Fund performance

Many hedge funds will have trouble retaining top managers next year, thanks to terrible market performance across the board and a reward system based on that performance, The Wall Street Journal reports. To retain talent, they will have to tap into profits. Otherwise, they will have to close shop.

Canadian securities regulators have begun on-site reviews of money market funds, fearing their exposure to devalued securities.

Recent moves by the U.S. government to prop up ailing money market funds seems to be helping stem the recent massive run on the funds, another fund implosion like the Reserve's Primary Fund can't be ruled out; managers may be holding investments that turn out to be worthless.

CHICAGO - It often takes an economic crisis before firms really start thinking about risk management.

NEW YORK - Fee-based independent advisers, so far, are winning the retirement income race, beating out mutual fund companies, brokerages and insurance firms in the quest to conquer the 77 million Baby Boomers' estimated $17 trillion in retirement savings and total $90 trillion net worth.

Tax-exempt money market funds began recovering some of the nearly $30 billion of outflows they suffered in the past seven days, but market participants say there's still a feeling of queasiness among traders and investors in the midst of a disconnect between municipal and Treasury securities as the government bailout program unfolds.

The Royal Bank of Canada has pledged $35 million to help cover clients invested in a money market mutual fund that recently broke the buck, Reuters reports.

One of the biggest arguments against the $700 billion bailout of Wall Street’s bad debt is that by having the government clean up investment houses’ balance sheets, the same firms that caused the problem might make outsized profits in helping the government assess the debt, the New York Times reports.

TD Ameritrade announced Wednesday that it will kick in an additional $50 million to support investors in Reserve Funds’ Primary Fund, whose net asset value fell to 97 cents.

Minnesota U.S. District Court Judge Paul Magnuson has decided to expedite Ameriprise Financial’s lawsuit against Reserve Funds’ Primary Fund. The court will fast-track the discovery of documents and other supporting information.

The Federal Reserve has moved to ease bank ownership thresholds, allowing private equity firms to acquire larger-sized stakes in banking companies along with board representation.

Sallie Krawcheck, the chief executive officer and chairman of Citi Global Wealth Management, is set to leave the firm, according to a statement from Citigroup, the parent company.

The labor supply may experience shortages in coming years as more Baby Boomers retire, according to a study by KPMG.

Investors began a run on The Reserve's Primary Fund last Monday when Lehman's bankruptcy news made them fearful about the money market funds' $785 million exposure to the investment bank's previously blue-chip commercial paper and medium-term notes that had fallen to zero value.

Fidelity Investments reached agreements with New York and Massachusetts officials to buy back at par $300 million of auction-rate securities from its customers by the end of the year, becoming the first retail brokerage firm to settle alleged fraudulent sales practices in the ARS market.

CHICAGO - In the coming weeks and months, financial officials and members of Congress will be scrambling to revisit a spate of sunsetting tax and accounting laws before the new presidential administration and Congress take over next year.

The turmoil in the financial industry and markets in recent days has caused serious anxiety among retirees or near-retirees, as they have seen their savings plummet in recent days, The Wall Street Journal reports.

Global insurance giant AIG sold more than $10.8 billion worth of annuities in the second quarter of 2008—more than any other insurer—and Lehman Brothers’ Neuberger Berman mutual funds managed more than $250 billion.

Bowing into pressure from banks and thrifts, the Department of the Treasury clarified its promise to guarantee money market mutual funds late Sunday. The government will insure money market mutual funds’ $1 net asset value for a year for investments in funds as of close of business last Friday.

Given the tremendous market turbulence of the past week, AMG Data Services data through Wednesday shows mutual fund investors holding steady.