About Financial Wealth

Japan to keep its share of production of Boeing's new 777X aircraft

2014-04-28T06:23:00.001-07:00

Credit: Reuters/Jim Young

Boeing Co (BA.N) has lined up Japanese companies, including Mitsubishi Heavy Industries (7011.T) and Kawasaki Heavy Industries (7012.T), to build one-fifth of its latest plane, the 777X, retaining Japan as its key Asian partner in commercial jetliners, two sources with knowledge of the plans said.
This would give the Japanese companies a share of the work on the new plane that is on par with the 21 percent of the 777 aircraft they have been making for two decades.
But because Boeing plans eventually to build more planes per month, there should be a greater volume of work for the Japanese suppliers, one of the sources said. Boeing's current production rate for the 777 is 8.3 a month.

A Boeing spokesman in Tokyo declined to confirm the information.
"Supply chain partnerships and production system decisions will be addressed at the appropriate time," the spokesman said.
Boeing, and to a lesser extent Airbus (AIR.PA), its European rival, assemble jetliners from parts made across the world. The arrival of new models or major variants of earlier ones - like the 350-406-seat 777X - gives suppliers a chance to compete.

For Mitsubishi Heavy, Kawasaki Heavy, Fuji Heavy Industries (7270.T) and other Japanese suppliers, the high watermark for Boeing work so far is the 787 Dreamliner, with 35 percent of the carbon composite jet, including wings, built in Japanese plants.
Delays in the 787 development and delivery, due in part to difficulties of managing a global supply chain, prompted Boeing to keep more of the 777X, including the wings, at home.
The prospect of higher output of the 777X, which competes mainly with Airbus's A350 and is a key source of cash and profits for the U.S. planemaker, first emerged when Boeing was wrestling with major production decisions last year. The company has not addressed in public how fast it would produce the jets.

Mitsubishi Heavy, according to sources who spoke to Reuters last year, made a bid to win the wing business when workers in the United States at first rejected a labor deal that would have secured the build in Washington State.

That proposal called for producing wings at a rate starting at 7 a month and rising to 10 a month, in what was seen as an indication of Boeing's own thinking on potential output since Mitsubishi was bidding as a core member of its production team.

BOEING'S IMPORTANCE
Japan's government sees the Boeing partnership as critical to rebuilding an aerospace industry that the U.S. dismantled after World War II.
Beginning with panels for the 747 jumbo, Japanese firms secured their ties to Boeing in the 1980s with a 16 percent share of the 767. That deepened further with their involvement in the 777 a decade later.

Boeing reckons that the business it gives Japan employs 22,000 engineers, accounting for around 40 percent of the country's aerospace workforce.
For Boeing, building in Japan helped to secure sales in what was once Asia's biggest aviation market, where it still dominates with an 80 percent share.

But a decision by Japan Airlines Co Ltd (9201.T) last year to order 31 A350 aircraft from Europe's Airbus (AIR.PA) instead of the 777X prompted angst in Tokyo that Boeing would look for suppliers elsewhere, particularly in China which is now the biggest market in the region for passenger aircraft.
JAL's rival ANA Holdings Inc (9202.T) helped to alleviate those worries last month when, as part of a 70 plane order, it bought a score of 777X jets as well as six 777s and 14 of the 787s.

source : reuters

Strong euro is a powerful deflationary factor: ECB's Noyer

2014-04-28T06:15:00.006-07:00

Bank of France Governor Christian Noyer attends a news conference at Bercy Finance Ministry in

Credit: Reuters/Charles Platiau

The euro's current strength is a powerful deflationary factor and low inflation is likely to persist in the euro zone for some time, European Central Bank policymaker Christian Noyer said on Monday.

Spare capacity and deleveraging by companies and governments have created a low inflation environment that is likely to persist for an extended period, Noyer, who is also governor of the Bank of France, said in an annual letter to the French president.

Though he did not see an imminent threat of a downward spiral in prices, or deflation, Noyer said the euro's strength added to the problem of uncomfortably low inflation.
"Given the weight of imports in the euro area's GDP, such an exchange rate development is a powerful deflationary factor," he said.

"An increase in the exchange rate is equivalent to an unintended and unwanted tightening of monetary policy."

At about $1.38 currently, the euro's strength drives import prices lower and weighs on overall inflation, which on a 12-month basis fell to only 0.5 percent in March, far below the European Central Bank's target of less than but close to 2.0 percent.
Noyer's view of the strong euro echoed recent comments by ECB President Mario Draghi, who has identified the strong euro as a potential trigger for policy action.

Draghi reiterated that stance last week when he said the central bank could print money to buy assets if the inflation outlook deteriorated.
(Reporting by Leigh Thomas; Editing by John Stonestreet)

source : router

Russia-West tensions weigh on stocks, buoy oil prices

2014-04-28T06:01:00.002-07:00

Credit: Reuters/Eddie Keogh

(Reuters) - World stocks steadied above 10-day lows on Monday, with investors holding back from making aggressive bets as tensions between Russia and the West over Ukraine showed no sign of easing.

MSCI's world equity index .MIWD00000PUS was flat after falling 0.7 percent on Friday.
Markets, especially in Asia, had earlier been hit by signals that Chinese authorities are unlikely to support the economy with more stimulus, but European stocks drew support from merger moves and upbeat results in the pharmaceutical sector.

The tensions over Ukraine boosted Brent oil prices above $110 a barrel, near a seven-week high, and prompted some investors to seek safety in assets such as the yen, which was close to one-week highs against the dollar.

