Sal. Oppenheim Jr. & Cie, one of Europe's largest private banks is moving towards alternative investments and hedge funds. Oppenheim said it wants to spin off a hedge fund from its proprietary trading book. The bank will seed the hedge fund with its own cash but expects to raise as much as €500 million ($680 million).
Oppenheim already has launched the Figaro Currency Fund, a Dublin domiciled hedge fund, as another example of success. It combines the bank's currency expertise with a modern absolute-return approach. The fund aims to achieve stable above-average returns (7% - 10% p.a.) with low correlation to stocks and bonds. The Investment process of the hedge fund is a disciplined analytical approach combining macro-economic analysis, geopolitical trends, technical indicators and general market sentiment towards investing in currencies.
Headquartered in the bank's offices in Zurich, the new hedge fund will will begin trading in the third quarter, taking long and short positions in small to mid size companies, investing almost two-thirds of the book in firms from German-speaking countries, it said. The rest will be invested primarily in other Western European countries.
Oppenheim today is one of Europe‘s leading private banks. Since the company‘s founding in 1789, the Cologne private bankers have been open to new developments in industry, business, and new financial models.
30 Apr 2007
Dresdner Kleinwort Announces New Head for US based Hedge Funds
Dresdner Kleinwort, the investment banking division of Dresdner Bank AG announced the appointment of Chris Baildon as Head of Equities Distribution for US based Hedge Funds. Baildon joins as a Managing Director and will report to Mark Small, Head of Equities in the US and Martin Newson, Head of the Hedge Fund Solutions Group based in London.
Baildon previously worked at UBS where he specialized in the coverage of hedge funds as Head of European Sales Trading. Martin Newson, Head of Hedge Fund Solutions said, "Chris is an important addition to our team and the ongoing development of our of hedge fund offering. The European markets are extremely significant to US based hedge fund clients, perhaps now more than ever, and the appointment of Chris further improves our ability to offer the funds the very best levels of servicing."
According to reports, Dresdner Kleinwort plans to double the number of hedge fund specialists in its investment bank over the next three years, aiming to increase hedge fund sales from 10-15% of fees and commissions to 25%.
The bank currently employs close to 50 staff focused on hedge funds across its corporate finance, equities, fixed income, currencies and derivatives divisions, and plans to double this to 100. Newson, hired last November to set up the bank’s hedge fund solutions group, said the new appointments would be spread over three years.
Baildon previously worked at UBS where he specialized in the coverage of hedge funds as Head of European Sales Trading. Martin Newson, Head of Hedge Fund Solutions said, "Chris is an important addition to our team and the ongoing development of our of hedge fund offering. The European markets are extremely significant to US based hedge fund clients, perhaps now more than ever, and the appointment of Chris further improves our ability to offer the funds the very best levels of servicing."
According to reports, Dresdner Kleinwort plans to double the number of hedge fund specialists in its investment bank over the next three years, aiming to increase hedge fund sales from 10-15% of fees and commissions to 25%.
The bank currently employs close to 50 staff focused on hedge funds across its corporate finance, equities, fixed income, currencies and derivatives divisions, and plans to double this to 100. Newson, hired last November to set up the bank’s hedge fund solutions group, said the new appointments would be spread over three years.
27 Apr 2007
Hedge Fund Ritchie Capital To Sell Flagship Fund
Hedge Fund Ritchie Capital Management, as part of a liquidation plan, is selling a significant portion of its assets in its Multi-Strategy Fund for $1 billion to New York City-based Reservoir Capital Group.
Ritchie Capital, which oversees about $2.8 billion including borrowed money, will liquidate its Multistrategy Global Fund and return cash to investors. The company told investors that the Ritchie Capital Management flagship multi-strategy hedge fund had about $730 million in assets in mid-2006.
Thane Ritchie, founder of Ritchie Capital said in a statement, "We are pleased that investors have approved this transaction as it is a significant first step in meeting our stated objectives for the Multi-Strategy Fund - preserving the value of its assets and returning capital to redeeming investors,.....However, we recognize that we need to continue to work diligently and intelligently to completely fulfill our commitment to all our investors."
After facing an extended period of under performance and investor demands for capital returns, the hedge fund has been in exclusive talks with Reservoir and Coller for several months to buy the flagship fund, sources have said. The sale is the first of what Ritchie Capital Management expects will be a series of transactions for the remainder of the fund’s assets. At the end of 2004, Ritchie lost more than 2% of its flagship fund and decided to alter it to a traditional, more liquid one to one that incorporates private equity and longer-term investments.
The deal with Reservoir has been approved by Ritchie investors launching a new fund called Rhone Holdings, L.P., which will purchase the assets in part with capital invested by Reservoir funds. Ritchie will manage this new entity, the firm explained in a statement.
Reservoir Capital is a private investment firm with about $3 billion under management. Ritchie Capital Management is headquartered in Geneva, Illinois with offices in New York, Chicago, London, Bermuda, Hong Kong, and Menlo Park, California.
Ritchie Capital, which oversees about $2.8 billion including borrowed money, will liquidate its Multistrategy Global Fund and return cash to investors. The company told investors that the Ritchie Capital Management flagship multi-strategy hedge fund had about $730 million in assets in mid-2006.
Thane Ritchie, founder of Ritchie Capital said in a statement, "We are pleased that investors have approved this transaction as it is a significant first step in meeting our stated objectives for the Multi-Strategy Fund - preserving the value of its assets and returning capital to redeeming investors,.....However, we recognize that we need to continue to work diligently and intelligently to completely fulfill our commitment to all our investors."
After facing an extended period of under performance and investor demands for capital returns, the hedge fund has been in exclusive talks with Reservoir and Coller for several months to buy the flagship fund, sources have said. The sale is the first of what Ritchie Capital Management expects will be a series of transactions for the remainder of the fund’s assets. At the end of 2004, Ritchie lost more than 2% of its flagship fund and decided to alter it to a traditional, more liquid one to one that incorporates private equity and longer-term investments.
The deal with Reservoir has been approved by Ritchie investors launching a new fund called Rhone Holdings, L.P., which will purchase the assets in part with capital invested by Reservoir funds. Ritchie will manage this new entity, the firm explained in a statement.
Reservoir Capital is a private investment firm with about $3 billion under management. Ritchie Capital Management is headquartered in Geneva, Illinois with offices in New York, Chicago, London, Bermuda, Hong Kong, and Menlo Park, California.
26 Apr 2007
VanthagePoint Joins With G Squared to Launch Fund Of Funds
G Squared Group Asset Management has teamed up with hedge fund services provider VanthedgePoint Group LL by purchasing a 10% minority stake and is launching a fund of hedge fund comprised solely of its emerging manager clients.
“By partnering with VanthedgePoint our idea is to greatly reduce the number one risk regarding investments in emerging managers: operational risk,” said Gualtiero Giori, managing partner of G Squared. The new vehicle, White Hill Fund, will invest exclusively in early-stage emerging hedge fund clients of VanthedgePoint Securities, the broker/dealer arm of VanthedgePoint Group. The fund will commence operations on May 1.
VanthedgePoint serves as a prime broker dealer, providing stock trading clearance and loans to small to midsize long/short equity hedge funds, with assets of over $1 billion, launching a fund of emerging hedge funds makes sense because larger pension funds typically have restrictions on investing more than 10% of their capital in any one fund.
"This allows us to offer our clients not only the potential outperformance typically demonstrated by emerging managers, but also a structure whereby they can track new talent while avoiding concentration risk and minimizing non-investment due-diligence work." said Giori.
“By partnering with VanthedgePoint our idea is to greatly reduce the number one risk regarding investments in emerging managers: operational risk,” said Gualtiero Giori, managing partner of G Squared. The new vehicle, White Hill Fund, will invest exclusively in early-stage emerging hedge fund clients of VanthedgePoint Securities, the broker/dealer arm of VanthedgePoint Group. The fund will commence operations on May 1.
VanthedgePoint serves as a prime broker dealer, providing stock trading clearance and loans to small to midsize long/short equity hedge funds, with assets of over $1 billion, launching a fund of emerging hedge funds makes sense because larger pension funds typically have restrictions on investing more than 10% of their capital in any one fund.
"This allows us to offer our clients not only the potential outperformance typically demonstrated by emerging managers, but also a structure whereby they can track new talent while avoiding concentration risk and minimizing non-investment due-diligence work." said Giori.
New Jersey To Invest in Hedge Funds of Funds
According to a due diligence memorandum presented to the New Jersey State Investment Council by director William Clark, NJ has a proposed $100 million investment in each of two Blackstone funds of funds strategies, Pacific Opportunities Strategy and an Emerging Markets Strategy to handle new hedge fund and private equity allocations.
The NJ pension system is also aiming at allocating a total of $625 million to two funds of hedge funds and three single-strategy managers, and a total of $325 million to four private equity funds, according to a due diligence memo penned by director William Clark to the system’s investment council.
Also in the investment proposal, NJ is looking to make a $150 million commitment to a fund of funds to be managed by Protégé Partners, the New York-based firm currently manages $2.2 billion and invests in smaller, niche funds and also seeds managers. The pension system is also allocating $150 million to Farallon Capital Institutional Partners, a multi-strategy fund, and $50 million to Omega Overseas Partners Ltd Class B, a long/short equity fund.
New Jersey’s proposed direct investments in single-strategy managers include a $75 million commitment to the Ascend Partners Fund II, which is a 1.5x levered version of the firm’s fundamental equity long/short strategy.
In private equity, NJ is making a $100 million commitment to Avenue Special Situations Fund V and a $50 million commitment to KPS Special Situations Fund III. Both funds focus on U.S. stressed and distressed opportunities. Finally, a $100 million commitment is being made to MatlinPatterson Global Opportunities Partners, a global distressed fund, and a $75 million commitment to Thomas H. Lee Equity Partners VI, a growth-oriented buyout fund.
The NJ pension system is also aiming at allocating a total of $625 million to two funds of hedge funds and three single-strategy managers, and a total of $325 million to four private equity funds, according to a due diligence memo penned by director William Clark to the system’s investment council.
Also in the investment proposal, NJ is looking to make a $150 million commitment to a fund of funds to be managed by Protégé Partners, the New York-based firm currently manages $2.2 billion and invests in smaller, niche funds and also seeds managers. The pension system is also allocating $150 million to Farallon Capital Institutional Partners, a multi-strategy fund, and $50 million to Omega Overseas Partners Ltd Class B, a long/short equity fund.
New Jersey’s proposed direct investments in single-strategy managers include a $75 million commitment to the Ascend Partners Fund II, which is a 1.5x levered version of the firm’s fundamental equity long/short strategy.
