Rumors of my death have been greatly exaggerated

Regulators and doom merchants are shedding a tear today as the HF Global Hedge Fund Index is reported to have risen by 1.4% in May. Add this to the 1.2% in April and the industry is only 0.2% behind the game for 2008.

Easing of some volatility has helped the industry recover and the arb funds have benefited from buyouts moving closer to completion, such as Clear Channel Communications.

``Some people may have prematurely started writing obituaries for the hedge-fund business,'' said Stephen Oxley, managing director of Pacific Alternative Asset Management Co. in London, which has about $10 billion invested in hedge funds. ``I've been around long enough to have heard several times the cry that `this is the end of hedge funds as we know them'.''

Arbitrage funds, those that bet on a difference between prices, got a lift on May 22, when Clear Channel said banks had fully funded the debt portion of its transaction to be bought by firms including Bain Capital LLC and Thomas H. Lee Partners LP. Highfields Capital Management LP and Third Point LLC are among hedge funds that hold Clear Channel shares, according to filings with the U.S. Securities and Exchange Commission.Merger arbitrage funds in May had their best month since October.

Gains in the industry are reported to have been lead, not surprisingly, by the marco funds which can make bets across a wide range of investments from commodities to currencies and interest rates. These funds climbed 11 percent according to HFR data. The Global Hedge Fund Index is based on returns from more than 2,000 funds and is published with a two-day delay, according to HFR's Web site. H.

Clearly there has been some 'deaths in the family' with those funds that made the wrong bets on the mortgage market going the way of the Dodo and there will be, no doubt, some more to come.

``There's still a huge amount of uncertainty out there,'' said Sophia Brickell, an investment specialist at GAM in London, which runs $28 billion in funds of hedge funds, who expected 2008 to be a ``weed-out year'' for hedge funds.

It looks, however, like we are seeing a calmer environment for funds with most of the potentially big problems having already been removed.

``We're seeing a break from the big losses out there and that's a good start,'' said Cambiz Alikhani, who helps manage hedge-fund investments for Iveagh Asset Management, the investment arm of the Guinness family brewing fortune.

So the industry may not be totally strong and healthy, but it looks as if the hedge fund industry has, once again, shown that it is a long term player in the markets and is not going away in a hurry.

Hedge Funds - Big Brother is Watching

If doubling the tax rate for carried interest was a blow to private equity funds, now it is hedge funds turn with the FSA announcing that it is launching a formal 'assessment' (code for 'investigation') into the system hedge fund managers have in place to guard against market abuse. This after an initial review showed that some managers don't have adequate controls.

This review lead the FSA to be 'disappointed' with some companies internal controls and said that market abuse training, in some cases, was 'non-existent'. This review took in smaller firms and larger firms alike and is has prompted a wider initiative by the FSA to ensure good practices are developed within hedge fund management companies.

"We will be following up with the firms visited and are also launching a program of visits to a wider cross section of (hedge fund managers) over the coming months to formally assess their market abuse systems and controls," the FSA wrote in its markets division's monthly newsletter.

The FSA has wide reaching powers which can included sanctions on firms, expulsion or even legal action.

The review comes after the FSA found that nearly one-quarter of U.K. takeover deals were preceded by possible insider trading in 2005, the most-recent period studied, though there is little to suggest that hedge fund managers are more likely to engage in insider trading than any other market participant.

"Some (hedge fund managers) had a high level of awareness and appropriate controls in place, whilst others were less aware, had fewer controls and demonstrated a complacent attitude to the risks," the FSA said.

This latest initiative by the FSA is due to a growing belief by regulators that insider trading is rife in the markets present both in the UK and US.

In March, the SEC caught a 14-person insider-trading ring that netted more than $15 million in profits and included a UBS research executive, a Morgan Stanley compliance lawyer, a Bear Stearns stockbroker, three hedge funds and a day-trading firm. In May, the SEC froze brokerage accounts owned by a Hong Kong couple it accused of turning an $8 million profit on Dow Jones & Co. shares after allegedly receiving insider information on News Corp.'s $5 billion offer for the group.

To catch rogue traders, regulators and banks increasingly are employing technology, such as complex event processing (CEP) and remote-control software, to monitor insider trading.

