From the London Times: Jan Loeys, head of market strategy at JP Morgan, believes that the hedge fund industry will have to change to survive. “Hedge funds have traditionally prospered by operating on the outskirts of the market,” he says. “The minute they become the market themselves, then they will find it much harder to generate above-average returns.”

A shake-out of sorts, is to be expected in an industry that lives or dies by its performance record. So far this year, an average of three hedge funds have been launched each working day. Analysts estimate that two of those will fail within the first 12 months. But just as size can restrict growth, so can it be a barrier to survival. Typically, investors will commit about $1 million to a new fund with an option to invest up to $50 million in the second year provided certain performance targets are met. The failure rate is most marked among funds that struggle to attract more than $20 million under management after that first crucial 12 months. It is estimated that up to 75 per cent of outstanding hedge funds manage less than $50 million in assets. Full article: Source

The dollar traded close to an all-time low against the euro on concern a report this week will show the U.S. trade shortfall held near a record. European policy makers contributed to the dollar's slide by indicating last week they aren't opposed to the euro's rally, said strategists including Mark Austin, head of currency strategy at HSBC Holdings Plc. Japan probably won't resume selling yen and buying dollars at the record pace of the first quarter, former deputy finance minister Takatoshi Ito said last week. "The dollar's definitely going down for the next few weeks,...Full article: Source

From the FT: The gold market is starting to resemble its 1970s form after the price of the precious metal hit a 16-year high yesterday, making the current rally the second-longest since bullion was freely floated in 1971. But, unlike the 1970s when inflation helped boost prices, this time it is lack of confidence in the dollar that is causing the metal to glisten again. Source

From the FT: The long wait for a new listed gold investment product backed by the World Gold Council and State Street Securities may soon be over, with the US Securities and Exchange Commission expected to approve the product, a first of its kind to be listed on a US stock exchange. The WGC, an industry body financed by some of the world's largest gold miners, and State Street, are expected to meet next week to finalize marketing details, which will allow investors to buy gold without worrying about storage, insurance or transportation costs, or the risk of margin calls associated with gold futures. Source

From the FT: The first-ever investment hedge designed to protect pension schemes against the risk that their members might live longer than predicted is to be launched today by BNP Paribas. The hedge, a GBP540m ($1bn) bond with a 25-year maturity issued by the AAA rated European Investment Bank, will have interest payments that are highest in the first year and decrease each year as members of each pension scheme die. If the population lives longer, interest payments stay higher.

Although the bond is to be denominated in sterling, BNP Paribas said there was no reason why similar issues could not be launched in the future to match pension liabilities on the European continent or in the US, where longer lives were also straining pension finances. Full article: Source

Infiniti Capital, the Swiss fund of hedge funds with a unique ‘no management fee’ structure, has launched an innovative structured note and is marketing the product in a variety of international markets, excluding the United States. The eight year note is issued by AA rated Barclays Bank PLC with performance linked to the Infiniti Capital Proprietary Matrix 10 portfolio, with a target return set at between 15% and 20% per annum. This note is available for professional investors only.

The Proprietary Matrix 10 is a dynamically managed, unleveraged portfolio of hedge funds allocating to over 150 individual strategies, including a significant allocation to emerging managers. Infiniti’s investment team is well-versed in finding emerging managers who can provide a performance boost to a portfolio, with better returns and lower volatility than other funds of hedge funds.

The note offers a look-back facility, ensuring that investors who stay invested until maturity will receive at least 80% of the highest value ever reached by the note and at least 100% of their initially-invested capital, regardless of any subsequent fall in the value of the note. The structural features of the note enable Infiniti to provide an income as well as capital growth. The note targets a coupon of 3% per annum over the life of the note. The coupon will only be paid out of performance and is designed to allow investors to take profit if they wish.

For further information, contact Anric Blatt: opal138@infiniti-capital.com, Tel: +41 (1) 307 37 00
For background information on Infiniti Capital see the Opalesque Close-Up. Source

The Directors of the Oberon Long / Short Japan Fund have decided to accept the Investment Manager’s recommendation that the fund be liquidated. This decision is a consequence of the fund failing to perform as the Managers would like, and their assessment that it would be likely to continue to do so. The fund’s assets stood at $251 million as of 31st October.

