The Hedge Fund Blog Man

US Hedge Fund Assets Peak in 2011

2012-01-26T14:57:00.000-08:00

US hedge fund assets peaked in September 2011, at just under $1.8 trillion.

Citadel Funds Finally Clear High Water Mark

2012-01-20T14:56:00.000-08:00

Citadel Funds Finally Clear High Water Mark

Two of Citadel's flagship hedge funds, the Kensington and Wellington funds, can finally breathe as strong 2011 performances helped thm clear high water marks. Also breathing, the fund managers who can now begin earning performance fees once again. According to CEO Ken Griffin, "The world changed dramatically in 2008, and we adapted our capabilities and resources to successfully compete in this new environment.”

Source: NY Times

Hedge Funds Lose Assets to End 2011

2012-01-20T14:54:00.001-08:00

Hedge Funds Lose Assets to End 2011

Hedge fund investors pulled more assets than they contributed in the 4th quarter of 2011, leading to $127 million in net withdrawals in Q4, 2011, according to Hedge Fund Research. Despite equity market gains int he 4th quarter, the unwillingness of hedge fund investors to deploy more capital may not bode well for hedge funds in 2012 as they face more withdrawal pressure.

Top 20 Largest Hedge Funds 2012

2012-01-02T08:36:00.000-08:00

2012 - The 20 Biggest Global Hedge Funds
Here is a list of the top 20 hedge funds, along with their assets under management (AUM) as of the beginning of 2012:

1. Brevan Howard Asset Management (AUM= $61.5 billion)
2. Goldman Sachs Asset Management (AUM= $52.1 billion)
3. Landsdowne Partners (AUM= $36.4 billion)
4. BlueCrest Capital Management (AUM= $35.3 billion)
5. Och-Ziff Capital Management (AUM= $35 billion)
6. BlackRock (AUM= $29.6 billion)
7. Baupost Group (AUM= $29.4 billion)
8. Moore Capital (AUM= $28.8 billion)
9. Renaissance Technologies (AUM= $26.5 billion)
10. Appaloosa Management (AUM= $24.6 billion)
11. Avenue Capital (AUM= $23.6 billion)
12. JPMorgan Asset Mangagement (AUM= $20.4 billion)
13. Fortress Investment Group (AUM= $19.9 billion)
14. Paulson & Co (AUM= $19.6 billion)
15. ESL Investments (AUM= $19.5 billion)
16. Soros Fund Management (AUM= $18.1 billion)
17. GLG Partners (AUM= $17.4 billion)
18. DE Shaw (AUM= $17.2 billion)
19. King Street Capital (AUM= $16.3 billion)
20. Bridgewater Associates (AUM= $15.6 billion)
Source: HedgeStats.com

Brevan Howard Asset Management ($61.5B) remains the world's largest hedge fund in 2012 with Goldman Sachs Asset Management ($52.1B) close behind. The top 5 hedge funds manage a combined $170 billion USD. The top 10 hedge funds manage $310 billion as of the end of 2011.

SEC Uses Risk Analystics to Charge Hedge Funds

2011-12-05T13:36:00.000-08:00

The SEC has announced several lawsuits against hedge fund managers including LeadDog Capital Markets, Solaris Management, and Millennium Global Investments.

According to the SEC enforcement chief Robert Khuzami, these civil charges are a result of using " risk analytics and unconventional methods to help achieve the holy grail of securities law enforcement—early detection and prevention. This approach, especially in the absence of a tip or complaint, minimizes both the number of victims and the amount of loss while increasing the chance of recovering funds and charging the perpetrators."

