Posts Tagged ‘investments’

Alan Grayson Testimony on Systmetic Risk

admin | Thursday, May 7th, 2009 | No Comments »

Alan Grayson

Alan Grayson Testimony on Risk

Here is a short video on systemic risk in the banking and hedge fund industries. To watch the embedded video below please click here.

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How to Get a Hedge Fund Job

admin | Thursday, May 7th, 2009 | No Comments »

Hedge Fund Job

How to Get a Hedge Fund Job

How to Get a Hedge Fund JobOne of the top 10 types of questions we get in running this site are those around how to get a hedge fund job, or how to move from an area such as investment banking to hedge fund work. On HedgeFundBlogger.com we have a Hedge Fund Career Guide, we also host Hedge Fund Job Listings.

Below please find links to many of our articles on hedge fund jobs:

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Tags: how to get a hedge fund job, how to get a first hedge fund job, hedge fund job, hedge fund, hedge funds, alternative investments, private equity, investments

Obama & The Dream of Socialist Hedge Funds

admin | Wednesday, May 6th, 2009 | 1 Comment »

Socialist Hedge Funds

Obama socialist hedge funds Obama & The Dream of Socialist Hedge FundsI am not here as a political commentator but I do take note of the daily battering of the industry in the mainstream news outlets. Late last week and early this week I published a few posts on Obama and his blasting of hedge funds for looking out for their investors. You may read these posts here and here and here.

Today we have a hedge fund professional standing up for hedge funds in the same way I have tried to here on this blog, here is an excerpt:

Asness of AQR Capital (who says he is speaking for himself and not his company) says the hedge funds are acting as they should act. “It is the job and obligation of all investment managers, including hedge fund managers, to get their clients the most return they can. They are allowed to be charitable with their own money–and many are spectacularly so–but if they give away their clients’ money to share in the “sacrifice,” they are stealing,” he says in the letter.

Hedge funds haven’t received a bailout, Asness notes, and haven’t asked for one. “The hedge funds were singled out only because they are unpopular, not because they behaved any differently from any other ethical manager of other people’s money.” source

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New Hedge Funds

admin | Monday, May 4th, 2009 | No Comments »

New Hedge Funds

New Hedge FundsAs part of our ongoing effort to expand our Hedge Fund Startup Guide please find below a short article excerpt on new hedge funds coming out this year:

Recessions, it is said, are great times to start new businesses. It seems that’s as true for hedge funds as it is for widget manufacturers or high-tech start-ups.

With banking lay-offs and defections at an all-time high, money managers are seeking greener pastures by going it alone. In most cases, they are happy to take a significant decrease in pay for more autonomy. For while it’s true that the hedge fund industry is constantly abounding with new start-ups and the next wannabe George Soros or James Chanos, this time round even those who are accustomed to running billions of big banks’ funds are beginning with as little as a few million dollars.

Take Hari Kumar, a former partner at $11 billion TPG-Axon Capital, a hedge fund giant which he helped found with three other fellow ex-Goldman Sachs prop traders. Along with Julian Smith, also a TPG-Axon employee, Kumar is now setting up a much more scaled-down Singapore-based fund called LionRock Capital. Rather than have to answer to today’s swelling majority of nervous investors however, Kumar has chosen initially just to manage $75 million of capital provided by him and his partners, according to AsiaHedge, a hedge fund industry publication. source


To view additional articles and resources on hedge fund startups please see our Hedge Fund Startup Tools.

Related to New Hedge Funds

  1. Top 5 Tips for Starting a Hedge Fund (Part 1 of 2)
  2. Top 5 Tips for Starting a Hedge Fund (Part 2 of 2)
  3. Hedge Fund Business Plan | Plans For Growth
  4. Raising Capital With Tenacity
  5. Hedge Fund Marketing Tools
  6. Hedge Fund Seeding
  7. Setup a Hedge Fund
  8. Hedge Fund Formation | Tips on Forming a Hedge Fund
  9. CHA Designation | Benefits to Hedge Fund Startups

Tags: New Hedge Funds, New Hedge Fund, Hedge Fund, Hedge Funds, Alternative Investments, equity, investments

Hedge Fund Spinouts & Bank Updates

admin | Wednesday, April 29th, 2009 | No Comments »

Hedge Fund Spinouts & Bank Updates

Below is a short video on a possible hedge fund spin out and other recent changes with major banks and hedge funds. If you are viewing this article through our daily Hedge Fund Email Newsletter please click here to see the embedded video below.

