Search This Blog

19 Jun 2009

Viathon Capital Launches Credit Focused Opportunity Fund

Viathon Capital, LP has announced the launch of a new credit focused opportunity fund, the Whitewater Master Fund, LP, as of May 1, 2009. The launch has affiliated with Citigroup Alternative Investments LLC (CAI) as seed investor in this new fund.

The fund employs a fundamental, credit-intensive research process in order to identify long and short investment opportunities in both US and European markets.

"We have a multi-million dollar, best-in-class trading and risk management system that allows us to manage portfolio risk on a real time basis and seamlessly integrate with our prime brokers and independent administrator." Bob Becker and Rob Comizio, managing partners said, "In addition, we have the relationships, infrastructure and investment process in place to effectively execute our investment strategy."

"As managers of the Whitewater Master Fund, we are keenly aware of the current changes and challenges in our industry. As a result, we have instituted a number of key policies and initiatives specifically designed to service the needs of sophisticated investors in this new environment." they said.

The performance estimate for Whitewater Master Fund for the month of May 2009 was approximately +1%. Viathon Capital, LP has 60 years of combined market experience including four investment professionals and two trade support/back office personnel to manage the new fund.

Cogo Wolf Trimaran Liquidity FoHF Launch

Global hedge fund manager Cogo Wolf Asset Management launched the Cogo Wolf Trimaran Liquidity Fund, a highly liquid fund of hedge funds designed to help institutional and private investors navigate the current global investing storms.

Managed by Co-CIOs and Managing Partners Christopher R. Wolf and Giles Conway-Gordon and offering complete transparency, the Trimaran Liquidity Fund targets 16-18% net return with expected volatility of 6-8% without the use of leverage.

“The global financial markets are forever changed. The industry has experienced a kind of ‘perfect storm’ in recent years—the credit contraction, the housing contraction and the overall economic contraction,” stated Christopher R. Wolf. “Trimaran is the first fund of its kind, designed as a remedy for sophisticated institutional and private investors who are ready to redeploy capital but need new assurances to do so.”

The Trimaran Fund has been designed to provide Alpha with non-correlation and liability protection including: Ultra Liquidity (monthly liquidity, 10-day notice with no lock-up, no gate, no redemption penalties and complete transparency); Flexibility (all underlying investments are ultra liquid, permitting rapid, opportunistic responses to global volatility and market uncertainty); and Stability (diversification).

The “three distinct hulls” the Trimaran Fund invests in include:

* Managed Futures, Global Macro, CTAs and other ultra liquid strategies which have low/negative correlation to equity markets;
* ETFs enabling narrow and controlled directionality as a proxy for direct hedge fund investing;
* Debt-Related Instruments, notably mispriced credit opportunities offering attractive returns and gains.

“A forward-looking, global tactical asset allocation model will be necessary for investors to deliver profit in the new fund of hedge funds paradigm,” commented Giles Conway-Gordon. “Our top-down investment methodology, namely skating to where the puck is going to be, is paramount to nimbleness and adaptability. We are asset allocators first, talent scouts second.”

“It’s not enough to know what instruments one finds compelling; what’s mandatory is to know why you’re there in the first place. What macroeconomic trend does that investment capture? And if so, how effectively and what risks are associated with that decision? Risk management is more than optimization modeling, VAR and stress testing. It’s a holistic understanding of the environment in which these instruments are being used, the opportunity they’re designed to capture and the finesse necessary to know depth and duration – how long and how much does one hold? That’s the art and a talent we’ve honed over 25+ years,” Wolf concluded.

Cogo Wolf has been nominated by Alternative Investment News and Institutional Investor as “Emerging Manager of the Year” given its strong growth trajectory lead by the firm’s President and Partner, Rachel S.L. Minard, its 14-year history delivering 12% net CAR and having never lost an investor since its doors opened.

Congress Acts to Tame Prowling Vulture Funds

Friday, 19 June 2oo9, Press Release: Africa ActionToday advocacy organizations and debt relief campaigners welcome the reintroduction of the Stop Very Unscrupulous Loan Transfers from Underprivileged Countries to Rich, Exploitive Funds or “Stop VULTURE Funds” Act (H.R. 2932) This bill, introduced in the House of Representatives, is designed to protect developing nations from lawsuits by so-called Vulture Funds.

The Stop VULTURE Funds Act introduced by Rep. Maxine Waters (D-CA) would prevent U.S. companies from buying the debt of impoverished countries at cut-rate prices and then suing to collect exponential profits. The bill would limit the excessive profits that companies and hedge funds collect off the backs of the world’s poorest citizens by capping the interest amounts for which the companies could sue at six percent. The legislation also increases transparency of these funds, requiring full disclosure from any fund that pursues Vulture Fund activity through the U.S. courts.

