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.

Terms for assets for fund managers eased

Bloomberg reports that a deadline to buy certain securities for fund managers has been extended to April 24. This new deadline will allow more time for public-private investment funds to buy legacy securities which are currently on the balance sheet.

When the program was first detailed last month, the Treasury said that for money managers to be selected to run one of about five public-private investment funds, firms had to prove an ability to raise $500 million in private capital, have a minimum of $10 billion in mortgage backed securities under management, a proven track record in these securities and headquarters in the United States.

Read the full story here.

Cayman Islands may protect hedge fund

According to Bloomberg, the Dynamic Decisions Corporate Management may be moved to the protection of an outside firm after the management was accused of gross mismanagement and misfeasance.

According to the filing, London-based Dynamic Decisions founder Alberto Micalizzi had stated that the fund had “substantial” losses last year and that assets may have fallen to as low as $20 million, excluding illiquid investments. The fund had $550 million at the end of 2008, according to a March 13 conference call the fund’s board had with investors.

Read the full report here.