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Large Hedge Funds Down Big in 2011

2011-09-08T09:08:00.000-07:00

Altis and Paulson Run Funds Underperform in 2011

Large hedge funds run by hedge fund giants like Altis Partners and Paulson & Co. are down big in 2011. While the average hedge fund is down 3.76%, just about .5% worse than the -3.1% return posted by the S&P 500 (Hedge Fund Research), there are a number of large hedge funds down over 20% in 2011. Some of the biggest hedge fund losers in 2011 include Altis Fund, Altima Global Special Situations Fund, Paulson Advantage Fund, MLM Macro Fund, and CRM Windringe, according to the returns from Lyxor Managed Account Platform Data.

As of September 1, 2011, Altis has $1.38 billion in AUM, Altima Partners has $1.6 billion in AUM, Paulson & Co. has $35.5 billion in AUM, Mount Lucas Management (MLM) has $1.7 billion in AUM, and Cramer Rosenthal Mcglynn (CRM) has $14.2 billion in assets under management, according to The Blue Heron Group.

Hedge Funds Can't Hedge August Volatility

2011-08-29T15:29:00.000-07:00

Some like to think high volatility provides opportunity for astute money managers like hedge funds to provide real alpha. Yet despite the wild swings in equity and commodity markets this month, hedge funds have lostm ore than 4% in August, 2011 according to Hedge Fund Research.

Equity hedge funds lost more than 6%, only narrowly beating the S&P 500. So have hedge fund managers lost their ability to hedge?

Hedge Funds in Texas

2011-08-08T09:29:00.000-07:00

From The Economist
FOR a state more closely associated with cattle and cowboys, Texas is home to a surprisingly big herd of hedge funds. They manage around $40 billion, making Texas the fifth-largest US state for hedge-fund assets (after New York, Connecticut, Massachusetts and California), according to the Blue Heron Group, a research firm. Some of the industry’s biggest names, like Lee Ainslie of Maverick Capital and Eddie Lampert of ESL Investments, have ties to the state or Texan investors.
Many Texans like to trace the industry’s vibrancy to the state’s risk-taking traditions. A century ago “wildcatters” put everything they had on the line to drill oil wells, hoping to discover a gusher. Some made millions; others lost everything.

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Hedge Fund Assets Under Management Reach $2 Trillion

2011-07-20T13:56:00.000-07:00

Hedge Fund Assets Surpass $2 Trillion in 2011

Hedge fund assets under management (AUM) reached $2 trillion USD as of June 30, 2011. This is according to Hedge Fund Research (HFR). Assets surged past $2 trillion with $62 billion in net inflows for January 1 - June 30, 2011. Most of these net inflows went to large hedge funds in excess of $5 billion, but with such large hedge funds accounting for 62% of overall hedge fund assets, the inflows were shared relatively equally by large and small hedge funds alike.

John Paulson Hedge Fund Loses 20%

2011-06-17T12:42:00.000-07:00

Billionaire hedge fund manager John Paulson is well known for his highly successful bets against mortgage backed securities and US financial institutions in 2008. But now, Paulson's $9bn Advantage Plus is down almost 20% in 2011 in part due to bad bets on US financial institutions like Citi and Bank of America.

Over the last few years, Paulson's company, Paulson & Co. has become one of the world's largest and most followed hedge funds. Paulson himself reportedly made more than $5 billion in 2010.

10 Largest Hedge Funds 2011

2011-05-01T15:27:00.000-07:00

The Top 10 Hedge Funds, 2011

Here are the Top 10 Biggest Hedge Funds as of 2011*:

Firm AUM

1 Bridgewater Associates      $59.1 billion

2 JP Morgan Asset Management      $46.2 billion

3 Paulson & Co.                                  $37.1 billion

4 Brevan Howard Asset Management $28.0 billion

5 Soros Fund Mgmt.                           $27 billion

6 Man Investments                             $25.3 billion

7 Blackrock Global                             $24 billion

8 Och-Ziff                                           $23 billion

9 Baupost Group                                 $23.4 billion

10 Farallon Capital Mgmt.                 $21 billion

* 2011 Assets Under Management (AUM)

Note that the top hedge funds in 2011 are not too dissimilar from the biggest hedge funds the year before. Bridgewater Associates surpassed JP Morgan Asset Management as the world's largest hedge fund. We will update the Top 10 hedge funds of 2011 throughout the year.

