Hedge funds

While both hedge funds and equities lost value in August, hedge funds outperformed equities by more than five percentage points. The Dow Jones Credit Suisse Hedge Fund Index fell 2.3% last month, but the Dow Jones Global Index of equities declined 7.69%.

Forty-two percent of hedge fund managers became bearish on stocks in August, up markedly from 27% who were pessimistic on equities in July, according to a survey by BarclayHedge and TrimTabs Investment Research. This is the largest percentage of bearish hedge fund managers in a year.

Invictus Consulting Group has created a bank stress test service for hedge funds that rates the valuation of bank stocks in relation to their peers. It also stress tests banks’ Tier 1 capital reserves two years out. By comparison, banks’ stress tests are handled in house, Invictus noted.

While hedge funds-of-funds tout their diversification as a limit on risk, this is not the case, according to research by NYU Stern Finance Professor Stephen Brown and co-authors Greg Gregoriou and Razvan Pascalau of SUNY College at Plattsburgh School of Business and Economics. In extreme market conditions, the professors attest, a broadly diversified hedge fund-of-fund is actually more sensitive to risk than an average hedge fund.

There is a new dynamic today between hedge funds, investors and hedge fund administrators, according to State Street Corp.’s new Vision Report, “Hedge Funds: Rebuilding on a New Foundation.”

Hedge fund managers have turned decidedly bearing on U.S. equities and the economy, according to a survey of 87 managers by TrimTabs Investment Research and BarclayHedge.

Registered Fund Services and UMB Fund Services have jointly developed a turnkey registered hedge fund program.

Hedge funds, as measured by the Dow Jones Credit Suisse Hedge Fund Index, rose 2.2% in the first quarter, with positive performance in each month.

The popularity of hedge funds, particularly among institutional investors, propelled total assets under management to a record $2 trillion in the first quarter, according the latest report from Chicago-based Hedge Fund Research Inc.

Despite heightened patches of political and economic instability around the globe in the first couple of months of 2011, many hedge funds of various strategies found ways to thrive, according to figures from Morningstar.

Fewer hedge funds opened their doors in the fourth quarter, according to HFR Hedge Fund Research.

Concerns about rising oil prices and an end to the stock market rally once quantitative easing ends has caused 40% of hedge fund managers to be bearish on U.S. equities, up from 26% in January, according to the TrimTabs/BarclayHedge Survey of Hedge Fund Managers. And only 26% are bullish, down from 37%.

The hedge fund industry has recovered most of the ground it lost during the financial crisis.

Despite the government’s insider trading case against expert consultants and hedge funds, flows to hedge funds should be strong in 2011, predicts Agecroft Partners, basing its findings on interviews with 300 hedge funds and 1,500 institutional investors. Agecroft is an alternative investments consultancy.

WTP Advisors, a tax and business advisory firm, has acquired Sala Associates, an operations consultancy for hedge funds and investment banks.

Hedge fund managers found it a little easier to hang out their own shingles in the third quarter.

Hedge fund managers found it a little easier to hang out their own shingles in the third quarter.

The Hedge Fund Association said it is adamantly opposed to the establishment of a self-regulatory organization for hedge funds, which the Government Accountability Office is currently investigating under the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Ultra-wealthy investors, with their $25 million in household net worth, might be a tempting lure for advisors who want their business. But any professional money manager who wants them as clients has to sharpen his or her knowledge about alternative investments.

E Fund Management, the second-largest asset management company in China, is planning to offer the nation’s first registered hedge fund. Along with a long-only mutual fund, the two will invest in emerging markets securities. They will be run out of E Fund’s Hong Kong office.