View over 100 videos on hedge funds within our Hedge Fund Video Library.

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Tags: Hedge Fund Spin Outs, Hedge Fund Spinout, Bank Owned Hedge Funds, hedge fund, hedge funds, investments, investing

Alpha Magazine Top 100 Hedge Funds 2009

admin | Thursday, April 23rd, 2009 | No Comments »

Alpha Magazine Top 100 Hedge Funds

Alpha Magazine Top 100 Hedge Funds 2009Alpha magazine just came out with their annual list of the top 100 hedge funds. Below please find the top 10 listed by total assets under management:

  1. Bridgewater Associates
  2. JP Morgan Asset Management
  3. Paulson & CO.
  4. Brevan Howard Asset Management
  5. Man Investments
  6. Och-Ziff Capital Management Group
  7. Soros Fund Management
  8. Goldman Sachs Asset Management
  9. Farallon Capital Management
  10. Renaissance Technologies Group

For more information on these funds please click on their names above, otherwise you may browse profiles of over 1,000 hedge fund managers within our Hedge Fund Tracker Tool.

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Video on Banking Sector & Fund Flows

admin | Friday, April 17th, 2009 | No Comments »

Banking Sector & Fund Flows

Below is a short video on Banking sector earnings and fund flows within the last few months. If you are viewing this through our daily Hedge Fund Newsletter please click here to watch the embedded video below.

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Tags: Videos on banking sector, banking sector, banking, hedge fund, hedge funds, investing, investments

Hedge Fund Video Series | Quick Updates

admin | Friday, April 17th, 2009 | No Comments »

Hedge Fund Video Series

Here are a series of videos on hedge funds which came out this week. The first video below discusses the state of the hedge fund industry, pending hedge fund related regulations, and possible adjustments to the taxes hedge fund managers must pay on their performance gains.

This next video below is on hedge fund performance and on how hedge funds now once again turning a profit. The video also discusses which strategies are doing well this year. The best strategies in March were the Equity Hedge Strategies and Relative Value Strategies, the worst performance was seen by Macro strategies.

The next video discusses how there are some positive signs for the hedge fund industry, in March aggregate hedge funds returns turned positive and redemptions have started to slow.

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Hedge Fund Video Series | Quick Summary Update

admin | Thursday, April 16th, 2009 | No Comments »

Hedge Fund Video Series

Here are a series of videos on hedge funds which came out this week. The first video below discusses the state of the hedge fund industry, pending hedge fund related regulations, and possible adjustments to the taxes hedge fund managers must pay on their performance gains. If you are viewing this article via our daily Hedge Fund Newsletter you will need to click here to view these embedded videos below.

This next video below is on hedge fund performance and on how hedge funds now once again turning a profit. The video also discusses which strategies are doing well this year. The best strategies in March were the Equity Hedge Strategies and Relative Value Strategies, the worst performance was seen by Macro strategies.

The next video discusses how there are some positive signs for the hedge fund industry, in March aggregate hedge funds returns turned positive and redemptions have started to slow.

View over 100 additional free videos within our Hedge Fund Video Library

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Tags: Hedge Fund Video, Hedge Fund, Hedge Funds, Alternative Investments, investments, stock market, stock market videos

Hedge Fund Strategies During the Recession

admin | Wednesday, April 1st, 2009 | No Comments »

Hedge Fund Strategies During the Recession

Hedge Fund Strategies During the RecessionJust came across an article which on top of the normal industry regulation and redemption talk discussed what strategies might actually do well over the next year or two. In addition to the ideas quoted below I believe that more simple, easy to understand strategies which survived both the 2001-2002 and current periods will go far with new investors.

