Hedge fund gains may not be what they seem (eFinancialNews)
Hedge fund performance data published this week by JPMorgan Chase & Co. (NYSE:JPM) prime brokerage appears to show that the sector outperformed domestic and international equities, commodities and fixed income during the 16 years from 1997 through 2012. But there are several reasons why this chart may exaggerate the actual performance of hedge funds. The chart [ http://bit.ly/1bzWAa9] documents time-weighted returns, rather than asset-weighted returns. Some will argue this is misleading because it gives the same weight to positive returns on a smaller asset base as it does to performance losses when the industry was at a historic high.
Hedge Fund Industry Continues To Underperform (WealthBriefing)
The hedge fund industry took in a net $430 million (0.02 per cent of assets) in April, building on an inflow of $817 million in March, according to the latest data from BarclayHedge and TrimTabs Investment Research. The results are based on data from 3,393 funds. Despite these April inflows, the hedge fund industry continued to struggle with performance, delivering a return of 0.6 per cent in April, one-third of the S&P 500’s 1.8 per cent rise. In the past 12 months hedge fund investors had a return of 8.1 per cent and the S&P 500 rose 14.3 per cent.
Hedge fund lobby group CEO to step down (Reuters)
The chief executive of hedge fund lobby the Alternative Investment Management Association, Andrew Baker, will step down at the end of 2013, AIMA said on Wednesday. Baker, who has been in the job since the start of 2009, will remain until his successor – who AIMA is in the process of identifying – has begun work. Baker said in a statement he was “looking forward to future challenges” but did not specify what he planned to do next. London-based AIMA, representing the interests of more than 1,300 corporate members, has spent recent years lobbying European policymakers to temper parts of an incoming Alternative Investment Fund Managers Directive, involving curbs on hedge fund pay and borrowing money to fund investments.
Stocks on a Fed high fail to impress Jim Rogers (IndiaTimes)
Investor Jim Rogers said he’s not optimistic on global stocks given central bank stimulus measures are providing an “artificial” boost to prices. “Quantitative easing is going to end,” Rogers, chairman of Singapore-based Rogers Holdings, said in an interview in Kuala Lumpur today. “Either the central bankers are going to wake up to reality and stop this insanity of printing money all over the world or the market is going to say ‘we don’t want your paper money’ anymore.” Equities around the world plunged this month after Federal Reserve Chairman Ben S Bernanke said May 22 US policy makers could scale back debt purchases that have driven demand for higher yielding assets.
Million Dollar 60th Birthday Parties With Private Concerts Are Still Hot On Wall Street (BusinessInsider)
Lavish 60th birthday bashes are still a hot trend in the private equity and hedge fund world. Page Six reports that hedge funder Thomas Kempner, Jr., who runs Davidson Kempner Capital Management, celebrated his birthday on Wednesday night at the Museum of Natural History complete with a Billy Joel concert. Joel played for the audience of financial heavy-hitters, which included Dan Loeb and The Blackstone Group L.P. (NYSE:BX)‘s Tony James, for an hour and a half, the report said. The Post estimates that the performance costs up to $2 million.
Todd Newman’s Insider Trading Conviction, Hedge Funds Take Heed (Forbes)
Todd Newman (Diamondback Capital) and Anthony Chiasson (Level Global) were both convicted in December of trading, and profiting, on inside information they gained from analysts who worked for them. The jury believed, as many juries do believe these days in about 90% of cases brought to trial, that the two men were guilty beyond a “reasonable doubt.” However, the conviction of Newman and his appeal should be of interest to every portfolio manager in the hedge fund industry …. because if he’s guilty, you’re all guilty.
