Fund Manager And Fund Management, Flagship Credit Fund And Financial Services Authority

GLG fund manager leaves

2006-3-29

By Liz Chong

GLG has parted ways with the hedge fund manager who ran a flagship credit fund that was battered by the downgrades of Ford and General Motors debt last May, The Times has learnt.

Jean-Michel Hannoun left GLG on Monday. The departure is understood to have been amicable. In the past year the credit fund dropped from $1 billion to just over $400 million as investors withdrew their cash after poor performances.

Mr Hannoun’s exit comes after a difficult period for GLG, which received a light ￡750,000 fine from the Financial Services Authority after an investigation into insider dealing.

Despite the pressure from the FSA, GLG raised $1.5 billion from investors recently, bringing its assets under management to $13 billion.

GLG’s ordeal is not yet over. Although it has decided against appealing, Philippe Jabre, one of its former directors, has challenged the FSA ruling. Mr Jabre was also fined ￡750,000.

It is understood that the credit fund will now be managed by Steve Roth, Mr Jabre’s successor, and Cyril Armleder. Mr Roth, who also runs GLG’s market neutral fund, joined last year from Deutsche Bank, where he had been head of UK proprietary trading.

Mr Hannoun and GLG declined to comment.

The market neutral fund was also hit by heavy redemptions, but it bounced back by the end of 2005, making the credit fund the only fund at GLG to lose money last year. It dropped 4.4 per cent in 2005 and rose 8 per cent in January, clawing back most of its losses after a slide of 20 per cent in the first six months. It fell 14.5 per cent alone in May after Standard & Poor’s downgraded Ford and General Motors’ bonds to “junk” status.

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Your fund manager likely is overpaid

2006-4-2

With almost a century of experience to go on, you might think the world would have decided by now what a competent mutual-fund manager is worth.

It hasn't. The subject is more hotly disputed than ever.

Fund management customarily is considered a big-money, high-prestige occupation. A 2005 study put the median pay of "senior portfolio managers employed by mutual funds" at $482,000 a year.

The top 10 percent among investment professionals command more than $750,000, said the study, published by the CFA Institute and the executive search firm Russell Reynolds Associates.

Some insist they see little or no value in a manager's services. In this view, all the most earnest efforts of the best and the brightest managers tend to cancel each other out.

"The popularity of mutual funds as the easiest and most reliable way for American shareowners to invest has waned a bit recently," says Better Investing, the magazine of the National Association of Investors Corp., in its March issue.

The article mentions one financial planner in middle America who "says he abandoned mutual funds a few years ago and doesn't miss paying those management fees. 'It didn't feel like we were getting what we deserve from them,' " the magazine quotes him as saying.

The most famous of all investors, Warren Buffett, takes a shot at fund managers and other financial intermediaries in his annual letter to shareholders of Berkshire Hathaway.

"The burden of paying Helpers may cause American equity investors, overall, to earn only 80 percent or so of what they would earn if they just sat still and listened to no one," Buffett wrote in the letter, published in March.

If enough people adopt that negative view of fund managers, those high six-figure salaries may be coming down.

The latest threat of that sort arises from a bit of revolutionary arithmetic that has attracted attention in professional investment circles.

Some would reason that active managers deserve to be paid only for the amount by which they outperform an unmanaged market index. This is known by the shorthand term "alpha." This has a chilling implication: Since active managers as a group stand little chance of beating the market (they ARE the market, and they cannot hope to beat themselves), those active managers as a group must deserve no pay at all!

It hasn't come to this yet.

What mutual funds have always had to sell is diversification, convenience, liquidity and something called "professional management." Well, the customers can get all the diversification, convenience and liquidity they want from index funds that avoid the costs of security selection.

That leaves active fund managers with "professional management" as their single hole card, their primary distinguishing attribute. Fund managers' paychecks attest that the marketplace continues to assign a large value to this commodity.

But there is nothing to say that perception cannot change.

More info about fund manager, please visit Indy Star.

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Star Student Fund Manager generates 130% fund growth in DFM's online stock game

2006-3-28

The game is witnessing fierce competition between students of colleges, universities, and schools from across the UAE.

