Institutional Investor's Alpha Magazine - September 2008 - (Page 10)

Holdings, which at the time had just acquired a minority stake in Ospraie Management. Wingspan’s mission, though perhaps risky, was straightforward enough: to provide seed capital and an operational platform for start-up hedge fund managers focused on the notoriously volatile commoditiestrading sector. At its height Wingspan had close to $1 billion in assets under management. Today, assets are down to $400 million. In addition to placing its money with ﬂedgling fund managers, Wingspan had invested in the Ospraie Fund, which was off by 40 percent on the year when Anderson announced this month that he would be winding it down. This arrangement — Wingspan’s committing capital to its parent fund — was intended as an incentive to draw investors in based on Anderson’s track record and experience, ﬁrst as a well-regarded analyst with Tiger Management Corp. in New York and then as a successful portfolio manager with Greenwich, Connecticut–based Tudor Investment Corp. Partly as a result of its parent’s faltering performance — as much as 20 percent of its capital was in the Ospraie Fund — Wingspan has also suffered redemptions in recent months. — I.R.-S. Mantra: Stay Calm A fter sweating some tough audience questions last year at a hedge fund conference where he was a panelist, Benjamin Shoval, managing director of marketing and investor relations at $260 million Wilkes-Barre, Pennsylvania–based Ambit Funding, vowed to ﬁnd a comedy class to help him learn how to bring humor to tense situations. Shoval found that the more jokes he told, the less stress he felt. Now he takes lessons from a drop-in comedy coach at Ambit’s Manhattan ofﬁces and does stand-up at open-mic nights in New York with hedge fund barbs: “No one understands hedge funds. They’re like the Björk of the investment world,” and, “We’re the Barry Bonds of investments. Barry goes to Mexico for his stuff. We go to the Cayman Islands.” Humor is hardly the only stressreduction medicine. Avalon Fund Akthe end of March, the ﬁrm told investors that its Monsoon India Inﬂection Fund was already down nearly 50 percent on the year and that its Monsoon Indian Inﬂection Fund 2 was off by almost the same percentage. (Over the same period India’s Sensex index fell by 26 percent.) The firm has not released more-recent data. Making the country more accessible to outsiders may help restore conﬁdence in India’s markets, and scores of off-shore investors have begun to ﬁ le as FIIs under the new rules. By August, FII registrations totaled almost 1,500, up from about 1,200 at the end of 2007. — Udayan Gupta UPDATE India Inches Forward nvesting in India is a lot less complicated than it was the last time we wrote about it (“Passage to India,” October 2007). Certain long-contemplated reforms introduced in May by the Securities and Exchange Board of India have eased the process by which foreigners can tap India’s markets. Nonresidents with foreign institutional investor (FII) licenses had been allowed to trade only through sanctioned intermediaries. Now they can trade on their own — with less red tape and fewer expenses. The license re- I quirements are nominal: As long as a foreigner can round up 20 accredited investors (defined as “institutional investors who are generally perceived to possess expertise and the ﬁnancial muscle to evaluate and invest in the capital markets”) — with no single investor contributing a majority of the fund — he can qualify. “The implications are significant,” says Janak Jethmalani, the managing partner of Avatar India Opportunities Fund, a tiny ($20 million), Mauritius-based hedge fund that focuses on Indian equities. “It opens it up to small NRIs [nonresident investors] like me.” W he t her t hese new s teps will stir excitement about India remains an open question. Most short-selling is still prohibited, and the Indian stock market tanked this summer. At the end of August, it was down 28 percent for the year, partly because foreign investors sold off $6.7 billion of India-based assets. Fundamental problems include a double-digit inﬂ ation rate and, as elsewhere, high oil prices and credit-market troubles. A major victim of the slumping market has been Monsoon Capital, a Bethesda, Maryland–based, $1.2 billion hedge fund ﬁrm. Toward 10 • INSTITUTIONAL INVESTOR’S ALPHA • SEPTEMBER 2008 Illustration by Joshua Gorchov for Alpha

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

Institutional Investor's Alpha Magazine - September 2008 Contents Letter from the Editor Longs & Shorts Pension Corner: Culling the Herd The Good Guys: Ending the Cycle Interview: Press Credentials Cover Story: Rethinking Chris Hohn Strategies: At the Edge of the Earth Profile: Alpha Femals Strategies: Tails, You Lose Research Center: The Top Equity Trading Firms Alpha Bytes: The Light Is On Unhedged: Commentary: Not-So-Dire Diagnosis

Institutional Investor's Alpha Magazine - September 2008

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