IVY Plus Blog » Risk Management

Merlin Publishes Roadmap to Running a Hedge Fund

admin — Thu, 24 Feb 2011 16:05:32 +0000

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Merlin securities has released a new guideline to running a hedge fund. Here is short synopsis, more at the jump.

In an industry where just ten to fifteen years ago the general belief was that hedge funds all had a lifecycle and were not constructed to be long-term businesses, there has been a definite shift in attitude. Managers and investors alike today (post financial crisis) value firms that are built to last longer than the market cycles of their strategies. Merlin Securities points out in a new white paper, "Whereas pre-crisis the top hedge funds were dedicated to performance alpha, post-crisis the top funds also seek enterprise alpha."

You can find more here, http://www.finalternatives.com/node/15597

******** IvyPlus March 8th Trusts, Estates and Alternatives Event –http://bit.ly/fu2VlG ******

Transparency and Liquidity Gain in Importance for Hedge Fund Managers

admin — Sat, 30 Jan 2010 16:15:55 +0000

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Greenwich Associates and SEI have published a white paper that reviews the growing importance of transparency, fee flexibility and liquidity in the Hedge Fund Marketplace.

"The survey revealed a continued commitment to hedge fund investing among institutions as nearly 80 percent of all survey respondents said they have no plans to change their hedge fund allocations in the next 12 months, while 15 percent expect to increase their allocations. What will change is their demand for transparency. Over 70 percent of respondents reported requesting more detailed information from managers than they did a year ago. While the type of information sought ranged from counterparty and leverage exposure data to sector and position-level detail, over 80 percent of the respondents reported a focus on funds� valuation methodologies. Investors also continue to exert influence on fee structures, as nearly one in five respondents reported negotiating fee arrangements different than the standard �2 and 20� for single-manager funds and �1 and 10� for funds of hedge funds over the last year."

More info here, http://bit.ly/9k9KTR

******** IvyPlus March 25th Fund Development and Capital Raising Event, http://bit.ly/atRVQJ *******

LTCM Founder Says Hedge Fund Firms Pose no Systemic Risk

admin — Thu, 25 Jun 2009 17:08:36 +0000

Hans Huffschmid head of GlobeOps has said that it is impossible for any single hedge fund to pose the type of systemic risk that LTCM did in 1998 or that led to the 2008 financial markets melt down. Though many Hedge Funds are significantly larger than LTCM now, none pose the risk that required a $3.5 billion bailout then. Reasons that limited risk are (1) the prevalence of Prime Brokers and their risk monitoring, (2) market regulation, (3)

At one point LTCM was leverageed 100 times. Average hedge fund leverage in London in 2008 was 1.15 times from 1.9 times in 2007. Huffschmid also commented that the roots of today’s crisis was in banks and housing capital markets, not the hedge fund industry. You can find more here, http://www.guardian.co.uk/business/feedarticle/8535671