U.S. President Barack Obama announced new sanctions against some Russians on Monday to stop President Vladimir Putin from fomenting the rebellion in eastern Ukraine.
Obama said he was holding broader measures against Russia's economy "in reserve". The European Union is expected to add targets to its Russia sanctions list later.

Pro-Moscow rebels have seized public buildings in Ukraine's east and are holding several international monitors hostage in the city of Slavyansk.
"Events in the Ukraine are expected once again to take center stage this week," said Markus Huber, senior analyst at Peregrine & Black.

"Traders will closely watch today how negotiations continue to proceed concerning the release of the captured Western observers and the new sanctions."
European stocks .FTEU3 rose 0.4 percent, thanks to a 15 percent jump in AstraZeneca (AZN.L) after U.S. drugmaker Pfizer (PFE.N) said it wanted to buy its smaller British rival in a deal potentially worth more than $100 billion.

Shares in Bayer (BAYGn.DE) jumped 4.7 percent after posting forecast-beating quarterly results.
"Thanks to central banks' massive (provision of) liquidity, a lot of companies are now looking for takeover targets across the board, which is very positive for the market," said Lionel Jardin, head of institutional sales at Assya Capital in Paris.
Expectations of merger-related inflows also helped sterling to a new 4-1/2 year high.

OIL GETS BOOST
Emerging stocks .MSCIEF slumped to a one-month low, led lower by Shanghai and Moscow.
Investor sentiment towards China took a hit after state media reported President Xi Jinping as saying current fiscal and monetary policies would basically remain unchanged following a Politburo meeting on Friday.

Russian stocks fell more than 1 percent before recovering, while the cost of insuring Russian debt against default hit its highest since November 2011 as concerns grew that new U.S. sanctions would hurt the already flagging economy.
"With the Russia-Ukraine crisis rumbling on, affecting financial markets in both emerging and developed economies, investors are apt to ask for how long it will continue," SEB analyst Per Hammarlund said.

"If (Putin) continues to pursue this tactic (of supporting rebels from outside) the implications are that the process will be drawn out for global markets."
The dollar pulled back against a basket of six major currencies .DXY, touching a two-week low ahead of a meeting of the Federal Reserve which is expected to see the central bank cut another $10 billion from its monthly bond-buying plan.

The euro rose to two-week highs against the dollar before mid-week data that is expected to show inflation ticking higher, easing pressure on the European Central Bank to loosen monetary conditions in the near term.

On bond markets, Slovenian 10-year bond yields jumped 22 basis points to 3.91 percent after Prime Minister Alenka Bratusek lost a vote for the leadership of her center-left party, Positive Slovenia.
German Bund futures fell 10 ticks.
source: reuters

Pfizer preparing £60bn bid for AstraZeneca

2014-04-28T05:52:00.004-07:00

World's biggest drug group considering a cash and shares offer at a 'significant premium' to AstraZeneca's share price

Pfizer has confirmed details of a multi-billion pound takeover approach for UK company AstraZeneca. Photograph: Dan Kitwood/PA

Pfizer has set the stage for a battle to buy Britain's AstraZeneca after the US drugs giant said it was willing to pay almost £60bn to secure the biggest foreign takeover of a UK company.
The news sent AstraZeneca's shares soaring by 15%, to £46.91, adding almost £8bn to the company's market value.

In a statement to the stock exchange, the world's biggest drug group said it had approached AstraZeneca twice this year about a takeover but had been rejected both times.
Pfizer made its first approach in January and indicated it was willing to pay £46.61 a share in cash and shares, valuing the AstraZeneca at £58.8bn. The companies discussed a potential deal but AstraZeneca broke off talks on 14 January.

The US company contacted AstraZeneca again on Saturday about reopening talks but the UK company rejected the approach.
Pfizer, best known for producing Viagra, said it was considering its options and that it was considering a cash and shares offer at a "significant premium" to AstraZeneca's share price. Under takeover rules it has until 26 May to make a firm offer unless an extension is granted.
Pfizer said an offer for AstraZeneca would give the UK group's shareholders a payout worth much more than the "undisturbed" share price on 17 April, before bid speculation started. The shares closed that day at £37.83 but after Pfizer's announcement jumped to £47.07 – above Pfizer's earlier mooted offer and valuing AstraZeneca at £59.5bn.

Under Pfizer's plan, the combined company would be incorporated in the UK with shares listed in New York and management in the Britain and the US. The arrangement would mean Pfizer would not pay US tax on its non-US earnings.

Ian Read, Pfizer's chief executive, said: "We have great respect for AstraZeneca and its proud heritage as an innovation-driven biopharmaceutical business with a rich science-based foundation in both the United Kingdom and Sweden. In addition, the United Kingdom has created attractive incentives for companies to manufacture products and maintain and protect intellectual property, and we have seen that capital and jobs have followed these types of incentives."

Speculation about a possible bid from Pfizer has sent AstraZeneca's shares up since Easter. The UK company's chief executive, Pascal Soriot, said last week a takeover at a standard premium would undervalue the company and the progress it was making in developing new products, for example cancer drugs.

Pfizer is said to be keen to put to use some of its £40bn cash pile obtained from its foreign subsidiaries, which would trigger big tax bills if it was repatriated to the US to be paid in dividends.
A takeover of AstraZeneca would be by far the biggest foreign acquisition of a UK company, dwarfing Kraft's £12bn buy-up of Cadbury in 2010 and Telefonica of Spain's £17bn takeover of O2 in 2005.

