WEST PALM BEACH, FL (www.hedgeco.net) – The world�s largest hedge fund manager, the MAN Group said on Wednesday, �That hedge fund assets were slowing, amidst concerns of the stability and performanceof hedge funds.� According to MAN, some institutional investors and insurance establishments are withholding hedge fund allocations, and some are postponing their initial hedge fund allocations.
Pierre-Yves Moix, RMF’s chief risk officer said, “We have not faced a lot of redemptions but we see that some of the clients are not investing more or are waiting from making their first investments.� He explained that hedge fund investors are not wavering over the instability in the hedge fund markets leading to some losses. Experts believe that up to $8 billion in complex trades were unwound following the downgrading of Ford and General Motors bond ratings.
Moix, further explained that, “Currently, it’s not a big slowing down, but the combination of relatively poor performance for the first three months plus this bad news. I can imagine that it will be some slowdown in the next months.� Moix added, “Institutions are generally becoming more cautious. I was last week in Japan and had a lot of discussion with clients on prospects and all were basically concerned by all this GM and CDOs (collateralised debt obligations) type of trades.�
The global hedge fund industry may have lost nearly 1.6 percent of their total portfolio assets during the first four months of 2005. Some strategies such as convertible arbitrage have lost nearly 6.2 percent of their total portfolios since the beginning of 2005. According to Moix, some small hedge fund managers with significant exposure in the convertible arbitrage market may be forced to shut down but he does not see significant fallout from the recent market losses.
The hedge fund industry has experienced significant asset inflows since 1999. It is widely believed that the global hedge fund assets are approaching $1.5 trillion.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net
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