Weekend News Update

Interesting story here by DanFonds on frontier markets; 'Ecobank's USD 2.5bn capital raising begins today.'

And here by Seth Berlin; 'Does Mimicking behavior lead to market crashes?'

Finaly, Avalon Capital Holdings Corporation has initiated alpha testing of its proprietary ECN system for the Forex market.

The system will be ideal, Avalon says, for traders seeking to execute large orders of a billion or more across many banks and hedge funds simultaneously.

Forex Market Platform Launch By Avalon

Avalon Capital Holdings Corporation, and its wholly owned subsidiary, Traders Development LLC, announced that it has initiated alpha testing of its proprietary ECN system.

The Avalon ECN is a liquidity aggregator, which takes the best prices from an unlimited number of price providers, and allows traders to execute off the best prices in the market. The system will be ideal for traders seeking to execute large orders of a billion or more across many banks and hedge funds simultaneously.

"The overall goal of the Avalon ECN is to significantly improve the institutional liquidity in the Forex Market by applying the latest software technologies in the Foreign Exchange Industry." Dr. Vladimir Karpenkov, Chairman of Avalon Capital Holdings Corporation said. "Additionally, the Avalon ECN is designed to reduce the cost for Retail Forex brokerages that are seeking interbank liquidity."

"The Forex Market is about reducing overhead, managing risk and acquiring new trading clients. With Avalon technology, companies ought to increase their profitability while reducing risk." Alex De Khtyar, President of Avalon Capital Holdings Corporations added.

Hedge Fund Buys Into Trucking Agency

In a Reglatory filing with the SEC, multibillion-dollar hedge fund, Tontine Associates, has bought 5% of trucking giant YRC, equaling 2.97 million shares of YRC common stock, for more than $48 million.

Jeffrey Gendell, founder of Tontine Associates, has made big investments recently in other struggling companies in the region. Earlier this year, he spent more than $11 million to acquire an 8.6 percent stake in Thermadyne Holdings Corp., a struggling producer of metal-cutting and welding equipment based in Chesterfield, Mo.

Gendell also bought more than 400,000 shares of TierOne Corp., a Lincoln, Neb., bank that has lost nearly $100 million in the past four quarters.

Stockpickr.com reports “Gendell’s specialty is picking a macro-styled theme, buying very large positions in companies that benefit from that theme, and then working with or pressuring management to improve shareholder returns”.

Gendell, among other things, is a donor to Duke University and a part-owner of the Cincinnati Reds baseball team.

Software Stake Bought by Hedge Fund Firm

Hedge fund firm Elliott Associates has taken a 9.9% stake in Epicor Software Corp. and is inquiring about possible strategic alternatives for the company.

According to a filing made with the Securities and Exchange Commission, Elliott now owns nearly 6 million shares of Epicor, just shy of 10% of the company. The firm has been steadily buying up shares since June but made particularly large acquisitions during the last month. It has also acquired more than $18 million worth of convertible bonds for Epicor over the past week.

Elliott also said it has made inquiries as to whether Epicor has considered exploring strategic alternatives. Such language is often a harbinger for an investor pushing for the sale of a company. Elliott earlier this year put pressure on MSC Software to put itself up for sale.

New York-based Elliott is known for its activism. In the recent past, it has launched a hostile takeover bid for IT company Packateer, pressed retailer Pier 1 to cut costs and helped Metrologic Instruments founder C. Harry Knowles take his company private. Metrologic has since been taken over by manufacturing giant Honeywell.

Hedge fund firm Breeden Capital Management also disclosed a 5.25% stake in medical equipment maker Hill-Rom. Former Securities and Exchange Commission Chairman Richard Breeden founded Breeden Capital, which uses an activist strategy to profit from companies that improve corporate governance. The firm's top holdings include H&R Block, medical equipment sterilization company Steris and diamond retailer Zales.

Investment Outsourcing for the Hedge Fund World

The growth of investment research outsourcing (IRO) was initially driven by economics. Sell-side Banks no longer had revenue streams to support the free distribution of research and therefore looked for a cheaper way. The answer was tapping into offshore brain pools that could produce high quality White Label research at a lower cost. By some estimates, you can get 3 analysts in India for the same price of 1 analyst in New York or London.