Here is a few quotes from the article:

“Macro funds will be a big winner,” predicts Sassan Ghahramani, former chief executive Medley Global Advisers, a research firm for hedge funds and other money managers. “There is so much policy involvement that is affecting the movements of markets. And in the next two to five years, central banks will unwind their interest rate cuts, but at different speeds in different countries.” That will create trading opportunities for the macro managers.

The environment also is ripe for hedge funds that invest in distressed assets, such as real estate and securities backed by credit card and auto loans. “There is a lot of interest out there for this,” Ghahramani says. “People are trying to put together war chests.”

“Probably the best hedge-fund trade in the next year is to partner with the government in buying the securities it wants to get sold from banks,” says David Gilmore, a partner at Foreign Exchange Analytics, which advises hedge funds and others about market trends. “You get the most leverage at the lowest rates and insurance on your downside risk.” source

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FamilyOfficesGroup.com Re-Launch

admin | Wednesday, March 11th, 2009 | No Comments »

FamilyOfficesGroup.com Re-Launch

Family Offices+ +2 FamilyOfficesGroup.com Re LaunchOur team has just re-launched FamilyOfficesGroup.com. The site now has an upgraded appearance, more free-to-access articles on family offices and many resources related to both UHNW philanthropy and alternative investments.

To learn more about family offices or to see our new site please visit http://FamilyOfficesGroup.com. Here are the most popular articles from this site:

Tags: family offices, family office, alternative investments, private equity, philanthropy, philanthropic, wealth management, investments, hedge fund, hedge funds, real estate

Family Office Business Information | FamilyOfficesGroup.com

admin | Wednesday, March 11th, 2009 | No Comments »

FamilyOfficesGroup.com Re-Launch

Family Offices+ +2 Family Office Business Information | FamilyOfficesGroup.comOur team has just re-launched FamilyOfficesGroup.com. The site now has an upgraded appearance, more free-to-access articles on family offices and many resources related to both UHNW philanthropy and alternative investments.

To learn more about family offices or to see our new site please visit http://FamilyOfficesGroup.com. Here are the most popular articles from this site:

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SEC Investigations of Hedge Fund Managers

admin | Monday, March 9th, 2009 | No Comments »

SEC Investigations

SEC Investigations of Hedge Funds

SEC Investigations of Hedge Funds SEC Investigations of Hedge Fund ManagersAlex Akesson just sent me a note about a change in SEC investigation procedures for the next few years. In the future the SEC will be taking a number of steps to prevent further cases of fraud within the investment industry. One of these steps will be verifying directly with investors that they are receiving the same marketing materials and monthly statements that are being shown to SEC officials during investigations. Here is an excerpt on this article by Alex:
___________________

At the MFA Legal, Compliance and Operations Seminar in New York last week, SEC staff described its examination and enforcement priorities for the foreseeable future with respect to hedge funds and investment advisers.

According to a letter obtained by HedgeCo, the SEC staff said that as part of their examination of hedge funds and investment advisers, the SEC intends to contact investors, verifying that the hedge fund/investment manager is providing the same statement information to both the client and SEC staff. source

Read about cases of hedge fund fraud and ponzi schemes as well as notes on hedge fund regulation and compliance here: Hedge Fund Regulation Corner.

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Hedge Fund Book Publishers

admin | Wednesday, March 4th, 2009 | No Comments »

Book Publishers

Hedge Fund Book Publishers

Hedge Fund Book PublishersI have received a contract from a major book publisher to write a book on hedge funds. I was wondering from those who work in the industry or those who have published books before in this space if you recommend any publishers or editors to work with?

Has anyone had a great or poor experience with a major publishing house or group that focuses on investment/hedge fund related publications? Please leave comments below or email me directly at Richard@HedgeFundGroup.org.

