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No joke: Hong Kong manager launches 'HAHA' on NYSE as it gains toehold in US ETF market
Asset Management
<p>While western firms scramble to set up shop in the region, Hong Kong-based CSOP revs up its quest to dominate New York.</p> <p>Hot on the heels of its first New York-listed ETF – the CSOP FTSE China A50 ETF (ticker: AFTY) – the asset manager is set to launch two more ETFs on the NYSE, according to a statement.</p> <p>Its second ETF, the CSOP MSCI China A International Hedged ETF (ticker: CNHX), aims to track the performance of the MSCI China A International Index while neutralizing the ups and downs of the yuan relative to the greenback. The third one -- the amusingly tickered CSOP China CSI 300 A-H Dynamic ETF (ticker: HAHA) -- seeks to track the performance of the CSI 300 Smart Index.</p> <p>Apparently, HAHA will be the first time anyone combined A and H-shares together in one product, and was specifically engineered “for the vast number of investors who have only invested in offshore H shares ETFs in the U.S.” Interestingly, the fund was also structured to arb A-shares and H-shares price differentials, which sounds neat. Let’s just hope investors won’t find any irony involved with its ticker.</p> <p>Joking aside, this actually sounds like a great opportunity for U.S. investors, as Louis Lu, a portfolio manager at CSOP, had to say:<br /> “After launching our first FTSE China A50 ETF in the U.S. market, we are proud to bring two more exciting products to U.S. investors. With the expedited opening steps of China's capital market, we maintain a constructive view on China's A-shares market and think it is good timing for U.S. investors to increase their holdings of China A-shares.”<br /> Photo: Thomas Hawk</p>
Aberdeen Asset to bag first private fund management license in China
Asset Management
<p>Say goodbye to joint ventures and say hello to a new era for foreign fund managers because according to the SCMP, Aberdeen Asset Management is about to bag the first ever private fund manager licence in China:<br /> “British fund manager Aberdeen Asset Management is due to be granted a private fund manager licence in China, signifying foreign fund managers will no longer need to go into joint ventures and can operate at 100 per cent shareholding in their investment businesses.</p> <p>The fund manager will receive a private fund licence for its wholly-owned foreign enterprise (WFOE) setup in Shanghai.</p> <p>The quota for Britain's renminbi qualified foreign institutional investors (RQFII) programme is due to be increased as part of the 200 trade agreements that are to be concluded over President Xi Jinping’s visit to London this week, sources familiar with the situation told the South China Morning Post.”<br /> The license not only allows Aberdeen to trade in China's secondary markets, but to also raise cash from individual and institutional investors onshore.<br /> Photo: Anthony Kelly</p>
Startups eager for sky-high valuations should heed this cautionary tale
Venture Capital
<p>As the IPO market tanks and startups continue to seek absurdly high valuations, they would do well to remember the 2013 listing of textbook rental service Chegg and its ill-fated use of the IPO "ratchet."</p> <p>Wall Street Journal's Venture Capital Dispatch recalls how Chegg sought to secure a higher valuation during its pre-IPO funding rounds by promising investors their share price would double by time the company went public – a term known as a "ratchet." It backfired. Massively. As early Chegg investor Oren Zeev explained in a conference this year:<br /> “While it turned out that the top line was great, the fundamentals of the business, or the assumptions we were making about the business, were a stretch. It was far less clear it was a great business.”<br /> The upshot was that the business sunk below its IPO valuation after going public and could not deliver on what it promised, and Chegg was forced to issue additional shares to Insight Venture Partners, the VC with which it had the covenant. Companies like Box Inc. and Kayak Software Corp. have also had to pay a painful price for the same reason. </p> <p>One has to wonder how many  of our newly-born unicorns managed to achieve such lofty valuations, and how they will cope when it's time to go public.<br /> Photo: Jellaluna</p>
$1.4 billion in losses don’t scare Bill Ackman
Hedge Funds
<p>In Ackman’s world, cutting losses is for fools:<br /> “Hedge fund manager Bill Ackman said Wednesday that he purchased an additional 2 million shares of Valeant Pharmaceuticals as the stock plunged following the release of an explosive note from Citron Research that alleges the drugmaker is channel stuffing.</p> <p>Ackman told CNBC that he believes in the company despite Citron claims. His firm, Pershing Square, was already one of the largest holders of Valeant stock.”<br /> Pershing Square has so far lost $1.4 billion on Valeant, with Reuters estimating his Wednesday loss at $500 million.<br /> Photo: Insider Monkey</p>
Goldman dumps Indian asset management unit
Asset Management
<p>It's a quiet breakup, but Goldman Sachs is dumping its Indian fund management unit and Reliance Capital Asset Management is picking it up.</p> <p>Goldman's $37.5 million cash deal is the sixth exit of an asset management from India since 2013, reports the International Business Times. Morgan Stanley, Deutsche Bank, PineBridge, ING, and Daiwa Capital Markets have left the Indian mutual fund sector as the cost of acquiring assets has gone up, cutting into profits.</p> <p>Goldman employees in the ETF business will be offered employment opportunities at Reliance Capital. The deal makes Reliance Capital the sole provider for the government's central public sector enterprises ETFs, reports Live Mint. Goldman's existing ETFs will be rebranded as Reliance Capital's. Goldman says it will remain invested in Indian securities through regional and global funds.</p> <p>Goldman managed about $1.1 billion in India at the end of September. Reliance Capital had about $23.5 billion in assets under management at the same time, and ranks as the third largest fund house in India. The Indian mutual fund industry is worth about $202 billion.<br /> Photo: Kirill Tropin<br /> &nbsp;</p>