A deal would raise concerns about job losses among AstraZeneca's 50,000 workforce worldwide.
Pfizer recently closed its main UK research and development centre at Sandwich in Kent with the loss of 2,400 jobs. The closure was a blow to the local economy and the government's plans to increase high-skill jobs.

AstraZeneca said it was examining Pfizer's statement and had no immediate comment.

source: guardian

Japan Pensions Hedge Funds

2011-07-14T22:03:00.000-07:00

Japan Pensions Hedge Funds

Japan Pensions Looking to Triple Allocations to Hedge Funds

Japan pension funds are increasingly looking to invest with hedge funds, according to Credit Suisse. Japanese corporate pension funds hold roughly $760 billion and are reportedly looking to triple their allocations to hedge funds. Over the next couple years, Japan's pension funds may boost their allocations to hedge funds to more than 10% compared to the typical 2-3% held in alternative investments.

Typically, 2 to 5 percent of pension fund assets are in alternative investments including hedge funds, private equity and real estate, and this may grow to about 10 to 15 percent over the next two years, said Benjamin Happ, Hong Kong-based Asia-Pacific head of capital services in Credit Suisse’s prime services division.

“What’s interesting to us right now is how important the institutional investors in Japan are for hedge funds,” said Happ in an interview in Tokyo, where the bank held a conference for Japanese institutions and global hedge-fund managers. “The investor-base in Japan today is the largest and most important group of hedge funds investors in all of Asia and we prioritize it accordingly.”

Credit Suisse, Switzerland’s second-largest bank, has been running a capital introduction business in Japan for over seven years where they help hedge funds set up offices and introduce them to potential investors. Source

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BSkyB Hedge Funds

2011-07-13T13:30:00.000-07:00

BSkyB Hedge Funds

Hedge Funds Burned by News Corp. BSkyB Bid Collapse

Hedge funds are reportedly losing big off news of the abandoned bid by News Corporation to purchase BSkyB. Many hedge funds seem to have taken heavy losses because they viewed the company as such a prime target for an acquisition and now that the bid has fallen through they have taken the hit.

Hedge funds have suffered one of their worst setbacks in years, losing tens of millions of pounds by betting that Rupert Murdoch's News Corporation was on the verge of taking full control of BSkyB.

Short-term speculators expected to make a killing by investing in a company viewed as a prime bid target, but instead have seen shares in the satellite television company plunge.

One trader said: "It's a bloodbath out there. The hedgies have dumped their holdings and some of them will be nursing big losses."

With News Corp bowing to political pressure by abandoning its plan to take full control of BSkyB, more selling is possible in the days ahead. Brokers estimate another 100m BSkyB shares are in the hands of "arbs", funds that specialise in opportunities presented by mergers and acquisitions. Source

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SEC Fletcher Fund

2011-07-12T21:51:00.000-07:00

SEC Fletcher Fund

SEC, Pensions to Investigate Fletcher Asset Management

The Securities and Exchange Commission has opened up an inquiry into another New York hedge fund. The SEC is looking into Alphonse Fletcher Jr.'s Fletcher Asset Management. The investigation comes as three Louisiana pension funds launched their own inquiries into the Fletcher fund after the hedge fund denied requests to withdraw money earlier this year.

News of the S.E.C. inquiry comes as three Louisiana public pension systems publicly raised questions about a Fletcher fund. The three pension systems said on Tuesday that they were hiring a team of experts to closely examine the Fletcher fund’s financial records after it was unable to meet their requests to withdraw money from the fund earlier this year.

Mr. Fletcher, 45, already drew headlines in February when he sued the Dakota apartment building on the West Side of Manhattan, accusing it and several of its board members of racial discrimination for denying his application to buy an apartment adjacent to his.

The Dakota is fighting the lawsuit and said that it rejected Mr. Fletcher’s application because it had serious concerns about his financial resources and suggested that his investment firm “may be seriously troubled.” Source

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Hedge Fund Startup Services

2011-07-11T14:54:00.000-07:00

Hedge Fund Startup Services

Guide to Reviewing Hedge Fund Startup Services

I recently contributed an article to Investopedia titled, "A Guide to Hedge Fund Startup Services." This guide is based on my experience working with hedge fund startups and provides you with practical tips for reviewing hedge fund startup services.

I cover several important areas for hedge fund startups including: constructing a board of advisors, fund formation services, third party marketers, compliance and regulation advisory, prime brokerage services, fund administration services, annual fund auditing services, training and certifications, and, finally, associations and networking groups. If you would like to read more about how to start a hedge fund please visit StartAHedgeFundNow.com to get your copy of my e-book.

Within this short article we are going to quickly review some options, service providers and processes you can follow while starting up your hedge fund so you will have a better feel for what options are available to you.

Board of Advisors Construction

The common dilemma in the hedge fund industry is that everyone wants you to have a team with deep expertise and experience, often referred to as a high level of "pedigree." The problem is that if you need that great team to raise capital, how are you ever suppose to build that team when you are starting at ground zero with say $2 million in capital or even $200,000 or less in capital? One solution is to build a killer board of advisors.

Your board could include investors in your fund, peers in the industry, friends, or those which you pay hourly or compensate in some other way to act as part of your advisory board. Your board could include investors in your fund, peers in the industry, friends, or those which you pay hourly or compensate in some other way to act as part of your advisory board. While many picky investors will quickly point out that a three-man hedge fund business with a 10-person advisory board is not an institutional quality operation, this is your quickest way of getting great consistent advice for building your hedge fund business without hiring 15 people to your team in your first few years. Read more here.