In private equity, NJ is making a $100 million commitment to Avenue Special Situations Fund V and a $50 million commitment to KPS Special Situations Fund III. Both funds focus on U.S. stressed and distressed opportunities. Finally, a $100 million commitment is being made to MatlinPatterson Global Opportunities Partners, a global distressed fund, and a $75 million commitment to Thomas H. Lee Equity Partners VI, a growth-oriented buyout fund.
25 Apr 2007
Hedge Funds & The Uranium "Arms Race"
Corrected on the 26th of April
Several hedge funds have been buying largely into the processed uranium market, causing most of the new demand for uranium and helping drive up the price more than fourfold within the past year.
Some hedge funds that have been reported as buyers are Adit Capital, who according to reports, bought up millions of pounds for as little as $20 per pound. Citadel Investment Group assumed control of 2.3 millions pounds through its stake in an IPO, and GLG Partners and Fortress Investment Group have set up teams to begin trading uranium.
There is no futures market for uranium and a declining supply of the product, coupled with an increase of outside investors, such as hedge funds, has led the Nuclear Energy Institute to suggest allowing only end users of uranium to purchase it. It is mined by only by a few companies such as Canada's Cameco Corp.
Uranium Participation Corporation is a closed end mutual fund that buys and holds uranium, making it one of the only ways for an average investor to buy directly into uranium. Its documents can be found on SEDAR and regarding transparency, the fund publishes its NAV every month on its website, disclosing what it has paid for uranium. It is exchange traded on the Toronto Stock Exchange by the symbol is U. There are also warrents on U for those who are inclined to more aggressive positioning.
A newly created uranium futures contract will begin trading on the Nymex electronic system on May 7, according to their VP of marketing Randy Warsager. Most of the Nymex products are traded on the Chicago Mercantile Exchange Globex system under a joint agreement between the two markets.
The Wall Street Journal has called hedge funds' involvement in the market “a new type of nuclear-arms race.” Hedge fund and other investors hold around 20 mm lbs of uranium equivalent, according to David Hard of NukemInc.com, that's about 20% of one year's mine production.
Several hedge funds have been buying largely into the processed uranium market, causing most of the new demand for uranium and helping drive up the price more than fourfold within the past year.
Some hedge funds that have been reported as buyers are Adit Capital, who according to reports, bought up millions of pounds for as little as $20 per pound. Citadel Investment Group assumed control of 2.3 millions pounds through its stake in an IPO, and GLG Partners and Fortress Investment Group have set up teams to begin trading uranium.
There is no futures market for uranium and a declining supply of the product, coupled with an increase of outside investors, such as hedge funds, has led the Nuclear Energy Institute to suggest allowing only end users of uranium to purchase it. It is mined by only by a few companies such as Canada's Cameco Corp.
Uranium Participation Corporation is a closed end mutual fund that buys and holds uranium, making it one of the only ways for an average investor to buy directly into uranium. Its documents can be found on SEDAR and regarding transparency, the fund publishes its NAV every month on its website, disclosing what it has paid for uranium. It is exchange traded on the Toronto Stock Exchange by the symbol is U. There are also warrents on U for those who are inclined to more aggressive positioning.
A newly created uranium futures contract will begin trading on the Nymex electronic system on May 7, according to their VP of marketing Randy Warsager. Most of the Nymex products are traded on the Chicago Mercantile Exchange Globex system under a joint agreement between the two markets.
The Wall Street Journal has called hedge funds' involvement in the market “a new type of nuclear-arms race.” Hedge fund and other investors hold around 20 mm lbs of uranium equivalent, according to David Hard of NukemInc.com, that's about 20% of one year's mine production.
24 Apr 2007
UK Treasury Examing Pooling EU Hedge Fund Information
Speaking at a Financial Services Authority conference, UK Treasury minister Edward Balls said he planned to seek the views of other European countries about pooling information and working together on European international regulatory issues concerning hedge funds.
This could signal that the British government is again taking a closer look at hedge fund regulation। He said in his speech, "The first thing to stress is the consensus over the positive role that hedge funds play - providing liquidity, helping markets price assets more accurately and driving financial innovation."
But, "authorities should be vigilant regarding any of the potential risks posed by hedge funds. As the location for around 90% of the EU's hedge fund management business, the UK - and in particular the FSA - has thought hard about getting the regulatory approach to hedge funds right."
Balls said a six-monthly survey of banks' exposures to hedge funds through derivatives, secured financing and prime brokerage, could be enhanced if other regulators shared information about their own banks' exposures to the hedge fund industry. "Following discussion with the FSA, we believe that the quality of prudential supervision of hedge fund activity would be enhanced if there were greater co-operation between the key regulators," he said.
The Treasury minister said he recognized that some experts feared hedge funds were taking increasing risks to generate high returns, but he rejected a more heavy-handed approach to regulation. He also confirmed that the government is looking at issuing shariah-compliant debt, in a move to position London as a global center for Islamic finance and build bridges with the Muslim community.
This could signal that the British government is again taking a closer look at hedge fund regulation। He said in his speech, "The first thing to stress is the consensus over the positive role that hedge funds play - providing liquidity, helping markets price assets more accurately and driving financial innovation."
But, "authorities should be vigilant regarding any of the potential risks posed by hedge funds. As the location for around 90% of the EU's hedge fund management business, the UK - and in particular the FSA - has thought hard about getting the regulatory approach to hedge funds right."
Balls said a six-monthly survey of banks' exposures to hedge funds through derivatives, secured financing and prime brokerage, could be enhanced if other regulators shared information about their own banks' exposures to the hedge fund industry. "Following discussion with the FSA, we believe that the quality of prudential supervision of hedge fund activity would be enhanced if there were greater co-operation between the key regulators," he said.
The Treasury minister said he recognized that some experts feared hedge funds were taking increasing risks to generate high returns, but he rejected a more heavy-handed approach to regulation. He also confirmed that the government is looking at issuing shariah-compliant debt, in a move to position London as a global center for Islamic finance and build bridges with the Muslim community.
$1.1 Billion Hedge Fund Deal Goes to Northern Trust
Chicago based Northern Trust has been selected to provide fund administration services to the 816 million Euro (approximately $1.1 billion) hedge fund, BH Macro Limited.
The BH Macro Limited fund, based on the British isle of Guernsey, is one of the first single strategy hedge funds to obtain a secondary listing on the London Stock Exchange under the recently revised listing rules in Chapter 14 of the Financial Services Authority regulations. The single strategy hedge fund will invest in the Brevan Howard Master Fund, a $12 billion hedge fund with a predominant exposure to global fixed income and foreign exchange markets.
Sue Baines of Northern Trust said "We have a long history of servicing more traditional, closed-ended funds with listings in a variety of locations, in addition to being a leading administrator of alternative assets. This combination of expertise has allowed us to support many asset managers taking advantage of the increasing flexibility to list a range of alternative funds, in a variety of domiciles, whether these are private equity vehicles on Euronext, or hedge funds and funds of hedge funds in London. We are delighted to be working with Brevan Howard and look forward to continuing to grow our hedge fund and fund of funds client base."
With $3.8 trillion in assets under management, Northern Trust Corporation is a provider of investment management, asset and fund administration, fiduciary and banking solutions for corporations, institutions and affluent individuals worldwide.
The BH Macro Limited fund, based on the British isle of Guernsey, is one of the first single strategy hedge funds to obtain a secondary listing on the London Stock Exchange under the recently revised listing rules in Chapter 14 of the Financial Services Authority regulations. The single strategy hedge fund will invest in the Brevan Howard Master Fund, a $12 billion hedge fund with a predominant exposure to global fixed income and foreign exchange markets.
Sue Baines of Northern Trust said "We have a long history of servicing more traditional, closed-ended funds with listings in a variety of locations, in addition to being a leading administrator of alternative assets. This combination of expertise has allowed us to support many asset managers taking advantage of the increasing flexibility to list a range of alternative funds, in a variety of domiciles, whether these are private equity vehicles on Euronext, or hedge funds and funds of hedge funds in London. We are delighted to be working with Brevan Howard and look forward to continuing to grow our hedge fund and fund of funds client base."
With $3.8 trillion in assets under management, Northern Trust Corporation is a provider of investment management, asset and fund administration, fiduciary and banking solutions for corporations, institutions and affluent individuals worldwide.
23 Apr 2007
Hedge Fund ''Landmine'' Conference
Thompson Hine LLP, a leading national business law firm, will present a seminar to help hedge fund organizers, managers and advisors identify and avoid common pitfalls. “Fiduciary Landmines in Organizing and Operating Hedge Funds” is a free seminar open to hedge fund industry professionals and will be held at the Palmer House Hilton in Chicago on May 17 from noon to 4:15 p.m. CDT.
Hedge Fund Innovator Joel Press of Morgan Stanley Will Deliver Keynote: “Emerging Trends in a Newly Scrutinized Industry”
The seminar focuses on how to identify and resolve fiduciary issues in structuring and operating hedge funds. The program is structured to provide valuable insight into the obligations of alternative asset managers. It is geared to hedge fund managers, compliance professionals and vendors who provide services to the hedge fund industry.
In addition to Joel Press of Morgan Stanley, other speakers and panelists will include Howard Altman, Co-Managing Principal at Rothstein Kass, a leading accounting firm for hedge funds; Scott Richter, Managing Director and Associate General Counsel, JPMorgan; Sam Weiser, former Managing Director, Citigroup; Douglas Squassoni, Vice President and Senior Counsel, Mellon Bank; Aaron Vermut, Chief Operating Officer, Merlin Securities; and Thomas Feher, Partner, Thompson Hine.
“The hedge fund industry is at a crossroads, and confusion about the potential for increased oversight is making it an ongoing challenge for the industry to anticipate emerging issues,” said Richard Heller, a partner in the investment management practice at Thompson Hine in New York, who is organizing the conference. “This seminar will help put things into perspective for current hedge fund managers, as well as those considering establishing alternative investment funds. Fiduciary landmines abound. Knowing where and how to deal with them is key.”
Conference topics include:
* “Issues of Interest to Alternative Asset Fund Managers”
* Luncheon Keynote: “Emerging Trends in a Newly Scrutinized Industry”
* “Issues to Consider When Structuring a Hedge Fund and Soliciting Investors”
* “Fiduciary Aspects of Running a Hedge Fund”
While hedge funds are no longer required to register with the SEC, the rules that govern how brokers use their “soft dollar” commissions are designed to prevent abuses, such as payment for meals, rent, travel and other expenses not directly attributable to investment decisions. Additionally, the SEC is reviewing a change to the accredited investor rule which may have implications for the hedge fund industry.
The seminar is free and open to hedge fund industry professionals. Registry online by May 7.
