Wednesday, 22 October 2014
Last updated 11 hours ago
Oct 27 2008 | 9:05am ET
Canadian financial cooperative Desjardins Group is shuttering as much as C$4 billion in hedge fund-linked products burned by the battering taken by hedge funds this year.
Desjardins will wind down the principal-protected notes, the Perspectives Plus Guaranteed Investment and Alternative Guaranteed Investment, which were scheduled to come due over the next five years, according to the Globe and Mail. The firm has been redeeming its hedge fund investments since Oct. 1, when CEO Monique Leroux decided to close the PPNs. It is unclear what losses, if any, the firm will sustain.
Investors, of course, will not lose anything: Their principal was guaranteed. Desjardins had invested about 80% of the proceeds from the sale of the PPNs in bonds, with just 20% invested in hedge funds. The hedge fund portion of the portfolio was levered in an effort to boost returns; according to the Globe and Mail, that investment is largely lost.
“We’re not necessarily losing money on this, it’s just that we cannot offer the possibility our customers get a good return on these investments,” Desjardins spokesman André Chapleau told the newspaper. “The customer is not affected and the capital is guaranteed. We were never able to guarantee the performance.”
Sep 22 2014 | 4:15pm ET
"I tell people that everybody likes good news and so if you have good performance that’s wonderful,” explains Mike McKitish of Peddie School's endowment, “but it’s the people that want to talk about the bad news or where they drifted and how they came back and how they stayed to their discipline…” that he wants to hear from. Read more…
Sep 30 2014 | 9:29am ET
The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…
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