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Connecticut Hedge Funds Tax

2011-07-10T22:36:00.000-07:00

Connecticut Hedge Funds Tax

Hedge Funds Warn They Could Leave State if Taxes Rise

Hedge funds are battling with the Connecticut government over taxes and they have a simple threat: if you raise taxes on us, we will leave the state. There are a high number of hedge funds with offices in the state, and one reason for this is that they enjoy lower taxes than in neighboring New York state.

As you might recall, last year, former Connecticut Governor Jodi Rell tried to woo hedge funds to move to Connecticut in order to avoid a proposed $50 million tax on some hedge fund managers. Now, hedge funds are threatening to leave the Nutmeg State if taxes go up for hedge funds.

As Gov. Dannel P. Malloy reaches out to hedge funds as part of a campaign to boost Connecticut jobs, the industry has a blunt message: We are a lucrative part of the state's economy and we can move if taxes rise too high.

Connecticut's southwestern "Gold Coast" has one of the world's largest concentrations of hedge funds, private partnerships that typically are open to a limited number of investors and require a large initial minimum investment. Connecticut is home to about 200 hedge funds.

Malloy is planning a meeting with industry representatives in recognition of their importance to the business sector in lower Fairfield County, spokeswoman Colleen Flanagan said Friday. She said the governor is reaching out to a range of businesses to see what government can do to help boost job creation. Source

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Hedge Funds Cut Bets

2011-07-07T21:57:00.000-07:00

Hedge Funds Cut Bets

Hedge Funds Cutting Bets After a Tumultuous June

Hedge funds have slashed bets after a very rough trading month in June. Many managers suffered stiff losses last month largely because the market has been so shaky from the high price of oil and especially the Greek debt crisis. Now, it appears that many hedge funds are backing off somewhat risky bets until the market settles down, and with the American economy depending on a debt deal that would prevent default if passed before the beginning of August it's uncertain that July will be any calmer than June.

Hedge funds found few bets -- calling market direction or trying to buy cheap stocks and go short on expensive ones -- worked in a month dominated by worries over Greece's attempts to push through austerity measures needed to secure a bailout.

"It's not been a good month," said one prime broker who asked not to be named. "Some strategies that were a bit crowded -- long commodities, long gold, short dollar -- didn't perform well."

Hedge funds lost 1.6 percent in June, according to Hedge Fund Research's HFRX index, lagging the FTSE 100's 0.7 percent fall.

After losses of 1.2 percent in May, according to the broader HFRI index, it takes losses this year to 2.1 percent, with big names such as Paulson and Moore Capital in negative territory. Source

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Exclusive Hedge Fund Training Program Opens Today to 200 Additional Participants

2011-07-06T21:12:00.000-07:00

CHP Program Opens to 200 Additional Participants

Today our hedge fund training and certification program is opening for Fall 2011 registration and during this training session we are opening up space for 200 new participants in the program.

The name of the program is the Certified Hedge Fund Professional (CHP), and it is a two-part training program that can be completed online from anywhere in the world.

Register Now: If you already know that you would like to register you may do so starting at 2PM EST today Thursday, July 7th, 2011: http://hedgefundcertification.com/Enrollment.html

Here are some links where you can learn exactly how the program works, how much tuition costs, how long it takes to complete, and how to join today while space is still available:

Learn why over 1,000 others have joined the program by reviewing our list of the Top 10 Benefits of completing the CHP designation program.
Get the full overview of the CHP program, understand how this two-level program works and how you can customize your training experience to make it as valuable as possible for your own business or career goals in the hedge fund industry.
Read over 220 testimonials and quotes from current and past CHP program members, including many who are traders, analysts, and principals at leading hedge funds.
Learn more about our hedge fund career coaching and resume feedback service. We provide this for free to all CHP designation and alumni to help them get the most out of their hedge fund training.
Read about our hedge fund internship program that is offered to program participants to help them get their foot in the door in this competitive industry.
Looking to start a hedge fund or improve your credibility as you grow your emerging hedge fund business? We have dozens of hedge fund startups and traders who are about to launch that join our program every year. Check out this page on hedge fund startup benefits and the CHP designation for more information on this.
Looking at hedge fund job listings and required qualifications? Our team does not offer recruiting services but we do offer a full line of hedge fund job placement services, these are free to all CHP designation members.

Register Now: If you would like to reserve one of the limited 200 spots in the program for yourself or your team please register here starting today Thursday July 7th, 2011 at 2PM EST: http://HedgeFundCertification.com/Enrollment.html

If you have any questions about the CHP program please reach out to our team via the Click to Chat button on HedgeFundCertification.com, or by emailing us at Team@HedgeFundCertification.com or calling (212) 729-5067 during West Coast business hours.

Take care, and I hope to see you in the CHP program shortly!

Richard Wilson
Founder & CEO
Hedge Fund Group (HFG)
http://HedgeFundCertification.com

The #1 hedge fund training and certification program, offering more video modules, hedge fund job placement service, and career coaching than anyone else.

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Tags: hedge fund job training, hedge fund career training, training for a hedge fund career, CHP designation training overview, review of the CHP designation parts, Level 1 and Level 2 of the CHP designation

How can I earn the Certified Hedge Fund Professional (CHP) Designation?

2011-07-05T20:03:00.000-07:00

Certified Hedge Fund Professional (CHP)

Tomorrow, on Thursday July 7th, 2011, the Certified Hedge Fund Professional (CHP) program will open again to 200 new participants.

