http://www.opalesquesolutions.com/asquare/

The Opalesque A SQUARE Index gained 1.5% in December, bringing the 2010 performance to +9.83%. The A SQUARE Funds of Funds Index posted a gain of 0.82% in December, finishing 2010 up 2.15%.

The monthly performance of the A SQUARE Index ranged between a gain of 3.12% in September and a loss of 1.97% in May, with 9 positive and 3 negative months. With a single-digit 2010 return, it slightly underperformed its two benchmarks: Hedge funds tracked by the HFRI Fund Weighted Composite Index returned 10.56% in 2010, while global equity markets, represented by the MSCI World Index, ended the year with a gain of 10.96%.

While the index underperformed by only 1% last year, the returns were generated with notably low absolute and relative risk. Volatility (defined as annualized standard deviation) was 4.55% for the A SQUARE Index and 4.38% for the FoF Index, compared to 6.55% for the HFRI and over 20% for the MSCI World.

INFO AND CONTACTS
About the Opalesque A2 Indices and database:

Opalesque A SQUARE = Alternative Alternatives is the first web publication, globally, that is dedicated exclusively to “alternative” investments. A SQUARE’s weekly selection feature unique investment opportunities that bear virtually no correlation to the main stream hedge fund strategies and/or distinguish themselves by virtue of their “alternative” motive - social, behavioural, natural resources, sustainable / environment related investing. The archive containing all issues of A SQUARE published to date can be found here:

With currently 583 Alternative Funds in 22 categories, the new A SQUARE database is the only database dedicated exclusively to “alternative alternatives” investments with fast facts and investment oriented analysis. Investors interested in alternative funds would find the database very useful because of:

• Detailed information provided for each of the funds
• Categorization of funds, helping users to navigate through information of interest
• Information is updated/sent by the fund managers themselves, reducing margin of error in the facts and figures
• Mark funds as Favorites
• Mark funds for Comparison
• Extensive search option available

The A SQUARE database is located here:
http://www.opalesquesolutions.com/asquare/

The A SQUARE Index and the A SQUARE FoF Index are the first indices tracking the performance of niche investment strategies only. Both indices are equally weighting the performance of all funds and FoFs listed in our database. More information on the performance and methodology of the indices can be found here:
http://www.opalesquesolutions.com/asquare/a2index.html

About Opalesque:
Opalesque was formed in 2001 to provide professional news services to participants in the alternative investment sector. Since inception, Opalesque has been providing premium online information services related to the hedge fund and investment industries. The Opalesque publication Alternative Market Briefing is the only daily hedge fund news service read by the elite hedge fund managers themselves (see our Testimonial page for more). Opalesque is led by Matthias Knab, an internationally recognized expert on hedge funds and alternatives.
http://www.opalesque.com

Contacts:
Editor, Opalesque A SQUARE research:
Florian Guldner
E-Mail:florian@opalesque.com

Opalesque A SQUARE database support team:
(Telephone support is available Monday through Friday from 9 AM to 5 PM GMT)
Tel.: +44-208-144-4926 or +1 914 619 5223
E-Mail: support@opalesquesolutions.com

Opalesque has been building and developing Databases for the past 12 months, and has be offering a series of extraordinary products and services to the industry.

We want to invite you to be included in our New Emerging Manager Fund Database, which Opalesque Solutions Pte Ltd. (www.opalesquesolutions.com) has built and will launch in the coming weeks. Already more than 180 funds are listed - please join us by emailing your monthly returns to db@opalesque.com.

The criteria for including the funds in our Emerging Managers database are:
1) The firms less that 36 months old
2) AUM of the firm less than $ 400 million at the time of inception.

If you think that your firm’s funds fits perfectly to be in our database then email us the fund detail with performances on the above email address.

The new Opalesque Solutions databases are available only by subscription. A key group to present the database will be Opalesque readers who are eligible investors. Opalesque has now over 50,000 registered users. About 50% of our readers are investors. Each day, about 30 new users sign up on the Opalesque site.

Again, please join our database by emailing your reports to db@opalesque.com.

Please disregard this post if you or your firm is not involved with such a fund, or, if you want to do someone a favor, forward this link to such a manager or firm…

As you may be aware, Opalesque is a leading publisher in the alternatives / hedge fund space. The firm has been publishing for six years now and reach over 600,000 readers each week with our eleven specialist publications.

