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31 Jul 2007

China Beats Japan As Asia's Top Hedge Fund Destination

According to Alpha Magazine's list of the region's biggest single-manager hedge funds, investors are rushing into China to capitalize on the country's soaring equity market, and Asia's native hedge funds are cashing in on the action.

Tokyo-based Sparx Group Co. topped the ranking for the second year in a row. Sparx, one of Japan's first money managers to get into hedged investing, now manages $6.7 billion. The next two firms, Hong Kong-based Value Partners and Singapore's Arisaig Partners, make their debut on the Asia Hedge Fund 25, managing $4.8 billion and $2.1 billion, respectively.

Despite their domination in the 2006 Asia 25 ranking, Japanese firms clearly take a back seat to China-based firms this year. A year ago four of the top ten firms were headquartered in Japan and accounted for one-third of the total assets managed by the Asia 25. his year, weakened by poor Japanese equities performance, only two of the top ten firms are Japanese.

China's equity market picks up where Japan's leaves off; the MSCI China index returned 78.7 percent in 2006, spurring the growth of China-focused funds under firms like Value Partners and Arisaig Partners.

The ten biggest firms in Alpha's exclusive Asia Hedge Fund 25 are:

Rank; Firm Name; Firm/Fund capital ($ millions)
1: Sparx Group Co.; (Tokyo, Japan); $6,651
2 Value Partners; (Central, Hong Kong); $4,772
3 Arisaig Partners; (Singapore); $2,100*
4 Penta Investment Advisors; (Central, Hong Kong); $1,910
5 Ward Ferry Mgmt; (Central, Hong Kong); $1,781
6 Lapp Capital; (Singapore); $1,400*
7 Tree Line Investment Mgmt.; (Central, Hong Kong); $1,300*
8 Artradis Fund Mgmt.; (Singapore); $1,220
9 Tantallon Capital; (Singapore); $1,092
10 Asuka Asset Mgmt.; (Tokyo, Japan); $1,034

Alex Akesson
Editor for HedgeCo.Net

Hedge Fund Barbarian Films Announces Alliance With Sand Dollar Capital

Hedge fund Barbarian Films LLC has announced an alliance with SandDollar Capital LLC, a private equity firm founded by The Hennessee Group principals Charles Gradante and E. Lee Hennessee.

SandDollar Capital's Charles Gradante said, “We have seen consistent interest from individual investors, funds and institutions for non-correlated alternative investments. We see film investment as a logical solution however for some time were unable to find the right business model that would offer engaging returns while effectively managing the downside risks typically associated with film investment”.

Lee Hennessee added, “Barbarian is the first film fund to capitalize on the inefficiencies in the current film investment landscape”. SandDollar Capital LLC structures financing from professional investors and institutional sources on behalf of Private Equity funds.

Barbarian has also recently formed ties with the Endeavor Agency and has announced its first film investments including: Powder Blue featuring Forrest Whitaker, Jessica Biel and Ray Liotta.

Barbarian Films is an investment fund founded by a trio of long time entertainment insiders that invests in structured independently produced film platforms. The hedge fund includes a unique investment methodology and slates of projects from best-in-breed producers and production companies which collectively have generated over $2 Billion (US) in combined box office returns.

“We have used our intimate relationships with consistently successful, award winning producers to create a unique fund which is the first of its kind to approach lower budget film slates in a significant way.” said Aaron Kaufman, Managing Member of Barbarian Films.

SandDollar Capital LLC’s alliance with Barbarian is a multi-year relationship, which will include Barbarian’s future funds and investment vehicles.

25 Jul 2007

Law Firm Considering Legal Action Against "Bear Funds"

The Law Firm of Klayman & Toskes, P।A. announced that it is investigating the possibility of taking legal action against Bear Stearns & Co., Inc on behalf of investors who lost money in the Bear Stearns High-Grade Structured Credit Strategies Fund and the Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Fund ("the Bear Funds").

This investigation is being launched on the heels of Bear Stearns' July 18 announcement that "there is effectively no value left for the investors in the Enhanced Leverage Fund and very little value left for the investors in the High-Grade Fund।"

Over the past few years, many brokerage firms, including Bear Stearns, bundled mortgages and sold them to investors as interest-paying bonds. Accompanying these products came an alphabet soup of securities like CMOs, CDOs, RMBSs and Alt-As. Most of these products are part of hedge funds, and were purchased by wealthy investors and institutions.

However, some individuals were unsuitably steered to invest in these risky products. Many of these investors and institutions did not understand how these products work, nor were the risks of owning these products fully explained to them at the time of purchase.

Combined, the Bear Funds had investor capital of about $1.56 billion. With this capital, and additional leverage taken out on the capital, Bear Stearns bet heavily on the market for subprime mortgages and invested in thinly traded collateralized debt obligations. Its gamble turned out to be wrong. As a result of the slumping U.S. housing market, the Bear Funds have collapsed within a very short period of time, and investors have lost about $1.9 billion.

Because of the collapse of the Bear Funds, K&T anticipates that it will be filing numerous claims on behalf of institutions and individuals who invested in these Funds. Moreover, as Federal Reserve Chairman Ben Bernanke has said that losses from the subprime mortgage fallout could reach $100 billion, K&T is also looking into the possibility of filing claims against other large brokerage firms who sustained losses in their mortgage-backed securities and subprime mortgage products.

K&T represents high-net worth investors throughout the nation in securities litigation and arbitration matters, against major Wall Street brokerage firms for securities violations including misuse of margin, failure to supervise, unsuitability, and misrepresentation and omission of material fact.

The Expanding Hedge Fund Practice Of Finn Dixon & Herling

Finn Dixon & Herling LLP announced today that they have significantly expanded their hedge fund practice.

The law firm recently made a number of lateral hires, resulting in what is believed to be the largest hedge fund practice group at a Connecticut law firm. In particular, Matthew Eisenberg, a prominent hedge fund attorney formerly of the law firm of Cobb & Eisenberg LLC, became a partner of the firm in the first quarter of 2007.

Mr। Eisenberg joins partners Harold B. Finn and Erik Bergman as leaders of the firm’s Hedge Fund/Alternative Investment Fund practice group. They are supported by an experienced team of attorneys and paralegals.

Brett Dixon, the firm’s administrative partner, stated “We are very excited about the significant recent growth of our hedge fund practice। The exceptional team of legal professionals that we have assembled provides Finn Dixon with substantially increased cumulative experience and capacity with regard to fund structurings and formations, as well as investment adviser and broker-dealer registration and compliance matters.”

Mr। Eisenberg added, “Finn Dixon’s hedge fund practice group works closely with the firm’s tax, private equity, mergers & acquisitions, banking/finance, employment law and litigation practice groups. These areas of expertise are critical to a sophisticated hedge fund practice, given the increasing complexity and hybridization of fund products and the business/regulatory environments in which they operate. Furthermore, Finn Dixon’s 'boutique' approach to client servicing, which emphasizes partner access and an individualized approach to client relationships, is well suited to the demands of fund managers.”

Finn Dixon provides a broad spectrum of legal services to the alternative investment community. Clients include hedge funds, funds of funds, private equity funds, commodity pools, investment advisers, broker-dealers and third party marketers. The firm's fund manager clients, ranging in size from $100 million to $10 billion, are located throughout North America, as well as in Europe and Asia.