"IRO, loosely defined, is the offshoring of front-office work to a 3rd party provider. In this article, I will look at the potential of integrating an IRO workstream into the Buy-side and Hedge Fund World." Seth Berlin, Principal at Performance Thinking & Technologies reports.

Given today’s bear market, write-offs, and reduced budgets at investment banks, outsourcing of front-office analysis will only continue to grow. Estimates of IRO 2008 growth rate range from 20% to 40%. The growth rate would probably be even larger except for the ability to scale resources.

BUY-SIDE MOTIVATION VS SELL-SIDE ECONOMICS

While the Sell-side is clearly motivated by cost, the Buy-side has a completely different motivation. Most IRO firms tout time, depth of research, and resource scarcity as reasons for Buy-side motivation. While these perceptions are on the right track they don’t fully explain the value that IRO brings, especially around the time dimension. IRO firms state that an IRO workstream frees up higher level traders/analysts to spend more time on investment ideas while passing-off the “grunt” work of detailed research. This may be true but it is only half the picture. The value of IRO is the ability to create a 24*6 “Follow The Sun” investment process which moves from idea genesis through trade execution at a much quicker pace. In essence, when your research day is ending in New York or London, it is just beginning in India. In a world of clustered investment decisions, the ability to supercharge your investment process is the real-key to the buy-side IRO approach.

INTEGRATING AN IRO WORKSTREAM

Developing an IRO workstream can be as simple as making a call/sending an email or as complex as having an on-site IRO resource serve as a communication gateway to a dedicated external team. In developing the IRO workstream, it is important to first understand your investment process. Then, ask how an external resource can fit for specific time-bounded tasks.

While the Sell-side IRO model grew via a “hand over the wall” approach. The Buy-side model is much more dependent on communication and investment process integration. Thus, it is much more vital to define how, when, why, and what. It is also important to think about how your resources will be affected by having external IRO resources.

Most firms start out with a “direct connect” model of having a single dedicated IRO resource connect with 1 to many internal analysts. The IRO team grows organically as they prove their worth. As with any outsourced model, both teams have an implementation period where they “learn to dance with each other”. A side benefit of the IRO workstream is the documentation and formalization of investment workflows.

BUY-SIDE SKILLS & IRO MARKET PERSPECTIVES

IRO firms vary in terms of geography and scale with the largest firms having research centers in India. Most firms have experience in business due diligence, investment research, and valuation. However, beyond these additional bandwidth skills, many firms have niche skills. Some IRO firms have more experience with credit modeling while others offer abilities to perform quantitative modeling, or stress-testing. A few offer complementary services such as business surveys and systems development.


It is estimated that up to 20% of US Institutional Managers utilize IRO firms, with an annual global market size of $550 Million ($385M Sell-side & $185M Buy-side). Given current conditions, this market will continue to grow rapidly. This is the reason scale is perhaps the biggest challenge both for Buy-side clients as well as IRO firms.

EVALUATING AN IRO PARTNER

When looking at IRO partners, it is important to understand that the nature of the buy-side investment process is different from the sell-side roots of the industry. A buy-side IRO workstream includes heterogeneous, time-bounded tasks that involve real-time communication. A resource’s judgement is paramount. Therefore, while past client experiences are helping in identifying domain expertise, the success ultimately rests on the IRO resource. This is why you must see resume of potential resources, interview these resources, and “beta-test” any resources.

Scale is another key evaluation point. With this industry growing rapidly and another growth wave coming from the sell-side, IRO firms have to balance the needs of new and existing clients. This is not so easy in a high-growth environment where the experienced talent-pool is limited and resource scarcity raises expectations of employees. Therefore, HR issues such as training and resource turnover become important factors. The last thing you want to do as an asset manager is to train and re-train IRO resources. Scale also includes issues such as physical infrastructure and ability to protect your intellectual property. Lastly, a manager needs to understand how IRO firms manage the spectrum of client needs. With scale concerns, it may not be good to be a small fish in a big pond.

Domain expertise specific to your investment strategy is also an important consideration. Firms with domain expertise save learning curve time. IRO firms with domain expertise also will likely have the potential of add-on and swappable resources.

SUMMARY

In today’s world of data overload and time-constrained decisions, an IRO workflow managed correctly, can make you a better manager. It is also clear that this industry is moving beyond additional bandwidth into higher value service offerings. An IRO workflow can serve as a key input to a “Follow the Sun” investment model. Growth challenges lay ahead, but an IRO integration can streamline investment decisions.

