Hedge Fund Assets To Hit $2 Trillion In 2012
Hedge fund assets are poised to grow 12% this year to $2.26 trillion, according to Deutsche Bank’s annual investor survey. The 392 respondents--including pensions, foundations, endowments, consultants and family offices–said low yields are driving them to reduce cash and chase after returns.
So, where’s all this return going to come from? Well, some such as Deutsch Bank’s Asia-Pacific Head of Prime Finance Sales Harvey Twomey say hedge funds’ strong showing in January has put some on track to outstrip targets for the year. We all know, however, that past performance is not an indicator of future returns.
U.S. Funds Run For European Credit
U.S. hedge funds are looking to Europe now that the economy has settled enough for managers to take a break from the Pepto-Bismol. The yanks are salivating over high-yield and distressed debt opportunities on the continent seeing as though opportunities stateside are still a bit tenuous.
U.S. funds such as Och-Ziff Capital Management, Avenue Capital and Anchorage Advisors have already raised money for European credit funds. The Europeans, however, remain largely unconvinced having watched the crisis unfold on the front lawns, so to speak.
Too Little, Too Late
The Securities and Exchange Commission’s fined New York’s DE Shaw $140,000 for exceeding monthly limits on corn and soya futures in 2010. And you thought the Feds were useless.
DE Shaw, in an attempt to short soya and corn futures, got its hands on 9,894 soybean contracts in April and 13,657 corn futures in June. The monthly limits are 6,500 and 13,500, respectively.
The firm reportedly told the SEC it had unintentionally exceeded position limits in April. But that didn’t stop it from doing the same thing in June.
If it takes almost two years for the SEC’s top guns to figure out what’s going on, chances are the $23 billion firm has enough time to execute a few more small, scofflaw trades. Maybe DE Shaw should put a swear jar in the kitchen.