Thompson Hine’s May 17 hedge fund landmine seminar will be followed at 5:30 p.m. by The Fifth Annual “Open Your Heart to Children” benefit held by the Chicago chapter of Hedge Funds Care at the Millennium Park Rooftop Terrace.
Hedge Fund Innovator Joel Press of Morgan Stanley Will Deliver Keynote: “Emerging Trends in a Newly Scrutinized Industry”
The seminar focuses on how to identify and resolve fiduciary issues in structuring and operating hedge funds. The program is structured to provide valuable insight into the obligations of alternative asset managers. It is geared to hedge fund managers, compliance professionals and vendors who provide services to the hedge fund industry.
In addition to Joel Press of Morgan Stanley, other speakers and panelists will include Howard Altman, Co-Managing Principal at Rothstein Kass, a leading accounting firm for hedge funds; Scott Richter, Managing Director and Associate General Counsel, JPMorgan; Sam Weiser, former Managing Director, Citigroup; Douglas Squassoni, Vice President and Senior Counsel, Mellon Bank; Aaron Vermut, Chief Operating Officer, Merlin Securities; and Thomas Feher, Partner, Thompson Hine.
“The hedge fund industry is at a crossroads, and confusion about the potential for increased oversight is making it an ongoing challenge for the industry to anticipate emerging issues,” said Richard Heller, a partner in the investment management practice at Thompson Hine in New York, who is organizing the conference. “This seminar will help put things into perspective for current hedge fund managers, as well as those considering establishing alternative investment funds. Fiduciary landmines abound. Knowing where and how to deal with them is key.”
Conference topics include:
* “Issues of Interest to Alternative Asset Fund Managers”
* Luncheon Keynote: “Emerging Trends in a Newly Scrutinized Industry”
* “Issues to Consider When Structuring a Hedge Fund and Soliciting Investors”
* “Fiduciary Aspects of Running a Hedge Fund”
While hedge funds are no longer required to register with the SEC, the rules that govern how brokers use their “soft dollar” commissions are designed to prevent abuses, such as payment for meals, rent, travel and other expenses not directly attributable to investment decisions. Additionally, the SEC is reviewing a change to the accredited investor rule which may have implications for the hedge fund industry.
The seminar is free and open to hedge fund industry professionals. Registry online by May 7.
Thompson Hine’s May 17 hedge fund landmine seminar will be followed at 5:30 p.m. by The Fifth Annual “Open Your Heart to Children” benefit held by the Chicago chapter of Hedge Funds Care at the Millennium Park Rooftop Terrace.
Court Of Baltimore Rules Against Costa Brava Hedge Fund
The Circuit Court for Baltimore City has, for the third time in just over a year, denied legal motions filed against Telos Corporation by Costa Brava Partnership III, L.P., a Boston-based hedge fund. Costa Brava previously had two motions for receivership dismissed or denied, and a motion for preliminary injunction regarding the sale of assets dismissed.
John B. Wood, CEO of Telos said, “As we said in our memorandum to the court, Costa Brava clearly refuses to take no for an answer. Not satisfied that their stock value has increased by nearly 200% in less than two years, Costa Brava wants to litigate even higher returns, an act that could have detrimental effects on our other shareholders and our employees.”
The activist hedge fund was demanding that Telos be prohibited from pursuing or closing any sale of assets until after May 31, 2007. That is the date that Costa Brava hopes to elect two new Class D directors of their choosing to the Telos Board of Directors.
Costa Brava and Telos are scheduled to meet on May 31 to discuss the election of two Class D directors. Costa Brava was previously given an opportunity to elect Class D directors, but failed to pursue that opportunity. The Court recognized Costa Brava’s “earlier reluctance” to fill the directorships and found that the Telos was “not in violation of any statutory, charter or by-law requirements with respect to the pending election of those directors.”
The same Court has in the past has addressed several claims by the activist hedge fund, including a recent opinion regarding Costa Brava’s demand that Telos be placed into receivership.
Wood said that Telos, whose stock over the past five years has outperformed the NASDAQ composite by 100%, “is committed to treating all shareholders equitably and continuing to focus on our role as a trusted provider of security solutions to U.S. government agencies and the Department of Defense.”
John B. Wood, CEO of Telos said, “As we said in our memorandum to the court, Costa Brava clearly refuses to take no for an answer. Not satisfied that their stock value has increased by nearly 200% in less than two years, Costa Brava wants to litigate even higher returns, an act that could have detrimental effects on our other shareholders and our employees.”
The activist hedge fund was demanding that Telos be prohibited from pursuing or closing any sale of assets until after May 31, 2007. That is the date that Costa Brava hopes to elect two new Class D directors of their choosing to the Telos Board of Directors.
Costa Brava and Telos are scheduled to meet on May 31 to discuss the election of two Class D directors. Costa Brava was previously given an opportunity to elect Class D directors, but failed to pursue that opportunity. The Court recognized Costa Brava’s “earlier reluctance” to fill the directorships and found that the Telos was “not in violation of any statutory, charter or by-law requirements with respect to the pending election of those directors.”
The same Court has in the past has addressed several claims by the activist hedge fund, including a recent opinion regarding Costa Brava’s demand that Telos be placed into receivership.
Wood said that Telos, whose stock over the past five years has outperformed the NASDAQ composite by 100%, “is committed to treating all shareholders equitably and continuing to focus on our role as a trusted provider of security solutions to U.S. government agencies and the Department of Defense.”
$91.16 Billion Hedge Fund Driven Bank Merger To Go Through
The Managing Board and Supervisory Board of ABN AMRO Holding N.V. and the Board of Directors of Barclays PLC announced jointly this morning that agreement has been reached on the combination of ABN AMRO and Barclays for $91.16 billion, in the world's largest bank takeover.
In March hedge fund and major shareholder TCI announced in a letter to Dutch bank ABN Amro that they believe the bank is undervalued and should sell some of its assets, merge with another bank, or even sell off the whole business. ABN Amro is due to hold a shareholder meeting this week and each of the Boards has unanimously resolved to recommend this new transaction to its respective shareholders. The holding company of the combined group will be called Barclays PLC.
The merger was expected to be completed during the fourth quarter of this year, the banks said. As part of the deal, ABN Amro announced it was selling its U.S. unit, LaSalle Bank, to Bank of America Corp. for $21 billion in cash. Under the deal announced Monday, Barclays offered 36.25 euros ($49.25) for each ABN Amro share, slightly below Friday's closing price of 36.29 euros ($49.38).
"The proposed merger of ABN Amro and Barclays will create a strong and competitive combination for its clients with superior products and extensive distribution," the banks said in a statement. "The merged group is expected to generate significant and sustained future incremental earnings growth for shareholders."
Barclays CEO John Varley said the hedge fund shareholders faced a stark choice: Either deconstruct ABN Amro by opting for the competing consortium's bid, or form one of the world's largest banks by accepting Barclays takeover. TCI, the hedge fund that pushed for the bank's breakup, said it was studying the proposed deal.
In March hedge fund and major shareholder TCI announced in a letter to Dutch bank ABN Amro that they believe the bank is undervalued and should sell some of its assets, merge with another bank, or even sell off the whole business. ABN Amro is due to hold a shareholder meeting this week and each of the Boards has unanimously resolved to recommend this new transaction to its respective shareholders. The holding company of the combined group will be called Barclays PLC.
The merger was expected to be completed during the fourth quarter of this year, the banks said. As part of the deal, ABN Amro announced it was selling its U.S. unit, LaSalle Bank, to Bank of America Corp. for $21 billion in cash. Under the deal announced Monday, Barclays offered 36.25 euros ($49.25) for each ABN Amro share, slightly below Friday's closing price of 36.29 euros ($49.38).
"The proposed merger of ABN Amro and Barclays will create a strong and competitive combination for its clients with superior products and extensive distribution," the banks said in a statement. "The merged group is expected to generate significant and sustained future incremental earnings growth for shareholders."
Barclays CEO John Varley said the hedge fund shareholders faced a stark choice: Either deconstruct ABN Amro by opting for the competing consortium's bid, or form one of the world's largest banks by accepting Barclays takeover. TCI, the hedge fund that pushed for the bank's breakup, said it was studying the proposed deal.
5th Annual Hedge Fund Industry Award Nominees
Alternative Investment News, a publication of Institutional Investor News covering the global hedge fund industry, has announced the nominees for the 5th Annual Hedge Fund Industry Awards. The awards recognize the hedge fund leaders, managers and investors who have made significant impacts on the hedge fund industry in the past year. Winners will be announced and awarded at an annual gala dinner on June 27, 2007, at New York City's historic Gotham Hall.
Nominees in all categories were selected by the editors of Alternative Investment News based on their accomplishments during the 2006 calendar year.
Lifetime Achievement award winner:
Guy Wyser-Pratte, President, Wyser Pratte & Company
Nominees:
Hedge Fund Leader of the Year:
Absolute Capital Management
Citadel Investment Group
Bulldog Investors
Fortress Investment Group
Fund of Funds Leader of the Year:
Cadogan Management
Dorchester Capital
Eden Rock Capital Management
Harcourt Investment Consulting
Hedge Fund Launch of the Year:
Kohlberg Kravis Roberts
MatlinPatterson Asset Management
Montrica Investment Management
Oceanwood Capital Management
Paulson Credit Opportunities
Emerging Manager of the Year:
ARCIM Advisors
Hudson Bay Capital Management
MKM Longboat Advisors
Rasmala Investments
Institutional Manager of the Year:
Lyxor Asset Management
Martin Currie Investment Management
Morgan Stanley
Robeco Group
Nonprofit Investor of the Year:
Bowdoin College
MIT Investment Management Company (MIT IMC)
Macarthur Foundation
Public Pension Fund Investor of the Year:
New Jersey State Investment Council
ABP
California Public Employees Retirement System
Ontario Teachers' Pension Plan
Corporate Pension Fund Investor of the Year:
Weyerhaeuser
BT and Hermes Pensions Management
General Motors Investment Management (GMIMCo)
More at;
http://www.iialternatives.com
Nominees in all categories were selected by the editors of Alternative Investment News based on their accomplishments during the 2006 calendar year.
