Institutional investment managers showed the most optimistic economic expectations from investment managers since the quarterly poll was begun a year ago by Northern Trust Global Advisors (NTGA).

Managers are still hesitant to call a buoyant V-shaped recovery, said the report, with potential fragility in the system. Just over three-quarters (76%) of respondents said they expect interest rates to hold steady, reflecting a view that central banks will be hesitant to raise interest rates for fear of choking off early signs of recovery.

Under half (46%) still believe the Standard & Poor's 500 Index is undervalued. The group of managers who believe the market has room for growth is more than double the size of those (20%) who believe the market is overvalued.

Reflecting a stabilisation of portfolio positioning, 53% of managers said they have no change in risk aversion and 88% said they are now within their normal range of cash holdings.

This is in contrast to responses from previous quarters when managers continued to increase risk and decrease cash positions at the margins.

Ahead of the late September announcement by the Federal Reserve to keep the main US interest rate unchanged, 75% percent of respondents expected interest rates to remain the same for the next quarter.

A majority (53%) now expect global inflation to remain the same for the next few months, compared to 42% who expressed the same opinion in the previous quarter.

Investment managers cited the technology, energy, industrials, healthcare and materials sectors as their top five most attractive market segments. The materials sector made its first appearance on the top-five list, edging out consumer discretionary.

The survey was completed by over 60 institutional managers, including fixed income and long-only equity managers across value and growth styles with a bias toward fundamental, bottom-up stock picking strategies. The survey is conducted quarterly.

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The founding team behind the company consists of Nicolai Borcher Hansen, Peter Brink Madsen, Christian Falster and Jacob Madsen. Three of the founders recently broke away from Denmark's largest privately owned asset manager, Formuepleje.

Formuepleje Safe, a fund that is directly comparable with the Paradigm Fund, returned 0.74% a month on average compared to the MSCI World 0.33%, the CS Tremont HF MS 0.25% and CS Tremont HF Global Macro 0.58% in the 53-month period the team ran it.

The team has five-year audited track record in investment strategy on which Paradigm Fund is based. They grew the company from $750 million in assets under management, to $4 billion in over five years creating Denmark's largest independent asset manager in the process.

The fund is an open-ended vehicle aimed at high net worth individuals and institutional investors. The investment strategy is based on a proprietary dynamic asset allocation model, aiming to create an investment with the highest risk adjusted return.

Citco Fund Services in Dublin has been appointed as fund administrator. Bedrock RealTime, the outsourced operator, runs additional shadow accounting and will strike a soft' net asset value daily. This system of two independent parties providing checks and balances should provide The management fee is fixed at 1.25% a year with a 10% performance fee with no hurdle.

The fund plans to launch November 2, targeting an annual return of 10%-12% a year over three years.

The asset allocation of the fund is based on modern portfolio theory grounded in theoretical understanding but applied through practical experience and with a value bias

It will invest in global bonds and equities with a focus on large caps, Danish mortgage bonds, foreign exchange and derivatives. It intends to take about 50 long and 10-15 short positions in equities, 30 bond positions, 15 Danish mortgage bonds and 4-5 currencies.

The fund offers monthly liquidity with 30 days redemption period notice. Minimum investment: 75,000.

Prime broker is UBS in London with Ernst & Young as auditor.

The fund can be leveraged two times with a minimum of 33.3 % solvency.

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At the end of the best quarter since 1998 for the Dow Jones Index, up nearly 15%, market sentiment was further boosted by several positive macro indicators. These included an increase in the Global Purchasing Managers' Index (PMI) signalling expanding manufacturing output and a continuing stabilisation of global economic activity.

Inflation continued its downward trend in the US and in the Organisation for Economic Co-operation and Development (OECD) countries. Central banks overall maintained low interest rates.

Many equity indexes finished in positive territory, although there were some late market corrections following reports of worse-than-expected US home sales.

A number of global macro quantitative managers had a positive month, driven by long currency trades in the yen and euro and decreased foreign volatility. Yield curves did not move significantly and front end positions had relatively little impact on performance.

Credit-oriented managers in the fixed income arbitrage and event driven sectors had a positive September, with performance coming from mortgage-related bonds, corporate bonds (especially financials), swap spread trades (which have been normalisation trades focusing on the narrowing in the spread between Libor rates versus US Treasuries) and opportunities in government bond auctions.

Managed futures also had another positive month, giving the strategy its third positive month for the year.

Equity market neutral managers were also up in September. The value factor contributed positively to performance while factors such as momentum detracted from performance.

Estimates are based on 65% of assets reporting; final September performance will be published October 15.

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The global network will offer customers access to low latency market data, analytics and data management platform and the ability to have their infrastructure, low latency data feeds and applications hosted and managed within these centres.

The suite will be accessible in each data centre with high performance direct market connectivity to worldwide execution venues, real time market data and post trade capabilities.

This will enable customers to plug trading applications into a single architecture to help bring market participants closer to strategic points of liquidity.

Customers are expected to benefit from lower total cost of ownership, streamlined deployment and improved time to market with a single point of access to global trading venues.

The offering will provide Thomson Reuters global portfolio of low latency feed technology, aggregated data feeds and middleware with Savvis's existing hosting facilities, proximity hosting and market connectivity for FIX trading and 200 exchange and venue connections.

Savvis provides outsourced internet infrastructure services for enterprises.

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Nedgroup head of relationship management Simon Spencer told Hedge Funds Review the change in manager had come after a review and ahead of the fund's South African launch.

"We just felt it was more appropriate for the South African market," Spencer said. He said JP Morgan's large South African offering as well as its track record in absolute return funds meant it was well placed to manage the fund.

Spencer said there had been "no fallout" with the fund's previous managers and Nedgroup was not "unhappy" with BNY Mellon.

