Merchant Hse Share Chat (MHG)

Benedicte Gravrand, Opalesque London:

Yesterday’s Part One (“Hedge fund managers adopt UCITS regime to load up on assets, but may have to surrender higher performance”) can be found here.

Assets

UCITS assets have grown rapidly to almost €4.8tn (US$6.5tn) since the original UCITS directive in 1985. Today, 40% of UCITS funds are sold outside of the European Union in Asia, the Middle East and Latin America, making them Europe’s most successful financial services export, according to a recent vision report, UCITS IV: The Path to Greater Efficiency, by State Street, a global provider of financial services to institutional investors.

According to statistics for Q3-09 from EFAMA Int’l, the USA manages 44.5% ($9.96tln) of the global fund industry’s assets, Europe 38% ($8.5tln), Brazil 5%, Australian 5%, Japan 3% and the remainder in the rest of the world. 33.8% of these assets are run under the UCITS regime. “UCITS is the most significant international brand,” said Peter O’Dwyer of Trinity Fund Administration.

And Chicago-based data provider HFR recently announced that a total of £35bn (US$54bn) had been raised by UCITS hedge funds – although S&P’s Kate Hollis believes the total AUM to be half as much.

Data management challenge

Daniel Simpson, CEO at Cadis, an international data management company, told Opalesque, that a lot of the hedge funds that his firm does business with are “certainly clearly aware that they need to evolve and have UCITS III-compliant products.”

http://www.opalesque.com/57367/UCITS_and_hedge_funds_Convergence_between367.html

yeh right

BNY Mellon’s Pershing unit has launched its multi asset class trading solution

Read more: [BNY Mellon] [Pershing] [multi asset] [trading]



BNY Mellon’s Pershing unit has launched its multi asset class trading solution, PR Newswire reports. Nexus Execution Services provides integrated agency execution services in global equities, exchange traded funds, exchange traded commodities, investment trusts, global government and corporate bonds and foreign exchange.

The services desks, based in London and the U.S., have over 100 sales executives covering different time zones. They offer clients a simple order entry via a single desktop route. Pershing’s equity trading capabilities are supported by memberships of the London Stock Exchange, Euronext and Deutsche Borsehttp://www.globalinvestormagazine.com/Article/2401417/BNY-Mellon-unit-launches-trading-service.html?LS=EMS368422 European Hedge Fund Event4th Annual Hedge Fund Thought Leadership Seminar: Speaker Biographies http://66.102.9.132/search?q=cache:geuxsgRBMvMJ:www.bnymellon.com/hedgefundseminar/biography.html+kinetic+partners+llp/ucits/ireland&cd=6&hl=en&ct=clnk Julian Korek

Founding Member Kinetic Partners LLP

Julian is one of the founding members of Kinetic Partners and has more than 25 years experience of working within the investment management industry. Through this time his focus has been on improving controls and reducing risk. Julian's experience includes working on numerous investigations into control failures and inadequate risk management. He has been the named partner in numerous regulatory investigations involving control failure, client money breaches, investment management failures, market pricing and market manipulation.

Julian is also an active member on various industry panels to derive best practice within the hedge fund community and a contributor to AIMA supporting the development of industry best practice. He was the catalyst for the formation of the PEP and ISA Managers' Association (PIMA) and is a regular speaker at industry events, including Hedgestock, Eurohedge, and Opal EAIS to name a few.

Sustained demand for long-term Ucits: Long-term Ucits (Ucits excluding money market funds) enjoyed net inflows of €165 billion in 2009, due to net inflows into equity funds (€66 billion), bond funds (€72 billion) and balanced funds (€44 billion)

- Outflows from money market funds: Investors withdrew €43 billion from money market funds in 2009, down substantially from the €64 billion they invested in 2008

- Robust demand for non-Ucits: Special funds reserved to institutional investors gathered €48 billion in 2009, and real estate funds another €4 billion

- Ucits accounted for 75% of the total European fund market, with a value of €5,299 billion at end 2009

The strength of the recovery in investor demand for Ucits and non-Ucits in 2009 is the result of the following factors:

- Low short-term interest rates convinced investors to seek alternative investments to bank deposits to secure higher returns

- Low stock prices, plus the confidence generated by the wide-ranging policy actions by governments and central banks, gradually strengthened investor appetite for equity funds

- High concentration of wealth in liquid investments encouraged investors to move towards more balanced asset allocations

- Ucits’ status as a global brand continued to boost net sales of cross-border funds outside Europe, especially in Asia

http://www.globalinvestormagazine.com/Article.aspx?ArticleID=2402394&LS=EMS369547

Hedge Fund Monthly

Ireland Expands Its Role as a Regulated Fund Centre

John Hamrock

Kinetic Partners Thanks to Ireland’s dedication to providing cost-effective, efficient and highly skilled fund administration, its global reputation as a leader in international investment management continues to expand. Clearly, recent events have required hedge funds to question existing business models and investors to increasingly seek greater transparency. This increased scrutiny has furthered Ireland’s strong industry position. With €1.4 trillion in total assets under administration, half of which is comprised of hedge fund administration, Ireland continues to demonstrate its strength and future potential.

