How does a hedge fund work?

Candice Choi of the The Associated Press recently took time to break down how a hedgefund works and what are the basic ins-and-outs of investing in one. For example, one must have at least a $200,000 income, and the fact that hedge funds are not allowed to advertise, but are reliant on the word-of-mouth marketing by their investors. Read the full article here.

Investing continues, but with more caution

According to Financial Planning, more investors are turning back to hedge funds, according to JP Morgan's private bank. But the investors are paying more attention to certain things such as market volatility, liquidity and overall risk. They also care about the transparency of their investments. Read the full article here.

Investors returning to high risk investments

According to Reuters, JP Morgan Chase is seeing more investors turning to high risk investments. As investors has held back from investing in high risk opportunities over the past year, now investors are returning, as they believe that the financial crisis is, for the most part, over. Read more about new new income investment flow here.

Possible EU hedge fund regulations could cost $1.3 billion euros

According to Reuters, the EU has introduced a new legislative action called "Alternative Investment Fund Managers" directive with could impose regulations on where hedge fund can be sold along with imposing control on the leverage. This bill was adopted in order to control future financial mishaps. Should it be adopted, it will go into effect in 2012. Read the full article here.

TerraVerde Capital Management launches "Green" fund

According to FINAlternatives, TerraVerde Capital Management has launched a fund of hedge funds that will invest in opportunities focusing on the global reduction of carbon emissions.

Richard Bookbinder, managing member of Bookbinder Capital Management, stated:
“Managers that we invest with have underlying strategies that in someway are investing in company that are doing something to reduce carbon, such as clean energy, clean technology, water, weather, agriculture, carbon/carbon trading, the whole gamut."

Read more here.

Hedge fund managers look to gold for personal investment

A recent survey found that 20 out of 22 hedge fund managers bought gold as a personal investment to protect their personal fund from inflation.

Jeremy Charlesworth, chief investment officer at Moonraker, stated "Gold is the ultimate currency, performing best when economies are at extremes, whether that is inflationary or deflationary."

Read more here.

New hedgefund to start in Asia

A new Hong Kong based hedge fund will be started by Transbridge Investment Partners. They've hired John Liptak, who is the former head of Bank of America's Asia Special Strategies group to run this hedge fund. It will seek out the mispriced and undervalued securities, and focus in pan-Asia. Read the full story here.

Hedge funds strong in first half of year

According to the Wall Street Journal, hedge funds performed exceedingly well in the first half of 2009, outpacing the stock market in the first half of this year. According to the Hennessee Hedge Fund Index, performance rose 11.7%. This will likely lead to new resiliency and growth in the months to come for hedge funds. Read the full article here.

Stress tests should be peformed on hedge funds

According to an article at Reuters, hedge fund managers believe that more rigorous stress tests should be performed on hedge funds before they are invested in. These stress tests show how the hedge funds will react to extreme market conditions, they are also key to answering questions such as how your fund is making and loosing money. Read the full article here.

Asian hedge funds look for gain in second half of 2009

According to Reuters, experts are predicting that Asian hedge funds will see an increase in growth in the second half of 2009. They believe this region will recover faster than the US and Europe, in addition to the new asset allocation models adopted by US pension funds.

Aureliano Gentilini, global head of hedge fund research at Lipper, a unit of Thomson Reuters, stated, "Appetite for risk will progressively resume, with new fresh money flows poured to emerging countries as investors' confidence is restored."

Read the full article here.

Hedge fund mangers take the risky route

A new article in the New York Times looks at how some hedge fund managers have switched strategies. With the rebound of the markets starting in mid-March, investors who had invested in the risky stocks beforehand.

Even GLG Partners, the hedge fund manager based in London that was hit hard by redemptions and poor returns in 2008, has experienced a turnaround, its funds rising 11 percent for the year, in part because of its large exposure to emerging markets, which have led the global rally.

Read the full article here.

Attempt to regulate hedge funds fail

According to the Wall Street Journal, the attempt for Connecticut to regulate hedge funds has failed. The State Senate passed a bill last week in order to introduce more transparent regulations for hedge funds. However, the House failed to vote on the issue before the legislative season ended Wednesday. For more details, read here.

Insurance increases for hedge funds

According to a recent article at Bloomberg, the cost to insure hedge funds has risen 20% in the past six months. This is largely due to the bankruptcy of the Lehman Brothers and the Bernie Madoff scandal. Read the full article here.

Strong April for hedge funds

According to the Wall Street Journal, hedge funds are coming off their strongest month in more than three years in April 2009. The Morning Star Hedge Fund Index rose 3.4%.

Nadia Papagiannis, Morningstar hedge fund analyst,
"Over the last two months, the bulls have dominated the markets, and stories of green shoots in the economy colored the financial media. Many hedge fund managers weren't confident in the sustainability of the rally, and invested with a more conservative market exposure."

Read the full article here.

Mergers and acquisitions headed for hedge fund industry

With the current turmoil in the hedge fund industry, it is bracing for a wave of mergers and acquisitions. These will result in bolstering depleted assets and increase the different sources for revenue. A third reason for these impending mergers is the fact that big firms will be looking to round out their assets, by going global and acquiring funds that will be located in different regions. Read the full article here.

Big plans for FRM Capital Advisors

According to Bloomberg, FRM Capital Advisers will contribute $300 million in strategic investments to hedge funds. They may also be hiring six more managers to aid their investments. The company makes investments in hedge funds for two to four years then takes a share of their fees from the incomes for up to ten years. Read the full story here.

More details in the Madoff case

According to the Reuters, Bernie Madoff's personal fortune and business fortune were inseparable. Documents were released Tuesday giving more detail to the situation.

"Madoff used BLMIS to siphon funds which were, in reality, other people's money, for his personal use and the benefit of his inner circle. Plain and simple, he stole it," stated Trustee Irving Picard.

Hedge funds down in first quareter

According to a recent article at Pensions and Investments, hedge funds fell 7.4% in the first quarter to $1.3 trillion. A large part of this was due to the $1.4 billion in redemptions.

Kenneth J. Heinz, HFR president, made the comment:
“Extreme investor risk aversion subsided into the end of the first quarter, but remained at elevated historical levels as industry consolidation continued through quarter end."

Hedge fund industry will have re-evaluate business model

According to a new article at CNN Money, the hedge fund industry has fallen to $1 trillion, this is down from $2 trillion last year, but is a result of the worst economic year for hedge funds. The article believes that hedge funds will continue to grow, and will receive plenty of investments between 2010 and 2013. This current economic downturn will force the industry to face its downfalls and readjust its business models. Read the full article here.

USB looses key hedge fund advisor

According to the Wall Street Journal Europe, Alexander Ineichen has left UBS after eight years. He was a key adviser for the their hedge funds.

Mr. Ineichen didn't manage money at the units, but did produce numerous reports on the state of the hedge-fund industry. Along with peer Huw van Steenis, head of European banks and financials research at Morgan Stanley, Mr. Ineichen has been one of the most well regarded and influential voices commenting on issues facing the industry.

For the full story, read here.