Vulture Funds are private equity or hedge funds that purchase the defaulted debt of developing countries, many of whom are Heavily Indebted Poor Countries (HIPC), at reduced rates and then sue the debtor nation for greatly inflated sums. Through the seizure of assets, litigation and political pressure, they seek repayments that are far in excess of the amount that the fund paid for the debt.

Led by Rep. Waters, the new legislation builds on the momentum from similar legislation introduced in the House in August 2008. The bill is co-sponsored by Representatives Spencer Bachus (R-AL), John Conyers (D-NJ), Donald Payne (D-NJ), Gregory Meeks (D-NY), Gwen Moore (D-WI), Maurice Hinchey (D-NY), Barbara Lee (D-CA), Eleanor Holmes-Norton (D-DC), Jan Schakowsky (D-IL), Luis Gutierrex (D-IL) and Wasserman Schultz (D-FL).

A coalition of non-governmental organizations working to prevent vulture funds from taking advantage of poor countries praised Rep. Waters’ legislation. “We commend the leadership shown by U.S. congressional representatives. H.R. 2932 is a key step in protecting developing countries from Vulture Funds. Now the legislation needs support by the full House and to move forward for Senate review,” Nicole Lee, Executive Director of TransAfrica Forum says.

The burden of Vulture Funds is being felt throughout Africa. “This year the Democratic Republic of the Congo could accrue fines of up to $80,000 a week as a result of a vulture lawsuit,” said Gerald LeMelle, Executive Director of Africa Action. He added, “This would be a enormous barrier to the DRC’s efforts to reconstruct its social and economic infrastructure amid years of conflict.”

Neil Watkins, Executive Director of Jubilee USA Network, an alliance of 75 religious denominations, development agencies, and human rights groups noted, “Vulture Funds make their profits by deepening the suffering of millions of people in some of the poorest countries in the world. They are stealing the resources that should be invested in education, health and infrastructure improvement.”

Last May, some of the world’s major creditor governments publicly committed not to sell or transfer any of their debt claims on HIPC countries to creditors who do not intend to provide debt relief under HIPC initiative, safeguarding this debt from litigation by Vulture creditors. Many countries, however, continue to sell their debt claims on vulnerable countries.

For more information, see:

Vulture Funds Backgrounder JubileeUSA
Vulture Funds Glossary Africa Action
Vulture Funds Policy Brief JubileeUSA
Spotlight on Zambia Africa Action

Fund of Hedge Fund AS ll Beats S&P Through Crisis

I recently conducted an interview with Colleen Sorrentino, CIO, and Charles M. Wright, CFA, of FoHF's Advanced Strategies II, LP (AS II) as part of a manager interview to be featured on our Manager Database. I thought to publish some excerpts in advance.

On the topic of the FoHF's positive 5 year track record, Wright said, "Our goal is to achieve 75 to 80% in the bull market and we have met that through the history of the fund, beating the S&P 500 about 8.54% last year. Our 5 year track record Feb 2004-2009 beat the S&P 500 by 35%."

As a multi-strategy fund with $36 million under management, a 1.50% management fee and a minimum initial investment of $250,000, AS II recently celebrated its 5 year track record this February.

"We are not afraid of volatility and our edge is in our long-short policy, we don't use leverage as much as other funds." Sorrentino said, "AS II is a great fit for family offices, institution investors, foundations and high net worth individuals."

"Our strategy is combination of art and science," Sorrentino continued, "We put a lot of time into into our managers and their selection in order to generate maximum return. We are not a hot fund, moving from manager to manager, we do complete background checks at the start, following up with a focus on due diligence, meeting on site on an annual basis as well as with independent advisers."

AS II stays away from over-leveraged funds, with no leverage at the fund level. "We do not place money with hedge funds that invest a substantial portion of their assets in esoteric investments such as derivatives, structured investment vehicles, CDOs, or managers that utilize black box quantitative models. We have been managing funds of hedge fund portfolios since 1992. The Firm’s partners and employees maintain a substantial stake in AS II." the FoHF's website states.

AS II's parent company, Wall Street Access Advanced Strategies LLC (WSAAS), has been managing fund of hedge funds portfolios for over 15 years. WSAAS is also an affiliate of Wall Street Access, which is a New York Stock Exchange member. G&S Fund Services is Fund Administrator.