Briefly: “U.S. hedge fund managers rake it in” and more news

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It’s probably cold comfort for most of your clients, but at least some people were making money in 2008. The latest issue of Alpha Magazine, a journal of the American hedge fund industry, reveals that four managers managed to pocket more than $1 billion each.

The top earner was James Simons of Renaissance Technologies Corp., who took home $2.5 billion in compensation. He was followed by John Paulson, of Paulson & Co., who made a cool $2 billion. John Arnold (Centaurus Energy) and George Soros (Soros Fund Management) took home $1.5 billion and $1.1 billion, respectively.

On average, American hedge fund managers took home $464 million apiece in 2008, with the 25 highest-earning hedge fund managers making a combined $11.6 billion.

“The hedge fund industry has a well-deserved reputation for enormous wealth creation,” says Michael Peltz, executive editor of Alpha. “But events of the past year have been a grim reminder that the hedge fund industry can also be a source of incredible wealth destruction.”

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Commodity prices dip in February

The prices of most Canadian export commodities were on the decline again in February, according to the Scotiabank Commodity Price Index, which fell 3.1% month-over-month. The all-items index is off 40.1% from its peak in July 2008.

It is now thought that February might have marked a low point ahead of an economic turnaround, but commodity prices could still need more time to recover.

“Comments by the chairman of the Federal Reserve Board that the U.S. recession might end by late 2009, better-than-expected earnings at several well-known U.S. and U.K. banks, and Fed initiatives to lower long-term interest rates and breathe life back into the U.S. mortgage market significantly improved sentiment over the potential for economic recovery last week,” says Patricia Mohr, vice-president, economics and commodity market specialist at Scotiabank.

“While positive, Scotiabank’s Commodity Price Index is unlikely to bottom until a number of key contract prices (especially for coking coal) are adjusted down this spring.”

The bright spot in February was among minerals, thanks to rising gold prices.

Energy prices have already risen above the $50-a-barrel mark, after West Texas Intermediate crude fell to $32.40 in December. Crude is forecast to trade for about $65 in 2010.

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Clarington narrows offering shelf

IA Clarington Investments has announced changes to its fund lineup, aimed at streamlining its offering shelf. As a result, the following funds will be merged into similar mandates, and will no longer be offered as stand-alone funds:

• IA Clarington Canadian Opportunities Fund • IA Clarington Canadian Value Fund; • Sarbit US Equity Trust; • IA Clarington U.S. Dividend Fund; • IA Clarington Core Portfolio; • IA Clarington Tactical Income Fund; • IA Clarington Diversified Balanced Fund; • IA Clarington Canadian Growth & Income Fund; • IA Clarington Canadian Income Fund II; and • IA Clarington Canadian Growth Fund

“The IA Clarington mutual fund family will continue to offer an excellent choice for investors,” said David Scandiffio, president of IA Clarington. “Assets are being focused on key managers both within our internal investment capabilities as well as among leading external managers, with teams including Ben Cheng of Catapult Financial, Leigh Pullen of QV Investors and Larry Sarbit of Sarbit Advisory Services.”

The mergers require investor and regulatory approval.

(03/25/09)