Hedge funds

The $600 million in new assets that Horizon Cash Management captured in the third quarter could be a sign of things to come for the Chicago company and other cash managers.

More than 110,000 people working in finance in the U.S. have lost their jobs so far this year, but that could nearly double to more than 200,000 in the final weeks of the year, the Anniston Star reports.

If investors have learned one thing from the financial crisis, it is that, eventually, level heads and long-term investing will prevail. In that spirit, sister publication Investment Dealers' Digest recently spoke with a man known for having one of the most level heads in the industry, John Bogle, founder of Vanguard Investments, about what he sees for mutual funds and other investment firms in the years ahead.

Treasury Secretary Henry Paulson wants to beef up hedge fund regulation as part of his plan for a systemic risk regulator, he said Thursday.

Investors withdrew $40 billion of assets from hedge funds in October, Dow Jones reports. Coupled with a $115 billion decline in holdings during the month, the $155 billion hit was the worst one-month decline in assets on record with Hedge Fund Research. By comparison, hedge funds lost $210 billion in the third quarter.

While it’s true that many hedge fund investors are planning to redeem billions of dollars, the danger of those redemptions further roiling the markets is low, HedgeWorld News reports.

The European Union, which has been in favor of new rules and capital requirements for hedge funds and private equity, will propose such regulations next month to the European Commission, Reuters reports.

Managers of hedge funds with $1 billion or more in assets under management will, for the most part, see their total compensation rise this year, even as predictions continue that as many as three-quarters of the hedge funds on the market will close their doors and many executives on Wall Street will be getting no bonuses this year at all.

A record $156.5 billion was withdrawn from mutual funds in Europe, according to the Lipper FMI report. All asset classes suffered net withdrawals.

Testifying before the House Oversight and Government Reform Committee last Thursday on the role of hedge funds in the credit crisis, five prominent hedge fund executives said they would be in favor of establishing a public exchange or clearinghouse for credit default swaps (CDS) to make the market more transparent.

The President’s Working Group on Financial Markets is looking at ways to better understand and regulate derivatives and credit default swaps, which essentially are insurance on corporate debt.

Testifying before the House Oversight and Government Reform Committee onThursday on the role of hedge funds in the credit crisis, five prominent hedge fund executives said they would be in favor of establishing a public exchange or clearinghouse for credit default swaps (CDS)to make that market more transparent.

The fate of many a hedge fund relies on what investors decide to do with their money on Nov. 15, when it is possible an overwhelming majority could ask for their money back by the end of the year, Dow Jones reports.

Referring to today’s stock and corporate prices as bargain basement, the chief executive officer of Aberdeen Asset Management of the U.K. said he is interested in purchasing other companies, particularly hedge funds-of-funds and private equity firms, Reuters reports.

Hedge funds lost only 3.9% in October, but overall, in the third quarter, they lost 16% of assets, ending at $2.497 trillion, due to heavy investor redemptions, according to a Wednesday report from HedgeFund.net.

While the average equity mutual fund is down 48% and the average hedge fund is down 20% so far this year, one uncanny hedge fund manager, Bernard V. Drury of Drury Capital, has posted incredible year-to-date gains of 60%, The New York Times reports.

Man Group’s assets as of the end of the third quarter stood at $67.6 billion a 9% decline since the end of March. Its pretax profit declined 24% to $622 million, as a result of lower fees.

Unlike most other markets around the world where hedge funds are allowed to take almost any risks they deem fit, including leveraging their holdings to place outsized bets, Brazil’s hedge fund managers must comply with strict parameters, Dow Jones reports. That means they cannot take margin or collateral calls.

NEW YORK - The fragmented, free-for-all liquidity in the marketplace is aggravating the extreme volatility in the stock market, and experts say a more organized, specialized system is needed.

Speaking before students at MIT, billionaire investor George Soros predicted that the number of hedge funds could shrink by as many as two-thirds, the Ottowa Citizen reports.