Hedge Fund News

Live #OccupyWallStreet Updates

2011-10-05T16:12:00.003+01:00

Saturday: 10/8/11
Day 22

ABC: An expedition of protesters from the Occupy Wall Street movement is scheduled to hold a "general assembly" at 3 p.m, in Washington Square Park . Which they describe as an opportunity to recruit new supporters and share ideas.

ABC News reports that GOP presidential candidate Herman Cain reiterated his criticism of the Occupy Wall Street protesters Friday, saying the groups are “anti-capitalism” and “anti-free market.”
Connecticut's version of "Occupy Wall Street" had its largest gathering to date Friday as more than 200 people joined an "Occupy Hartford" march through downtown and prepared to camp in a park.
Ben & Jerry’s made the following statement:

"We, the Ben & Jerry’s Board of Directors, compelled by our personal convictions and our Company’s mission and values, wish to express our deepest admiration to all of you who have initiated the non-violent Occupy Wall Street Movement and to those around the country who have joined in solidarity. The issues raised are of fundamental importance to all of us."
The company specified:

The inequity that exists between classes in our country is simply immoral.
We are in an unemployment crisis. Almost 14 million people are unemployed. Nearly 20% of African American men are unemployed. Over 25% of our nation’s youth are unemployed.
Many workers who have jobs have to work 2 or 3 of them just to scrape by.
Higher education is almost impossible to obtain without going deeply in debt.
Corporations are permitted to spend unlimited resources to influence elections while stockpiling a trillion dollars rather than hiring people.

CBS Video: At the Value Voters Summit on Friday, Rep. Eric Cantor (R-Va.) said he is "increasingly concerned" by "Occupy Wall Street" demonstrations which began in New York and spread to other major cities.
Opinion from NYT: The Occupy Wall Street Quiz
"If you look at the results, you’ll see a sort of historically familiar pattern: Democrats sympathizing with the protestors, Republicans railing against them and Michael Bloomberg worrying about his city’s tax base."

Friday 10/7/11
Day 21

CNN Tweeted: Press Secretary Carney is expected to discuss the #OccupyWallStreet protests at today's White House briefing.
CBSNews Photo gallery
The Guardian also has a photo gallery up.
Friday Fun: 1% of the population (the cookie monster) eats 100% of the cookies.

Wednesday 10/5/11 Day 19

Washington Post: Who are the 99 percent?
“I am young. I am educated and hard working. I am not able to pay my bills. I am afraid of what the future holds.”

Who are the 99 percent? Part 2

“I did everything I was supposed to and I have nothing to show for it.”

NYDaily Mail reports that approximately $35,000 has been raise by the protesters so far. "Some money will be used to pay bail for arrested demonstrators."

From NPR: The Occupy Colleges movement called for a "nationwide college student walk out" at noon today, their website lists 75 colleges where walkouts are expected to happen.

Gothamist reports that Jeff Mangum played at the protest last night

The NYCLU Tweeted that they are sending a team of legal observers today.

From Politico - Massachusetts Democrat Elizabeth Warren came out swinging against the financial industry in her first U.S. Senate primary debate, arguing that “the people on Wall Street broke this country.”

From CNN - Transport Workers Union Local 100 spokesman Jim Gannon says, 'Their Goals Are Our Goals'

The Massachusetts Nurses Association says "hundreds" of the city's nurses will rally with the Occupy Boston protesters on Wednesday.

Protesters have begun publishing The Occupied Wall Street Journal, NYT reports.

Protest FAQ's by The Nation

Fox Footage on YouTube interview with a protester.

The "Occupy Wall Street" protests "appears to be settling in for the long term," NPR's Jeff Brady reports.

Retro: Wall Street Protest, Circa 1967

Tuesday morning 10/4/11 Day 18

Anti-Wall Street protests spread to South Florida
NYT: Wall Street Closes Sharply Lower

10:20
CNN: Demanding Accountability
10:15
Warren Buffett: Wall Street doesn't feel loved
Bloomberg: Anti-Wall Street protests spread nationwide
9: 57
Baltimore Sun. Occupy Wall Street protests spread to Baltimore, other cities
9:48
CNN Occupying Wall Street, demanding accountability

9:25
BBC: George Soros' sympathy for Wall Street protesters
WGA East Endorses Occupy Wall Street Protests
Daily Kos - Three Concrete Demands

Monday morning: 10/3/11

The New Yorker on Rational Irrationality
In Arabia news: protests have spread to cities across the country as well as overseas in London and Germany http://bit.ly/njd2Pb
Dangerous Minds shows footage of the arrest of a 13 year old girl.
How to Occupy an Abstraction Opinion
Occupy Wall Street Protesters Coming To Providence
Albuquerque protesters
St Louis protesters
Virtual March by @moveon (This coming Wednesday) http://bit.ly/o4cEct

Live Tweeters
@OccupyWallStNYC
@jalfordfowler
12:00

Occupy Wall Street Protesters: We Are Americans (ABC)

Protesters ask New Yorkers: We need blankets, water and food.

Mashable photos

12:45

Wall Street protests gain steam | Detroit Free Press
NYPD accused of heavy-handed tactics | World news | The Guardian

Sunday: 10/3/11

MSNBC Reporter SLAMS NYC Police Brutality! http://youtu.be/meT8CJgEBQw

"There’s been class warfare for the last 20 years, and my class has won" - Warren Buffett http://wapo.st/rpQi4h

More than 700 arrested in Wall Street protest | Reuters http://reut.rs/qomSGL

Declaration of the Occupation of New York City | NYC General Assembly http://bit.ly/pLf0sL

The Marines are Coming to PROTECT the Protesters - YouTube bit.ly/nDwyki

Protester describes NYPD Brooklyn Bridge Bottleneck. http://www.youtube.com/watch?v=Og_o4krKRMA&feature=related

NYT changes the Brooklyn Bridge Bottleneck story http://bit.ly/nkjJUh

Fox's Faux pas http://bit.ly/nPfD6P Ouch!

According to Gothamist, the police officers have arrested NYT contributing writer Natasha Lennard. @natashalennard

Occupy Wall Street: Interview with Chris Hedges Part 1/6 - http://bit.ly/o0lXZW

I see: (blogger Interviews)

A timeline of the Occupy Wall Street movement: (via MOJo)

July 13: The Canadian magazine Adbustersmakes a call to Occupy Wall Street.
August 30: The hacktivist collective known as Anonymous releases a video answering the call and encouraging others to follow suit.
September 17: Nearly 1,000 gather to protest corporate greed and begin occupying the financial district in New York City.
September 19:Roseanne Barr is the first celebrity to lend support to the so-calledNYC General Assembly.
September 20: The NYPD starts arresting protestors for wearing masks, citing an arcane law that prohibits masked gatherings of two or more people with an exception: "a masquerade party or like entertainment." The police soon become more forceful.
September 22: Demonstrators interrupt a Sotheby's Auction, "in a show of solidarity with the art handler's union that had been locked out." This is the first instance of labor unions and the movement locking step.
September 24: 80 protestors are arrested during a peaceful march; a video of a policeofficer pepper-spraying a nonthreatening woman goes viral.
September 26: Anonymous allegedly leaks the name and details of the police officerwho wielded the pepper spray.
September 27: The Occupy Wall Street campaign comes out in support of postal workers who are protesting their reduced five-day work week.
September 28:Transport Workers Union votes to support Occupy Wall Street; over 700 Continental and United Airline pilots demonstrate in front of Wall Street.
September 30: More than 1,000 demonstrators march on NYPD headquarters, protesting the police response against the demonstrators.
October 1:Over 700 demonstrators are arrested for marching across the Brooklyn Bridge and blocking traffic.

Live updates by Alex Akesson
alex@hedgeco.net

ALTSO's Annual Hedge Fund Charity Rocktoberfest

2011-09-23T16:18:00.000+01:00

The Eighth Annual Hedge Fund Rocktoberfest, the cornerstone fundraiser for children’s charity A Leg To Stand On (“ALTSO”), is taking place on Thursday, October 13 at 583 Park Avenue in New York City.

Hedge fund managers and hedge fund related industry professionals will perform to raise money for ALTSO, which provides prosthetic limbs and corrective, life-altering surgeries to children with limb disabilities in developing market countries.

This year’s Hedge Fund Rocktoberfest promises to be ALTSO’s most high-octane event ever. Wide World Ferrari Maserati is sponsoring a Maserati Gran Turismo S which guests will have the opportunity to bid on that night. More than 1,000 attendees from the hedge fund and related financial services industries are expected at this year’s event.

New Hedge Fund Gets $100 Million From World Bank

2011-09-12T18:32:00.001+01:00

HedgeCo News - The World Bank's private-sector lending arm, the International Finance Corp, is investing$100 million in a new hedge fund recently launched by Christofferson Robb & Co, according to Reuters.

The hedge fund, based in London and New York, will "Put up cash to cover unexpected loan losses in return for a cut from the bank. The fund’s cash will lower the banks’ requirements under the Basel capital rules and reduce the impact of planned tighter rules. IFC hopes the fund will encourage an extra $2.5bn to $4bn of lending to developing countries. " FT reported.

IFC is the largest global development institution focused on the private sector in developing countries.

Hedge Fund Acquisitions: Alaris/Concept Capital Markets

2011-08-17T11:44:00.002+01:00

New York (HedgeCo.net) - Hedge fund manager and investor, Concept Capital Markets, LLC., has been acquired by hedge fund broker/dealer Alaris Trading Partners, LLC.
“Bringing our two companies together will allow us to capitalize on each other’s best practices, enhance our already high level of customer service, and provide our customers with an expanded offering” Jack Seibald, co-founder and Senior Managing Director of Concept Capital, said.
“This business combination will provide our customers with additional custodial options, and importantly, seamless risk management and reporting technology” Darren Day, President and co-founder of Alaris, added.
The terms of the transaction, which is pending approval by the Financial Industry Regulatory Authority, were not disclosed. The combined company will offer institutional brokerage services to hedge funds, asset managers, and registered investment advisers on a global basis.

Nordic hedge fund managers on the U.S. downgrade

2011-08-10T17:47:00.002+01:00

Here’s a excerpt from an article we did with some top Nordic hedge fund managers, asking them to comment on Standard & Poor’s downgrade of U.S. government bonds from AAA to AA+.

André Havas, Head of Investor Relations Optimized Portfolio Management Stockholm AB: “The world has not recovered fully from the financial crisis that started in 2007. Many of the risks that existed in the various markets are beginning to materialize, the consequences are apparent.

“What began with a banking crisis has now rubbed off on to individual countries. Both the credit crisis and the subsequent state debt crisis is by no means a new phenomenon. PIGS countries’ high budget deficits and high debt, combined with a disconnected economic credit expansion, has been under discussion since the mid 1990′s.”

Daniel Broby, Chief Investment Officer at Silk Invest Ltd: “Sadly, the downgrading of the US sovereign credit rating should have taken no-one by surprise, other than the Congressional Budget Office and a few wrong footed politicians. Whether net public debt is 79% or 81% by 2015 is neither here nor there. It is too much and it is fiscally irresponsible not to have a long term plan to bring it under control.

“The recent debt ceiling spat took saw politicians bring the US to the brink of a selective default on a technicality. That is not what one expects from a risk free rate. The US no longer deserves a AAA rating. In that respect, I note that the AA+ rating is still on negative watch.”

The full article is available at: Nordiska Hedgefondforvaltare Kommenterar

Most hedge fund managers chose not to respond.

Indie Film Financing at Annual Film Finance Summit in New York

2011-08-10T15:28:00.003+01:00

HedgeCo News - The 11th annual New York International Film & TV Finance Summit, presented by BNA / CITE will convene September 22nd -23rd, 2011, to explore ways in which independents can find financing to make, distribute, and market films – even in a challenging economic environment.

The conference is sponsored by Deloitte LLP, Sheppard Mullin Richter & Hampton LLP, Film Pro Finance, Goodmans LLP, Entertainment Partners, Greater Philadelphia Film Office and Ontario Media Development Corp. ProductionHub is the media sponsor.

"Now more than ever, independent film companies and specialty divisions of major studios need to be creative when mining the money and tax incentive seam," says program director Robert Ross. "Our panelists, including film producers, bankers, film commissioners, talent agents, tax specialists, film finance lawyers and accountants, know the strategies that work and will share them in a host of case studies and panels across the two days."
More than 40 speakers will share their expertise, insights, ideas, and contact information throughout the sessions, networking meals and cocktail receptions.

Learn how to tap into state film tax credits and incentives in the U.S. and locate funds in international market
Get the latest developments in the use of Federal tax incentives, ETI exclusion, R&D credits in relation to film finance
Understand the roles played by specialized banks, finance companies, hedge funds and equity providers in film financing
Know how to properly utilize brand integration and execute product placement strategies to generate additional funds
Find out how to attach the right talent to a motion picture to make financing happen
Understand how to deal with labor issues in regard to producing an independent or studio feature film
Learn about the latest developments in digital distribution platforms and technologies in securing film financing
Hear in a case study how an independent feature film was financed, marketed and distributed

The 11th Annual International Film & TV Finance Summit will take place at the Marriott Marquis Hotel, on 1535 Broadway, New York, NY 10036, Tel 212 398 1900. To register, go to www.citeusa.org or call (800) 207.4432 for further information on special rates for independent producers, and sponsorship opportunities.

Investors Allocated $30 Billion to Hedge Funds in Q2

2011-07-29T14:01:00.001+01:00

HedgeCo News - Brighton House Associates (BHA) has released their quarterly report, which explores trends within the alternative investment industry during the second quarter.

Some highlights from the report include:

- The second quarter of 2011 was characterized by tumultuous global markets and uncertainty regarding the financial well-being of a number of euro-zone countries as well as the U.S. Still, investors remained interested in hedge funds and allocated $30 billion to the asset class during the quarter, a small decline from the $32 billion allocated in the first quarter. Despite lackluster returns and markets that proved challenging for hedge fund managers, funds saw strong investment inflows.

- Many investors who had been sitting on the sidelines became more active in the hedge fund space. In a conversation with BHA analysts, a wealth advisor investing on behalf of a large U.S. insurance firm noted that for the past three years, the firm had not been allocating to the hedge fund space. In the second quarter, however, the firm met with new managers, and it anticipates adding three or four global macro and CTA managers as well as two new long/short equity funds to its portfolio by the end of the year.

- Other investors increased their single-manager hedge fund exposure at the expense of their fund of hedge funds allocations. An insurance firm in Bermuda, which has traditionally invested in funds of hedge funds, confirmed that it is planning on investing solely in single-manager funds going forward. In fact, the firm plans on increasing its hedge fund allocation from its current $350 million to $800 million over the next two years. Still other investors were increasing their hedge fund exposure by employing firms to create customized funds of funds on their behalf, essentially designing a tailor-made hedge fund portfolio.

- In the private equity space investors were increasingly interested in sector-focused funds. While interest in funds with diversified sector exposure fell, investor demand grew for funds with exposure to the energy, technology, and clean-technology sectors. Compared with the first quarter of 2011, demand for energy, technology, and clean-technology focused funds grew by 53.6%, 33.1%, and 36.4% respectively.

BHA profiled just fewer than 1200 investor mandates across hedge funds, private equity, real estate, and related funds of funds through extensive one-on-one interviews with institutional investors around the globe.

Hedge funds and game theory

2011-07-26T19:23:00.001+01:00

coming soon

Assets under management threshold raised

2011-07-26T19:22:00.002+01:00

HedgeCo Blogs - A new order impacting all SEC registered investment advisers (and certain state registered investment advisers) that provide advisory services to hedge funds and/or separately managed accounts and receive performance-based compensation for such advisory services.

Effective September 19, 2011, the assets under management threshold is being raised from $750,000 to $1 million and the net worth threshold is being raised from $1.5 million to $2 million. In addition, an investor can no longer include the value of his or her primary residence in calculating whether he or she meets the $2 million net worth threshold.

More info from Sadis & Goldberg

Hedge Fund Convictions Over The Weekend

2011-07-25T15:07:00.000+01:00

HedgeCo News - Over the weekend there were hedge fund fraud related convictions in the US, Australia and Germany. All have been sentenced to jail time.

US: Five employees for hedge fund manager A&O Resource Management Ltd were sentenced for their part in a $100 million fraud scheme.

“Brent Oncale (the founder) and his co-conspirators operated a sham investment company that turned fraud and deceit into a business model,” said Assistant Attorney General Breuer. “They stole millions from hundreds of unsuspecting investors, pocketing huge sums for themselves.”

Russell E. Mackert, 52, general counsel for A&O, was sentenced to 188 months in prison; Brent Oncale, 36, former owner and founder of A&O, was sentenced to 120 months in prison; David White, 41, the former president of A&O, was sentenced to 60 months in prison; Eric M. Kurz, 47, a wholesaler of A&O investment products, was sentenced to 60 months in prison; and Tomme Bromseth, 69, an A&O sales agent in the Richmond area, was sentenced to 36 months in prison.

Australia: A New South Wales Supreme Court has convicted Shawn Richard of Astarra Asset Management with fraud, insisting on up to 5 years of jail time, the sentencing is scheduled for the 12 August.

The Australian Securities and Investments Commission alleged that the hedge fund manager was placing investor monies in overseas hedge funds, in circumstances where he would personally receive a significant portion of the money.

“The monies Richard placed in the overseas hedge funds had been raised by the responsible entity of ASF, Trio Capital Limited (Trio).” The ASIC said, “Richard received in excess of $6.4 million in undisclosed payments.”

EU: Helmut Kiener, the founder of 345-million euro ($497 million) hedge fund K1 Group, was sentenced to 10 years and eight months in prison. The ”Mini Madoff” was found guilty of fraud, forgery and tax evasion by a court in Germany.

Also sentenced last week: Danielle Chiesi was sentenced to 30 months in federal prison for securities fraud.

New names in the Petters Ponzi: Frank Elroy Vennes, Jr., a business associate of and primary fundraiser for Thomas J. Petters was named in a superseding indictment last week, the indictment also charges James Nathan Fry, age 57, of Orono, Minnesota, with five counts of securities fraud, four counts of wire fraud, and three counts of making a false statement to the United States Securities and Exchange Commission during its investigation of investments in PCI by hedge funds under the management of Fry’s company, Arrowhead Capital Management.

S&P Awards SEB Fund of Hedge Funds "AA" Rating

2011-07-07T13:15:00.000+01:00

Stockholm (HedgeFonder.nu)- SEB's True Market Neutral fund has become the first Nordic fund of hedge funds to receive an ”AA” rating by worldwide financial-market intelligence leader Standard & Poor (S&P).

"This is a stamp of approval for the fund, which has delivered stable returns for our customers regardless of the development in the stock market," Mikael Spångberg, lead manager at SEB's True Market Neutral fund, said.

The Sweden based wealth manager has total assets of SEK 2,118 billion and is represented in 21 countries with 17,000 employees.

S&P said of the the Swedish money manager, ”SEB deserves credit for its highly disciplined process, achieving the fund objective during periods in which the overwhelming majority of funds of hedge funds have fallen short. For example, the fund returned 3 per cent in 2008, and has continued to provide positive returns every year."

The fund, which is targeting institutional investors, aims to provide an annualised return of 3-4 percentage points above the risk free rate and to deviate no more than 5 percentage points from the target and have no correlation to stock markets.

In addition, S&P's has also rated SEB's hedge funds Dynamic Manger Alpha and Asset Selection funds "AA".

New York Hedge Fund Launch: The Long/Short Stanphyl Fund

2011-06-27T15:16:00.001+01:00

HedegCo News - New York-based limited liability company Stanphyl Capital GP, LLC (Stanphyl) has launched a long/short equity hedge fund.

The new hedge fund, Stanphyl Capital Partners, LP., launched earlier this month out of NYC. Managing member Mark Spiegel reported the current AUM at $2M.

The Strategy
– Stanphyl runs a highly concentrated (three to ten “best ideas”) long-short equity strategy
– The long positions consist primarily– but not exclusively-- of underfollowed microcap stocks
– The short positions consist of individual stocks and index and “macro” ETFs
– Investment decisions are fundamentally-based (both top-down and bottom-up), with technical analysis occasionally used to optimize entry and exit points
– There are over 8000 publicly-traded U.S. companies with market caps of under $500 million.
- The managing member believes that “outsized” gains can be made in these stocks due to the minimal attention paid to them by large institutional investors, while by using ETFs to establish well-timed index and “macro” positions, hedges (and often outright gains) can be created on the short side with minimal risk of being “squeezed”
– Using modest leverage, the strategy has generated a 26.7% gross annualized return since January 1, 2005 for the managing member’s personal portfolio

Spiegel is the managing member of Stanphyl Capital GP, LLC and is a NY-based equity investor. From late 2003 through early 2009 he was an investment banker (most recently as a Principal with Piper Jaffray & Co.) financing microcap public companies via private placement (“PIPE” and “Registered Direct”) transactions sized from $5 million to $100 million in companies with market caps of $50 million to $500 million. Prior to becoming an investment banker, Mark spent a year “inside” (i.e., working for) a microcap Nasdaq tech company.

