Following reports that hedge funds such as Citadel and Vega are trying to gain direct access to the pan-European bond exchange network MTS, the European Primary Dealers Association (EPDA) reported that it has not yet decided whether to allow third parties to access its platform, but the group has reportedly set up a committee to consider admitting hedge funds as members.
They do warn however, that third party participation in the electronic markets could undermine the current structure and introduce greater risks.
MTS is an abbreviation for Mercato dei Titoli di Stato, which translates to "Market for Government Bonds". The technology of the Italian based MTS platform is the Telematico system, a sophisticated electronic platform specifically designed for the trading of fixed income instruments. It replaces the expensive and often time-consuming process of trading over-the-counter.
According to a recent FT report, these moves are showing how powerful the hedge fund industry is becoming and also highlights the dispute over the current structure of the euro-zone government bond markets.
In a discussion paper circulated Tuesday, the EPDA said, "While issuers have influence over their primary dealerships, primary dealers may not be in a position to exercise control over third parties,.............They would be squeezed between the commercial pressure of their prime brokerage business and the inability to regulate the activity of third parties trading in the primary dealers' name. Lack of control could give rise to potential misbehavior by rogue traders."
27 Feb 2007
Hedge Fund Mega-Investor Expands To U.S.
In a effort to strengthen its presence in the United States, BNP Paribas Securities Services announced that it has expanded its hedge fund administration operations to include services within the United States. BNP Paribas has EUR 570 billion ($754.8 billion)in assets invested in over 4,480 hedge funds worldwide and EUR 3.43 trillion ($4.54 trillion) in assets under management.
Located in King of Prussia, Pennsylvania, the hedge fund administration team is headed by Andrew Dougherty, Chief Operating Officer for fund administration in the United States.
BNP Paribas has recently enhanced its global portfolio by expanding its hedge fund administration businesses in Spain, Italy and France. From its offices in 18 countries, BNP Paribas works closely with its clients to provide comprehensive middle and back-office solutions to hedge funds and fund of hedge funds firms worldwide, including Asia and emerging markets.
Frederic Perard, Head of Global Fund Services at BNP Paribas Securities Services commented: "Our fully-integrated client services and operations team, which specializes in master-feeder structures, partnership accounting and high-volume trading portfolios, delivers added-value services to our clients. Our service offering is well-positioned to serve middle-market managers across various locations who seek an independent administrator to handle their multiple prime brokerage relationships."
BNP Paribas Securities Services is a leading securities services provider to the world's financial institutions, with a local presence in all key European markets as well as in the US and Australasia. With 4,200 staff in 18 countries, BNP Paribas Securities Services has over 700 clients, including 8 of the world's top 10 investment managers, and a global custody network covering 90 markets.
Located in King of Prussia, Pennsylvania, the hedge fund administration team is headed by Andrew Dougherty, Chief Operating Officer for fund administration in the United States.
BNP Paribas has recently enhanced its global portfolio by expanding its hedge fund administration businesses in Spain, Italy and France. From its offices in 18 countries, BNP Paribas works closely with its clients to provide comprehensive middle and back-office solutions to hedge funds and fund of hedge funds firms worldwide, including Asia and emerging markets.
Frederic Perard, Head of Global Fund Services at BNP Paribas Securities Services commented: "Our fully-integrated client services and operations team, which specializes in master-feeder structures, partnership accounting and high-volume trading portfolios, delivers added-value services to our clients. Our service offering is well-positioned to serve middle-market managers across various locations who seek an independent administrator to handle their multiple prime brokerage relationships."
BNP Paribas Securities Services is a leading securities services provider to the world's financial institutions, with a local presence in all key European markets as well as in the US and Australasia. With 4,200 staff in 18 countries, BNP Paribas Securities Services has over 700 clients, including 8 of the world's top 10 investment managers, and a global custody network covering 90 markets.
DaimlerChrysler Wary Of Possible Hedge Fund Takeover
DaimlerChrysler announced this month it was considering all options for Chrysler, including a split, but without Chrysler, the Daimler group could be more of a takeover target for hedge funds.
According to CNN Money, the likelihood of an unsolicited approach, such as a hedge fund takeover, was still low but had gone up to 20% from 10%.
One person familiar with the situation said Chief Financial Officer Bodo Uebber had routinely played down suggestions that hedge funds could team up to buy DaimlerChrysler because he felt such a wolf pack would be unable to agree on strategy and goals.
"But should it come to pass that Chrysler is split off from Daimler, then Daimler would be an interesting target," the source said. A complete split-up of the cars, trucks and vans businesses would then be "a real danger."
DaimlerChrysler declined comment on prospects for being acquired if it divests Chrysler but has said in the past the best defense against takeovers was good financial performance. The company has a market capitalization of $79 billion.
According to CNN Money, the likelihood of an unsolicited approach, such as a hedge fund takeover, was still low but had gone up to 20% from 10%.
One person familiar with the situation said Chief Financial Officer Bodo Uebber had routinely played down suggestions that hedge funds could team up to buy DaimlerChrysler because he felt such a wolf pack would be unable to agree on strategy and goals.
"But should it come to pass that Chrysler is split off from Daimler, then Daimler would be an interesting target," the source said. A complete split-up of the cars, trucks and vans businesses would then be "a real danger."
DaimlerChrysler declined comment on prospects for being acquired if it divests Chrysler but has said in the past the best defense against takeovers was good financial performance. The company has a market capitalization of $79 billion.
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