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Plenty of Good Apples : More Awareness Needed

admin | Tuesday, February 24th, 2009 | No Comments »

Plenty of Good Apples

More Alternative Investment Awareness

Hedge Fund Apples Plenty of Good Apples : More Awareness NeededI recently read a post on Hedge Lines about the alternative investment industry and how Portfolio.com has claimed that private equity firms add no value – only fees. Here are some quotes from that blog post:

“The entire spectrum of alternative asset management is under attack.”

“The problem is that no one is talking about the good apples in the alternatives arena. No one is making the case that hedge funds and private equity are valuable, even important, vehicles for institutions, like pension funds, that should reasonably expect to make money even when the market is down. This should be an easy argument to make, but no one is actively taking it on.”

The Hedge Fund Group (HFG) and HedgeFundBlogger.com are taking this on. Through this financial crisis we have been pointing out how hedge funds have outperformed the markets, how hundreds of new funds are being started right now, and we have also detailed how this diverse industry is as alive as ever.

What the industry needs is a more concerted effort to converse with the public, with government officials, with banks, and wealth management firms. There should be an easier channel for hedge fund manager communication directly with the public whether they are a potential investor or not.

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Tags: hedge fund, hedge funds, investment, investments, stock market, stock markets, hedge fund publicity, hedge fund awareness, hedge fund branding rules, investment branding rules and regulations

Top 20 HedgeFundBlogger.com Pages

admin | Sunday, February 22nd, 2009 | No Comments »

Top 20 Articles

Top 20 HedgeFundBlogger.com Pages

Here is a list of 25 of the most popular articles on HedgeFundBlogger.com based on pageviews over the last month:

  1. Top 100 Hedge Funds to Watch
  2. Hedge Fund Tracker Tool (Over 1,000 Hedge Funds)
  3. Hedge Fund Job Listings
  4. Letters to Hedge Fund Investors
  5. Hedge Fund Employment
  6. Hedge Fund Startup Tools
  7. Hedge Fund Strategy Guide
  8. Hedge Fund Websites
  9. Geographical Guide to Hedge Funds
  10. Hedge Fund Performance Articles
  11. Hedge Funds in New York
  12. Book Summary of Good to Great
  13. Top Banks in the US
  14. Renaissance Technologies Hedge Fund Profile
  15. Blue Ridge Capital Hedge Fund Profile
  16. Beta Formula – Finance Definition
  17. Hedge Fund Marketing Tools
  18. Hedge Fund Transparency Act
  19. Bernard Madoff Hedge Fund Fraud Case
  20. Table of Contents

Tags: hedge fund, hedge funds, private equity, hedge fund articles, hedge fund information, hedge fund news, news, investments, investment, alternative investments, alternative investment

Allen Stanford Fraud Case | SEC

admin | Wednesday, February 18th, 2009 | No Comments »

Sir Allen Stanford

Sir Allen Stanford Fraud Case | SEC

Below is a short video on Sir Allen Stanford who was just accused of fraud by the SEC. Below the video please see additional resource on this unfolding case.

Resource #1:

Resource #2: The Securities and Exchange Commission charged R. Allen Stanford with an $8 billion fraud centered around the sale of certificates of deposit, saying the flamboyant businessman hoodwinked investors by promising high and seemingly safe returns.

As the SEC charges were made public Tuesday morning, U.S. marshals and Federal Bureau of Investigation agents raided Stanford offices in Houston.

The SEC said that Stanford Investment Bank sought to lull investors into thinking their investments were safe, providing assurances that the bank invested the money in liquid financial instruments that were monitored by a team of more than 20 analysts. source

Resource #3: The England & Wales Cricket Board yesterday suspended relations with Sir Allen Stanford after he was charged with what United States investigators allege is a “massive, ongoing fraud.

A Dallas Federal court was asked to freeze Stanford’s assets and his company was put in the hand of receivers after the Securities and Exchange Commission took drastic action following days of intense speculation about his company as US Marshals raided Stanford’s office in Houston in the early hours of the morning Stateside.

