27 Feb 2007
They do warn however, that third party participation in the electronic markets could undermine the current structure and introduce greater risks.
MTS is an abbreviation for Mercato dei Titoli di Stato, which translates to "Market for Government Bonds". The technology of the Italian based MTS platform is the Telematico system, a sophisticated electronic platform specifically designed for the trading of fixed income instruments. It replaces the expensive and often time-consuming process of trading over-the-counter.
According to a recent FT report, these moves are showing how powerful the hedge fund industry is becoming and also highlights the dispute over the current structure of the euro-zone government bond markets.
In a discussion paper circulated Tuesday, the EPDA said, "While issuers have influence over their primary dealerships, primary dealers may not be in a position to exercise control over third parties,.............They would be squeezed between the commercial pressure of their prime brokerage business and the inability to regulate the activity of third parties trading in the primary dealers' name. Lack of control could give rise to potential misbehavior by rogue traders."
Located in King of Prussia, Pennsylvania, the hedge fund administration team is headed by Andrew Dougherty, Chief Operating Officer for fund administration in the United States.
BNP Paribas has recently enhanced its global portfolio by expanding its hedge fund administration businesses in Spain, Italy and France. From its offices in 18 countries, BNP Paribas works closely with its clients to provide comprehensive middle and back-office solutions to hedge funds and fund of hedge funds firms worldwide, including Asia and emerging markets.
Frederic Perard, Head of Global Fund Services at BNP Paribas Securities Services commented: "Our fully-integrated client services and operations team, which specializes in master-feeder structures, partnership accounting and high-volume trading portfolios, delivers added-value services to our clients. Our service offering is well-positioned to serve middle-market managers across various locations who seek an independent administrator to handle their multiple prime brokerage relationships."
BNP Paribas Securities Services is a leading securities services provider to the world's financial institutions, with a local presence in all key European markets as well as in the US and Australasia. With 4,200 staff in 18 countries, BNP Paribas Securities Services has over 700 clients, including 8 of the world's top 10 investment managers, and a global custody network covering 90 markets.
According to CNN Money, the likelihood of an unsolicited approach, such as a hedge fund takeover, was still low but had gone up to 20% from 10%.
One person familiar with the situation said Chief Financial Officer Bodo Uebber had routinely played down suggestions that hedge funds could team up to buy DaimlerChrysler because he felt such a wolf pack would be unable to agree on strategy and goals.
"But should it come to pass that Chrysler is split off from Daimler, then Daimler would be an interesting target," the source said. A complete split-up of the cars, trucks and vans businesses would then be "a real danger."
DaimlerChrysler declined comment on prospects for being acquired if it divests Chrysler but has said in the past the best defense against takeovers was good financial performance. The company has a market capitalization of $79 billion.
26 Feb 2007
Some of the key topics include; New business in emerging markets, such as Asia, India and Latin America, the future of hedge funds and manager selection, fund selection and best practice portfolio construction.
The event provides specialist workshops, and there will be 50 leading speakers. The Hedge Funds World Middle East 2007 website boasts an 8 year track record, intensively researched to deliver in-depth insight into the hedge fund universe and the latest trends and investment styles.
To attend; http://www.terrapinn.com/2007/hfwme/
Chris Hitchen, Railpen chief executive, said they are planning on having £1.4 billion ($2.7 billion) invested in hedge funds by December, increasing their exposure from 5% to 8%.
“We have been divesting our equity portfolio to buy other asset classes, such as private equity, property, hedge funds and infrastructure,” Mr Hitchen said. “We went into infrastructure assets last year, but they’re somewhat overheated, so we’re trying to make sure we don’t put all our money in at the same time.”
According to the Times Online, a recent NAPF survey indicated that 11% of pension funds had invested in hedge funds by the end of 2006, up from 8% the previous year. There were also rises in the amount of money that pension funds invested in property, private equity and venture capital as part of a wider move out of equities in 2006.
He said that despite concerns about the stability of the hedge fund industry, the funds could provide returns that were more stable than equities.