Investment banker Hafiz Naseem's last move before boarding a plane from Pakistan back to his Madison Square Park office in New York was to take out his Blackberry and, just like millions of users worldwide, add a telephone number to his contact list. What Naseem didn't know was that the move, like every single keystroke on his mobile device and laptop, was being monitored and logged in real time by an FBI agent back in the U.S.

When the 37-year-old banker landed in New York, he was arrested on insider trading charges in what proved to be the culmination of four months of investigation harnessing both traditional methods and new technology.

We have said it before on this blog, the regulators are getting tough and are probably being backed by a political will to catch the big guys. Someone's scalp will be on the mantle of an ambitious politician soon, we are sure of it.

What of the algorithmic traders? Although a technological Bermuda Triangle myself, others in the industry are not so unskilled. Looking at charts and market movements in securities with the benefit of hindsight, it is fairly easy to spot inside trading patterns, but what of those computer trading programs that search out these anomalies and benefit from that trading pattern. In other words computer programs that are specifically geared to spot insider action and trade on it? Is that market abuse?

I understand that it is. Spies on your Blackberry, keystroke finders on your laptop and computer systems seeking out computers systems... It is all getting a bit 1984 for me.. and I don't mean the dodgy hair do's and the fluorescent socks, more an Orwellian nightmare.

The Sharks are Circling at Northern Rock

It looks like Northern Rock's woe's are just beginning with three of the most aggressive funds plotting to break up the company. Reports suggest that the break-up of the bank would generate hundreds of millions for the funds and leave very little for the shareholders.

Former Goldman Sachs trader, Chris Flowers is among the group looking at a possible deal for the bank. It is also said that Cerberus (the vulture fund that owns Chrysler) and Citadel are among the group circling the stricken financial services company.

The deal would see Northern Rock's mortgage book, worth £100bn plus, divided up amongst the funds but shareholders would come out of it 'penniless' according to the Telegraph.

The markets, recently, have thrown up huge opportunities for funds to snap up under performing securitized mortgage books from struggling banks at below face value. Holding them until maturity would reap huge profits for the funds concerned.

After having loaned NRK £3bn last week a market commentator said "The Bank of England has been trying to get someone to make a bid with no success at all this week. The easiest thing to do is to buy a lot of the assets. It's much more likely to happen this way."

The funds have yet to approach the Northern Rock board, which has spent the week scrabbling to find a new source of financing.

The management of NRK are in a catch 22 position as, obviously, a deal that gave no value on the equity, which a few months ago was worth £5bn, is not something the board would be happy to take. Their options, however, are becoming more limited by the day.

The problems we see here are that this is not some company that makes widgets in some far off land that has little impact on the collective consciousness of the UK public. This is a bank that little old ladies have their savings in. Any aggressive move against the bank will surely be spun by the 'Red Top' tabloids as some sort of 'rich getting richer' scheme at the expense of the little guy. With the fact also that there are depositor guarantees (increased to £100,000) the funds are on shaky ground and could look like they are profiting at the taxpayers expense, not to mention the shareholders.

We could see an old fashioned situation where the aggressive funds are seen as hostile takeovers merchants intent on breaking the company up for profit. RAB capital headed the call from management for hedge funds to buy into the company, by buying 6% of the equity a classic 'white knight move'.

Whomever gets hold of this firm better make sure that the spin they put on this is better than Tony Blair losing a by-election because the political fallout could be huge for the fund that gets it wrong. It is the kind of thing that brought the raiders of the 80's to the attention of the regulators and politicians and ultimately lead to the dismantling of much of the Junk Bond industry.

The bottom line here, in my opinion, is that the winner in this could ultimately end up as the loser through more regulation and politically motivated moves to curb the accesses of the hedge fund industry. If I was a politician looking to make my name, I would be circling this deal, licking my lips at having an arrogant hedge fund manager explaining his billion dollar salary while seeing pictures of little old ladies with placards outside the Houses of Parliament because they have lost thousands investing in NRK.

What is required is nerves of steal, flesh eating lawyers and a very, very fluffy PR company that can turn this particular lemon, for the hedge funds, into lemonade.

Homm Quits - Investors Locked-In

Don't you just love the hedge fund industry? The swash buckling image that is prevalent is underpinned by a certain arrogance written into documents that investors sign up for. So keen have investors been to grab a ride on the money train that they have basically thrown away rights that others would take for granted..such as being able to get your money back, for example.