“We are alleging a fraud of shocking magnitude that has spread its tentacles throughout the world,” said Rose Romero, director of the SEC’s Fort Worth office. source

Resource #4: We thought Bernie Madoff’s world record in Ponzi-scheming would be safe for a while, maybe for all of time. But now comes the news that the SEC is investigating one R. Allen Stanford, a billionaire who runs a money-management firm out of tropical, tax-free St. Croix. To his moneyed clients, Stanford offers certificates of deposit that offer “unusually high and consistent returns” (double the market average, according to Business Week). Hmmm, where have we heard that phrase before? Oh, also: The company overseeing the firm’s books is “a tiny accounting firm in Antigua” whose CEO recently died. Oh, dear. Stanford manages $51 billion, just nosing out the amount that Madoff had “under management.” source

Resource #5:

Resource #6:

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Sir Allen Stanford Fraud Case SEC Charges

admin | Wednesday, February 18th, 2009 | No Comments »

Sir Allen Stanford

Sir Allen Stanford Fraud Case | SEC

Below is a short video on Sir Allen Stanford who was just accused of fraud by the SEC. Below the video please see 5 additional resources on this unfolding case. If you are viewing this article via our daily hedge fund newsletter please click here to watch the embedded videos:

Resource #1:

Resource #2: The Securities and Exchange Commission charged R. Allen Stanford with an $8 billion fraud centered around the sale of certificates of deposit, saying the flamboyant businessman hoodwinked investors by promising high and seemingly safe returns.

As the SEC charges were made public Tuesday morning, U.S. marshals and Federal Bureau of Investigation agents raided Stanford offices in Houston.

The SEC said that Stanford Investment Bank sought to lull investors into thinking their investments were safe, providing assurances that the bank invested the money in liquid financial instruments that were monitored by a team of more than 20 analysts. source

Resource #3: The England & Wales Cricket Board yesterday suspended relations with Sir Allen Stanford after he was charged with what United States investigators allege is a “massive, ongoing fraud.

A Dallas Federal court was asked to freeze Stanford’s assets and his company was put in the hand of receivers after the Securities and Exchange Commission took drastic action following days of intense speculation about his company as US Marshals raided Stanford’s office in Houston in the early hours of the morning Stateside.

“We are alleging a fraud of shocking magnitude that has spread its tentacles throughout the world,” said Rose Romero, director of the SEC’s Fort Worth office. source

Resource #4: We thought Bernie Madoff’s world record in Ponzi-scheming would be safe for a while, maybe for all of time. But now comes the news that the SEC is investigating one R. Allen Stanford, a billionaire who runs a money-management firm out of tropical, tax-free St. Croix. To his moneyed clients, Stanford offers certificates of deposit that offer “unusually high and consistent returns” (double the market average, according to Business Week). Hmmm, where have we heard that phrase before? Oh, also: The company overseeing the firm’s books is “a tiny accounting firm in Antigua” whose CEO recently died. Oh, dear. Stanford manages $51 billion, just nosing out the amount that Madoff had “under management.” source

Resource #5:

Resource #6:

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Tags: Sir Allen Stanford, Stanford Fraud Case, SEC Charges Against Allen Stanford, Allen Stanford SEC Case News, Allen Stanford Ponzi Scheme, Ponzi Scheme, Bank Fraud, Banks, investments

Hedge Fund Industry & The Markets

admin | Sunday, February 15th, 2009 | No Comments »

Hedge Fund Trend

Hedge Fund Industry & The Markets

Hedge Fund Industry & The MarketsI just had a comment on a past blog post related to how the current markets have changed the current hedge fund strategies being offered right now.

Here was my response:

While many strategies have struggled in 2008 and 2009 global macro and shorting strategies have done well. I’ve also heard of many managers who are shifting their strategies to more short term vol trading instead of long term holding for obvious reasons. Managers who used to do 80% long term holding and 20% short term trading have now flipped those stats on their head. Lots of new commercial financing and distressed asset funds are coming out right now as well.