23 Feb 2007
Attorney General Douglas F. Gansler froze the assets of Williams's hedge funds, saying that John H. Williams of Upper Marlboro violated eight civil statutes of state security laws.
Williams lured investors with free lunch seminars and hid losses with fake statements, the state attorney general's office said. Williams became involved in the scheme after meeting a Canadian hedge fund trader, Stephen Chesnowitz, in an Internet chat room, according to a court filing by Gansler's office.
According to The Washington Post, the two traders sent out mass mailings advertising a free "gourmet meal" and the opportunity to "earn excellent returns with a guarantee against market risk." More than 150 people, mainly from Montgomery and Prince George's counties, attended the seminars and gave Williams a total of $9 million. He transferred the money to Chesnowitz's hedge funds in Canada and the Cayman Islands.
Investors could log onto a Web site to check how the hedge funds were doing, and online statements showed that their investments were profitable. But that was not true. On April 28, 2006, alone, the hedge fund piled up $626,380 in losses, the filing said. Williams, "knowing the money was gone . . . continued to take fees" based on phantom returns, the court filing said. In total, Williams paid himself $586,000 for managing the investments.
Maryland officials said they are trying to figure out how much Williams lost in his trades and whether there is anything left to return to investors. Most of the money has been transferred out of the country to Chesnowitz's firms.
21 Feb 2007
All proceeds from a placing and offer for subscription, net of working capital requirements, will be invested in a portfolio of underlying hedge funds, it added. No numbers were provided.
The company's initial investment rationale, methodology and portfolio management will be consistent with that of Gottex Market Neutral Fund, a conservative open ended fund of hedge funds that seeks consistent returns with a low correlation to the major stock and bond market, it has been managed by GFM since 1999.
JPMorgan Cazenove is the group’s financial adviser, book runner and sponsor.
TCI Fund Management takes its name from the money it donates to children's charities. The hedge fund, which said it owns more than 1% of ABN AMRO, asked shareholders to vote on its proposals at a shareholder meeting scheduled for April 26.
In 2005 TCI was part of a group of activist investors who criticized Deutsche Börse for its $2.5 billion bid for the London Stock Exchange, eventually causing Werner Seifert, the chief executive to resign. It turns out TCI, which owned 8% of Deutsche Börse, actively recruited some powerful partners, including Atticus Capital, Merrill Lynch, and Fidelity Investments, in order to facilitate the move.
In a letter first published by Reuters, the hedge fund said, "We believe that this strategy would not only create significant shareholder value but also would best serve all the stakeholders who otherwise would suffer over the long term from the structurally declining competitive position ofABN AMRO,......In 2006 they again committed to cut costs and they have so far failed to deliver," the hedge fund said.
TCI was founded by money manager Christopher Hohn, a 39-year-old graduate of Southampton University. It is said that Mr Hohn set up the hedge fund so that half of TCI's annual assets go to charity as a way of motivating himself.
20 Feb 2007
It is not immediately clear whether the move will increase the transparency of US-owned assets in offshore accounts, but the legislation is being set up with the hopes of curbing tax evasion. The US has in the past years signed tax information exchange agreements with Aruba, the Bahamas, Bermuda, the British Virgin Islands, the Cayman Islands, Guernsey, Jersey and the Isle of Man.
Obama has joined senators Carl Levin and Norm Coleman in introducing legislation aimed at stopping offshore tax haven and tax shelter abuses. Says Obama: "This is a basic issue of fairness and integrity. We need to crack down on individuals and businesses that abuse our tax laws so that those who work hard and play by the rules aren't disadvantaged."
They believe the loss to the Treasury from offshore tax evasion could amount to $100 billion a year. They say abusive tax shelters add tens of billions of dollars more.
"This bill provides a powerful set of new tools to clamp down on offshore tax and tax shelter abuses. None of these offshore schemes would work without the secrecy that prevents US agencies from enforcing our laws. Our bill offers innovative ways to combat offshore secrecy." Levin says.
The bill would strengthen detection of offshore activities by requiring US financial institutions that open accounts for foreign entities controlled by US clients, open accounts or establish entities in offshore secrecy jurisdictions for US clients to report such actions to the IRS.
