Hedge Fund News Wrap: Week Ending 11/07/14

Bullish bets on oil have decreased significantly since the summer, but many Hedge Funds are regaining their bullish outlook. A swift rebound in the oil market has occurred before, and investors believe that the worst news has already been absorbed into the futures and options markets.

An increase in the global supply of oil to its highest level in over a year has resulted in plummeting oil prices. There is potential for the trend to continue.  Saudi Arabia, the biggest oil exporter in the world, appears to be willing to suffer with decreased prices to preserve market share.

There will be more certainty regarding the level of oil production in late November.  John Kilduff of Again Capital said, “The focus in November will be on the [Opec] meeting and whether they can come to an agreement to make cuts.”

 

See detailed coverage from:

The Wall Street Journal

Businessweek

International Business Times

 

 

Goldman Sachs Selling Off Hedge Fund Stakes

Goldman Sachs has unloaded $285 million more of its hedge fund investments, bringing the total to $2.55 billion since 2012.  The company is responding to the Volcker Rule, which prevents companies from holding more than 3% of its capital in hedge funds.

It will be very difficult for Goldman Sachs to sell an additional $11.4 billion to fully comply with the rule by the July 2015 deadline.  The company may need an extension, as some of its investments are illiquid.  A regulatory filing by Goldman Sachs said, “…we may receive a value for our investments that is less than the then carrying value as there could be a limited secondary market for these investments and we may be unable to sell them in orderly transactions.”

 

See detailed coverage from:

DealBook

Bloomberg News

ValueWalk

 

 

Hedge Fund Salaries Rising

Compensation at Hedge Funds is rising as capital pouring into the industry has reached a new record and competition for quality talent from other industries is increasing.  The high demand for talent means that the hiring process at hedge funds has been expedited and evaluations are given earlier.  Firms used comprehensive criteria to assess the value of employees.  Personnel that could perform multiple duties, especially client-facing, were able to benefit the most from the recent trend of accelerated salary growth within the industry.

 

See detailed coverage from:

MarketWatch

HedgeWeek

FINalternatives