Snapchat execs are disappearing
Venture Capital
<p>Blink and they're gone. Snapchat's executives are disappearing like their photos, with eight upper-level execs leaving in the last year.</p> <p>It's not unusual to see leadership shuffles in startups as competition is high for talented staff, reports Business Insider. But it may be a bit concerning that Snapchat can't keep execs on board. Only one of the eight now-departed leaders lasted longer than eight months.</p> <p>Is the super-young CEO Evan Spiegel to blame, or is this just the tech world we live in?<br /> Photo: AdamPrzezdziek</p>
Nailed It: This leveraged ETF is on fire
Asset Management
<p>Homebuilder stocks and exchange traded funds have recently been buoyed by a spate of encouraging data. Data out Monday show the National Association of Home Builders/Wells Fargo housing market index jump three points to 64, its highest reading in a decade.</p> <p>On Tuesday, it was revealed that September housing starts surged 6.5 percent, well ahead of the 1.4 percent increase expected by economists. Predictably, those data points and other are boosting homebuilder stocks and ETFs. For example, the $2.1 billion iShares U.S. Home Construction ETF (NYSE: ITB) is up 7.7 percent this year and resides at its highest levels in over eight years.</p> <p>Gains for homebuilders and stocks would be even more impressive if not for a slump that started in August and lasted well into September, but the aforementioned data points ...</p> <p>Full story available on Benzinga.com</p> <p>Photo: istock/PhilAugustavo</p>
Hedge funds post largest asset declines since ‘08
Hedge Funds
<p>Investors may have kind been to hedge funds during the third quarter, but apparently, the market was just too much for them:<br /> “Total global hedge fund capital posted the largest decline since the Financial Crisis in the third quarter, as global financial market volatility surged on uncertainty over US interest rates, China and M&amp;A transactions. Estimated hedge fund capital declined by $95 billion across all strategy areas to end the quarter at $2.87 trillion, as new investor capital inflows only partially offset performance-based declines.”<br /> The quarterly asset decline is supposedly the first since the second quarter of 2012 and the largest since fourth quarter of 2008, according to HFR. Inflows remained strong though, with three of the four main hedge fund strategies boasting net capital inflows for the quarter. Event-driven funds for example saw $5.4 billion in inflows while relative value funds punched in $2.9 billion. Macro funds however experienced $5.1 billion in outflows, largely due to the Fed cooking the emerging markets and China's slowdown hurting commodities.<br /> Photo: Lucas Stanley</p>
Watch out Silicon Valley, Asia’s VC space has you in its sights
Venture Capital
<p>Silicon Valley may have Apple, Google, and Facebook but as far as venture capital investments are concerned, Asia’s beginning to give it a serious run for its money.<br /> “The venture capital industry in Asia has seen strong growth over the past year, and in Q3 the aggregate value of deals was comparable to the total value of deals in North America. India and China, the largest part of the Asian industry, marked 709 financings in the quarter, worth a combined $16.9bn. There were 932 venture capital deals in North America in the same period, worth an aggregate $17.5bn.”<br /> Preqin adds that total Q1 to Q3 venture capital investments in China and India have surged to $36.2 billion – an over 180% climb from 2014’s $19.9 billion total – bringing Asian VC investments just $17 billion shy of North America’s $53.5 billion for the same time period.</p> <p>Nine of the ten largest venture capital deals in the third quarter were based in Asia as well, with Didi Kuaidi’s two recent rounds bagging the top two spots.</p> <p>However, North America may still have a chance to stretch their lead. While deal numbers in the west has fallen, deal sizes continue to climb with some late stage and debt financing deals reaching “record levels.”</p> <p>Deal numbers in Asia are still climbing though, as Preqin’s Christopher Elvin notes:<br /> “The venture capital industry is developing in two different directions between emerging and mature markets. In emerging markets, particularly in Asia, rapidly developing economies like China and India are providing increasing numbers of opportunities for investors and fund managers. While average deal size is increasing slightly, the key driver of growth is the increasing number of deals.”<br /> Photo: brefoto</p>
Bridgewater’s All-Weather Fund down 6% for the year
Hedge Funds
<p>Guess it couldn’t weather this stormy 2015.<br /> “The $70 billion Bridgewater All Weather Fund, managed by hedge fund titan Ray Dalio, was down 1.9 percent in September and is down 6 percent through the first nine months of the year, three people familiar with the fund's performance said on Tuesday.</p> <p>The All Weather Fund is one of two big portfolios managed by Bridgewater Associates and uses a so-called ‘risk parity’ strategy that is supposed to make money for investors if bonds or stocks sell off, though not simultaneously.”<br /> Reuters does add that it’s up 3.7% for October, though unfortunately for them, spoos has climbed 5.8% in the same time period. As for Dalio’s Pure Alpha II Fund, it did slightly better with a 3.9% year to date return.<br /> Photo: Fadil Basymeleh</p>