On Tuesday we saw Florian Homm quit Absolute Capital Management Holdings, an AIM listed hedge fund manager, because he was unhappy that his top fund managers were not being rewarded enough. The shares in Absolute plunged 84% in two days and people were, obviously, a little worried about their investment.

With Northern Rock you could just turn up on the banks doorstep with your tent and a few sandwiches, sing some songs with other panicked depositors and wait for the smiley girl at the cashiers desk to give you your money back, unconcerned at what the shareholders in Northern Rock were suffering.

Imagine the scenario in high streets up and down the UK if Northern Rock had said "sorry we are locking up our branches for restructuring and you can have your money in a years time". Victorian riots would have ensued and people up and down the country would be taking the side of crying pensioners and baying for blood.

Pity then the investors in Absolute. On the news of Homm's departure $100mn of the funds under management wanted to leave, however Absolute have executed a lock-in provision for the funds under management and have suggested that investors cannot get at their funds for a year while restructuring of the funds takes place.

"The proposed restructuring of the equity funds and the imposition of the lock-in period will provide stability to its equity fund business," Absolute Capital said in a statement. "The company has held discussions with large fund investors, who have indicated their preliminary support for the proposal."

I can understand the issues that Absolute have to a certain extent, as they have as much as $500mn in illiquid over the counter shares in funds which would be difficult to sell. Under the proposed reorganization, the illiquid positions will be transferred to a new fund in which investors will get separate shares. Absolute will hire external advisers to value the illiquid assets before selling them, the company added. The other shares would track the liquid portfolio.

It does show, however, that there are a number of get outs that funds have when structuring the documents which investors just have to grin and bare. I do think, however, that investors will now be wising up to these lock-ins and 'gates' for future investments into hedge funds.

As for Homm, he is still the single largest shareholder in Absolute so standing on principal has just cost him 84% of his holdings value, you have to take your hat off too him for that. Also bare in mind that this was the guy who got shot because he would not hand over his wallet to a mugger. If I was the management at Absolute I would be looking for another job, as this guy is hardly likely to walk away from the company he founded if he is prepared to get shot for a few bucks in his wallet.

For me, Absolute looks like a buy today, when Homm comes riding back into town like John Wayne, having just disposed of some evil corporate management Bandidos, it will be a nice little earner.

Our investment accounts are managed on a discretionary basis via an external asset managers agreement with a large Swiss bank. We are not securities dealers and do not execute individual trades only those emanating from our management of accounts. We are regulated to provide discretionary managed services in the name of our clients and not in the name of our company. We also provide cost affective corporate finance solutions for small companies who are seeking to raise funds. Should you wish to know more, please get in touch below, or visit our offshore investment site here

Back to The Future - Inside Information 80's Style

It looks as if the SEC is stepping up its examination of insider trading at hedge funds. According to Bloomberg "SEC officials told hedge funds to list clients and workers who serve as officers or directors of publicly traded companies, along with the names of any relatives who hold such posts, according to a 27-page letter to industry executives."

I have to say. My market radar has been sounding the alarm for some time now and I will tell you why. Read the book The Junk Bond Revolution. You will have to buy an old copy but you can get it through Amazon (link on the right). It is the story of the all powerful junk bond market of the 80's where billions were being made by lots of young people and the King of it all, Mike Milken, came crashing down after being accused of inside information. This was against a background of political concerns over the role junk bonds played in the market.

The problems started for Wall Street when Ivan Boesky was caught red-handed trading on inside information for his arbitrage fund. That quickly lead to lawyers, investment bankers and analysts being arrested and put in hand cuffs for all to see. There is a good account of the whole thing in 'Inside Out' - a confessional book of Dennis Levine, one of the culprits (also available on the Amazon link, right)

The case against Milken was brought under the RICO statutes in the US, which were originally designed for the Mafia. This effectively closed down Drexel Burham Lambert (Milken's fim) and eventually lead to Milken recieving a 10 years prison sentence (he served just over 2) even though they found only $300,000 worth of trades that were suspect. Considering he earned a then record of $500mn this seemed more of a political statement than anything else. Rudolph Guliani was Mayor at the time.... and he is going for the highest job in the land now...enough said.

My point here is that there has been a raft of corporate convictions with Enron etc and there is now an environment of political criticism of both the hedge fund and private equity industry, there are also many politicians who would love a large hedge fund or private equity scalp to kick off their carreer. With the markets being turbulent, people losing jobs as PE bought firms are 'rationalised' and huge earnings being atributed to hedge fund managers and PE firm bosses alike, it just seems to me that the environment, and will, is now there to reign in the industry one way or another.

