Emerging Hedge Fund Managers Outperform Older Funds

Newer hedge funds continued to out-perform their older more established brethren in 2008. In a year when equities generated returns of -40% and even the average prudently managed balanced fund and many large endowments lost around -25%, emerging hedge fund managers (defined as managers that are less than 36 months old and have AUM of less than $300m at inception) continued to deliver relative outperformance of between +180 to +400 basis points (-16% to -18.2%) compared to average hedge fund returns of around -20%; depending on which benchmark you use to measure the performance of the average established Fund. Infiniti’s own emerging manager products did even better losing only around -12% in 2008. While this is not the absolute return most investors hope for from alternative investments, it still represents a significantly better preservation of value than can be had from equities, which have continued their fall into 2009, while hedge funds have in general been flat so far. The reasons for the relative out-performance of newer managers remain that they are leaner and meaner and hungry for success. Many of the larger more established ‘brand name’ hedge funds did very poorly in 2008, with some of the largest and oldest losing more than 50%.

The article by Peter Urbani :
http://www.finalternatives.com/node/7064

Hedge fund managers "face greater scrutiny and transparency demands"

Institutional investors appear committed to hedge fund investing, but hedge fund managers will face wider-ranging and more in-depth scrutiny of operations and investment processes, according to a survey by SEI and Greenwich Associates. The survey report, entitled Hedge Funds under the Microscope: Examining Institutional Commitment in Challenging Times, points to a need for greater transparency and enhanced client reporting and communications from hedge fund managers. These are especially needed in the wake of changing institutional expectations brought on by the worst year on record for hedge fund performance. SEI collaborated on the survey with Greenwich Associates, initially polling institutional investors in Continental Europe, the UK and the US at the end of August. As the financial crisis deepened, the firms re-interviewed respondents in November, to gauge the impact of market turmoil on institutional attitudes and plans concerning hedge funds.

The whole article is on :

http://www.hedgeweek.com/articles/detail.jsp?content_id=289739