For more info on IRO or to contact Seth Berlin, see www.p-t-t.com.

Asia Stocks Edge Higher as China Approaches Policy Change

In a Reuters release today, it is reported that Asian stock markets edged higher, rebounding from a two-year low.

Chinese shares surged on hopes for policies from Beijing to jumpstart growth, though many analysts said it was a long shot. Although world stock markets slid to the lowest since September 2006 on Tuesday, most Asian indexes turned higher as cheap valuations proved irresistible, especially with markets rife with chatter about fiscal stimulus in China.

"Bargain hunters have returned to the market on talks that a rescue package is on the way," said Francis Lun, general manager from Fulbright Securities in Hong Kong. "We are all waiting for a miracle," Lun added.

Despite the sudden turnaround in Asian stocks, apprehension about the earnings outlook was rife, according to Reuters, especially after the Bank of Japan on Tuesday described the world's second-largest economy as "sluggish" -- a term it has not used since the Asian financial crisis a decade ago.

Stephen Green, head of China research with Standard Chartered Bank in Beijing, said that given economic growth is still expected to stay above 8 percent this year and next, it is too early for the government to squeeze its budget to boost growth.

Rather, Beijing should consider relaxing loan quotas to stimulate bank lending to support growth. "It is too early for a fiscal stimulus package, and we should be responsible about calling for one," he said in a research note. "There is still room for monetary policy before we try fiscal policy."

Hedge Fund SageCrest Goes Bankrupt

In an effort to head off a forced asset sale, Windmill Management’s SageCrest Finance and SageCrest II filed for Chapter 11 bankruptcy after its assets fell sharply.

The hedge fund filed at U.S. Bankruptcy Court in Bridgeport, Conn. In a letter to investors, The fund said that the bankruptcy process would give SageCrest the time necessary to conduct an orderly liquidation of their assets to maximise the return to investors.

The fund described its investment strategy as making short-term loans to small- and mid-sized firms that cannot secure them from banks and specialty lenders. "Our position in a market where lending opportunities continue to outpace sources of capital provides an ideal point of departure for growth." The SageCrest website says, "Our investments target asset-rich and undervalued situations overlooked by, and with limited access to, the mainstream capital markets."

In its bankruptcy filing, SageCrest claimed fewer than 49 creditors and debts of between $1 million and $10 million. The hedge fund, which once boasted assets of as much as $650 million, said it now had between $50 million and $100 million.

Hedge Fund Forum 2008

The Greenwich Hyatt will be the scene of the 2008 Global Alpha Forum, the hedge fund event is for both fund managers operating in Connecticut and investors wishing to get to know those managers.

The Forum will be held on September 16 and 17, 2008, and will be followed on September 18 by the Green Hedge Trail, an opportunity for institutional investors to visit the offices of some of the world-class funds operating in the Greenwich area, to both meet the funds’ managers and to have some of their questions answered concerning strategies of the various funds included in the Trail.

The Forum is jointly sponsored by the Connecticut Hedge Fund Association, the association of hedge fund professionals representing over 150 member firms based in the “hedge fund capital of the world” of Fairfield County, Connecticut, and Opalesque, the world’s largest subscription-based publisher covering the alternative investment industry.

Rudolph W. Giuliani, Partner, Bracewell & Giuliani, will kick off the Forum at 9 am on Tuesday, September 16th. His address will be followed by panels discussing first Green Trading and Carbon Finance and then the 10 Days that Changed Capitalism.

Lawrence H. Summers, Managing Director, D.E. Shaw and former U.S. Secretary of the Treasury, will be interviewed as part of the luncheon on Day One. After lunch, a panel discussion will explore the Rise of the Sovereign Wealth Funds.

Once the main agenda is concluded, a Hedge Fund Manager Workshop is available that will present the secrets to Creating Reinsurance Firms and Banks: New Permanent Capital Vehicles for Hedge Funds and Funds of Funds. Following the first day’s sessions will be a Networking Event that begins at 5:30pm designed to allow plenty of time for attendees to become acquainted with one another or strengthen existing relationships.

