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Thursday, February 14, 2008
From Richard Wilson Hedge Fund Blog - view blog entries - visit this blog
February 14, 2008 at 6:46 am ET
Institutional InvestorsSEI recently completed a survey of institutional investors and their perspective on hedge funds. 100 institutions were surveyed and 47 were currently invested in hedge funds. Even the ones who were investing in hedge funds had extra due diligence steps to ensure that each allocation to a hedge fund manager is done in a deliberate and cautious fashion.The problem I have with this is often selecting hedge funds in a "deliberate and cautious fashion" often boils down to a RFP or due diligence checklist where you are basically looking for those 30 hedge funds that can check ... (more)

Wednesday, February 13, 2008
From Richard Wilson Hedge Fund Blog - view blog entries - visit this blog
February 13, 2008 at 6:40 am ET
Prime Broker DefinitionA large bank or securities firm that provides various administrative, back-office and financing services to hedge funds and other professional investors. Prime brokers can provide a wide variety of services, including trade reconciliation (clearing and settlement), custody services, risk management, margin financing, securities lending for the purpose of carrying out short sales, record keeping, and investor reporting. A prime brokerage relationship doesn't preclude hedge funds from carrying out trades with other brokers, or even employing others as prime brokers. To compete for business, some prime brokers act as incubators for funds, providing office space and services to help ... (more)

Tuesday, February 12, 2008
From Richard Wilson Hedge Fund Blog - view blog entries - visit this blog
February 12, 2008 at 11:54 am ET
Ritchie Capital, Founder Pays $40 Million to End Probe ``We are pleased to put this matter behind us, and we will continue our other efforts to maximize value for all of our investors,'' Thane Ritchie said in a statement issued by the firm on Business Wire... "The respondents' attempt to cover their tracks by using falsified order tickets merely underscores the egregiousness of the fraudulent scheme,'' Merri Jo Gillette, who heads the SEC's Chicago regional office, said in its statement. ``Thorough and tenacious investigative work'' uncovered it, she said...Here is the full update from Bloomberg- RichardSubscribe To this Blog via ... (more)

From Richard Wilson Hedge Fund Blog - view blog entries - visit this blog
February 12, 2008 at 6:47 am ET
Emerging Market FundsEmerging markets hedge funds drew in over $9B in new assets last year. This is a great deal more than was investing in this area 5 years ago when only $3.3B was put into these types of hedge funds. One reason why this strategy has been receiving so much attention is while the average hedge fund had performance of around 11% last year emerging market hedge funds returned close to 25%.HFR notes that these high performance numbers were fueled by eye-popping returns at funds like the GLG Emerging Markets Fund which surged 50.5%, the Kazimir ... (more)

Monday, February 11, 2008
From Richard Wilson Hedge Fund Blog - view blog entries - visit this blog
February 11, 2008 at 2:46 am ET
Hedge Fund Capital RaisingThere are a growing number of firms now that will take equity stakes in hedge funds after investing $15-$50M in a manager. Many times the managers have been operating for 1-4 years before the investment is made but sometimes "brand new" managers with fully operating trading processes are seeded as well. While the "5 Ps" are considered the most emphasis is being put on the pedigree and talent of the hedge fund manager. Here is an article on what some of these seeders are looking for. FinAlternatives Article. Here is an article I ... (more)

Friday, February 8, 2008
From Richard Wilson Hedge Fund Blog - view blog entries - visit this blog
February 8, 2008 at 6:27 am ET
Risk Arbitrage StrategyHedge Fund Strategy Explanation: Risk Arbitrage StrategiesRisk arbitrage hedge fund strategies usually involve purchasing stocks of companies that are likely takeover targets, while assuming short positions in the would-be acquiring companies. Risk arbitrage hedge fund managers can employ an event-driven investment strategy or merger arbitrage investment strategy, seeking situations such as hostile takeovers, mergers and leveraged buyouts. Such funds typically experience moderate ... (more)

