Hedge funds

What a difference a year makes. Just about this time last year, investors were clamoring to get into some of the best-performing hedge funds. But with some of the biggest names in the business down 7%, 25% in some cases, year to date, hedge fund managers fear that their investors are gearing up for massive withdrawals come the Sept. 30 deadline for year-end notices, The Wall Street Journal reports.

England's Financial Services Authority has found no evidence of a "concerted attempt by individuals" to alter share prices in Halifax Bank of Scotland (HBOS) during the raid of its shares earlier this year, according to the Mondaq Business Briefing.HBOS' shares fell by 17% in 20 minutes on March 19 after someone spread false rumors that the bank had asked the Bank of England for an emergency loan. The panic came just days after the collapse of Bear Stearns in the U.S.Many officials suspect that hedge funds may have played a large role both incidents, though regulators have not been able to pin the blame on anyone yet.After four months of investigating, the FSA found no evidence of abuse. The agency stated that it would continue to watch for rumor-mongering "at a high level of intensity," and will take action if any evidence is found.The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

The Securities and Exchange Commission has opened a 60-day public comment period to see whether the U.S. should adopt international reporting standards.

Hedge funds may do a good job of shorting stocks and investing in futures, but when it comes to their own legacies, few have management succession plans or future growth strategies. This is according to a report from accounting and consulting firm Rothstein Kass, Reuters reports. In fact, 70% are ill prepared for the times ahead.

Investors increased their allocation to global emerging markets hedge funds by more than 60% from the first to the second quarter, according to new data. Hedge Fund Research Inc. said that investors allocated approximately $995 million to such alternative investment funds.

The Securities and Exchange Commission suffered a setback last week in its efforts to prosecute individuals for insider trading after a judge dismissed the charges on a case from 2001.

A ruling last month by the Internal Revenue Service, limiting the ability of investors in funds of hedge funds to deduct management fees from their federal income taxes, could prompt some managers and their investors to either redo their tax forms or challenge the decision.

Rather than acquire or invest only in companies seen as turnarounds, private equity firms are increasingly attracted to the strength and high-net-worth retail customer base of asset management firms, a category they traditionally have sidestepped, Dow Jones reports.As Miguel Sagarna, a partner in the private equity group at KPMG, put it, “It’s a very scalable business, and it is a good quality product, it can grow fast with good margins.”And with so many banks and asset management firms looking to raise capital by selectively selling off divisions, private equity firms are seeing this as a great opportunity to take advantage of good prices. Some are even planning to build broad financial services operations, said William Kirsch, chairman of the private equity group at Paul Hastings.Certainly, private equity firms are looking to diversify their holdings, Sagarna agreed.However, since most private equity firms closely guard their business, it is likely they will run any asset management firms they acquire alongside their business, experts said. That does not mean that they may not still share information and research, Kirsch said.Asset management firms might even help private equity shops develop new products, added Adam Schneider, a principal at Deloitte.

Many alternative asset managers, who brag about their ability to make money regardless of market conditions, posted their worst figures in years last month after worldwide sentiment suddenly changed on energy prices, financial stock and the U.S. dollar.

Sharp money managers love market volatility.

As the stock market continues to stumble along, high-net-worth investors are becoming increasingly pessimistic about the economy and dissatisfied with the performance of their financial services providers.

The Blackstone Group reported a $165.6 million profit for the second quarter, thanks to huge gains in its hedge fund businesses, according to the International Herald Tribune. The private equity firm’s hedge funds reported $225.2 million in revenue, offsetting other gains and large losses, including a pretax loss of $185.5 million.

Whereas the S&P 500 declined 0.99%, the Dow Jones Industrial Average rose 0.25% and the Nasdaq Composite Index gained 1.42% in July, the Hennesee Hedge Fund Index fell 1.95%.

Hedge funds are enjoying tremendous success in Hong Kong and Singapore, with the number of managers and assets under management going through the roof, according to data from Hong Kong’s Securities and Futures Commission and Singapore’s Monetary Authority.

Investment firms will continue to hone their specialties and look to raise capital through mergers and acquisitions throughout the rest of the year, according to a report by Jefferies Putnam Lovell.

Despite hedge funds that have received returns on investments in commodities and emerging-market stocks, the hedge fund industry, as a whole, is set to turn in their worst monthly performance since July 2002.

The Securities and Exchange Commission issued guidance last week for fund boards of directors in assessing their firm’s soft-dollar practices. The SEC said it was issuing the guidance a full two years after the limitations it put on soft dollars in 2006, restricting it only to research, due to rapidly evolving market and trading practices. True enough, there are wide discrepancies among brokerages today, due to rapidly evolving markets, trading practices and electronic crossing networks. Fund companies have until Oct. 1 to comment on the SEC’s guidance.

One year after one of the hedge fund industry's most talked-about collapses, failed fund manager Jeffrey Larson is raising capital for a new fund.

In his last public appearance as a member of the Securities and Exchange Commission, Commissioner Paul Atkins said that, with regards to shareholder rights, the agency “would be wise to continue to respect the principles of federalism and avoid the temptation to exceed the limitations on its authority delegated by the Congress.”

According to the data in the Northern Trust Universe, the majority of U.S. institutional investors posted negative returns for the quarter ending June 30 - the third negative quarter in a row for participating plans in the study.