Hedge Fund News Wrap: Week Ending 04/10/15

Fund Managers Pose Threat to Global Financial Stability, says IMF

(The Guardian) – Fund management companies that invest billions of pounds of savers’ money pose a threat to global financial stability and regulators should police them more closely, according to the International Monetary Fund.

Delegating day-to-day investment decisions to large asset managers, as pension funds and many individual savers do, “introduces fundamental incentive problems between end investors and fund managers, which can induce destabilising behaviour and amplify shocks,” the Washington-based organisation says.

Asset management has so far largely escaped the more intrusive regulatory regime introduced for banks in the wake of the global financial crisis.

Read the entire article at The Guardian
More coverage: ValueWalk and The Wall Street Journal

Bridgewater Surges on Bearish Euro Bet, Low Rates

(CNBC) – The largest hedge fund firm in the world has made a killing this year by correctly predicting two big trends: the continued decline of the euro and a delay in increasing U.S. interest rates.

Thanks to those bets and more, the main fund run by Bridgewater Associates, Ray Dalio’s $169 billion institutional investor-focused firm, gained more than 14 percent net of fees in the first quarter, according to two people familiar with the performance.

The large return was partially driven by negative bets on the value of the euro, a short, coupled with a long position in the U.S. dollar, according to one of the people. Bridgewater’s Pure Alpha hedge funds also gained by correctly predicting that there would be a delay in the increase of U.S. interest rates, a bet expressed by bullish positions on 10-year U.S. Treasurys, for example.

Read the entire article at CNBC
More coverage:  Bloomberg Business and FINalternatives

Hedge Fund Kamunting Changing to Family Office, Teh Says

(Bloomberg Business) – Hedge fund Kamunting Street Capital Management is returning outside capital and will convert to a family office, founder Allan Teh said by phone today.

Kamunting, also known as K-Street, decided to hand back remaining client money after one of its largest investors redeemed as of March 31, Teh said. He started Greenwich, Connecticut-based Kamunting in 2004 and the firm oversaw $982 million in regulatory assets as of Dec. 31.

“In a zero interest-rate environment, it’s much more difficult to make money without taking more risk,” Teh said. He added that the firm’s largest investor was no longer interested in having a large exposure to the credit strategy he trades. K-Street sought to profit from price differences between credit instruments.

Read the entire article at Bloomberg Business
More coverage: The Wall Street Journal and CNBC