The fund is a low volatility, non-correlated product that started trading in April 1999 and closed to new investors at the end of 2000. Over its life to 5th November it has made an estimated annualised return of 7.8% on 6.5% annualised volatility, with a correlation of 0.32 to the local Topix index.

The fund’s assets will be moved into cash during November, and the Auditors will perform a final audit in December. Oberon Asset Management will continue to run the Oberon Strategic Fund, which is a long biased fund that invests predominantly in Japanese small caps. The firm is also moving into new hedge fund related business areas. Any queries relating to this release can be directed to Nick Mann, 44 (0)1749 812125. No online Source

Fortis Investments recently launched its fourth hedge fund product, a convertible arbitrage hedge fund. The fund has a global strategy covering the US, Europe, Asia and Japan. It began trading with €10 million in seed capital, has attracted an additional €4 million from outside investors, and is up over +0.7% in its first month. Assets are expected to reach €50 million by year-end, based on further investor commitments, and total capacity for the fund has been set at €500 million. The strategy has no directional element in terms of equity or interest rates, and the managers take views only on volatility and credit. Fortis Investments is a multi-centre, multi-product asset management company. As the asset manager of Fortis, Fortis Investments has EUR 81 billion of assets under management. No online Source

From the London Times: Going short, as it is called, is the preserve of hedge funds. And hedge funds — the good ones anyway — are the preserve of the wealthy. “Don’t bother us unless you have at least $250,000” is the normal response from the rocket scientists of Mayfair. Of course, there are more accessible funds of hedge funds, but they tend to invest in esoteric stuff a million miles from the business of betting that a particular share price is likely to fall. The fees are huge, while the double-digit returns of the past just aren’t being made anymore.

But it is possible to back fund managers to take occasional down bets without having half your money diverted into exotic areas such as commodity futures and convertible bond arbitrage. Some relatively straightforward investment trusts go short. One of them is SVM UK Active, which is managed by SVM Asset Management, headed by Colin McLean. “Hedge fund lite,” he calls the approach. He generally shorts as part of what is called a sector hedge. Mr McLean has achieved some coups in recent months…Full article: Source

Large companies, it is often remarked, are like giant ocean liners. Once set, it is difficult to alter course. Turn the clock back three years and the venerable ship Schroders, launched in 1804 when Admiral Nelson was in his prime, was in danger of heading for the rocks: For the first time in 42 years, one of the largest independent fund management companies had posted a loss. It was not only listed - on the London stock exchange - but listing. There was a palpable sense of drift among company staff, and long-term clients of the blue chip London institution were queueing up to jump overboard.

Enter new captain Michael Dobson, who ran a hedge fund when he was recruited by Schroders, aided at the wheel by Jonathan Asquith. Together they introduced a four-year recovery plan. Three years on, having recorded a £60m profit for the first half of this year, Mr Dobson and Mr Asquith now feel confident enough about the company to talk - for the first time - about the turnaround. Full article: Source

UK Internet bank Cahoot was forced to shut down yesterday after the discovery of a major security breach which allowed customers to access other people's accounts without using a password, according to a report by the BBC. The BBC says it was contacted by a viewer who found he could log in to other people's Cahoot accounts using just a user name and bypassing any security questions. Cahoot, which is run by Abbey, says the problem was caused by a system upgrade 12 days ago. The site was closed down for 10 hours on Thursday to carry out repairs. Source

From the Billingsgazette.com: For years, if not decades, entrepreneurs have dreamed of making it in China, salivating at the prospect of more than a billion people and an economy growing at 9 percent a year. But for the most part, those dreams have so far remained just that - dreams, with few and limited cases of success.

Now, new developments are drawing the eyes of venture capitalists, and they see money. A raft of recent successful initial public offerings of Chinese companies show foreign investors finally have a way to recoup profits from investments there. The companies, which are listed on Nasdaq or Hong Kong stock exchanges, are producing gains some say could make U.S. ventures pale in comparison.