Day Two sessions again begin at 9 am and will include panels on Hedge Fund Regulation, Institutional Investing and the Economic Outlook, all from a global perspective. The luncheon keynote on this day will be Eugene Ludwig, Chairman and CEO, Promontory Interfinancial Network and Former U.S. Controller of the Currency.

Another Hedge Fund Manager Workshop will be offered after the close of the main conference sessions. This workshop will address Islamic Finance: Tapping Middle Eastern Wealth through Islam-Compliant Vehicles.

The GAF was inaugurated in 2007 and that event attracted several hundred delegates and live coverage by both CNBC and Bloomberg Television. Along with the notables highlighted above, numerous financial media personalities will participate as panel moderators and interviewers and panelists consist of world-renowned experts in their subject areas. The GAF is poised to become “Davos on the Sound”—the center of thought leadership for issues impacting the alternative investment industry.

Trump To Launch India Hedge Fund

Trump Organization USA announced plans to launch a $1 billion hedge fund to invest in Indian real estate. Donald Trump Jr.'s interest in the Indian real estate market was sparked in 2007 when he visited the subcontinent for the Cityscape real-estate conference in Mumbai.

"We feel it is now time to invest in Indian realty projects as the quality has moved up and we see emergence of some high-end developers with a product level that will support our brand," Trump Jr. said.

Trump announced in late July that he intends to set up a hedge fund worth up to $1 billion to invest in Indian real estate, the privately held fund would initially target property in Mumbai.

Thirty year-old Trump did not give specific details about the fund, such as how he plans to raise the money, or where the first investment would be made. But in an interview with Bloomberg LP, he did say that it would start conservatively and expand as the opportunities presented themselves.

"The fund will be for acquisitions of real estate in the high end and across the spectrum," Trump said. "We'll start it off relatively small and grow it as we get more familiar with the Indian market. Our entry has to be in Mumbai, and that's where everything is going on right now in terms of the high-end real estate. That's the place where one is going to achieve the highest prices per square foot. It sets the tone for all of the other future developments."

When asked at the conference which cities Trump Organization would consider for business deals, Trump responded, "Certainly, the city I'm standing on (Mumbai), Delhi, Hyderabad and Bangalore, where the IT sector has witnessed a boom."

Hedge Fund Advisor Hires Mathematician and Boosts Assets

Hedge fund advisory firm D5 announced the launch of two new accounts, with each promising capacity of $50 million, for a possible $ 100 million on additional capital for the firm. The new accounts coincide with the hiring of mathematician and scientist Andrew Vizcarra as Director of research.

"Andrew's 10 years in the study and teaching of mathematics and statistics is a great asset to our research department and is a wonderful compliment to the fundamental nature of our strategy." Theodore Dumbauld, founder of D5 said, "Mr Vizarra will focus on both the enhancement of our current strategy and the exploration of universe expansion."

D5's strategy utilizes a relative value strategy, trading only a unique set of securities for which net asset values can be calculated.

Hedge Fund Harbinger Buys Nearly 5%of Cablevision

Harbinger Capital Management, an activist hedge fund has accumulated a 4.9% stake in Cablevision Systems Corp, according to The Wall Street Journal.

In a regulatory filing, Harbinger said that it had bought 11.45 million of Cablevision's Class A shares. Harbinger, now Cablevision's fifth biggest shareholder, was not present at meetings with the company's top executives and large investors this week, the Journal said, citing a person familiar with the meetings.

The move may have prompted CEO James Dolan to explore options. Cablevision shareholders rejected a $36.26-a-share buyout from the founding Dolan family last October. That bid was the family's fourth attempt to take the company private.

The Dolan family owns 75% of the voting rights for Cablevision. It remains unclear what Harbinger intends to do with its holding. Harbinger isn’t currently planning a proxy fight with the company, said a person close to the company.

Cablevision last month acquired 97% of Newsday Media Group ("Newsday") through the formation of a new partnership with Tribune Company. For Cablevision, the completion of this transaction adds a complementary print and online media group with local content in the New York area.

Hedge Fund Correlation Research Report by Credit Suisse

Hedge funds generally are more correlated in bull market runs and more de-correlation at market downturns. A comparison of the Credit Suisse/Tremont Broad Benchmark Index (HEDG), an asset-weighted broad benchmark of the hedge fund industry, to the MSCI World Index, a broad equity index, shows that the 12-month rolling correlation between the two has dropped from its peak of 0.97 in June 2006 to 0.61 in June 2008. The findings are given in a research report by Credit Suisse Index.