Some Hedge Fund Highlights
• Volatility: Due to their reduced liquidity, microcap stocks can be quite volatile on a short-term basis, and this volatility is often compounded by the portfolio’s “best ideas” concentration and typical hold period of six months to two years. Thus, on a monthly basis the NAV of the portfolio can move around quite a bit.
• Investor Concentration Limitations: While Spiegel keeps the majority of his liquid net worth in Stanphyl, due to its high degree of concentration he limits each investor to placing no more than 10% of his or her liquid net worth in the fund.
• Occasional Very High Levels of Cash: Depending upon the availability of attractive investment opportunities (or lack thereof), there are times when Stanphyl may have much or all of its assets in cash. Spiegel is quite comfortable with the concept of “patiently waiting for the right pitch at which to take a swing.”

Dyment Joins UBS as Global Head of Hedge Fund Distribution

2011-06-27T15:11:00.000+01:00

Global wealth management giant UBS has appointed John Dyment, president and founder of $9 billion Greenwich hedge fund, Shumway Capital Partners, as UBS's Global Head of Hedge Fund Distribution.

Based in New York, Dyment will be responsible for the management and development of UBS’s strategically important hedge fund franchise, with global functional responsibility for sales, capital introduction and business consultancy services to the hedge fund community within Global Prime Services and have responsibility for coordinating all hedge fund sales activities across the Investment Bank’s FICC and Equity Divisions.

"The hedge fund business presents a significant opportunity for our global investment banking franchise." Yassine Bouhara, UBS Co-Head of Global Equities, said, "Dyment comes to UBS with deep knowledge and experience, and we are pleased that he will lead our hedge fund distribution business globally. We are equally pleased to demonstrate continued investment in our senior team in the Americas, which is of critical importance to our global business."

Prior to the Shumway hedge fund, Dyment was Managing Director at Deutsche Bank, where he managed the Global Hedge Fund Capital Group. Prior to Deutsche Bank, Dyment worked for Goldman Sachs, building the firm’s capital introduction and consulting services businesses.

DnB NOR Global Energy Hedge Fund Launch

2011-06-21T18:04:00.000+01:00

Stockholm based hedge fund manager, Carlson Fund, has launched a Global Energy fund. The fund invests in traditional energy companies globally, emerging markets included. Prime investment targets are oil and gas companies as well as in the service industry.

Lill Evanger Aafos and Aliya Orazalina will be managing the fund. They have 28 years of combined investment experience.

Ms. Aafos came to DnB NOR in 2008 to head up the global energy team. Previously, she was responsible for all energy investments at Norway’s state pension fund.

The new fund was launched on April 29. Carlson is part of the DnB NOR Asset Management group, which has a long history of managing energy stocks as part of client mandates and global portfolios.

The case for energy
To sustain global growth, the world has a need for energy that goes beyond the sources currently available.
Consumption in emerging markets has a long way to go to catch up with that of the West: The average Chinese citizen will have to quadruple his energy consumption to reach the consumption level of Americans. Indians must increase consumption more than tenfold.

Discovery of new oil does not keep up with increases in consumption, and new finds are in places where extraction is difficult. This leads to higher prices on oil and increased activity in the oil sector.

Recent set-backs for the nuclear energy sector will make the world more dependent on other sources of energy. Germany decided this week to decommission all nuclear reactors by 2022. Alternative energies are part of the mix, but traditional sources will still make up the lion’s share of energy supply over the foreseeable future.

Hedge Fund Industry Awards

2011-06-21T14:41:00.000+01:00

HedgeCo News - Sadis and Goldberg was named the best law firm in the United States at the Hedgeweek USA Awards. The awards were for excellence among hedge fund managers and service providers for the U.S. industry's best performers and their ability to demonstrate consistency and depth of expertise against the backdrop of a more complex investment climate.

The awards were decided by the votes of Hedgeweek's 20,000 U.S. based subscribers, which include institutional and high net worth investors, fund administrators, prime brokers, custodians, advisers and other industry professionals. Ron S. Geffner, Partner and Head of the Financial Services Group, stated that, "the Hedgeweek USA Law Awards rank amongst the top global awards and we are honored to be recognized by our industry in this category."

Sadis & Goldberg is one of New York's leading law firms, providing legal counsel to several hundred advisers, broker-dealers and commodity pool operators that sponsor, manage and advise hedge funds, private equity funds, venture capital funds and separately managed accounts.

Preet Bharara on the Galleon Hedge Fund Trial

2011-06-21T14:31:00.001+01:00

The June 27, 2011, issue of The New Yorker, on page 42, “A Dirty Business”, George Packer, writes about the biggest insider-trading case in history, and has an exclusive interview with Preet Bharara, the United States Attorney for the Southern District of New York, whose office pursued the investigation.

When Bharara took office, in 2009, he made it clear that he would go after Wall Street greed, and the Galleon case helps to illustrate the broader culture of the financial world, in which, “over the past decade, cheating and self-dealing became a principal way to succeed,” Packer writes.

But some Wall Street observers have called the Galleon case—which included thousands of taped phone calls by the government and more than two hundred and thirty subpoenas for phone numbers by the S.E.C.—a sideshow.

The case centers around Raj Rajaratnam, the head of Galleon, a multibillion-dollar hedge fund, and Anil Kumar, a former senior executive with the consulting firm McKinsey, who, in 2003, secretly agreed to be an outside consultant to Rajaratnam. In seducing Kumar, Packer writes, Rajaratnam “made a valuable addition to the network that he had built up over the years.”

Initially, Kumar believed that he’d be passing information to Rajaratnam legally, but it wasn’t long before he realized that Rajaratnam wanted tips that he could convert into profitable stock trades, and Kumar began breaking both McKinsey’s confidentiality rules and the securities laws that forbid such exchanges. When Kumar was arrested and subsequently handcuffed, Packer writes, “He fainted, hitting his head against a wall. He had to be treated at a local hospital before he could be brought in for booking.” Later that day, Rajaratnam’s wife sent a text message to Kumar’s wife, which read, “I’m sorry.”
Read the full review on HedgeCo.

Morningstar: Merrant Outperforms With High Sharpe Ratio and Low Standard Deviation

2011-06-07T17:22:00.002+01:00

Stockholm (HedgeFonder.nu) - Leading Swedish hedge fund investor, Merrant Alpha Select, has continued to outperform its peers, according to global hedge fund research provider Morningstar.

Merrant Alpha Select has the second highest Sharpe ratio and the third lowest standard deviation of all the 2700 Fund of Hedge Funds (FoHFs)on Morningstar Direct´s global database.

"The (fund) has an unbroken track-record of positive returns and has proven it's ability to generate substantial alpha and explore market inefficiencies regardless of the directional movement of global equity and bond markets." Managers Ulf Sedig & Rolf Hagekrans said in a press release regarding Morningstar's rating.

The FoHF performed +0,42% in April, with a Sharpe ratio of 4,64 and has shown 100% positive months and 87% positive weeks since inception. The FoHF targets an annual performance of 8-14% and a standard deviation of 2-4%.

Survey: Co-domiciled Hedge Funds On The Rise

2011-06-06T14:29:00.001+01:00

HedgeCo News - A survey report released today by RBC Dexia and KPMG predicts that hedge fund managers will continue to create EU-domiciled hedge funds to complement their Cayman Islands or other offshore offerings, but that the QIFs and SIFs were gaining popularity versus the UCITS framework.

The survey challenges the notion that onshore domiciles could rival the supremacy of the Cayman Islands amongst hedge fund managers. Only a quarter (24%) of hedge fund managers said that they had already brought offshore funds onshore. Of those, more than half (55%) said they opted for co-domiciliation by creating onshore clone funds to complement their existing Cayman or other offshore offerings. Less than 5% of those with onshore funds said they had decided to transfer the domicile of their funds to the EU outright. The trend for hedge funds to create more EU regulated funds seems set to continue however, with 27% of respondents stating that they are considering doing so.

Jean-Michel Loehr, Chief of Industry and Government Relations at RBC Dexia, commented: "The survey shows that EU fund domiciles are becoming more and more relevant to the hedge fund community, and that they respond to a real need amongst clients for more liquidity and transparency. Co-domiciliation allows hedge fund managers to cater to investors that are not authorised to buy into Cayman funds with onshore products while retaining their existing offshore strategies."

The prominence of co-domiciliation could be short lived however due to uncertainty over the AIFM Directive: most hedge fund managers considering domiciling their funds in the EU said they would do so before the implementation of the AIFM Directive in 2013, and fully 69% of them said they were considering doing so by transferring the domicile of their existing funds to the EU.

The research also shows that the UCITS framework, which some respondents said was an effective marketing tool to stem outflows during the financial crisis, has lost some of its appeal amongst hedge fund managers. Indeed, whereas those polled were just as likely to set up UCITS funds as other regulated structures, such as Irish QIFs and Luxembourg SIFs, in the past, 77% of those considering creating an onshore structure in the future now say they would prefer QIFs and SIFs instead.

Tom Brown, KPMG Head of Investment Management for the EMEA Region, said: "The market is starting to realise that even though 90% of alternative strategies can be replicated under UCITS, specialised structures such as SIFs and QIFs offer more flexible liquidity and transparency rules for hedge funds. UCITS still offers very robust protection for investors, but clearly the wholesale shift into alternative UCITS some had been predicting has not taken place."

Ethical Hedge Fund Sees Positive Results in 2011

2011-06-01T16:33:00.005+01:00

Stockholm (HedgeFonder.nu) - Long/short European equity fund CB Hedge is up +2.27 for April 2011 and up +4.1 in the last 12 months.

The hedge fund is run by CB Asset Management, a Swedish investment company with high ethical guidelines regarding alcohol and tobacco, weapons, child labour, extortion and corruption.

With SEB as primebroker, CB Hedge is a long/short European equities fund with the objective of generating an absolute return of 10-15%. To provide a systematic protection during a decline CB Hedge takes a short position in a European index. Usually, the turnover of the portfolio is very low.

Launched in 2007, the hedge fund is biased towards market neutrality, always net long but never more than 20% of the fund's AuM.Investors can buy shares on a daily basis and sell shares on a monthly basis. The performance fee is 20% of the return and there is a 1% redemption fee. There is currently no minimum required investment or subscription fee.

CB Asset Management was established in 1994 upon licensing from Finansinspektionen (FI), the Swedish Financial Supervisory Authority (Swedish FSA), for management of equity portfolios. The company manages three funds: CB Hedge, European Quality Fund and Save Earth Fund. The funds are managed by Carl Bernadotte, Marcus Grimfors and Alexander Jansson.

Alexis Åkesson
Editor at HedgeFonder.nu

www.hedgefonder.nuhttp://hedgefonder.nu/

New Yorker Review: Madoff’s Curveball

2011-05-23T13:56:00.004+01:00

HedgeCo News - In the upcoming May 30th issue of The New Yorker, the article by Jeffrey Toobin, “Madoff’s Curveball”, covers the the money Fred Wilpon, the chairman and chief executive of the New York Mets, lost in Madoff’s hedge fund Ponzi scheme and what it means for Wilpon’s future with the Mets.

Tobin also speaks with Madoff about his take on the events.

Wilpon was introduced to Bernard Madoff by his son, Jeff, who had become friendly with Madoff’s son Mark. Toobin writes that “for a few years they had contact only through their sons. Then Madoff made a casual offer to manage some of Wilpon’s money.” Wilpon, his family, and his friends began sending Madoff money to manage in the mid-eighties, and Wilpon tells Toobin, “we jumped in very small. And, as the years went, it became more and more and more and more.”

“Madoff talks about his investment strategy as if it were a finely tuned instrument that just went a little off at some point,” but that he “is contrite—sort of.” Still, Madoff speaks about his financial acumen with unmistakable pride. “The strategy that I was using for them, whether it was real or not, was not something that anyone would understand if you were not an expert.”

Madoff tells Toobin that Wilpon “must feel that I betrayed him, as do most of my friends who were involved. Hopefully, they will understand the pressures I was under. I made money for them legitimately to start, but then I got trapped and was not able to work my way out of it. It just became impossible for me to extricate myself, or even try and extricate myself.”

“It’s really tragic,” Madoff tells Toobin. “I feel terrible about everything that he’s going through.” Madoff says that Wilpon and Katz “were only guilty of trusting their friend and I will live with that guilt and shame forever.”

The full review can be found on HedgeCo News.

Brummer & Partners Win Three Hedge Funds Review Awards

2011-05-19T10:57:00.008+01:00

Stockholm (HedgeFonder.nu) - Some of the biggest names in Europe’s hedge fund industry won awards at The Eleventh Hedge Funds Review European Performance Awards in London yesterday.

Swedish hedge fund manager, Brummer & Partners, won the award for "Best fixed income hedge fund" and "Best non-directional hedge fund over 10 years", for hedge fund Nektar Asset Management. Nektar was also shortlisted for "Hedge fund of the year" and "Best non-directional hedge fund over three years."

Another of Brummer & Partners hedge fund's, Futuris Asset Management, won "Best directional hedge fund over 10 years" and was shortlisted for, "Best directional hedge fund over three years."

The "Hedge fund of the year" award went to GLG Market Neutral Fund run by GLG Partners, now part of the Man Group.

The Judges were Caroline Butler, co-director of family office Lord North Street; Phil Irvine, director of PiRho Investment Consulting; Chris Jones, chief investment officer (CIO) at Key Asset Management; Tushar Patel, managing director of Investment Management; and Michiel Timmerman, managing director and CIO at Ignis Advisors. Chairman of the panel was Margie Lindsay, editor of Hedge Funds Review.

Alexis Åkesson
Editor at HedgeFonder.nu
www.hedgefonder.nu

AlfaKraft's CTA Fund Up 9,89% In April

2011-05-18T17:30:00.009+01:00

Stockholm (HedgeFonder.nu) - Swedish hedge fund manager AlfaKraft, which specialises in quantitative hedge funds investing in energy and commodities, posted strong results in April. One of their hedge funds, the ALFA Commodity Fund, is up 9,89% for the month.

AlfaKraft manages two hedge funds, the ALFA Commodity Fund and the ALFA Energy Fund, up 2,0% in April. The ALFA Commodity Fund is up 12,47% YTD 2011 and the ALFA Energy Fund is up 9.56% YTD.

"The strong result for ALFA Commodity Fund last month is due to the upward trends in metals, especially in silver." Managers Thomas Stridsman and Bengt Lindblad said in their April report, "While most of our competitors in CTA's had a difficult time, AlfaKraft posted positive results for both hedge funds, which have also outperformed the Newedge CTA Trend Sub-Index (www.barclayhedge.com)."

AlfaKraft was founded in 1998 and invests in energy and raw materials, as well as different types of futures and mutual funds, commodities, currencies, interest rates and stock indices. Under the supervision of the Swedish Financial Supervisory Authority since 1999, the hedge fund manager offers institutions and private individuals an opportunity to add alternative investments to their portfolio.

Hedge Fund Managers, The Mayor And Republicans Join The Fight For Same Sex Marriage in NY

2011-05-17T15:33:00.001+01:00

HedgeCo News - - A group of three hedge fund managers, Paul E. Singer, a "top-tier Republican donor," Steven A. Cohen and Clifford S. Asness have decided to back, financially and otherwise, the establishment of same-sex marriage in the state of New York, the New York Times reported.

Some comments in the Times include:

- "An unexpected source: a group of conservative financiers and wealthy donors to the Republican Party, most of whom are known for bankrolling right-leaning candidates and causes." The Times reported.

- "I'm a pretty straight-down-the-line small-government guy," Asness, a self-described libertarian, told the New York paper. "This is an issue of basic freedom," he said.

- "We believe in social justice for all Americans," said Cohen, who runs SAC Capital Advisers and is a frequent fundraiser for Republicans.

- "I think it is important in particular for Republicans to know this is a bipartisan issue," said hedge fund manager Daniel Loeb, who has donated hundreds of thousands of dollars to the cause. "If they're Republican, they will not be abandoned by the party for supporting this. On the contrary, I think they will find that there is a whole new world of people who will support them on an ongoing basis if they support this cause."

- "The involvement of Mr. Singer is the most striking," the Times reported, "given his devotion to conservative candidates and philanthropy: He is chairman of the Manhattan Institute, a right-leaning research group, and one of the most generous Republican donors in the country. But he also has a personal stake in the issue: he has a gay son who married his partner in Massachusetts, where same-sex marriage is legal."

New York Mayor Michael Bloomberg, a billionaire businessman and philanthropist, is also planning a fundraiser for the cause at his Upper East Side town house and will be giving $100,000 of his own money, as well as lobbying lawmakers at the state capital and giving a speech on the issue.

The donations from the Republican donors total about two-thirds of the same-sex marriage coalition's fund raising. On Sunday, supporters and opponents of same-sex marriage held competing rallies in Manhattan and the Bronx, the New American reported.

40 Under 40 Rising Stars of Hedge Funds

2011-05-16T16:25:00.001+01:00

HedgeCo News - Financial News has announced it's first listing of the 40 under 40 Rising Stars of Hedge Funds, acknowledging the talent of men and women from all corners of the hedge fund industry.

"The list, which was whittled down from a longer list of 100, was drawn up by a panel of four over three months." Financial News said, Their roles vary, but the 40 names on the list all have in common fierce determination, dedication, dynamism and, of course, youth."

The list, in alphabetical order, includes:

Shamez Alibhai, partner and head of real estate debt management team at Cheyne Capital (38)
Jamie Allsopp, portfolio manager, Insparo Asset Management (33)
Reza Amiri, founder of Susa Fund Management (36)
Geoff Bamber, chief investment officer, Skyline Capital (29)
Daniele Benatoff, co-founder, Benros Capital (31)
Jeff Blumberg, chief executive, Egerton Capital (35)
Charlotte Burkeman, co-head of European prime brokerage, Bank of America Merrill Lynch (32)
Leonard Charlton, portfolio manager, Dalton Strategic Partnership (34)
Jean-François Comte, co-president, Lutetia Capital (36)
Frederic Couderc, founder, Toro Capital at Chenavari Financial Group (36)
Anne-Sophie d’Andlau, co-founder and deputy chief executive, CIAM (38)
Django Davidson, partner, Algebris Investments (31)
Frederic Denjoy, founder, Denjoy Capital Partners (33)
Pedro de Noronha, founder, Noster Capital (34)
Dominic Freemantle, head of European prime brokerage sales and capital introductions, Morgan Stanley (35)
Lisa Fridman, head of European manager research, Paamco (31)
James Hanbury, portfolio manager, Odey Asset Management (31)
Ali Hedayat, partner, Edoma Partners (36)
Jeff Holland, founder, Liongate Capital Management (36)
Alexander Ivanovitch, managing partner, The Environmental Investment Partnership (34)
Mark Jones, chief operating officer, GLG (31)
Andre Konstantinow, head of manager selection, Barclays UK Retirement Fund (34)
Damien Loveday, global head of hedge fund research, Towers Watson (34)
Simone Lowe, fund manager, Thames River (29)
Jerome Lussan, founder, Laven Partners (38)
Tommaso Mancuso, partner and head of research, Hermes BPK Partners (34)
Lionel Melka, founder and head of research, Bernheim, Dreyfus & Co (34)
Henrik Molin, head of development, Frey Quantitative Strategies (35)
Gideon Nieuwoudt, portfolio manager and member of the investment committee, Silver Creek (35)
Emily Porter, portfolio manager, absolute return strategies, Universities Superannuation Scheme (32)
Stephen Rosen, senior portfolio manager, Omni Partners (35)
Ariel Roskis, co-founder, Benros Capital (35)
Fabrice Seiman, co-president, Lutetia Capital (32)
Edgar Senior, global co-head of capital services, Credit Suisse (35)
Robert Sorrell, founder, Sorrell Capital (36)
Nick Stukas, managing partner, Nightscape Capital (32)
Ross Turner, founder, Pelham Capital (34);
Alex Vaskevitch, fund manager, BCM & Partners (31)
Tim West, partner, Herbert Smith (33)
Guy Wolf, partner, Oxburgh Partners (34)

The criteria for the award was achievement to date given their age, the stature of their mentors, firepower at their disposal and their potential to reach a position of great influence.

