Hedge funds vulnerable as cyberattacks surge | Private equity firms sign up to iCI partnership | Economic VIX suggests good days ahead for stocks
August 10, 2020
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Hedge fund launches are on track to grow by 20% compared with last year, executives predict. A Goldman Sachs report notes funds suffered in the first quarter, but 37% of institutional investors are looking to increase their exposure.
Full Story: The Wall Street Journal (tiered subscription model) (8/3) 
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Security experts are warning of a sharp rise in cyberattacks, with some saying hedge funds are particularly vulnerable. The potentially high reward of attacking a hedge fund, along with funds' relative lack of precautions and the recent shift to working from home, are cited as factors.
Full Story: Financial News (UK) (subscription required) (8/4) 
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Dozens of private-equity firms have joined a new sustainability initiative called the Initiative Climat International (iCI) partnership. The arrangement will see the firms adopt a set of principles for assessing, managing and reducing the carbon-related footprint and risk exposure of their portfolio companies.
Full Story: Financial News (UK) (subscription required) (8/3) 
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The Economic VIX, a lesser-known gauge of volatility in economic growth, suggests US stocks perform best when volatility is extremely low or extremely high. Jim Paulsen, creator of the index, says this is a good time to invest in stocks, given the likelihood of high volatility in coming months.
Full Story: The Wall Street Journal (tiered subscription model) (8/8) 
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The coronavirus disruption has increased demand for alternative data as investors find traditional financial market indicators less indicative of the economic slowdown.
Full Story: Financial Times (subscription required) (8/3) 
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Regulation and Tax
Central bankers have launched a review of the market turmoil in March that could see hedge funds and other non-bank financial market operators come under greater regulatory scrutiny in future. Regulators are understood to have pointed to leveraged trades involving US Treasurys as one reason for the disruption as concerns grow that the sector has become systemically important.
Full Story: Bloomberg (tiered subscription model) (8/3) 
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The UK's Financial Conduct Authority wants investors to wait longer before they can redeem their stakes in property funds. The regulator has proposed a 180-day waiting period so that funds can avoid liquidity issues when meeting redemption demands.
Full Story: Reuters (8/3) 
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Financial firms are considering their potential exposure to a number of top Hong Kong officials who are the subject of US sanctions announced on Friday. The Hong Kong Securities and Futures Commission said it is "not aware of any aspect of the [law] or the US sanctions... that would affect the way in which firms carry on their normal operations in Hong Kong."
Full Story: Reuters (8/8) 
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Brexit
The pound will lose ground from its recent highs amid growing uncertainty around Brexit and the coronavirus pandemic, a Reuters poll of foreign exchange strategists has found. Respondents largely expect Sterling to dip to $1.28 in the next three months before recovering to current levels this time next year.
Full Story: Reuters (8/5) 
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The City of London is braced for reduced access to EU markets from the end of the year, as the bloc takes an increasingly hard line on granting equivalence. UK banks, derivatives traders, asset managers and ratings agencies face a range of differing outcomes.
Full Story: Reuters (8/6),  Reuters (8/6) 
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