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21 Feb 2007

Fund of Hedge Funds Launches Trust

Fund of hedge funds manager, Gottex Fund Management, announced that they intend to launch a publicly listed closed-ended investment company, Gottex Market Neutral Trust, which will be listed on London’s main market.

All proceeds from a placing and offer for subscription, net of working capital requirements, will be invested in a portfolio of underlying hedge funds, it added. No numbers were provided.

The company's initial investment rationale, methodology and portfolio management will be consistent with that of Gottex Market Neutral Fund, a conservative open ended fund of hedge funds that seeks consistent returns with a low correlation to the major stock and bond market, it has been managed by GFM since 1999.

JPMorgan Cazenove is the group’s financial adviser, book runner and sponsor.

Activist Hedge Fund Wants Dutch Bank To Sell Assets

The Children's Investment Fund Management, a $3.8 billion hedge fund launched in 2003, 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.

TCI Fund Management takes its name from the money it donates to children's charities. The hedge fund, which said it owns more than 1% of ABN AMRO, asked shareholders to vote on its proposals at a shareholder meeting scheduled for April 26.

In 2005 TCI was part of a group of activist investors who criticized Deutsche Börse for its $2.5 billion bid for the London Stock Exchange, eventually causing Werner Seifert, the chief executive to resign. It turns out TCI, which owned 8% of Deutsche Börse, actively recruited some powerful partners, including Atticus Capital, Merrill Lynch, and Fidelity Investments, in order to facilitate the move.

In a letter first published by Reuters, the hedge fund said, "We believe that this strategy would not only create significant shareholder value but also would best serve all the stakeholders who otherwise would suffer over the long term from the structurally declining competitive position ofABN AMRO,......In 2006 they again committed to cut costs and they have so far failed to deliver," the hedge fund said.

TCI was founded by money manager Christopher Hohn, a 39-year-old graduate of Southampton University. It is said that Mr Hohn set up the hedge fund so that half of TCI's annual assets go to charity as a way of motivating himself.