Take SMIC, the big Shanghai semiconductor company that went public in March. It increased its revenues to $1 billion within four years - perhaps the "fastest growing company in the history of the world," says Dick Kramlich, partner at Menlo Park, Calif.'s New Enterprise Associates. He invested more money into SMIC - $120 million - than any other startup in his 25 years of investing. Two years later, he has already earned a paper profit.

Stories like SMIC are sparking a veritable race among investors to get to China, despite the long list of risks and caveats involved with doing business or investing there. In June, Silicon Valley Bank took 25 California venture capitalists to China to meet with local politicians and entrepreneurs. Many had never been before. On their heels came 200 Israeli venture capitalists on a similar mission.

The interest is already translating into action. Private equity investments into China companies grew to $1.6 billion last year, up from $418 million in 2002. And this year should see still more. Last year, 172 venture firms operated in China, up from 38 in 2002, according to the Asia Venture Capital Journal. About $1 billion in capital is invested in China a week.

Going to Shanghai today is like arriving in San Francisco in 1849 amid the Gold Rush: "If I was 22, I'd move to Shanghai, print a business card, and I'd figure it out,"… Of course there are numerous horror stories… Full article: Source

Bloomberg reports China's central bank said the country will further reforms to “create a more flexible exchange-rate mechanism,” responding to an International Monetary Fund recommendation that the yuan's peg should be relaxed. “We will take measures in various ways to further this reform, in a gradual and steady manner,” the People's Bank of China said in a statement on its Web site. The IMF on Nov. 5 released a 72-page report, which said a more flexible exchange rate would help China's government achieve its goal of a gradual economic slowdown.

The Singapore dollar yesterday rose to its strongest in almost five years, leading a rally in Asian currencies, on speculation China will allow the yuan to gain in the months ahead. China wants some ``fluctuation'' in the yuan while limiting exchange-rate movements and stemming crises, Guo Shuqing, head of the State Administration of Foreign Exchange, was cited by China Reform Daily as saying on Nov. 4. It gave no timetable for change. Source

From FinanceAsia.com: Japanese institutions have embraced funds of hedge funds, but some fund managers think PE may be the next trend. Global fund managers in Japan are preparing to introduce their institutional clients to private equity funds in the expectation that this asset class will become an important alternative.

Upcoming liberalization expected to pass in December will let the Financial Services Agency recognize limited partnerships as a security. This means licensed investment advisory companies (i.e. fund managers) will be able to offer such products to Japanese corporate pension fund clients. Investors are keen because their normal vehicle for alternative investments, the fund of hedge fund, has suffered from mediocre performance this year. "Hedge fund performance is poor so clients are looking at other asset classes such as Japanese or Asian equities," says one manager. "We want to be ready to provide them with private equity funds as well." Source

Hit by hurricanes Berkshire Hathaway`s 3rd-Quarter down 37%
Berkshire Hathaway ran headfirst into hurricane losses in the third quarter, knocking net income down 37%. (IWON)

US Regulators Handing Out Stiffer Penalties
Penalties against Wall Street firms and individuals by regulators have in some cases doubled in recent years and are likely to continue growing. (InstitutionalInvestor)

UBS Investment Bank doubles its U.S. market share (JP33)
Four years after spending $11.5 billion to buy U.S. retail broker Paine Webber Group Inc. and laying out another $600 million to hire more than 50 senior bankers from Los Angeles to New York, UBS is winning market share -- and recognition -- in the United States, where other European banks have floundered. According to Greenwichtime.com (Bloomberg) its share of investment banking fees in the United States surged to 5 percent last year from 2.3 percent in 1999, ranking behind leader Citigroup Inc. and ahead of European competitor Deutsche Bank AG. No online Source

GAIM USA 2005
January 18-20, 2005 * Boca Raton Resort * Boca Raton, FL
The Largest Gathering of Hedge Funds and their Investors in the USA!