Hedge Funds in April: Net trade is up 500% since March

2011-05-09T17:16:00.002+01:00

Stockholm (HedgeFonder.nu) - Investors are buying hedge funds while selling low risk mutual funds according to statistics from Nordic stock analyst company, Nordnet.

"Investors are still waiting for direction when it comes to investing, due to the recent debt crisis." Jan Dinkelspiel, Head of the Swedish arm at Nordnet, said, "Whatever happens next will determine how investors will invest in the future."

Net trade has grown by over 500% since March, showing that investors are venturing into the market again. Investors are choosing to invest in niche funds such as hedge funds, small caps, and emerging market funds.

The top ten funds selling in Sweden at the moment include:

Brummer & Partners Nektar
Key Management
Robur Eastern Europe Fund
Ohman High Yield Fund
Fidelity Korea Fund
Nordnet Stock Index Sweden
Skagen Kon-Tiki
Excalibur Fund
Skagen Global
Atlantic Stability

The statistics come from a database of over 215 000 Swedish Nordnet accounts during the month of April 2011.

Alexis Åkesson
Editor at HedgeFonder.nu
Tel: +46 76 212 0523
www.hedgefonder.nu

New Catella Hedge Funds Show 100% Positive Months Since Launch

2011-05-09T16:31:00.006+01:00

Stockholm (HedgeFonder.nu)- Nordic hedge fund manager Catella Capital recently launched two hedge funds, the Nordic Fixed Income Opportunity fund and the Nordic Long Short Equity fund. The funds were timed to launch at the start of 2011.

"The Nordic market offers attractive fundamentals and the investable universe is well diversified over sectors and in terms of regional exposure. Nordic companies represent investor-friendly equities and are traded on secure and mature venues under transparent and well-regulated markets."

Catella's Nordic Fixed Income Opportunity Fund has already raised 220 million SEK primarily from foundations, private banking, wealth management and smaller institutions. It stands at +2.8%

Catella's Nordic Long Short Equity Fund raised 80 million SEK since launch. It's long holdings include Golar, Trelleborg, Statoil and the short holdings include Northland Resources, Sca, and Talvivaara.

Catella manages nearly €1.7 billion (15.21 billion SEK) distributed over 19 funds in more than 150 managed accounts. All together, Catella has brought to the market four new Nordic UCITS III hedge funds,two Newcits, one long only and one mixed fund.

The new funds are authorized to be marketed and sold in Sweden to private investors and already have 15 distributors. The investable universe primarily consists of equities listed on the Nordic exchanges. Catella Capital is owned by Catella AB.

Alexis Åkesson
Editor at HedgeFonder.nu
Tel: +46 76 212 0523
www.hedgefonder.nu

Best Fund of Hedge Funds Newcomer: Merrant Alpha Select Fund

2011-05-05T15:18:00.005+01:00

HedgeFonder.nu - The Merrant Alpha Select Fund, a fund of hedge funds run by Independent Swedish investment management firm Merrant, has been nominated for a HFMWeek 2011 award as "Best Fund of Hedge Funds Newcomer".

"It’s very satisfying to see that it’s the third time within the last six months that Merrant’s market neutral strategy is validated as one of the leaders in the hedge fund Industry." Co-founders Ulf Sedig & Rolf Hagekrans said of the nomination.

Merrant Alpha Select was in 2010 named "Best New Fund of Hedge Funds in Europe" by Hedge Fund Review and nominated for the "Best New Fund of Hedge Funds" by InvestHedge.

Merrant Alpha Select's USD-class returned +0.61% and it's SEK-class was up 1.01% during March 2011. The HFRI Fund of Fund index returned -0.11%.

The fifth annual HFMWeek Awards will be held in London on May 26, 2011. The event celebrates hedge funds and funds of hedge funds that outperformed their peers through the volatility of the last year. Award categories covered a wide range of strategies. The full shortlist can be accessed here.

Alexis Åkesson
Editor for Nordic Business Media AB
www.hedgefonder.nu
·

Hedge Fund Event Keynote Speakers: George W Bush, Gordon Brown, Collin Powell

2011-05-03T14:12:00.001+01:00

HedgeCo News - The SkyBridge Alternatives (SALT) Conference, which will convene 1,500 participants including global leaders, capital allocators and hedge fund managers at the Bellagio Resort & Casino in Las Vegas May 11 to 13, 2011, has sold out, according to the $7.78 billion global alternative investment firm, SkyBridge.

Keynote speakers for the conference include former President George W. Bush, Colin Powell and former Prime Minister of Great Britain and Northern Ireland, Gordon Brown.

Among other notable additions to the agenda are Steven A. Cohen, Founder, Chairman & Chief Executive Officer, S.A.C. Capital Advisors, L.P.; Jon S. Corzine, Chairman & Chief Executive Officer, MF Global Holdings Ltd.; David Axelrod, Senior Adviser to President Barack Obama (2009-2011); Michael Milken, Co-Founder, Milken Family Foundation & Chairman, The Milken Institute; and Rex Ryan, Head Coach, New York Jets.

"We are excited to gather some of the world's most influential public policy makers with top thought leaders of the investment community to share experiences, ideas and takeaway solutions for navigating the ever-evolving regulatory and economic environment," said Victor Oviedo, partner of SkyBridge and director of SALT.

CNBC, the exclusive broadcast media partner, will broadcast live from the Conference, which will also feature Christopher J. Dodd Chairman of the Senate Committee on Banking, Housing and Urban Affairs (2007-2010); Ken Griffin, Founder & CEO of Citadel; Jane Buchan, CEO, Pacific Alternative Asset Management Company (PAAMCO); John Burbank, Founder, Passport Capital LLC; Jamie Dinan, Founder, Chairman, & CEO, York Capital Management; Izzy Englander, Founder, Millennium Partners; Dan Loeb , Founder, Third Point LLC; and Marc Lasry, Chairman, CEO & Co Founder, Avenue Capital Group.

9th Annual Midwest Benefit for Hedge Funds Care

2011-04-27T15:02:00.003+01:00

HedgeCo News - Midwestern hedge fund managers and other alternative investment industry members will be meeting for the 9th Annual Midwest Open Your Heart to the Children Benefit on May 19th in Chicago, Illinois.

In support of Hedge Funds Care, a global non-profit organization that works to prevent and treat child abuse, the gala will be held at the new JW Marriot in Chicago (151 West Adams St., Chicago, IL) from 5:30pm until 10:00pm CST.

In addition to this year’s reception, there will be a ceremony held at 7:00pm followed by a high profile live auction featuring items such as the privilege of throwing a ceremonial pitch at Wrigley Field along with 4 box seats to the game and a once-in-a-lifetime trip to Paris in a luxurious Gulfstream 450 and a private apartment.

Additionally, The Kelly Lively Memorial Award, given in recognition of outstanding commitment to Hedge Funds Care and the prevention of child abuse and neglect, will be presented to Mesirow Advanced Strategies, Inc. The Co-chairs for the event are Amy Rosenow, Chief Operating Officer of Sheffield Asset Management, LLCand Jennifer Edgcomb, Vice President GEM Realty Capital, Inc. Attendees will include hedge fund investors, service providers and senior professionals, including some of the most recognized and respected investment managers in the industry.

“Thanks to the plentiful help and support of the Midwest alternative investment industry, the Chicago benefit is in its 9th and what we hope to be its most successful year. We call on our colleagues in the financial services industry to help us set a new annual fundraising record as every little bit can make a difference in the lives of these children,” said Jennifer Edgcomb, Vice President GEM Realty Capital, Inc.

“Hedge Funds Care has been steadfast in pursuing our vital mission since the charity was founded: working to raise and invest funds for best-of-breed programs to prevent and treat child abuse and neglect.” stated Amy Rosenow, Chief Operating Officer of Sheffield Asset Management, LLC. “It is wonderful that the hedge fund industry can work together to show the world the power of targeted philanthropy in helping these children who are so much in need.”

Since its inaugural grant-making cycle in 2003, the Midwest Chapter has made 121 grants totaling in excess of $4,200,000. The ongoing commitment of hedge fund industry professionals and investors, Hedge Funds Care looks forward to continuing to support existing grantees while also expanding support to new programs.

The Midwest Committee of Hearts is co-chaired by Ron Suber, Senior Partner of Merlin Securities, and Benji Wolken, Partner at Ernst & Young LLP.

Activist Hedge Fund Challenges Board At Fisher Communications

2011-04-27T13:54:00.000+01:00

HedgeCo News - FrontFour Master Fund, Ltd., an affiliate of hedge fund investor FrontFour Capital Group LLC., has written a letter to the stockholders of Fisher Communications, Inc., criticizing the current board of directors and nominating new candidates. Fisher's stock has recently declined by 48%, representing a total stockholder loss of $173 million.

"FrontFour is compelled to run this election contest because after having one representative on the Board for two years, we were unable to get the Board to take the necessary steps to improve stockholder value." the activist hedge fund investor, who is also a long-term stockholder of Fisher, said in the letter, "We are seeking your support to elect highly qualified candidates to the Board of Directors of Fisher at its 2011 Annual Meeting of Stockholders."

FrontFour has nominated John F. Powers, Joseph J. Troy, Matthew Goldfarb and Stephen Loukas as qualified director candidates.

"If elected, our nominees will seek to have the Board carry out an operational and strategic analysis of all alternatives to maximize stockholder value, including ways to monetize Fisher Plaza." FrontFour concluded.

The Long Odds of an Acquittal for Raj Rajaratnam

2011-04-26T12:13:00.001+01:00

HedgeCo News - After nearly seven weeks of testimony, the high-stakes insider trading trial of hedge fund manager Raj Rajaratnam has been handed to a federal jury in New York's Southern District.

Although there was no conclusion on the first day of deliberation, some are quick to tally the long odds of an acquittal for Rajaratnam, who faces serious prison time for the 14 criminal counts against him.

"This case has been an exceptionally strong prosecution - with wiretap evidence, including straightforward evidence of a defendant discussing trades based on insider information - and it has presented no technical elements that are beyond the grasp of a jury," former federal prosecutor and Congressman Artur Davis said. "A failure to convict or a muddled verdict like the one coming out the recent Barry Bonds steroids trial, would be a devastating blow to the prosecution."

Davis is now a partner in the white collar and government investigations practice at SNR Denton and a one-time member of the House Judiciary Committee.

A clear conviction, Davis believes, "will galvanize the government to duplicate the aggressive tactics used in the Galleon investigation. Investigations of high-dollar insider trading and other financial crimes will more and more resemble those in narcotics or public corruption cases, with wiretaps, extensive use of informants and even daring sting operations."

Davis acknowledges that the government's aggressive use of wiretap recordings - a tactic that is showing up in other Wall Street cases - may invite appellate scrutiny of electronic surveillance in insider trading cases. "In the Galleon example," he notes, "prosecutors got around the problem that the wiretap statute does not explicitly spell out securities fraud as a predicate crime by relying on case law that does allow wiretaps for general wire fraud cases. Still, the maneuver may draw closer attention from judges in future cases."

In broader context, Davis sounds a note of caution. "The Galleon investigation arguably tells us little about how judges and prosecutors are interpreting insider trading laws themselves," he notes. "For all the drama and publicity surrounding the trial, the legal basis of the Rajaratnam case is a garden variety claim that does not test novel or unlitigated theories of insider trading liability. That's a big contrast with, for instance, the Martha Stewart case, or other cases involving spousal sources of information and the definition of what constitutes confidential relationships under securities fraud laws."

Among the jurors are a former Israeli Defense Forces volunteer, a food services employee with the NY board of education, a city transportation agency worker, a graphic designer, an instructor for the blind, a retired bookkeeper and a nurse.

Manager Interview: Adrigo Hedge

2011-04-26T10:05:00.011+01:00

Nordic Business Media - Adrigo Hedge, managed by Adrigo Asset Management AB, is a so called “Specialfond” according to the Swedish Act (2004:46) of Investment Funds and the Swedish Financial Supervisory Authority.

Interviewees: Göran Tornée och Håkan Filipson, Adrigo Asset Management

Introduction:
Adrigo Hedge started in December 2006 based on own money and investments from ‘friends and family’ with the idea to build a record to prove that its low risk stock picking strategy would work. After a successful start, Swedish industrialists Melker Schörling and Carl-Henric Svanberg, joined by investing into both the Fund Management company, Adrigo Asset Management (51% ownership) and the Fund.

The investment team and management, Göran Tornée (CIO and Fund Manager), Håkan Filipson (Man Director and Analyst) and Karl-Johan Bonnevier (Analyst) have all worked in the Nordic financial markets for leading banks and brokers for more than 20 years prior to setting up Adrigo Asset Management. The Fund, Adrigo Hedge, has returned 34% since its inception which compares with 11% for its benchmark, STIBOR, and -5% for the Nordic OMXN40 index.

Adrigo Hedge was recently nominated to Hedgefund of the Year 2010 by Swedish business magazine Privata Affärer.

Adrigo Hedge is a Nordic long/short equity fund – how do you go about the selection of your investments? Do you have fixed criteria?
We invest mainly into Nordic big and mid cap equities, both long and short positions. Our methodology is focussed on key elements like change (we need to see the trigger which should change the stock’s mispricing), alternative information (we search for additional information in unusual places, not just in management meetings) and we make a careful risk/reward calculation ahead of each investment. For example, we do not invest into biotech companies or exploration stocks where we cannot estimate the potential, or the risks. We meet or interact (conference calls, conferences, etc) with 150-200 companies each year.

Is the selection purely down to manager discretion or do you also use systematic elements?
The approach is very systematic but in the end our Fund Manager Göran Tornée decides which ideas go into the Fund, and when. Importantly, he handles the portfolio construction process which includes risk management by spreading bets over several sectors/themes and matching long and short exposures.

How do you decide when to enter and leave a winning/losing position?
We try to look at the portfolio every day with a fresh and open attitude, and not be influenced by whether it is a ‘winner’ or ‘loser’. Our investment decisions are always based on our stock picking methodology. This means that we need to see the value in a stock as well as the change factor which will unlock the value. In addition, we need to have done our homework by meeting the management and to have found some alternative information, for example; by interviewing unlisted competitors to the companies we invest into.

Can you give some examples of profitable and losing trades in the past.
We were early investors into Danish brewer Carlsberg which we bought in January 2009 after the shares had fallen by some 70% following the company’s ill timed purchase of Scottish & Newcastle. The acquisition left Carlsberg with too much Euro denominated debt at a time when its earnings power collapsed due to a dive in the Russian Rouble, which in turn was caused by the oil price crash. Our first purchases were made around DKK 180 and we have held the shares for much of the time, but not all, and seen the bulk of the appreciation to today’s DKK 580 level.

We see mistakes as a natural part of the investment business and we have plenty of losing trades each year. In percentage terms we held only a small position in Swedish directory company Eniro, but it turned out ill timed, with the stock losing 30% in a matter of days, albeit with only a minimal impact on the Fund.

Your chart would suggest a long bias. What was your typical and historic maximum of short exposure to the market?
Our net exposure to equity markets, measured as long exposure minus short exposure, in normal market conditions is around 20-50% and we have been mostly within those levels.

During the difficult time in the latter half of 2008, benchmarking to the equity index, you did relatively well. How did you get through that period – how were you positioned?
We are an absolute return fund, so we do not benchmark against a stock market index but rather against the Swedish interbank rate, STIBOR. In 2008 we saw a disappointing decline of 3,5% when our benchmark rose slightly. However, to place the decline in context, our Nordic markets fell by close to 50% in 2008 which was the worst stock market downturn in some 40 years. We think the 2008 experience proved that our investment philosophy worked well, both on stock picking and risk handling. At the time, our net exposure was lower, the long holdings were mainly in defensive companies (health care, telcos etc.) and the shorts were concentrated on high beta stocks, like industrials and financials.

Nonetheless your fund gave up almost 10% of its value from its 2007 peak. You do not claim to be totally unaffected by the stock markets, but how do you handle situations like that?
We know, and we can show, that there are always opportunities in stock picking, regardless of how the markets develop. While the market conditions were extreme in 2008, we remained confident in our methodology to select stocks, and we took the appropriate actions to reduce the market risks. At the worst point since the Fund was started it was down 0.9% for an original investor. However, the stock market’s worst point showed a decline of over 50%.

As a smaller manager, one could argue you are more exposed to manager risk, ie one of your key asset managers not being able or willing to continue work. How do you handle that?
All three members of our investment team are shareholders in Adrigo Asset Management and all have made substantial investments into the Fund. We work with something we love to work with, ie stock picking. Together with our main shareholders we have every intention of growing Adrigo to a leading player on a European scale. Our structure is set up to handle big money which we will do within a few years. As we grow, the manager risk will decline.

Any plans for the future, new products, new strategies?
We will continue to grow the company profitably in the coming years whilst adding shadow funds on Adrigo Hedge aimed at both domestic insurance platforms and more substantial international institutions. Our plans go beyond that, but we will not disclose the next steps just yet…

Interview by Kamran Ghalitschi
CEO of Nordic Business Media AB.

Hedge Fund Launches Up 34%

2011-04-21T18:10:00.002+01:00

HedgeCo News - According to a new hedge fund industry study, Sizing The 2010 Hedge Fund Universe: A PerTrac Study, the single-manager hedge fund industry recovered in 2010 with assets under management (AUM) increasing 11% over 2009 to $1.6 trillion.

“As we look across the fund universe, one clear area of growth has been in the number of single-manager hedge funds, and we see that momentum continuing in the future,” Lisa Corvese, Managing Director at PerTrac said. “Overall, the study demonstrates a rebound — with the industry as a whole getting closer to prior peaks.”

1,184 new funds were launched, representing a 34% increase over the prior year. Total AUM for single-manager hedge funds and fund of funds was $2.1 trillion in 2010.

Fund of funds continue to see AUM decline. The 3,196 fund of funds in the study – approximately the same number as in 2008 – had $518 billion under management in 2010. This represents a 10.5% decrease from 2009 and a steep 31% decline from 2008 when $750 billion was reported.

Commodity Trading Advisors (CTAs), the third category measured in the study, attracted investors in 2009 as a haven from stocks and bonds as their numbers peaked that year at 2,425. In 2010, the number of CTAs dropped to 1,997 which is approximately the same level as in 2008.

GAM Star Dynamic Global Bond Launch

2011-04-21T17:44:00.002+01:00

HedgeCo News: The Star Dynamic Global Bond was launched on the 11th April 2011. The new fixed income – developed markets UCITS hedge fund aims to produce consistent total returns and outperform an index of developed global bond markets over a market cycle.

The UCITS hedge fund has daily redemptions and trades in USD, GBP, EUR, CHF, JPY and SEK. Minimum subscriptions start at USD 20,000,000 or currency equivalent (institutional class) and USD 10,000 or currency equivalent (ordinary class). Manager fees are 0.65% and 0.90, respectively.

The co-managers, Tim Haywood and Daniel Sheard each have over 20 years’ experience. They look to capture both alpha and beta using credit, FX, interest rate and inflation hedges to diversify risk. Their dedicated expertise in non-core sectors and their unconstrained ‘go-anywhere’ approach means the fund is able to access the most interesting opportunities globally, through tactical and dynamic sector rotation.

"Risk management should be integrated philosophically and systematically at each stage of the decision making process." Tim Haywood said, "By assessing the key risks – defaults, inflation, duration, currency (and hedging, as appropriate), we aim to produce an attractive risk/return profile."

Key Facts Include:

• Specialist expertise spanning the global fixed income and currency universes
• Tactical and dynamic rotation of sectors and diversification across a wide range of alpha sources
• Harnessing alpha by understanding what drives markets

"Qualitative and quantitative tools are used on an ongoing basis; modifying positions to limit risk and capture the upside as investment themes evolve." Daniel Sheard explains in the launch release, "In parallel, the independent GAM Market Risk team conducts ongoing monitoring to identify risk ‘hot spots’ and ensure the focus remains clearly on achieving the fund’s long term objectives."

Tim Haywood joined GAM following its acquisition of the fixed income and foreign exchange specialist, Augustus, in May 2009. Tim joined Augustus (then Julius Baer Investments Limited) in 1998 from Orient Overseas International Limited in Hong Kong, where he was CIO. He has worked as both CIO and CEO of Augustus, established the hedge fund business, as well as being the founder and original investment manager of an emerging market bond fund.

Daniel Sheard joined GAM following its acquisition of the fixed income and foreign exchange specialist, Augustus, in May 2009. He joined Augustus (then Julius Baer Investments Limited) in 2006 as deputy chief investment officer and became chief investment officer in 2008. Daniel previously worked at Prudential M&G, where he was a director of the Institutional Fixed Income group. Prior to that he was a principal within the Advanced Strategies group at Barclays Global Investors, and before that was an associate director within the Fixed Income unit at Schroders.

