Here we take a look at the August 2012 and year-to-date through August performance for the top 5 fixed income arbitrage funds, as tracked by Lipper’s hedge fund database. To see more analysis, including assets under management and domicile information for the top 10 funds, click here. To be truly connected to all the Lipper analytics available on HedgeWorld, become a HedgeWorld Premium Plus member. To find out more about how to do that, visit hedgeworld.com/membership/.

Under the Securities Act of 1933, the U.S. Securities and Exchange Commission allows companies to offer securities for sale without having to register those securities or file periodic reports, provided the companies meet exemptions laid out in Regulation D. For hedge funds’ purposes, those securities are limited partnerships. When a hedge fund firm sells its first securities, it is required by Reg D to file a Form D, which includes names and addresses of the company’s executive officers and stock promoters and the date of the first sale in the offering. As such, Form D filings can be a useful tool to find new hedge fund launches.

BAYVIEW OPPORTUNITY DOMESTIC IIIb, L.P.

LAE P Fund Ltd

OPULENT FUND LP

Infinium Global Opportunities Fund LLC

O’Connor Global Multi-Strategy Alpha (Levered) Ltd

SERAPH CAPITAL PARTNERS, L.P.

—Compiled by Angela Sormani

Our weekly newsletter is out, and if you follow our newsletter and blog regularly, you know we tend to speak with one voice on a variety of subjects related to managed futures and portfolio construction, but to be fair, it’s never just one person behind the curtain. Our materials are a team effort, with a dozen different hands touching a piece before it heads out the door and to your inbox. And these pieces rarely get put together without some level of debate occurring on different portions. Everyone comes at the subjects from a unique perspective with diverse opinions and input, which is the way we like it. After all, if steel sharpens steel…

But the process behind the construction of our research – how sausage gets made, if you will – belies the portfolio construction process as a whole, and the unique approach taken with each individual investor. As we’ve said before and we’ll say again, if you can afford a managed account investment tailored to your investment goals, risk tolerance and available risk capital, your experience in the managed futures space is going to be a more efficient and satisfying one, in our opinion. When we speak with investors, you’re not hearing a pitch script or the “deal of the day”; our recommendations will change based on the person with whom we’re speaking.

So this week, we’re doing something a little bit different. Instead of resolving differences of opinion into a singular perspective, we’re highlighting those differences, and giving you a glimpse into a few of the minds working on client portfolios on a daily basis. This space, at its best, isn’t about the one-size-fits-all investment; it’s about the investment that fits YOU best, and we wanted to show off some of the custom designs that our portfolio tailors are working on these days. Read on to see what we mean.

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To read more Managed Futures research pieces, visit Attain’s Managed Futures Newsletter archive and our Managed Futures Blog.

DISCLAIMER

Forex trading, commodity trading, managed futures, and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors.

The entries on this blog are intended to further subscribers understanding, education, and – at times- enjoyment of the world of alternative investments through managed futures, trading systems, and managed forex. Unless distinctly noted otherwise, the data and graphs included herein are intended to be mere examples and exhibits of the topic discussed, are for educational and illustrative purposes only, and do not represent trading in actual accounts.

The mention of asset class performance is based on the noted source index (i.e. Newedge CTA Index, S&P 500 Index, etc.) , and investors should take care to understand that any index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices: such as survivorship and self reporting biases, and instant history.

Managed Futures Disclaimer:

Past Performance is Not Necessarily Indicative of Future Results. The regulations of the CFTC require that prospective clients of a managed futures program (CTA) receive a disclosure document when they are solicited to enter into an agreement whereby the CTA will direct or guide the client’s commodity interest trading and that certain risk factors be highlighted. The disclosure document contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA.

Copyright © 2011 Attain Capital Management, licensed Managed Futures, Trading System & Commodity Brokers. All Rights Reserved. Reprinted with permission.

