Hedge Fund Statistics

Video Interview on Closures & Redemptions

Here is a short video interview with a Yale professor who is an expert on hedge funds. He estimates that the industry will shrink by another 25% next year due to poor markets, volatility and low liquidity across many asset classes. He also discusses hedge fund redemption rates and how many institutions need to raise cash and many have lost some faith in hedge funds. This means that many hedge funds have had to restrict the securities which they own so they can meet redemption requests. The reporter also discusses how many hedge funds have been slashing fees to attract more investors.

If you are viewing this article via our daily hedge fund newsletter please click here to view the video now.

View over 50 additional videos here: Free Hedge Fund Videos

Related to Hedge Fund Statistics | Video Interview on Closures & Redemptions

• Hedge Fund Tracker Tool
• Fund Marketing and Sales Advice
• Top Hedge Fund Managers
• Free Online Hedge Fund Videos
• Hedge Fund Terminology
• Geographical Guides
• Hedge Fund Startup Tools

Tags: Hedge Fund Statistics, Hedge Fund Redemption, Hedge Fund Closures, Hedge Funds Closing, Hedge Funds Shutting Down, Hedge Fund, hedge funds, stock market, investments, finance

Hedge Fund Redemption Day

Hedge Fund Redemption Day | Details

Today is the last day of Q3 which means deadline day for thousands of hedge funds which now owe payments to those investors who have requested a redemption. Here’s a quick run down on redemptions:

Redemption Notice Periods: Most hedge funds have 45-65 day redemption notice periods. This means investors must notify hedge funds 45-65 days before quarter end.

Lock Up Periods: Most hedge funds have lock up periods – the average length of which is one year. What this means is that when someone invests in a hedge fund they agree that they will not take their money out within a certain amount of time requested by the manager. Lock-up periods can range from 3 months to 5+ years. Many funds offer relatively soft lock-up periods which allow investors to pull their money within the lock-up period but penalize them by 1.5-2.5% for doing so.

Gating Clauses: Another way in which hedge funds are shielded from an immediate or short-term run on their assets is through the use of what are often called Gating Clauses. Gating clauses allow hedge fund managers to stipulate that only a certain percentage of assets may be withdrawn from the fund per quarter or year. These were not often used in the past but rumors of dozens of managers recently “closing the gate” have been numerous.

Institutional Investors & Small Hedge Funds: The wild cards here are institutional investors and small hedge funds. Institutional investors often invest such large amounts of money they negotiate more flexible or lenient capital constraint agreements when they make hedge fund investments. On the same note of lenient terms, many small hedge funds do not have gating clauses and often tout their short lock-up periods.

Free Daily Hedge Fund Newsletter

Related to Hedge Fund Redemption Day:

• Hedge Fund Redemptions
• Hedge Fund Tracker Tool
• Financial Certification
• Hedge Fund Forum
• Hedge Fund Accountants
• Investment Consultants
• Investment Book
• Hedge Fund Terms and Definitions
• Geographical Hedge Fund Guides
• Hedge Fund Database

Permanent Link: Hedge Fund Redemption Date
http://richard-wilson.blogspot.com/2008/09/hedge-fund-redemption-day-september.html

Tags: Hedge Fund Redemption Date, Hedge Fund Redemption Dates, Hedge Fund Redemption, Hedge Fund Redemptions, Redemptions by Hedge Fund Mangaers, hedge funds redemptions

Hedge Fund Redemptions

Hedge Fund Redemption Dates

The WSJ recently ran a short piece on how some relatively large hedge funds are facing waves of redemptions from their investors. One $14B hedge fund has seen their assets shrink to just $11B after dozens of investors submitted their redemption requests. Another has shrank from $10B to $8B.

Many hedge funds have what is caused a gate or gating clause within their agreements with investors which only allows a certain percentage of the firm’s assets to leave the fund through redemption requests each quarter. While some hedge funds have gating clauses set at 7.5%-10% many others are at 15-20%, meaning that only 7.5% of the hedge fund’s total assets may leave the fund via redemption notices each quarter.

While there will always be hedge fund redemptions as investors shift their investment allocations it will be interesting to see if the above gating clause percentage rates fall as some hedge funds face liquidity issues with clearing their current positions or whether investors become more aggressive in demanding higher gating percentage levels as they might have gotten out of a past hedge fund investments later than planned due to one of these gating redemption clauses.

Read additional articles such as this within the Hedge Fund Performance Category

- Richard

Subscribe To this Blog via Email Or RSS

Articles Related to Hedge Fund Redemptions

1. Hedge Fund Hurdle Rate Definition – What is a Hurdle Rate?
2. Hedge Fund Performance – Finance Sector
3. Hedge Fund Decline
4. Hedge Fund Jobs
5. Hedge Fund Managers
6. Alternative Investments Outperform
7. Hedge Fund Performance Q1 2008
8. Top Performing Hedge Funds
9. Hedge Fund Performance
10. Hedge Fund Redemption Date

Permanent Link: Hedge Fund Redemptions

Tags: Hedge Fund Redemptions, Hedge Fund Redemption, Hedge Fund Redemption Dates, Hedge Fund Redemption Date, Hedge Fund Gating Clause, Hedge Funds redemption, Hedge Fund Redemption Day

Hedge Fund Redemptions

After investing in hedge funds some accredited investors have a much harder time getting their money out of a hedge fund then into them. While this is often preventable it is usually the result of:

• Preset lockup periods where investors must keep their money in the fund for a minimum of 6 months to 3 years depending on the fund mandate but negotiable
• The liquidity of the asset classes the hedge fund deals with. Some hedge funds work in such illiquid markets that they will have redemption clauses in their contracts that allow them to wait 3-12 months for more liquid markets before being forced to sell a position.
• Arbitration. The process of going through arbitration and looking at which funds have been through it before can vary widely and be difficult. While a definate exception to the rule if you get invested with a rogue hedge fund manager you might have to chase them through arbitration or other legal means to redeem your initial investment.