We always get flooded with questions about the process you have to follow in order to earn the CHP designation, so here is an overview of how the program works:

First, you must register for the program. It costs $975 for both CHP Level 1 and Level 2 if you pay for them both together. The option is to pay for them at separate times which results in the cost being $775 for CHP Level 1 and $675 for CHP Level 2. As you can see, you save around $500 by registering for both levels at once so that is what more than 90% of our participants choose.
After registering you will automatically be emailed a receipt for your tuition payment that you can use for tax evidence, employer reimbursement, or just your own record keeping.
Our team will then contact you with a welcome email within one business day, and we will send you a welcome folder in the mail within 10-14 days of your registration, depending on what country you are based in.
The rest of the hedge fund training program is self-paced and 100% online. You may study 2 hours a week or 20 hours a week, using our study guide, the recommended readings, our practice test, and our exclusive hedge fund video training platform.
The examination is offered twice a year on June 15th and December 1st so you just need to let us know when you are going to take your examination and we will adjust the roster to reflect that testing date for you. You must score an 80% or higher on this multiple choice and essay test which is offered online through a secure testing website used by hundreds of colleges and universities for online examinations.
After you complete CHP Level 1 & Level 2 we will send you a certificate in the mail for free to wherever you are based in the world. Over 50% of our participants are from outside of the United States with a growing number in Asia, Africa, and the Middle East.

Over 1,200 professionals have joined this hedge fund training and certification program to date. The full history of the program as well as the program details are available on our website at HedgeFundCertification.com.

p.s. I hope you do at least check out HedgeFundCertification.com, if you have been watching us grow over the years you will note that every time we open for registration we have added new video modules, more study aides, a better study guide, or additional hedge fund job placement services. We will not stop improving the program and we appreciate all of the feedback that we have gotten to date from the community.

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Hedge Fund Pension Funds Video

2011-07-05T10:18:00.000-07:00

Hedge Fund Pension Funds Video

McCabe: Pensions Increasingly Allocating to Hedge Funds

Pension funds are flocking to hedge funds to improve upon meager gains in other investments and to make up for past losses. Carrie McCabe, founder and chief executive officer of Lasair Capital LLC, talks about this trend in this video from the Washington Post. She also says that hedge funds have had a big hand in the uptick in mergers and acquisitions and initial public offerings. If you are reading this via e-mail or RSS, please click here.

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Free 90 Minute Hedge Fund Career Webinar

2011-07-05T07:57:00.000-07:00

Free 90 Minute Hedge Fund Career Webinar

I recently recorded a 90 minute webinar on hedge fund career strategies for a group of professionals looking to possibly join the Certified Hedge Fund Professional (CHP) program and we have now released this webinar to the public making it free to watch here on our website: http://hedgefundcertification.com/Free-Webinar.html

This webinar will provide you with strategies on how to make more money in the industry, examples of how I and others got into the industry, how much money you can expect to make while working in the alternative investment space, and the formula that I have used to succeed in this industry.

By the way, I just finished up a trip to Europe (picture to the left was taken in Monaco) where I was speaking at a hedge fund conference, and while I was there I recorded 10 more video modules for the CHP Designation program. If you are a member of HedgeFundPremium, then you can login and check them out as they get posted this week.

I hope you get a ton of value out of this free webinar, take care.

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Hedge Fund Seeding Funds

2011-07-04T21:51:00.000-07:00

Hedge Fund Seeding Funds

Tough Competition for Hedge Fund Seeding Funds' Capital

Hedge fund startups are in heated competition for the select group of hedge fund seeding funds. Hedge fund seeding funds provide the capital needed to launch a hedge fund and there are a high number of traders and managers looking to open their own hedge fund. DealBook has a great story on hedge fund seeding funds and how would-be start-ups compete for the startup capital.

He oversees a seeding fund at PineBridge Investments, which means he provides cash for hedge fund start-ups whose managers harbor dreams of becoming the next Steven A. Cohen or John A. Paulson.

While seeding funds have been around for the better part of two decades, they are staging a recovery as more prospective fund managers spill into the market but struggle to attract investors.

Executives at seeding funds say it has never been easier to find talented hedge fund managers eager for cash.

“This is probably the best environment I’ve seen since I started in the business back in 1988,” said Mark Jurish of Larch Lane Advisors, which is PineBridge’s seeding partner.
DESCRIPTIONChester Higgins Jr./The New York Times Robert T. Discolo, right, of PineBridge Investments, with Mark Jurish of Larch Lane Advisors. Together, the two firms are now creating a $1 billion seeding vehicle.

The hard part, however, is finding great investment strategies and backing funds that will not wilt and die. Source

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The #1 Highest Rated Book on Investing: "The Hedge Fund Book: A Training Manual for Professionals Capital Raising Executives"

2011-07-01T05:40:00.000-07:00

The #1 Rated Book on Investing!

Just getting back in the office here from a trip to Europe where I served as opening day chairman for the GAIM International 2011 conference and spoke on the topic of "$100,000 Hedge Fund Marketing Mistakes"

The GAIM conference was held in Monaco where many family offices are based, the F1 race is held, and where cabbies drive around $100,000 Mercedes AMG coupes (picture on the left was taken in a cab on my way to the conference)

The conference was great, I met several CHP designation participants, family offices, and $1B+ hedge fund managers. It was fun to be able to meet and welcome to the stage Nassim Nicholas Taleb who wrote "The Black Swan."

