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Hedge funds ended the week in negative territory, concluding a tough quarter for alternative strategies, according to Lyxor’s managed account platform research team.
The performance drivers of Q3 were once again running at full tilt last week: choppy equity markets, credit spreads widening, and a strong US dollar among weaker commodity prices.


Underperforming strategies this quarter are to be found on the relative value and event-driven side. After a strong start this year, convertible arbitrage and L/S credit fund have suffered from the outflows witnessed on the credit space, whilst event-driven funds reported some losses on broken deals during
- 07/10/2014
Market regulation is starting to impact the way prime brokers do business with their hedge fund clients. The need to store away more capital and strengthen their balance sheets under Basel III regulations and other requirements imposed by central banks are set to redefine the way primes view their clients, with the return on assets they earn from them likely to become the de facto parameter.
Simply put, prime brokerage divisions are increasingly going to assess hedge funds based on the extent to which their portfolios use the bank’s balance sheet.
More specifically, primes will increasingly be sensitive to
- 07/10/2014
By Kavitha Ramachandran, Maitland Group – The EU’s Alternative Investment Fund Managers Directive (AIFMD) has essentially created a vast ‘Fortress Europe’. As of 22 July this year, managers of alternative investment funds must become authorised under the Directive as ‘AIFMs’ (Alternative Investment Fund Managers) or accept the burden and uncertainty of the private placement regimes if they want to market their funds in Europe.
Some fund managers may choose simply to walk away from the European market and not bother with the rigours of the AIFMD at all. But many will not. Europe is a huge market with its fair share
- 07/10/2014
- 07/10/2014
This summer, Peregrine Communications pitched its flag on 44th & Fifth, New York to further bolster its award-winning reputation as a marketing solutions provider. Overseeing the new office is Peregrine's Max Hilton.
“We’ve been working with US clients since 2002 but it became apparent that we needed to be on the ground. Sixty per cent of hedge fund managers are based in the US, and many of the investors into hedge funds, and New York and London are the two most important media hubs,” says Hilton.
‘We are making a major commitment with our new office in New York,” says Anthony
- 07/10/2014
The second part of a report released by Deutsche Bank in September 2014 reveals that investor allocations to US alternative mutual funds currently stand at 24 per cent; up from last year’s figure of 13 per cent.
The report, entitled From Alternatives to Mainstream Part Two, surveyed 86 hedge fund managers representing USD6trn in combined assets and 212 investors that collectively manage and/or advise on USD804bn in hedge fund assets. Since 2008, assets have grown 38 per cent on an annualised basis and since end-2013 they have grown 18 per cent (through May 2014).
“Since 2008 I really can’t
- 07/10/2014
Developing trends – Recent SEC investigations into hedge funds, investment advisers, officers, directors, and political intelligence firms have been indicative of two separate trends that are currently shaping SEC enforcement decisions.
One, under the leadership of Chair Mary Jo White, the SEC has increased its focus on enforcement and has made it a goal to pursue all types of violations, big and small. Second, it has been a few years since the adoption of Dodd-Frank and it has taken a while for the SEC to digest the legislation, implement regulations, and react. “For the first time since 2008, the SEC
- 07/10/2014
- 07/10/2014
“Being able to wrap an alternative trading strategy into a ’40 Act fund structure is going to open up hedge funds to a far wider audience,” comments Martin Sreba (pictured), Senior Director, Global Solutions Management & Sales at Advent Software.
Registered investment advisers who have never before contemplated mutual funds are now looking over their shoulders as large traditional asset managers launch their own internal hedge fund strategies. This is producing significant convergence as both traditional and alternative managers look to tap in to the USD15trn mutual fund market.
Figures released by Barclays Prime Services show a 43 per
- 07/10/2014
Jill Calton (pictured) is a managing director of the Alternative Investment Services division at UMB Fund Services. Over the past 12 months, the firm, which currently administers just north of USD31bn in alternative investment assets, has seen increasing inflows into credit strategies and private equity funds; particularly the latter.
“We have several existing private equity clients that are entering new deals and launching new vehicles. We’ve also taken on a few fairly large private equity groups this year who have rotated out of other administrators. In addition, an increasing number of private equity managers who previously did fund administration internally are
- 07/10/2014
The continuing institutionalisation of the hedge fund industry can be illustrated by a growing demand among managers – and indeed their investors – for shadow administration. Market regulation is pushing firms to stay operationally compliant. As a result, hedge funds need to be comfortable, and confident, that the investment books and records are accurate.
To do this requires an additional set of eyes; someone who is watching the watchers.
“Do you build an operations team that fully shadows the books and records? Do you put in review controls to get comfortable with the administrator? Or do you appoint a
- 07/10/2014
Under the stewardship of Mary Jo White, Chairperson of the SEC, the US regulator is pursuing a “Broken Windows” enforcement strategy, as used to great effect by the New York police department in the 90s.
In recent times, the SEC has become increasingly active in monitoring the activities of hedge funds to ensure that investor interests are protected. The fact that they now have enormous amounts of information on hedge funds filing Form-PF under Dodd-Frank is proving effective, not to mention the regulator’s improved technology capabilities.
“I think they are trying to gauge a better understanding of hedge funds
- 07/10/2014
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