I hate to be the prophet of doom, but can you see the similarities too?

The odds of not finding someone trading on inside information is small, in my opinion, because it is just too lucrative for some to ignore. With some deals involving over 1000 people as reported in some corners of the press, can you tell me that absolutely none of them traded on inside info? If you think that you are not only 'away with the fairies', you have probably bought a house in Goa and smoke copious amounts of mind bending drugs.

We, in the industry, know it goes on and so do the politicians and regulators. I will make a prediction now that someone big, somewhere, is going to pay the price and this SEC investigation is just the start.

Our investment accounts are managed on a discretionary basis via an external asset managers agreement with a large Swiss bank. We are not securities dealers and do not execute individual trades only those emanating from our management of accounts. We are regulated to provide discretionary managed services in the name of our clients and not in the name of our company. We also provide cost affective corporate finance solutions for small companies who are seeking to raise funds. Should you wish to know more, please get in touch below, or visit our offshore investment site here

Hedge Funds Aim to Tame Volatility

Now is the time where hedge fund managers will earn their keep. Earnings season, market volatility, high oil price and possible rate cuts. Working out a strategy that ties all these together and ends ups with a correct trade in each or a trade that makes all these factors neutral, has to be the Holy Grail over the next few weeks and months.

Strategies are being created and battle lines being drawn, it should be interesting.

Some of the trades that have been catching the markets eye have been worryingly bizarre, at least at first glance. Options trades on Bloomberg screens last week were suggesting that some investors were gambling on a 50% drop in the equity markets by September 21st. The number of options that were bet on the S&P reaching half its current level was 120,000 contracts. To put this in perspective there was only 819 at this time last year.

But far from being so-called Bin Laden trades – referring to bets that were allegedly placed on a sharp fall in US stock markets just before the September 11, 2001 terrorist attacks – a large part is down to a cheap funding strategy known as a box spread. A box spread involves combining two pairs of options with the same expiry date. For example, a trader buys S&P 500 calls with a strike price of 700, which gives it the right to buy the index at a set price and time, and sells 700 puts, which gives it the right to sell the index at a set price and time.

The third and fourth legs involve buying puts with a strike of 1,700 and selling 1,700 calls simultaneously.

This structure has a pre-determined pay-off, regardless of where the index is trading on September 21 at expiry. It is called a funding strategy, because it allows one party to lend money, typically a bank with a high credit rating, at a more attractive rate to another borrower, which does not have a balance sheet and usually pays more to borrow money, such as a market maker or hedge fund. src - Financial Online

When I was in the commodities business we always knew that volatility was our friend. If the market was going up or going down, that was fantastic, if it was going sideways it made for a boring day at the office. Trading in 1998 and 1999 in the commodities market was thoroughly mind numbing with little volatility and, consequently, less stress. My colleagues still trading in this market place since 2000 must be licking their Ferrari's clean every day and seeing their doctors regularly about their ulcers.

I was at a party with an actor friend of mine during this period and many of the people who were there openly despised anyone in our industry. One 'actress' went so far (after a gallon of cheap wine) as to suggest that people in our industry were parasites who fed off the collective wealth of the world.

My argument was that our industry (commodities trading in particular), to a certain extent takes volatility out of everyday life. I suggested that if financial mechanisms were not in place in the coffee market, for example, that you may pay £2 for a jar of coffee today and £2.50 next week. A simple and crude example I know, however, it was the best I could come up with at short notice.

She was unimpressed and continued along similar lines until I resorted to a low blow and asked what her appearance in a recent advert for Campbell's soup had done for society, she said "It pays the bills". That ended the argument and any chance I had of leaving with an actress that night.

My argument of 'price smoothing' is looking a little lame these days with rising food and energy prices to the consumer. We will see if the complicated trades being executed on trading floors throughout the world will save my theory and the rest of us, from sustained volatility that affects our everyday lives.

The actress, by the way, ended up as lawyer....Enough said.

$55bn Run On Hedge Funds In July

As the markets took a battering, July saw the biggest withdrawals from hedge funds in seven years. In total $55bn was withdrawn with inflows in the same period of $23bn. The figures based on data from TrimTabs and Barclayhedge reports show how jittery some investors were becoming during this period.