Players were given a fantasy fund of AED1 million with which to build a portfolio of DFM listed securities. After one week, Sharjah University leads the field of 2700 students from 38 colleges and universities.

Osama Abdul Razak of Sharjah University came in the first position with portfolio growth of 130 per cent. Haitham Shahda of Sharjah University is second with growth of 69 per cent and Yousef Majid of Al Ofouq College is a close third, with growth 68 per cent. Shamsa Sultan, a student from the Technology College, Al Ain, is the leading female player with growth of 19 per cent.

After one week, some students are thrilled with their portfolio growth while others are trying to cut their losses. DFM is delighted with the high levels of involvement in the game. Students will experience first hand the merits of diversifying portfolios, understanding fundamentals and of taking a long-term perspective to investing.

The DFM's 'Online Stock Game' started on March 20, 2006 and will run till April 20, 2006. Winners will be selected based on the growth they generate during the game period.

More info about fund manager, please visit Ame Info.

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Hedge fund manager withdraws from industry following overvaluation

2006-3-28

The UK FSA has taken action to prevent a hedge fund manager from operating, alleging the overvaluation of fund assets at Regent Park Capital Management.

The FSA has obtained an undertaking from Jae Wook Oh, a former hedge fund investment manager at Regents Park Capital Management LLP (Regents Park), that he will not undertake any controlled function in relation to regulated activities for three years. Oh was Chief Executive and senior partner with overall responsibility for the firm's activities.

Regents Park is currently in liquidation and will relinquish its permission to act as a fund manager.

Regents Park is a small FSA authorised fund manager, which managed a fund domiciled outside the UK. It appears that over a number of months in 2005 there was a discrepancy between the realisable value of certain investments and those valuations provided by Regents Park.

The importance of fund valuations and the need for robust independent valuation processes was highlighted by the FSA in its recent Discussion Paper 05/4 Hedge Funds: A discussion of risk and regulatory engagement.

The FSA requires authorised fund managers to have in place appropriate systems and controls to ensure that any fund valuations are accurate. The FSA is visiting a number of firms to review this issue.

The FSA confirms that it has not commenced an investigation into Regents Park Capital Management LLP or any individuals, nor has it made any finding of misconduct or breach of the FSA's rules.

More info about fund manager, please visit Hedge Week.

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Vanguard Fund Manager Robert Rands to Retire

2006-3-30

Vanguard announced today that Robert D. Rands, CFA, of Vanguard(R) Morgan(TM) Growth Fund, will retire on December 31, 2006. Mr. Rands is a senior vice president at Wellington Management Company, LLP, which provides investment advisory services for roughly one-third of the $6.4 billion fund.

"Bob Rands is an accomplished and experienced manager who has made considerable contributions to the Morgan Growth Fund's superior long-term record," said Vanguard CEO John J. Brennan. "On behalf of our shareholders, we thank him for his twelve years of dedication to the fund."

Mr. Rands, 63, joined Wellington Management in 1978. He has served as portfolio manager for Wellington's portion of the Morgan Growth Fund since 1994. Paul E. Marrkand, CFA, who has served as co-manager of Wellington's portion of the fund since 2005, will assume Mr. Rands' responsibilities upon his retirement in December. Mr. Marrkand, a vice president at Wellington, has 19 years of investment management experience.

Vanguard Morgan Growth Fund is a large-capitalization growth fund that invests primarily in stocks of companies expected to have above-average growth in sales and profits. The fund employs three investment advisors with distinct but complementary approaches: Wellington Management Company, Franklin Portfolio Associates, and Vanguard Quantitative Equity Group.

The Vanguard Group, headquartered in Valley Forge, Pennsylvania, is the nation's second-largest mutual fund firm and a leading provider of company-sponsored retirement plan services. Vanguard manages nearly $960 billion in U.S. mutual fund assets, including more than $275 billion in employer-sponsored retirement plans. Vanguard offers more than 130 funds to U.S. investors and more than 40 additional funds in foreign markets.

All Vanguard asset figures are as of February 28, 2006, unless otherwise noted.

Mutual funds are subject to risk. Past performance is not a guarantee of future results.

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