What’s news around the hedge fund industry for Monday, Sept. 24, 2012:

Around the web

Wall Street scandals fill lawyers’ pockets. (DealBook)

L.A. billionaire Patrick Soon-Shiong, Guggenheim Partners plot AEG bid. (Reuters, via the Chicago Tribune)

Falcone eyes Stanley Black & Decker fixture unit. (New York Post)

Bankers mauled by Sheila Bair in new book. (New York Post)

With smartphone deals, patents become an asset class. (DealBook)

Yusko: Hedge funds remain best long-term investment. (FINalternatives)

Asian hedge fund assets rise, especially in Hong Kong. (AsiaHedge, via FINalternatives)

Comac Capital’s Colm O’Shea earns €42 million. (FINalternatives)

Hedge funds up 1.71% in Q3: BofAML. (FINalternatives)

Stanley Fink says U.K. should go offshore. (FINalternatives)

Gundlach to hold press conference on $10 million robbery. (FINalternatives)

Gabelli Securities boots alts. group. (FINalternatives)

Revealed: Britain’s biggest taxpayers. (The Independent)

Accidental trades blamed for volatility. (Irish Times)

Asset manager angst at collateral requirements. (Financial Times)

Japan teachers’ fund to start REIT and hedge fund investments. (Bloomberg)

Hedge funders, puppet terrier for Soane. (Bloomberg)

Australian bank launches new hedge fund. (HFMWeek, via HedgeFund.net)

Northern Trust to add 400 jobs in Ireland. (HedgeFund.net)

Under the Securities Act of 1933, the U.S. Securities and Exchange Commission allows companies to offer securities for sale without having to register those securities or file periodic reports, provided the companies meet exemptions laid out in Regulation D. For hedge funds’ purposes, those securities are limited partnerships. When a hedge fund firm sells its first securities, it is required by Reg D to file a Form D, which includes names and addresses of the company’s executive officers and stock promoters and the date of the first sale in the offering. As such, Form D filings can be a useful tool to find new hedge fund launches.

THYRA GLOBAL TECHNOLOGY FUND, L.P.

INVESTCORP BALLAST LONG/SHORT U.S. OPPORTUNITY FUND LLC

Cederian Palisander Fund, LP

Sibilla Capital Onshore LLC

Annapurna Pareto Value LP

INVESTCORP PROSIRIS OPPORTUNITIES FUND Ltd

INVESTCORP BALLAST LONG/SHORT U.S. OPPORTUNITY FUND LTD

—Compiled by Angela Sormani

Here we take a look at the August 2012 and year-to-date through August performance for the top 5 event-driven funds, as tracked by Lipper’s hedge fund database. To see more analysis, including assets under management and domicile information for the top 10 funds, click here. To be truly connected to all the Lipper analytics available on HedgeWorld, become a HedgeWorld Premium Plus member. To find out more about how to do that, visit hedgeworld.com/membership/.

Chief Compliance Officers (CCOs) at alternative asset management firms are facing increasing challenges overseeing and monitoring compliance with respect to investment guidelines and portfolio compliance mandates. To meet the new and growing challenges of effective compliance and risk management, a new trend is emerging among CCOs—namely, an expansion of the role to include greater involvement than ever with the investment process and, at the same time, expanded monitoring of portfolio compliance risk. Compliance risk can be broadly defined as monitoring compliance of investment style, portfolio construction and investment risk management, where these and other key areas relate to investment mandates, risk management guidelines and investor disclosures.

Several Factors Behind Heightened Oversight

CCOs are also introducing a wider regulatory focus on matters that reach beyond traditional “hot topics,” such as code of ethics and insider trading. These additional areas include investigating the control structure of the firm’s investment management practices and adhering to investor disclosures. Collectively, this heightened scrutiny stems from several contributing factors, including:

- Market events over the last several years have forced fund managers to meet investor demands for greater visibility into risk management policies and practices. As a result, there has been an increase in the level of investor disclosures surrounding portfolio strategy risk and compliance (e.g., control over “style drift” and concentration risk).

- Many larger, more experienced investors have been turning to separately managed accounts to gain access to prominent alternative investment managers. In doing so, these investors have been able to secure increased transparency and risk monitoring with respect to investment managers’ trading strategies, portfolio construction, risk metrics and portfolio performance.

- Additionally, with the implementation of Dodd-Frank, there has been a significant increase in the sheer number of SEC-registered advisors. This brings with it the attendant burdens of demonstrating and documenting appropriate compliance with investment policies, procedures, and other elements that comprise fund offering memorandums, external marketing materials and internal operating manuals.

To meet these and other new dimensions of external scrutiny, CCOs are more acutely focused on thoroughly understanding their firm’s investment and risk management environment in order to measure, monitor and report on portfolio risk against established investment policies and limits. While the extent and involvement of the CCO will vary by firm, “best in class” CCOs will focus on closer interaction and collaboration with risk managers in learning both the qualitative and quantitative dimensions of investment styles and strategies, portfolio construction processes, risk management framework, pre- and post-trade limit monitoring, periodic portfolio compliance reviews and testing.

