Singapore Hedge Fund

Alternative asset management in Singapore

Most hedge funds failed to make money in June

From Reuters, Singapore.  Most strategies employed by hedge fund managers globally failed to generate positive returns in June as stock markets moved sideways and commodity prices slid during the month, according to estimates from Lipper on Tuesday.

The best-performing hedge fund strategy was “convertible arbitrage” which returned 0.28 percent, while the worst-performing strategy was “managed futures” which lost 1.59 percent. Long/short equity hedge funds declined 0.23 percent.

Overall, nine of the 13 strategies tracked by Lipper lost money last month.

“Managed futures managers were hit in June by the lack of a clear trend as intra-month volatility spikes resumed across a number of asset classes,” Lipper’s global head of hedge fund research Aureliano Gentilini said in a report.

Commodity prices fell in June, with the Reuters/Jefferies CRB Index .CRB declining 1.22 percent, as gains in industrial metals and energy were offset by losses in agricultural, soft commodities and precious metals, said Lipper, a unit of Thomson Reuters.

Hedge fund managers have come under increased scrutiny since last year due to their failure to generate positive returns in bear markets as they are supposed to, resulting in outflows from the industry. Many observers say, however, that withdrawals are easing and managers could see inflows before the end of 2009.

Strategies used by managers include arbitrage, which typically involves exploiting different valuations of what is essentially the same underlying security such as the price of a stock and its price in the forward market.

Managed futures traders, on the other hand, focus on trading futures contracts in areas such as metals, grains, stocks and currencies.


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Brummer & Partners launches Karakoram in Singapore

Singapore is reallybecoming the place to be for new Hedge Fund…

Brummer & Partners, Sweden’s largest hedge fund manager, has set up an office in Singapore and is launching a long-short fund focusing on Asian ex-Japan equities, sources familiar with the firm said.

The fund, called Karakoram, will be launched on Wednesday and has an initial capital of $80 million, most of which is seed money from the parent firm, the sources said. The fund hopes to notch an annual net return of 15-20 percent.

Brummer is one of the more high profile hedge fund launches seen in Singapore over the last few months. The company declined comment on the launch of the fund.

Karakoram is a large mountain range spanning the borders between India, Pakistan, and China.

Brummer is a privately-owned hedge fund manager with about $5.2 billion in assets under management spread over several funds. Its portfolio managers typically have fairly large stakes in the funds they manage.

Karakoram is charging an annual management fee of 1 percent plus 20 percent of returns that exceed a pre-agreed target, which is lower than the traditional 2 and 20 percent charged by most funds in the past, according to company documents seen by Reuters.

Brummer’s venture into Asian equity comes during a rally in Asia ex-Japan stocks .MIAPJ0000PUS which have risen 34 percent so far this year, outperforming the 1.8 percent gain in the S&P 500 .SPX and the 2.2 percent rise in European stocks .

The improvement in investor sentiment has slowed redemptions at global hedge funds, and many industry players expect Asian and other emerging market funds to see net inflows in the current quarter.

Brummer’s five-man Singapore team is led by Chief Investment Officer Chia Ee Toh, who was previously with Amaranth Advisors and Schroder Investment Management.

According to Lipper, a unit of Thomson Reuters, Brummer also operates a fund of hedge funds structure that invests in the firm’s various funds. The Swedish firm has been looking to bring in new investment teams to broaden the range of strategies it offers clients.

With Reuters

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