Lifetime Achievement award winner:
Guy Wyser-Pratte, President, Wyser Pratte & Company
Nominees:
Hedge Fund Leader of the Year:
Absolute Capital Management
Citadel Investment Group
Bulldog Investors
Fortress Investment Group
Fund of Funds Leader of the Year:
Cadogan Management
Dorchester Capital
Eden Rock Capital Management
Harcourt Investment Consulting
Hedge Fund Launch of the Year:
Kohlberg Kravis Roberts
MatlinPatterson Asset Management
Montrica Investment Management
Oceanwood Capital Management
Paulson Credit Opportunities
Emerging Manager of the Year:
ARCIM Advisors
Hudson Bay Capital Management
MKM Longboat Advisors
Rasmala Investments
Institutional Manager of the Year:
Lyxor Asset Management
Martin Currie Investment Management
Morgan Stanley
Robeco Group
Nonprofit Investor of the Year:
Bowdoin College
MIT Investment Management Company (MIT IMC)
Macarthur Foundation
Public Pension Fund Investor of the Year:
New Jersey State Investment Council
ABP
California Public Employees Retirement System
Ontario Teachers' Pension Plan
Corporate Pension Fund Investor of the Year:
Weyerhaeuser
BT and Hermes Pensions Management
General Motors Investment Management (GMIMCo)
More at;
http://www.iialternatives.com
20 Apr 2007
G7 To Discuss Hedge Fund Oversight
E.U. Finance Ministers are planning to push for more oversight of hedge funds at this week's Group of 7 meeting in Berlin, the G7 has welcomed the contribution of hedge funds to market liquidity but still see investor protection as an issue.
Industry-led measures could include reporting trades to watchdogs to stamp out possible market abuse. The Alternative Investment Management Association, a global lobby, said a voluntary code was acceptable in principle, but how it would be enforced was unclear.
Ministers meeting this weekend will look at whether "enhanced international cooperation on the regulatory response should be pursued", according to a background document. They also plan to discuss intervention in takeover battles such as the recent hedge fund fight over Dutch bank ABN AMRO.
The document says that action of some sort is needed "given that the influence of hedge funds on the efficiency and stability of the financial system has grown substantially". Hedge fund managers are also accountable to regulators even though most funds are registered offshore such as in the Cayman Islands.
The G7 is comprised of official representatives from Britain, Canada, France, Germany, Italy, Japan, and the United States. The group released their conclusion last month 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.
Industry-led measures could include reporting trades to watchdogs to stamp out possible market abuse. The Alternative Investment Management Association, a global lobby, said a voluntary code was acceptable in principle, but how it would be enforced was unclear.
Ministers meeting this weekend will look at whether "enhanced international cooperation on the regulatory response should be pursued", according to a background document. They also plan to discuss intervention in takeover battles such as the recent hedge fund fight over Dutch bank ABN AMRO.
The document says that action of some sort is needed "given that the influence of hedge funds on the efficiency and stability of the financial system has grown substantially". Hedge fund managers are also accountable to regulators even though most funds are registered offshore such as in the Cayman Islands.
The G7 is comprised of official representatives from Britain, Canada, France, Germany, Italy, Japan, and the United States. The group released their conclusion last month 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.
19 Apr 2007
Environmental Hedge Funds Growing Rapidly
The Energy Hedge Fund Center LLC announced today that they are now tracking more than 560 energy and energy-related hedge funds in their new Directory of Energy Hedge Funds.
The vast majority of these energy focused hedge funds are based in North America but Europe is already home to 130 energy focused hedge funds and has been the focus for recent energy hedge fund formation. The directory is also now tracking more than 180 commodity hedge funds that have exposure to energy and energy-related commodities.
"Recently, we have seen a renewed interest in the creation of fund of funds in the energy and natural resources sector," reports Dr. Gary M. Vasey, Co-Principal of the Energy Hedge Fund Center, LLC. "Perhaps as interestingly, there has also been a new wave of hedge fund formation focused on energy and other related commodities since the beginning of 2007."
"We are also seeing substantial interest in the launch of larger green hedge funds and more significant growth of sustainability fund of funds this spring. We expect this trend to the accelerate as the US more toward carbon market mandates," said Peter Fusaro, Co-Principal of the Energy Hedge Fund Center LLC. "Energy and environmental hedge funds are still seen as an asset diversification play due to its non correlation."
The Energy Hedge Fund Center(EHFC) also publishes a subscription newsletter 'Energy Hedge' that tracks and announces new energy hedge funds, provides analysis of the Directory's content and includes energy hedge fund manager interviews.
The vast majority of these energy focused hedge funds are based in North America but Europe is already home to 130 energy focused hedge funds and has been the focus for recent energy hedge fund formation. The directory is also now tracking more than 180 commodity hedge funds that have exposure to energy and energy-related commodities.
"Recently, we have seen a renewed interest in the creation of fund of funds in the energy and natural resources sector," reports Dr. Gary M. Vasey, Co-Principal of the Energy Hedge Fund Center, LLC. "Perhaps as interestingly, there has also been a new wave of hedge fund formation focused on energy and other related commodities since the beginning of 2007."
"We are also seeing substantial interest in the launch of larger green hedge funds and more significant growth of sustainability fund of funds this spring. We expect this trend to the accelerate as the US more toward carbon market mandates," said Peter Fusaro, Co-Principal of the Energy Hedge Fund Center LLC. "Energy and environmental hedge funds are still seen as an asset diversification play due to its non correlation."
The Energy Hedge Fund Center(EHFC) also publishes a subscription newsletter 'Energy Hedge' that tracks and announces new energy hedge funds, provides analysis of the Directory's content and includes energy hedge fund manager interviews.
InFocus Hires Hedge Fund Manager
InFocus Corporation announced that they have added hedge fund manager John D. Abouchar and Bernard T. Marren to serve as members of the Company’s Board of Directors. Abouchar and Marren were designated to serve on the Board of Directors by the companies largest shareholder Caxton Associates L.L.C.
Abouchar is an independent consultant to GRT Capital Partners, LLC, based in Boston, Massachusetts, and a portfolio manager for the GRT Technology L.P. hedge fund. Prior to joining GRT Capital Partners in 2006, Abouchar was a Senior Analyst for six years at Pacific Edge Investment Management, a $300 million value technology hedge fund based in Palo Alto, California. Mr. Marren is the Chairman, Chief Executive Officer and President of OPTi Inc., an intellectual property licensing company based in Palo Alto, California.
“Effective yesterday, we officially added Mr. Marren and Mr. Abouchar to the InFocus Board of Directors,” stated Michael Hallman, lead InFocus independent director. “We look forward to their insights and contributions as we continue the evaluation of strategic alternatives for the Company,” concluded Hallman.
InFocus is an inventor and pioneer in the projection market, InFocus Corporation's global headquarters are located in Wilsonville, Oregon, USA, with regional offices in Europe and Asia. LiteShow, LP, ASK, ScreenPlay, Play Big, Work Big, Learn Big and The Big Picture are also registered trademarks of InFocus.
Abouchar is an independent consultant to GRT Capital Partners, LLC, based in Boston, Massachusetts, and a portfolio manager for the GRT Technology L.P. hedge fund. Prior to joining GRT Capital Partners in 2006, Abouchar was a Senior Analyst for six years at Pacific Edge Investment Management, a $300 million value technology hedge fund based in Palo Alto, California. Mr. Marren is the Chairman, Chief Executive Officer and President of OPTi Inc., an intellectual property licensing company based in Palo Alto, California.
“Effective yesterday, we officially added Mr. Marren and Mr. Abouchar to the InFocus Board of Directors,” stated Michael Hallman, lead InFocus independent director. “We look forward to their insights and contributions as we continue the evaluation of strategic alternatives for the Company,” concluded Hallman.
InFocus is an inventor and pioneer in the projection market, InFocus Corporation's global headquarters are located in Wilsonville, Oregon, USA, with regional offices in Europe and Asia. LiteShow, LP, ASK, ScreenPlay, Play Big, Work Big, Learn Big and The Big Picture are also registered trademarks of InFocus.
18 Apr 2007
ABN In Exploratory Talks With Shareholders
Last week Dutch bank and activist hedge fund manager ABN AMRO received a letter from Royal Bank of Scotland, Banco Santander and Fortis in which they invited ABN AMRO to start exploratory talks regarding their intentions, the Dutch Decree on the Supervision of Securities Trade 1995 makes these kinds of requests possible.
The bank agreed to the request for a meeting and has invited all signatories to a meeting in Amsterdam early next week to seek clarification of their intentions and interests.
ABN AMRO and Barclays also announced today, regarding their possible merger/takeover, that they have extended the exclusivity period of their talks to the end of Friday 20 April 2007. ABN AMRO and Barclays are in talks regarding a potential combination of the two organizations that the statement says, "would create value for both sets of shareholders."
The bank also said in the statement, "The discussions, which seek to incorporate the broad objectives set out on 20 March 2007, are progressing, but there can be no certainty that they will lead to a transaction or the form it will take." The two banking groups have been in merger talks since Barclays confirmed it was in "exclusive preliminary discussions" with ABN on March 20.
Netherlands-based ABN AMRO is an international bank with total assets of 899.3 billion euros ($1.2 trillion). It's hedge fund arm, ABN AMRO Asset Management has over 173 billion euros ($235 billion) in assets under management.
The bank agreed to the request for a meeting and has invited all signatories to a meeting in Amsterdam early next week to seek clarification of their intentions and interests.
ABN AMRO and Barclays also announced today, regarding their possible merger/takeover, that they have extended the exclusivity period of their talks to the end of Friday 20 April 2007. ABN AMRO and Barclays are in talks regarding a potential combination of the two organizations that the statement says, "would create value for both sets of shareholders."
The bank also said in the statement, "The discussions, which seek to incorporate the broad objectives set out on 20 March 2007, are progressing, but there can be no certainty that they will lead to a transaction or the form it will take." The two banking groups have been in merger talks since Barclays confirmed it was in "exclusive preliminary discussions" with ABN on March 20.
Netherlands-based ABN AMRO is an international bank with total assets of 899.3 billion euros ($1.2 trillion). It's hedge fund arm, ABN AMRO Asset Management has over 173 billion euros ($235 billion) in assets under management.
KBC Acquires Majority Stake in Russian Absolut Bank
Yesterday evening a deal between Belgian bank KBC Group NV and Russian bank Absolut was made in which the Belgian bank and hedge fund investor acquired 92.5% of shares in the Russian bank. It was announced in a press release this morning.
The deal values the bank at 761 million euros, ($1.03 billion) and is awaiting regulatory approval by the Central Bank of Russia. Absolut, established in 1993 and based in Moscow, is the seventh largest non-state-owned mortgage lender and offers universal banking services. Absolut has more than 1600 employees and 39 branches. KBC said it intends to keep the current key management in place.
KBC Group Chief Executive Andre Bergen said in a statement, "KBC's long-term strategic plans entail further expansion in the markets of emerging Europe. Russia is therefore an extension of our existing presence in neighboring Central and Eastern Europe."
KBC Bank & Insurance Holding Company itself was established in 1998 following the merger of three Belgian financial institutions. The Group's corporate history is a testament to the successful expansion into growth countries of Central and Eastern Europe which have joined the European Union in 2004, such as Hungary, Poland, the Czech Republic and Slovakia. KBC employs some 50,000 people and caters for twelve million customers.