The report showed that during times of market stress sharp declines from HEDG’s previous peak levels of positive correlation with MSCI World demonstrated the ability to de-correlate from broad equity market indices.

Between July 2007 and June 2008, HEDG increased by 4.09% compared with a fall of 12.5% in the MSCI World Index and a decrease of 13% in the S&P 500.

The ability of hedge funds to maintain exposure to a range of asset classes allows them to preserve capital in down markets and, if successful, offer a more balanced investment option compared to traditional equity indices. In addition, the ability of hedge funds to monetise negative views through short selling is clearly effective during market downturns.

Morningstar Hedge Fund Report, July 2008

Hedge funds saw their worst monthly performance in the history of the Morningstar 1000 Hedge Fund Index. The index returned a negative 3.07% in July 2008, an eventful month for the markets.

In the first half of July, high oil prices and continued trouble in the U.S. banking sector caused equities to tumble and the U.S. dollar to slide, hitting a low point mid-month when the Federal Reserve expressed concerns about economic growth. The announcement of a U.S. government bailout plan for Freddie Mac and Fannie Mae, along with the Securities and Exchange Commission's short-sale restrictions on financial stocks allowed for a partial rebound in the second half of the month. "In July, the bet on long commodities and short financials didn't work as well for hedge funds,” said Daniel Farkas, hedge fund analyst for Morningstar.

Commodities showed their worst month in more than five years. The S&P GSCI Index, a commodities index heavily weighted in energy, fell more than 12% in July, as the price of crude oil plunged from its July 2 peak on weaker demand forecasts. European and Asian central banks attempted to combat inflation with interest rate hikes, causing a slide in those equities markets.

Consequently, the Morningstar Europe Equity, Morningstar Asia Equity, and Morningstar Emerging Markets Equity Hedge Fund Indexes saw much strife in July, though not as much as the Morningstar Global Equity Hedge Fund Index, which lost almost 8%. The Morningstar US Equity Hedge Fund Index also performed poorly, underperforming the S&P 500 Index by more than two percentage points.

"It's unusual for hedge funds to underperform equities in down markets, but hedge funds haven't been able to navigate the credit crunch that started last summer” added Farkas. The MSCI World Index outperformed the Morningstar 1000 Hedge Fund Index in four of the 24 down months since January 2003, the inception of the Morningstar 1000 Hedge Fund Index. Three of these four months occurred in the last year.

Because July also saw big losses in commodities, the Morningstar Global Trend Hedge Fund Index halted its upward trend. For the year, however, this index still outperformed every other Morningstar hedge fund category index by a wide margin. Year-to-date through June 2008, hedge funds in the Morningstar Global Trend category also experienced the highest inflows, at almost $10 billion. For the month of June, hedge funds overall saw more than $10 billion of inflows.

Multi-Strategy hedge funds had more than double the inflows of other categories, placing second only to Global Trend hedge funds. In a dynamic macro-economic environment, Multi-Strategy hedge funds can be more nimble than single-strategy hedge funds, quickly allocating assets to strategies with a brighter outlook, while pulling away from strategies with more dismal prospects. In July, however, most hedge fund strategies proved unprofitable, and the Morningstar Multistrategy Hedge Fund Index lost more than 3.67%.

Funds-of-Funds outperformed the Morningstar 1000 Hedge Fund Index in July, returning a negative 2.41%. Year-to-date, the Morningstar Hedge Funds of Funds Index has lost 2.52%.

Returns are based on hedge funds in the Morningstar hedge fund indexes that reported performance as of August 8, 2008.

More Service Providers

MAM Launches Hedge Fund-Like Returns Strategy

California based Martin Asset Management is replicating hedge-fund-like returns and risk factors through its ETF strategies without the heavy fees, lockups and non-transparent holdings, the boutique alternative investment firm said.

"Our approach allows investors to obtain the very same benefits as they would with a hedge fund without the limitations usually associated with hedge funds", says Francisco Martin, Senior Managing Director and Founder of Martin Asset Management.

"We use a similar investment philosophy as you would with 'Global Tactical Asset Allocation'." Martin said, "It is an investment strategy that attempts to exploit short-term market inefficiencies by taking positions in various markets with a view to profiting from relative movements across those markets."