Evidence of Ireland’s growth includes the recently announced joint venture between Morgan Stanley, Goldman Sachs and Bank of America Merrill Lynch – launching 13 exchange-traded funds and 22 exchange-traded commodity funds domiciled in Ireland.

http://www.merchant-capital.com/downloads/MerchantUCITSPresentation.pdf looking sweet guys Long-term funds are 2009 winners

01 March 2010

Investment funds bounced back to positive asset growth and net sales in the fourth quarter of 2009

Read more: [EFAMA] [investment funds] [growth ]



Investment funds bounced back to positive asset growth and net sales in the fourth quarter of 2009, according to data from the European Fund and Asset Management Association.

In a statement, EFAMA said the main highlights of the quarterly statistical release include:

- Increase in the value of investment fund assets in 2009: investment fund assets in Europe increased by 15.6% in 2009 (2.8% in the fourth quarter of 2009), from €6,088 billion at the end of 2008 to €7,039 billion at the end of 2009

- Turnaround in net sales of Ucits: Ucits registered net inflows of €123 billion in 2009, compared to net outflows of €356 billion in 2008.

- Sustained demand for long-term Ucits: Long-term Ucits (Ucits excluding money market funds) enjoyed net inflows of €165 billion in 2009, due to net inflows into equity funds (€66 billion), bond funds (€72 billion) and balanced funds (€44 billion)

- Outflows from money market funds: Investors withdrew €43 billion from money market funds in 2009, down substantially from the €64 billion they invested in 2008

- Robust demand for non-Ucits: Special funds reserved to institutional investors gathered €48 billion in 2009, and real estate funds another €4 billion

- Ucits accounted for 75% of the total European fund market, with a value of €5,299 billion at end 2009

The strength of the recovery in investor demand for Ucits and non-Ucits in 2009 is the result of the following factors:

- Low short-term interest rates convinced investors to seek alternative investments to bank deposits to secure higher returns

- Low stock prices, plus the confidence generat

Gracey transferred to Merchant Capital with the sale of the ACI business along with other colleagues, including Peter Raku and Tommy Ip.Industry welcomes FSA hedge fund survey

26 February 2010

The consultancy, Kinetic Partners has openly welcomed the FSA's Hedge Fund Survey and Hedge Fund as a Counterparty Survey





According to the consultancy firm, Kinetic Partners, the Financial Service Authority’s Hedge Fund Survey and Hedge Fund as a Counterparty Survey demonstrates that hedge funds do not pose a potentially destabilising credit counterparty risk across the surveyed banks and that there is a relatively low level of ‘leverage’ under the FSA’s various measures across the 50 hedge funds surveyed.

This demonstrates that hedge funds are generally not exposed to any more risk than a fund managed by the traditional sector. Kinetic Partners believes that it is totally inappropriate for members of the EU to single out hedge funds as being responsible for the recent financial crisis.

The Spanish EU Council presidency’s recent interventions on the Draft AIFM Directive further demonstrates the complete lack of understanding of hedge funds by a majority of onshore EU member states.

Andrew Shrimpton, a member at Kinetic Partners commented: “By showing how widely fund leverage figures can differ, depending on the measurement approach used, the above mentioned surveys demonstrate how simplistic and unworkable it will be for the European Commission to impose hard caps on fund leverage under the Alternative Investment Fund Managers’ Directive.”

In summary, the continuing oversight of the FSA through these surveys at six monthly intervals will identify whether hedge fund managers pose a systemic risk either individually or collectively.

Julian Korek, a founding member at Kinetic Partners added: “It has always been Kinetic Partners’ belief that the hedge fund industry does not present a systemic risk in the manner in which it had been feared. It is also clear that the many and varying risks that asset managers are exposed to are not unique to any one type of investment.”

http://www.globalinvestormagazine.com/Article/2401425/Industry-welcomes-FSA-hedge-fund-survey.html?LS=EMS368422 Turnover (value of foreign exchange transactions) for the period up 36 per cent

http://www.americanchronicle.com/articles/yb/141780468

Merchant Cap returns with income product

Merchant Capital has launched its first income structured product since the acquisition of the Arc Capital & Income business in November.

The six-year FTSE-linked plan offers two payout options and targets a maximum annual income of 9.25 per cent.

If the final level of the index is more than 50 per cent below its initial level or if it falls by more than 50 per cent on a daily closing basis during the plan and fails to recover to its strike level, investors will lose some capital.

Securities for the plan are backed by Nomura Bank International which is Standard & Poor's Arated.

Minimum investment is pound 3,000 and maximum is pound 2m.

The new plan follows a growth plan launched by the firm earlier this month and structured products director John Gracey says it is part of a suite of products planned over the coming months.

He says: "We will try to have two or three plans out every couple of months. The selling period is typically six to eight weeks and we would like to have an income product out there, a growth product and some form of kickout plan."

In November, administrator Carter Backer Winter sold ACI to Merchant Capital, preserving the interests of around 10,000 investors with investments totalling pound 100m.

ACI was put into administration in October following compliance errors made by the firm in June 2008 in relation to Lehman-backed products' promotional material.