The deal values the bank at 761 million euros, ($1.03 billion) and is awaiting regulatory approval by the Central Bank of Russia. Absolut, established in 1993 and based in Moscow, is the seventh largest non-state-owned mortgage lender and offers universal banking services. Absolut has more than 1600 employees and 39 branches. KBC said it intends to keep the current key management in place.
KBC Group Chief Executive Andre Bergen said in a statement, "KBC's long-term strategic plans entail further expansion in the markets of emerging Europe. Russia is therefore an extension of our existing presence in neighboring Central and Eastern Europe."
KBC Bank & Insurance Holding Company itself was established in 1998 following the merger of three Belgian financial institutions. The Group's corporate history is a testament to the successful expansion into growth countries of Central and Eastern Europe which have joined the European Union in 2004, such as Hungary, Poland, the Czech Republic and Slovakia. KBC employs some 50,000 people and caters for twelve million customers.
17 Apr 2007
Credit Suisse/Tremont Hedge Fund Index Up For March
The Credit Suisse/Tremont Hedge Fund Index is up 1.24% in March and up 3.34% for the first quarter of 2007 according to Oliver Schupp, President of the Credit Suisse Index Co., Inc.
“Despite getting off to a rocky start, global equity markets managed to recoup losses in the beginning of March and ended the month on a positive note. Markets were affected by remarks made by U.S. Federal Reserve Chairman, Ben Bernanke, that inflation is "uncomfortably high" promoting speculation that the U.S. central bank won't reduce interest rates to prop up the slowing economy, a weakening consumer confidence, and a growing housing slump,” said Mr. Schupp.
“Overall, this market environment has led to the estimation that eight of the ten hedge fund sectors will end March on a positive note. Long/Short Equity managers, in particular, were up 1.87% in March as industry themes and ongoing M&A activity provided stock specific opportunities, while superior stock selection paid off.” Performance for the Credit Suisse/Tremont Hedge Fund Index and its ten sub strategies is calculated monthly.
The Credit Suisse/Tremont Hedge Fund Index is comprised of 432 funds as of March 31, 2007. The Index is constructed using the Credit Suisse/Tremont database of more than 4,500 hedge funds. It includes both open and closed funds located in the U.S. and offshore, but does not include fund of funds.
“Despite getting off to a rocky start, global equity markets managed to recoup losses in the beginning of March and ended the month on a positive note. Markets were affected by remarks made by U.S. Federal Reserve Chairman, Ben Bernanke, that inflation is "uncomfortably high" promoting speculation that the U.S. central bank won't reduce interest rates to prop up the slowing economy, a weakening consumer confidence, and a growing housing slump,” said Mr. Schupp.
“Overall, this market environment has led to the estimation that eight of the ten hedge fund sectors will end March on a positive note. Long/Short Equity managers, in particular, were up 1.87% in March as industry themes and ongoing M&A activity provided stock specific opportunities, while superior stock selection paid off.” Performance for the Credit Suisse/Tremont Hedge Fund Index and its ten sub strategies is calculated monthly.
The Credit Suisse/Tremont Hedge Fund Index is comprised of 432 funds as of March 31, 2007. The Index is constructed using the Credit Suisse/Tremont database of more than 4,500 hedge funds. It includes both open and closed funds located in the U.S. and offshore, but does not include fund of funds.
16 Apr 2007
Sallie Mae Agrees to $25 Billion Buy Out
A group consisting of hedge funds JC Flowers & Co. and Friedman Fleischer & Lowe, agreed late last night to buy SLM Corp also known as or Sallie Mae, the US's largest provider of student loans, in a $25 billion deal. Also in on the deal is J.P. Morgan Chase & Co. and the Bank of America.
The idea driving the deal revolves around using financial engineering and more-efficient management to improve Sallie Mae's balance sheet. The two New York-based hedge fund firms will control 50.2% of the company, while the banks will own the rest.
Under the terms of the deal, they said, the buyers will pay $60 a share in cash, which represents almost a ५०% premium over Sallie Mae’s battered share price before news of a potential buyout was reported in The New York Times last week. The share price has surged nearly 15% on the prospect that the company could be bought out.
JC Flowers & Co is one of the largest investment funds focused solely on the financial service sector. The fund has over $900 million in commitments from financial and strategic investors. Investors in the hedge fund include ABN Amro, AIG, Banco Santander, GE, Goldman Sachs, JP Morgan Chase among others.
Friedman Fleischer & Lowe focuses on investing in middle-market companies and currently has over $1 billion in assets under management.
The idea driving the deal revolves around using financial engineering and more-efficient management to improve Sallie Mae's balance sheet. The two New York-based hedge fund firms will control 50.2% of the company, while the banks will own the rest.
Under the terms of the deal, they said, the buyers will pay $60 a share in cash, which represents almost a ५०% premium over Sallie Mae’s battered share price before news of a potential buyout was reported in The New York Times last week. The share price has surged nearly 15% on the prospect that the company could be bought out.
JC Flowers & Co is one of the largest investment funds focused solely on the financial service sector. The fund has over $900 million in commitments from financial and strategic investors. Investors in the hedge fund include ABN Amro, AIG, Banco Santander, GE, Goldman Sachs, JP Morgan Chase among others.
Friedman Fleischer & Lowe focuses on investing in middle-market companies and currently has over $1 billion in assets under management.
London Doubles its Share of Global Hedge Fund Assets
London's share of global hedge fund assets increased from 10% to 21% between 2002 and 2006, making London one of the fastest growing hedge fund centres according to the 2007 edition of IFSL's Hedge Funds report. Assets managed by hedge fund managers based in London totaled around $360bn in 2006, up 40% on the previous year, and a six-fold increase from 2002.
New York remained the leading global location for hedge fund managers in 2006 with 36% of global assets. Its share was down however, from 45% in 2002 as growth of the hedge fund industry in Europe and Asia outpaced growth in the US. This was largely a result of a rise in institutional portfolio allocation into hedge funds in these regions during this period.
London is by far the largest center for European hedge fund managers. The 900 hedge funds located in London accounted for four-fifths of European based hedge fund assets in 2006. If figures for fund of funds and US hedge funds with a trading desk in Europe are taken into account, London's share was more than 90%. Other locations for hedge fund managers in Europe include France, Spain, Sweden and Switzerland.
Factors underpinning London's strong position include its local expertise, the proximity of clients and markets, a strong asset management industry and a favorable regulatory environment. London is also a leading center for hedge fund services notably prime brokerage services offered by the leading London based investment banks. More than 90% of European prime brokerage activity is conducted through London.
New York remained the leading global location for hedge fund managers in 2006 with 36% of global assets. Its share was down however, from 45% in 2002 as growth of the hedge fund industry in Europe and Asia outpaced growth in the US. This was largely a result of a rise in institutional portfolio allocation into hedge funds in these regions during this period.
London is by far the largest center for European hedge fund managers. The 900 hedge funds located in London accounted for four-fifths of European based hedge fund assets in 2006. If figures for fund of funds and US hedge funds with a trading desk in Europe are taken into account, London's share was more than 90%. Other locations for hedge fund managers in Europe include France, Spain, Sweden and Switzerland.
Factors underpinning London's strong position include its local expertise, the proximity of clients and markets, a strong asset management industry and a favorable regulatory environment. London is also a leading center for hedge fund services notably prime brokerage services offered by the leading London based investment banks. More than 90% of European prime brokerage activity is conducted through London.
13 Apr 2007
State Street Study Shows Institutional Investment In Hedge Funds Is On The Rise
According to the 2007 State Street Hedge Fund Research Study, nearly two thirds of institutional investors are now allocating more than 5% of their portfolio to hedge fund strategies, while only 4% have no hedge fund allocation. In comparison 2005 and 2006 study results showed less than half had more than 5% allocation to hedge funds and 16% had no allocation.
Although institutional investors allocations to hedge funds are relatively small, they represent the fastest growing segment of direct investors to hedge funds.
92% of institutional investors surveyed expressed either an "increased" (52%) or "maintained" (40%) level of comfort with hedge funds over the previous 12 months. Hedge funds also earned high marks from institutions for increasing absolute portfolio returns. 65% of respondents said their hedge fund investments matched expectations for gains in the absolute return of their portfolio, up from 57% in 2006.
According to the report, hedge funds and hedging strategies are becoming an accepted part of, if not a conventional choice in, the investment portfolios of institutional investors. Hedge fund strategies are continuing to evolve and some hedge funds are adopting new business models, while some traditional investment vehicles adopt hedge fund-like characteristics, blurring the line between alternative and traditional investing.
Joseph Hooley, Vice Chairman of State Street says in the report "What we have learned from these studies, customers and industry participants is that hedge funds are becoming less "alternative" all the time...Investors are beginning to see beyond the isolated cases of fraud and mismanagement that brought negative attention to the industry," and, "We believe plan sponsors and other institutional investors will be able to successfully navigate the risks and mine the opportunities in these important investment products."
The 2007 State Street Hedge Fund Research Study was conducted with the input of global asset owners that collectively manage more than ¤1 trillion in assets, representing corporate pension plans (21%), public and government pension plans (32%) and endowments and foundations (44%).
Although institutional investors allocations to hedge funds are relatively small, they represent the fastest growing segment of direct investors to hedge funds.
92% of institutional investors surveyed expressed either an "increased" (52%) or "maintained" (40%) level of comfort with hedge funds over the previous 12 months. Hedge funds also earned high marks from institutions for increasing absolute portfolio returns. 65% of respondents said their hedge fund investments matched expectations for gains in the absolute return of their portfolio, up from 57% in 2006.
According to the report, hedge funds and hedging strategies are becoming an accepted part of, if not a conventional choice in, the investment portfolios of institutional investors. Hedge fund strategies are continuing to evolve and some hedge funds are adopting new business models, while some traditional investment vehicles adopt hedge fund-like characteristics, blurring the line between alternative and traditional investing.
Joseph Hooley, Vice Chairman of State Street says in the report "What we have learned from these studies, customers and industry participants is that hedge funds are becoming less "alternative" all the time...Investors are beginning to see beyond the isolated cases of fraud and mismanagement that brought negative attention to the industry," and, "We believe plan sponsors and other institutional investors will be able to successfully navigate the risks and mine the opportunities in these important investment products."
The 2007 State Street Hedge Fund Research Study was conducted with the input of global asset owners that collectively manage more than ¤1 trillion in assets, representing corporate pension plans (21%), public and government pension plans (32%) and endowments and foundations (44%).
The "Index" Reports Positive Hedge Fund Returns
The Greenwich Global Hedge Fund Index, one of the world's largest hedge fund databases, reported returns of +0.87% in March, closely followed by the Greenwich Investable Index returning +0.86%.