• A speaker faculty and attendee list comprising a “who’s who” of hedge fund investing - an unrivalled forum for discovering critical information on the industry and its investment opportunities in 2005
• Active participation of leading institutional investors from North America, Asia & Europe
• Ideal networking opportunities in the exclusive and comfortable surroundings of the Boca Raton Resort & Club
• The seniority and level of expertise of the GAIM USA speaker faculty surpasses that of any other alternative industry event in the USA

Over 500 Senior Industry Leaders Attended in 2004! Register by November 15th and save $600:

To Register or for more information, visit www.gaimusa.com
Please mention priority code: XUAMB

France ranks second in Europe after Luxemburg in terms of asset under management with EUR 982 billion and is one of the countries with the most diversified range of products. France has traditionally had one of the highest saving rates in Europe at 15%.

Hedge Fund type of products listed in this report (Single Manager Funds and Funds of Funds, excluding advisory mandates and guarantee products) represent 73.6 billion Euros at the end of June 2004 and 7% of the total asset management in France. The new onshore category of funds of funds listed under “OPCVM de fonds alternatifs” and created in 2003 represents 1% of the total retail asset management.

France: Outlook 2004 is the third edition published by Astérias on the French market; It presents a full update on the regulation, institutional demand and industry players. Astérias is an independent advisory firm specialised in Hedge Funds investments. Since 1998 Asterias has developed an industry wide reputation for its research driven analysis of the hedge fund industry in Europe.

On 200 pages, this research gives details on:

• Total assets under management and size in hedge funds
• Growth and types of products
• Concentration of players and foreign players
• Product development and the new legislation
• Asterias analysis on over 50 French Managers interviewed, 52 profiles with list of funds, strategies, and contact details, lists over 300 funds

20% discount to Opalesque Subscribers: 1.200 Euro + Tax (instead of 1.500 Euro). To order your copy contact us on asterias@opalesque.com
Download Table of Contents (pdf file)
Download Executive Summary (pdf file)
Download Manager Presentation Table (pdf file)
Download Sample Profile (pdf file)

28 - 30 November 2004
Don Carlos Resort Hotel - Marbella, Spain
www.srinstitute.com/cx530

Leading hedge funds, fund of hedge funds, pension plan sponsors, consultants, and other decision makers will convene this November on Spain's Costa del Sol to take stock of the burgeoning hedge fund industry and focus on how to obtain alpha through the investment strategies used by today's best and brightest managers. The conference runs concurrently with the Private Equity Roundup offering attendees a wide array of networking opportunities.

Featured speakers include:
Charles Beazley, Board Director, Head of Institutional and Alternative Investments Gartmore Investment Management
Robert Howie, Head of European Hedge Fund Research, Mercer Investment Consulting
Michael P. Hennessy, Senior Director, Investments, University of North Carolina Management Company
Mark Burbach, Investment Manager, Stichting Pensioenenfonds TNO
Derek Doupe, Executive Director, Fund of Hedge Funds, Schroder Investment Management Ltd.

Please use priority code DEM004775 when registering.

Hedge Funds World Japan 2004 - Returning to Tokyo for the seventh successful year, recognised as THE industry event in Japan! Featured speakers include:

• Jim Rogers, the Wall Street legend, the man Time magazine calls the Indiana Jones of Finance and co-founder of the Quantum fund
• Noboru Terada, Executive Investment Officer of the world's largest pension fund, Japanese Government Pension Investment Fund
• Yasuchika Asaoka, Executive Director, of the the largest Employees' pension fund in Japan, Pension Fund Association for Corporate Pension Funds
• Daisuke Hamaguchi, Director of the Mitsubishi Corporation Pension Fund
• Donald Sussman, Chairman and Chief Executive Officer of Paloma Partners Management Co. and the recipient of Alternative Investment News 2004 Lifetime Achievement Award

The event offers a unique opportunity to gain access to new markets and new clients. 10% discount for Opalesque subscribers!

For more information please click www.hedgefundsworld.com/2004/hfw_jp or contact Rani at Tel: +65 63222 721 or rani.kuppusamy@terrapinn.com

Canada's premier hedge fund event presented by Canadian Hedge Watch and the Canadian Institute of Financial Planners in Niagara Falls, Canada, December 5 – 7 , 2004.

