Thu, 20/03/2014 - 23:19
A Japan-focused multi-strategy hedge fund run by three former Goldman Sachs Group Inc managing directors returned 38 per cent in its first two months, according to two people with knowledge of the matter.
The Golvis Asia Opportunities Fund, which started trading on Jan. 6 with money from its founding partners and employees, began accepting capital from outside investors in February, they added, declining to be identified because the information is private. Ryan Collins, head of business development at Singapore-based Golvis Investment Pte, declined to comment.
The fund, run by a team of 12 employees led by Chief Investment Officer Koji Gotoda, outperformed the 6.7 per cent retreat by the benchmark Nikkei 225 (NKY) Stock Average between Jan. 6 and Feb. 28. Japan-focused hedge funds lost an average 1.2 per cent in the first two months, according to preliminary data from Eurekahedge Pte, amid a mixed global economic outlook and as the yen strengthened.
The Golvis fund gained 27 per cent in February, mostly from picking undervalued and overpriced stocks based on company fundamentals, the people said without elaborating. The relative-value strategy, which exploits valuation gaps of related securities, drove the fund’s 8.5 per cent return in January, allowing it to profit from market swings, they added.
Japan-focused hedge funds returned 27 per cent last year, the most since records began in 2000, benefiting from government stimulus that led to a weaker yen and a stock market rally, according to Singapore-based researcher Eurekahedge. The Japanese currency slid 18 per cent against the dollar last year, helping drive a 57 per cent rally in the Nikkei by making the country’s exports more competitive.
Hedge-fund investors ranked Japan the second-most attractive region in the year ahead, according to a Credit Suisse Group AG survey released earlier this week.
Developed Europe ranked at the top, it showed. About 34 per cent of the investors that control USD1.2 trillion of hedge-fund assets between them in the Credit Suisse survey said they will probably increase allocations to Japan in the year ahead, with 1 per cent saying they would reduce such assets.
Financial markets posted declines through mid-March, as geopolitical uncertainty associated with the Ukraine and the Crimean Peninsula increased, while weak economic data on Chinese growth also raised investor concerns. Global equity markets declined through mid-March, with declines across most regional and sector exposures led by Emerging Markets, with the Russian equity market falling over -16 per cent through mid-March.
Declines in European equities were led by declines in Germany, France, UK, Switzerland and the Netherlands, while Asian equity market declines were led by Hong Kong, Korea, Japan and China. US equities also posted declined through mid-March, with sector weakness led by Technology, Energy, Telecom and Healthcare, which were partially offset by sharp gain in Commodity sensitive equities.
HFRX Equity Hedge Index posted a decline of 0.39 per cent through mid-March with tactical short exposure mitigating volatility. HFRX Market Neutral Index declined 0.13 per cent, with gains across fundamental, trading oriented strategies offset by declines in factor-based models, as volatility increased and dispersion widened. HFRX Fundamental Value Index declined 0.32 per cent with positive contributions from exposures to Financials and Consumer sectors offset by declines in European small cap equities. HFRX Fundamental Growth Index posted a decline of 0.63 per cent with positive contributions from Global Healthcare offset by declines in Emerging Asian exposure.
HFRX Event Driven Index posted a decline of 0.35 per cent through mid-March, with positive contributions from Distressed/Restructuring managers offset by Equity Special Situations strategies. HFRX Distressed Index posted a gain of 0.14 per cent with contributions from restructurings across Technology, Industrials and Consumer sectors in the US. HFRX Merger Arbitrage Index posted a modest gain of 0.04 per cent, with mixed contributions from transactions in Suntory/Beam, Actavis/Forest Labs, CapitalSource/PacWest Bancorp, Sterling Financial/Umpqua Corp, Avago Technologies/LSI and Tower Financial/Old National Bancorp. HFRX Special Situations Index declined -0.53 per cent, with contributions from core positioning in American Realty, Hertz, Time Warner, Sensient Technologies, Apple Herbalife, eBay, Jos A. Bank, Ferro and American Airlines.
