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Business News

LONDON Former BlueBay fund managers Neil Phillips and Jonathan Fayman are preparing to launch a global hedge fund early next year, a source with direct knowledge of the matter said, as interest in macroeconomic investment stages a strong comeback.

The are setting up Glen Point Capital in London, the source and records with Britain’s Companies House showed, following the same macro strategy they had at BlueBay with a focus on emerging markets.

After years of lacklustre returns, hedge funds that bet on macroeconomic trends are showing signs of revival as divergent economic policies across the globe create investment opportunities.

Macro funds, which bet on assets such as stocks, currencies, bonds, commodities and market indexes, achieved a 2.5 percent in the first eight months of this year, data from industry tracker Eurekahedge shows. Net inflows were $4.3 billion in the first half of the year, against outflows of $14 billion for the whole of 2014.

There is a strong pipeline of macro hedge fund launches expected over the coming months and Glen Point will be joining the likes of start-ups from top fund managers such as former Brevan Howard trader Chris Rokos and Soros Fund Management’s Chief Investment Officer Scott Bessent.

BlueBay’s $1.4 billion macro hedge fund was jointly managed by Phillips and Fayman and was shut down by the firm after the duo’s departure late last year.

Their BlueBay fund never suffered a down year and increased investors’ capital at an annualised rate of about 8 percent since its launch in 2009, performance data seen by Reuters showed.

Phillips and Fayman will be joined at Glen Point by former COMAC Capital CEO Hopewell Wood, the source said.

A spokesman for Glen Point declined to comment.

(Editing by David Goodman)

LONDON/BEIJING Shares in British hedge fund manager Man Group Plc fell more than 6 percent in early trade on Tuesday following a report the head of its China unit had been taken into custody as part of a probe into the country’s recent market volatility.

That, along with a broader market sell-off and losses in the firm’s flagship funds last week, contributed to the share price fall, said David McCann, an analyst at Numis Securities.

Bloomberg said on Monday that Man’s China chairwoman, Li Yifei, was helping authorities investigating the recent sharp swings in the country’s stock market, noting this did not mean she faced charges or had done anything wrong.

A spokeswoman for Man Group, which says on its website that it manages $78.8 billion of assets, declined to comment on the report or share price move.

The company’s largest investor, Odey Asset Management, also declined to comment.

Chinese authorities have been probing possible market manipulation following wild gyrations in the country’s stock markets, which have plunged around 40 percent since mid-June on concerns of a slowing economy and a surprise devaluation of the yuan currency last month.

Reuters has not been able to independently confirm the Bloomberg report and there was confusion in China on Tuesday as to what exactly Li’s situation was.

Li’s husband, Wang Chaoyong, told Reuters his wife was having meetings at a convention centre in a hotel in a suburb of Beijing.

“She said she is fine, discussing many professional issues,” Wang said. “Regulators often ask some institutions to have meetings. This is normal.”

A source familiar with Man Group said the firm had no trading operations in mainland China and only had a $50 million Qualified Domestic Limited Partner licence that allowed it to raise capital onshore to invest in offshore assets.

As Chinese regulators investigate reasons behind a steep fall in the country’s shares, they have jangled nerves in the financial industry and also raised questions over the ruling Communist Party’s commitment to free-market reforms.

Earlier this month, China’s markets regulator froze a trading account linked to Citadel Securities, a unit of the U.S. group that also owns hedge fund Citadel LLC.

“I guess a company like Man has to be in China. After all, their original business was built on being where others were not,” said Christopher Cruden, chief executive of Insch Capital Management.

“But as always, the problem is not just that everyone rushes for the exit at the same time. It’s that the door simultaneously gets smaller.”

At 1125 GMT, Man shares were down 4.5 percent at 154 pence in a mid-cap index down 1.2 percent.

Li became Man’s China chairwoman in 2011, having previously worked as the head of MTV China.

(Additional reporting by Nishant Kumar and Sinead Cruise in London; Writing by Rachel Armstrong; Editing by Alex Richardson and Mark Potter)

LONDON Aberdeen Asset Management has raised $500 million in a new fund that provides exposure to a selection of hedge fund managers and offers investors a chance to invest or take out their money on a daily basis.

Such funds, known in the $3 trillion hedge fund industry as liquid alternative funds, are relatively cheaper, more liquid and provide better transparency than a traditional hedge fund, which makes them more attractive to retail investors.

“This style of investment is becoming more popular among investors concerned about the current levels of equity and fixed income markets and the potential for more correlation between asset classes in the future,” Aberdeen said in a statement.

The launch marks a push by the emerging markets-focused money manager into the alternatives industry, which included the recent purchase of U.S. hedge fund investor Arden Asset Management.

(Reporting by Nishant Kumar; editing by Simon Jessop)

LONDON Qbasis, a hedge fund which more than doubled clients’ money during the 2008 financial crisis, is cashing in again by exploiting fresh turmoil in global markets.

The fund, which aims to profit from market dislocations, as described in the “black swan” theory of academic Nassim Nicholas Taleb, gained about 11 percent this month to Aug. 24, Chief Executive Florian Wagner told Reuters.

Peers as measured by the HFRX Global Hedge Fund Index lost 3.2 percent in the month to Aug. 25 as ructions triggered by fears over the health of the Chinese economy led to steep losses in markets across the globe.

Prominent hedge funds such as William Ackman’s Pershing Square, Leon Cooperman’s Omega Advisors and Larry Robbins’ Glenview Capital have lost money this month.

Based in Austria, Qbasis uses mathematical models to evaluate risk, pricing and timing in financial markets.

This month, the fund has gained through intra-day trading in equity indices, shorting stocks and taking long positions on the euro against the US dollar.

The euro hit $1.1715 on Monday, a seven-month high.

The fund also benefited from short positions on oil prices.

Investors are increasingly looking for ways to protect their portfolios amid rising volatility and markets shocks, sending billions of dollars to hedge funds.

“It helps people to sleep better, they don’t have to worry so much about their timing,” Wagner said. “So many people are struggling with when should they go long, when should they go out of the market.”

Hedge funds attracted $48 billion in fresh inflows in the quarter to June, up from $29 billion in the first quarter of the year, according to data from industry tracker Preqin.

Qbasis said in June it would receive more than $200 million in its fund from Britain’s Omada Capital, signalling rising interest in hedge fund strategies which can profit from steep declines in asset prices.

The Qbasis i Trend fund strategy returned 157 percent in 2008 when the S&P 500 Index plunged 38.5 percent.

(Additional reporting by Anirban Nag, editing by Sinead Cruise and Susan Thomas)