Thursday, February 7, 2008
From Richard Wilson Hedge Fund Blog - view blog entries - visit this blog
February 7, 2008 at 7:00 am ET
Alan Greenspan Joins a Hedge FundIn case any of you missed it Alan Greenspan agreed to join a hedge fund that profited handsomely off of the sub prime meltdown. Here is the Climateer's slant on this series of events:Alan Greenspan: Competent Criminal or Criminally Incompetant?- RichardSubscribe To this Blog via Email | Or RSSRelated Articles:1. Book Review: Running Money By Andy Kessler2. ... (more)

Tuesday, February 5, 2008
Hedge Fund Losses (11 clicks)
From Richard Wilson Hedge Fund Blog - view blog entries - visit this blog
February 5, 2008 at 8:36 pm ET
Hedge Fund LossesIt looks like this January has been the worst month for hedge fund performance and losses since the 1998 crises surrounding Long Term Capital Management. If you follow Financial Armageddon's blog or have read his blog he thinks that the worst hedge fund losses are yet to come, which by the title of the blog is not entirely surprising. I will let you read and decide that for yourself."Many people are still fixated on the idea that what we are going through right now is some kind of short-term disruption. Once the Fed, the Treasury, ... (more)

Monday, February 4, 2008
From Richard Wilson Hedge Fund Blog - view blog entries - visit this blog
February 4, 2008 at 3:39 pm ET
Top 10 Hedge Fund BooksWhat are YOUR top 10 favorite hedge books?I am taking an email poll of which hedge fund books are reader favorites and then post the resulting top 10 hedge fund books here within my blog over the next two weeks. To tell me your favorite hedge fund books please send an email to Richard@RichardCWilson.com. To not miss the results please subscribe to this hedge fund blog using the link below or by clicking here.Some of my favorites include "All About Hedge Funds" by Robert Jaeger, "Hedge ME" by Claude Schwab and "Running Money" by ... (more)

Richard Wilson (7 clicks)
From Richard Wilson Hedge Fund Blog - view blog entries - visit this blog
February 4, 2008 at 3:37 pm ET
*Future Bio Placeholder ... (more)

Treynor Ratio (1 click)
From Richard Wilson Hedge Fund Blog - view blog entries - visit this blog
February 4, 2008 at 8:45 am ET
Treynor RatioSometimes referred to the in the hedge fund industry as the return vs. volatility ratio the Treynor Ratio is a measure of the excess return per unit or risk, where the excess return is defined as the difference between the portfolio's return and the risk-free rate of return over the same period.Treynor Ratio Calculation:(Average Portfolio Return - Average Risk Return of Risk Free Instrument ) / Beta of the PortfolioHere is a white paper on the Treynor Ratio.- RichardSubscribe To this Blog via Email | Or RSSTop 5 Related Articles:1. ... (more)

Sunday, February 3, 2008
From Richard Wilson Hedge Fund Blog - view blog entries - visit this blog
February 3, 2008 at 5:30 pm ET
Hong Kong & Singapore Based Hedge FundsThere are now well over 10,000 known hedge funds in existence. A large majority of these reside in major western economic hubs such as New York & London but more asian hedge funds from Hong Kong, Singapore and China are starting to gain market share. A recent report on asian hedge fund states that there are now over 1,500 hedge funds in Asia. With over $160 billion in assets there are 7 new asia-based hedge funds being launched each month. In 2001 there were just 14 hedge funds in ... (more)

Saturday, February 2, 2008
From Richard Wilson Hedge Fund Blog - view blog entries - visit this blog
February 2, 2008 at 6:52 pm ET
Hedge Fund Industry PerformanceThere was a great hedge fund performance article written up by the Financial Times last week. In it they discuss how some hedge funds navigated late 2007 volatility in relation to how the banks have largely been slow to act and were mostly caught without a chair to sit when the sub prime music stopped. Here are some excerpts from the story:The former Goldman Sachs trader who is now president of Fortress Investments, a hedge fund with $40bn (£20bn, €27bn) under management, pointed out that for years the assumption had been that hedge funds would ... (more)

