According to Bloomberg,
Investors are pouring more money into stock mutual funds in the U.S. than they have in 13 years, attracted by a market near record highs and stung by bond losses that would deepen if interest rates keep rising.
Stock funds won $172 billion in the year’s first 10 months, the largest amount since they got $272 billion in all of 2000, according to Morningstar Inc. (MORN) estimates. Even with most of the cash going to international funds, domestic equity deposits are the highest since 2004.
The move marks a reversal from the four years through 2012, when investors put $1 trillion into fixed income as the financial crisis drove many to redeem from stocks and miss out as the Standard & Poor’s 500 Index almost tripled from its low. Rare losses this year in core bond portfolios, coupled with a 25 percent gain in the S&P 500, spurred the switch back to equities that some professionals call risky performance chasing.
New York Stock Exchange
“The timing of retail investors tends to be terrible,” said Jonathan Pond, an independent financial adviser in Newton, Massachusetts, who oversees $200 million. The deposits may be a contrarian indicator of a market near a top, he said.
Jeremy Grantham, chief investment strategist at Boston-based money manager Grantham Mayo Van Otterloo & Co., told clients in a letter this week, “We will have the third in the series of serious market busts since 1999.” BlackRock Inc. Chief Executive Officer Laurence D. Fink said this month that stocks may decline as much as 15 percent because of political risks in China, Japan, France and the U.S.
Posted in Bond Market, Commodities, Derivatives, Economy, equity trading
Tagged Boston, Jeremy Grantham, Laurence D. Fink, Massachusetts, Morningstar, mutual fund, Standard & Poor, Stock fund
Hedge fund assets hit $2.4 trillion — Hedge Fund Research
Hedge funds toppled another record high point when industry assets totaled $2.4 trillion as of June 30.
Aggregate hedge fund assets were up 1.2% from March 31, 7.2% from Dec. 31 and 20.3% from Dec. 31, 2011, according to Hedge Fund Research’s second-quarter 2013 asset flows report.
Hedge fund industrywide assets have been climbing every year after hitting a nadir of $1.4 trillion at the end of 2008, HFR reported.
Net inflows in the second quarter were $14.5 billion and $15.2 billion in the second quarter. Midyear total net inflows of $29.7 billion were higher than first-half net inflows in 2012 of $20.4 billion.
Blackstone readies fund to let retail clients access hedge funds
(Reuters) – Blackstone Group LP, one of the world’s biggest hedge fund investors, is now giving retailclients a taste of these normally exclusive portfolios through a new mutual fund.
The Blackstone Alternative Multi-Manager Fund (BXMXX) will be run by the company’s hedge fund unit and be advised by nearly one dozen hedge funds, including Two Sigma Advisers, HealthCor Management and Good Hill Partners, the company said in a statement on Tuesday.
Best known as a private equity business, Blackstone’s hedge fund unit, Blackstone Alternative Asset Management, boasts strong industry credentials, having investing $49 billion with prominent firms including Pershing Square and D.E. Shaw & Co, and seeding newcomers like Marcato Capital Management and Bow Street LLC.
Posted in Breaking news, Events, Finance, Hedge Funds
Tagged Blackstone, Blackstone Group, D.E. Shaw & Co., hedge fund, mutual fund, Pershing Square, Private Equity, Reuters
Hedge Funds Are for Suckers
At the height of the financial crisis in 2008, a group of famous hedge fund managers was made to stand before Congress like thieves in a stockade and defend their existence to an angry public. The gilded five included George Soros, co-founder of the Quantum Fund; James Simons of Renaissance Technologies; John Paulson of Paulson & Co.; Philip Falcone of Harbinger Capital; and Kenneth Griffin of Citadel. Each man had made hundreds of millions, or billions, of dollars in the preceding years through his own form of glorified gambling, and in some cases, the investors who had poured money into their hedge funds had done OK, too. They were brought to Washington to stand up for their industry and their paychecks, and to address the question of whether their business should be more tightly regulated. They all refused to apologize for their success. They appeared untouchable.
Posted in Events, Finance, Financial Crisis, Hedge Funds, Opinion
Tagged Bloomberg Businessweek, Business, funds, hedge fund, investing, Investment management, mutual fund
Morgan Stanley Gets $770 Million for Private-Equity Fund
Morgan Stanley (MS), owner of the world’s largest brokerage, said its money-management division raised $770 million for a pool that will buy interests in private-equity funds in the secondary market.
The division of the New York-based bank said today in a statement that it exceeded its $600 million target for the fund, called Morgan Stanley Global Secondary Opportunities Fund LP II. The pool will invest in “off-market” deals such as smaller buyouts and special situations, according to the statement.
“We recently completed several restructuring deals and believe these types of deals are an ever-important and growing part of the broader secondary market,” Jon Costello, senior portfolio manager at Morgan Stanley Alternative Investment Partners, said in the statement.
Posted in Breaking news, Equity Markets, Finance, Private Equity
Tagged Business, funds, investing, Morgan Stanley, mutual fund, New York City, PE, Private equity fund
New research adds fuel to debate over need for private equity funds of funds
A growing number of consultants consider the plain-vanilla private equity funds of funds a quaint relic of days gone by, a tool that has outlived its usefulness.
Underlying this chorus is new research showing funds of funds underperform direct investment in private equity funds. Also, investors in funds of funds are paying an extra layer of fees at a time when private equity returns are expected to be lower, competition is driving down private equity fees overall and the cost of implementing a direct investment program also is falling.
Posted in Equity Markets, Finance, Opinion, Private Equity
Tagged Business, Financial Services, Fund Families, funds, investing, investment, mutual fund, Private Equity