Monday, December 04, 2006

Goldman Ousts Bridgewater as Largest Hedge Manager

the data gets even more impressive when you add the leverage (up to 12 times in the case of citadel!) / das ganze wird umso beeindruckender wenn man den hebel (von bis zu 12 bei citadel) berücksichtigt.

in the case of goldman it is even without their official hedgefundsunit already a "hedge funds" that makes the majority from their tradingdesks......./ guckt euch mal abseits des offiziellen ablegers bei goldman an wie die ansonsten ihr geld verdienen.......

Total Investment Banking 1,288

Total Trading and Principal Investments 4,720 (over 60%!)
Total Asset Management and Securities Services 1,455
Total net revenues $ 7,463 Dec. 1 (Bloomberg) -- Hedge fund managers can make you rich quicker than just about anyone. Sometimes, they can make you poor even faster.

Just look at Amaranth Advisors LLC, the Greenwich, Connecticut-based hedge fund manager that stumbled over wrong-way bets on natural gas. Going into September, Amaranth was up 26 percent in 2006. By October, it had lost $6.6 billion.

The next Amaranth is out there somewhere. ......

Since 2000, the secretive world of hedge funds has more than doubled in size. There are now more than 9,000 of these funds with combined assets of $1.34 trillion. .....

Investors poured a record $110.7 billion into these vehicles during the first nine months of 2006 -- more than twice what they did in all of 2005. Since September, Morgan Stanley has bought stakes in two hedge-fund firms and purchased a third outright. And since late 2005, Goldman Sachs Group Inc. has become the largest manager of hedge fund money, with $29.5 billion in assets, according to HFR and Bloomberg.

Goldman passed Westport, Connecticut-based Bridgewater Associates Inc., which has $28 billion in assets, and New York- based D.E. Shaw & Co., which has $23.2 billion.

Returns Sag
So many hedge funds have crowded into the markets that the industry is struggling to generate standout profits. As of Sept. 30, the average hedge fund was up 7.1 percent in 2006. .....

As money pours in and returns sag, Theodore Aronson, ...., sees potential danger ahead. ``You don't have to go back to the tulip bulb mania to see how things could turn out,'' he says. ``It could be ugly.'' .....

Troubled Industries
Hedge funds that trade distressed assets, typically junk bonds and corporate loans, posted an average annualized return of 14.6 percent during the three years ended on Sept. 30, according to HFR. During the first nine months of 2006, these funds returned 9.8 percent. So many hedge funds are chasing distressed investments that returns have withered from 18.9 percent in 2004. ...(explains the record low spreads./erklärt die rekorverdächtig niedrigen spreads)

Fallen Angels
More companies are likely to run into trouble soon, according to S&P. As of early October, 38 companies around the world had lost their investment-grade credit rating in 2006. Forty-one more, with a combined $77.6 billion of debt, were at risk of landing on the junk-bond heap..... (with more companies than ever with junk ratings there is plenty to choose from..... )

Industry Giants
Investors poured more than $30 billion into long/short funds during the first nine months of 2006. These funds now sit atop a combined $379.3 billion in assets, more than a quarter of the industry total.

``We'll buy something that has a 40 trailing P/E, but if we look at where we see it going, it'll have a forward P/E of 10,'' Mashaal says. .....(seems to be the mentality of almost everybody... not only hedge funds.../scheint mir die menatlität von fast allen zu sein ... nicht nur bei hf)

Fed Headache
As the funds rate has climbed, so have U.S. Treasury yields. Two-year Treasury yields reached 4.75 percent on Nov. 8, up from 3.07 percent in late 2004. Ten-year yields have climbed less, to 4.64 percent from 4.22 percent. As a result, investors who borrow at short-term rates to buy bonds make less money on their investments. (hey the can use the carrytrade..../nehmt doch den carrytrade...)

Housing Market
Mortgage bonds are getting riskier now that U.S. home prices have begun to decline. Banks fashion these securities out of mortgages and home equity loans. If enough people default on the loans, the securities' credit ratings could suffer.... (already happening at a record pace..../ ist gerade in der mache....

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