19 Feb 2007
Bruno Sangle-Ferriere, founder of British-based Carrousel, said he would make an announcement to the Stock Exchange on Friday or early next week.
Carrousel Capital said in informal talks with Gartmore that the hedge fund aims to buy into undervalued closed-end funds, restructuring it into an umbrella fund which could offer a range of investment mandates and which could take over or merge with other funds.
Gartmore Chairman Rodney Dennis said on Thursday. "We have had a couple of meetings (with Carrousel), but we've been unable to get a clear idea of what's being proposed,"
Over the past five years Gartmore European's net asset value has risen 72%, compared with a 51% return from the FTSE World Europe excluding UK index. "Performance has been very good, it's on a very tight discount, the manager is highly regarded and shareholders are happy. It is a bit mysterious that there is even an issue around Gartmore European," Dennis said.
Gartmore Chairman John von Spreckelsen and director Bruno Merki retired in September. The trust said at the time that the changes were due to corporate governance pressures and not the result of shareholder pressure.
APCOA has operations in 13 countries, primarily Germany, Great Britain and Scandinavia. In 2006 APCOA had sales of €489 million ($642.5 million), up 7% on 2005.
Thilo Sautter, head of the German private equity practice at Investcorp: “We are delighted with the sale of APCOA to Eurazeo, after having led the successful transformation of APCOA to the leading European car park operator. Eurazeo is an excellent shareholder for APCOA and will provide APCOA with the necessary resources to continue the international expansion and support the growth strategy initiated under Investcorp’s stewardship.”
Peter Fischer, CEO of APCOA, said: “Over the past three years we have, together with Investcorp, developed and implemented a successful strategy to become the leading European car park operator....Our portfolio is well suited for selective bolt-on acquisitions and our network will benefit from expansion into new markets.”
With more than €6 billion in diversified assets and a market capitalisation of €5.8 billion, Eurazeo is one of the leading listed European investment companies. Eurazeo is a majority or key shareholder in companies such as Europcar, Rexel, B&B Hôtels and ANF. Eurazeo also holds significant stakes in Danone, Véolia and Air Liquide.
Investcorp is a leading provider and manager of alternative investment products. It has offices in New York, London and Bahrain. Investcorp has five lines of business: private equity, hedge funds, real estate, venture capital and Gulf growth capital. Founded in 1982, Investcorp has grown to become one of the largest and most diverse alternative investment managers in terms of both product offerings and geography. It currently has over $10 billion in invested assets under management.
16 Feb 2007
"I would be very reluctant to get involved in heavy-handed, direct regulation of hedge funds," Bernanke told the Senate Banking Committee in response to a question during semi-annual testimony on monetary policy.
"One of their key characteristics is that they are very nimble," Bernanke said. "That is good for the economy, because they help create liquidity in markets, they help to spread risks around more broadly, and a regulatory regime that inhibited that flexibility and nimbleness would eliminate a lot of the economic benefits."
U.S Treasury Secretary Henry Paulson called for market discipline, rather than government regulation, to address risks of the rising global hedge fund business at the G7 meeting. "Market discipline, focusing on risk management of regulated counter parties, is the most effective way to address potential systemic risk concerns."
Paulson and Bernanke work together as heads of the President's Working Group on Financial Markets, working with the Securities and Exchange Commission and the Commodities Futures Trading Commission to study the hedge fund industry. "The group continues to assess developments in markets, disclosure and counterpart risk management," Paulson said.
Paulson also said he's convinced "hedge funds provide considerable benefits to financial markets and our economies," but they also can present potential challenges and risks.
"It is in the U.S. interest to promote a thriving, competitive global hedge fund industry that facilitates price discovery and promotes liquidity in financial markets, while maintaining investor protection and promoting financial stability," Paulson said.
Most of the launches were in the first six months of the year. But after the equity market meltdown last spring and summer hammered hedge funds, and Amaranth Advisors went bust last fall, raising money got harder for new funds.
Only 29 funds raising at least $50 million - the minimum required to be included in the survey - launched during the second half of the year. These funds raised a mere $6.2 billion, or 20% of the total.