The #1 Investing Book Rating Title: While traveling Wiley contacted me yesterday to congratulate me on the success of the sales of my hardcover book that I wrote last year on capital raising and hedge fund management. While checking on my sales data in the Kindle Store for the book I saw that it is now the #1 Most Highly Rated Investing Book on Amazon.com.

Thank you for your support in reading my blog and book! I feel very fortunate and grateful for all of your support and comments over the past few years. If you have purchased my book please look for the coupon section at the back of the book, this is how you can save money if you are looking at attending our live workshops or using our capital raising resources or training videos.

Kindle Release: For you iPad addicts, my book is now available in Kindle edition as well as hardcover and it can be picked up here:

Kindle Edition: http://www.amazon.com/gp/product/0470520639/ref=olp_product_details?ie=UTF8&me=&seller=
Hardcover: http://www.amazon.com/gp/product/0470520639/ref=olp_product_details?ie=UTF8&me=&seller=

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Libyan Investment Authority

2011-06-30T22:57:00.000-07:00

Libyan Investment Authority

Libyan Investment Authority Sought to Trim Hedge Funds

The Libyan Investment Authority, the sovereign wealth fund for the country that is currently in civil war and under frequent NATO airstrikes, has cut its hedge fund holdings. According to a document disseminated by a human rights group, the $64 billion sovereign wealth fund sought to reduce its hedge fund holdings after weak returns and high fees. The Libyan Investment Authority had invested $4.5 billion in alternative investments but has since cut that number after a number of bets did not pan out.

The Libyan Investment Authority, or LIA, invested $4.5 billion in so-called alternative assets, according to an LIA “Management Information Report” dated Sept. 30. KPMG LLP, which was advising the fund, recommended reducing the holdings by $2.4 billion amid high fees and sluggish performance, the document shows.

The world’s 11th-biggest sovereign wealth fund turned to financial firms from Goldman Sachs Group Inc. (GS), the fifth-biggest U.S. bank by assets, to HSBC Holdings Plc, Europe’s largest bank, to achieve its goal of 8 percent annual returns. The bets didn’t always work out, raising concern among the fund’s managers that capital would be eroded, the LIA document shows.

“By liquidating the funds we can guarantee capital preservation and ensure reduction in expenses,” the 42-page document said.

Libya established the investment authority to find outlets for its rapidly growing oil wealth. The fund never disclosed detailed information about its holdings or returns. Source

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President Obama Hedge Funds

2011-06-29T22:15:00.000-07:00

President Obama Hedge Funds

Obama Looks to End Tax Breaks for Hedge Fund Managers

President Obama has again called for Congress to close the tax loophole that allows carried interest to be taxed at a lower rate than ordinary income. This is a sensitive issue for hedge funds and private equity managers who are compensated largely by carried interest and have benefited from the preferential tax treatment.

In yesterday's press conference, the President referred specifically ending tax breaks for hedge fund managers as one of the ways to raise revenue as part of the government's efforts to reduce the federal deficit and avoid a government shutdown by August 2, the date that Treasury Secretary Timothy Geithner has said that the government will default on its debt. Hedge fund managers were not the only targets of the President's speech, he also spoke of corporate jet owners (which, admittedly, could be hedge fund managers) and CEOs.

During a press conference lasting more than an hour, the president blasted congressional Republicans for refusing to compromise on revenue-generating measures to offset deep spending cuts. "Everybody else has been willing to move off their maximalist position," the president said. "They need to do the same."

Democrats, who agreed to as much as $2 trillion in spending cuts during negotiations that were broken off last week by Republicans, are calling for an end to several tax breaks and loopholes. One, the so-called carried-interest loophole, allows hedge and private equity fund managers to pay the much lower capital gains rate on the performance fees they earn.

Obama and congressional Democrats have tabled an end to that loophole, which could more than double the amount of taxes hedge fund managers pay, as well as an end to or reduction in tax breaks on oil and gas companies and corporate jets.

"You'll still be able to ride on your corporate jet," Obama said in one of six mentions of the issue. "You'll just have to pay a little more."

The president added that CEOs and hedge fund managers are paying the lowest tax rates in almost 60 years. Source

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Houston Municipal Employees Pension System Hedge Fund

2011-06-29T02:43:00.000-07:00

Houston Municipal Employees Pension

Houston Municipal Employees to Add More Hedge Funds

The Houston Municipal Employees Pension System has a plan in the works to allocate a lot of capital toward hedge funds. The public pension fund has $2.1 billion and has allocated $31 million to four hedge funds and is looking to allocate as much as $80 million to up to 15 hedge funds.

The Houston Municipal Employees Pension System is well on its way towards making its new hedge fund allocation plan a reality.

The $2.1 billion public pension fund has allocated $31 million to the four hedge funds making up the first "tranche" of its "absolute return implementation plan," approved last year. Now, Houston has begun talks about the second tranche of the three-part plan, which could add 15 hedge fund managers and spend $80 million this year.

The first four hires, made earlier this year, are Anchorage Advisors, Davidson Kempner Capital Management, Oz Management and Paulson & Co., HFMWeek reports.

The pension is focusing on single-manager hedge funds, although Houston told HFM last year that it may hire some non-hedge fund multi-strategy managers.Source

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Managed Funds Association Lobbying

2011-06-27T21:29:00.000-07:00

Managed Funds Association Lobbying

Hedge Fund Group Spends Nearly $1 Million Lobbying in Q1

Hedge funds spent an impressive sum lobbying the government in Q1 of 2011. The Managed Funds Association, a hedge fund trade association, spent nearly $950,000 lobbying federal officials overseeing the implementation of the financial regulation signed into law almost a year ago. The nearly $1 million spent is actually a drop from the first quarter of 2010.