General reports in the market suggest that these redemptions will pale into insignificance when the results of redemptions are issued for August, in early October. It will be interesting to see which funds are the worst affected but the general consensus is that it is likely to be the computer driven or 'quant' funds that took quite a hit in August, however, commentators are saying that these funds have made up some of the losses which would make those who blinked first by withdrawing funds a little sore.

One of the interesting comments to come out of the report was from Charles Biderman, of TrimTabs. He believes the fall in investment in July could actually have been to blame for the significant stock market falls that were the hallmark of August. Mr Biderman said the drop "likely sparked the dislocation in the equity markets in the summer". He also believes, however, that the worst could now be over. "Assuming market volatility does not spike again this month, the worst of the selling in the hedge fund world is probably finished," he said. - Src - The Telegraph

Redemptions for July would have been made in May or June so this theory would make sense, If you knew that you were having large redemptions coming within the next 30 - 60 days it would make sense to sell off some positions which could have exacerbated an already jittery market that was waking up to the sub-prime situation.

Recovery signs are there in the market with most still beating the drum about corporate earnings and economic outlook being OK, however, the credit squeeze could begin to have an affect with the next few months. If the banks are tightening their belts for corporates with good credit ratings, because of a bearish attitude to lending, then there are many companies who may feel the pinch lower down the pecking order. The problem here is, however, that this tightening of the belts may turn into a self fulfilling prophecy.

Its a little like saying you are not going to pay the milkman because you think he is not going to deliver your milk. You will be right in your assumption sooner or later, but right for the wrong reasons, you didn't pay so he didn't deliver. This is what the bank needs to be careful of; cutting off credit becoming the route of the problems they fear most.

Hedge Funds - No Cold Turkey Yet

We start with a humble apology. Our post 'Redemption Song' was picked up by quite a few notable blogs and sites including a call last night from a delightful lady at Dow Jones Newswire. We weren't taking the mickey, we were just injecting a little humour...

The premise of the post was that redemption day (being the last 45 day notice for withdrawals) was upon us and there were rumoured to be tidal wave of redemptions coming to funds which could make the matter a whole lot worse. However, as pointed out by the FT, history doesn't seem to be repeating itself...not yet anyway.

Its only been a couple of weeks of course but I am yet to find a report on a mass exodus from hedge funds. According to the FT “there has been nothing like the level of outflows that accompanied market wobbles in 1998, 2005 and 2006.” The FT's explanation for this is that the changing dynamics of the industry have a lot to do with it. Diversified strategies and institutional investors in it for the long term have worked to calm the nerves of other investors. Also “The slow-burning nature of the subprime fallout has also given managers time to mop investors’ brows – while steering expectations downward.”

This could, of course, change in an instant and it could be that managers who have suffered large redemptions are keeping them quiet for the short term at least.

Another situation could be that hedge funds have just shut the doors. Most hedge funds have "lock-ups," a minimum period of time during which investors agree to tie up their money and not make any withdrawals. Once that period ends, investors generally can redeem their stakes as long as they give advance notice, usually 45 to 90 days before the quarter end. Although that cut-off has passed for many funds for the current quarter, investors can still put in requests to get their money out by year-end.

But there is a nifty sting in the tail in some of the funds and that is the 'Gate'. Basically it is a withdrawal maximum imposed on investors. For example the fund could have in it's documentation that only 10% of the fund can be withdrawn in any quarter. Clearly if you are not the first in, you have pretty much had it until the next quarter where, one would assume, you get priority on the withdrawal list.

According to a memo from law firm Morrison & Foerster recently issued to its clients, of the more than 9,000 hedge funds that currently exist, at least 2,000 are vulnerable to "runs on the bank" by investors.

Obviously at this early stage it is unclear whether this 'run on the banks' will happen as some funds have already posted big recoveries in losses. One thing is for sure, however, and that is that investors have now seen the vulnerability of some hedge funds. This may lead to investors cashing on their chips on a winning streak and waiting to see how the land lies before diving into the next 'big thing'.

Here We Go - Cue The Excuses.....

I didn't particularly want to be writing about specific hedge fund failures unless it was a monster one, mainly because, in reality, smaller funds are failing all the time, for one reason or another. This story, however, peaked my interest and its not a hedge fund.. A $1.6bn cash manager (small, in the grand scheme of things), Northbrook, Illinois-based Sentinel, wrote to investors last week saying that it could not meet client redemption requests without selling securities at a deep discount.