Gracey transferred to Merchant Capital with the sale of the ACI business along with other colleagues, including Peter Raku and Tommy Ip.Industry welcomes FSA hedge fund survey

26 February 2010

The consultancy, Kinetic Partners has openly welcomed the FSA's Hedge Fund Survey and Hedge Fund as a Counterparty Survey





According to the consultancy firm, Kinetic Partners, the Financial Service Authority’s Hedge Fund Survey and Hedge Fund as a Counterparty Survey demonstrates that hedge funds do not pose a potentially destabilising credit counterparty risk across the surveyed banks and that there is a relatively low level of ‘leverage’ under the FSA’s various measures across the 50 hedge funds surveyed.

This demonstrates that hedge funds are generally not exposed to any more risk than a fund managed by the traditional sector. Kinetic Partners believes that it is totally inappropriate for members of the EU to single out hedge funds as being responsible for the recent financial crisis.

The Spanish EU Council presidency’s recent interventions on the Draft AIFM Directive further demonstrates the complete lack of understanding of hedge funds by a majority of onshore EU member states.

Andrew Shrimpton, a member at Kinetic Partners commented: “By showing how widely fund leverage figures can differ, depending on the measurement approach used, the above mentioned surveys demonstrate ho

Hedge fund phoenix is rising

16 February 2010

Merchant Capital, a London-based corporate investment adviser and stockbroker, in January this year launched a Dublin-based umbrella structure to help smaller hedge funds with a quicker route to market. The initiative aims to bridge the growing gap between the heavyweights and the boutiques. Ucits may bring a number of benefits but they have also raised the barrier to entry by increasing set-up and operational costs.

Tannenbaum says: “New managers need a one-stop-shop to meet the daily demands of the investors. They have to be transparent, and provide consistent valuation policies, market risk analytics, central counterparty analytics and increased levels of investor reporting. Much of this has to be outsourced to firms like ours, which provide independent valuation and reconciliation directly to the investors. After Bernie Madoff, the self-administration model is finished.”

Custody banks are moving to meet the new demands. To meet the growing demand for Ucits-compliant hedge funds, Citi has launched a full service, end-to-end integrated servicing solution. The servicing solution, which includes prime finance, custody, middle office support and fund administration, builds on Citi’s front, middle, and back office solutions for hedge fund managers, while also using Citi’s experience in the traditional long-only fund administration and fiduciary businesses.

Andrew Gelb, head of securities and fund services in Europe, Middle East & Africa at Citi, said: “Investors are now focused on governance, risk management, independent valuation and transparency of reporting. Hedge fund managers are increasingly offering Ucits and other EU domiciled fund structures to meet these needs as the industry continues to converge across the alternative and traditional fund sectors

In fact, the industry was undergoing “a transformational crisis”. A report jointly published in April that year by BNY Mellon and Casey, Quirk & Associates predicted that “the value proposition of the hedge fund across all geographies and investment styles remains largely intact, despite the difficult year the sector has experienced and despite record redemptions.” So it has turned out.

The 2009 report, which canvassed the opinions of 150 market participants, went on to forecast that the industry would rebound to $2.6 trillion by 2013, with bullish sentiment pushing that figure to more than $3.2 trillion. The more bearish view among those polled was that assets would struggle to reach $2 trillion, but this still is double the level of industry assets in the first half of this year. This forecast sits comfortably with Eurekahedge’s figure of $1.75 trillion by the end of this year

http://www.globalinvestormagazine.com/Article/2393935/Search/Results/Hedge-fund-phoenix-is-rising.html?ArticleID=2393935&Type=Search&ID=Results&Keywords=Merchant+Capital+Uci

Financial services business, Merchant House Group says that it has been greatly encouraged by progress in the last six weeks.



The Group says that the foreign exchange proprietary trading was ahead of budget with trading volumes exceeding $10bn per day.Net fee contributions - 12.5% of net profits - to Merchant Capital are ahead of budget.

Following Irish FSA approval being granted in December for a UCITS 111 umbrella fund, the Group says it has contacted by funds from around the world interested in using the platform, is in active discussions with some twenty funds and has received requests from a number for formal paperwork.

MD Christopher Day says:""Whilst its too early to say how many funds will sign up, I do believe we have created a platform that will be of interest to funds who seek a wider scope for fundraising and investment.

Our first fund, the advisor and distributor being Spanish based is now trading actively and we have completed the framework and groundwork needed to help this Merchant Capital business grow."

Merchant House launched its new Plan Management business in December and having taken over the administration of funds from a company in administration is now responsible for some 90 million.

The Company is launching a new growth plan backed by Morgan Stanley and which it will now sell through the distribution network of 2,000 IFAs established over a number of years.

A second product launch is expected shortly and the Group says it is also in discussions with a number of parties regarding the possibility of taking over their Plan Management businesses and hence adding considerably to the funds being administered and the investors being serviced

Im hoping for a postive day, Last 2 days 11 of my 15 share have all been down lol so hoping for a good friday.

I also hope mhg will have a good 2010 as there seems to be quite alot going on so hopefully were see that in the sp.

GL M8