Unleashing the Financial Prowess of Hedge Funds

As 2008 unfolds, there are few questions that its answers are already obvious, growth in the global Hedge Fund industry will continue regardless of whether some hedge funds folded up or went into bankruptcy. Indeed Hedge Funds and Private Equity firms have helped to increase the global efficiency of capital markets.

While hedge fund growth have in some ways created nervousness for some, few still argue about hedge fund’s contribution in providing additional efficiency to the global financial markets. Hedge funds have also helped many investors achieve greater levels of investment diversification, through some of their strategies. It is also important to mention that hedge fund investments do not come without risk. 2007 was a turbulent year for some hedge funds, particularly, those exposed to credit risks.

The growth of global hedge funds has pushed the industry into the number 11 position of the highest GDP income in the world, with its latest projection, that global Hedge funds’ managed assets could be approaching $1.8 trillion range. In an article in the Mckinsey Quarterly entitled, “The World’s New Financial Power Brokers”, the author made predictions among others that even if the growth of Hedge Funds slows down significantly, by the year 2012, assets managed by the industry could reach the range of $3.5 trillion.

In the latest release of the Annual Survey of Alternative Investments, it was shown from Institutional respondents around the world that their strategic allocations to hedge funds will increase in 2009, in Europe allocations have been projected to increase to 8.4 percent, in Japan up to 9.9 percent, in North America by 8.9 percent and in Australia by 4.1 percent.

In 2008 it is also expected that many more institutional investors such as Pension funds, Endowment funds, Insurance and Banking establishments and Family Offices will continue to adopt hedge fund investment strategies as a growing component of their investment philosophies.
Hedgefundexchange.net Staff Writer

FIC LP Sues Bear Stearns over the Collapse of Two Hedge Funds

Bear Stearns was sued in Manhattan Federal Court, over the collapse of the firm’s two High-Grade Structured Credit Strategies, the Enhanced Leveraged Fund, and the Bear’s High-Grade Structured Fund. The lawsuit was filed by FIC, a San Francisco Partnership, which alleges that the Bear Stearns managers engaged in fraud, bad faith and gross negligence. According to published reports, the collapse of the two hedge funds, led to losses of $1.6 billion of investor capital. It has been also reported that Barclays PLC have in a separate filing sued Bear Stearns over the Collapse of the two funds as well.

The FIC LP suit is taking a dimension of class-action lawsuit, seeking to represent all the investors in the two failed Hedge Funds. Federal investigators are looking into the circumstances leading to a $2 million withdrawal made by fund manager, Ralph Cioff, several weeks ahead of the collapse of the Hedge Funds. The US Securities and Exchange Commission along with the US Attorneys Office in Brooklyn are also carrying out criminal and civil investigations of the circumstances leading to the Collapse the two Hedge Funds. Bear Stearns representatives were not available for comment, according to the report.

Hedgefundexchange.net Staff Writers

Parties to further develop their existing partnership to manage and
distribute funds investing in the environmental sector

Paris - London, 19 December 2007 - BNP Paribas Investment Partners ("BNPP
IP"), a leader in the European asset management industry, and Impax Group
plc, the quoted investment manager focusing on the environmental markets
sector ("Impax") announce that, following the publication earlier today of
Impax's Preliminary Statement of Results, BNP Paribas Investment Partners*
has acquired from existing Impax shareholders 31 million shares,
corresponding to 28.3 percent of Impax's issued ordinary shares and
increasing its total holding to 29.4 percent.

Impax and BNP Paribas Investment Partners initiated their cooperation in
May 2006, when Impax started advising BNPP IP's "Parworld Environmental
Opportunities" fund. It has since developed further, with Impax providing
advisory services to two funds initiated by BNP Paribas Investment Partners
targeted at clients in Korea and Malaysia, and, today, with a further
agreement under which BNPP IP will distribute in parts of Europe,
Asia-Pacific and the Middle East, products that are managed or advised by
Impax.

Gilles Glicenstein, Head of BNP Paribas Investment Partners, said: "The
acquisition of a minority stake in Impax is a natural extension of a
cooperation started 18 months ago. Impax's core activity is focused in a
key area of development for our clients and BNPP IP. We are convinced that
this new step will reinforce our capacity to deliver state-of-the-art
expertise in a fast growing market."

Ian Simm, Chief Executive of Impax Group plc, said: "Impax is now
established as a leading investment manager in the rapidly expanding
environmental sector.  We are delighted to be able to extend our
relationship with BNP Paribas Investment Partners, and I believe that both
parties are set to benefit significantly from closer co-operation."

About BNP Paribas Investment Partners
BNP Paribas Investment Partners brings together the full palette of asset
management expertise of the BNP Paribas group. Through a unique platform
that offers immediate and simplified access to a broad range of specialist
Partner companies BNP Paribas Investment Partners has become a leader among
the multi-specialist asset managers. At 30 September 2007, assets under
management were EUR 348 billion*, nearly half of which managed for
institutional clients. With 2,000 professionals servicing clients in over
70 countries, the network of Partners provides clients with the most
advanced and dedicated expertise in asset management today, blending
excellence in client service with innovative solutions that can highlight
or combine specialities.