In January 2007, together with Sona Blessing, Opalesque created the first research platform dedicated to Alternative Alternatives - A SQUARE ( http://www.opalesque.com/AboutA2.html ).

Opalesque has been building and developing this technology unit for the past 12 months, and will be offering a series of extraordinary products and services to the alternative investment industry.

We want to invite you to be included in our A SQUARE Database, which Opalesque Solutions has built and will launch in the coming weeks. Already 137 funds are listed - please join us by emailing your monthly returns to db@opalesque.com.

The new Opalesque Solutions databases are available only by subscription. A key group to present the database will be Opalesque readers who are eligible investors. Opalesque has now over 50,000 registered users. 61% of Opalesque users are investors. Each day, about 30 new users sign up on the Opalesque site.

Again, please join this database by emailing your reports to db@opalesque.com.

At Opalesque Solutions, we have built communication tools such as the IR Suite as well as the White Label Solution. Both these web-based applications are simple to use for hedge fund managers and service providers, and are also affordable compared to the alternatives. The IR Suite lets managers create their weekly and monthly newsletters securely online, and delivers them to the managers’ investor and prospect lists through our email servers. Managers can also use the IR Suite to track the performance of their communication by using the reports feature, so they know who’s read their newsletters, and who haven’t. We’re giving free accounts to anyone who sends to 100 or less recipients, and this can be registered for here: www.opalesquesolutions.com/irsuite.

The White Label Solution lets you and your team create your very own newsletter campaigns, manage your mailing lists, and view campaign reports from a web-based platform. You don’t have to install any CDs, download any software, or worry about upgrades, as this White Label Solution is completely web-based. More information about the White Label Solution can be found here: http://www.opalesquesolutions.com/products/white-label-solution/.

Why do hedge fund managers prefer paying annual license fees, support fees, one time engineering fees, integration fees for the proprietary systems that suck them into “long term relationship” with their software vendor instead of easy to start and easy to end “one night stands” with open source software projects. Just to get on board and migrate existing operations data to the new software system takes humongous amount of time and, off course, money - that eventually lead to “marrying” software vendor “for better or for worse”.

The answer here most likely lies in the specifics of the hedge fund business, where investing strategies are managers’ bread and butter and are guarded better than detainees in Guantanamo. Hedge fund managers are very sensitive when it comes to giving someone access to their investing strategies or even worse - making them public.

One can argue that its all good, but how about support, reliability and more importantly timeliness of those two. At least having a software vendor there is someone who can add a newly desired feature (that is very important) and at least there is some one to call when the system goes down and this someone is obliged to fix it for you in a matter of days. The answer to that is - if the open software would become popular in the hedge fund business there would be tons and tons of the individual freelance developers as well as dedicated software companies who would be specializing in customization and improvement of it. I believe you would be able to get and so much desired new features and support and you also will be able to shop for these services. Eventually you as a consumer will win.

If open source software has brought so much positive to consumers in other software industries (think Mozilla Firefox, Eclipse) why it can not do well in hedge fund software field???

At Opalesque Solutions, we are fully committed to bringing the concept of Open Source to the hedge funds industry. We’ve built all our web applications on open source technology, which is what allows us to offer them to our clients at rock-bottom prices while being able to dedicated our resources to customer support. We are bringing change to the industry, one hedge fund at a time.

The Alternative Investments Industry is changing. To gain or keep your competitive edge in the new alternative investments world, you need to deploy new technological solutions to your business. We develop solutions for the alternative investments industry that use Semantics, Folksonomy, Mashups and other Web 2.0 technology. Basically, we build technological solutions that connect people in the alternative investments industry to what they are looking for. Our solutions encourage transparency and independence for our users.

Our products range from niche alternative investment databases such as the Opalesque Solutions Managed Futures Database. We also have a White Label solution which allow users to create, send and manage their branded customised newletters and remain connected with their investors and prospects.

As a technology company with deep experience in web applications, Opalesque Solutions also provides cost-effectve solutions such as the Investor Relations Suite, which is a set of web tools (no software installation required!) for fund managers to manage their investor relations activities and raise money. If you are an emerging manager, you might want to take a look at our Web Development services to get your online identity set up.

