Friday, 29 August 2014
Last updated 5 hours ago
Jul 23 2010 | 12:23pm ET
Despite a major rebound in the values of once-illiquid assets, hedge funds with side-pockets have proven resistant to selling them or desegregating them, according Standard & Poor’s Fund Services.
In many cases, the side-pockets have actually outperformed the hedge funds’ main portfolio, according to S&P’s Randal Goldsmith. That has had the side-effect of increasing the size of the side-pocket relative to the whole portfolio. But in spite of that fact, and in spite of the fact that a rebound in asset values have made such assets easier to sell, some hedge funds are holding on to them.
“It’s the most stubborn area of illiquidity to resolve,” Goldsmith told Reuters.
While the assets have become increasingly liquid, some hedge fund managers are still concerned about wide spreads, Goldsmith said. Still, S&P has been stripping some of the hedge funds it rated whose side pockets become too large.
“We’ve been disappointed how slow they’ve been to reduce them as a percentage of the total portfolio,” Goldsmith said. He added that S&P has been denying ratings to some funds that have sought them after due diligence found large side pockets.
Aug 25 2014 | 11:21am ET
As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…
Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...