June 2007
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June 21, 2007
Germany Welcomes Hedge Fund Sector Transparency Initiative
German Finance Minister Peer Steinbrueck welcomed on June 20 an initiative by the trillion-dollar hedge fund sector for increased transparency, saying that such a move had only come about thanks to Germany's persistence. In a statement issued by 13 funds -- including sector giants such as Brevan, Howard, Centaurus, GLC, Man Group and Marshall Wace -- on June 19, the investment firms said a working party would be set up under former Bank of England deputy Andrew Large, to examine a possible voluntary code of conduct. "The group will complete its work at the beginning of 2008," the statement said.
At the recent Group of Eight summit in Heiligendamm, host country Germany had failed to win support among the world's richest countries for regulation of the fast-growing and increasingly powerful hedge fund industry. Germany has put hedge funds on top of the agenda of its year-long G8 presidency given its concerns that rapid growth in the increasingly powerful sector could destabilize the entire global financial system.
Hedge funds are highly speculative and aggressive investment instruments that are estimated to manage close to $1.5 trillion in assets worldwide. An estimated 9,000 such funds are currently in operation, most of them based in the U.S. and Britain.
Berlin fears a possible domino effect should one of the big funds fail. But it has been gradually forced to scale back its ambitions for increased transparency and more disclosure in the sector in the face of fierce resistance, particularly from Britain, the U.S. and Japan.
-Industry Week-
Posted by su at 11:02 AM | Comments (0)
June 11, 2007
Hedge fund returns hit three year high
Strong gains last month have lifted hedge funds' 12-month returns to almost 14%, their highest in three years, but their performance over that period has closely mirrored the equity market according to new figures.
Data provider Hedge Fund Research said its overall hedge fund index had risen by 2.43% in May. This has taken the cumulative return for the year to date to 7.19%, which is almost as high as the hedge fund industry achieved during the whole of either 2004 or 2005.
The 12-month return rose to 13.85%, the highest level it has been since April 2004, when the 12-month return was 18.06%.
However, the investment performance of hedge funds, recommended to investors as a way to diversify their portfolios, has been similar to equities over the last three years, in terms of volatility as well as investment return. Over the last 12 months the S&P 500 has generated a return of 23%.
Continental European investment consultants said they recommend hedge funds to institutions as an alternative to bonds, rather than as an alternative to equities. The Lehman government and corporate bond market has risen 6.5% in the last 12 months, with similar volatility.
-Financial News-
Posted by su at 3:37 PM | Comments (0)