Let us tell you how we can help your business.  We help investment firms and professionals to leverage today’s technology. Please contact us now for more information. ]]> http://www.opalesquesolutions.com/headline/feed/ http://www.opalesquesolutions.com/book-review-michael-covel%e2%80%99s-trend-following-updated-edition/ http://www.opalesquesolutions.com/book-review-michael-covel%e2%80%99s-trend-following-updated-edition/#comments Thu, 11 Jun 2009 12:18:48 +0000 OSOL http://opalesquesolutions.com/?p=525 Trend FollowingDespite the new book cover, Michael Covel’s updated Trend Following book doesn’t horse around. When I received my copy in the mail, my first thoughts were “Ok, here we go again…. another trend trading book…” BUT WAIT! The first 10 pages immediately changed my mindset, in typical Michael Covel fashion. Micahel went straight for the kill, no bull, by saying that this book was not going to teach you any trading strategy in particular, nor was it going to show you how to read charts (or tea leaves). Rather, the book highlights and discusses the most important points that both traders and fund managers tend to overlook when they trade the markets - Trend Following and Price.

Go with the flow or drown in the flood is really the best way to describe what Michael highlights in his book.

If you’re a Market Wizards fan, you’re definitely going to like the interviews and case studies that Michael puts in this book. Just the case studies and interviews conducted by Michael inTrend Following (Updated Edition) is akin to Market Wizards on steroids. There is so much data in this book that an amateur would miss if taken lightly. The case studies, side bar quotes, and the personal stories and philosophy of successful trend followers are extremely good reads and useful in a trader’s business. Fund managers and investors would also find this book a good read, as it explains reasonably well the reason why most lost (a lot of) money in 2008.

Learn more about the book and the other interesting stuff Michael has on his website, http://www.trendfollowing.com/

According to research firm Carbon360, which publishes the Fund Administration Fact Book, the traditional role of the hedge fund administrator is to provide back-office support by taking responsibility for operational, accounting, and regulatory tasks, thereby allowing hedge fund managers to focus on executing their investment strategies.Source In addition to these responsibilities, administrators also provide NAV estimates which have grown from monthly reporting to weekly and even daily reporting; communicating with investors via statements preparations, takes responsibility for antimony laundering services; process subscriptions and redemptions; ensuring compliance with domicile regulations; maintain statutory books and records and conduct annual shareholder meetings; amongst many other responsibilities. Although this outline of responsibilities seems clear, the relationship between hedge funds and independent administrators is a complicated one, fraught with both dependence and disdain. “98% of all hedge funds view administrators as a waste of money and a necessary evil that they are forced to use because of their investors,” says Jason Scharfman, Managing Partner at Corgentum a hedge fund due diligence consultancy.

Often, firms that started managing only internal assets have built their own administration systems and view changing to a third party as a cost-incurring requirement to secure outside investments. On the other end, administrators balance the need to serve two masters; the hedge funds who hire them and the investors they need to protect. But the tension of this relationship may in the end serve to strengthen the industry as a whole.

At launch, when investor numbers and budget constraints are on a lower scale, managers often look to administrate in-house. Others, such as quant funds act as their own administrators because of the amount of trading they do. “Many have spent millions on their administration systems,” says Christopher Kundro Co-Chief Executive Officer LaCrosse Global Fund Services.

LaCrosse had its own beginnings in this way. Cargill Global Capital (which became Black River Asset Management) began an administration platform when they were unable to find one that could adequately handle the many asset classes the fund was trading. LaCrosse finally spun out of the firm in 2007 to become its own, separate entity.

Are third party administrators necessary?
In the wake of the Madoff scandal institutional investors (with UBP leading the way) ramped up their demands for funds to secure third party administrators or risk redemption. Opalesque reached out to US institutional giant CalPERS to see if this policy had taken hold as a general standard. The CalPERS hedge fund program makes investments in 26 US based hedge funds and 9 international fund of hedge funds.

Since launching their Risk Management Absolute Return Strategy in 2002, the pension fund has invested in hedge funds without having a specific policy requiring third party administration. Instead, a CalPERS spokesperson told us “We work very closely with our external funds and have a very fine-tuned due diligence process for a few funds, that we may add to the program from year to year.”