84% of the 1,025 hedge funds reporting thus far had positive returns. 16 out of 18 index strategies outperformed the S&P 500, the two exceptions being Futures and Short Selling, which together represent 10% of the Global Index. Market Neutral strategies were positive for the 17th consecutive month.
Event-Driven managers capitalized on M&A strength, returning +1.18% in March. Long-Short Equity strategies captured the upside across global equity markets, yielding +1.26%. It proved to be a difficult month for Futures managers, who were unable to recover from volatility early in the month, to end down -1.64%.
The Greenwich Investable Index has continued to achieve its investment objective of closely tracking the Global hedge fund Index, posting year-to-date returns of +2.62%--within nine basis points of the Global Index year-date +2.71%.
Both Greenwich Indices have outperformed market benchmarks year-to-date. The S&P 500, MSCI World Equity, FTSE 100, and Lehman Brothers Aggregate Bond indices posted March returns of +1.12% (+0.64% Q1), +1.59% (+2.06% Q1), +2.21% (+1.40% Q1), and 0.00% (+1.50% Q1), respectively.
The Greenwich Investable Index, comprising 51 funds, adds investability, active management and liquidity to the broad Greenwich Global Hedge Fund Index. Unlike other investable indices, it references actual hedge funds as opposed to separately managed accounts that merely attempt to replicate the returns of hedge fund vehicles. Since inception January 2003, the Investable Index posted an annualized return of +10.70% versus +11.64% for the Global Index. The Investable Index is reported monthly net of a 0.04% Index calculation fee.
84% of the 1,025 hedge funds reporting thus far had positive returns. 16 out of 18 index strategies outperformed the S&P 500, the two exceptions being Futures and Short Selling, which together represent 10% of the Global Index. Market Neutral strategies were positive for the 17th consecutive month.
Event-Driven managers capitalized on M&A strength, returning +1.18% in March. Long-Short Equity strategies captured the upside across global equity markets, yielding +1.26%. It proved to be a difficult month for Futures managers, who were unable to recover from volatility early in the month, to end down -1.64%.
The Greenwich Investable Index has continued to achieve its investment objective of closely tracking the Global hedge fund Index, posting year-to-date returns of +2.62%--within nine basis points of the Global Index year-date +2.71%.
Both Greenwich Indices have outperformed market benchmarks year-to-date. The S&P 500, MSCI World Equity, FTSE 100, and Lehman Brothers Aggregate Bond indices posted March returns of +1.12% (+0.64% Q1), +1.59% (+2.06% Q1), +2.21% (+1.40% Q1), and 0.00% (+1.50% Q1), respectively.
The Greenwich Investable Index, comprising 51 funds, adds investability, active management and liquidity to the broad Greenwich Global Hedge Fund Index. Unlike other investable indices, it references actual hedge funds as opposed to separately managed accounts that merely attempt to replicate the returns of hedge fund vehicles. Since inception January 2003, the Investable Index posted an annualized return of +10.70% versus +11.64% for the Global Index. The Investable Index is reported monthly net of a 0.04% Index calculation fee.
12 Apr 2007
Hedge Fund Manager To Launch Multi-Strategy China Fund
UG Investment Advisers, a hedge fund manager with over $500 million invested in China's Qualified Foreign Institutional Investor program, has announced that they are looking to raise $200, to $500 million more for the launch of a Greater China multi-strategy hedge fund, a senior executive with the firm said in a Reuters interview.
UG Investment Advisers has six main hedge fund vehicles, including the UG Formosa Patriot Fund, UG Formosa Multi-Strategy Fund, UG Great Wall Hidden Value Fund, UG-Adwell Great Wall Absolute Return Fund, UG Hidden Dragon Balance Fund and UG Hidden Dragon Undervalued Assets Fund. The new vehicle's strategies would include looking for arbitrage opportunities in closed-end funds listed in mainland China, said Richard Fan, a partner and director with the $900 million hedge fund manager.
"It's in the very preliminary stages right now. If it does proceed and go forward it will probably launch in the next three months or so," he told the Reuters Hedge Funds and Private Equity Summit in Singapore. Fan said UG wants to launch a new multistrategy fund because the Formosa vehicle is currently about 70 percent invested in Taiwan, and the firm wants the flexibility to put a greater percentage of assets to work in mainland China.
The new fund would be focused on investing in China's more than 50 closed-end funds, which typically list on an exchange and trade like stocks. While Asia-focused hedge fund assets have risen six-fold over the past five years, rising more than 30 percent last year alone, Fan said UG is not overly concerned about competition when it comes to closed-end fund arbitrage strategy in China.
UG Investment Advisers has six main hedge fund vehicles, including the UG Formosa Patriot Fund, UG Formosa Multi-Strategy Fund, UG Great Wall Hidden Value Fund, UG-Adwell Great Wall Absolute Return Fund, UG Hidden Dragon Balance Fund and UG Hidden Dragon Undervalued Assets Fund. The new vehicle's strategies would include looking for arbitrage opportunities in closed-end funds listed in mainland China, said Richard Fan, a partner and director with the $900 million hedge fund manager.
"It's in the very preliminary stages right now. If it does proceed and go forward it will probably launch in the next three months or so," he told the Reuters Hedge Funds and Private Equity Summit in Singapore. Fan said UG wants to launch a new multistrategy fund because the Formosa vehicle is currently about 70 percent invested in Taiwan, and the firm wants the flexibility to put a greater percentage of assets to work in mainland China.
The new fund would be focused on investing in China's more than 50 closed-end funds, which typically list on an exchange and trade like stocks. While Asia-focused hedge fund assets have risen six-fold over the past five years, rising more than 30 percent last year alone, Fan said UG is not overly concerned about competition when it comes to closed-end fund arbitrage strategy in China.
State Street Hedge Fund Report
State Street Corporation, the world’s leading provider of financial services to institutional investors, released a report on hedge funds as part of its series of proprietary reports designed to advance the dialogue around key themes and trends within the financial services industry.
The new Vision paper on hedge funds offers a comprehensive overview of the impact of rising institutional allocations to alternative investment vehicles and the implications of this trend for institutions and the hedge fund industry going forward. State Street’s report provides insightful explanations of hedge fund investing trends and techniques, as well as an in-depth analysis of the evolution of risk management, new developments in the pursuit of alpha, and a global review of hedge fund regulation.
"As part of the ongoing series designed to provide the industry with timely insights, this Vision paper responds to a need for greater understanding of all aspects of hedge fund investing," said Jay Hooley, vice chairman of State Street. "Given the results of our third institutional hedge fund study released last month, it is evident that institutional hedge fund investing is becoming less ‘alternative.’ We hope this new report will help industry professionals enhance their knowledge of hedge funds and navigate the risk and opportunities available in these important investment products."
The report draws on State Street’s extensive insights from across the company to bring a unique insight into the hedge fund industry.
State Street Global Advisors, State Street’s investment management arm, has two decades of absolute return investment expertise and offers an array of strategies focused on generating alpha.
Through its acquisition of International Fund Services (IFS) in 2002, State Street significantly expanded its global hedge fund servicing capabilities and now administers more than $200 billion in hedge fund assets from servicing centers in New York, Dublin, Luxembourg and Toronto.
The new Vision paper on hedge funds offers a comprehensive overview of the impact of rising institutional allocations to alternative investment vehicles and the implications of this trend for institutions and the hedge fund industry going forward. State Street’s report provides insightful explanations of hedge fund investing trends and techniques, as well as an in-depth analysis of the evolution of risk management, new developments in the pursuit of alpha, and a global review of hedge fund regulation.
"As part of the ongoing series designed to provide the industry with timely insights, this Vision paper responds to a need for greater understanding of all aspects of hedge fund investing," said Jay Hooley, vice chairman of State Street. "Given the results of our third institutional hedge fund study released last month, it is evident that institutional hedge fund investing is becoming less ‘alternative.’ We hope this new report will help industry professionals enhance their knowledge of hedge funds and navigate the risk and opportunities available in these important investment products."
The report draws on State Street’s extensive insights from across the company to bring a unique insight into the hedge fund industry.
State Street Global Advisors, State Street’s investment management arm, has two decades of absolute return investment expertise and offers an array of strategies focused on generating alpha.
Through its acquisition of International Fund Services (IFS) in 2002, State Street significantly expanded its global hedge fund servicing capabilities and now administers more than $200 billion in hedge fund assets from servicing centers in New York, Dublin, Luxembourg and Toronto.
10 Apr 2007
Citigroup In Talks Over $600m Hedge Fund Buy Out
Citigroup has been in talks with year-old hedge fund Old Lane, with a plan to spend $600m on the acquisition of the hedge fund. At an estimated 45% gross margin on $150 million in revenue, the hedge fund could clear $67.5 million.
Ex-Morgan Stanley money manager, Vikram Pandit, founder of Old Lane Management has heavily invested in Indian securities, real estate and infrastructure projects.Citigroup would add about $4 billion in assets under management in the deal, and would make Pandit chief executive of its alternative investments unit.
Launched early last year, Old Lane has between $150 million and $160 million in revenue, based on a 2% management fee and 20% share of any profit formula. In its first full year of business the hedge fund returned around 10% to investors.
The alternative investments unit is the smallest of Citigroup's four main businesses, with about 875 employees. It has $49.2 billion of private equity, hedge fund, real estate and other assets, including $10.7 billion of Citigroup's own money.
Ex-Morgan Stanley money manager, Vikram Pandit, founder of Old Lane Management has heavily invested in Indian securities, real estate and infrastructure projects.Citigroup would add about $4 billion in assets under management in the deal, and would make Pandit chief executive of its alternative investments unit.
Launched early last year, Old Lane has between $150 million and $160 million in revenue, based on a 2% management fee and 20% share of any profit formula. In its first full year of business the hedge fund returned around 10% to investors.
The alternative investments unit is the smallest of Citigroup's four main businesses, with about 875 employees. It has $49.2 billion of private equity, hedge fund, real estate and other assets, including $10.7 billion of Citigroup's own money.
Carlyle Group to Launch Hedge Fund Business
Private equity firm Carlyle Group is launching a $1 billion hedge fund called Carlyle Multi Strategy Partners, the fund is said to have a wide-ranging investment strategy.
Last year, the $56 billion firm hired 2 new managers to head up a hedge fund business called Carlyle Blue Wave and has since put together a team of 55 for the unit. Carlyle, based in Washington, D.C., declined to comment on the timing of the hedge fund's launch.
There has been a global rush of investment dollars into lightly regulated private partnerships such as private-equity firms and hedge funds. Private-equity firms use client funds to buy companies, take them private, restructure them, and sell them again, typically three to five years later. Hedge funds, by contrast, use clients' money to invest in a variety of securities and investments, frequently trading very actively and quickly in public markets.