Would you like me to write that again? the company "could not meet client redemption requests without selling securities at a deep discount".

So follow the logic on this one (and please if I have got this all wrong..do let me know) a 'short term' cash manager is investing money given to him by hedge funds and the like (funds that are suppossed to be 'un-invested', one would imagine) and then investing these in the market...hmmm...

Following the ethos that now "is a good time to get bad news out" they wrote this letter to clients saying:

'Investor fear has overtaken reason and has induced a period in which most securities have simply ceased to trade. We've all read the stories about one hedge fund or another suffering losses related to sub-prime exposure and closing down or being rescued.

'This fear has spilled over into the rest of the credit market and liquidity has dried up all over the street. This liquidity crisis has caused bids to disappear from the market and makes it virtually impossible to properly price securities or to trade them. High-grade securities are trading like junk bonds as panicked investors dump names like General Electric at Tyco-like prices.

'We had previously thought that the market would return to some semblance of order and that our clients would not join in the panic. Unfortunately, this has not been the case. We are concerned that we cannot meet any significant redemption requests without selling securities at deep discounts to their fair value and therefore causing unnecessary losses to our clients.'

Re-arrange this well know saying "CROCK - WHAT - A"

'High grade securities trading like junk'. I know I have been away for a few days and haven't really been paying too much attention but I must have missed this particular meltdown.

Forgetting the financial equivalent of 'the dog ate my homework' excuse what is the logic here? You pay your 2 & 20 fees to a hedge fund which you have, presumably, done your research on. There would have been a note in the prospectus about Sentinel being short term managers and you assume this would be overnight stuff aimed at getting a better return on cash... Then you find that the cash manager has been trading in securities that 'are impossible to properly price' in a fast market....

I don't know about you, but I would be looking in my contacts file under 'flesh eating lawyer'.

After having their trading strategy eating by Fido, Citadel Investment Group, a hedge fund manager that has already acquired distressed credit portfolio assets over the past month from Sowood Capital, bought a reported USD312m in assets from Sentinel at a discount of at least 10 per cent. It turns out this was not a popular move.

Investors, such as Penson Worldwide, said "the assets had been sold at an unfair price" without consulting creditors and against agreements between the companies. While this was being argued Sentinel filed for Chapter 11 bankruptcy protection.

The SEC is now bringing fraud charges against Sentinel, saying that a previous inspection had revealed that it had been concealing losses and had submitted false client account statements. Something tells me that Sentinel will need to get a bigger dog.

The SEC claims: 'For a period of at least several months up to and including the week of August 13, Sentinel's advisory clients suffered undisclosed losses and risks of losses as a result of several unauthorised practices engaged in by Sentinel.

'These include pledging securities owned by clients as collateral in order to obtain a line of credit [from Bank of New York] as high as USD500m for Sentinel, placing at least USD460m of client securities properly belonging in segregated customer accounts in Sentinel's house proprietary account, commingling client assets without the ability to verify ownership of particular securities by particular clients, and providing false client account statements that did not accurately reflect client portfolio holdings or the fact that securities had been encumbered by Sentinel.'

A Chicago bankruptcy judge ruled on Wednesday that Sentinel could distribute to investors the USD312m proceeds of the asset sale to Citadel, but the money currently remains blocked by an order from the National Futures Association.

Although some investors are understood to have recovered their assets from Sentinel prior to its collapse, Paris-based hedge fund manager Capital Fund Management has told investors that its Discus Master Fund may face losses of as much as USD407m.

It is a very odd situation when a company such as this has the internal structures that allow this to happen. We have individual discretionary accounts where client funds are managed via block trading in deals. When setting up the accounts we have the ability to be 100% fully in charge of the accounts if clients so wish, but we never, (and cannot see a time when we ever would) have this facility put into our terms and conditions, why would we? When would there possibly be a time when clients funds would need to be sent to a proprietary account of our company?

I feel sorry for those who have lost money from this debacle, but I have to say, that if we had invested into a 'cash manager' who was playing the markets without adequate backup for the bad times, then we would have a hard time explaining to our investors why we didn't know this....

I hope that there will be no 'investment speak' given to investors that have lost out in the funds that used Sentinel, but I fear that there are a few hedge fund managers dogs who will be taking the blame for this...