In another sign the economy has turned a corner, the number of new hedge funds launched is growing in size and volume, reports The Financial Times. Citing data from Chicago-based Hedge Fund Research, the article notes that new fund launches rose to 182 for the second quarter of 2009, up from 148 in the previous quarter. However, the sum total of all new assets raised by hedge funds in Europe still do not match the $2.5 billion raised by a single fund, Brevan Howard’s Strategy Fund, in 2008.
The pace of start-ups is an important measure of industry health, building on the uptick in performance and investor inflows that have also picked up this year.
In a related story, legendary hedge fund manager Julian Robertson, along with Emil Henry Jr., are planning to launch a private equity firm to invest in North American and European infrastructure.
As you may know, Robertson founded Tiger Management LLC in 1980 and turned it into one of the world’s largest hedge funds, until closing the fund in 2000. Emil Henry was previously global head of infrastructure at Lehman Brothers Holdings Inc. in New York.
Their new Tiger Infrastructure Partners LP will invest in energy, water and transportation, reports Bloomberg.
Institutional Investor News runs an award program identifying and honoring up-and-coming professionals in the hedge fund community, based on demonstrated achievement and their potential to evolve into leaders in the industry. Candidates are nominated by their managers, mentors and peers.
This year’s Rising Stars were honored at the magazine’s 7th Annual Hedge Fund Industry Awards Dinner this summer. You can check out the award winners’ profiles, and download a PDF of the Institutional Investor News Global Hedge Fund Leadership report, along with an exclusive interview with John Paulson, at their website.
Hedge fund managers use a wide variety of trading strategies with differing levels of risk and return. Overall, their primary goal is to generate positive returns regardless of market conditions.
There are dozens of hedge fund strategies and sub-strategies within those categories. Complicating matters is that there is no standardized system of classifying hedge funds that is widely accepted by industry members. However, there are clearly some hedge fund managers who take more of a geographical orientation to their investment strategies. Some may focus on a particular region of the world, such as North America, Europe, Asia or Africa. Others zero in even further and focus on specific countries such as China, Japan and India.
An approach that involves a heavy concentration of investments, usually stocks, within one single country or a few specific countries in a region is commonly referred to as a “country-specific” hedge fund strategy. HedgeFundIntelligence.com reveals the variety of approaches that can exist even within this narrow range of geographic targeting. For example:
AsiaHedge Indices
AsiaHedge Composite
Asia ex Japan – USD
Asia inc Japan – USD
Australian Long/Short Equity
Chinese Long/Short Equity
Indian Long/Short Equity
Japan Long/Short Equity
Japan Long/Short Equity
To name just a few. (Source: http://www.hedgefundintelligence.com/)
Someone with a hedge fund job as an equity hedge fund manager may even hedge against downturns in a particular country by shorting what he feels are overvalued stocks or indices in that country, while going long in the equities of another country which he feels are undervalued.
Emerging Markets
Emerging markets describes a hedge fund strategy that focuses on countries in the process of rapid growth and industrialization. There are currently 28 emerging markets in the world, with Brazil, Russia, India and China (nicknamed the BRIC countries) representing largest among them.
Next time, we’ll look at the size of emerging markets hedge funds and some of the strategies they employ.