The sum the Managed Funds Association spent was down from the $1.37 million it spent a year earlier but up from the $670,000 spent in last year's fourth quarter.

The Managed Funds Association represents hedge funds, lightly regulated investment pools whose investors primarily include wealthy individuals, and institutional clients such as pension funds and endowments.

It lobbied on implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which tightened restrictions on banks and Wall Street and created the Consumer Financial Protection Bureau. The Managed Funds Association also lobbied on a mortgage relief program and registration requirements for private equity fund advisers, according to an April 20 filing with the House clerk's office.

In addition to Senators and members of the House, the association lobbied the Securities and Exchange Commission, the Department of Treasury and the Commodity Futures Trading Commission. source

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Hedge Funds Japan Pension Funds

2011-06-27T16:37:00.000-07:00

Hedge Funds Japan Pension Funds

Hedge Funds Look to Japan Pensions Following Quake

Several global hedge funds are looking to get a piece of Japanese pension funds following the disastrous earthquake that rocked the country in March. Pension funds in Japan are looking for ways to offset losses from the world's lowest bond yield and a declining birth rate that has pushed down contributions to the funds. Global hedge funds are looking to fill that need and get a slice of the pension funds.

Global hedge funds are vying for allocations from Japan’s corporate pension fund managers, who oversee about $740 billion and are seeking alternatives to stocks following the March earthquake.

Prosperity Capital Management, the largest manager of Russia-focused funds with about $5 billion in assets, plans to open an office in Tokyo in August. Van Biema Value Partners LLC, a New York-based fund of hedge funds with about $800 million in assets, is targeting Japanese pensions by offering funds that buy securities seen as inexpensive relative to the market.

Japanese pension funds are redoubling their quest to offset the world’s lowest bond yield and a falling birthrate, which have curbed contributions, after the March 11 temblor sent the benchmark Nikkei 225 (NKY) Stock Average to its biggest intraday drop since 1987. Thirty-one percent of 135 retirement funds plan to increase alternative investments such as hedge funds from this fiscal year starting April 1, according to a JPMorgan Asset Management (Japan) Ltd. survey in May.

“After the earthquake, there has been strong emphasis on gaining exposure to investments outside Japan, both for pure diversification reasons and to try to achieve higher returns,” said Michael van Biema, a former Columbia Business School professor and the founder of van Biema Value Partners. “The big problem is that most of the large pensions still have about 60 percent of their money in Japanese government bonds. You just can’t earn a reasonable rate of return doing that.” Source

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Mid-Sized Hedge Funds

2011-06-26T22:02:00.000-07:00

Mid-Sized Hedge Funds

Mid-Sized Hedge Funds Grew the Fastest in 2010

According to a recent Citigroup survey, mid-sized hedge funds grew the fastest during 2010. Hedge funds in the "sweet spot" ranging between $1 billion and $5 billion had the greatest share of investor inflows. This undermines the belief that the biggest hedge funds enjoy the greatest flood of investor money.

A Citigroup survey of global hedge funds with more than $1bn under management shows that managers in the “sweet spot” of between $1bn and $5bn experienced the largest percentage increase in assets under management last year, at 37 per cent. Assets under management across managers in that range rose by $85bn in 2010, versus a net increase of $30bn among managers with an AUM of between $5bn and $10bn, and a net increase of $72bn for funds with more than $10bn under management.

Pension funds and sovereign wealth funds are increasing their exposure to smaller funds as the industry has matured, according to Citi.

“By getting in early, pensions and sovereign wealth funds are positioned to grow with the manager as they build towards the $10bn AUM point and above,” said Nick Roe, head of global prime finance at the US bank.

Pension funds and institutional investors had about $1,100bn in hedge funds in the first quarter of this year – close to half of all the money invested globally in hedge funds. This is against $125bn in 2002 which represented about a fifth of the hedge fund industry. Source

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Family Offices Definition

2011-06-26T21:17:00.000-07:00

Family Offices Definition

SEC Approves New Rule Defining Family Offices

Hedge funds aren't the only ones having to deal with new rules made by the Secuirties and Exchange Commission. The Securities and Exchange Commission today approved a new rule to define “family offices” that are to be excluded from the Investment Advisers Act of 1940. The new definition will take effect in 60 days. If you're interested in a free report on family offices or other resources on family offices, visit FamilyOffices.com

The rulemaking stems from the Dodd-Frank Wall Street Reform and Consumer Protection Act.

“Family offices” are entities established by wealthy families to manage their wealth and provide other services to family members, such as tax and estate planning services. Historically, family offices have not been required to register with the SEC under the Advisers Act because of an exemption provided to investment advisers with fewer than 15 clients.

The Dodd-Frank Act removed that exemption so the SEC can regulate hedge fund and other private fund advisers. However, Dodd-Frank also included a new provision requiring the SEC to define family offices in order to exempt them from regulation under the Advisers Act.

The new rule adopted by the SEC enables those managing their own family’s financial portfolios to determine whether their “family offices” can continue to be excluded from the Investment Advisers Act.

The rule is effective 60 days after its publication in the Federal Register.

FACT SHEET

Defining A Family Office

How are family offices impacted by the Dodd-Frank Act?

