International Investing

With more competition than ever, hedge funds are investing in ever more risky and exotic items.

This Dirk Pitt style find of $500 million in gold has made some hedge fund investors rich:

The once-in-a-lifetime find is reportedly valued somewhere around $500 million and is fetching some pretty hefty dividends for a lot of the hedge funds invested in the company.

GLG Partners and Fortress Investment Group, who have a combined 20 percent stake in the company, were the largest beneficiaries from the historic find. Other hedge funds reaping the benefits of the May 18 discovery are Dimensional Fund Advisors, D.E. Shaw & Co. and Galleon Management.

How hard up for suitable investments do you have to be to dream this up. Is this anything but a very speculative bet on the global liquidity glut continuing? Small upside and a very large downside - for the investors anyway - the 2/20 managers will do just fine:

Florian Leonhard, a London-based violin dealer and restorer, is aiming to start investing the Fine Violins Fund once it has raised $50m, with a target of returning 8 per cent to 12 per cent a year.
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But some investors worry about the dangers of putting money into assets that are hard to sell and where there is difficulty in establishing what drives prices. Such reservations helped scupper plans last year by Stanley Gibbons, the London stamp dealer, to launch a hedge fund investing in stamps.

However, once obscure assets are becoming mainstream, with reinsurance, direct loans, carbon credits and film financing being given attention.