Institutional Investor's Alpha Magazine - June 2008 - (Page 92)

Europe Hedge Fund 50 ofﬁces in the region. Man was also among the very ﬁrst publicly traded hedge funds, a strategy the U.K. hedge fund market in particular has been keen to embrace. Brevan Howard has been among the most successful at tapping the public markets. Last year it raised $1.2 billion on the London Stock Exchange for a closed-end publicly traded fund. This May the ﬁrm, whose ﬂagship macro fund was up 25 percent in 2007, raised $1 billion in a second public offering. Although Brevan Howard has grown sharply this year — it has added $4 billion in assets since the end of 2007 — GLG faces the prospect of big redemptions with the impending departure of portfolio man ager Greg Coffey. GLG made its own public markets debut last year, through the acquisition of Freedom Acquisition Holdings, and now trades on the New York Stock Exchange. The widely publicized loss of Coffey, who is likely to take at least $4 billion in GLG assets with him to a new hedge fund, and the announcement of $222 million in losses for the ﬁrst quarter of 2008 show— IBRAHIM GHARGHOUR, case the negative side of beCO-HEAD OF HEDGE FUNDS, ing a public company. At the BAHRAIN- AND LONDONend of May, GLG’s share price LISTED INVESTCORP was down almost 40 percent from November. The fall of one particular high-ﬂying fund is a reminder of how tough Europe can be. Peloton Partners, a global macro specialist and one of the big launch stories of 2005, had $3 billion in assets at the end of 2007. But in February, Peloton announced severe losses and promptly began closing shop. The wind-down is expected to be completed this month, and one of the firm’s founders, Geoffrey Grant, is already out marketing a new fund. But Peloton’s collapse doesn’t necessarily spell gloom for macro hedge funds in London, says Jaeson Dubrovay, a senior consultant and hedge fund specialist with Cambridge, Massachusetts–based investment consulting ﬁrm NEPC (for merly New England Pension Consulting). “European-based investors are often better at seeing the global picture than their American counterparts, which tend to be more U.S.-centric in their view,” he explains. Europe is also a hotbed for shareholder activists, an ad- On the Web Please visit www.alphamagazine.com for more Europe Hedge Fund 50 data and rankings, as well as the list and profiles of the world’s 50 best-paid hedge fund managers in 2007. “London has matured in terms of quality of managers, their infrastructure, the depth of market and standard of people.” ditional area of recent fund growth. And few do it better than Christopher Hohn, founder of the Children’s Investment Fund Management U.K., No. 10, which launched in 2002 and has emerged as a world-class performer. Last year London-based TCI delivered a roughly 37 percent return for investors, helping the ﬁrm’s assets grow from $9.5 billion at the end of 2006 to $13 billion. A transformation in corporate governance at European companies, which are slowly becoming more responsive to shareholder interests, has created wealth opportunities for Hohn and other activists. “A lot of capital is being allocated to this sector,” says Stephen Harper, CIO of Londonbased fund-of-hedge-funds ﬁrm Strathmore Capital. The credit and credit-derivatives markets in Europe have also been a strong source of returns. London-based credit specialists BlueBay Asset Management, No. 6, Cheyne Capital Management (U.K.), No. 12, and BlueCrest Capital Management, No. 13, have all tapped these markets, which have been nurtured by the formation of the European Union and London’s emergence as the global center for structured finance. With the seizing-up of that industry and the volatile credit markets of the past year, however, it remains to be seen how credit funds will do. “This is as difﬁcult an environment as we have ever seen in credit,” says David Bailin, the Stamford, Connecticut– based head of alternative investments at Banc of America Securities. “But it is also perhaps the best investment opportunity hedge funds have seen in two decades.” European hedge funds don’t have the sandbox all to themselves. More and more U.S. funds are setting up ofﬁces across the pond to take advantage of the opportunities. But London’s growing place in the hedge fund world order — impressive though it is — will probably be challenged soon enough by the likes of Hong Kong and Singapore. In Europe’s rearview mirror Asia looms larger every day. This ranking was compiled by Associate Editor Timothy Roberts under the guidance of Assistant Managing Editor Sathya Rajavelu and Senior Editor Jane B. Kenney, with assistance from Researcher Lauren Bennett. To request a questionnaire for next year’s Europe Hedge Fund 50 ranking, e-mail your contact details to alphahedgefundsurvey@alphamagazine.com. How the Ranking Was Compiled In Alpha’s 2008 Europe Hedge Fund 50, we provide each manager’s total assets under management as of December 31, 2007, unless otherwise indicated. Where possible we also show assets at the individual fund level, with 2007 net returns for the ﬁve biggest funds run by a ﬁrm. Asset totals reﬂect internally run single-manager hedge funds and separate accounts; they exclude funds of funds, overlay accounts, funds managed by third parties, mutual funds and traditional long-only funds, dynamic money market funds, assets in collateralized debt and bond obligations, private equity and venture capital, and assets in private-equity-style vehicles that issue capital calls. We gathered the data through questionnaires completed by hedge fund managers and supplemented by extensive staff research. 90 • INSTITUTIONAL INVESTOR’S ALPHA • JUNE 2008 http://www.alphamagazine.com

Table of Contents Feed for the Digital Edition of Institutional Investor's Alpha Magazine - June 2008

Investor's Alpha Magazine - June 2008 Contents Letter From the Editor Longs & Shorts Cover Story: Alpha Hall of Fame Bruce Kovner Michael Steinhardt Kenneth Griffin Louis Bacon Steven Cohen George Soros James Simons Seth Klarman Julian Robertson Jr. Jack Nash Leon Levy Paul Tudor Jones II Alfred Winslow Jones David Swensen Looking Ahead: Back to the Future Research Center: Europe Hedge Fund 50 Unhedged: Let the Sunshine In

Institutional Investor's Alpha Magazine - June 2008

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