Reuters – Private bankers say clients remain sanguine about the hedge fund industry in spite of billions of dollars in losses reported by two top hedge funds in the past month.
At the Reuters Wealth Management Summit in Geneva, top private banking executives from HSBC, Credit Suisse and Barclays said they had not advised private clients to invest in the Amaranth or Vega Select hedge funds.
Greenwich, Connecticut-based Amaranth Advisors, a multi-strategy hedge fund which in late August had assets of $9 billion (5 billion pounds), lost a reported $6 billion in less than two weeks after leveraged natural gas positions went badly wrong.
Europe’s Vega Select, once an $11 billion fund, is said by clients to have shed between 10 percent and 20 percent in September, adding to a loss of 9.6 percent in August after finding itself on the wrong side of an interest rate trade after failing to anticipate a rally in bonds.
The private bankers said their due diligence practices help them identify and, where necessary, avoid high-risk funds.
