The Morning Brief: New Wave of Hedge Funds to Sweep Switzerland; Inflows on the Upswing in Q1.
So much for Switzerland getting clobbered by new rules. When the new oversight regulations were announced in Switzerland, bringing them in line with other new regs in Europe, skeptics warned this would harm the hedge fund industry. Look again. At least ten hedge funds will be launched this year, versus none in 2012. The new funds expect to raise $8 billion — a goodly sum, considering that the industry is only $24-billion strong.
Investors seemed to shrug off another year of underperformance. Industry tracker Hedge Fund Research says total assets under management increased by $122 billion in the first quarter, the largest increase since the fourth quarter of 2010. This brings total industry assets to a record $2.375 trillion. Total net inflows came to $15.2 billion in the first quarter, the highest inflow since the first quarter of 2012. HFR says that hedge funds have seen net inflows in 14 of the past 15 quarters. Investors continued to favor the biggest firms, allocating more than $10 billion to funds with more than $5 billion in the first quarter, bringing the total to more than $1.6 trillion. Firms managing less than $500 million reported net inflows of $1.5 billion, a reversal of the trend of the prior quarter.
Todd Newman, a former fund manager at Diamondback Capital Management who was convicted in December of fraud, is asking for a lighter sentence than the maximum of 78 months sought by prosecutors. He is scheduled to be sentenced May 2 for his role in a $72 million insider-trading scheme. Newman was convicted of one count of conspiracy to commit securities fraud and four counts of securities fraud stemming from trades in Dell and Nvidia Corp. He was convicted along with Level Global Investors co- founder Anthony Chiasson, who is scheduled to be sentenced May 13.
SS&C GlobeOp said its Forward Redemption Indicator for April shows notifications of 2.95 percent, down from 4.33 percent in March and 3.96 percent in February. SS&C also said it expects less volatility in the indicator over the coming months, as investors wait to see how hedge funds perform. SS&C GlobeOp’s data represents about 10 percent of the hedge fund industry. The Forward Redemption Indicator represents the sum of forward redemption notices received from investors in hedge funds administered by SS&C GlobeOp on the GlobeOp platform, divided by the Assets Under Administration at the beginning of the month for SS&C GlobeOp fund administration clients. This figure peaked at 19.27 percent in November 2008.