GLG News Analyses of the following article:

Locked away

view article

Published at: www.economist.com

Defend your funds

December 22, 2008

Analysis by: GLG Expert Contributor

Market has shattered and very few funds as decsribed in the article have sustained the downfall. Majority of funds have gone into emptiness pusing the investors to sleepless nights. Immediate remedy has to be chalked that can assure at least a single digit rate yield than going volatile.

Himadri BanerjiChairman and Managing DirectorEcoUrja

The Market Regulator's Nightmare: Hedgefunds Gone Awry

December 22, 2008

It is reported in an article in The Economist dated 21st Dec 2008, that the hedge-fund firms, Fortress, Tudor Investment, Citadel, D.E. Shaw and Farallon Capital Management have all suspended redemption thereby restricted the right of investors to withdraw their money. The economic downturn has hit most of the hedge funds hard, though some have been able to stem the downward tide by such measures as restricting redemption. The average fund lost 17.7% in the 11 months to the end of November, according to Hedge Fund Research, a consultancy. That may be better than equities but is hardly the “absolute return” the industry promised. And the losses that have been revealed may be understated; had investors been able to redeem all their holdings (forcing managers to sell more assets) things might have been a lot worse. Industry enthusiasts claimed hedge-fund returns were less volatile than their conventional, long-only peers.

" Consolidation" - The Answer for Hedge Fund lack of Liquidity!!

December 20, 2008

Analysis by: GLG Expert Contributor

Implications: 1.A Major Problem - small funds do not have the liquidoty to survive the Long Term. 2.As Fees seem to be the determinable factor: The goal manager has the objective to grow the fund ubtil the inevitable consequence becomes reality - a loss in valuation. 3.Consolidation has an embredded , potential conflict:A well-endowed newer fund vs the large asset base fund. A consequence to be faced at one other time in the future. 4.Diversification by Fund Management involves both the Manager and the Investor - either share the risk and or return:pread the capital between common shares and government bonds. 5.The Industry has , clearly, been overeached - Many funds have leveraged to straddle the the Bull Markets. 6.The structure of the hedge-fund industry has been and will continue to be less stable than conventional fund markets and or management!!!!