Source: HedgeLists

Hedge Funds Follow Market in March - Flat

2011-04-27T13:15:00.000-07:00

Hedge Funds Flat
Hedge fund indexes were flat in March of 2011, following in the footsteps of the S&P500 and other equity markets. The largest hedge funds in Morningstar's database were up just .1%. The S&P was up .04%

Following the financial meltdown in 2007 and beyond, hedge funds as a group had returns just about as disappointing as the broader market, making many question just how "hedged" the average fund is. In March anyway, hedge funds continued their lockstep performance with the markets.

Hedge Fund Launches Increase

2011-04-25T15:11:00.000-07:00

Hedge Fund Launches Increased in 2010
There were more than 1100 new hedge fund launches in 2010, more than 50% more than in 2009. Better economic conditions and rising market prices probably account for the increase as investors begin to regain confidence. Also, many managers that could had to face prohibitively high water marks after the market crash have opted instead to open new hedge funds.

2010: A Banner Year for Hedge Funds

2011-02-24T14:47:00.000-08:00

Hedge funds had an incredible 2010 in terms of performance. The group averaged a return of just under 20% for the industries best year since 1996.

Hedge funds' strong performance in 2010 is a result of several factors including a strong equity market, low volatility, and the self-selection process that has eliminated weaker hedge funds over the last couple of years.

If the equity and commodity markets are able to continue their bullish run (and there is certainly no guarantee of this) 2011 could be another great year for hedge fund performance.

Hedge Funds Increasing Leverage in 2011

2011-02-24T14:32:00.000-08:00

In January of 2011 hedge funds increased their leverage to levels not seen since 2007, according to Bloomberg.

Though hedge funds seem to be increasing leverage in tandem with the rising market, it is not necessarily the case that record amounts of hedge fund leverage in 2011 indicate increased risk taking overall - available cash and margin available also increased.

Its also not unusual to see hedge funds lever into bullish (appearing) markets. It will be interesting to see how a moderate decline in the equity indexes will affect hedge fund leverage.

Hedge Funds Betting on Commodities

2010-12-13T14:19:00.000-08:00

With gold, copper and other precious metals reaching all or near-term highs, hedge funds are making their biggest bet in years that commodities will continue to rally. According to Commodity Futures Trading Commission data, speculative bets on commodities reached the highest level since at least February 2006.

And, according to Barclay Capital, about 75 percent of respondents surveyed last week in New York predicted a bigger inflow into direct commodity investments next year.

Fund of Funds to Trade Publicly

2010-11-11T08:54:00.000-08:00

London Stock Exchange

A London based hedge fund company with a fund of funds product is planning to list on the London Stock Exchange. The fund, the CQS Diversified Fund will invest its asserts in the Segregate Portfolio Alpha (DVA) a fund of funds. CQS has over $8 billion in assets under management.

CEO of CQS, Michael Hintze, believes the multi-fund approach is appropriate for investors in the listed funds sector.

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GS to Withdraw $120 Million from Major Hedge Fund

2010-11-10T12:59:00.000-08:00

Goldman Sachs is withdrawing more than $120 million from Harbinger Capital Partners' most prominent hedge fund, the $3.4 billion Harbinger Capital Partners Fund. Harbinger has approximately $20 billion in assets under management. Goldman's withdrawal comes after revelations that Harbinger's CEO, Philip Falcone, borrowed hundreds of millions from the firm's other funds to pay personal taxes as well as the relatively poor performance of the fund.

Because redemption agreements with Harbinger limit quarterly redemptions to 25% it will take 12 months for Goldman to receive its entire investment. It is reported that Goldman had as much as $1 billion invested with Harbinger.