Over 70 speakers from around the world including:

• Jim Rogers, investment industry legend, co-founder of the Quantum Fund, bestselling author
• Marianner Smythe, Partner, Wilmer, Cutler, Pickering LLP, Washington DC, formerly of the SEC
• Frank Mersch, Managing Partner, Front Street Capital, a leader in Canada's hedge fund industry
• Ian Bremmer, Ph.D., President and founder of New York and London based Eurasia Group
• Dermot Butler, Chairman, Custom House and Deputy Chairman, AIMA International

Opalesque subscribers are eligible for the same registration discount as members of the host organizations. Early-birds save even more. Please register now for savings of more than 50% - call Robert Jeffrey at 1-866-933-0233 for your special discounts.

European Hedge Fund Investment Forum plus Awards 2004 Dinner
London, 8 & 9 December 2004

The European Hedge Fund Investment Forum provides diverse industry perspectives on hedge fund investment strategies and key insights into developments in risk measurement and management. The event programme has been designed for investors in fund of funds and hedge funds. All institutional investors and family offices will be able to attend for free.

Our keynote addresses provide a unique insight into the thinking of the decision makers in the institutional investment and hedge fund worlds:

• Timothy P. Cahill, State Treasurer and Receiver General, MASSACHUSETTS STATE TREASURY
• Ramos Koss, Head of Alternative Investments and Mutual Funds, CREDIT SUISSE
• Lindsay P. Tomlinson, Chairman, INVESTMENT MANAGEMENT ASSOCIATION
• Dan Waters, Director of Retail Policy and Asset Management Sector Leader, FINANCIAL SERVICES AUTHORITY

Examine industry perspectives on key issues, including:

• Regulatory updates and their impact on the industry: US and EU experiences
• Challenges and opportunities of investing in hedge funds
• Choosing a fund of funds to invest in hedge funds
• Creating an internal independent risk analysis of funds framework
• Effectively selecting and monitoring managers and strategies
• Hedge fund indices
• Absolute vs. relative return: Main opportunities for institutional investors

On the evening of 9 December 2004, Hedge Funds Review magazine will be holding its third annual Fund of Hedge Funds Awards 2004 Dinner. Winning one of the categories is one of the most sought-after accolades in the industry, and this is the only awards presentation and dinner that is held exclusively for European funds of hedge funds.

E-mail: tracey.huggett@incisivemedia.com Or contact Tracey Huggett on tel: +44 (0)20 7968

2 Day conference: 14-15 December 2004, The Selfridge Hotel, London

10% DISCOUNT for Alternative Market Briefing Readers (quote AMB) - significant discounts also apply for institutional investors.

Come to Finance IQ's Volatility Trading and Risk Management conference and grasp how you can hedge your portfolio using volatility trading strategies and also exploit the link between credit, equity and the underlying volatility.

You will hear from top quantitative analysts such as Dr. Rami Habib from Fimat, Michael Wexler from Maple Leaf, Dr. Michael Erhart from DFL Financial Services, and many others regarding the changing nature of volatility trading strategies. The following organizations will also be presenting at this exciting event: Abraxas Capital Management, Bank of America, Societe General Asset Management, BGB Weston, Ersiwell Capital LLP, Gaim Advisors, Lakeview Arbitrage, ER Capital, London Business School, Chicago Board of Options Exchange.

To guarantee your place visit: www.iqpc.co.uk/GB-2383/op email: holly.rowland@iqpc.co.uk or call: +44 207 368 9300 quoting AMB to receive your 10% discount.

Thursday 9 December 2004, Geneva, Hotel des Bergues

Equities have tended to provide upsetting returns for investors over the past 5 years, whereas commodity prices have been rising steadily. After 20 years of disappointing returns, commodities have now turned around and entered a secular up trend. A new bull market is underway and it is in commodities.

It has been shown that investing in commodities improves the risk return of an investment portfolio and now the commodities are accepted both as a diversification asset and as a hedge against inflation especially unexpected inflation.

The Commodities Investors Forum is the European only one true event where the institutional and private investors meet to learn and debate about all the issues surrounding the commodity market. With over 11 speakers, the Commodity Investors Forum will feature commodity experts from across Europe including the UK, France, Switzerland, and the USA.

The Commodity Investors Forum provides the best networking and business opportunity in commodities this year. Update yourself on developments and trends in commodities and make sure that you are present at the Forum Geneva on Thursday the 9 of December 2004.

