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| News & Scoreboards |
10 Questions For Your Private Banker - 09/05
09/01/2005
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Fine art investment funds may be for unwary aficionados or those with more money
than sense (or some combination of the two), but how about funds of fine art
investment hedge funds? ABN Amro, through its Singapore office, is reportedly
assembling a fund of funds that will invest in at least five established art
funds. Would such an investment be able to tame the immense liquidity and market
risks faced by individual portfolios, like the London-based Fine Art Fund,
launched in February 2003?
Private equity firms are barring hedge funds from
participating in some European buyouts because they do not trust the hedge funds
to take a long-term view if an economic downturn occurs. One of the biggest LBO
firms has told its preferred lenders not to sell its loans to hedge funds,
according to Reuters. Are the LBO firms in which I invest likely to follow suit?
Should they? What does this mean for the leveraged loan market?
Skyrocketing
volumes of computer-driven stock trading have swamped equity exchanges as
brokers and investment managers have sought to reduce their costs and exploit
tiny arbitrage opportunities by automating the trading of huge blocks of
equities at lightning speed. But these programs trade liquid, large-cap stocks,
meaning small and microcap stocks are getting less and less attention. If this
trend continues, will small- and micro-cap stocks suffer, or will it open
investment opportunities in those sectors?
Hedge fund redemptions in August
could push credit-based funds badly weakened by the credit crisis this spring
(in the wake of the General Motors and Ford Motor Co. downgrades) over the edge
and force them to close. Are any of my funds in jeopardy? If I ask to redeem my
investments, will the fund have the necessary liquidity to do so?
Oil prices
will crash as global growth slows, according to an economist at Morgan
Stanley—one of the world’s biggest energy derivatives trading firms. However,
the firm’s only serious rival in the energy derivatives world, Goldman Sachs, is
predicting a super-spike in oil prices to more than $100. If experts disagree to
this extent, how should I position my own investments in energy or energy
dependent companies?
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