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Tags: hedge fund, hedge funds, private equity, investments, stock market, real estate, depression 2009, stock markets, investment, hedge fund trends, hedge fund strategy changes

Q & A Email Financial & Investment Blogs

admin | Tuesday, February 3rd, 2009 | No Comments »

Q & A Email

Q & A Email Exchange

Question: Richard, you have done a great job branding yourself online, I appreciate all of the advice contained within your articles. I am curious what you do besides run http://HedgeFundBlogger.com, do you consult full time?

Answer: Greg, thanks for the note. My background is in capital raising for hedge fund managers but in 2008 I quit that position to focus full time on run this website, work with hedge funds on their prime brokerage and capital raising needs in more of a consulting role and help launch and grow the CHA Designation. Most of my day-to-day work with hedge funds now consists of evaluating prime brokerage options, multi-prime brokerage models, capital raising methods and capital introduction opportunities.
The websites that I run or help run include:

http://CHADesignation.org
http://HedgeFundBlogger.com
http://FamilyOfficesGroup.com
http://PrivateEquityBlogger.com
http://HedgeFundsCareer.com
http://PrimeBrokerageGuide.com
http://HedgeFundGroup.org

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Hedge Fund Losses and Closures in 2008 2009

admin | Tuesday, January 27th, 2009 | 3 Comments »

Hedge Fund Losses

Hedge Fund Losses in 2008 2009

Here is a video below on hedge fund asset losses and closures. While there is a small set of institutional investors investing in a number of opportunistic hedge funds most are still loosing assets each quarter. Many firms were profitable just 2-3 years ago and now have less assets to manage and little if any performance fees to collect. If you are reading this article over email through our daily hedge fund newsletter please click here to watch the embedded video below.

View over 100 additional hedge fund videos within our Hedge Fund Video Library

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Hedge Funds Care | February 11th in New York City

admin | Thursday, January 22nd, 2009 | No Comments »

Hedge Funds Care

Hedge Funds Care Event in NYC

Hedge Funds Care | February 11th in New YorkNext week on Thursday January 29th the Hedge Fund Group (HFG) is having a networking event in Chicago on Wacker Drive. Read more about this event here. A few weeks later in New York the Hedge Funds Care organization is putting on an event as well. Here are the details on this event:

Only Grant Making Charity Exclusively Focused On the Prevention and Treatment of Child Abuse Plans Flagship Gala on February 11, 2009 at Cipriani 42nd Street

NEW YORK, January 21, 2008 – Hedge Funds Care, a global non-profit organization which raises funds and awareness within the hedge fund industry for programs that work to prevent and treat child abuse, announced today that it will hold its 11th Annual New York Open Your Heart to the Children Benefit on Wednesday, February 11th, 2009 at Cipriani 42nd Street (110 East 42nd Street, New York City). This year’s highly anticipated event will include an elaborate cocktail reception and the presentation of the Hedge Funds Care Award for Caring to Kenneth G. Tropin, the Founder of Graham Capital Management, for his organization’s kind and generous support over many years. The Co-chairs for the event are John M. Budzyna, President and Chairman of Hedge Funds Care, and Dean Backer, Managing Director, Goldman Sachs & Co.

Since the first benefit in 1998, Hedge Funds Care has distributed over $18 million in more than 500 grants in the United States and abroad. Currently the New York benefit, which raised almost $2.2 million in 2008, supports 44 grants to organizations that deal with child abuse and neglect in New York City, Westchester, Connecticut and New Jersey. Through the ongoing generosity and commitment of hedge fund industry professionals and investors, Hedge Funds Care looks forward to continuing to offer support to existing grantees while also expanding support to new programs.

“In the current economic downturn, child welfare agencies across the country are concerned about an increase in abuse and neglect cases, while government funding for these agencies is down,” stated John Budzyna, President and Chairman of Hedge Funds Care. “Our work at Hedge Funds Care is more vital than ever before, since we know historically that child abuse increases with rising unemployment. We urge hedge fund industry professionals to support the Open Your Heart to the Children Benefit by purchasing tickets, placing an ad in the program journal, underwriting portions of the event, or making a direct donation to Hedge Funds Care.”