Family offices typically are considered to be investment advisers under the Advisers Act because of the investment advisory services that they provide. As such, they are subject to the registration requirements set forth in that Act. Historically, however, most family offices have been structured to take advantage of an exemption from registration for firms that advise less than fifteen clients and meet certain other conditions.

The Dodd-Frank Act repeals the 15-client exemption to enable the SEC to regulate hedge fund and other private fund advisers. But, the Dodd-Frank Act includes a new provision requiring the SEC to define family offices in order to exempt them from regulation under the Advisers Act.

Today, the Commission is considering adopting a final rule defining family offices that will be excluded from regulation under the Advisers Act.

Which family offices will be excluded from Advisers Act regulation under the rule?

Any company that:

Provides investment advice only to “family clients,” as defined by the rule.

Is wholly owned by family clients and is exclusively controlled by family members and/or family entities, as defined by the rule.

Does not hold itself out to the public as an investment adviser.

Which family members and employees can the family office advise under the exclusion?

Family members. Family members include all lineal descendants ( including by adoption, stepchildren, foster children, and, in some cases, by legal guardianship ) of a common ancestor ( who is no more than 10 generations removed from the youngest generation of family members ), and such lineal descendants’ spouses or spousal equivalents.

Key employees. Key employees include:

Executive officers, directors, trustees, general partners, or persons serving in a similar capacity for the family office or its affiliated family office.

Any other employee of the family office or its affiliated family office ( other than a clerical or secretarial employee ) who, in connection with his or her regular duties, has participated in the investment activities of the family office or affiliated family office, or similar functions or duties for another company, for at least 12 months.

Other family clients. Other family clients generally include:

Any non-profit or charitable organization funded exclusively by family clients.

Any estate of a family member, former family member, key employee, or subject to certain conditions a former key employee.

Certain family client trusts.

Any company wholly-owned by and operated for the sole benefit of family clients.

When will family offices have to register with the Commission under the Advisers Act or with applicable state securities authorities if they do not meet the terms of the exclusion?

By March 30, 2012.

Will existing family office exemptive orders be rescinded?

No. Family offices that obtained exemptive orders from the Commission will be able to continue operating under their existing exemptive orders or they may operate under the new rule.

When will family offices have to register with the Commission under the Advisers Act or with applicable state securities authorities if they do not meet the terms of the exclusion?

That family office will have to obtain a Commission exemptive order or register as an investment adviser.

Grandfathering Provision

The Dodd-Frank Act requires that the Commission not preclude certain family offices from meeting the new exclusion solely because they provide investment advice to certain clients ( and provided that advice prior to January 1, 2010 ). The adopted rule incorporates this grandfathering provision.

If you're interested in a free report on family offices or other resources on family offices, visit FamilyOffices.com

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Hedge Fund Risk Management

2011-06-23T23:00:00.000-07:00

Hedge Fund Checklist

Hedge Fund Managers Fear Institutional Investor Checklist

One theme reported in the media is the growing fear among hedge fund managers that the entrepreneurial spirit that has encouraged the massive growth of the hedge fund industry is being stifled. Reportedly, hedge funds are worried that with the wealth management scandal of Bernard Madoff and other high-profile frauds, investors will make stricter demands of hedge fund managers and harm the industry as a result.

Although the mood was overall better than last year's Monaco summit, several managers seem distressed by the demands made especially by institutional investors and the checklist of various requirements for a hedge fund before they will invest in it.

Managers left the GAIM conference, the annual get-together for the European industry, in more upbeat mood than last June after a year of client inflows, but they warned rigid demands by institutional investors threatened hedge funds' reputation as maverick investors.

"Institutions now are looking more for risk managers than investors, and that's a bad trend," said Oscar Schafer, managing partner of O S S Capital Management.

Executives said many big institutions, which helped hedge funds recover from the crisis of 2008, are now focusing their attentions on a checklist of attributes a hedge fund must have, such as a chief risk officer, a certain level of disclosure or a demonstrable investment process.

Not only can such demands distract managers from the task of managing money, but they may still not pinpoint the real risks and may mean that genuinely talented managers get starved of capital, managers warned. Source

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Hedge Fund Fees Prime Brokers

2011-06-22T18:21:00.000-07:00

Hedge Fund Fees Prime Brokers

Hedge Fund Fees to Prime Brokers Fall From Previous Years

Prime brokerage businesses aren't bringing in the high revenue that they used to from hedge funds, according to a recent survey. Global Custodian, the magazine that conducted the survey, found that investment banks and broker-dealers gathered about $10 million from hedge funds, about a third below historical norms.

"Assets under management have risen substantially in the last year, yet both investment returns and the appetite for risk--as measured by leverage and appetite to borrow stock to cover short sales --remain suppressed by comparison with the years prior to the financial crisis of 2007-09," said Global Custodian, a magazine.

The magazine's annual survey, based on more than 3,100 hedge funds, assumed that hedge funds in total manage $2 trillion in assets globally. The survey also made the assumption that financial conditions led to a narrowing of the fees on prime brokers' sources of income, such as margin finance and stock loans, to 40 basis points from 50.

May was brutal for hedge funds, with wild swings in the currency and commodities markets during the month. The average fund lost 1.2% during the month, according to Hedge Fund Research.

"Macro uncertainties have kept leverage fairly low" for hedge funds, said Barry Bausano, Deutsche Bank AG's (DB, DBK.XE) co-head of global prime finance and head of equities for the Americas. "Hedge funds have had a bad six weeks in performance, and that will likely cause them to be cautious during the summer," but Bausano expected strong third-quarter earnings would revive the market. Source

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