Larger alternative asset management firms have responded to these demands by formalizing the risk management function through the addition of an independent Chief Risk Officer (CRO) to assist the Chief Investment Officer (CIO) and portfolio managers in making sound investment decisions. CROs are also playing the role of policing investment guidelines and risk management rules. To support the CRO and the risk management function, firms are making significant investments in building a comprehensive and integrated risk management framework. This may include establishing the proper governance to define appropriate measurements based upon investment guidelines and investor disclosures, defining policies and procedures to properly monitor compliance with such measurements, implementing advanced risk technology to measure risk limits and portfolio performance, and conducting stress testing and scenario analyses. Even with the sufficient levels of risk management experience and resources available at larger firms, implementing risk frameworks remains a challenging and time-consuming task and an even bigger challenge for smaller firms.

New Hedge Fund Launches Spur Scrutiny

As reported recently, new hedge fund launches during the first quarter of 2012 reached the highest level since the fourth quarter of 2007. At the same time, we are seeing a significantly sharpened focus on newly registered alternative asset managers by regulators. The SEC’s short term strategy includes examinations of a significantly large number of newly registered managers and reviews of marketing materials as well as all compliance policies and procedures, among other materials.

Although start-up funds typically lack the budget and resources of larger, more established firms, they still bear the same “burden of proof” in terms of fulfilling their fiduciary responsibilities and contractual obligations. For this reason, newly launched alternative managers are facing major challenges in the area of compliance risk monitoring. Whether they bite the bullet and invest in advanced risk technology and staff resources or leverage third-party service providers with the necessary scale and risk-management experience, newly launched alternative asset managers must ultimately check the same compliance and risk boxes as their largest, more seasoned rivals.

To be precise, firms are not looking to outsource the risk management function, which is the mandate and responsibility of the portfolio management team. What they seek are experienced risk professionals along with the risk technology needed to help them meet the demands of investors and regulatory requirements. This can range from establishing a sound risk governance framework and designing customized risk reporting to advising on customized stress testing and scenarios analyses, and more.

While they face fierce competition for investor allocations and must closely manage costs, firms increasingly view operational, compliance and risk infrastructure as a competitive advantage. Sustaining that competitive advantage while continually adapting to a dynamic regulatory environment has led to ever-widening demands for complex, cross-functional capabilities, intelligence, analytics and intensified reporting horsepower. It is in the midst of this historic transformation that firms need to be thinking pro-actively about the solutions they are implementing in the course of managing formalized risk management and compliance practices within a continually evolving alternative asset management industry.

Shyam Prakash is Director of Risk and Steven Richard is Managing Director of Risk at Gravitas Risk Analytics & Advisory Services, a provider of co-sourcing solutions for technology, investment operations, risk and research support to the alternative investment and financial services industry. Gravitas is based in New York with offices in Chicago, Greenwich, Mumbai and Ahmedabad, India. (www.gravitas.co).

Here we take a look at the August 2012 and year-to-date through August performance for the top 5 equity market neutral funds, as tracked by Lipper’s hedge fund database. To see more analysis, including assets under management and domicile information for the top 10 funds, click here. To be truly connected to all the Lipper analytics available on HedgeWorld, become a HedgeWorld Premium Plus member. To find out more about how to do that, visit hedgeworld.com/membership/.

Under the Securities Act of 1933, the U.S. Securities and Exchange Commission allows companies to offer securities for sale without having to register those securities or file periodic reports, provided the companies meet exemptions laid out in Regulation D. For hedge funds’ purposes, those securities are limited partnerships. When a hedge fund firm sells its first securities, it is required by Reg D to file a Form D, which includes names and addresses of the company’s executive officers and stock promoters and the date of the first sale in the offering. As such, Form D filings can be a useful tool to find new hedge fund launches.

BlackRock Special Credit Opportunities ASP Fund

Invenio Capital Partners, L.P.

Pishon Partners, L.P.

Tekne Master Fund, L.P.

PIMCO Multi-Asset Volatility Onshore Fund LLC

Earnest Series, a Series of LPE, LLC

—Compiled by Angela Sormani

Here we take a look at the August 2012 and year-to-date through August performance for the top 5 pure emerging markets funds, as tracked by Lipper’s hedge fund database. To see more analysis, including assets under management and domicile information for the top 10 funds, click here. To be truly connected to all the Lipper analytics available on HedgeWorld, become a HedgeWorld Premium Plus member. To find out more about how to do that, visit hedgeworld.com/membership/.