The approach focuses on general movements in the markets rather than on performance of individual securities within them Positions are generally taken with a relatively short-term time horizon (3 – 6 months) – hence the term Tactical Asset Allocation – and in markets across the globe – hence the term Global.

"Our philosophy is simple; we don’t charge any management fees but participate with a 10% performance fee and a High Water Mark. The transparency of a separate managed account and the elimination of all hedge fund imposed barriers make our approach much more attractive to the investor," says Martin.

MAM is expected to launch its new product by August of 2008.

ActionsXchange Appoints Laura Pollard As Company Head

Hedge fund Provider, Fidelity ActionsXchange, has appointed Laura J. Pollard as executive vice president and head of the company. Pollard will report to Larry C. Renfro, president of Fidelity Developing Businesses, a new division that comprises a number of growing businesses and strategic initiatives for Fidelity.

“Working in partnership with ActionsXchange’s management team, Laura has done an outstanding job of leading the company over the past several months, and I am confident that her industry experience, proven strengths as a leader and ability to build strong relationships with clients will position her for success in her new role,” said Renfro. “Laura will lead a talented and experienced management team that will continue its focus on providing the most accurate, timely, and comprehensive global corporate actions information to our clients.”

Pollard, a 19-year Fidelity veteran, will lead all aspects of ActionsXchange’s day-to-day operations. Prior to her new role, Pollard spent the past two years as ActionsXchange’s senior vice president of client services, product development and implementation. Before joining ActionsXchange, Pollard spent four years at Fidelity Charitable Services and 13 years in a variety of leadership roles in Fidelity’s 401(k) retirement services and benefits outsourcing divisions.

ActionsXchange was formed in 1997 to offer corporate actions processing software and outsourcing solutions to financial institutions. Operating as an independent company, ActionsXchange partners with more than 50 major global financial institutions such as banks, asset managers, hedge funds and broker-dealers.

Partner Files Hedge fund Management Complaint

The Manager of the K Squared Funds, a New York-based group of hedge funds, was named as a defendant in a lawsuit filed by his ex-partner. The suit brings claims for fraud, breach of contract, unjust enrichment, and bad faith dealing in connection with the hedge funds.

Filed in the Commercial Division of New York Supreme Court, New York County, the complaint details how Kane and the hedge funds benefited by false attribution of income to Kane's ex-partner by profiting from the interest income while saddling the ex-partner with the tax bill, and how Kane failed to comply with his contractual obligations, keeping his ex-partner in the dark about the value of the hedge funds.

The complaint further alleges that Kane belatedly provided incomplete information purporting to show that the Funds were valued at less than $100 million. At the same time, the complaint cites a circular to investors in which Kane boasted that assets under management during the period in question actually exceeded $150 million -- well over the threshold at which he was obligated to pay his ex-partner management and incentive fees. Thus, the complaint alleges, Kane kept the fees that were rightfully due to his ex-partner. A conservative calculation of those fees puts them well into the six figures.

The defendant, Chris Kane of New Canaan, Connecticut, parted ways with his partner in 2006.

Castle Hall Hires Kosta Segounis

Castle Hall Alternatives, a provider of hedge fund operational due diligence, has hired Kosta Segounis as Senior Manager, he will supervise a team of analysts responsible for operational due diligence on numerous hedge funds.

"I am delighted to have the opportunity to join Castle Hall's team." Kosta said, "Operational due diligence has become an increasingly important element of managing a hedge fund portfolio, and Castle Hall offers a unique solution for investors who wish to work with an external partner to enhance their due diligence program."

Kosta previously held the position of Senior Consultant, Compliance, at Standard Life in Montreal. Kosta is a member of the Canadian Institute of Chartered Accountants and is also a CFA (chartered financial analyst) charterholder.

Chris Addy, Castle Hall's President and CEO, said "we are extremely pleased to add Kosta to our growing team of due diligence professionals. His knowledge and experience will be a great asset to our firm, particularly with respect to compliance best practices in the hedge fund industry."

Castle Hall Alternatives helps investors identify better hedge fund managers - firms which not only have attractive performance but also match operational best practices. Castle Hall's team of due diligence professionals uses a proprietary methodology to prepare a detailed operational assessment for each fund under review.