“Each year, Hedge Fund Care provides grants to over 100 organizations worldwide that are working to alleviate child abuse through prevention, treatment, education, research, and advocacy,” stated Rob Davis, Founder and Chairman Emeritus of Hedge Funds Care. “Yet with 3.3 million reports of child abuse each year in the U.S., it remains critical that each of us connected to the industry, and concerned about children, do our part.”

The 11th Annual New York Open Your Heart to the Children Benefit is also an excellent opportunity to connect and build relationships with like-minded peers in the hedge fund community. Attendees will include hedge fund investors, service providers and senior professionals, including some of the most recognized and respected investment managers in the industry.

To learn more, please visit www.hedgefundscare.org

About Hedge Funds Care – Preventing and Treating Child Abuse:

The principal mission of Hedge Funds Care is to support efforts to prevent and treat child abuse. Hedge Funds Care is a charity raising funds and awareness within the hedge fund industry. Through its regional and international fundraising events, Hedge Funds Care generally grants the funds raised at each event within the local region to organizations selected and evaluated on the basis of their ability to address child abuse. Funds are raised through annual Open Your Heart to the Children Benefits and other events in Atlanta, Boston, Chicago and the Twin Cities, Denver, New York, San Francisco and Los Angeles, Cayman Islands, London, and Toronto and through personal donations. Money raised is distributed locally to community based nonprofit organizations that provide:

· PREVENTION services to at-risk children and families

· TREATMENT for children who have been physically or sexually abused and support services to non-offending family members

· EDUCATION to enhance awareness and understanding of abuse and neglect for children, parents, and professionals in the community

· RESEARCH on best practices in child welfare

· ADVOCACY to improve child welfare

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Conducting Due Diligence on Hedge Funds

admin | Monday, January 19th, 2009 | No Comments »

Due Diligence on Hedge Funds

Conducting Due Diligence on Hedge Funds

Conducting Due Diligence on Hedge Funds(HedgeFundBlogger.com) No set of rules can guarantee that you do not end up with a mini-Madoff at some point, but learning about best practices in the industry, working with institutional consultants, and working with a qualified wealth manager or family office can greatly reduce the chances. There is a small blog I sometimes read written private equity and hedge fund investors. Recently they have been discussing fraud in the industry and the rules they follow to avoid such groups. Below is part of an article released this weekend on what to do while looking at a hedge fund investment:
_____________________

1. Rule number 1, never invest in a manager solely on a referral without doing some basic homework NO MATTER HOW MUCH YOU TRUST OR RESPECT THE REFERRAL PERSON– the follow monthly should take less then an hour total and a monthly follow up less then 30 minutes per month.

2. Rule number 2, Meet your prospective manager at his office and get a complete review of his strategy – take reasonable notes and ask at least the following questions:

a. How do you make money? What makes your strategy special or different from other strategies? How much leverage do you use and how important is leverage to your strategy (remember leverage isn’t a bad thing if the exposure to the leverage as a function of time is small relative to the leverage)

b. Look at the office, how many employees are there, who is helping the manager, meet other important people involved in the fund and specifically ask how long they have known the manager and what there basic role is in the fund.

c. Who custody’s your hedge funds assets? What prime broker does he use? Who does the monthly return accounting? Will he give you a contact at the prime broker and authorize the prime broker and or monthly accountant to disclose basic information about the fund; specifically, the funds assets (ask this after you have asked the assets under management). Walk away if the manager does his own accounting internally or if he custody’s funds internally for no good reason (a real estate fund for example doesn’t use a prime broker, but they will use a bank to hold the funds – call the bank and investigate his reputation with that bank).

d. Ask the manager for personal references not from investors but from people he has previously worked at in other fund management capacities. Call these references and verify there roles match the roles described to you by the manager.

e. Ask your manager under what conditions he would expect to make money and under what conditions he would expect to lose it – do not accept that he can make money in all markets – no strategy does this – require a better answer.

f.Review the terms of the investment, what are the liquidity terms, is there a gate provision in the documents? What are the risks. Read the offering documents. If there is ANYTHING you are uncomfortable with, walk away.