Survey: Old Wine in New Bottles

2011-04-08T14:01:00.002+01:00

HedgeCo News - Retirement plans, endowments, foundations and other large investors are looking for hedge funds, funds of hedge funds and investment managers with strong capabilities in global and emerging markets, according to the 2011 Consultant Search Forecast.

This year’s survey, “Old Wine in New Bottles,” polled 55 leading investment consulting firms in the U.S. and Canada responsible for $10.4 trillion in assets under advisement. This was the fifth annual poll conducted jointly by eVestment Alliance (eVestment) and Casey, Quirk & Associates.

Three key trends include:
- Ongoing portfolio globalization
- The increasing role of “alternative” investments—hedge funds, private equity and real estate
- A greater emphasis on outcome-oriented portfolios constructed by risk budgeting and return attribution

Additional significant findings of this year’s survey include:
- More than one-third of consultants expect more emerging markets equity and less international developed markets activity for the remainder of the year
- More than half of U.S. equity, U.S. bond and EAFE searches will involve manager replacements in 2011
- Half of those surveyed expect an increase in institutional interest in inflation hedging strategies this year
- More than one-third of investment consultants surveyed anticipate a boost in liability driven investing (LDI) mandates in 2011
- Three-fifths of consultants expect moderate or strong bond search activity this year
- Consultants expect significant increases in private equity and real estate mandates in 2011

“A sluggish growth in search activity is to be expected, as many in the institutional investment industry emerge from the policy rebalancing many conducted during late 2009 and 2010, following the global financial crisis,” Heath Wilson, eVestment Principal and Founder, said. “eVestment and Casey Quirk hope that the latest search expectations provide a clear picture on how North American institutional investors should adapt to the changing investment frameworks and increasingly competitive environment.”

"One of the more interesting findings in this year's consultant survey is the rising interest in private equity and real assets," Yariv Itah, Casey Quirk Partner, added. "Institutional investors increasingly manage toward outcomes rather than just excess return, and they want asset managers who can use illiquid investments to mitigate inflation risk and manage liabilities."

Coeli Acquires Plenum Power Surge Hedge Fund

2011-04-08T09:53:00.004+01:00

Nordic Business Media (HedgeFonder.nu) - Entrepreneurial banking specialist, Coeli AB, has acquired the 43 million-euro ($61 million) Plenum Power Surge hedge fund. Coeli takes over the management of the hedge fund from Plenum Investments.

One of the hedge fund´s co-founders, Henrik Wennberg, will take over as head trader starting May 1st 2010. The fund will be re-named the Coeli Power Surge Fund and will retain it's strategy of investing in Nordic electricity contracts, according to a letter from the Swedish banking specialist.

“Considering the very specialized knowledge and commitment it takes to be successful in this market, It is necessary to be able to focus my solely on managing the portfolio.” Wennberg said of the acquisition, ”By working with Coeli, I will have the opportunity to do so. Coeli has the strong infrastructure with licenses, administration, risk management and distribution that international investors are looking for.”

Wennberg has been a senior fund adviser for the Plenum Power Surge fund and an electricity trader for more than 12 years, Wennberg joined Plenum in 2005 from Norweigan energy fund, Markedskraft ASA.

Coeli is also aquiring a majority stake in Wennberg International Advisory AB. Coeli now offers a new single manager hedge fund with focus exclusively on the Nordic power market.

Alex Åkesson
Editor for Nordic Business Media AB

Hedge Fund Acquisitions: Medley/Viathon

2011-04-04T20:04:00.000+01:00

HedgeCo News - NY-based Medley Capital LLC has announced the acquisition of credit hedge fund manager Viathon Capital LP and all its related entities.

"This transaction combines the analytical and credit strengths of the two organizations." Brook Taube, Managing Partner at Medley said.

"Having known the Medley team for some time, I am excited about the opportunity to leverage our combined resources and to grow the firm's investment management and advisory franchise," Robert Comizio, Viathon founder, added.

Medley is a U.S. registered investment adviser with $1.4 billion of assets under management in private investment funds and hedge funds

Predominantly focused on companies in North America and Europe, Viathon invests in fundamental and event driven opportunities across the credit spectrum.

The AquaTerra Hedge Fund Launch

2011-03-28T15:53:00.001+01:00

HedgeCo News - Global Fund Exchange has announced the launch of the AquaTerra Fund, a new investment vehicle which invests in global opportunities in agriculture, water and natural resources.

The AquaTerra Fund is a carve-out of the existing agriculture, water and natural resources strategies of the asset manager’s flagship portfolio, the Earth Wind & Fire hedge fund.

"The sustainability and efficiency needs for our water and food resources are the most critical ‘must outcome’ for Planet Earth." Global Fund Exchange CEO Lauralouise Duffy said, "The AquaTerra Fund is a focused investment on these vital assets."

The global population is growing at a rate of 80+ million people per year and is predicted to top 9 billion by 2050. As a result, the Food and Agriculture Organization of the United Nations (FAO) predicts that global agricultural output will need to increase by 70% to meet new demand.

Demand for freshwater is rising steeply as well. By 2025 it is estimated that global demand will exceed current available freshwater reserves by 25%. Unpredictable weather patterns causing severe droughts and major flooding have exasperated the food supply stability. In addition, rapid economic growth in developing nations continues to escalate resource supply and demand disparities, resulting in an exciting opportunity set for forward-looking investors who have identified these areas of growth.

"The best investments are when necessity creates opportunity," Chairman Anric Blatt said. "We are launching the AquaTerra Fund to offer our clients a focused, disciplined investment opportunity that capitalizes on these major global trends."

200 Gather For HedgeCo's Hedge Fund Networking Event

2011-03-24T11:53:00.003+01:00

HedgeCo News - Over 200 guests attended the 2011 HedgeCo Spring Networking Event on the evening of the 22nd. Celebrating the end of winter, there was food, drink and networking with other members of the alternative investment community.

"I enjoyed everything about the HedgeCo spring networking event." Craig S. Aronoff, Managing Member at Victor Securities said, "You chose the perfect location, and had a very impressive turn out! The attendee list had a perfect mix of funds, allocators and service providers."

A mix of investors, hedge fund managers, and other industry professionals came together at the Aspen Social Club in New York to enjoy a night of sharing ideas and meeting new contacts.

Recognized as having the largest attendance for any type of event in the hedge fund industry, the HedgeCo Networking Events have quickly become the top destination for generating new business and meeting new industry contacts.

The 2011 HedgeCo Spring Networking Event event was sponsored by American Airlines.

Alex Akesson
Editor for HedgeCo.net
alex@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership in HedgeCo.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!

Roundup: Rajaratnam's Hedge Fund Trial Updates

2011-03-23T14:14:00.001+01:00

HedgeCo News - As the Sri Lankan born-American hedge fund manager charged with 14 counts of conspiracy and securities fraud awaits trial, speculation is mounting about who will be testifying against him.

MarketWatch - U.S. federal prosecutors plan to call Lloyd Blankfein, the chief executive of Goldman Sachs Group Inc,, to testify in the insider-trading trial of Galleon Group hedge-fund manager Raj Rajaratnam.

Bloomberg - In calling Blankfein as a witness, prosecutors in the office of U.S. Attorney Preet Bharara in Manhattan said they don’t want Blankfein to be questioned about “whether Goldman Sachs is presently the subject of any pending investigations by either the Department of Justice or the U.S. Securities and Exchange Commission” or whether the bank bears any responsibility for the 2008 financial crisis.

BBC - So far more than two dozen people have been criminally or civilly charged in the case. 19 have pleaded guilty

Hindustani Times - Rajat Gupta, former chief executive of consulting major McKinsey and accused by the US Securities and Exchange Commission of conspiring with Galleon hedge fund executive Raj Rajaratnam in an insider trading scam, has resigned as the chairman of Indian School of Business (ISB), Hyderabad. “Gupta has requested the ISB executive board to relieve him of his board responsibilities till his pending matter with the US SEC is resolved,” an ISB spokesperson said.

Rajat Gupta is also suing the SEC, claiming an administrative action it filed for insider trading bars him from a jury trial.

Editing by Alex Akesson

Cayman Islands Secures Tax Agreement with India

2011-03-22T13:31:00.003+01:00

HedgeCo News - The Cayman Islands signed its twenty-second Tax Information Exchange Agreement (TIEA) with India yesterday.

The Cayman Islands is on the Organisation for Economic Cooperation and Development's (OECD) 'white list' of jurisdictions that implement international tax standards for investors such as hedge funds and other alternative investors.

"Our Government has a strong working relationship with our Indian counterparts, and we look forward to implementing the terms of this TIEA", Premier W. McKeeva Bush said.

Signing the agreement on behalf of India was India’s High Commissioner to The Bahamas, the Cayman Islands and Jamaica, Mohinder S. Grover.

"Both countries are members of the OECD Global Forum Global Forum on Transparency and Exchange of Information for Tax Purposes, and are involved in the Peer Review Process; therefore ensuring the effective implementation of the international standards of transparency and exchange of information for tax purposes," the Premier added.

Speaking on behalf of the Cayman Islands International Tax Cooperation Team, George McCarthy commented, "It is further anticipated that this Agreement will continue to pave the way in enhancing the business relationship between our two countries. The TIEA will provide a common ground upon which the Cayman Islands and India can exercise mutual cooperation and focus on increasing investment funds business in the Cayman Islands."

Man Group Donates $1 Million to Japan Relief

2011-03-18T13:33:00.001+01:00

HedgeCo News - Hedge fund giant Man Group has made an immediate $1 million commitment via its Charitable Trust to relief efforts in Japan.

“We have all witnessed through TV coverage the scenes of devastation in Japan after the earthquake and tsunami." Peter Clarke, Chief Executive of Man, said, "It is hard to imagine how this feels to those affected. Our long established and close relationship with Japan means that we are naturally very anxious to play our part in joining with local and international efforts to alleviate the huge suffering that has been caused."

In a response coordinated with its Tokyo office, the hedge fund will focus this charitable donation on children impacted by the crisis and has pledged $900,000 to Save the Children's Japan Emergency Appeal and $100,000 to local children's charities.

“We are extremely fortunate that all of our employees and their families are safe but we are acutely aware that hundreds of thousands of people have been left devastated by last week’s events." Hidehiko Hayashi, Head of Man’s Regional Office in Japan, said, "We will continue to ensure that we are doing all we can to provide support and assistance to Japan as the nation works together to address this massive natural disaster.”

HFA Symposium on Government Impact on the Markets and Hedge Funds

2011-03-18T13:31:00.001+01:00

HedgeCo News - The Hedge Fund Association (HFA) has appointed Edward Foreman, a Tax Partner at Price Waterhouse Coopers, as Director of its Midwest Chapter.

“It’s an honor to serve as the Director of HFA’s Midwest Chapter. I have watched the hedge fund industry evolve and become an important participant in the global financial markets. I look forward to advancing the HFA’s many initiatives in Chicago and the greater Midwest area,” Foreman said.

The Midwest Chapter’s new leadership will be introduced on March 22nd at the HFA Symposium on Government Impact on the Markets and Hedge Funds. This event, followed by a cocktail reception, will be held at 4:30pm CST at the Chicago offices of law firm K&L Gates LLP, 70 West Madison Street, Second Floor Conference Room Chicago, IL 60640.

Fresh Air Fund Seeks Hedge Fund Hosts

2011-03-16T19:34:00.006+01:00

The Fresh Air Fund is again in need of host families for this summer. If you or someone you know is able to host, please sign up now.

In 2010, The Fresh Air Fund's Volunteer Host Family program, called Friendly Town, gave close to 5,000 New York City boys and girls, ages six to 18, free summer experiences in the country and the suburbs. Volunteer host families shared their friendship and homes up to two weeks or more in 13 Northeastern states from Virginia to Maine and Canada.

Many thanks to previous host families who have opened up their homes for a few weeks each summer, helping children growing up in New York City’s toughest neighborhoods to experience the joys of Fresh Air experiences.

As Hedge Fund Jury Selected, Speculations Of Misplaced Trust Continue

2011-03-10T13:38:00.000+01:00

HedgeCo news - As the Sri Lankan born-American hedge fund manager charged with 14 counts of conspiracy and securities fraud awaits trial, speculation is mounting about who will be testifying against him, close friends and colleagues, among others.

A jury of seven women and five men has been chosen for the trial, which is expected to last more than two months. Rajaratnam could face over 100 years in jail if convicted.

Former Goldman Sachs director Rajat Gupta hass already been charged with allegedly tipping Rajaratnam off to a $5 billion investment by Warren Buffett in Goldman Sachs before the information became public.

"The Galleon hedge fund managed to buy nearly 300,000 shares of Goldman stock just before the markets closed. The shares soared when news of Buffett's investment was disclosed." Bloomberg reports. Rajaratnam is said to have sold the stock for a $900,000 profit.

Two ex-Galleon hedge fund managers also pleaded guilty in January of this year to insider trading. Adam Smith agreed to testify against Rajaratnam in exchange for protection from prosecution for other crimes. Michael Cardillo also pleaded guilty to the same charges. The ex-hedge fund managers agreed to give up any money they made, and Cardillo also agreed to testify against Rajaratnam next month. Smith and Cardillo could face up to 20 years in prison on the securities fraud counts.

Rajaratnam's co defendant Danielle Chiesi also pleaded guilty in court. She was accused of receiving insider information from Robert Moffat, Jr., who also pleaded guilty in the Galleon hedge fund fraud scheme.

Robert Moffat, Jr., in January also pleaded guilty to trading on insider information relating to IBM, Advanced Micro Devices, Inc. (AMD) and Lenovo Group Ltd. (Lenovo), providing the insider information to to Chiesi, hedge fund founder Raj Rajaratnam’s co-defendant. She worked for New Castle Partners, an equity hedge fund group affiliated with JPMorgan Chase & Co.

Rajaratnam was taken into custody in New York on Oct. 16, 2009 in what is being called the USA’s largest hedge fund insider-trading scheme. He is being accused of insider trading and securities fraud, generating as much as $49 million in profit. The majority of the stocks involved are in technology, including, IBM, Intel, Akamai Technologies Inc, Polycom Inc, Hilton Hotels Corp, Google Inc, Sun Microsystems Inc SUNW.TI, Clearwire Corp, Advanced Micro Devices, ATI Technologies Inc and eBay Inc.

Alex Akesson
Editor for HedgeCo.net

DeLillo’s “Cosmopolis” To Be Directed By David Cronenberg

2011-03-02T19:55:00.002+01:00

HedgeCo News: Horror master David Cronenberg has taken on Don DeLillo’s #1 bestseller “Cosmopolis” and has signed Robert Pattinson to star in the thriller.

Like James Joyce’s Ulysses, “Cosmopolis” covers roughly one day of time and includes highly sexed women and the theme of father-son separation.

The plot involves a young hedge fund billionaire (Pattinson) who hops in his limo to get a haircut but in a course of traveling across Manhattan, loses his fortune, cheats on his wife, and is threatened by two mysterious folks.

The film also stars Juliette Binoche as the the wife, Paul Giamatti as the stalker and Mathieu Amalric’s part is yet unknown. Colin Farrell and Marion Cotillard were originally cast as the lead.

Goldman Director Charged In Galleon Case

2011-03-02T14:08:00.002+01:00

HedgeCo News - Former Goldman Sachs director Rajat Gupta has been charged with allegedly tipping Raj Rajaratnam off to insider information in the giant SEC vs. Galleon case.

Gupta is alleged to have told Rajaratnam of a $5 billion investment by Warren Buffett in Goldman Sachs before the information became public.

"The Galleon hedge fund managed to buy nearly 300,000 shares of Goldman stock just before the markets closed. The shares soared when news of Buffett's investment was disclosed." Bloomberg reports. Rajaratnam is said to have sold the stock for a $900,000 profit.

The charges are "totally baseless," Gary Naftalis, Gupta's lawyer said, noting that Gupta is not accused of trading in the stocks himself or sharing in any profits. Naftalis said Gupta did nothing wrong and stands by his 40-year record of ethical conduct, integrity and commitment to keeping clients’ confidence.

Rajaratnam was taken into custody in New York on Oct. 16, 2009 in what is being called the USA’s largest hedge fund insider-trading scheme. He is being accused of insider trading and securities fraud, generating as much as $49 million in profit. The majority of the stocks involved are in technology, including, IBM, Intel, Akamai Technologies Inc, Polycom Inc, Hilton Hotels Corp, Google Inc, Sun Microsystems Inc SUNW.TI, Clearwire Corp, Advanced Micro Devices, ATI Technologies Inc and eBay Inc.

Alex Akesson

Hedge Fund Analyst Bail Includes House Arrest with Electronic Monitoring Bracelet

2011-02-24T14:15:00.003+01:00

HedgeCo News - Hedge fund consultant Winifred Jiau has pleaded not guilty to conspiracy and securities-fraud charges in the Galleon investigation. Bail was set at more than $500,000.

According to the Seattle Times, the Judge agreed to the bail "Only after she had pledged to turn over the deed to a $25,000 stretch of land and provide $50,000 in cash to go along with $500,000 in cash and property being posted by three friends. She will be required to wear an electronic monitoring bracelet and mostly remain in her Fremont, Calif., home under terms of the bail. She will not be released until all bail conditions are met."

“Company executives and other insiders moonlighting as consultants to hedge funds cannot blatantly peddle their company’s confidential information for personal gain,” Robert Khuzami, director of the SEC’s enforcement division said.

The SEC filed civil charges of insider trading against six people associated with expert network firms after criminal cases brought earlier by the Justice Department against the same group.

The consultants are accused of leaking privileged information to hedge funds about companies like Advanced Micro Devices, Apple and Dell, about $6 million in illicit gains was made through the tips, the SEC complaint said.

Galleon Hedge Fund Trial: Wiretapping Spousal Communications

2011-02-22T15:50:00.001+01:00

HedgeCo News - A judge has asked to see a transcript of 18 spousal conversations in the case against Craig Drimal, a trader for the Galleon Group of hedge funds, the Las Vegas Sun reports.

Federal agents were eavesdropping on the couple, it was revealed, intercepting 164 calls between Drimal and his wife during two months in late 2007 and early 2008. The hedge fund trader's defense lawyer complained the calls were of an "intensely personal nature," and is asking the judge to leave the recordings out of the trial.

"In court documents that were recently unsealed with redactions, many of the intercepted spousal calls were of a profoundly personal nature, and yet agents continued to listen to them far in excess of the time necessary to determine that they were spousal calls." The defense said.

The defense has also accused the government of having a "cavalier disregard for marital privacy, (the agents) intercepted 330 calls between Drimal and family members, including his three children, his siblings and his in-laws." The judge said it was unlikely he would exclude the wiretap evidence against Drimal from the trial.

Drimal, who has pleaded not guilty, is scheduled to go on trial in May on suspicion of securities fraud charges.

In order to curtail federal wiretapping, hedge fund managers have begun hiring security firms "to comb their offices and homes for listening devices." Bloomberg reported today.

Galleon/Rajaratnam Hedge Fund Trial Phostponed Till March 2011

2011-02-11T13:55:00.006+01:00

HedgeCo News - U.S. District Court Judge Richard Holwell in New York has postponed hedge fund founder Raj Rajaratnam's trial from February 28, to March 8th according to Reuters.

The judge did not provide a reason. Reuters reported that according to court officials, the federal prosecutors requested the postponement.

Two ex-Galleon hedge fund managers also pleaded guilty in January of this year to insider trading. Adam Smith agreed to testify against Rajaratnam in exchange for protection from prosecution for other crimes. Michael Cardillo also pleaded guilty to the same charges. The ex-hedge fund managers agreed to give up any money they made, and Cardillo also agreed to testify against Rajaratnam next month. Smith and Cardillo could face up to 20 years in prison on the securities fraud counts.

Rajaratnam's co defendant Danielle Chiesi also pleaded guilty in court. She was accused of receiving insider information from Robert Moffat, Jr., who also pleaded guilty in the Galleon hedge fund fraud scheme.

Rajaratnam was taken into custody in New York on Oct. 16, 2009 in what is being called the USA’s largest hedge fund insider-trading scheme. He is being accused of insider trading and securities fraud, generating as much as $49 million in profit. The majority of the stocks involved are in technology, including, IBM, Intel, Akamai Technologies Inc, Polycom Inc, Hilton Hotels Corp, Google Inc, Sun Microsystems Inc SUNW.TI, Clearwire Corp, Advanced Micro Devices, ATI Technologies Inc and eBay Inc.

Richard Gere Replaces Al Pacino As Hedge Fund Honcho

2011-02-08T17:26:00.004+01:00

Hedge Fund Lounge - Al Pacino is reported to have quit the role as big time hedge fund manager in the new financial thriller “Arbitrage” opposite Susan Sarandon.

