Posted on 01/27/2008 1:59:47 AM PST by TigerLikesRooster
Crisis grips European hedge funds
Louise Armitstead
A RAFT of European hedge funds have been forced to introduce emergency measures to protect their businesses from collapsing in the wake of the turmoil in financial markets.
Up to 10 European hedge funds have suspended redemptions after investors clamoured for their cash when the managers made severe losses.
A London prime broker told The Sunday Times that even before last week’s extreme gyrations, nearly two-thirds of London-based hedge funds had lost between 4% and 10% of their value. A “significant number” had lost much more, he said.
The manager of one of Britain’s biggest hedge funds said: “It’s been an extraordinary week. Even in the crash of 1987 I don’t remember so much carnage.”
Experts warned that the problems among hedge funds were likely to cause more disruption in the markets, especially if many are forced to liquidate positions.
Funds with heavy losses reportedly include Corin, Phylon, Addax FX1, Henderson Global Currency, Odey Treasury, Sector ERV, Kinetic Special Situations, Systeia Alternative Risk Trading and Polar Technology, according to Eurohedge, which monitors the industry.
The problems have been exacerbated by the fact that prime brokers, the arms of investment banks that finance hedge funds, have tightened lending policies.
One manager said: “Since market losses are magnified by leverage in a hedge fund, there can be a sudden need for a cash injection. But this time, the banks can’t lend as easily. Funds are then forced to sell, which causes even more problems.”
Hedge funds said that for many the problems started last year with a difficult May followed by worse problems in November and December.
Thanks for posting. Very interesting.
Ping!
Thanks for the ping, TLR....
For those old enough to remember the old Ed Sullivan Show (Sunday nights, CBS - I think), you may remember the recurrent juggler who balanced spinning plates on poles all over the stage....
Reading this - and most other - articles, I have this continuing mental picture of yet another plate starting to wobble.....
If somebody in the audience takes a picture using eye-blinding flash light, or a kid throw a couple of marbles at the stage, we could have a wholesale crash.:-)
” If somebody in the audience takes a picture using eye-blinding flash light, or a kid throw a couple of marbles at the stage, “
And, since it’s a quiet Sunday morning, I’ll push the metaphor to yet another, perhaps ridiculous, level —
The juggler ain’t all that good to start with, and he has blind spots so that he can’t even see many of the plates, and of those he can see, he seems to have a preference for the red plates over the green ones....
I think we’re beyond ‘could happen’ — I’m bracing for the ugly inevitable.....
The failure of liberal globalism continues.....
Oh, I forgot, there's no speculation in oil. It's just increased demand from China and India.
And the announcement of the affordable Tata in China dives prices down because it's just so bodacious.
Cheers!
Oh, I forgot, there's no speculation in oil. It's just increased demand from China and India.
And the announcement of the affordable Tata in India dives prices down because it's just so bodacious.
Cheers!
Back in the old days a hedge fund was a hedge fund. You made money in any type of market. These days hedge fund means unregulated mutual fund for rich people.
Cheers!
Cannot feel sorry for anyone playing that game now.
What? Those guys in California were armatures, these hedge funds are for the real professionals who know what they’re doing. Okay.
I’d hit it. :)
I think she looks like a llama.
Sooooooooo 1929.
There are all kinds of hedge funds and all kinds of hedge fund managers. Some are more competent than others.
Like kiting checks.
Highly illegal for an individual to do, but, pushed all in the name of profits and the bottom line in the NWO of The Global Economy.
A wealthy man needs a good hedge to support ‘the needs’ of the Golden Lookers.
http://www.finalternatives.com/node/1282
Addax Launches Maiden Currency Fund
March 7, 2007
U.K.-based Addax Capital last month launched its maiden fund, the Addax FX1 Fund, an Irish-domiciled and listed global currency fund. The new offering boasted more than €17 million (US$22.3 million) in assets under management and finished its first months of trading up 0.54%.
The fund employs a model-driven mechanical trading strategy focusing on short-term trends in the currency markets, according to fund documents. Its entry and exit points, as well as risk parameters and stop-loss levels, are also determined by the trading model, which generates signals across all major currency pairs.
The funds charges a 2% management fee and 20% performance fee, with a €250,000 (US$327,600) minmum investment requirement.
Going forward, the firm says it will roll out more aggressive products. “For example, we have plans for a more aggressive fund using exactly the same technical model and trading techniques as the FX1 Fund, but using more leverage,” said Gavin Taylor, Addax’s CFO. “This will be aimed at investors with a higher risk appetite. There are also plans to roll out our existing trading model and strategy into other products.”
Co-founder Federico Grego, a former foreign exchange trader with Dresdner Bank and HSBC Markets in New York, is the fund’s portfolio manager.
Ah the Bear Stearns timetable. We know how well that ended, and how little time it took.
Is this your ‘shorters’ club?
or just a social network, Soros Christmas Card recipients, Gold speculator, etc.
Yeah “the shorters’ club” would be the most accurate. Not permabears though. Stick around and I’ll toss out a trade of mine from time to time.
For example, any substantial hedgefund has its investors locked in for a long time period (five years not uncommon), and has agreements in place to receive continuous capital subscriptions from investors into the future.
Additionally, when several substantial funds froze redemptions a short while ago, it was a mere footnote. Now it's "The Continuing Hedge Fund Crisis."
The guys in advertising really ought to stay away from the reporters' typewriters.
Surprisingly enough, a guy keeps track of how many U.S. hedge funds have gone bankrupt since May 2007.
Twenty-two so far.
OMG! Some investors lost money! Thanks for the ping. LOL!
So what's that, one-tenth of one percent?
How many new ones opened since May 2007?
The question was whether some kind of trend had petered out.
He does not track how many new ones have opened.
I'll bet a lot more than 22 closed since May. I'll bet a lot more than 22 closed from May 2006 to May 2007. You don't have to be any good to open a hedge fund. I know lots of idiots who did.
He does not track how many new ones have opened.
Because that would make people laugh at his panic (?) over the 22 that closed.
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