Philip Falcone, who grew up in Minnesota and was a star hockey player in college, helped Harbinger funds return more than 100% in 2007 with timely bets that the U.S. housing market would collapse.

Hedge Funds Have Strong October

2010-11-10T09:12:00.000-08:00

Hedge funds had a relatively strong October led by Global Macro and Emerging Market hedge funds. Overall, the hedge fund sector posted returns of 2.35% for the month (a 32% annual rate), according to HFRI Fund Weighted Composite Index. Overall, the index is up just over 7% on the year. By comparison, the S&P 500 was up just over 8% YTD.

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Hedge Fund Manager Provides GOP Strategy

2010-09-02T18:13:00.000-07:00

Though hedge fund managers have been characterized recently as leaning democratic, the head of a major hedge fund held a strategy session this week to discuss how the Republican Party can better position itself to win the mid-term elections.

Steven Cohen, CEO of SAC Capital Advisors held the GOP event with other hedge fund managers in attendance including Paul Singer of Elliot Management ($16B AUM) and Bruce Kovner from Caxton Associates. Paul Singer is one of the hedge fund industry's largest contributors to the Republican Party. Singer has also been dissaproving over Ben Bernanke and Alan Greenspan.

SAC gave 93% of its 2010 election-cycle donations to Republicans through Aug. 1

Hedge Funds Scaling Back Risk

2010-08-30T17:54:00.000-07:00

With the US economy and the major stock indexes taking a step back, hedge funds are putting their money into more defensive sectors such as utilities and other high dividend stocks.

Some hedge fund manages say that a lot of risk is being taken off the table.

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Duquesne Capital Management to Shut Down

2010-08-17T17:59:00.000-07:00

Stanley Druckenmiller of Duquense Capital Management

Dozens of hedge funds have closed already in 2010, and now you can add Duquesne Capital Management to that list. The $12 billion hedge fund run by billionaire Stanley F. Druckenmiller has not had a losing year and has averaged 30 % annually (though the fund is down 5% this year).

Duquesne returned about 11 percent in 2008, when hedge funds on average lost a record 19 percent. It rose about 10 percent in 2009, when the average return was 20 percent.

Druckenmiller is quitting the fund to pursue philanthropic goals.

Metals Hedge Fund to Close

2010-08-10T10:50:00.000-07:00

Apollo Management LP, a New York based hedge fund and private equity firm closed its metals hedge fund in London.

The $40 million into the Apollo Metals Trading Fund started in March 2009, according to a U.S. Securities and Exchange Commission filing. An outside spokeswoman for the firm declined today to say why Apollo shut the fund or to give the number of fund employees.

Commodity hedge funds fell in the first half of 2010 amid sliding commodity prices.

Hedge Funds Off to Poor Start in 2010

2010-07-24T14:55:00.000-07:00

Hedge funds had their fourth worst first half in more than 20 years according to the Hennessee Group. Though hedge funds outperformed the major stock averages in the first half of 2010, .2% vs -7%, it still ranked among the worst first half performances. In 2009, the Hennessee Hedge Fund Index was up over 11% January through June. In 2008, one of the worst years for hedge funds given the broad market declines, hedge funds were down over 2% through June and finished the year down 19.9%.

The best performing hedge fund sectors in 2010 have been the debt categories with Fixed Income up 5.69%, High Yield up 4.42%, and Distressed up 3.87%. This comes amid tightening spreads between high yield debt and government securities.

The worst performing hedge fund strategies in 2010 are, somewhat unsurprisingly, Europe funds down 6.46%, Health Care down 2.85%, and Growth down 1.95%.

Alphabet Management Hedge Fund Attracting Top Talent

2010-07-21T10:55:00.000-07:00

New York based hedge fund Alphabet Management landed Nelson Saiers, a managing director of derivatives trading with Deutsche Bank. Saiers will lead a group that trades derivatives including volatility options. The departure comes amid Deutsche Bank's decision to close down its proprietary trading operations.