For the year, six new funds raised more than $1 billion. The biggest launch of the year, Convexity Capital, set a new record in terms of assets for its $6.3 billion fund launch last February. Convexity was founded by Jack Meyer, the former Harvard University endowment money manager superstar.
The second largest launch in 2006 was Old Lane Management’s Old Lane fund launched in April with $3.7 billion. It finished the year with roughly the same amount. The giant multistrategy fund’s founders include Vikram Pandit, John Havens and Guru Ramakrishnan - a high-profile trio from Morgan Stanley.
A closer look at the alpha-pack points to two ongoing themes: Billion-dollar megalaunches are alive and well - but only for the right pedigree. Seven of the top ten launches were new funds by established players, more evidence that the big, established names will continue to get bigger.
The trend for larger megalaunches in the past few years is likely to continue if institutional investors - pensions and endowments more so than funds of funds - continue to wade into hedge funds.
14 Feb 2007
The G7 is comprised of official representatives from Britain, Canada, France, Germany, Italy, Japan, and the United States. The group released their conclusion that the world's major developed economies show solid growth, but foreign exchange fluctuations, the rising power of hedge funds and dwindling energy supplies are a concern.
"We are confident that the implications of these developments will be recognized by market participants and will be incorporated into their assessment of risks," the statement said, which was released after the G-7 participants ended their two-day meeting.
"Given the strong growth of the hedge fund industry and the instruments they trade, we need to be vigilant," the statement added, also saying that the group will talk with the private sector and hedge fund operators and would ask the Financial Stability Forum to update its 2000 report on hedge funds.
Early stage funds are typically set up by experienced money managers who have recently left other hedge funds or investment banks, or by managers who have existing hedge funds and are launching a new vehicle to focus on different strategies.
The initial portfolio will be composed of approximately 15-20 managers with targeted returns of 12-14% with annualized volatility of 5-7% over the medium term. The fund offers quarterly liquidity with a one-year lock up period.
Deepak Gurnani, Managing Director and co-head of the Investcorp Hedge Funds program said: "The Early Stage Fund is a unique investment opportunity which provides access to promising early stage funds, while minimizing the potential issues investors face in investing with such funds. Investors will have the benefit of immediate diversification, with quarterly liquidity and an anticipated attractive return and volatility relationship over the medium term."
Since 1996, Investcorp has invested with more than 50 hedge funds within the first 12 months of their launch and now manage approximately $1 billion in early stage investments.
13 Feb 2007
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The hedge fund is to be run by a team of three, Sanjay Joshi, Rabbani Wahhab and Mario Nicolaou, and quantitative analyst Shilen Shah. They hired the team of fixed income hedge fund managers from London & Capital.
Last month F&C had announced their interest in expanding their hedge fund presence, saying they had plans to increase their investments in hedge funds.
"This is an important development for F&C Alternative Investments and a mark of F&C's ambition to grow our hedge fund presence. We will continue to actively look for further opportunities," Fernando Ribeiro, head of investments, said in a note.
At the end of last month shares in F&C fell heavily after the firm said it would rebase its 2007 dividend to allow increased investment in higher-margin new products.
F&C Management Ltd is a European investment house quoted on the London Stock Exchange with €154.6 billion (over $200 billion) under management and offices throughout Europe.
The judge entered a default judgment against Wright ordering the repayment of $17 million, interest of $2.7 million and an imposed a civil penalty of $120,000, the SEC said in the statement.
Wright's hedge fund came under scrutiny eventually for it's unusually consistent high returns, vague descriptions of investment strategies, aggressive marketing, no auditing, and secretive behavior by the manager.
From 1997 through early 2006, Wright raised as much as $185 million from 500 investors through a "fraudulent scheme" involving seven hedge funds that he managed through IMA, the SEC said in a lawsuit filed a year ago.
Wright was also spending too much for his funds, it was noted, a lavish wedding reception, the $55,000 engagement ring his bride wore, the entertainment suites at Atlanta Falcon football games, Atlanta Hawk basketball games, concerts, a Bentley, a Jaguar, an Aston Martin, a BMW, and a Lamborghini, and as proof of his investment returns, only photocopied spreadsheets.The firm also sent out quarterly statements misrepresenting the amount of money in those funds and their performance.