Website: www.academyfinance.ch/Pdf/AF145Commodities.pdf

2 Day conference: 31 January – 1 February 2005, The Selfridge Hotel, London

10% DISCOUNT for Alternative Market Briefing Readers (quote AMB) and FREE to attend for institutional investors.

Attend Finance IQ's Generating Absolute Returns for Pension Funds - a pension fund packed conference where huge opportunities exist for hedge fund providers who have established relationships with current and future investors.

Your clients - institutional investors - are coming so they can hear from top hedge fund experts such as Christopher Fawcett from Fauchier Partners LLP, Simon Ruddick from Albourne Partners, James Walsh from Hermes Pensions Management, Chris Mansi from Watson Wyatt, and many others regarding the changing nature of absolute return investment strategies.

The following organisations will also be presenting at this exciting event: ABP Investments, Lloyds TSB Group Pension Fund, Asterias, Clwyd Pension Fund, EDHEC Business School, the Financial Services Authority, Lovells, Mercer Investment Consulting, Pacific Alternative Asset Management Consultancy, Sabre Fund management Ltd., Schneider Capital, Merseyside Pension Fund, Skandia life and Insurance Company.

To guarantee your place visit: www.iqpc.co.uk/GB-2314/amb email: enquire@iqpc.co.uk or call +44 207 368 9300

1 - 3 February, Steigenberger Frankfurter Hof, Frankfurt, Germany

Get the definitive facts on the German hedge fund market at Germany's premier hedge fund event for investors and fund managers.

Conference highlights include:

• Are the new rules presenting real opportunities?
• Analysis of local single hedge funds and funds of hedge funds trends
• How much money has actually been allocated to hedge funds in Germany?
• Focus on German investors - who are they and what are they really buying?
• How is Germany positioning itself against other major hedge fund markets
• Successful styles and strategies in challenging times

Top-level speakers include:

• Alexander Appelt, Senior Portfolio Manager, SwissLife Germany
• Ernst-Ludwig Drayss, Partner & CIO, Berlin & co. KGaA
• Fred Siegrist, Co-Head & CIO, RMF Investment Management
• Alberto Giovannini, CEO & Director, Unifortune SGR SpA
• Ulf Becker, Head of Equity Hedge Funds & Senior Portfolio Manager, Lupus Alpha

To obtain your 10% discount as an Opalesque subscriber, call Naheed Sharmin on +44 (0) 20 7827 5980 or mailto:naheed.sharmin@terrapinn.com. Website: www.hedgefundsworld.com/2005/hfw_DE a>

Build your brand and create new business with the intelligent marketing options of the Opalesque Alternative Market Briefing - the industry's favorite hedge fund newsletter! Please email me: knab@opalesque.com for details. Communication that works!

ISSN Number: 1450-1953
Alternative Market Briefing has been called the best news service on hedge funds. Our mission is to intelligently select and timely provide the most important daily news for professionals dealing with hedge funds. Alternative Market Briefing offers both a quick overview and indepth coverage of all subjects through the "Source" link that leads you to the publicly available online news sources. The concept that we follow is that of a "clipping service" - the added value for you is that we screen, intelligently select and efficiently present each day the most important hedge fund news. The majority of the news sources used do not require a subscription, however some may ask you to register. Once registered, you can access these news sources freely. Please mail us your feedback and suggestions to feedback@opalesque.com - we love to hear from you!

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Disclaimer: The information contained in this newsletter does not constitute an offer or solicitation to sell any security or fund to or by anyone in any jurisdictions, nor should it be regarded as a contractual document. Under no circumstances should the information provided on this newsletter be considered as investment advice, or as a sufficient basis on which to make investment decisions. The information contained herein has been gathered by Opalesque Ltd. from sources deemed reliable as of the date of publication, but no warranty of accuracy or completeness is given. Opalesque Ltd. is not responsible for and provides no guarantee with respect to any of the information provided herein or through the use of any hypertext link. Past results are no indication of future performance. All information in this newsletter is for educational and informational purposes and does not constitute investment, legal, tax or accounting advice.