Myriad, Azentus Post Gains as Asian Hedge Funds Beat Peers (SFGate)
Myriad Asset Management Ltd. and Azentus Capital Management Ltd. posted gains in 2012 as a market rebound in the last four months of the year helped Asian hedge funds outperform global peers. The Myriad Opportunities Master Fund, a $1.4 billion multistrategy fund led by Carl Huttenlocher, former Asia head of Highbridge Capital Management LLC, returned about 7 percent last year, said two people with knowledge of the performance. Azentus’s $1.7 billion multistrategy fund reversed earlier losses to post a gain of about 1 percent for the year, said two others with knowledge of the returns. The people declined to be identified because the information is private.
Hedge fund insurance becomes more prevalent as uncertainty reigns (Opalesque)
Hedge fund manager insurance is not something that may immediately spring to mind as a consideration either on the part of managers or investors during a due diligence process, however, it can be a way of mitigating key man risk. According to Paul Grassi, head of the Hedge Fund Insurance group, at Wells Fargo hedge fund insurance has evolved since its earliest iterations in response to the financial crisis and investor demand. Grassi recently spoke to Matthias Knab about hedge fund insurance for Opalesque TV.
Finra’s suitability rules on private funds create conflicts (InvestmentNews)
Over the last several years the entry costs for marketing alternative investments has been pushed ever higher. Now a series of somewhat conflicting regulations has pushed those costs to new heights and threatens the traditional way in which many of these investments are marketed. The regulations at issue here are the SEC/CFTC’s Rule that has been implemented pursuant to Section 404 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, commonly known as Rule PF (and Form PF); FINRA’s enhanced Rule 2111 concerning suitability; and most recently FINRA Rule 5123. Rule PF is generally viewed as demanding confidential information with the understanding by the industry that the information will be guarded by the SEC/CFTC and kept in confidence. The other rules listed above now would take the confidential information in Form PF and disclose it to the world. The clash of these regulatory mandates will noticeably change the way that hedge funds and private equity funds are marketed by broker-dealers and financial advisers. Needless to say, the interaction of these rules will also have the potential to change the landscape of regulatory investigations and arbitrations.
Mixed 2012 For Asian Hedge Funds (Finalternatives)
Two of 2011’s highest-profile Asian hedge fund losses posted middling returns last year. Myriad Asset Management’s US$1.7 billion flagship returned about 7% last year, while Azentus Capital Management’s US$1.7 billion multistrategy hedge fund was up about 1%, Bloomberg News reports. The average Asia-focused hedge fund returned almost 10% last year, according to Eurekahedge, thanks to a rally in the last four months of last year.
Houston hedge fund manager to retire, close fund (BizJournals)
The top executive of Houston commodity hedge fund SandRidge Capital LP told Reuters he is retiring and closing the fund after its institutional clients saw 11 percent gains last year on trading natural gas futures. SandRidge had $320 million in assets under management, and Andrew Rowe, who also founded the hedge fund, told Reuters most of his investors’ money would be returned by the end of the first quarter. Three SandRidge traders — Matthew Titus, Matthew Parker and Rick Thielke — may join Houston hedge fund Goldfinch Capital Advisors LLC, Reuters reports, citing sources familiar with the matter.
Billionaire James Dinan’s Most Promising Stock Picks Include United Rentals (InsiderMonkey)
Small-cap and mid-cap stocks are the source of much of a hedge fund’s alpha, as these stocks are less covered by the media and other large investors and therefore are more likely to be inefficiently priced. As a result a hedge fund’s research team is more likely to uncover value when evaluating companies with market caps under $5 billion, and so it’s not surprising that on average stocks in this valuation range that hedge funds buy tend to perform particularly well. We’ve estimated that the most popular small cap picks among hedge funds have an alpha of about 120 basis points per month (read more about our hedge fund small cap strategy).