All of this lends to making sure you have your investment goals and expectations clearly defined so they can included in research a hedge fund consultant does for you and so you can just keep these extra thing in mind while doing research yourself. Many hedge funds do not have lockup periods of more than 3-6 months and the majority work in relatively liquid markets. As the Financial Times put it, “The salutary lesson for those wanting to invest directly in hedge funds is that, under the commonly used limited partnership framework, they are, in effect, going into business with a managing partner, not just investing.”

Read dozens of additional articles like this within the guide to Hedge Fund Terms and Definitions.

- Richard

Related Articles:

• Hedge Fund Marketing Guide
• Hedge Fund Terms & Definitions
• Hedge Fund Due Diligence
• Hedge Fund Employment Guide
• Hedge Fund Strategy Guide
• 52 Most Popular Hedge Fund Articles
• Investment Book Reviews
• Geographical Hedge Fund Guides
• Hedge Fund Performance Category
• Miscellaneous Hedge Fund Information

Permanent Link:Hedge Fund Redemptions

Related Terms: Hedge Fund Redemption, Hedge Fund Managing Partner, Hedge fund Liquidity, Hedge Fund Asset, Hedge Fund Market, Hedge Fund Accredited Investors, Hedge Fund Due Diligence, Hedge Fund Investing

Story Source: FT

Picture Source: Credit E

Man Investments Profile

The following piece on Man Investments is being published as part of our daily effort to track hedge fund events in the industry. To review other hedge fund research please see our Hedge Fund Tracker Tool.

Resource #1: Man Group warned profits would fall for its half year that ends today as the largest listed hedge fund nanagera saw lower performance at its biggest fund. Shares in Man hit their lowest in three years falling 68¼p, more than 18 per cent, to 305½p, as funds under management tumbled $4.3bn in six months to $70.3bn (£38.1bn). Man said earnings per share excluding exceptional items were likely to be 5 per cent down on the 34.1 cents achieved in the same period last year, hit by the weak performance of AHL, its biggest hedge fund. Net performance fees would fall about 40 per cent, Man said, from $283m a year before.

However, Peter Clarke, chief executive, said sales had remained strong and the rate of client withdrawals was not up significantly. “To have sold as much product in the second quarter as the first quarter in the teeth of these financial markets is testament to the strength of our distribution,” he said. AHL, which tries to catch trends in commodity and other futures prices, has given back almost all of its gains for the year after commodity prices crashed over the summer then unexpectedly spiked again. For the year to September 24, AHL was up 0.9 per cent.

Man’s main funds of hedge funds have all fallen, with Chicago-based Glenwood down 5.8 per cent, Man Global Strategies off 10.8 per cent and RMF down 2.5 per cent, amid a general rout in the hedge fund sector. Analysts cut profit forecasts further after downgrades last week. Numis Securities, which lopped 11 per cent off its prediction of next year’s earnings, said it expected Man to benefit long term as the hedge fund sector became less competitive.

Mr Clarke said hedge funds would face more regulation as market watchdogs increased oversight of the financial world after bank collapses. But he said Man – already highly regulated – was likely to cope better than most with that, as well as having enough cash to be able to buy stakes in other funds. Last night Man spent about £9.4m buying back 3m of its shares at 312.2p. Source

Resource #2:
Man Investments has announced the development of an online hedge fund trading platform called MI Trade. This allows advisers to manage hedge fund investments as if they were bonds or stocks with the ability to rebalance portfolios at a days notice instead of waiting for weekly or monthly or quarterly redemption dates. Only Man Group products are being offered on this platform and it is being offered for free.

The CEO of Man Investments John Morrison called it “a major leap forward for hedge funds that gives Man Investments a strong competitive advantage. Investors can now, at no extra cost, actively and easily trade hedge funds as part of an overall portfolio of stocks, property and bonds.”

Sometimes companies release PR that is mostly fluff, this is not one of those times. This is a major step forward towards more transparency and flexibility and the ability to trade hedge funds on a daily basis will be valued highly by the family office and wealth management community.

There are other hedge funds scrambling to put something together to compete against this. What starts as proprietary in the investment world eventually becomes open source, it is only a matter of time before there is a platform that hosts unaffiliated hedge fund products and allows them to be traded at any time in the day.

- Richard

Permanent Link: Man Group Announces First Ever Hedge Fund Trading Platform

Related Posts:

1. Renaissance Technologies
2. Man Investments
3. Financial Public Relations
4. Family Offices
5. Hedge Fund Research
6. Hedge Fund Due Diligence
7. Hedge Fund Terms
8. Hedge Fund Marketing
9. Hedge Fund Strategy
10. Prime Brokers

Related Terms: hedge fund platform, hedge fund trading platform, hedge fund day trading, hedge fund redemption, hedge fund holding period, hedge fund trading program Man Group, Peter Clarke, AHL, Glenwood, Man Global Strategies, RMF, Numis Securities

Source: HedgeWeek