Wright was arrested in May on mail-fraud charges, He's in an Atlanta detention center awaiting a criminal trial related to the 21 counts of mail fraud and three counts of securities fraud, each carrying a maximum sentence of 20 years behind bars.
Original story; Fake Hedge Funds Cost Investors Millions
8 Feb 2007
In the ‘Insiders Corner" Michael Brush said "Investors had big bets on energy stocks, but now that crude oil has fallen 9% this year and 30% since last summer, hedge funds are heading for the exits. Is there any end in sight?"
Predicting the cold weather trends that have set in, the Insiders Corner also reminded investors of other factors, besides the weather, that support higher energy prices including “Tensions in the Middle East”, but the eerily warm weather in much of the U.S. is about to "turn on a dime," predicts AccuWeather.com forecaster Joe Bastardi.
Michael Brush, author of “Lessons From the Front Line”, is an award winning financial writer that writes a weekly market column for MSN Money as well as the ‘Insiders Corner’ for InvestorIdeas.com Mr. Brush has also covered business and investing for the New York Times, Money magazine and the Economist Group.
As far as where oil is currently trading, Eden Energy Corporation President and CEO Don Sharpe comments, “We expect oil prices to strengthen throughout the remainder of the year as geopolitical risks reemerge due to actions in Nigeria, Iran and other volatile parts of the oil producing world."
OilandGasStockNews.com is a global investor and industry research portal for the oil and gas sector.
Artis Capital Management, a San Francisco hedge fund was co-investor with Sequoia Capital, the venture capitalists that took a chance with the tiny YouTube project. Artis and several other hedge funds affiliated with them were listed as having received 176,621 shares, valued at $83 million.
Sequoia Capital invested close to $11.5 million in You Tube, is now listed as owning 941,027 shares, which are valued at more than $442 million. The filing also lists Sequoia Capital XI Principals Fund owning 102,376 shares, valued at more than $48 million, and Sequoia Technology Partners XI with 29,724 shares, valued at nearly $14 million. A total of $504 million.
The company's three founders also made extraordinary amounts, YouTube's chief executive Chad Hurley received shares worth more than $345 million. Another founder, Steven Chen, received shares worth more than $326 million. The third founder of YouTube, Jawed Karim, who left the company early on to pursue a graduate degree in computer science, received more than $64 million in shares. Some of these shares have been deposited in trusts for the young founders.
7 Feb 2007
The Federal regulators that are conducting the probe, have asked approximately 10 major Wall Street banks for trading information from the last two weeks of September 2006, at the close of the third quarter.
It's become difficult for hedge fund managers to make money without access to sensitive information, so the SEC examiners will try to determine whether big buy and sell orders placed with the banks by mutual funds in that period triggered any suspicious front-running activity in those same stocks by hedge fund managers or other traders.
Lori Richards, director of the SEC's Office of Compliance, Inspections and Examinations, confirmed that her office was looking into the matter. "We're always concerned about information leakage in the market which could harm investors," she said.
Details of the investigation first appeared Tuesday in the New York Times, which said that the SEC request for information had gone out in mid-January.
5 Feb 2007
The loan comes after back-to-back Hurricanes Frances and Jeanne pounded the area relentlessly in 2004, and Hurricane Wilma added further damage in 2005, turning the 30-story dream community into a nightmare of a business deal for the 119 homes involved.
The hedge fund partners cosed the $23.3 million deal with Kennedy Funding of Hackensack, NJ, borrowing the funds for a complete renovation. Jeffrey Wolfer, President and Co-CEO of Kennedy Funding said, "With this many unique and unusual circumstances, a loan like this wouldn't meet the criteria of traditional lenders.......That's why it's called situational lending-we consider each situation individually and evaluate it as such.
Stillwater Capital Partners is a provider of alternative investment services with over $600 million in assets under management. The hedge fund performs independent research that provides the potential for clients to preserve and grow their capital using a risk-controlled approach to investing.
