When asked where to invest in the U.S. stock market, hedge fund managers said that Technology (41.0%), Financial Services (31.2%), Consumer Goods (26.2%), Food & Beverage (21.3%) and Defense (21.3%) will be the best performing sectors in 2007. These results were released after VanthedgePoint Group Inc's second annual Emerging Hedge Fund Manager Sentiment Survey. The hedge fund managers believe a continued "Real state market slowdown" (29.5%) and "inflation" (21.3%) will play the biggest role in how the U.S. economy will fare this year.
Over half of all respondents manage hedge funds with less than $10 million in assets under management, while over 85% currently manage less than $100 million. In addition, emerging hedge fund managers indicated that the most difficult aspect of running a hedge fund business is "raising capital/marketing".
In 2006, the survey results turned out to be quite accurate. Last year, respondents predicted increasing energy costs and a real estate market slowdown, both of which slowed the U.S. economy in 2006. They correctly predicted that Technology, Raw Materials, Financial Services and Defense would be among the top performing sectors in the U.S., and they narrowly missed the mark by indicating China would be the best performing international market.
Recent financial statistics have shown that pension plans are beginning to out-pace high net individuals with respect to hedge fund investing. At the same time, sub-prime funds struggle in the aftermath of blow-ups such as Amaranth and Bayou.
Here are the Emerging Markets in the headlines:
Investment News - Hong Kong's Securities and Futures Commission is simplifying the licensing agreements for overseas hedge-fund managers looking to set up shop in the territory.
Reuters - Schroders said on Wednesday its fund-of-hedge-funds division had opened a research office in Hong Kong to try to capitalise on the region's booming hedge fund sector.
Reuters India - Indian hedge funds will grow rapidly despite a hesitant attitude from the country's regulators, industry participants said on Tuesday, as investors keep piling money into the nascent industry.
Also, according to Dr. Susan M. Mangiero, CFA, Accredited Valuation Analyst and certified Financial Risk Manager, "Pension fiduciaries are on the hook for making sure that they have done everything possible to avoid a hedge fund meltdown. We want to help plan sponsors before trouble starts. Issues such as independent valuations and good risk controls are essential but that is just the tip of the iceberg."
Wall Street Journal- Hedge fund JANA Partners has agreed to pay 1.01 billion yuan, or about $132 million, for the equity stake in Shenyang Machine Tool (Group) Co., China's largest lathe maker.
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