While CalPERS has the resources to do their own, continual, in-depth due diligence, investors in hedge funds are being advised by many different industry groups to press for third party administrators. AIMA recently released their Guide to Sound Practices for Funds of Hedge Funds Managers that recommends FoHF managers require “independent and reputable third party administrator” of underlying hedge funds.

It also advises FoHFs to encourage their own investors to communicate directly with the administrator/custodian for the FoHF with respect to each investor’s own transactions.

Hedge funds such as UK-based commodity fund Ebullio Capital Management, which has successfully raised funds during the past few months acknowledge the change in investor attitude towards operational due diligence. “Due diligence is much harsher and much more rigid. They look a lot deeper than they did historically.”

Ian Tracey, co-founder of Acceleration Capital, a firm that works with both managers and seeders confirms that for investors, “Triangulation of oversight facilitated by third party administration is paramount.” The requirement has become enough of an industry standard that seeders looking to maximize their own return on investment by helping funds reach AUM goals will almost always require a fund have a third party administrator in place.

In the recently released San Francisco Opalesque Roundtable (Source), the value of third party administrators arose several times. Administrator importance was cited directly in reference to fundraising activities, to which hedge fund consultant Bucky Isaacson, of Futures Funding said, “I also tell people who call me for advice to pick their attorney and administrator very carefully. Of course most of the professionals can do a competent job, but part of the benefit an attorney can give you is networking with potential capital sources. And the better they are plugged in, they may be able to give you some referrals, and the same refers to the administrators.”

Mitch Levine of Enable Capital Management used his own experience as a startup manager (in 2003) who began with $1.1m in assets and a plan for track record to eventually lead to capital raising. The plan worked, as five years later Levine was managing $450m in assets, but in addition to track record he attributes this asset raising directly to the third party service providers the firm employed.

“So it can be done, but it can’t be done without first-rate service providers, which gave us much-needed credibility. Let me come back quickly to the position of a start-up manager. Running the business of being a hedge fund is so complicated, so convoluted and most founders, including me, are money managers and might not have the capability to manage a business. Fortunately, now six years later, I think I have a good idea of how to do it, but not without our administrators who are there every step of the way,” he says.

Six degrees of separation
One of these benefits is the ability to update profiles and reach out to colleagues at your (and their) convenience, across time zones and during lulls in busy days. Some offer the ability to see who you and your business contacts share common relationships with, a very good reminder of how small and tight knit the financial community can be.

Most recently Opalesque announced that it had over 500 members in the LinkedIn networking group the firm hosts “Alternative Alternatives//Uncorrelated Returns” at: www.linkedin.com/groups?gid=1642997&trk=hb_side_g. A complement to the Opalesque A Square publication, the group looks to engage in discussions about “alternative alternative” investing. Additionally, industry groups such as the Connecticut Hedge Fund Association are making use of these forums to reach out to their members and to allow members an easier way to contact each other, as the host of each group has the power to approve or disapprove anyone hoping to join. As Matthias Knab told AMB readers recently “industry practitioners, investors and managers (no recruiters) can join here”.

Networking for employment
Time Magazine recently reported that 27% of jobs come from referrals and 12% of jobs are filled through job sites. LinkedIn allows search firms to reach out to a base of interested employees and keep them up to date on potential positions as well as industry news.

Future of business networking online
Regulatory bodies have not directly addressed the issues which may arise as online networking and socializing takes a greater hold in the industry. However, as with the advent of email and instant messaging, sooner or later firms will more than likely need to determine what their social networking policies are.

Forget about the generic databases and other online networking sites. If you have a position to fill, you need to find the right candidate, quickly. The Hedge Professionals Database is a niche directory of professionals who work in the hedge fund or other related industries. More than 8,000 entries listed till date.

Access the Hedge Professionals Database now.

Fund Managers

Looking for investor information? Look no further, the Hedge Professionals Database lists more than 8,000 professionals in the Hedge Fund industry, including investors, pension fund advisors, fund of fund professionals, seed investors, and more.

Access the Hedge Professionals Database now.

Service Providers

The market is down, but your business should not be! With more than 8,000 hedge fund professionals listed, the Hedge Fund Professionals database is a precious resource for any service provider looking to target the alternative investments industry.

Access the Hedge Professionals Database now.