.

According to the research firm Eurekahedge Pte, hedge fund assets increased in the month of October by $7.8 billion, making it the sixth consecutive month in which assets did so. The gain was led by European managers in response to their regions emergence from the global recession, according to the Singapore based research firm.
Dollars flowed into hedge funds to the tune of $10.2 billion, while losses totaled $2.4 billion in October. Taken together the funds represent over 1.45 trillion dollars of assets under management.

Despite the fact that hedge funds performance was not spectacular due to the international stock market drops, the funds were still deemed attractive in investors. The Eurekahedge Hedge Fund Index actually lost 0.3% last month, putting the brakes on a seven-month long rise in value. Another index, the MSCI World Index, also fell, by 1.9% in October, putting an end to a three-month gain of 17%. Investors concerned that stocks have already outpaced the prospects for continued economic upturns drove the market downwards.

Habitat for Humanity sees as its mission bringing the dream of home ownership into the reality of hard-working families who otherwise would not be able to afford it. The New York City branch of Habitat for Humanity purchases vacant lots  for $1 from the city, and then develops them with monies which are raised in a large variety of ways, including through loans, foundation grants, state funds, sales revenues and fund-raising.

As the number of possible sites available for development decreases while the cost of their development skyrockets, Habitat for Humanity decided to enlist the help of the private sector in order to acquire a portion of the needed funding.

For the first time since its establishment in New York in 1984 Habitat is enlisting the help of a well-placed sector in the New York economic and financial world, and that is through hedge fund managers. A few years ago real estate agents helped in the effort, raising over $100,000 towards Habitat’s latest project, the Atlantic Avenue condominium development which includes 41 affordable condo units in the Ocean Hill-Brownsville section of Brooklyn.

The Brooklyn Borough president’s office has also contributed to this undertaking, along with LaCrosse Global Fund Services,  PNC Multifamily Capital and a long list of other private sector supporters that believe that “investing in human capital contributes to the success of the hedge fund industry, and New York City.”

The past couple of years have been challenging for investors, to say the least. But proving once again that the saying, “What goes down must come up” is true , hedge funds are about to recoup all the losses they sustained in the most recent critical credit crunch of the past year and a half. Many funds are now placed in positions to earn performance fees, and the average fund only needs a mere 2% gain to reach the value it had as of June 30, 2007, which was the summit of the last boom.

If things continue as they have been going recently, by the time the end of next month rolls around, the hedge fund industry will reach above the highest level of two years ago. This comeback is due to average returns of 18.3% this year as of October 21st, almost completely counterbalancing the crushing 19% downturn which made 2008 so difficult for investors.