Two Things You Should Know If You Want To Be Real About Hedge Funds (BusinessInsider)
Hedge funds are known for being high powered, high performing financial firms that employ the smartest people and command the top of top dollar for their services. So it’s important to keep up with what they’re doing. This morning, two snippets of information about hedge funds caught our eye. If you think about them at all, you should know these facts about their performance and who’s behind it. …Hedge Fund Research said in April that funds saw inflows in 14 of the last 15 quarters (PDF)—but now there is evidence that substandard returns may finally be having an effect. According to eVestment, the $2.69 trillion industry has seen net inflows of just $5.8 billion through the first four months of the year, which it calls the slowest rate of growth to start a year on record. (The firm’s database goes back to the third quarter of 2003.) The figure is also the second-worst total on record, after the start of 2009, when investors pulled out $260 billion.
The Morning Brief: Hedge Fund Tell-All to Hit Shelves Soon (InstitutionalInvestorsAlpha)
Preqin reports that the top 100 hedge fund managers have combined assets under management of $1.4 trillion, which accounts for 61 percent of total hedge fund capital. This compares with the recently published Hedge Fund 100 ranking by Institutional Investor’s Alpha, which counted total assets among the 100 largest firms at $1.3 trillion. That figure represents roughly 58 percent of the $2.25 trillion in total hedge fund assets worldwide at the start of 2013. Preqin, a London-based collector of data on alternative investments, also counts 176 institutions that have allocated at least $1 billion to hedge funds, 26 more than last year. These investors account for more than $550 billion invested with hedge funds, according to Preqin. In its report, Preqin notes that over the next two months, the $7.2 billion Arizona Public Safety Personnel Retirement System, which now allocates about 20 percent of its total assets to various hedge fund strategies, plans to make six new hedge fund investments.
How Hedge Funds Invest in Volatile Markets (InstitutionalInvestorsAlpha)
Losses of 7 percent and 3 percent in Japan on two different days in the past week, along with subsequent dives —followed by abrupt rallies — in the U.S. market, have caused investors to start worrying. Meanwhile, bond prices are plummeting as interest rates have surged in recent days. What’s a bullish hedge fund investor to do? Buy puts on broad index exchange-traded funds. This is what a cross section of hedge funds did in the first quarter. t is no secret that many hedge funds, especially macro and multi-strategy funds, like to use ETFs as part of their overall strategy, especially when they want to bet on a certain market or industry.
The World According to Britt Harris (InstitutionalInvestor)
In late 2006, Thomas (Britt) Harris found a comfortable new perch from which to weigh in on the world economy. After extricating himself from a brief dip in the shark-infested hedge fund waters of Southern Connecticut, Harris, known to all as “Britt,” took over as chief investment officer of the $117 billion Teacher Retirement System of Texas in Austin. Although he now invests on behalf of 1.3 million teachers, among them his own mother, the CIO is perhaps best known in the pension world as a pioneer in forming “strategic partnerships” with asset managers who took on large, broad mandates to oversee diversified portfolios while at the pension fund of GTE Corp. (now Verizon Communications Inc. (NYSE:VZ)) in the mid-1990s. Today, as head of the fifth-largest U.S. public pension system, Harris commands a rapt audience wherever he goes.
