40 Act fund space is promising but some funds may not have true liquidity (Opalesque)
Panelists at the recent Alternative Assets Summit in Las Vegas said that costs to bring a ’40 Act to market had dropped significantly and that it now takes around four months to structure a fund. Indeed, now a lot of U.S. alternative fund managers are launching ’40 Act hedge fund-style mutual funds (funds registered under the Investment Company Act of 1940), the most recent being Franklin Templeton and K2 Advisors, Morgan Creek and Blackstone Alternative Asset Management. Despite some of the unknown challenges, many of the hedge fund managers and funds of funds involved in ’40 Act funds feel the game is just beginning, said a recent report from Infovest21, a research firm. Only about 1.1% of all mutual fund assets i.e. $108 billion are currently in alternative ’40 Act funds, according to Morningstar.
Ex-Eminence Execs. To Launch $200 Million Hedge Fund (Finalternatives)
A pair of Eminence Capital veterans are set to launch a hedge fund of their own with at least $200 million in initial assets. Hari Ramanan and Adam Ryan have founded Valarc Holdings in New York. The two plan to build a concentrated long/short global equities portfolio, The Wall Street Journal reports, similar to the strategy employed by Eminence, which is up 8.43% this year and returned 24% last year. Investors in Valarc will be subject to a four-year lockup. Ramanan was a European and emerging-markets portfolio manager at Eminence, while Ryan served as a senior analyst. The $4.5 billion hedge fund has been in the news lately with its foray into activism, pushing for a merger between Jos. A. Bank Clothiers and The Men’s Wearhouse, Inc. (NYSE:MW), which it owns 10% of.
Jim Rogers: Abolish The “Incompetent” US Federal Reserve (LiveTradingNews)
Jim Rogers: Abolish The “Incompetent” US Federal Reserve Legendary investment guru Jim Rogers not only thinks Federal Reserve policy is incompetent, he thinks the entire institution should be abolished. When asked recently what he’d do if he was named chairman of the central bank, Rogers said, “I would abolish the Federal Reserve, and then I would resign.” The world has survived just fine without central banks for most of its history, he noted. “America has had 3 central banks in its history. The first two disappeared,” Mr.Rogers said. “This one will too, because they keep . . . leveraging up the balance sheet. They keep making mistake after mistake. They keep printing money.” The result?
Why Warren Buffett’s Berkshire Hathaway Won’t Pay a Dividend in 2014 (DailyFinance)
Berkshire Hathaway Inc. (NYSE:BRK.A) has a number of things going for it if you’re considering an investment in it, but dividend income certainly isn’t one of them. Warren Buffett‘s company doesn’t pay out a single dime to its investors in the form of dividends — and 2014 isn’t likely to change that trend. …Two of Berkshire’s most recent and notable investments — International Business Machines Corp. (NYSE:IBM) and Exxon Mobil Corporation (NYSE:XOM) — have two of the highest dividend yields on the list. Berkshire also holds the exclusive $5 billion stake in Bank of America Corp (NYSE:BAC) preferred shares that carry an annual dividend of 6%. If you take those eight investments, plus the Bank of America position, Berkshire rakes in roughly $2 billion each year in the form of dividends from other companies.
Hedge funds: From alternatives to mainstream – Deutsche Bank (InvestmentEurope)
“From Alternatives to Mainstream” analyses how hedge funds have evolved to run non-traditional products such as long-only and liquid alternative strategies to meet new demand from institutional investors. Institutional investors are moving away from traditional asset allocation in favour of a risk-based approach, incorporating hedge funds into their core portfolio rather than as a separate alternatives allocation, Deutsche Bank AG (USA) (NYSE:DB)‘s survey also revealed. This removes constraints on allocations to alternatives, and investors are now choosing to work with trusted hedge funds on new products such as liquid alternatives and long only strategies.
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