Carlyle Group has over 400 investment professionals operating out of offices in 18 countries to uncover opportunities in North America, Europe, Asia, Australia and Africa. Carlyle has investments in 48 funds, including buyouts, venture capital, real estate and leveraged finance, they are also reported to be considering investing in renewable energy infrastructure.
Last year, the $56 billion firm hired 2 new managers to head up a hedge fund business called Carlyle Blue Wave and has since put together a team of 55 for the unit. Carlyle, based in Washington, D.C., declined to comment on the timing of the hedge fund's launch.
There has been a global rush of investment dollars into lightly regulated private partnerships such as private-equity firms and hedge funds. Private-equity firms use client funds to buy companies, take them private, restructure them, and sell them again, typically three to five years later. Hedge funds, by contrast, use clients' money to invest in a variety of securities and investments, frequently trading very actively and quickly in public markets.
Carlyle Group has over 400 investment professionals operating out of offices in 18 countries to uncover opportunities in North America, Europe, Asia, Australia and Africa. Carlyle has investments in 48 funds, including buyouts, venture capital, real estate and leveraged finance, they are also reported to be considering investing in renewable energy infrastructure.
9 Apr 2007
CBB Sets Up Hedge Fund Regulations
The Central Bank of Bahrain (CBB) is finalizing new regulations that they hope will open up the development of a regional industry of hedge funds, derivatives and other alternative investment instruments.
Requirements for the registration of such higher risk and volatile instruments in Bahrain are contained in a new regulatory framework for collective investment undertakings (CIUs), which the CBB plans to issue later this month.
The new framework, which updates regulations governing mutual funds, will also introduce Bahrain's first-ever rules allowing CIUs targeting professional investors. It will permit exempt schemes subject only to limited regulation (such as hedge funds), but which may only be sold to a high net worth institutional and investor base.
At present, Bahrain leads the region as a hedge fund center, with over 2,000 authorised funds, including over 100 locally domiciled funds. The new CIU regulations will further enhance and develop the market, by allowing a much broader range of CIU to be domiciled and offered in Bahrain, all within a credible regulatory framework.
The new framework will create a new category of "Exempt" schemes. These schemes will be required only to register with the CBB, rather than be authorized, and will not be subject to on-going supervision. They will not be regulated, but may only be sold to a restricted investor base;- those able to make a minimum investment of US$100,000, and with at least US$1 million in financial assets, and subject to verification by the institution selling the product that the investor fully understands the risks involved.
The rules for Exempt schemes will allow hedge funds and other higher risk alternative investment vehicles to be legally domiciled and/or sold in Bahrain, within an appropriate regime that recognizes the sophistication of this limited investor base.
"Currently, Middle East investors have to look overseas for such products. The CBB regulations, however, will enable regional access to such instruments." said Mr. Al Baker, Executive Director at the CBB, whose responsibilities include the supervision of CIUs.
Requirements for the registration of such higher risk and volatile instruments in Bahrain are contained in a new regulatory framework for collective investment undertakings (CIUs), which the CBB plans to issue later this month.
The new framework, which updates regulations governing mutual funds, will also introduce Bahrain's first-ever rules allowing CIUs targeting professional investors. It will permit exempt schemes subject only to limited regulation (such as hedge funds), but which may only be sold to a high net worth institutional and investor base.
At present, Bahrain leads the region as a hedge fund center, with over 2,000 authorised funds, including over 100 locally domiciled funds. The new CIU regulations will further enhance and develop the market, by allowing a much broader range of CIU to be domiciled and offered in Bahrain, all within a credible regulatory framework.
The new framework will create a new category of "Exempt" schemes. These schemes will be required only to register with the CBB, rather than be authorized, and will not be subject to on-going supervision. They will not be regulated, but may only be sold to a restricted investor base;- those able to make a minimum investment of US$100,000, and with at least US$1 million in financial assets, and subject to verification by the institution selling the product that the investor fully understands the risks involved.
The rules for Exempt schemes will allow hedge funds and other higher risk alternative investment vehicles to be legally domiciled and/or sold in Bahrain, within an appropriate regime that recognizes the sophistication of this limited investor base.
"Currently, Middle East investors have to look overseas for such products. The CBB regulations, however, will enable regional access to such instruments." said Mr. Al Baker, Executive Director at the CBB, whose responsibilities include the supervision of CIUs.
Rivals to Bid in Hedge Fund Driven Dutch Bank Sale
The Royal Bank of Scotland Group and Spanish bank Grupo Santander Central Hispano of Madrid are combining their efforts to counter bid Barclays in the hedge fund driven sale of Dutch bank ABN.
ABN Amro Holding was in preliminary discussions with Barclays about creating a company worth more than $177 billion, this would be a record deal in the financial sector. In March hedge fund TCI announced in a letter to Dutch bank ABN Amro that they believe the bank is undervalued and should sell some of its assets, merge with another bank, or even sell off the whole business.
Activist hedge funds and shareholders Polygon and Centaurus backed up TCI's demands by increasing their stakes in ABN in order to pressure the bank into the sale. According to a British newspaper report, the offer could be presented immediately after Barclays makes a formal bid for the bank and would involve a break-up of the Dutch bank.
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.
Centaurus is one of the activist shareholders that was embroiled in a dispute with Dutch companies Stork NV and Royal Ahold NV last year, and Polygon Investment Partners is a British equity fund that was involved in the sale of Dutch publisher VNU.
ABN Amro Holding was in preliminary discussions with Barclays about creating a company worth more than $177 billion, this would be a record deal in the financial sector. In March hedge fund TCI announced in a letter to Dutch bank ABN Amro that they believe the bank is undervalued and should sell some of its assets, merge with another bank, or even sell off the whole business.
Activist hedge funds and shareholders Polygon and Centaurus backed up TCI's demands by increasing their stakes in ABN in order to pressure the bank into the sale. According to a British newspaper report, the offer could be presented immediately after Barclays makes a formal bid for the bank and would involve a break-up of the Dutch bank.
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.
Centaurus is one of the activist shareholders that was embroiled in a dispute with Dutch companies Stork NV and Royal Ahold NV last year, and Polygon Investment Partners is a British equity fund that was involved in the sale of Dutch publisher VNU.
8 Apr 2007
Hedge Fund Investors of Tommorow Compete
Over 2,000 post-secondary students acted as hedge fund managers for the InvestYoung National University Stock Market Competition which ran from October 16, 2006 to March 9, 2007. Approximately 20,000 trades were executed on over 2,800 symbols across all major North American markets.
All ten finalists posted returns that more than doubled the performance of the RBC Capital Markets Hedge 250 Index, which is a representative benchmark of hedge fund performance. The most actively traded securities were Apple, Google, Microsoft, Yahoo! and Sony.
Students were given the opportunity to invest a simulated portfolio of $1,000,000 Canadian (US $869,000) in securities traded on major North American exchanges.
Jason Mah, 26, a fourth year student attending University of Victoria triumphed in the competition. He placed first with a final portfolio value of $1,451,619 representing a 45% return on investment. His strategy was to invest in distressed companies ahead of quarterly earnings announcements. Mah notes, "It is important to always look out for opportunities. I had an incredible time networking and discussing strategies with competitors across the nation." Mah is graduating in the fall with a Bachelor of Economics and looks forward to working on Wall Street.
The InvestYoung Online Stock Market Competition is Investors of Tomorrow's flagship program allowing students to learn about money management through hands-on experience managing a virtual investment portfolio. Investors of Tomorrow also operates a keynote speaker series that has brought some of Canada's most prominent financial industry leaders back into the classroom.
All ten finalists posted returns that more than doubled the performance of the RBC Capital Markets Hedge 250 Index, which is a representative benchmark of hedge fund performance. The most actively traded securities were Apple, Google, Microsoft, Yahoo! and Sony.
Students were given the opportunity to invest a simulated portfolio of $1,000,000 Canadian (US $869,000) in securities traded on major North American exchanges.
Jason Mah, 26, a fourth year student attending University of Victoria triumphed in the competition. He placed first with a final portfolio value of $1,451,619 representing a 45% return on investment. His strategy was to invest in distressed companies ahead of quarterly earnings announcements. Mah notes, "It is important to always look out for opportunities. I had an incredible time networking and discussing strategies with competitors across the nation." Mah is graduating in the fall with a Bachelor of Economics and looks forward to working on Wall Street.
The InvestYoung Online Stock Market Competition is Investors of Tomorrow's flagship program allowing students to learn about money management through hands-on experience managing a virtual investment portfolio. Investors of Tomorrow also operates a keynote speaker series that has brought some of Canada's most prominent financial industry leaders back into the classroom.
5 Apr 2007
Alea Group Agrees to Hedge Fund Takeover
Alternative asset manager Fortress Investment Group has announced plans to buy up re-insurance company Alea Group Holdings for £162 million. ($319.6 million)
"The independent directors are pleased to recommend the acquisition, which results from the strategy that management have pursued over recent months to bring greater stability to the company," Chairman of Alea, John Reeve said in a statement.
Alea put itself up for sale in 2005 following $0.8 million in record storm losses in 2005, down from $178.9 million the year before. Net premium revenue fell to $215.9 million from $1.087 billion due to a decision to cease writing new business.
Fortress said it would pay 93 pence a share in cash, 1.1% less than Alea's closing price Tuesday but a 15% premium over its average price for the past six months. That would value the offer at $320 million.
Fortress Investment Group is a global hedge fund investor with over $30 billion in assets. Headquartered in New York the company has affiliates with offices in Dallas, Frankfurt, Geneva, Hong Kong, London, Los Angeles, Rome, San Diego, Sydney and Toronto. Fortress raises, invests and manages private equity funds, hedge funds and publicly traded alternative investment vehicles.
"The independent directors are pleased to recommend the acquisition, which results from the strategy that management have pursued over recent months to bring greater stability to the company," Chairman of Alea, John Reeve said in a statement.
Alea put itself up for sale in 2005 following $0.8 million in record storm losses in 2005, down from $178.9 million the year before. Net premium revenue fell to $215.9 million from $1.087 billion due to a decision to cease writing new business.
Fortress said it would pay 93 pence a share in cash, 1.1% less than Alea's closing price Tuesday but a 15% premium over its average price for the past six months. That would value the offer at $320 million.
Fortress Investment Group is a global hedge fund investor with over $30 billion in assets. Headquartered in New York the company has affiliates with offices in Dallas, Frankfurt, Geneva, Hong Kong, London, Los Angeles, Rome, San Diego, Sydney and Toronto. Fortress raises, invests and manages private equity funds, hedge funds and publicly traded alternative investment vehicles.