HFRX Macro Index posted a decline of 0.80 per cent through mid-March as EM volatility increased, Russian equities fell sharply and the Rubble collapsed on uncertainty over Ukraine. HFRX Macro: Systematic Diversified Index and HFRX Emerging Markets Index declined 1.39 per cent and 1.49 per cent, respectively, from losses in equities and currencies; while discretionary fixed income exposure had a partially offsetting gain.
HFRX Relative Value Arbitrage Index posted a decline of 0.46 per cent through mid-March with mixed contributions from Convertible Arbitrage offset by Multi-Strategy managers. HFRX Convertible Arbitrage Index declined -0.76 per cent as gains in volatility positions were offset by exposure to Asian and Japanese convertibles. HFRX Fixed Income Credit Index posted a narrow decline of 0.18 per cent while the HFRX MLP Index gained 1.76 per cent through mid-month on continued demand for yield generating energy infrastructure partnerships.
Preqin’s global survey of over 100 hedge fund managers in December 2013 showed that managers have frequently changed the service providers working on their funds, including fund administrators, prime brokers, custodians, auditors and law firms.
Almost half of respondents indicating they had switched service provider at least once since their fund’s inception. Fund administrators and prime brokers are the most frequently switched provider, and most commonly, dissatisfaction with the quality of service provided was the reason given by fund managers for changing their service provider.
“Our recent study of fund managers shows that many hedge funds change their service providers; 45 per cent of the respondents indicated they had switched service provider at least once since their fund’s inception," commented Amy Bensted, Head of Hedge Fund Products at Preqin. "Dissatisfaction with the quality of the service they receive is a common concern across all fund managers, and is a particular problem in emerging regions for hedge fund management, as the service provider sector may be less developed or has little local presence. There is certainly an opportunity for groups that can provide consistent, good service on a local level to appeal to this growing group of managers in Asia-Pacific and other regions outside North America and Europe.
For Europe-based managers it has been a challenging few years in terms of fundraising, and new regulations in the region have made it more costly to run hedge funds. As such, these managers are conscious of the need for service providers to provide good value for money. As their funds grow, North America-based fund managers tend to switch service providers to firms that are better able to cope with their scale. As a result, there is a clear opportunity for different types of service providers that can provide services to funds of different sizes, or are specialized in providing services for funds of a particular size.”
According to CNBC, a macro hedge fund launched by LSK & Partners, the firm chaired by controversial ex-International Monetary Fund (IMF) chief Dominique Strauss-Kahn, is aiming to raise USD2 billion.
The 64-year-old fell from grace when he was forced to resign from the IMF in 2011, after being embroiled in a series of sex scandal allegations relating to sexual assaults.
In 2011, a New York hotel maid Nafissatou Diallo, accused Strauss-Kahn of sexually assaulting her but charges were dropped after her credibility was questioned. In the same year, journalist Tristane Banon accused the former IMF head of raping her, but prosecutors dropped all charges again.
Strauss-Kahn could now face trial on "aggravated pimping" charges relating to an alleged prostitution ring at the Carlton hotel in Lille. He admitted his involvement in the sex parties but denied that he knew any of the women were prostitutes.
But last year, DSK - as he is commonly known – teamed up with a member of the French society of financial analysts Thierry Leyne, to form LSK & Partners, an investment banking firm based in Luxembourg.
Strauss-Kahn's latest venture, called the DSK Global Invest fund, will see him manage the fund with his daughter Vanessa Strauss-Kahn, an economics professor who will be head of the research unit. The pair, along with LSK & Partners' chief operating officer Mohamad Zeidan, are currently on a trip to China in an effort to drum up investment from institutional investors and wealthy individuals.
China has been an attractive place for hedge funds to seek capital due to the explosion of high net worth individuals there. The world's second-largest economy has 643,000 millionaires, according to Capgemini and RBC Wealth Management.
The Eurekahedge Asia Macro Hedge Fund Index, which tracks the performance of hedge fund managers who invest solely in Asia, returned 9 per cent last year, posting the largest annual gain in four years. This shows the appetite of investors in the region.
A macro hedge fund strategy focuses on major economic and political trends and invests on the basis of these. A macro hedge fund may bet on a variety of assets including stocks, bonds and commodities.
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