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20 Apr 2010

Sadis & Goldberg Congratulates SkyBridge Capital on Purchase of Citigroup's Hedge Fund Business

HedgeCo News - When SkyBridge Capital announced the purchase of Citigroup's Hedge Fund Business on April 14, Paul Fasciano, who headed up the acquisition team from Sadis & Goldberg, stated. "We are pleased that SkyBridge selected us to represent them in this transaction and we congratulate Anthony on his vision to acquire the hedge fund business from Citigroup."

The Sadis & Goldberg team working on the transition consists of Paul Fasciano, Mergers and Acquisitions and Investment Management Partner, and Lance Friedler, Investment Management. Also on the team were Steven Etkind and Roger Lorence, Tax; Dan Viola, Regulatory and Compliance; and Ron S. Geffner, Head of the Financial Services Group.

The deal included the purchase of Citi Alternative Investments' fund of funds, hedge fund seeding and advisory businesses, with $4.2 billion worth of assets under management. The transaction is scheduled to close on June 30, 2010.

“SkyBridge continues to expand its presence in the financial services industry and this acquisition will position us as one of the leading global alternative asset managers,” said Anthony Scaramucci, Managing Partner of SkyBridge Capital. “We have been working on the purchase with a team of attorneys from Sadis & Goldberg since February and once the deal closes, we will have approximately $5.6 billion in assets under management.”

"The current climate of increased opportunity for M&A in the asset management industry provides great benefits to our clients who continue to fortify their position in the financial services industry. While the increased regulatory scrutiny presents new challenges, it is critical to be aware of the latest developments and trends," said Ron S. Geffner, Partner and Head of the Financial Services Group.

Cheung Capital Management to launch Global Gaming Opportunities Fund

Today Cheung Capital Management announced the launch of its maiden fund, the Global Gaming Opportunities Fund (“Fund”). The Fund will invest in listed casino and gaming stocks around the world. The Fund is open to Australian wholesale and sophisticated investors.

“The global gaming industry includes casinos, poker machine manufacturers, lotteries and bookmakers and has a total market capitalization in excess of $100 billion. In spite of its size, many traditional fund managers and brokerage houses still shy away from the sector. This presents an opportunity for the Fund to generate strong returns for its clients through the application of bespoke research,” said Timothy Cheung, Portfolio Manager for the Global Gaming Opportunities Fund.

“Gaming stocks can be very attractive for investors because they have defensive characteristics while still retaining exposure to increasing consumer affluence. This is particularly relevant to investors seeking exposure to Asia’s burgeoning middle class. One market the Fund will focus on is Macau, the world’s largest casino destination. In spite of the global financial crisis, casino revenues in Macau have grown every year since it welcomed overseas operators in 2004.”

"Hedge Fund Hotel" Manager Arrested For $1.6 Million Fraud

HedgeCo News - Hedge fund manager and owner and President of New York Financial Company (NYFC), was arrested in an FBI operation on allegations of wire and hedge fund fraud in an alleged $1.6 million investment fraud scheme, according to the SEC.

The complaint alleges that New Jersey resident Robert J. Sucarato, through his financial consulting firm, launched two hedge funds, the NYFC Strategic Fund and the NYFC Diversified Strategic Fund, which purportedly invested in the commodities market.

Sucarato solicited for his hedge funds through a website, the SEC claims, working from a “virtual office” in New York City which allowed him to claim that NYFC had a prestigious mailing address. In reality, this space was nothing more than shared office space, rented for a nominal fee, which shared receptionists, conference rooms, and office areas with many other companies.

The allegations include, making false claims about the age of the hedge funds as well as their performance and returns. The hedge fund manager claimed over $7.2 billion in assets under management and a net worth of approximately $798 million.

The charge of wire fraud carries a maximum statutory sentence of 20 years in prison and a fine of $250,000. The charge of fraud by a commodity pool operator carries a maximum statutory sentence of 10 years in prison and a fine of $1 million.