4 Apr 2007
Electronic Tracking For Cayman Domiciled Funds In Place
As domicile for approximately 80% of the world's hedge funds, the Cayman Islands have now implemented a mechanism for the electronic submission of annual returns for all funds licensed, registered and administered in the Cayman Islands.
The Cayman Islands Monetary Authority's (CIMA) Managing Director Cindy Scotland said, "Not only will we be able to more efficiently handle the audited accounts that are submitted but we will be in a position to provide better aggregate industry statistics than we have been able to provide so far. This will benefit all stakeholders." and "Because the Cayman Islands is the domicile for a majority of the world’s offshore hedge funds, we believe CIMA’s E-reporting system will be able to improve the reliability and quality of aggregate fund industry statistics globally".
Following successful industry testing, CIMA released on its website the electronic Fund Annual Return (FAR) form and has opened the internet portal through which funds’ local auditors will submit the required returns. Related guidance notes have also been released.
CIMA has been developing the electronic reporting initiative for funds for several months, with assistance from its retained business advisor Ernst & Young and with input from the funds industry. The Monetary Authority expects the initiative to facilitate more efficient collection and processing of returns from the over 8,300 funds it now oversees.
The legislation implementing E-reporting for funds, the Mutual Funds (Annual Returns) Regulations 2006, was passed on 27 December 2006.
The Cayman Islands Monetary Authority's (CIMA) Managing Director Cindy Scotland said, "Not only will we be able to more efficiently handle the audited accounts that are submitted but we will be in a position to provide better aggregate industry statistics than we have been able to provide so far. This will benefit all stakeholders." and "Because the Cayman Islands is the domicile for a majority of the world’s offshore hedge funds, we believe CIMA’s E-reporting system will be able to improve the reliability and quality of aggregate fund industry statistics globally".
Following successful industry testing, CIMA released on its website the electronic Fund Annual Return (FAR) form and has opened the internet portal through which funds’ local auditors will submit the required returns. Related guidance notes have also been released.
CIMA has been developing the electronic reporting initiative for funds for several months, with assistance from its retained business advisor Ernst & Young and with input from the funds industry. The Monetary Authority expects the initiative to facilitate more efficient collection and processing of returns from the over 8,300 funds it now oversees.
The legislation implementing E-reporting for funds, the Mutual Funds (Annual Returns) Regulations 2006, was passed on 27 December 2006.
3 Apr 2007
SkyBridge Capital Invests in IronShield Hedge Fund
New York based hedge fund investor SkyBridge Capital, announced plans to invest in Ironshield Capital Management, a London-based hedge fund scheduled to launch later this year.
Ironshield Capital Management is the latest in a series of investments that SkyBridge has made in up and coming hedge funds. Other hedge funds they have arranged financing for include Westport Capital Partners, Brompton Cross Capital Advisers, Abdiel Capital and Outpoint Capital Management.
SkyBridge will provide Ironshield with a team of people to help build up the new fund's operation. The amount of the investment was not disclosed. Ironshield is led by David Nazar, previously a principal at Bank of America in London.
SkyBridge Capital is a seeding firm created in 2005 by Anthony Scaramucci, co-founder of Oscar Capital, a hedge fund acquired in 2001 by Neuberger Berman; and Andrew Klein, co-founder of Soleil Securities Group.
Ironshield Capital Management is the latest in a series of investments that SkyBridge has made in up and coming hedge funds. Other hedge funds they have arranged financing for include Westport Capital Partners, Brompton Cross Capital Advisers, Abdiel Capital and Outpoint Capital Management.
SkyBridge will provide Ironshield with a team of people to help build up the new fund's operation. The amount of the investment was not disclosed. Ironshield is led by David Nazar, previously a principal at Bank of America in London.
SkyBridge Capital is a seeding firm created in 2005 by Anthony Scaramucci, co-founder of Oscar Capital, a hedge fund acquired in 2001 by Neuberger Berman; and Andrew Klein, co-founder of Soleil Securities Group.
European Mutuals Push For Hedge Fund Access
European mutual fund managers are pushing regulators to allow them to buy into derivatives of hedge fund indexes.
Approval from regulators would allow European Union-regulated funds to put some of their $7.3 trillion of assets into derivatives tracking the hedge fund indexes, allowing them to profit from hedge fund gains in a safer, regulated way.
Relatively few hedge funds are actually domiciled in European countries, so that although their use has been fairly widespread amongst institutional investors for some time, they have been limited to high net worth individuals able to pay the high minimum initial investments that are often in place.
Fund industry representatives argued in front of the Committee of European Securities Regulators that indexes linked to hedge funds performance have increasingly become standard financial indicators.
Although ruled unsuitable for mutual funds last year, the mutual funds are pushing to be allowed to bet on the performance of hedge funds just as they can for other financial indicators such as stock indexes.
"These are a class of assets that retail investors could benefit from," said Stephane Kuzmin, responsible for regulatory matters for index-linked funds at Barclays Global Investors Ltd., the hedge-fund arm of Barclays Plc, at the hearing. "We'd welcome to have some hedge-fund indices available."
The EU executive agency in Brussels may consider broadening those rights to permit buying of funds of hedge funds when it considers future rule revisions.
European countries including Germany, Spain and the U.K. have permitted limited investment in funds of hedge funds or other means of investing in the vehicles traditionally restricted to institutional investors or people with $1 million or more.
Approval from regulators would allow European Union-regulated funds to put some of their $7.3 trillion of assets into derivatives tracking the hedge fund indexes, allowing them to profit from hedge fund gains in a safer, regulated way.
Relatively few hedge funds are actually domiciled in European countries, so that although their use has been fairly widespread amongst institutional investors for some time, they have been limited to high net worth individuals able to pay the high minimum initial investments that are often in place.
Fund industry representatives argued in front of the Committee of European Securities Regulators that indexes linked to hedge funds performance have increasingly become standard financial indicators.
Although ruled unsuitable for mutual funds last year, the mutual funds are pushing to be allowed to bet on the performance of hedge funds just as they can for other financial indicators such as stock indexes.
"These are a class of assets that retail investors could benefit from," said Stephane Kuzmin, responsible for regulatory matters for index-linked funds at Barclays Global Investors Ltd., the hedge-fund arm of Barclays Plc, at the hearing. "We'd welcome to have some hedge-fund indices available."
The EU executive agency in Brussels may consider broadening those rights to permit buying of funds of hedge funds when it considers future rule revisions.
European countries including Germany, Spain and the U.K. have permitted limited investment in funds of hedge funds or other means of investing in the vehicles traditionally restricted to institutional investors or people with $1 million or more.
2 Apr 2007
Hedge Fund To Separate Brokerage Arm to New York
Top ten hedge fund firm Man Group said on Friday it is considering splitting off its brokerage arm into a new £2 billion ($3.9 billion) company. The de-merger would separate its U.S. brokerage unit and list it in New York.
Man group has funds under management of more than $61 billion as of January. The listing of a majority interest in the unit, Man Financial, will take place in the third quarter of 2007, subject to market conditions remaining favorable, the firm said. It will be renamed MF Global following the separation, which is subject to shareholder approval, and net proceeds will be returned to shareholders later in the year.
A Man Group spokesman said; "Man regularly reviews the structure of its business, in line with our commitment to achieve superior returns for our shareholders...... Separation will allow each business to focus even more effectively on their separate growth strategies and take advantage of the significant business development opportunities in each of their industries."
Man Group, best-known for its hedge fund activities, believes its brokerage business is being overlooked and would be worth far more as a separate company. Man Financial's Managing Director Kevin Davis will become CEO of the new group. Chris Smith will be chief operating officer and deputy CEO, while Amy Butte will be chief financial officer. The non-executive chairman will be Alison Carnwath.
Man group has funds under management of more than $61 billion as of January. The listing of a majority interest in the unit, Man Financial, will take place in the third quarter of 2007, subject to market conditions remaining favorable, the firm said. It will be renamed MF Global following the separation, which is subject to shareholder approval, and net proceeds will be returned to shareholders later in the year.
A Man Group spokesman said; "Man regularly reviews the structure of its business, in line with our commitment to achieve superior returns for our shareholders...... Separation will allow each business to focus even more effectively on their separate growth strategies and take advantage of the significant business development opportunities in each of their industries."
Man Group, best-known for its hedge fund activities, believes its brokerage business is being overlooked and would be worth far more as a separate company. Man Financial's Managing Director Kevin Davis will become CEO of the new group. Chris Smith will be chief operating officer and deputy CEO, while Amy Butte will be chief financial officer. The non-executive chairman will be Alison Carnwath.
French Candidate Disapproves of Hedge Fund Strategies
French Interior Minister and presidential candidate Nicolas Sarkozy criticized hedge funds as an example of undesirable speculation, saying he didn't approve of companies...."that buy up a company, sell it off in pieces, sack 25% of the staff in the meantime, collect 25% profit and create zero wealth."
Sarkozy said, "I don't want a speculative capitalism. I want a capitalism that creates riches." He added that a second topic for European debate would be "moralizing" the region's model of financial capitalism. Speaking during a television debate he argued that a weaker Euro should be a tool to help European industry: "We've built the second currency in the world and we're the only region in the world that obstinately refuses to put our currency to the service of jobs and growth. It can't last," he said.
Sarkozy is widely viewed by admirers as France's best hope for economic reform, but he has sought to temper a reputation for unpopular liberalism by emphasizing the role of the state and leaping to the defense of French industrial champions. In common with other French politicians, he has also called repeatedly for a change in the European Central Bank's mandate, to include growth and jobs among its criteria when setting interest rates.
On Sunday, he accepted that those demands, requiring unanimous agreement, were unrealistic. But said that if elected, he would ask his finance minister to call a Eurogroup meeting with Eurozone colleagues to discuss exchange rate strategy and "convince our partners to move forward."
Sarkozy said, "I don't want a speculative capitalism. I want a capitalism that creates riches." He added that a second topic for European debate would be "moralizing" the region's model of financial capitalism. Speaking during a television debate he argued that a weaker Euro should be a tool to help European industry: "We've built the second currency in the world and we're the only region in the world that obstinately refuses to put our currency to the service of jobs and growth. It can't last," he said.
Sarkozy is widely viewed by admirers as France's best hope for economic reform, but he has sought to temper a reputation for unpopular liberalism by emphasizing the role of the state and leaping to the defense of French industrial champions. In common with other French politicians, he has also called repeatedly for a change in the European Central Bank's mandate, to include growth and jobs among its criteria when setting interest rates.
On Sunday, he accepted that those demands, requiring unanimous agreement, were unrealistic. But said that if elected, he would ask his finance minister to call a Eurogroup meeting with Eurozone colleagues to discuss exchange rate strategy and "convince our partners to move forward."
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