Friday, February 1, 2008
From Richard Wilson Hedge Fund Blog - view blog entries - visit this blog
February 1, 2008 at 4:34 pm ET
List of Litigation Funding Hedge Funds Near the beginning of this year I named the top 5 hedge fund strategies that I saw exploding in growth over the next 5-7 years. Litigation funding or IP related hedge funds were among that list. Here are a list of litigation funding and IP hedge funds in the industry. Intellectual Ventures 400mm - 1bnColler IP Fund 200mmNW Patent Funding Northwater Cap IP Fund 50-100mmNorthwater Cap IP II 250mm (in progress)Bay Ridge partners 5mmNew Venture Partners 275mmredE4 100mm (in progress)IP Finance Holdings 300mm1790 Capital LLC 10mm-25mmAcacia Technologies 400mmAcacia Technologies 250mm (in progress)Rembrandt ... (more)

From Richard Wilson Hedge Fund Blog - view blog entries - visit this blog
February 1, 2008 at 2:15 pm ET
Hedge Fund Relationship Building The best part about writing in this blog is getting 30-50 emails a day from hedge fund professionals, investors and students in finance. One of the most frequent questions I get is "can you help our hedge fund raise capital from new investors?" I usually refer these people on to others as the firm I am with already has our hands full in raising capital right now for a set number of funds. One piece of advice relevant to everyone though is mentioned here at MajorGiftsGuru.com.Tom quotes Woody Allen's great quote: "80% of ... (more)

From Richard Wilson Hedge Fund Blog - view blog entries - visit this blog
February 1, 2008 at 9:39 am ET
Sovereign Wealth Fund ListsHere is an interesting map put together by the WSJ on where exactly each sovereign wealth fund is located and how much money they manager.Link: WSJ Map of Sovereign Wealth FundsAlso just found this interesting slide show list of sovereign wealth funds posted by Forbes.Link: Sovereign Wealth Fund Slide Show- RichardPermanent Link: Sovereign Wealth Fund ListsSubscribe To this Blog via Email | Or RSSRelated Articles:1. ... (more)

From Richard Wilson Hedge Fund Blog - view blog entries - visit this blog
February 1, 2008 at 2:04 am ET
Bayou's James Marquez Jailed!James G. Marquez, the founder of several Bayou Management hedge funds, was sentenced yesterday by a federal district judge to 51 months in prison, followed by two years of supervised release. He must also pay close to $6.26 million in restitution.In December 2006, Marquez pleaded guilty to conspiring with Bayou's CEO (Samuel Israel III) and CFO (Daniel Marino) to misrepresent the profitability and overstate the value of the Bayou funds. Investors relying on those representations lost mountains of money when Bayou collapsed in July 2005. Read the nytimes.com article here. Israel and Marino still await sentencing.- Bob ... (more)

Thursday, January 31, 2008
From Richard Wilson Hedge Fund Blog - view blog entries - visit this blog
January 31, 2008 at 11:53 pm ET
Hedge Funds Do Not Always Suffer in Volatile MarketsThe business times online recently ran an article which is of the variety that keeps me motivated to keep writing in this hedge fund blog. Here is what they wrote with my insert comments:Hedge funds suffer in volatile markets Hedge funds worldwide are heading for their worst monthly performance in almost ten years amid signs that the credit crunch is claiming fresh victims across the investment markets. Industry experts (which experts? There are none mentioned here) predict that there will be a shakeout of the hedge fund industry this ... (more)

From Richard Wilson Hedge Fund Blog - view blog entries - visit this blog
January 31, 2008 at 10:10 pm ET
Middleast Sovereign Wealth FundsResource thanks to Forbes and the business development consultant Kim Chinn - Mcchin.biz- RichardPermanent Link: Middle East Sovereign Wealth FundsSubscribe To this Blog via Email | Or RSSRelated Articles:1. ... (more)