3. If you do not understand the strategy in even a basic way, then get a third party to review it or simply walk away. read more…

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Hedge Fund Course | CHA Designation Program

admin | Thursday, January 15th, 2009 | 12 Comments »

Hedge Fund Course

Hedge Fund Course CHP Designation

 Hedge Fund Course | CHA Designation ProgramBelow is a short interview just conducted with popular private equity writer Theo O’Brien.

Theo: What is the Certified Hedge Fund Professional (CHP) program?

The CHP Designation program is an online hedge fund certification program sponsored by the Hedge Fund Group (HFG) starting in 2008.

The CHP Designation is a two part program. Level 1 helps participants gain a comprehensive base level of knowledge about the hedge fund industry. Level 2 allows participants to specialize within a niche area of the industry such as marketing and sales, due diligence or analytics.

Theo: What do graduates from the CHP program receive, as in what are the benefits from taking the program?

For a list of the benefits from completing the program please see this page: http://chadesignation.org/CHA-Designation-Benefits.html.

Our program also benefits hedge fund startups and sub $100M hedge fund managers. Here is how: http://chadesignation.org/How-To-Start-A-Hedge-Fund-Startup-Benefits.html

Theo: How is this program connected to the Hedge Fund Group (HFG) and who decides what goes on the exam?

The Hedge Fund Group (HFG) sponsors the CHP Designation and created it in 2008. There is a team of 5 professionals who have developed and maintain the designation and they are aided by an advisory board of approximately 55 professionals who work at hedge funds, fund of hedge funds and prime brokerage/auditing firms.

Theo: Where are classes held? New York? How much do they cost.

The CHP Designation is offered 100% online and tuition is $599 or $499 if you register within the first 24 hours of registration opening. The program and exam may be taken from anywhere in the world as long as the individual has a reliable internet connection. Last year we had participants from Hong Kong, UK, US, Canada, India and China.

Theo: So the CHP Designation program is really international and not based within the Manhattan or any one location for that matter.

Yes that is correct.

Theo: How well known is the program? Have mainstream media outlets interviewed your team?

To some extent we have been covered. We have not graced the cover of the WSJ or any large American newspaper but we have been picked up by the Financial Times, Alpha Magazine, Institutional Investor and Job Search Digest. Most of these stories were ran in interview form. The Financial Times was the most thorough, we spent over 4 hours speaking with them and that doesn’t count their inquiries to actual participants within the program as well.

Theo: Is there anything else you want to mention here before we end this interview?

We have much more information on our website: http://chadesignation.org/.

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Truth About Hedge Fund Performance 2008

admin | Monday, January 12th, 2009 | 1 Comment »

Hedge Fund Performance

Truth About Hedge Fund Performance

Truth About Hedge Fund Performance 2008(HedgeFundBlogger.com) Hedge funds have been hurt by their overall negative returns in 2008. The truth about hedge fund performance is that it still far outperforms the broader markets. With all of the recent bad press hedge funds have been receiving you would think they had lost twice as much as the S & P 500, the truth is they lost less than 20% while the S & P was down over 38% for 2008.

Counterparty risks, fraud and redemption notices are obviously the hot topics which are hurting the hedge fund industry just as much if not more than performance. Many in the industry hope and believe that many groups are sitting on cash, waiting to allocate and completing much more due diligence before investing back into the markets or hedge funds. Hopefully these issues mentioned above cease to break the front pages of the WSJ and fade away with the weak economy in 2009.

Here is a short snippet from a recent news story on hedge fund performance:

Although hedge funds finished up 2008 with some of the worst numbers to date, they showed some signs of promise in December. According to the latest research by the Hennessee Group LLC, a New York-based advisor to hedge fund investors, hedge funds advanced .51 percent in December.

Hedge funds finished up the year down 19.15 percent according to the research. Although it was a dismal year for funds as a whole, they still outperformed the S & P, which was down 38.5 percent on the year, the Dow Jones, who dropped almost 34 percent, and the NASDAQ Composite Index, which posted a 40 percent drop on the year. source

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