Hedge funds: Redemptions, Returning money, Short positions
- Independent: Hedge funds suffer mass redemptions
272 individual funds strategies were launched during the first six months of 2008, the lowest for nine years. In the same time, 243 funds have been liquidated, the highest in a six-month period.
The industry will know for sure whether it is a drip or a deluge when the data providers release their statistics for the third quarter, next month. One market analyst said: “I know even the good hedge funds have been suffering withdrawals recently. Investors are very nervous.”
- Financial Times: Hedge fund returns money
The best-performing hedge fund manager of the past two years has closed down his funds and is returning money to investors after concluding that the danger of losing money from a bank collapse is too high.
The move by Mr Lahde, who returned 870 per cent last year in one fund betting against subprime mortgages, and was at one point up more than 1,000 per cent, underscores the threat that is posed to hedge funds by bank failures.
“While we concede there are additional opportunities in this episode of crisis and uncertainty, we have concluded that those opportunities are far outweighed by the risks attendant in the use of the over-the-counter derivatives market.”
- Wealth Bulletin: Hedge funds quick to close short positions
Hedge funds’ and other short sellers’ moves to close their short positions on Friday came amid a 16.8% rally that day by the FTSE index of UK financial companies.
The Securities & Exchange Commission, which introduced a blanket ban on shorting of 799 US financials companies late last week, today amended its rule to mean short positions hedge funds have to report to the US regulator are not revealed to the public via the SEC’s website until two weeks after their reporting.
Check out the Short Stories blog for commentary on short positions in financial stocks.
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