However, Pacino is to be replaced by Richard Gere, according to Hollywood sources. Gere is said to be in talks regarding the role.

The movie depicts a hedge fund magnate under investigation, desperate to complete the sale of his trading empire to a major bank before his double-dealings are revealed.

The film is written and directed by Nicholas Jarecki, shooting is set to begin in New York mid-spring. Eva Green, from Casino Royale, will also be starring in the film, according to Hollywood Reporter. The film is to be produced by Infinity Media.

Hennessee Hedge Fund Index advanced +0.80% in January

2011-02-08T13:44:00.000+01:00

HedgeCo News - The Hennessee Hedge Fund Index advanced +0.80% in January (+0.80% YTD), while the S&P 500 advanced +2.26% (+2.26% YTD), the Dow Jones Industrial Average increased +2.72% (+2.72% YTD), and the NASDAQ Composite Index climbed +1.78% (+1.78% YTD). Bonds advanced, as the Barclays Aggregate Bond Index increased +0.12% (+0.12% YTD) and the Barclays High Yield Credit Bond Index advanced +2.21% (+2.21% YTD).

“Hedge funds had a decent start to the year as the environment for stock picking improved. Some managers struggled to produce profits as short portfolios detracted from performance,” Charles Gradante , co-founder of Hennessee Group, said. “The general consensus among hedge fund managers is that the economy is improving and markets should continue to advance in the short term. That said, managers are aware of several key macro risks, such as the European Sovereign debt crisis, emerging market inflation, and fiscal imbalances in the U.S. , that have the potential to cause volatility throughout the year.”

Six Analysts Charged In Hedge Fund Insider Trading Case

2011-02-04T13:53:00.000+01:00

Winifred Jiau

James Fleishman with attorney Ethan Balogh

New York (HedgeCo.net) – The SEC yesterday charged Mark Anthony Longoria, a manager at A.M.D.; Daniel L. DeVore, a manager at Dell; Winifred Jiau, a consultant with insider information about Marvell Technologies, and Walter Shimoon, an executive at Flextronics International.

Bob Nguyen and James Fleishman, both employees of Primary Global, were also charged by the S.E.C, according to a report by the New York Times.

Walter Shimoon

Mark Anthony Longoria

The SEC filed civil charges of insider trading against six people associated with expert network firms after criminal cases brought earlier by the Justice Department against the same group.

The consultants are accused of leaking privileged information to hedge funds about companies like Advanced Micro Devices, Apple and Dell, about $6 million in illicit gains was made through the tips, the SEC complaint said.

“Company executives and other insiders moonlighting as consultants to hedge funds cannot blatantly peddle their company’s confidential information for personal gain,” Robert Khuzami, director of the SEC’s enforcement division said. “The Primary Global consultants and employees schemed to facilitate widespread and repeated insider trading by several hedge funds and other investment professionals.”

Ramius Challenges Immersion Choice of Directors

2011-02-01T12:20:00.000+01:00

HedgeCo News - Alternative investment and hedge fund advisor Ramius Value and Opportunity Advisors LLC, a subsidiary of Ramius LLC., (Ramius) has challenged the board of top touch technology company Immersion to elect a new Director. Ramius also nominated a list of directors for presentation at Immersion’s 2011 annual meeting of shareholders.

“As Immersion’s largest shareholder, we have continually tried to work cooperatively to enhance the composition of the Board for the benefit of all shareholders. “Ramius Managing Director Peter Feld said in a letter to the members of the Board of Directors of Immersion Corporation, “Unfortunately, our efforts have been rebuffed at every turn. Meanwhile, the current Board has overseen extremely poor long-term operating and stock price performance.”

Ramius owns approximately 8.8% of the shares outstanding. In the letter, the hedge fund advisor outlined its views regarding the weak long-term operating and stock price performance and the need for change on the Board of Directors.

Ramius claims the current Director has no experience in technology and was placed in the position due to direct ties to the Chairman of Immersion, Jack Salticha. Only 27% of Immersion’s shareholders voted to support his election to the Board at the 2010 annual meeting.

“Since the end of 2007, Immersion has burned through approximately $78 million of cash, equivalent to $2.77 per share or 46% of the Company’s current stock price. For this substantial investment, which included over $30 million in research and development expenses, revenues have increased by a dismal $1.5 million or 5%,” the letter said.

Dialectic Capital, the second largest shareholder of Immersion, publicly disclosed that they too had nominated a slate of directors for election at the 2011 annual meeting.

“This should be a wake up call to the Board.” Ramius said, “Your shareholders are not happy.”

Hedge Fund Managers Agree To Testify Against Rajaratnam In Exchange For Leniency

2011-01-27T13:26:00.003+01:00

HedgeCo News - Two ex-Galleon hedge fund managers pleaded guilty yesterday to insider trading. Adam Smith agreed to testify against Galleon hedge fund founder Raj Rajaratnam in exchange for protection from prosecution for other crimes.

Michael Cardillo also pleaded guilty to the same charges. The ex-hedge fund managers agreed to give up any money they made, and Cardillo also agreed to testify against Rajaratnam next month. Smith and Cardillo could face up to 20 years in prison on the securities fraud counts.

Rajaratnam's co defendant Danielle Chiesi also pleaded guilty last week. She was accused of receiving insider information from Robert Moffat, Jr., who also pleaded guilty in the Galleon hedge fund fraud scheme.

Rajaratnam was taken into custody in New York on Oct. 16, 2009 in what is being called the USA’s largest hedge fund insider-trading scheme. He is being accused of insider trading and securities fraud, generating as much as $49 million in profit. The majority of the stocks involved are in technology, including, IBM, Intel, Akamai Technologies Inc, Polycom Inc, Hilton Hotels Corp, Google Inc, Sun Microsystems Inc SUNW.TI, Clearwire Corp, Advanced Micro Devices, ATI Technologies Inc and eBay Inc.

Breakout Science Bloggers via Science Weekly

2011-01-24T13:46:00.001+01:00

Mind Hacks by Vaughan Bell
Observations of a Nerd by Christie Wilcox
Neurotic Physiology by Scicurious
Science Seeker, an aggregator
Not Exactly Rocket Science by Ed Yong
Bad Astronomy by Phil Plait
The Loom by Carl Zimmer
Laelaps by Brian Switek
Frontal Cortex by Jonah Lehrer
Neuron Culture by David Dobbs
Superbug by Maryn McKenna
NeuroTribes by Steve Silberman
The Gleaming Retort by John Rennie
Science 3.0 by Mark Hahnel
John Hawks' Weblog
Thoughtomics by Lucas Brouwers
Krulwich Wonders by Robert Krulwich
A Blog Around the Clock by Bora Zivkovic
Scientific American blogs
The science comedian by Brian Malow

Chiesi Pleads Guilty Ahead Of Rajaratnam/Galleon Hedge Fund Trial

2011-01-20T14:10:00.002+01:00

HedgeCo news - Danielle Chiesi has pleaded guilty at a plea proceeding in U. S. District Court located in New York. She was accused of receiving insider information from Robert Moffat, Jr., who also pleaded guilty in the Galleon hedge fund fraud scheme.

From August to October 2008, Moffat got insider information relating to IBM, Advanced Micro Devices, Inc. (AMD) and Lenovo Group Ltd. (Lenovo), providing the insider information to to Chiesi, hedge fund founder Raj Rajaratnam’s co-defendant. She worked for New Castle Partners, an equity hedge fund group affiliated with JPMorgan Chase & Co.

The court documents reveal that in September 2008, Moffat provided Chiesi with information relating to IBM’s and Lenovo’s performance in the companies’ respective fiscal quarters ending in September 2008.

Chiesi and Rajaratnam were arrested in October 2009. Her guilty plea comes a month before Rajaratnam goes on trial.

Hedge Fund Tax Alert: Reporting of ‘Specified Foreign Financial Assets

2011-01-07T13:59:00.001+01:00

New York (HedgeCo.net) – U.S. taxpayers with ownership in foreign hedge funds, investments and assets may be affected by the Foreign Account Tax Compliance Act (“FATCA”), which was included as part of the 2010 Hiring Incentives to Restore Employment (“HIRE”) Act, according to hedge fund adviser Decosimo.

Hedge fund managers may need information on related costs and penalties associated with noncompliance.

A short summary of the key points are:

* WHO is subject: individuals (but may be expanded to entities by regulations).

* WHAT is subject: any “specified foreign financial asset” which includes foreign bank or securities, accounts, any stock or security issued by a non-US person, any financial instrument or contract held for investment where the issuer or counterparty is a non-US person and any interest in a foreign entity with total value of all accounts of $50,000 or more.

* WHEN is effective date: Tax filing year 2011 for most individuals.

* WHERE is this reported: Form 1040 package (specific form not yet drafted).

* WHY should taxpayers comply: potential penalties are substantial and statute of limitations may be involuntarily extended.

Full Alert Here: Reporting of ‘Specified Foreign Financial Assets’ (22KB)

Hedge Fund Fraud: iPod Leaking Executive Makes Bail

2011-01-05T11:32:00.002+01:00

HedgeCo.net - Three of the research executives arrested by the FBI in December have been granted bail, including the man who allegedly leaked details about the iPad to a a hedge fund.

James Fleishman, from Primary Global Research, Mark A. Longoria, from Advanced Micro Devices, Walter Shimoon, from Flextronics International, and Manosha Karunatilaka from Taiwan Semiconductor Manufacturing, are accused of selling confidential information to hedge funds.

Along with travel restrictions, Reuters reports that Shimoon's bail was set at $150,000, Longoria's at $50,000 and Fleishman's bail was set at $700,000.

Hedge Fund Projects: Epic Louis Armstrong Bio

2010-12-31T13:38:00.002+01:00

HedgeCo News - Good news for music lovers and art investors, film producers Oley Sassone and Bill Badalato are seeking hedge fund financing for a major motion picture based on the young life of Louis Armstrong, entitled Black & Blue.

Total budget for the project is $18 million. The film will be shot in New Orleans, where a 30% State tax credit is available. Musical bio pics such as Ray, Walk The Line, La vie En Rose, have been extremely successful at the box office (all have grossed over $100 million) and have won Academy Awards.

The investment proposal describes Black & Blue as, “A sometimes poignant, sometimes sad, sometimes humorous but always entertaining story of the young Louis Armstrong as he claws his way through the seamier side of New Orleans from childhood through adolescence to young adulthood on his path to becoming a jazz superstar – an icon in the entertainment industry.”

I’ll know more about the project soon, as Sassone is sending me the details as they develop. I’m a personal fan of both Armstrong and New Orleans, and am excited to play even a small part in the development of the film.

Oklahoma Hedge Fund Manager Sentenced To 10 Years

2010-12-22T16:25:00.000+01:00

HedgeCo News - Former hedge fund manager, Mark S. Trimble, of Edmond, Oklahoma, was sentenced to serve 10 years in federal prison for money laundering.

Trimble, 44, pleaded guilty in April to money laundering. Trimble’s hedge fund, Phidippides Capital Management, was used to divert $1,000,000 of investor funds to his own account, the prosecution claimed. The judge also ordered Trimble to serve two years of supervised release following his prison term and pay $9,045,451.23 in restitution to investors.

The investigation was conducted by the FBI, the Criminal Investigative Division of the IRS, and the United States Secret Service.

Hedge Fund Alert: The New Tax Act

2010-12-22T16:23:00.003+01:00

Holland & Knight Alert on the New Tax Act

Hedge fund law specialists, Holland & Knight said that the estate, gift and generation skipping transfer tax provisions of the new tax act are of major interest.

These changes will require every estate plan to be reviewed to make sure the best advantages are incorporated. Holland & Knight feels that there are significant planning opportunities still left for 2010.

Private Wealth Services Alert 12 20 10 (413KB)

Sadis & Goldberg on the Tax Relief Act of 2010

The Tax Code has been recently amended to extend what is commonly known as the “Bush Tax Cuts” that Congress enacted in 2001 (which by their original terms expired on December 31, 2010) will apply for another two years. The extension means that the income tax rates will now stay at 28% and 35%. Capital Gains tax rates will now stay at 15% and qualified dividends will continue to be taxed at 15%. The Alternative Minimum Tax exemption amount has been increased which will lower the number of taxpayers subject to this tax.

There are a number of tax breaks for businesses and individuals, such as the ability to make a tax free distribution of up to $100,000 from an IRA to a charity, and faster depreciation for businesses when property is placed into service.

Another major change is in the Federal Estate Tax law. The Federal Estate tax exemption will now be raised to $5,000,000, and the tax rate reduced from 55% to 35% for Federal Estate taxes. For estates of decedents dying in 2010, they can elect to have no estate taxes apply, and to have a modified basis carryover, instead of an estate tax imposed retroactively along with a step-up in basis. For example, if a married couple owns $10,000,000 in assets, with a properly planned estate, they would not be subject to any Federal Estate taxes. However, we must remind you that New York State has a separate estate tax imposed on estates over $1,000,000.

Prior to 2011, the Gift Tax Exemption was limited to $1,000,000. As of January 1, 2011, the gift tax exemption is increased to $5,000,000. Taxpayers should consider using their increased gift tax exemption over the next two years, as the lifetime exemption may decrease in the near future. There are a variety of estate planning techniques which can use the increased gift tax exemption. Additionally, the Generation Skipping Tax Exemption will be raised to $5,000,000.

5 Arrested In Insider Trading Probe

2010-12-18T13:18:00.002+01:00

HedgeCo.net - Five research executives have been arrested by the FBI, James Fleishman, from Primary Global Research, Mark A. Longoria, from Advanced Micro Devices, Walter Shimoon, from Flextronics International, and Manosha Karunatilaka from Taiwan Semiconductor Manufacturing.

The Washington Post reports that the four men were accused of selling confidential information to hedge funds while the fifth man, Daniel Devore, formerly an executive with Dell, pleaded guilty to wire fraud and conspiracy to commit wire fraud and securities fraud.

“A corrupt network of insiders at some of the world’s leading technology companies served as so-called consultants who sold out their employers by stealing and then peddling their valuable inside information,” U.S. attorney Preet Bharara said in a statement, according to The Washington Post.

Summary of SEC Proposed Regulations Implementing Dodd-Frank’s Mandated Hedge Fund and Private Equity Fund Registration and Reporting Regime

2010-12-03T15:28:00.001+01:00

Attached is a brief summary of the more than 400 pages of rule proposals recently released by the SEC pertaining to regulations implementing Dodd-Frank’s mandated hedge fund and private equity fund registration and reporting regime.

SEC Rule Proposals – Registration and Reporting (pdf 158KB)

The summary of the proposed rules covers which investments advisers will have to register with the SEC, which advisers will be exempt from registration with the SEC, and which advisers will have to register with the states rather than the SEC.

Also included is a reference to the timeline proposed by the SEC for implementation of the final rules, as well as remarks pertaining to an adviser’s own timeline for SEC registration, if necessary.

Hedge Funds Attract $61 Billion So Far In 2010

2010-11-16T14:05:00.000+01:00

New York (HedgeCo.net) - Hedge funds attracted $61 billion over the first 10 months of 2010, according to the November 2010 Eurekahedge Report, taking the hedge fund industry to $1.63 trillion, above October 2008 level.

Hedge funds are up 7.33%# YTD October, ahead of global markets by 4.64%. The Eurekahedge Long/Short Equity Hedge Fund Index is up 29.8% over the last 24 months and assets in long/short equity funds crossed US$500 billion.

All regional mandates delivered positive returns, with the exception of Japanese managers, as global markets kept up the momentum built up in September. A strong corporate earnings season and expectations of further quantitative easing resulted in healthy movements in the underlying markets. Asia ex-Japan funds continued their strong run, coming out on top for the fourth consecutive month, with gains of 3.08% and all strategies ending the month in positive territory. Managers investing in China witnessed a second month of excellent returns, up 3.78%, taking their two-month gain to 10.33%. Chinese managers were helped by a strong run in the underlying equity markets – the Shanghai Composite rose 11.53% while the Hang Seng gained 3.30%.

Managers in developed markets also registered some strong gains, with the Eurekahedge North American Hedge Fund Index gaining 2.47% in October. The healthy corporate earnings environment and increased investor confidence resulted in favourable conditions for equity based strategies – the S&P 500 was up 3.69% for the month.

Strong launch activity was seen in the first three quarters, with more than 600 funds launched in 2010 so far.

Two Florida Hedge Fund Managers Accused In Petters Scheme

2010-10-15T12:01:00.002+01:00

HedgeCo.net - The SEC has charged two Florida-based hedge fund managers and their funds with defrauding investors out of more than a billion dollars into a Ponzi scheme run Tom Petters, Reuters reports.

The SEC’s complaint filed in U.S. District Court for the District of Minnesota alleges that hedge fund managers Bruce Prévost and David Harrold, along with their firms Palm Beach Capital Management LP and Palm Beach Capital Management LLC invested more than $1 billion in hedge fund assets with Petters while pocketing more than $58 million in fees.

Petters promised investors that their money would be used to finance the purchase of vast amounts of consumer electronics by vendors who then re-sold the merchandise to such “Big Box” retailers as Wal-Mart and Costco. In reality, the “purchase order inventory financing” business was merely a Ponzi scheme. There were no inventory transactions.

Petters sold promissory notes to feeder funds like those controlled by Prévost, Harrold, and their firms, and Petters used some of the note proceeds to pay returns to earlier investors, diverting the rest of the cash to his own purposes.

Comments from the defense were not available at the time, the SEC is seeking a permanent injunction against the hedge funds and their managers, as well as disgorgement, including interest and financial penalties, the WSJ said.

Rajaratnam Challenges Wiretap Evidence

2010-10-05T12:21:00.003+01:00

New York (HedgeCo.net) - Hedge fund founder Raj Rajaratnam is again seeking to throw out the evidence gained by the prosecution's wiretapping evidence.

"In applying for wiretap permission in March 2008, an FBI agent failed to tell a judge about prior lengthy probes of his client by securities regulators and the FBI." Rajaratnam's lawyer, John Dowd, told Monday's Manhattan federal court hearing, according to Reuters.

In Feburary, Dowd attacked the U.S. government’s wiretap evidence saying he would file a motion to suppress the telephone recordings which were used to arrest Rajaratnam and more than a dozen other people in the Galleon raid. Rajaratnam then won an emergency order relieving him from having to turn over wiretap recordings because of legal hurdles in obtaining the 14,000 wiretap intercepts.

"The recordings were cherry picked and mismanaged and someone did not do their homework." Dowd told the Judge in the Feb hearing.

The hedge fund millionaire was taken into custody in New York on Oct. 16, 2009 in what is being called the USA’s largest hedge fund insider-trading scheme. He and his co-defendant, Danielle Chiesi, face up to 20 years in prison if convicted on the charges.

World Habitat Day Today

2010-10-04T12:53:00.004+01:00

HedgeCo Blogs - The United Nations has designated the first Monday in October as annual World Habitat Day. So on October 4, 2010 Habitat for Humanity (US) is echoing the United Nations’ theme for 2010: “Better City, Better Life” by focusing on neighborhood revitalization. Habitat is also releasing the 2011 Shelter Report, which focuses on the need for more research on the connections between homes and family health.

Habitat for Humanity-NYC is currently building a 41-unit affordable condominium building on Atlantic in Brooklyn made with environmentally-friendly materials. ”I can think of no better way to maximize our return-on-investment in human capital than by joining with Habitat for Humanity – New York City to build homes for families in need.” Stuart Feffer of Hedge Funds for Habitat NYC, said.

Habitat for Humanity Ireland is holding its first-ever Women Build in Romania from October 2-10. Fifteen women will travel to Romania to work with local families to build simple, decent, affordable homes. Global Habitat for Humanity offices have also organized local World Habitat Day events, click to find one in your area.

Barclays Wealth has hired fourteen new investment representatives

2010-09-30T11:48:00.004+01:00

$232 billion hedge fund manager Barclays Wealth has hired fourteen new investment representatives in it US branch offices.

In Miami, Tony Esses joins as a Director and Investment Representative after 24 years at HSBC Private. Robert Sperber joins as a Director and Investment Representative from Morgan Stanley Smith Barney. Previously, Sperber was a financial advisor at UBS and Oppenheimer & Co. in New York. James Hafele, also joins Sperber’s team from Morgan Stanley Smith Barney.

In Palm Beach, Matthew Burton joins as a Vice President and Investment Representative from JP Morgan.

In Atlanta, Tom Pair joins Barclays Wealth as a Director and Investment Representative in Atlanta. John Nicholas joins as a Vice President and Investment Representative in Atlanta from Morgan Stanley Private Wealth Management. Forest Simmons joins as a Vice President and Investment Representative in Atlanta from BNY Mellon Wealth Management, where he worked for the past three years.