Hedgefundexchange Exclusive Manager Interview with Paul Pomfret

Periodically our editors at Hedgefundexchange.net, contacts Hedge fund managers randomly for discussions of their fund’s performance, strategies, and other issues of importance to the global hedge fund industry. In this exclusive interview, Hedgefundexchange Editors interviewed Mr. Paul Pomfret, veteran Hedge Fund Manager, and founder of PDP Capital LLC, based in Palm Beach, Florida. Mr. Pomfret’s promising NFL career with the Green Bay Packers, was cut short by a knee injury, and he went to Wall Street and had a 15 year run, working for some of the most successful Wall Street firms before he formed his Hedge Fund company. The full interview with Paul Pomfret is available on Hedgefundexchange.net Manager Interview Section, and is available only to registered users.

SEC Announces Roundtable Discussions Regarding International Financial Reporting Standards
FOR IMMEDIATE RELEASE
2007-261
Washington, D.C., Dec. 12, 2007 - The Securities and Exchange Commission announced today that it will host two roundtable discussions in December on issues surrounding the growing prevalence of International Financial Reporting Standards (IFRS).

The first roundtable, on Dec. 13, 2007, will address the issues arising from the current co-existence of two accounting standards in the U.S. markets — a development that has been accelerated by Europe's decision to mandate IFRS for all public companies beginning in 2005. Under current rules, public companies with U.S. listings that are domiciled in other countries often use IFRS. The roundtable will consist of two panels, which will look at the effect of allowing foreign companies the choice of whether to use IFRS or U.S. Generally Accepted Accounting Principles (U.S. GAAP), and denying that same choice to U.S. issuers. The first panel will explore these issues primarily from the perspective of U.S. investors, issuers, and markets, and the second panel primarily from the perspective of the global markets.

The second roundtable, on Dec. 17, 2007, will focus on the practical issues surrounding the possible future use of IFRS by U.S. companies. The first panel will explore these issues primarily from the perspective of U.S. investors, issuers, and markets. The second panel will discuss the experience of those global markets and foreign companies that have already completed the transition to IFRS.

"For several years, U.S. investors have witnessed the growing use of IFRS in U.S. markets by overseas companies with U.S. listings," said SEC Chairman Christopher Cox. "In effect, for the last few years U.S. investors have been dealing with two competing accounting systems — IFRS for many U.S. listed companies from overseas, and U.S. GAAP for domestic issuers. The mandatory use of IFRS throughout Europe and increasingly throughout the world requires us to consider the impacts on our domestic markets."

The roundtables will begin at 9 a.m. ET and will be held in the Auditorium at the Commission's headquarters at 100 F Street NE, Washington, D.C. The roundtables will be open to the public with seating on a first-come, first-served basis. Doors will open at 8:30 a.m. and visitors will be subject to security checks. The roundtable discussions also will be available via webcast on the Commission's Web site at www.sec.gov.

The agendas for the roundtables and the list of participants are accessible at http://www.sec.gov/spotlight/ifrsroadmap.htm.

The Commission welcomes feedback regarding any of the topics to be addressed at the roundtables. The information that is submitted will become part of the public record of the roundtables. Submissions to the Commission may be provided by any of the following methods:

Electronic submissions:

Use the Commission's Internet submission form.
Send an e-mail to This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .
Paper submissions:

Send paper submissions in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, D.C. 20549-1090.
All submissions should refer to File Number 4-552. This file number should be included on the subject line if e-mail is used. To help process and review submissions more efficiently, please use only one method. The Commission will post all submissions on its Web site at www.sec.gov.

Please note that all submissions received will be posted without change; the SEC does not edit personal identifying information from submissions. Only information desired to be shared publicly should be submitted.

Hedge Funds and  Back-Office Staffing Problems

The exponential growth occurring within the global hedge fund establishment means an additional pressure is being exerted on the Back-office staff to keep up with the challenges of accounting as well as new regulatory requirements. Few years ago, the US Securities and Exchange Commission introduced some new regulations for US based hedge fund managers. This measure increased pressure on many Hedge Funds struggling to keep their funds in compliance with the new rules.

These new rules have created additional staffing problems to the Back-Office situation of many funds, already besieged with numerous staffing shortages and other problems. According to new study conducted by Rothstein Kass, a CPA company, about 70% of hedge funds are experiencing staff shortages and retention of their office personnel at their Back-Office operations. The new study showed that 60% of the managers polled said they are short of staff at their Back-Office.

Todd Noah, a principal at Rothstein Kass said, "It was clear to us from our daily interactions with clients, that back- office staffing concerns are pervasive across all segments of the hedge fund industry. In partnering with Russ Prince and his team on this initiative, we sought to gain better insight into the scope of the problem. With 59.2% of all firms and even 47.7% of large funds reporting shortages in back-office personnel, it's apparent that recruiting and retention issues will persist”.

Russ Alan Prince, and Hannah Shaw Grove authored the study, entitled  “The Compensation Conundrum."The study surveyed Over 500 Chief Financial Officers of Hedge Funds, managing at least $100 million of investor assets.

Hedgefundexchange.net Staff Writer