Investing December 13, 2000

Q3 Hedge Flows Rebound Sharply

December 13, 2000 (PLANSPONSOR.com) - Hedge fund investment underwent a dramatic turnaround in the third quarter, with $4.2 billion in net new investment, contrasted with a $4.9 billion outflow in the prior three months.
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Overall, hedge fund investments attracted $6.1 billion, with $1.9 billion in outflows.

Longing for Long/short

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Long/short equity funds drew the vast majority (83%) of the new investment in the third quarter, according to figures reported by TASS Research, the information/research subsidiary of Tremont Advisers.

Also pulling a significant investment was the event driven category, which drew $1.6 billion.  Much of this flowed toward US and European risk arbitrage, according to the release.  Event driven investing attempts to profit from “pricing inefficiencies” resulting from some type of corporate event, such as a merger or spin-off.

The net gaining categories were:

  • $3.500 billion – Long/short equity funds
  • $1.600 billion – Event Driven
  • $0.563 billion – Convertible arbitrage
  • $0.460 billion – Equity market neutral

Saying ‘No’ to Macro

Investors continue to be pull back from global macro funds, withdrawing nearly $1.4 billion in the quarter. Global macro investing now represents just 10% of assets under management in the hedge fund industry compared with 30% at the beginning of 1994, according to TASS.

Categories suffering net outflows were:

  • $1.400 billion – Global macro
  • $0.272 billion – Managed futures
  • $0.133 billion – Emerging markets
  • $0.066 billion – Short selling
  • $0.032 billion – Fixed income arbitrage

TASS Research provides data on the performance of more than 2,500 alternative investment managers and funds.

Benefits December 12, 2000

Employer Plans Cover More, Despite Higher Costs

December 12, 2000 (PLANSPONSOR.com) - Despite increased health care costs, the number of American workers covered by an employer-based health plan increased last year.
Reported by

Nearly three-quarters (73.3%) of American workers were covered by an employer-based health plan in 1999, up slightly from the 72.8% covered in 1998, according to the Employee Benefits Research Institute.

Overall, 42.1 million people under age 65 were uninsured in 1999, compared to 43.9 million people in 1998, according to EBRI.

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The percentage of uninsured Americans under age 65 fell from 18.4% in 1998 to 17.5% last year, according to the study.

The study found that company size had a major impact on health coverage. Families of employees working for a company with fewer than 10 employees had a 32.2% probability of being uninsured, compared with just 10.7% for those working at firms with more than 1,000 workers.

The highest rate of uninsured were found in:

  • New Mexico (29.4%)
  • Texas (25.8%)
  • Arizona (24.3%)

States with the lowest rate of uninsured individuals include:

  • Rhode Island (8.1%)
  • Minnesota (8.9%)
  • Iowa (9.5%)

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