In New York, Ron Willis and John-Paul Tomassetti have joined as Directors and Investment Representatives. Rene Joliot, Edgar Ramirez and Romel Rodriguez have joined Barclays Wealth as Investment Representatives in New York from UBS International.

In Philadelphia, Gerhard van Arkel and Brett Thomas Meyers joined as Investment Representatives in from Wilmington Trust.

Finally, Barclays Wealth appointed Brian Sears as a Managing Director and Regional Manager for Los Angeles. Sears joins from Neuberger Berman in New York, where he was most recently Global Co-Head of Distribution for Alternative Investments. Prior to that, he spent 15 years as an investment advisor at Lehman Brothers, Merrill Lynch and Goldman Sachs.

Hedge Funds Provide Biofuel Company With Bridge Loan

2010-09-29T12:31:00.003+01:00

New York - Hedge funds Third Point and Greenlight Capital have made a short-term loan of $19.4 million to BioFuel Energy Corp., in which they hold shares, MarketWatch reports.

With a 12.4% interest rate, a 4% fee and and repayments by March 24, 2011, the Securities and Exchange Commission reports that the bridge loan is secured by an equity stake in a BioFuel subsidiary.

The two hedge funds own 69% of BioFuel’s outstanding common shares combined, MaketWatch said. Third Point and Greenlight stand to make a large profit if BioFuel does not produce the payments.

With debts of $212 million, BioFuel has lost $57 million since 2007.

Hedge Funds To Get Tribune Out Of Bankruptcy

2010-09-29T11:26:00.002+01:00

HedgeCo News - The Chicago Tribune and Los Angeles Times have made a deal with hedge funds Oaktree Capital Management and Angelo, Gordon & Co LP., which will give the two hedge funds significant stakes in the now bankrupt Tribune Co., according to a Reuters report.

Hedge fund Angelo, Gordon & Co., already holds stakes in the Philadelphia Inquirer and Minneapolis StarTribune.

The Tribune has been languishing in Chapter 11 bankruptcy since 2008, the deal would also would allow for Tribune to exit bankruptcy before resolving legal claims, Reuters said.

Awaiting bankruptcy court approval, Tribune said the two hedge funds hold a "significant" amount of the $6.6 billion in loans stemming from the first part of the two-step deal that put the previous owner in control.

"The mediator is confident that the proposed plan will lead to additional constructive discussions between and among the debtors and other parties," said a court filing from Kevin Gross, the Delaware bankruptcy judge who acted as mediator, according to the paper. The mediations are ongoing.

The Age Illusion: How the Wealthy are Redefining Their Retirement

2010-09-28T12:09:00.002+01:00

New York (HedgeCo.net) Global hedge fund manager Barclays Wealth reports that retirement is being rejected by a new breed of wealthy workers – the 'Nevertirees' - who want to carry on working for as long as they are able.

Ledbury Research surveyed over 2,000 high net worth individuals, all of whom had over $1.5m/1m in investable assets, 200 had more than $15m/10m. Respondents came from 20 countries across Europe, North America, South America, Middle East and Asia Pacific.

Sixty percent of wealthy individuals polled in a global survey say that they plan to become a Nevertiree, shunning traditional retirement, instead continuing to work, start businesses and take on new projects in their later years.

The report, the 12th in the Barclays Wealth Insights series, is based on a survey of more than 2,000 high net worth individuals, who were asked to consider what retirement and later life means to them.

The findings show that the concept of nevertirement is expected to grow over the coming decades, with over 70% of respondents under the age of 45 saying that they will always be involved in some form of work.

In particular, 75% of U.S. respondents plan to work part time after they have stopped working permanently, seven percent more than the global average. Specifically, 32% plan to work between five and 20 hours per week in "retirement", and seven percent plan to work more than 20 hours per week, "simply reaching the normal age to retire" is not at all important in determining when they stop working.

Only 40% of U.S. high net worth individuals "completely agree" that they are "totally confident" in having enough money for retirement, with another 37% "slightly agreeing". Only 48% of U.S. high net worth individuals would completely classify themselves as financially secure.

When planning for retirement 35% of U.S. wealthy feel that the rate of tax they have to pay is predictable, compared to 58% of Latin American high net worth individuals and 73% of wealthy individuals in Switzerland.

Further, one in ten of the wealthiest surveyed do not agree that they have enough money for retirement (greater than $15m in investable assets). Among the global wealthy who are already retired, only 51% agree they are completely confident in having enough money for their retirement.

Hedge Fund Launch: Clareville Capital Partners LLP

2010-09-21T11:53:00.002+01:00

HedgeCo News - Privately owned financial management company, ML Capital Asset Management, (ML Capital) announced that the first manager to launch on the Montlake UCTIS platform* will be Clareville Capital Partners LLP, the hedge fund founded by David Yarrow. The fund will commence trading on October 1, 2010.

"The UCITS revolution allows investors to access managers who can actively short stocks and hedge a portfolio, however managers with long and successful experience of running equity hedge funds are in short supply." John Lowry, Chairman of ML Capital said, "The Pegasus fund has been running for over a decade and has always been run in line with the UCITS principles, which is very comforting to our investors."

David Yarrow and Angus Donaldson will co-manage a UCITS compliant derivative of the 13-year-old Pegasus Fund, which employs a UK Long/Short equity strategy.

"Yarrow and Donaldson's investment style will appeal to a lot of our investors. Their strong performance in upwardly trending markets and excellent downside protection in perilous markets is demonstrated by their track record." Lowry said.

"The past 10 years have illustrated the limitations of traditional "long only" equity investing." Angus Donaldson added, "All investors should have the opportunity to protect themselves from market volatility by investing in regulated hedge funds. However, many of the managers who have launched alternative UCITS products have found that they have weak brand awareness outside of the hedge fund world. This applies not just to smaller boutiques but also some of the very largest hedge fund houses. "

*Domiciled in Ireland, the Montlake UCITS platform Plc, provides investment managers with a turnkey solution for launching UCITS funds under its umbrella structure.

Dublin As A Center Of Hedge Fund Expertise

2010-09-20T12:31:00.004+01:00

HedgeCo News New Jersey-based hedge fund service provider Fi-Tek LLC has chosen Dublin for it's European headquarters. "Ireland's pro-business environment, availability of highly skilled personnel, the presence of many of our clients, and working with IDA were the key reasons Ireland was chosen as the location for our European Headquarters." Peter Marshall, Managing Director, Fi-Tek Ireland said.

The company provides software products and solutions for the alternative investments, trust, asset servicing and securities processing industries. The company's HedgeTek product, a fully integrated book and tax allocation platform for hedge funds, covers both US partnerships and unitised funds, is used by many of the leading hedge fund administrators, accounting firms and fund managers servicing over 3,500 funds with over $400 billion in assets..

"Ireland is the largest hedge fund administration centre in the world with almost half of all global alternative investment funds operated from here." Ireland's Minister for Enterprise, Trade and Innovation Batt O'Keeffe said, "Fi-Tek's decision to establish a European headquarters in Dublin shows we can out-perform rival locations for major global investments in the financial services sector. More than half the world's leading financial services firms now have operations in Ireland."

"Fi-Tek Ireland has recently gone live implementing HedgeTek with two leading global banks in Dublin," stated Subir Chatterjee, Fi-Tek founder and CEO. "Dublin has become a center of expertise for hedge fund administration globally, and our intent is to make Fi-Tek Ireland a centre of excellence for us as well."

Charter Launches London Hedge Fund

2010-09-20T11:59:00.004+01:00

HedgeCo News - Charter Group has teamed up with Brian Taitz to launch a new hedge fund administration firm, Charter Group Fund Administration Ltd. The firm is based in London and focuses primarily on offshore funds managed by boutique fund managers.

Taitz founded and successfully managed an award-winning fund administration operation in Sydney, Australia before relocating to the UK. In Taitz’s previous firm, clients included regional Hedge Fund of the Year winners, Best Market Neutral Fund winners, other alternatives including electricity and power hedge funds, as well as established and distinguished long only boutiques.

Taitz says that the UK market is fragmented with larger administrators turning away smaller funds and relying more on their size than their service levels to win clients. This leads to clients having to look to foreign providers to fill the gap and then having to deal with a plethora of issues such as time zones and language or cultural differences. Taitz says it is re-assuring for a fund manager to know that they can deal directly with the principals of the business whose office is around the corner.

The boutique offers full service fund administration to offshore funds and caters for a wide variety of strategies including equity long/short, long only, market neutral, arbitrage, global macro, private equity, fund-of-hedge funds and others. For more traditional funds, the firm offers an attribution/ performance analysis reporting service.

The firm sees its differentiating factors as being: an unrelenting focus on service quality; having the best technology available; hiring properly qualified staff; and being based in London, in close proximity to intended clients. “Our clients are not just one of hundreds fighting for management’s attention which may be the case at the larger shops” says Taitz.

The firm also has the distinct technological advantage that all its administrative services are carried out through a single integrated system - investor registry, fund accounting, investing and complex performance fees – reducing risk and leading to greater efficiencies.

“Our key strategic differentiator, however, is to pace our growth.” Taitz continues, “As a result we will position ourselves as a premier provider of fund administration services to boutiques. We will soft close periodically to ensure that service levels are never compromised.”

People Moves: Hedgeye Names Gagliardi Managing Director of Energy

2010-09-16T16:02:00.001+01:00

HedgeCo News – Virtual hedge fund, Hedgeye Risk Management, has appointed industry veteran Louis Gagliardi as Managing Director of Energy.

Gagliardi was noted in Robert Bryce’s book as being an “Analyst Who Thinks” and “the first time any major Wall Street research firm had dared question Enron’s valuation.” Gagliardi is also known for alerting investors as early as 2003 ahead of buying opportunities in emerging markets: Brazil’s Petrobras, Russia’s Lukoil, China’s PetroChina, Austria’s OMV, and Hungary’s MOL. Gagliardi has been cited throughout the media including CNBC, NY Times, Forbes, and Financial Times.

“We’re thrilled to have Lou champion our Energy effort and add to our growing platform; he brings experience across investment analysis and corporate, a stellar track record, and a history of thinking independently on behalf of his clients.” Keith McCullough, CEO of Hedgeye notes, “To that end, we’re confident that his standards and expertise will hold up to our client’s expectations, and our reputation.”

Hedgeye Risk Management will officially launch its Energy sector research and services to subscribers on September 16, 2010.

Book Review: Too Big To Fail

2010-09-14T13:28:00.005+01:00

HedgeCo Blogs - I asked Andrew Ross Sorkin: "In hindsight, what is the most important lesson to be learned from the financial crisis?"

"It all comes back to one word: debt." Sorkin said, "We can blame the financial crisis on a lot of things -- misguided housing policy, too-low interest rates, global imbalances, lax regulation, bankers-gone-wild -- but in the end, it was a function of an over-leveraged system."

Andrew Sorkin, the award winning financial reporter for the New York Times, spent over five hundred hours interviewing high net worth individuals, advisers and officials in an effort to capture the full account of the Financial crisis in detail.

In his book: "Too Big To Fail - The inside story on how Wall Street and Washington fought to save the financial system - and themselves", Sorkin recounts the maelstrom that struck high finance in 2008 in story-like detail.

I can see why it has been on the bestseller list for over 40 weeks. Once revealed, it is hard to look away from the secret life of those in power. "Pay very much attention to the man behind the curtain."

Sorkin is also the editor and founder of Dealbook, an online daily financial report. He has won a Gerald Loeb Award, been named Young Global Leader by The World Economic Forum and has recently been added to The Directorship 100, which recognizes influential US corporate boardroom members.

6 Months Inside For Robert Moffat in Hedge Fund Insider Trading Ring

2010-09-14T11:52:00.002+01:00

HedgeCo News - Former IBM vice president Robert Moffat was sentenced to six months in prison in the Rajaratnam/Chiesi hedge fund insider trading case, the Courthouse News Services reported this morning. Judge Deborah Batts additionally fined Moffat $50,000.

“White-collar crime is just as destructive to our social fabric as the crimes of drugs and violence,” the Judge said in handing down the sentence. Moffat’s conspiracy count carries a maximum sentence of five years in prison and a maximum fine of $250,000. His securities fraud count carries a maximum sentence of 20 years in prison and a fine of $5 million.

Moffat pleaded guilty in March to conspiracy and securities fraud stemming from his involvement in the largest US hedge fund insider trading case in history.

The court documents reveal that in September 2008, Moffat provided Chiesi with insider information in August to October 2008, relating to IBM and Lenovo Group Ltd.

Moffat confessed to providing the indider information to to Danielle Chiesi, Rajaratnam’s co-defendant. She worked for New Castle Partners, an equity hedge fund group affiliated with JPMorgan Chase & Co.
Chiesi, along with Sri Lankan billionaire Raj Rajaratnam, are scheduled for trial in 2011.

Moffat said he did not use the information to make money, but that he passed it along to Chiesi through “misplaced trust” and “a misguided desire to appear important and knowledgeable.” the Courthouse News Services said.

Hedge Fund Launch: Peakside Opens Real Estate Private Equity Firm

2010-09-14T11:17:00.002+01:00

HedgeCo News - Peakside Capital and its affiliates are launching a new real estate private equity firm and concluding a transaction with Bank of America Merrill Lynch (“BofAML”) involving the following elements:

• the acquisition by Peakside of BofAML’s 100% indirect interest in the general partner of the Merrill Lynch European Real Estate Opportunity Fund L.P. (“MLEREOF”), which has a total of EUR 261 million ($335.6 million) of capital commitments;
• the replacement of an affiliate of BofAML with Peakside as the manager of MLEREOF;
• the acquisition by Peakside of BofAML’s interests in the general partner and investment manager of the Bosphorus Real Estate Fund I (“BREF”), which has a total of EUR 204 million ($262 million) of capital commitments; and
• the completion of a portfolio management agreement between Peakside and an affiliate of BofAML for Peakside to manage a portfolio of European real estate investments held directly or indirectly by BofAML affiliates.

The Fund portions of this transaction have been approved, with the requisite voting percentages, by the limited partners of both the MLEREOF and BREF funds. In connection with the transaction, MLEREOF will be renamed “Peakside Real Estate Fund I”. BofAML plans to maintain its limited partnership positions in both funds following the transaction.

“Peakside will launch as a mid-sized manager with a strong track record, an experienced team and the investment capacity needed to take advantage of the opportunities that are rapidly emerging in real estate in Europe." Roger Barris, Chairman of Peakside, said.

Peakside has been newly created by the former senior managers of the European team of the Real Estate Principal Investments group within BofAML, consisting of Roger Barris, Stefan Aumann, Boris Schran and Mark Fenchelle. The team was responsible for the management of the two real estate funds and the European BofAML portfolio, In addition to the senior managers, Peakside has employed 13 former members of the BofAML group and plans to hire an additional 4 persons, including Christoph Munte, formerly of Morgan Stanley, who will join as General Counsel and a member of the Peakside Management Committee.

Peakside has opened offices in the Cayman Islands, Switzerland, the United Kingdom, and Luxembourg. Peakside will provide investment advisory, deal origination and execution, asset management and fund management services in real estate across Europe, including CEE and Turkey, to qualified investor clients such as institutions and high-net-worth individuals. Going forward, Peakside plans to raise discretionary funds, but also plans to take non-discretionary investment mandates from investors.

“We considered many alternatives for these assets, and driven by our confidence in the Peakside team, we concluded that the best option, in our capacity as a limited partner in the funds and the owner of the proprietary assets, is to allow the Peakside team to continue to manage the funds and the legacy European real estate assets as an independent company.” Jim Forbes, BofAML Global Principal Investments executive, said.

Swiss Hedge Fund Acquires Dunedin Independent

2010-09-13T11:36:00.007+01:00

HedgeCo News - Helvetia Wealth has expanded its influence in Scotland with the acquisition of Dunedin Independent, Scotland's largest independently-owned financial advisor (IFA) . With GBP350 million ($539 million) in AUM, Dundein is ranked in the top 100 wealth management companies in the UK.

"With offices also in Liechtenstein, Geneva, London, Hamburg, Mauritius, Dublin and Glasgow, Helvetia Wealth AG now has an increased asset base of CHF 1.5-billion ($1.47 billion), with the UK earmarked as one of the group's key markets," Helvetia CEO Kamil Stender, said. "Employing the latest methodologies in wealth management, we are well positioned to service the rapidly growing demand for wealth management services. This demand is the result of globalisation and the increased prosperity it engenders."

"There are now in excess of 7.6 million high net worth individuals worldwide. Since 2002, this market has grown at a rate of 7.5% p.a. And total assets under management now exceed CHF 36Trillion ($35.5 trillion)." Stender said.

"The enlarged group features two prominent IFA firms in Scotland, Dunedin Independent plc and City Gate Money Managers. In addition, Helvetia owns a controlling stake in London-based TAM Asset Management with a London Stock Exchange brokerage licence allowing us to execute our own trades faster at better margins." Yuill Irvine, MD at Dunedin Independent said, "The amalgamation will introduce a range of cost attractive synergies for Helvetia and attractive efficiencies for all three firm's clients as well as offering our clients access to Swiss banking facilities."

A team from leading national law firm HBJ Gateley Wareing acted on behalf of the shareholders of Dunedin Independent. "

Cayman Ranked #1 For Hedge Funds, Specialized Finance

2010-09-10T12:24:00.003+01:00

HedgeCo News - The world’s largest domicile for hedge funds, healthcare insurance captives and catastrophe bond transactions, has been named the top specialised financial center by The Banker, a banking and finance magazine, in it’s 2010 IFC Rankings released this month.

Cayman, for the second year running, has been awarded first place by an increased margin over other jurisdictions such as Bermuda, Jersey, Guernsey, Malta, Gibraltar, Monaco and Cyprus.

The Banker’s ranking of international financial centres is based not simply on the size of the financial services industry in each location, but focuses instead on the level of international business and the value offered to institutions seeking to expand their overseas operations.

“This is yet another objective finding that reinforces the fact that Cayman is regarded by institutions, if not by stubborn popular press, as a successful and transparent tax neutral jurisdiction from which to base international operations.” Anthony Travers, OBE, Chairman of Cayman Finance said.

“This result comes at a time when Cayman has just signed its twentieth tax information exchange agreement and statistics from the Islands’ regulating body CIMA show a continuingly robust performance by the financial services industry over the past year. Most importantly the financial crisis has been negotiated without the need to introduce corporate, income, capital gains, payroll or property taxes, the absence of which is likely to enhance Cayman’s attraction in the immediate future.” Travers said.

Statistics from the Cayman Islands Monetary Authority (CIMA) note that Cayman still maintains US$1.795 trillion in deposits and interbank bookings.

Lance Futures To Launch Hedge Funds, Futures Funds

2010-09-10T11:51:00.004+01:00

HedgeCo News – Frankfurt based Lance Futures has established a team of Commodity Trading Advisors and is launching CTA based hedge funds and managed futures funds, providing their clients with risk-adjusted returns with low volatility.

Lance will be diversifying class fund assets transversely with a team of money managers whose expertise in technical strategies would help diversify portfolios of the investors as they are well-versed in counter-trend, pattern recognition, intra-market spreads and option volatility arbitrage.

The new fund management utilizes well-researched strategies across worldwide liquid exchange-traded futures markets and at the same time evaluates these futures markets across various time frames.

Targeting annual returns of 10-20 percent with less than 10 percent draw-downs and with expected annual volatilities of 10-to 15 percent, the Lance Futures Investment Team targets such performance through due diligence, fund management strategies, qualitative and quantitative screening, monitoring and rigorous selection processes.

Centaur Appointed Hedge Fund Administrator at Scipion Capital

2010-08-26T12:04:00.003+01:00

HedgeCo News - Frontier market investment specialist, Scipion Capital, has appointed hedge fund specialist, Centaur Fund Services to take over fund administration for its range of funds.

"To be a successful frontier markets investor you must understand the landscape." Nicolas Clavel, CIO and founder of Scipion, said, "There are outstanding returns available in frontier markets, but accessing them requires an intimate knowledge of the regions and an agile and nuanced strategy to capitalise on the opportunities as they appear. There is no such thing as a generalised frontier market strategy."

Centaur will provide Scipion with the full suite of fund administration services, including fund accounting and investor and corporate services. Scipion’s fund range, including the firm’s flagship Commodities Trade Finance Fund, will use Centaur’s cutting edge iNAV process model, which provides an accurate daily NAV calculation and support services around the funds.

"Scipion’s range of funds has highly specialised and innovative strategies." Ronan Daly, Chairman of Centaur, added, "In many cases, the strategies they offer their investors are the first of their kind in the market."

