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 BEST PERFORMING STRATEGIES |
March 2010 Commentary
Last summer we published a paper that focused on the state and possible future of Hedge Fund Transparency. The original paper (co-authored by Gregory Dyra of New Legacy Capital) can be found here http://www.finalternatives.com/node/8349. Although the quality of information reported by hedge fund managers has improved slightly as the result of the Credit Crisis, the range of Transparency Spectrum® remains very wide.
Today we are taking the next logical step and propose a solution for improving the current state of Hedge Fund Transparency.
Our Solution - Transparency Building Blocks®...
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| FUND OF THE MONTH |
Fund of the Month Section
By Aleksey Matiychenko | Risk-AI, LLC
We continue our Fund of The Month Section. In this section we identify funds that have
interesting risk/return profiles. The following section is neither an advertising of the
funds nor investment recommendation. At the time of writing Risk-AI, LLC has no
relationship with the fund described. The following is presented for academic purposes
only. Since in our main column we wrote about market regime analysis, we thought it would
be appropriate to select a fund based on its performance in different regimes.
For this exercise we identified an Equity Long/Short Fund called Futuris Fund for our analysis...
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| MACRO ENVIRONMENT |
Monetary Policy - Part II
By Ron Laurent | Veritas Partners LLC
We expect the Fed to maintain its ultra-accommodative monetary policy indefinitely, in an attempt to support economic activity and avoid deflation. The financing of the expanding fiscal deficit, the impaired financial health of the banks, the large and illiquid balance sheet of the Fed, the housing market and Fannie Mae will prevent the Fed from tightening monetary policy in the foreseeable future. We examine each of the aforementioned issues.
U.S. Government Spending and the Deficit
The Federal Reserve's monetary policy will remain geared toward funneling as much inexpensive credit into the financial system as the system will allow, in order maintain low borrowing rates. While this policy has been extremely limited in its ability to encourage growth in private lending and borrowing, it has allowed for the inexpensive financing of the expansion in government borrowing...
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| LEGAL & COMPLIANCE |
Hedge Fund Regulation Inches Forward
By Judith Gross | JGAdvisory
After a year of proposals, hedge fund regulation took a small leap forward during the past week here in the US with the introduction of truly viable legislation by Senator Dodd. In the EU, regulation is more or less at a standstill for the moment (but probably not for long).
In the meekly-titled 64 page bill called “Restoring American Financial Stability Act of 2010“, hedge funds are squarely in the mix of financial institutions that are being reined in. As expected, adviser registration requirements for advisers with over $100m under management are proposed. In addition, there is only a limited exemption for foreign advisers: they will only be exempt from registration if they have no place of business in the US, have fewer than 15 clients, have less than $25m in US client assets and do not hold themselves out to US investors as investment advisers (that’s a big “and”)...
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| THE CRISIS IN GREECE |
By Calhoun Asset Management
Fiscal instability in Greece has contributed to a weaker euro and has even raised the likelihood of a
possible disbanding of the European Economic and Monetary Union (EMU). More specifically, large
funding needs in fiscal-year 2010 and the approaching maturities of more than Euro 20 billion in
outstanding government debt have raised the potential of a Greek default that would potentially generate
losses at German financial institutions and potentially spread throughout Europe. This fear of heightened
systematic risk has forced Germany and France to promise financial support to Greece, in the event the
country is unable to manage its fiscal affairs. Ultimately, the promise of support and rising yields on
Greek debt that peaked at levels more than twice the yields on benchmark German Bunds pushed Greece
to pass legislation that would raise taxes and cut government expenditures, in an attempt to bring the
country’s outstanding debt and fiscal expenditures into compliance with the Maastricht Treaty. This task
of bringing down the deficit will be compound the problem of weak economic growth...
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| CHRYSLER NEWS |
Chrysler on track to break-even operations in 2010
(Reuters) - Chrysler Group LLC is on track to break even on an operating basis in 2010 and is ahead of its turnaround targets, Chief Executive Sergio Marchionne said on Tuesday.
Chrysler, which emerged from a U.S. government-supported bankruptcy in June under the management of Italy's Fiat SpA (FIA.MI), has been battling to stabilize sales in the United States while working to improve its vehicles.
Marchionne -- speaking a year after the U.S. autos task force rejected turnaround plans for Chrysler and U.S. rival General Motors Co GM.UL and warned bankruptcy was an option -- said Chrysler holds more than $5 billion in cash.
He also said Chrysler's break-even point was substantially lower than most analysts estimated.
"To the extent that I'm producing cash and I keep on investing in the brand portfolio ... I feel a lot more comfortable today than I did 12 months ago -- by far," Marchionne said at the National Automobile Dealers Association/IHS Global Insight Automotive Forum in New York...
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HEDGE FUND MANAGERS IN THE NEWS | 10 MOST WRITTEN ABOUT MANAGERS |
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