JP Morgan portfolio manager Talib Sheikh will manage the Global Cautious Fund on a discretionary basis, basing management on JP Morgan's own Global Capital Preservation Fund.

Spencer said JP Morgan had been selected as part of Nedgroup's best of breed range of managers, which aims to give South African investors access to leading investment managers.

The Global Cautious Fund is a single-manager fund which aims to achieve long-term returns with low volatility by investing in a range of asset classes including cash, equities and bonds. It aims to deliver one month Libor plus 3% a year.

Fortis Prime Fund Solutions will be the fund administrator and Citi the fiduciary custodian for the fund, which is domiciled in the Isle of Man.

The minimum investment in the fund is $100,000 for institutional investors and $4,000 for retail investors.

Spencer said assets under management were currently below $10 million but a recent roadshow in South Africa had prompted a lot of interest in the fund.

JP Morgan Asset Management head of UK and international sales John Bennett said the new mandate would give wider access to South African investors.

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The electronic reporting system supports submissions by segregated portfolio companies and umbrella structures with improved formatting. It has the ability to save entries for later submission. The information obtained from the filing is consolidated and used for statistical purposes.

The deadline for filing is October 15, 2009 for the reporting period ending December 31, 2008. Any fund that has already submitted a hard copy of the return is not required to re-file.

Funds may use the online application for the next reporting period ending December 31, 2009 with a filing deadline will be June 30, 2010.

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Man sold an estimated $5 billion to private investors in the six months to September 30, 2009, including estimated private investor sales of $1.6 billion in the second quarter.

Man experienced strong demand for its products throughout with good flows from Japan, Hong Kong, the Middle East, Europe and Latin America.

Redemption levels were lower in the second quarter, leading to an estimated private investor net inflow of $2.7 billion for the six months to September 30, 2009.

Taking into account investment movement, foreign exchange and other effects, private investor funds under management increased to $29.1 billion at September 30 2009 compared with $27.3 billion at June 30, 2009.

Man's institutional sales remained muted. However, institutional redemptions declined markedly. They are expected to total $1.7 billion for the second quarter compared with $3.6 billion in the first quarter.

This slowing of redemptions is set to continue, said the company, with quarterly redemptions to be paid on October 1 of $700 million. In total institutional investor funds under management at September 30, 2009 are expected to be $14.7 billion compared with $16 billion at June 30, 2009.

"Investors are increasingly selective as they assess their portfolio needs and reassess investment management providers," commented Peter Clarke, chief executive of Man. "They continue to focus on transparency, liquidity and, increasingly, onshore product offerings for accessing hedge fund returns," he added.

"There has been significant progress across our business over the summer," continued Clarke. "We have launched new products and entered new markets to meet increasing investor demand for onshore regulated products. Two new AHL Ucits funds are launching in Europe. We have had new regulated product approvals in our existing European and Asia Pacific markets and we have launched the first onshore product in Taiwan," he said.

The company has completed the establishment of a multi-manager business and continued to expand its managed account platform.

"Investor sentiment is continuing to improve across the industry," said Clarke. "The performance outlook is healthy and the prospects for sustained industry inflows are very promising," he concluded.

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The funds added to the platform are: Apollo Distressed Fund, Centaurus International Risk Arbitrage Fund and Marathon Distressed Opportunities Fund which are all event driven and risk arbitrage funds; .Gartmore European L/S Fund, GLG European Opportunity Fund, Ellington Quantitative and Zebra Equity Fund Equity Fund which are all long/short equity funds; Acorn Ultra ARS Fund, a convertible bond and volatility arbitrage fund; and PJM Fund which is a CTA fund.

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It is the third fund to use Merrill Lynch's Ucits-compliant Luxembourg SICAV vehicle, Merrill Lynch Investment Solutions, as a sponsor.

York UK Advisors' chief executive Christophe Aurand said the fund would use a similar multi-strategy approach to its flagship global hedge fund, which was launched in 1991 and currently has over $3.1 billion AUM.

It would concentrate on listed equities and liquid corporate bonds from larger capital issuers. The corporate bond issues would be limited to 10% of the portfolio's net asset value.

Aurand said York Capital had chosen a Ucits structure and the Merrill Lynch platform in order to target a wider range of institutional investors.

"We think after the events of the last few years there's an increased demand for transparency and liquidity and regulated products," Aurand said.

He said Merrill Lynch's sponsorship of the fund would enable York Capital to use the bank's larger client base as well as attract investors that might be unable to invest in offshore funds.

Aurand said he could see the fund's AUM exceeding $1 billion in the future.

The event-driven Ucits fund will be co-managed by York Capital founder Jamie Dinan and chief investment officer Dan Schwartz.

It is currently available to institutional and retail investors in the UK, Ireland, France, Italy and Spain. Regulatory approval is being sought for Germany.

The minimum institutional investment is $1 million, 1 million or 1 million. Accumulation shares are available in US dollars, euro and sterling, and income shares are also available in sterling.

Redemption is weekly. The fund's investment management fee is 1.5% for A and B shares and 1% for D shares. Performance fees are 25% for A shares, 15% for B shares and 10% for D shares. D shares are available for institutional investors only until the net asset value of the fund reaches $100 million.

The fund's custodian is Socit Gnrale and Euro-VL Luxembourg is the fund administrator.

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To meet the demand, the final deadline is now 5pm on September 23. There will be no exceptions after this deadline.

Entry forms can be downloaded on the Hedge Funds Review website.

The awards ceremony will take place on the November 26, 2009 at the Grosvenor House Hotel in London.

Hedge Funds Review is the market-leading publication for the alternative investment industry. Register for one months free trial including a copy of the magazine and access to the website worth 54. [source:incisivemedia]