Scipion was established in February 2007 by Nicolas Clavel, who has over 30 years’ experience of the financial services industry in Africa, with notable previous roles including CEO of both Citibank in Senegal and Stanbic Bank Sarl in the Congo.

The firm has an outstanding track record investing in Africa. The Scipion Commodity Trade Finance Fund, launched in August 07, has returned 35% since inception. The firm’s other strategies, The Scipion Alpha Seeker Fund, and the Scipion Ai40 Index Tracker Fund, the world’s first pan-African investible index, have both made positive returns for the year to date.

Established last year, Centaur already has approximately $1 billion in assets under administration. Its founders, Ronan Daly, Karen Malone and Eric Bertrand, have over 50 years of combined experience working within the hedge fund market in Europe.

Hedge Fund Boosts Red Cross Flood Relief in Pakistan

2010-08-20T11:11:00.002+01:00

New York (HedgeCo.net) - Harris today announced its support of Red Cross flood relief and recovery efforts in Pakistan through a $100,000 contribution from the bank's parent company, BMO Financial Group. Additionally, through Sept. 17, 2010, Harris branches will accept donations to the Red Cross and will waive wire transfer fees for customers sending funds to Pakistan to help facilitate additional humanitarian aid.

"Our team at Harris is deeply saddened by the devastation in Pakistan," said Ellen Costello, president and CEO, Harris Financial Corp. "We hope that by utilizing our resources -- our retail branch network and ability to carry out wire transfers -- we can help facilitate the emergency relief work of agencies like the Red Cross, which is providing vital aid to victims of this disaster."

"We're so pleased that Harris Bank continues to make supporting humanitarian relief efforts a priority. They've been a valued partner and continue to provide much needed help to people affected by disasters that strike here in our backyard, across the country or around the world," said Heidi Mucha, Chief Advancement Officer, American Red Cross of Greater Chicago.

$14 Billion Swiss Hedge Fund Develops Dow Jones Index Relationship

2010-08-19T11:46:00.004+01:00

New York (HedgeCo.net) - SAM, the E11.2 billion ($14.36 billion) hedge fund boutique focused exclusively on Sustainability Investing, is deepening its eleven-year-old collaboration with Dow Jones Indexes by expanding its worldwide Sustainability Index offering.

Under this joint marketing agreement, Dow Jones Indexes will be responsible for calculation, marketing and distribution of the indexes including the European indexes, while SAM remains responsible for the component selections. As a result, SAM’s collaboration with STOXX Ltd., which had previously calculated the European STOXX Sustainability Indexes, has been terminated.

“Over the past eleven years, the Dow Jones Sustainability Indexes have been successfully developed and expanded worldwide." Rodrigo Amandi, Managing Director SAM Indexes said, "Through what is now an exclusive global collaboration with Dow Jones Indexes, we are taking account of the growing significance of sustainability benchmarks by offering investors around the world a homogeneous index family. We extend our thanks to partner STOXX for the positive cooperation to date and look forward, in partnership with Dow Jones Indexes, to continuing our pioneering work in the field of sustainability and shaping the segment’s future growth.”

SAM retains responsibility for component selection The Dow Jones Sustainability Indexes (DJSI) are the oldest benchmarks for Sustainability Investing. Aggregate investment volumes in DJSI-based portfolios now total more than USD 8bn.

The firm’s offering comprises asset management, indexes and private equity. Its asset management capabilities include a range of single-theme, multi-theme and core sustainability investment strategies catering to institutional asset owners and financial intermediaries in Europe, the United States, Asia-Pacific and the Middle East.

SAM was founded in 1995, is headquartered in Zurich and employs over 100 professionals.

Grant Thornton LLP outlines key financial reform issues in Dodd-Frank Act for public company audit committees paper

2010-08-17T11:37:00.001+01:00

The recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act) will change the landscape for financial services firms and financial institutions. The Act addresses four major issues: transparency, risk management, accountability and structural oversight; and will create new regulators, bring new firms and markets under regulatory oversight, and provide new rulemaking and enforcement powers to regulators.

Although central elements of the Act focus on regulating the financial services sector, it also includes provisions affecting every public company, including enhanced SEC enforcement authority and additional corporate governance requirements.

Grant Thornton LLP’s Financial Service practice has created a paper – Financial reform: What public companies and their audit committees need to know about the Dodd-Frank Act– that outlines some key financial reform issues that public companies and their audit committees should understand, as well as actions they can consider to help guide their companies through this changing regulatory landscape.

“Although many audit committee members may not want to mire themselves in the minutiae of this complex legislation, they need to know that the important details are being addressed by their management teams,” noted Jack Katz, national managing partner of Grant Thornton’s Financial Services practice.

Some of the issues covered in the paper include:

1. Enhanced whistleblower protections

2. Nonbinding shareholder votes on “Say on Pay” and golden parachutes

3. Risk committees

4. Independence of compensation committees

5. SOX Section 404 (b) exemption

To download a full copy of Financial reform: What public companies and their audit committees need to know about the Dodd-Frank Act, please click here.

Many of the specific rules of the Act have yet to be shaped by regulators, and firms must stay a step ahead. To help companies navigate this uncharted territory, Grant Thornton LLP has created the Financial Regulatory Reform Resource Center. For more information about the legislation and emerging issues from the legislation, visit www.GrantThornton.com/financialreform.

Hedge Fund Handbook Released: ‘A Guide to Fund Management’

2010-08-16T17:47:00.000+01:00

HedgeCo.net News – There is a new book on the market for those who are planning to set up their own hedge fund. Daniel Broby’s ‘A Guide to Fund Management’ is published by Risk Books, a specialist in hedge fund and risk related publication.

“I wanted to capture all aspects of running a firm in one book.” Daniel Broby, Chief Investment Officer at Silk Invest, said, “I have spent far too much of my career reading industry white papers and compliance manuals. I wrote the sort of book that I wanted to buy when I first became a Chief Investment Officer over ten years ago.”

The book’s text is complimented by diagrams and bullet points that simplify the vast array of information.

Broby has had a long and successful career in both fund management and the hedge fund industry. He set up the first regulated and listed hedge fund in the Danish market for Bankinvest and launched a number of alternative funds for the investment arm of the Russian giant Renaissance Capital. After that that he branched out on his own.

“The advice is equally applicable for hedge funds as it is for established fund managers, especially as relates to the client centric firm. Essentially, it is a ‘how to do it’ manual that covers everything from the industry, investment process, through the front, middle and back office.” Broby said.

Hedge Fund Broker Lighthouse Suspends Trading Activities

2010-08-04T12:49:00.000+01:00

HedgeCo News – New York-based Lighthouse Financial Group has suspended their trading activities until further notice, effective August 3rd 2010, according to the hedge fund brokers’ website.

Lighthouse became a subsidiary of Lighthouse Global Partners, LLC in 2005, the shutdown includes the Lighthouse Prime Services unit.

According to hedge fund and private equity news source FINalternatives, the firm has been unable to make payroll, and has informed clients that they could only sell assets through the firm.

“A different source close to the firm says that Lighthouse is in talks with a boutique firm that has eyes on becoming a much larger player and is making a bid for all of the divisions, and an announcement could come as early as this afternoon.” FINalternatives said.

Hedge Fund Association To Sponsor AT&T Cycling Championship

2010-08-03T13:41:00.002+01:00

HedgeCo News - The AT&T USA Cycling Professional Criterium National Championship at the Glencoe Grand Prix is being sponsored this year by The Hedge Fund Association, a not-for-profit international educational and philanthropic group. The race will be be held Saturday August 14, 2010 in the village of Glencoe, Illinois.

“This event’s incredible popularity will allow the Hedge Fund Association and the Glencoe Education Foundation to draw attention to the issues plaguing today’s schools,” said Jim Gabriele, HFA Midwest Chapter Director and Managing Director of Butterfield Fulcrum.

The race, a regional staple for 23 years, will support the Glencoe Educational Foundation, a non-profit organization that seeks to enhance education in the Glencoe School District. As an event sponsor, the HFA will have its own tent where food and refreshments will be offered all day. For devoted racing fans, arrival time is suggested at noon on August 14, 2010, but arrivals are permitted as late as 6pm. A block party will follow the race.

“This is a wonderful opportunity for the hedge fund industry to contribute to education,” stated Stuart Brogan, HFA Director, Business Leader for Hedge Funds at Morningstar Inc and racer at the event. “Through the race’s collaboration with the Glencoe Educational Foundation, we will be supporting technology in the classroom, which is essential for today’s students.”

U.S. Hedge Fund Reform: Investor Protection Provisions

2010-08-03T12:24:00.001+01:00

HedgeCo.net - On July 21, 2010, after a legislative process that included intensive lobbying by influential interest groups and a partisan minority, President Obama signed into law H.R. 4173, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”). With this legislation, Congress approved the most sweeping overhaul of U. S. financial regulation since the Great Depression.

The U.S. Chamber of Commerce says the Act will require federal agencies to develop 520 rules, conduct 81 studies, and issue 93 reports. As a result of the legislation, the U.S. Treasury Department will create a Federal Insurance Office and the Federal Reserve Board will create a Consumer Financial Protection Agency, which will have an Office of Financial Protection for Older Americans and an Office of Financial Literacy. The topics the Financial Literacy Office will address include retirement planning. Other sections of the Act will revamp bank and hedge fund regulation and create a Financial Stability Oversight Council.

Investor Protection Provisions of the Act

General Purposes & Approach
While further regulations and studies are yet to be developed under the Act, the Investor Protection Provisions aim generally to protect investors, foster efficient and competitive markets, and enable the best services to investors. A fundamental purpose is to address areas identified as adversely impacting investors during the 2008 and 2009 credit and financial crisis. To better protect investors, the Act focuses primarily on enhanced SEC regulatory authority and penalty imposition with respect to financial institutions, securities brokers and dealers, and investment advisers.

With respect specifically to investment advisers, the Investor Protection Provisions generally first empower the SEC to gather and monitor from such advisers additional information regarding financial products sold, trading strategies, fee and commission structures and related matters. Second, they authorize expanded SEC examinations of, and enforcement protocols against, investment advisers, including imposition of civil penalties. Additional provisions include prohibitions against improper credit (margin) extension to investors.

A. Disclosure & Oversight Provisions
The Act amends the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advisers Act of 1940 and establishes an Investor Advisory Committee to advise and consult with the SEC on (1) regulatory priorities and issues regarding new products, trading strategies, fee structures, and the effectiveness of disclosures; (2) initiatives to protect investor interests; and (3) initiatives to promote investor confidence in the integrity of the financial marketplace.

Observation: To enforce the new disclosure rules, the SEC is authorized to gather information, communicate with investors or other members of the public, and engage in temporary or experimental programs in the public interest or for the protection of investors.

The SEC is also directed to establish a standard of conduct or fiduciary duty for brokers, dealers, and investment advisers to act, without regard to their own financial or other interests, in the best interests of the customer when providing personalized investment advice about securities to a retail customer.

Additionally, the SEC is required to:

Publish a study that examines the nature of “retail customers,” the range of products and services sold to them, the sellers or providers, and information such customers should receive before their purchase of investment products or services; and, following completion of this study, promulgate rules requiring that the appropriate persons or entities provide designated documents or information to retail customers prior to the purchase of identified investment products or services.

Report to Congress on the need for enhanced examination and enforcement resources for investment advisers, and regarding the regulation and oversight of financial planning.

B. Enforcement and Remedies
The Act authorizes the SEC to restrict or prohibit mandatory dispute arbitration affecting customers or clients of brokers and dealers, including municipal securities dealers, and requires reporting to Congress on the costs of arbitration related to the Financial Industry Regulatory Authority as overseen by the SEC. The Act also expands incentives and protections for so-called whistleblowers and funding to the SEC to pay awards to whistleblowers as well as to provide investor education initiatives to help investors protect themselves against securities fraud or other violations of securities laws and regulations.

Observation: The Act also broadens the regulation of brokers, dealers, municipal securities dealers, transfer agents, and investment advisers, to revise requirements for collateral bars or suspensions in the case of persons associated, or seeking to be associated, with any who are subject to penalties for specified offenses. The Investment Advisers Act of 1940 is also broadened with regard to liability of, and prosecution and penalties for, persons who aid or abet violations of that act.

Enhanced SEC enforcement and remedies also include:
(1) Expanded deadlines and procedures for completing compliance examinations, inspections, and enforcement actions for violations of securities laws; (2) nationwide service of subpoenas; (3) imposition of civil penalties in cease and desist proceedings; (4) enforcement authority over any person who at the time of the alleged misconduct was a member or employee of specified bodies (formerly associated persons); (5) the sharing of privileged information with other authorities; (6) increased access to grand jury information; (7) recklessness as an element of the aiding and abetting standard of knowledge; and (8) SEC extraterritorial jurisdiction with respect to antifraud activities.

Requirements for the fidelity bonding of registered management companies.

Reasonable periodic, special or other information and document requests by SEC representatives conducting surveillance or risk assessments of all securities markets, national securities exchanges, their members, brokers or dealers who transact a business in securities through the medium of any such member, SEC-registered securities associations, registered brokers or dealers and municipal securities dealers, registered securities information processors, registered transfer agents, and other persons.

Record-examination requirements for registered investment companies, and each underwriter, broker, dealer, or investment adviser that is a majority-owned subsidiary of such a company.

Provision that any person who controls a person liable for a violation is also jointly and severally liable to the SEC in certain actions it may bring.

Extension of SEC rulemaking authority to prescribe rules for proxy access by shareholders.

Observation: Section 413 of the Act excludes a primary residence from an investor’s net worth for purposes of determining “accredited investor” status under Rule 501(a)(5) of the SEC’s private placement safe harbor in Regulation D. This exclusion, immediately effective upon enactment without any further action by the SEC, will make it more difficult for natural persons to qualify as accredited investors. Issuers and other participants in private placement transactions should review their disclosure and subscription documents immediately and make necessary changes to conform to the new standard.

Also regarding Section 413, it has been reported that the staff of the SEC is expressing informally its view that, in determining an individual’s net worth for such purposes, the amount of mortgage or other indebtedness secured by the investor’s primary residence – to the extent such indebtedness does not exceed the value of the residence – does not need to be considered as a liability, but where the indebtedness secured by the primary residence exceeds the value of the residence and the lender has other recourse against the investor, the excess should be deducted from the investor’s net worth.

Observation: The Act addresses manipulative and deceptive devices, and (1) makes it unlawful for any person to effect, accept, or facilitate a transaction involving the loan or borrowing of securities in contravention of SEC rules and regulations; (2) imposes requirements for the reporting of lost and stolen securities to include canceled securities or any other category the SEC may prescribe; (3) requires fingerprinting of partners, directors, officers, and employees of registered securities information processors, national securities exchanges, and national securities associations; and (4) declares void any condition, stipulation or provision binding any person to waive compliance with the rules of a self-regulatory organization.

Further, the Act:

Revises the prohibition against unlawful credit extension (margin lending) to customers.

Extends the definition of “interested person” to any natural person who is a member of a class of persons the SEC determines are unlikely to exercise an appropriate degree of independence due to (1) a material business or professional relationship with a company or any affiliated person of such company or (2) a close familial relationship with any natural person who is an affiliated person of such company.

Repeals two current requirements dealing with execution of portfolio transactions and the lending of money or other property.

Authorizes the SEC to limit the extent to which a registered open-end investment company may own, hold, or invest in illiquid securities or other illiquid property.

Subjects to domiciliary state registration requirements certain mid-sized investment advisers otherwise not exempt from federal registration requirements.

Directs the SEC to adopt a rule making it unlawful for an SEC-registered investment adviser to have custody of funds or securities of a client the value of which exceeds $10 million, unless: (1) the funds and securities are maintained with a qualified custodian either in a separate account for each client under the client’s name, or in accounts that contain only client funds and securities under the name of the investment adviser as agent or trustee for the client; and (2) the qualified custodian does not directly or indirectly provide investment advice with respect to such funds or securities.

Requires the SEC to revise recordkeeping requirements for each person with custody or use of a registered investment company’s securities, deposits, or credits.

Requires the SEC to revise requirements for beneficial ownership and short-swing profit reporting.

Requires every institutional investment manager who effects a short sale of an equity security to file daily with the SEC specified short sale disclosures and makes it unlawful to effect manipulative short sales of securities.

Requires registered brokers or dealers to notify customers that (1) they may elect not to allow their fully paid securities to be used in connection with short sales and (2) the broker or dealer may receive compensation in connection with lending the customer’s securities.

C. SEC Funding and Organization and Additional Reforms
The Act directs the SEC to promulgate rules to collect fees annually from registered investment advisers, in order to recover the cost of inspections and examinations of such advisers. To implement this provision, the SEC is required to hire an independent consultant to examine and report to the SEC and Congress on SEC internal operations, structure, funding and the need for comprehensive reform, including the SEC’s reliance upon self-regulatory organizations for the regulation of securities matters and the protection of investors.

The SEC is also now required to report to certain congressional committees on the implementation of SEC reforms in the wake of the Madoff fraud.

Additionally, the Act directs the SEC, the Public Company Accounting Oversight Board (PCAOB), and a designated standard-setting body to provide oral testimony annually for five years to the Committee on Financial Services of the House of Representatives regarding efforts to reduce the complexity in financial reporting, in order to provide more accurate and clear financial information to investors.

On other procedural matters, the Act also:

Directs the Comptroller General to study and report to Congress on SEC employees who leave the agency to work for financial institutions regulated by the SEC.

Establishes a Financial Reporting Forum composed of certain senior federal agency personnel to report annually to Congress on immediate and long-term issues critical to financial reporting.

Requires the SEC to (1) appoint an Ombudsman to act as a liaison between the SEC and any affected person who may have a problem dealing with the SEC as a result of its regulatory activities; and (2) revise its regulations to require due diligence on the part of brokers and dealers and other specified paying agents to search for lost security holders who have been sent checks for dividends, interest, and other valuable property which have not yet been negotiated.

Revises requirements for SEC filing procedures with respect to proposed rule changes.

D. Securities Investor Protection Act Amendments
The Act amends the Securities Investor Protection Act of 1970 (SIPA) to increase: (1) the minimum assessment paid by Securities Investor Protection Corporation (SIPC) members; (2) the borrowing limit on Treasury loans; (3) the standard maximum cash advance for each customer (including an inflation adjustment); and (4) the fine for certain prohibited acts, including misrepresentation of SIPC membership or protection for investors.

Additionally, the Act:

Amends SIPA with respect to (1) SIPC trusteeship in liquidation proceedings; (2) insider ineligibility for SIPC advances; and (3) futures held in a portfolio margin securities account.

Revises requirements for determining whether a SIPC member qualifies for SIPC use of the direct payment procedure to satisfy customer claims without a liquidation proceeding; and increases from $250,000 to $850,000 the maximum aggregate amount of claims of all customers of a SIPC member that, among other criteria, allows SIPC to use the direct payment procedure.

Directs the Comptroller General to study and report to Congress whether SIPC should be required to impose risk-based assessments on member brokers and dealers in order to maintain the SIPC Fund adequately and to provide additional levels of coverage on an optional basis.

E. Seniors’ Investment Protection
With regard to older investors, the Act directs the SEC to establish a program of grants to states to (1) investigate and prosecute misleading and fraudulent marketing practices and/or (2) develop educational materials and training to reduce misleading and fraudulent marketing of financial products.

F. Registration of Municipal Financial Advisors
The Act requires municipal financial advisers to register with the SEC.

Conclusion
The reports and regulations to implement the key Investor Protection Provisions of the Act will be developed over the next 6 to 18 months or longer, reflecting varying effective dates for different provisions and allowing in many cases a transition period for affected institutions to meet new requirements.

For more information, contact: swittner@eisnerllp.com

Editing by Alex Akesson
For HedgeCo.net
alex@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership in HedgeCo.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!

People Moves: Hedge Fund Specialist Takes Position at $3 Billion Arts Foundation

2010-08-02T12:51:00.004+01:00

HedgeCo News - Marc A. Schwartz has been named chief investment officer of The Broad Foundation's $3 billion portfolio, working closely with founder Eli Broad.

"Marc's vast experience in hedge funds, private equity and other similar investments that are consistent with our portfolio makes him a perfect fit," said Broad. "I am impressed with Marc's intelligence, drive, instincts and investment success, and we are delighted that Marc will join our team."

Schwartz joins The Broad Foundations from Reservoir Capital Group, a more than $4.5 billion hybrid fund where he served for nine years as managing director, principal and vice president. Schwartz was a senior member of the Reservoir investment team and most recently was focused on private fund sponsorship and direct co-investments. Before joining Reservoir, Schwartz spent much of the previous decade working in senior positions at a global holding company and an international private equity firm.

