Bloomberg – There are signs of life returning to the hedge-fund industry. Assets under management are rising. New funds are being launched. Some are even making money.
Reports of hedge funds’ demise are exaggerated even if it isn’t quite time to raise prices in Mayfair’s fancy restaurants, or get into the interior-decoration business in the Hamptons. The industry is going to stick around as an important part of the financial universe.
Bloomberg – Hedge funds and other tenants in London’s Mayfair and St. James’s district, the world’s second- most expensive business location, face a doubling in property taxes in the next five years, real estate brokers said.
Tenants in central London may start demanding rent cuts to compensate for municipal business property taxes, known as “rates,” that may increase to 50 pounds ($81.50) a square foot by 2014 from 25 pounds now, according to adviser Jones Lang LaSalle Inc.
The tax, reset to property rental values in April 2008, will rise even as rents in London’s West End area are tumbling. Since that reference date, prime rents have fallen 46 percent to 58.50 pounds a square foot after inclusion of rent-free incentives, JLL said. The financial crisis and the recession have cut demand from financial services firms, which account for 60 percent of tenant seeking to locate in the district.
West Palm Beach (HedgeCo.net) – A new book set set in the world of hedge funds ‘This Bleeding City’, set against the global financial collapse, has been bought by Faber editorial director Walter Donohue.
It is 30-year-old City trader Alex Preston’s début novel by, described as a heartbreaking love story taking place during the credit crisis.
Donohue bought UK and commonwealth rights to ‘This Bleeding City’ from Anna Power at Johnson & Alcock. The novel (due to be published in March 2010) tells of a young graduate who secures a job at a Mayfair hedge fund and is plunged into the world of high finance.
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The Independent – Rents for plush offices in Mayfair and St James’s plunged almost 30 per cent last year, hammered by the declining fortunes of many of their hedge funds tenants.
The commercial property agency NB Real Estate has released new research that shows the rent in swanky west London offices tumbled from £120 per square foot at the end of 2007 to £85 at the end of last year, a consequence of a bad year for hedge funds. They have been vilified for short selling bank shares, have suffered mass redemptions and experienced their worst ever full-year losses.
The Australian – ARPAD Busson is angry. He has just looked at the returns of a hedge fund he used to invest in and they’re down more than 60 per cent in the past nine months.
"That a-hole!" Busson says of the New York-based manager, as he walks out of the conference room at the Mayfair offices of EIM, the $US11.5 billion ($16.2 billion) fund-of-hedge-funds firm of which he is founder and chairman. Although EIM yanked its money out of the fund in April 2008, when it was down only 25 per cent, there are too many like it out there, Busson says.
"If these managers are not focused on preservation of capital, they should not have the right to manage other people’s money," he says.
Busson’s opinion matters. Since he launched EIM in 1992 he has been instrumental in luring billions of dollars of public and corporate pension money into his and other funds of funds. The industry, which Busson helped pioneer, allows investors to spread their risk among hedge funds with different strategies.
Bloomberg – Arpad Busson is angry. He’s just looked at the latest returns of a hedge fund he used to invest in; it’s down more than 60 percent in the past nine months.
“That a-hole!” Busson says of the New York-based manager, as he walks out of the conference room at the Mayfair offices of EIM SA, the $11.5 billion fund-of-hedge-funds firm of which he is founder and chairman. Though EIM yanked its money out of the fund in April 2008, when it was down only 25 percent, Busson says there are too many like it out there.
“If these managers are not focused on preservation of capital, they should not have the right to manage other people’s money,” he says.
Business Intelligence Middle East – As the eye-popping profits of hedge funds dry up amid the financial crisis, the industry looks set to shrink substantially in its European headquarters of London over the next year.
Discretion is everything in London’s exclusive Mayfair district which is quietly home to a third of the world’s hedge funds, the highly speculative investment vehicles often blamed when markets plunge.
A small brass plaque on a door tucked in between Chanel and Versace boutiques is often the only sign of their existence. But those highly polished doors cannot hold back the same chaos that has swept through the rest of the finance world.
John Godden, CEO at hedge fund consultancy IGS Group, is one of the rare figures in a secretive world to speak openly about the scale of the problems.
He was in the process of drawing up next year’s aims for his group when US investment bank Lehman Brothers collapsed in September, and panic buttons were pressed all over the financial world.