Blackstone Launches CleanTech Investment Arm

Alternative investment manager, The Blackstone Group, has launched a new business group focused on investments in the cleantech energy sector and will provide advice on renewable energy strategies across Blackstone’s asset base.

The team is being led by James D. Kiggen, who has joined the firm’s Corporate Private Equity group as a Senior Managing Director. Also joining as Principals from AllianceBernstein are Walter C. Vester and Richard L. Troyer.

“Jamie and his team’s understanding of rapidly evolving technology applications in solar and wind power generation, carbon sequestration, next generation ethanol, and other renewables will be a key input in Blackstone’s investment decisions." Garrett Moran, Senior Managing Director of The Blackstone Group, said, "We look forward to working with the new team across both conventional energy investments and new developments, including those at our portfolio company Sithe Global Power, as well as several other sizeable investments that we are currently evaluating.”

Blackstone's alternative asset management businesses include the management of corporate private equity funds, real estate funds, hedge funds, funds of funds, debt funds, collateralized loan obligation vehicles (CLOs) and closed-end mutual funds. The Blackstone Group also provides various financial advisory services, including mergers and acquisitions advisory, restructuring and reorganization advisory and fund placement service. Further information is available at www.blackstone.com.

Rupert Allan Hires Fund Of Hedge Fund Specialist

Established leader in the management of fund of hedge funds, Tremont Capital Management, has appointed Scott R. Metchick as Chief Investment Officer. Metchick brings to Tremont over 20 years of experience in the fund of hedge fund industry and a proven performance record.

Tremont says his demonstrated ability to manage a defined process-oriented investment philosophy while managing a global investment team complements the existing investment approach at Tremont, allowing the firm to deepen its presence in key global institutional and distribution markets.

"Investment excellence is core to our strategy of establishing a scalable, institutional standard multimanager fund of funds business," said Rupert Allan, President and Chief Executive Officer. "Scott's appointment represents the execution of the final phase of this strategy by capping a series of senior hires which, together with our existing expertise in the investment management group, completes the leadership team at Tremont."

"The role of the fund of hedge funds is even more important for investors in today's market which makes Tremont's over 20 years of experience and dedication to excellence critical factors in delivering the products and performance that our clients need and deserve," said Metchick. "I'm excited to join the firm and look forward to all that's ahead of us."

Metchick's hire as CIO, replacing Cynthia Nicoll who left Tremont for personal reasons, is the most recent in a succession of senior appointments in the investment team including Andrew Kaneb, former head of Global Equities at Lighthouse Partners, and Jim Purnell, who came from the structured product group at Dresdner Bank to lead the risk management group at Tremont.

Allan has moved quickly within a challenging external environment since becoming CEO last year, adding to his role as President. "Now more than ever," said Allan, "clients want to know that they are working with an investment manager that has the experience, the infrastructure and the ability to deliver on a mandate in various market conditions with the products and solutions they need. We now have the team in place to do just that."

AFS Launches Alternative Trading Feature

Archer Financial Services (AFS), has launched Balarie Capital Management ("BCM"), a division of AFS created with the specific purpose of helping Institutional and High Net Worth investors achieve diversification by providing them with products and services that are typically non-correlated with their traditional investment portfolios.

AFS, an Introducing Broker, is wholly owned by ADM Investor Services, Inc. The brokerage also announced the appointment of Emanuel Balarie as managing director of the division.

"Mr. Balarie brings on board industry expertise in both the commodities and managed futures arena" said Kurt Johnson, President of AFS. "The combination of his experience, BCM's consultative approach to managed futures investments, access to hundreds of Commodity Trading Advisors all over the globe, and the financial integrity and operational structure of ADMIS will allow us to provide investors with a wide array of products and services."

Emanuel Balarie added, "While the asset flow in the managed futures sector has increased significantly over the last several years, we still feel that there is a need for a firm that is able to provide a consultative approach to managed futures portfolios. The goal is not to recommend cookie-cutter type portfolios for every investor, but to look at the investor's individual profile and portfolio to determine the specific allocation that is most appropriate for the investor. This approach is especially attractive to institutions and investors that have to meet specific portfolio requirements."

BCM works with high-net worth investors, family offices, pensions, and endowment funds who are interested in adding managed futures to their investment portfolios. In addition, Balarie, through its affiliation with ADMIS, offers clearing and execution services for Commodity Trading Advisors, Fund of Funds, and professional traders.