The Broad Foundations were established by entrepreneur and philanthropist Eli Broad to advance entrepreneurship for the public good in education, science and the arts. The Broad Foundations include The Eli and Edythe Broad Foundation and The Broad Art Foundation.

Guilty Plea From Hedge Fund Manager In University Ponzi Scheme

2010-07-30T11:53:00.002+01:00

New York (HedgeCo.net) – Former hedge fund manager Paul R. Greenwood pled guilty to criminal charges involving a Ponzi-esque scam in which he is alleged to have cheated millions from four university endowments.

The Chronicle For Higher Education reports that Greenwood and his partner, Steven Walsh, may have used the $900 million as a personal fund. Walsh has pleaded not guilty, and Greenwood will testify against him at trial.

“The two spent at least $160-million on mansions, horses, rare books, and an $80,000 collectible teddy bear.” The paper reports.

Offering low risks and high returns, the team’s investors included the University of Pittsburgh, who invested $65 million, Carnegie Mellon University, $49-million, Bowling Green State University, $15 million, and Ohio Northern University who invested $10-million.

Greenwood’s assets will be auctioned off in an attempt to recoup some of the investor losses. He also faces a prison sentence of as long as 85 years and hundreds of millions of dollars in fines at his December sentencing, according to The Chronicle For Higher Education.

HedgeBay: Secondary Hedge Fund Market Rebounds

2010-07-29T12:14:00.001+01:00

New York (HedgeCo.net) - The average price for assets on the secondary hedge fund market rose to 78% after shaking off some of the fallout from May’s European debt crisis, according to Hedgebay’s June Index.

Investors’ confidence was shaken by the damage caused by the Greek crisis, and saw the average price for hedge fund shares drop to an all time low. Although the average price shows that secondary users continue to be wary of paying too much for assets, the rise does indicate an upturn in confidence.

The 8% rise in the average price has been helped by trading in the ‘near-par zone’ – trades which take place at just below the net asset value of each share. Originally a key driver of trading volume, significant trading in this area has not been seen since before the credit crisis. Previously, investors would offer small discounts for their shares in order to tactically manoeuvre within locked up hedge funds:

“The near-per zone was typically used by investors in locked up funds to raise short term capital or reduce the market risk in their portfolios. When the crisis first arrived, the ability of managers to raise any capital disappeared, and there are virtually no locked up funds around. This, and the fact that investors generally have much greater concerns than liquidity or tactical trading, has made near par trading virtually non-existent”, Elias Tueta, co-founder of Hedgebay said.

“It is a consequence of the change in the basic nature of the secondary market caused by the crisis. Where once the main use of the market was to access high quality, locked up funds, investors are now concerned with mitigating the damage within their portfolios.”

While Mr Tueta believes that near par trading is an interesting development, it is not yet conclusive evidence of what is to come on the secondary market. The return of near par trading in earnest will be the clearest indication that trading patterns on the secondary market have returned to pre-crisis conditions – and that the hedge fund market has finally and fully recovered. Mr Tueta says that the primary market will dictate when this occurs.

“The volume of near par trading is a good barometer of the health of the hedge fund industry. The performance of hedge funds in the primary market will give us a good idea of what we can expect in that regard. The success of capital raising among managers will depend on them sustaining the solid performance we have lately seen in the industry. If this continues, we may eventually see more managers closing to new investors or offering share classes with longer lock-ups, and then we may see the de facto return of near par trading.

Summary Of The Dodd-Frank Act For Hedge Fund Advisers

2010-07-29T11:46:00.003+01:00

Holland & Knight LLP (HedgeCo Blogs) - On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act). The Act has several potential impacts on our clients and within the investment management community.

"This memo is intended to summarize, in general, what we believe to be notable aspects of the Act that impact many of our clients." Scott R. MacLeod, Jay S. Crenshaw of Holland & Knight said, "A more explanatory summary from us is available upon request. However, you should review the Act as a whole to identify specific areas of relevance. Lengthy and detailed write ups regarding the background, impacts, and policy of all areas of the Act are available online."

Unless otherwise stated, any changes in law discussed herein generally are effective July 21, 2011.

I. Adviser Registration

A. If you manage any separately managed accounts and have assets under management ("AUM") in excess of $100 million, then you must register with the SEC (even if you only have one account /client).

B. If you have separate accounts and AUM of $25 million - $100mm, you must register with your home state unless exempt under state law, in which case you must register with the SEC.*

C. If your only clients are investment funds and you have AUM of more than $150 million, also register with the SEC.

D. If you are a non-U.S. adviser with any separate accounts, or with fund assets over $150 million, also register with the SEC unless you have (1) no place of business in the U.S.; (2) less than $25 million in AUM from U.S. clients and U.S. fund investors; (3) fewer than 15 U.S. clients and fund investors; and (4) do not hold yourself out generally to the public in the U.S. as an adviser.

E. If you have AUM of less than $25 million or are exempt from SEC registration, then you must be registered or find an exemption in any state where you have a place of business or more than 5 clients.*

F. If you are a "Family office" or an adviser solely to one or more "venture capital funds" (both terms to be defined), then you are exempt from SEC registration.

*It is not clear what state exemptions may change as a result of the Act; we can help you analyze state law if you fit within one of the noted categories.

IMPORTANT NOTE RE: WHEN TO BEGIN IMPLEMENTING: IF, AS A RESULT OF THE ABOVE, ANY ADVISER NEEDS TO: (1) REGISTER WITH THE SEC; (2) REGISTER WITH ANY STATE(S); AND/OR (3) DE-REGISTER WITH THE SEC, SUCH ADVISER SHOULD SEEK TO IMPLEMENT ANY OF THE FOREGOING ACTIONS WELL IN ADVANCE OF THE JULY 21, 2011 EFFECTIVE DATE, PREFERABLY BEGINNING IN THE FALL OF 2010.

II. Investor Certifications

A. You must immediately amend your fund subscription agreement's definition of accredited investors to exclude primary residence from an investor's net worth. For now, this change seems to apply only to new investors or additional subscriptions from existing investors with no need to expel any existing investors. This change is effective immidiately and requires your prompt attention.

B. IF you are a registered investment adviser ("RIA") and charge performance fees/allocations to any investor in a 3(c)(1) fund, you WILL need to amend to adjust for inflation the "qualified client" certification obtained from each client/fund investor next year.

III. Swaps

A. You may need to register with the National Futures Association ("NFA") as a Commodity Pool Operator (CPO) IF (1) you buy commodities and currently rely on an exemption based on margin and notional exposure percentage limitations because you will now need to include any swaps when determining compliance with such limitations, or (2) you are defined as a "major swap participant" when new rules are adopted.

B. You may need to report (1) pre-enactment swaps if applicable regulators issue related interim rules, and (2) future swaps which are not accepted for clearing.

IV. Miscellaneous

A. Reporting.

If you manage funds (whether or not you are a RIA), you will be required to maintain records and file reports to the SEC.

Such reports will include a description of funds':

o amount of AUM;

o use of leverage, including off-balance sheet leverage;

o counterparty credit risk exposure;

o trading and investment positions;

o valuation policies and procedures;

o types of assets held;

o side letters;

o trading practices, and

o any other information that the SEC deems to be “necessary or appropriate…"

B. Custody.

Future rules under the Act MAY require RIAs to take further steps to safeguard client assets.

C. The "Volcker" Rule.

If you are affiliated with a bank, you generally must not engage in proprietary trading activities or sponsoring or investing in a hedge fund, private equity fund or similar entity.

D. "Bad Boy" Provisions.

I further rules are adopted, you will be disqualified from using Rule 506 Regulation D offerings if your firm or principals have engaged in certain improper conduct in the past.

E. Securities Lending.

Within two years, the SEC will promulgate rules designed to raise the transparency of information available to investors with respect to the loan or borrowing of securities.

F. Shorting and Arbitrage.

The SEC may adopt further reporting rules and restrictions on such activities pursuant to the Act.

G. Mandatory Arbitration.

The SEC MAY adopt rules and regulations restricting or prohibiting the use of mandatory arbitration agreements by advisers.

Note from the authors: "This is a very brief summary intended to highlight aspects of rules that are very fact dependent. Please contact us to discuss specific questions."

Hedge Fund Seeding Arm Of FRM Teams Up With Varna Capital

2010-07-29T11:31:00.000+01:00

Hedgeco News - The hedge fund seeding division of Financial Risk Management (FRM), and Varna Capital LLC (Varna) have formed a strategic relationship which involves FCA making a significant investment in Varna’s first fund.

Varna is a newly formed hedge fund manager based in New York and headed by Svetlana Lee. Following the signing of the strategic relationship, Varna is expected to launch its first fund during the fourth quarter of 2010.

“The long-term performance characteristics of fundamental equity long-short strategies are very attractive, and we look forward to bringing this opportunity to our investors.” Clive Peggram, CEO of FRM, said, “Lee is one of the most talented new equity long-short managers in the industry and we are very pleased to form a strategic relationship with her new firm and to support its development.”

“A firm’s anchor investors are a critical element to a successful launch. FCA is a well respected institutional firm and its significant day one investment will provide us with a strong foundation to launch and grow.” Lee said.

Lee, together with the Varna team, previously managed an equity long-short fund at Citadel’s PioneerPath new manager platform. Prior to that she gained extensive investment experience at leading hedge funds Greenlight Capital, The Baupost Group and Perry Capital. Varna will implement a value-focused, equity long-short strategy that seeks to exploit event-driven situations, structural market dislocations and identify hidden fundamental business value.

SEC Pays $1 Million To Hedge Fund Whistleblowers

2010-07-28T16:34:00.001+01:00

HedgeCo.net News -Based on the new Dodd-Frank Act that was just signed into law last week by President Obama, new legislation allows the SEC to award huge sums to whistleblowers in insider-trading cases such as the one against hedge fund Pequot Capital Management.

“As of this past Friday, the SEC now has greater ability to extract information from employees of corporations and others involved with those employees.” Ed Tomko, head of the White Collar Crime practice at Curran Tomko Tarski, announced.

On Friday, a payment was made by the SEC to Karen and Glen Kaiser who provided documents that helped the SEC build its case against Arthur J. Samberg, founder of the Pequot hedge fund and David E. Zilkha, a former Microsoft employee.

“This has broad reaching implications for public companies as well as businesses operating in the financial sectors,” said Tomko. “This is the largest amount awarded by the SEC to whistleblowers in an insider-trading case.”

As a result, there is the potential now for whistleblowers to be enticed by lucrative fees they will receive for providing information to the government. This can become a slippery slope for businesses. This can now provide possibly a powerful incentive for an employee or individual related to an employee who know of a securities violation to contact the SEC and provide information that may lead to a large payment in exchange for the information.

SEC Reverses Course In Favor of Third Party Marketing

2010-07-02T12:31:00.002+01:00

Donald A. Steinbrugge (Feb, 2010) via HedgeCo : The SEC has changed its position with regard to third party marketing firms and is exploring legislation that indicates that the SEC is apparently willing to reconsider its recommendation that all third parties be banned from soliciting government business.

SEC Director Andy Donahue has asked FINRA's Robert Ketchum for help in crafting legislation that is designed to curb pay for play activity while protecting the role of third party marketing firms. The SEC changed course, at least in part, because of an outcry of response from a wide spectrum of investment professionals, that articulated the positive role that third party marketing firms play in the industry.

The SEC had originally signalled that it intended to ban third party marketing to public pension plans in the wake of the New York State Common Retirement Fund pay-for-play fiasco. While eliminating pay-for-play activities is laudable, the SEC's original course of action completely ignored the positive impact that third party marketing has on the investment decision making process. Based on numerous complaints that the SEC received that articulated the positive impact that third party marketing firms play throughout the investment process, the SEC reversed course and asked for FINRA’s help in crafting legislation that would curb pay for play activities, but protect the role of third party marketing firms.

As you may recall, in early 2009, David J. Loglisci, former chief investment officer of the New York State Common Retirement Fund, and Henry Morris, (former chief political adviser and chief fundraiser for former New York State Comptroller Alan Hevesi), were indicted on 123 charges, including enterprise corruption, securities fraud, grand larceny, bribery and money laundering.

Following the indictment, New York state Attorney General Andrew Cuomo promised to eliminate the use of third-party marketers in the public pension allocation process. As the nation’s third largest pension plan, the Common Fund wields significant influence in the pension industry. Unfortunately, the initial debate regarding third party marketing firms was framed in part by the Common Fund and others who committed wrongdoing, who chose to deflect blame from themselves and their deficient internal governance practices onto others.

I am delighted that during its due diligence the SEC has listened to the outcry from investment professional and now recognizes the important role that third party marketing firms play in the industry. If the SEC had followed the New York State Attorney General's recommendation to ban third party marketing, the marketplace would likely sustain far-reaching negative consequences without resolving the breach of fiduciary duty and public trust that is alleged. I will go into greater detail regarding the benefits that third party marketing firms bring to the process later in the discussion.

While I applaud the SEC’s decision to reconsider its course of action, I would encourage the SEC and FINRA to adopt a series of measures.

First, I would require all marketing professionals that call on public funds to be registered with FINRA, whether they are employed with third party marketing firms or employees of alternative investment firms.

This measure will level the playing field for everyone soliciting business with public funds. Second, I believe that greater transparency including fee disclosure be required of all third party marketing firms. THIRD, I would also suggest a ban on political contributions from third party marketing firms and all alternative investment firms seeking to do business with public funds. Finally, I would expect that strict policies regarding Travel and Entertainment Expenses of all third party marketing firms be enforced by FINRA. Effective legislation combined with rigorous enforcement will protect the positive role that third party marketing firms bring to the table and protect the broader interests of all market participants.

The State of New York Common Retirement Fund pay for play disaster serves to remind us that we have no outright protection from fraud and unethical behavior in our society. However, we do have powerful regulatory bodies capable of enacting and enforcing laws that promote ethical and responsible behavior. I am encouraged that the SEC has solicited feedback and is apparently willing to be thoughtful in its approach to third party marketing firms.

The value that third-party marketers add to the allocation process is manifold. Third-party marketers act in the role of an investment bank by raising capital for many private equity firms, hedge funds and other organizations in the alternative investment arena. Third party marketing firms are paid a fee for their efforts, typically a percentage of assets raised or a percentage of all fees generated by the investment in the future. The elimination of third-party marketers would likely cause many of these alternative investments firms to close their doors while simultaneously creating a higher hurdle rate for new managers considering entry into the business. It would also disproportionately harm minority- and woman-owned firms, which tend to be smaller. Many small and medium-sized hedge funds and private equity firms provide seed capital to start-up and small businesses and are an integral part of the global economy's shadow banking system. Small businesses represent a significant portion of our country’s job growth and are the backbone of our nation’s economic competitiveness on a global scale. Retarding the growth of the nation’s shadow banking system, during a time when traditional banks and lending institutions are less active, will likely have negative consequences for the market.

In sum, third party marketers contribute to the health and existence of the alternative investment arena, which in turn provides capital for the global economy and increases market efficiency. Banning third-party marketers from the investment process would also shrink the opportunity set for investors and speed the migration of investor’s capital to the largest hedge funds and private equity firms, who can afford large marketing infrastructures. Many would argue that compared with their smaller brethren, larger organizations are not able to generate the same returns as their smaller, more nimble competitors, which would negatively impact market efficiency. Given that small and mid-size hedge funds and private equity firms have the potential to generate a significant amount of alpha, any legislation that impacts their existence should be carefully considered. Hedge funds can choose to build their own sales teams, outsource the fundraising effort to a third-party marketing firm, or choose a hybrid approach.

There are some important distinctions between third-party marketing firms and in-house sales staff. Third-party marketers are required to be licensed and regulated by the SEC and FINRA. These firms are heavily regulated and are required to follow all rules and regulations. Most hedge funds are not regulated and their internal sales people in many cases are not licensed. As it now stands, third-party marketers face a much higher degree of regulatory scrutiny than hedge funds that have not voluntarily registered with the SEC. Another critical role played by third-party marketers is the screening of the manager universe. The best third-party marketers perform extensive due diligence before making the decision to represent a hedge fund. In some cases, third-party marketers represent less than 1% of the firms on which they perform due diligence. If one of the firms they are representing becomes less marketable for any reason, they have the option to focus their efforts on the other managers they represent.

All of the reasons articulated above suggest that the SEC is wise in its most recent efforts to explore a framework of rules and regulations that protect third party marketing firms and market participants.

I am pleased that the SEC has listened to the marketplace and recognizes the value that third party marketing adds to the investment process. The SEC’s appreciation of the role that third party marketers play and its request for help from FINRA to create rules that will level that playing field for all of us is welcomed.

Donald A. Steinbrugge is managing member of Agecroft Partners LLC, a Richmond, Va.-based consulting and third-party marketing firm specializing in hedge funds and other alternative investments.

Hedge Fund Trader Banned For Manipulating Stock Prices

2010-06-30T12:48:00.003+01:00

HedgeCo News - The Financial Industry Regulatory Authority (FINRA) has permanently barred a former Deutsche Bank broker from the securities industry for manipulating the price of Monogram Biosciences (MGRM) stock in an effort to enrich a hedge fund client, himself and his family.

A FINRA panel found that Edward S. Brokaw was engaged in a pattern of trading designed deliberately to drive the value of MGRM stock down and, in turn, drive up the value of contingent value rights (CVRs) on that stock.

According to FINRA, Brokaw`s hedge fund client held approximately 18.5 million CVRs – nearly 30 percent of the 64.8 million MGRM CVRs outstanding. For every penny the final VWAP dropped below $2.90, the value of the hedge fund`s CVRs increased by $185,000.

If the maximum payout of $.88 per CVR were achieved, FINRA said, the hedge fund would receive approximately $16 million. Brokaw and his family owned 217,000 of the CVRs, with a potential maximum payout of $188,000.

Included in the evidence against Brokaw were tape recordings of his phone calls to his firm`s trading desk to place sell orders. In one phone call, Brokaw told a Deutsche Bank sales trader, “Take 50,000 MGRM at the market. Sell it down. Sell it as low as you want. Sell it hard, 50,000.”

FINRA also found that Brokaw violated a Deutsche Bank`s policy by only completing one “booking ticket” each day, each showing a single 100,000-share order to sell, each with a false notation that the order was given by the client directly to the trading desk rather than to Brokaw – thus circumventing automatic branch office compliance review of the orders.

Deutsche Bank first suspended, then terminated Brokaw based on his MGRM sales orders for the hedge fund.

UK Hedge Fund SRM's Case Against Countrywide Dismissed

2010-06-18T11:43:00.005+01:00

New York (HedgeCo.net) – London hedge fund SRM Global’s case against Countrywide Financial Corp, the mortgage lender acquired by Bank of America, was dismissed yesterday according to a Reuters article.

The hedge fund alleged that Countrywide was “flying blind” and had made misrepresentations and omissions, delaying disclosure of its problems in the U.S. housing market fall, Reuters said. The hedge fund said it lost nearly 90% of its value in 50 million shares of Countrywide common stock in 2008.

Manhattan federal court Judge Richard Berman said, “The hedge fund failed to plead facts showing a primary violation of the securities laws,” dismissing the lawsuit, which also identified Countrywide, Bank of America and former BOFA Chief Executive Officer Ken Lewis, former Countrywide Chief Executive Officer Angelo Mozilo, company President David Sambol and Executive Managing Director Eric Sieracki as defendants, the news source reported.

The three former Countrywide executives are also defendants in an SEC civil fraud lawsuit, Reuters said.

Philanthropy NY: The Fresh Air Fund

2010-06-11T12:11:00.003+01:00

HedgeCo News - The Countdown to Summer 2010 is on and The Fresh Air Fund is in need of host families.

The Fresh Air Fund is an independent, not-for-profit agency, which has so far provided free summer vacations to more than 1.7 million New York City children from low-income communities since 1877. Nearly 10,000 New York City children enjoy free Fresh Air Fund programs annually. In 2008, close to 5,000 children visited volunteer host families in suburbs and small town communities across 13 states from Virginia to Maine and Canada. 3,000 children also attended five Fresh Air camps on a 2,300-acre site in Fishkill, New York. The Fund’s year-round camping program serves an additional 2,000 young people each year.

"We also just received a tremendous offer by a very generous donor."Sara Wilson od www.freshair.org said, "Any gift given from now until the end of June will be matched dollar-for-dollar."

In 2009, The Fresh Air Fund's Volunteer Host Family program, called Friendly Town, gave close to 5,000 New York City boys and girls, ages six to 18, free summer experiences in the country and the suburbs. Volunteer host families shared their friendship and homes FOR up to two weeks or more in 13 Northeastern states from Virginia to Maine and Canada.