From Richard Wilson Hedge Fund Blog - view blog entries - visit this blog
January 31, 2008 at 5:47 pm ET
Hedge Funds and Countrywide Merger SRM Global Fund, founded by Jonathon Wood, is seeking to stop the merger between Bank of America (BAC) and Countrywide Financial (CFC). In a statement released by SRM, a company spokesperson said: "We strongly believe that the terms of the proposed merger with Bank of America are contrary to the interests of the Company's shareholders."SRM Global filed a Schedule 13-D with the SEC today. The company claims that the book value of the shares of CFC are $20.00 a share as of December 31, 2007. SRM owns 5.19% of Countrywide. They would receive 0.1822 shares ... (more)

From Richard Wilson Hedge Fund Blog - view blog entries - visit this blog
January 31, 2008 at 10:27 am ET
Hedge Funds 2.0Social Media and Web 2.0 trends are affecting all industries, including hedge funds...Web 2.0 is the term coined to describe websites that contain user interaction or user content contribution abilities. These websites include blogs or weblogs, forums, online communities and interactive "wiki-like" pages. The hedge fund industry is starting to embrace these changes at a rapid pace. Sites like the Albourne Village, Linkedin.com, Hedgeco and investment blogs such as this hedge fund blog are seeing rapid increases in traffic. If they are not familiar forget all of the technical terms used above, the real reason why these websites ... (more)

Tuesday, January 29, 2008
From Richard Wilson Hedge Fund Blog - view blog entries - visit this blog
January 29, 2008 at 9:56 pm ET
Hedge Fund TaxationWith all of the tax issues flying around regarding hedge funds and carried interest, etc. I thought I would post this note which 30% of you have probably already seen at one point or another. It is very relevant to hedge funds, and thousands of hedge fund managers will leave America if taxes increase by too much._________________________________________________Why should we give tax cuts to the hedge funds?Let’s put tax cuts in terms everyone can understand. Suppose that every day, ten men go out to dinner. The bill for all ten comes to $100. If they paid their bill ... (more)

From Richard Wilson Hedge Fund Blog - view blog entries - visit this blog
January 29, 2008 at 8:17 pm ET
Warrant ArbitrageDeveloped as a result of the experience gained whilst working and trading on the Japanese Warrants desk and having fine-tuned the software for the Japanese market, other markets, in particular the European markets, have been incorporated. The application combines a blend of traditional option pricing calculators together with practical fine tuning to identify warrant price anomalies on a volatility basis, or where warrant prices have broken their historic relationships with the underlying stock price.At the heart of the system is empirical regression and volatility crossover analysis, providing real-time pricing and graphical capabilities to view particular issues, or the market ... (more)

Monday, January 28, 2008
From Richard Wilson Hedge Fund Blog - view blog entries - visit this blog
January 28, 2008 at 11:40 pm ET
Retail Hedge FundsInteresting article here by the Financial News on hedge funds being offered to broader retail channels in Europe. The European Commission has been relaxing trading restrictions on open-ended funds in the EU to increase the fund options available to the general public. These products have no daily liquidity, can use leverage and are allowed to have large cash positions. They are not technically classified as retail products but they are being used within traditional retail distribution channels.I don't see a high percentage of hedge funds jumping on this bandwagon unless they are already running ... (more)

From Richard Wilson Hedge Fund Blog - view blog entries - visit this blog
January 28, 2008 at 8:33 pm ET
Zero Coupon BondsA Zero coupon bond (also known as a discount bond) is a bond bought at a price lower than its face value, with the face value repaid at the time of maturity. It does not make periodic interest payments, or so-called "coupons," hence the term zero-coupon bond. Investors earn interest via the difference between the discounted price of the bond and its par (or redemption) value. Examples of zero-coupon bonds include U.S. Treasury bills, U.S. savings bonds, and long-term zero-coupon bonds.In contrast, an investor who has a regular bond receives income from coupon payments, which are usually made ... (more)

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