4 Feb 2007
Growing concerns over issues such as global warming have meant that more investors are looking for an ethically minded fund, especially one that makes a profit.
An innovator in ethical investing is Charlie Thomas, head of Jupiter Asset Management, a Citywire AAA-rated hedge fund. Thomas has defied skeptics by proving environmentally friendly investing can produce strong returns in what was a relatively muted year for global fund managers.
Last year the average hedge fund manager return was 8.1%, way below the average gain of 26.5 percent in 2005. However, Thomas' hedge fund Jupiter, returned 27.8% on the Jupiter Ecology fund last year, bringing the hedge fund's assets under management to around $436 million.Thomas, who has been a member of Jupiter's socially responsible investment team since 2000, has a background steeped in environmentally responsible behaviour. Prior to joining Jupiter, he worked for BP as an environmental policy adviser and also worked on the United Nations environmental programme.
He told Citywire: "I look for opportunistic companies which are addressing environmental change." Especially productive was his investment in the organic market, he said, "it is gaining momentum as more and more people want organic, high quality products." He screens stocks on six green investment themes: clean energy, sustainable living, green transport, waste management, environmental services and water management.
Thomas recently told Citywire he was heartened by news the European Commission wants to make its recent proposals on energy security and climate change, including a proposal to cut CO2 emissions by a least 20 percent, legally binding in 2020.While this isn’t the usual criterion on which most investors make decisions, according to Standard and Poor’s, this ethically minded hedge fund has made a bid-to-bid return of 82.87% against the sector average of 48.88% over the three years to 2006.
Germany would like greater control over the highly speculative funds in the interests of the international financial system, and has promised to make this a priority of its G8 presidency. Germany is at the core of the euro single currency zone and the European Central Bank is building a huge new headquarters in Frankfurt.
Major German corporations have adeptly ridden the wave of globalization and exports continue to soar even during 2006 with the euro hitting near-record highs against the dollar.
Steinbrueck has been a Social Democrat for more than 35 years, he began his political career in the federal Ministry of Construction in 1974, and has since been riding high as finance minister, having presided over a cut in Germany's budget deficit to bring it in line with the eurozone's strict fiscal target for the first time since 2001.
2 Feb 2007
Whittier has been charged with securities fraud, failure to disclose a beneficial interest in 5% or more in a publicly traded security and two counts of failing to disclose a beneficial interest of 10% or more in a publicly traded security.
Prosecutors alleged Thursday that Whittier, from fall 2004 to September 2005, schemed to defraud investors in the company's U.S.-based Wood River Partners LP and Cayman Islands-based Wood River Partners Offshore Ltd. hedge funds by acquiring beneficial ownership of more than 70% of the common stock of EndWave without disclosing that ownership as required by the SEC.
The government said Whittier also accumulated beneficial ownership for the Wood River U.S. fund and other managed accounts of more than 20% of the common stock of New Jersey digital media and publishing company MediaBay Inc. without disclosing that ownership as required by the SEC.
Prosecutors alleged that Whittier falsely represented to investors that the funds had a broad investment strategy and no investment would ever constitute more than 10% of their holdings, he also falsely represented to investors that the U.S. fund was audited by outside auditors.
Chilowitz was charged with conspiracy and unauthorized computer access, according to a criminal complaint unsealed in July of last year.
Federal prosecutors charged Ira Chilowitz with stealing the confidential pricing information from Morgan Stanley’s hedge fund prime brokerage group and passing it on to a “co-conspirator’’ at a midtown company that provides advisory services to hedge funds.
From about December 2005 until about February 2006, Chilowitz conspired with another individual, who was a former Morgan Stanley client service representative, to misappropriate the Client Rate List and to transmit it, via e-mail to his partner. Morgan Stanley provides financial and administrative services to numerous hedge funds and the data in the Client Rate List is not generally known to the public and is valuable to competitors of Morgan.
Chilowitz admitted in court during his guilty plea that he took the confidential and proprietary information from Morgan Stanley because it would potentially assist him in generating business for a consulting firm they had planned to launch.