As domicile for approximately 80% of the world's hedge funds, the Cayman Islands have now implemented a mechanism for the electronic submission of annual returns for all funds licensed, registered and administered in the Cayman Islands.
The Cayman Islands Monetary Authority's (CIMA) Managing Director Cindy Scotland said, "Not only will we be able to more efficiently handle the audited accounts that are submitted but we will be in a position to provide better aggregate industry statistics than we have been able to provide so far. This will benefit all stakeholders." and "Because the Cayman Islands is the domicile for a majority of the world’s offshore hedge funds, we believe CIMA’s E-reporting system will be able to improve the reliability and quality of aggregate fund industry statistics globally".
Following successful industry testing, CIMA released on its website the electronic Fund Annual Return (FAR) form and has opened the internet portal through which funds’ local auditors will submit the required returns. Related guidance notes have also been released.
CIMA has been developing the electronic reporting initiative for funds for several months, with assistance from its retained business advisor Ernst & Young and with input from the funds industry. The Monetary Authority expects the initiative to facilitate more efficient collection and processing of returns from the over 8,300 funds it now oversees.
The legislation implementing E-reporting for funds, the Mutual Funds (Annual Returns) Regulations 2006, was passed on 27 December 2006.
3 Apr 2007
SkyBridge Capital Invests in IronShield Hedge Fund
New York based hedge fund investor SkyBridge Capital, announced plans to invest in Ironshield Capital Management, a London-based hedge fund scheduled to launch later this year.
Ironshield Capital Management is the latest in a series of investments that SkyBridge has made in up and coming hedge funds. Other hedge funds they have arranged financing for include Westport Capital Partners, Brompton Cross Capital Advisers, Abdiel Capital and Outpoint Capital Management.
SkyBridge will provide Ironshield with a team of people to help build up the new fund's operation. The amount of the investment was not disclosed. Ironshield is led by David Nazar, previously a principal at Bank of America in London.
SkyBridge Capital is a seeding firm created in 2005 by Anthony Scaramucci, co-founder of Oscar Capital, a hedge fund acquired in 2001 by Neuberger Berman; and Andrew Klein, co-founder of Soleil Securities Group.
Ironshield Capital Management is the latest in a series of investments that SkyBridge has made in up and coming hedge funds. Other hedge funds they have arranged financing for include Westport Capital Partners, Brompton Cross Capital Advisers, Abdiel Capital and Outpoint Capital Management.
SkyBridge will provide Ironshield with a team of people to help build up the new fund's operation. The amount of the investment was not disclosed. Ironshield is led by David Nazar, previously a principal at Bank of America in London.
SkyBridge Capital is a seeding firm created in 2005 by Anthony Scaramucci, co-founder of Oscar Capital, a hedge fund acquired in 2001 by Neuberger Berman; and Andrew Klein, co-founder of Soleil Securities Group.
European Mutuals Push For Hedge Fund Access
European mutual fund managers are pushing regulators to allow them to buy into derivatives of hedge fund indexes.
Approval from regulators would allow European Union-regulated funds to put some of their $7.3 trillion of assets into derivatives tracking the hedge fund indexes, allowing them to profit from hedge fund gains in a safer, regulated way.
Relatively few hedge funds are actually domiciled in European countries, so that although their use has been fairly widespread amongst institutional investors for some time, they have been limited to high net worth individuals able to pay the high minimum initial investments that are often in place.
Fund industry representatives argued in front of the Committee of European Securities Regulators that indexes linked to hedge funds performance have increasingly become standard financial indicators.
Although ruled unsuitable for mutual funds last year, the mutual funds are pushing to be allowed to bet on the performance of hedge funds just as they can for other financial indicators such as stock indexes.
"These are a class of assets that retail investors could benefit from," said Stephane Kuzmin, responsible for regulatory matters for index-linked funds at Barclays Global Investors Ltd., the hedge-fund arm of Barclays Plc, at the hearing. "We'd welcome to have some hedge-fund indices available."
The EU executive agency in Brussels may consider broadening those rights to permit buying of funds of hedge funds when it considers future rule revisions.
European countries including Germany, Spain and the U.K. have permitted limited investment in funds of hedge funds or other means of investing in the vehicles traditionally restricted to institutional investors or people with $1 million or more.
Approval from regulators would allow European Union-regulated funds to put some of their $7.3 trillion of assets into derivatives tracking the hedge fund indexes, allowing them to profit from hedge fund gains in a safer, regulated way.
Relatively few hedge funds are actually domiciled in European countries, so that although their use has been fairly widespread amongst institutional investors for some time, they have been limited to high net worth individuals able to pay the high minimum initial investments that are often in place.
Fund industry representatives argued in front of the Committee of European Securities Regulators that indexes linked to hedge funds performance have increasingly become standard financial indicators.
Although ruled unsuitable for mutual funds last year, the mutual funds are pushing to be allowed to bet on the performance of hedge funds just as they can for other financial indicators such as stock indexes.
"These are a class of assets that retail investors could benefit from," said Stephane Kuzmin, responsible for regulatory matters for index-linked funds at Barclays Global Investors Ltd., the hedge-fund arm of Barclays Plc, at the hearing. "We'd welcome to have some hedge-fund indices available."
The EU executive agency in Brussels may consider broadening those rights to permit buying of funds of hedge funds when it considers future rule revisions.
European countries including Germany, Spain and the U.K. have permitted limited investment in funds of hedge funds or other means of investing in the vehicles traditionally restricted to institutional investors or people with $1 million or more.
2 Apr 2007
Hedge Fund To Separate Brokerage Arm to New York
Top ten hedge fund firm Man Group said on Friday it is considering splitting off its brokerage arm into a new £2 billion ($3.9 billion) company. The de-merger would separate its U.S. brokerage unit and list it in New York.
Man group has funds under management of more than $61 billion as of January. The listing of a majority interest in the unit, Man Financial, will take place in the third quarter of 2007, subject to market conditions remaining favorable, the firm said. It will be renamed MF Global following the separation, which is subject to shareholder approval, and net proceeds will be returned to shareholders later in the year.
A Man Group spokesman said; "Man regularly reviews the structure of its business, in line with our commitment to achieve superior returns for our shareholders...... Separation will allow each business to focus even more effectively on their separate growth strategies and take advantage of the significant business development opportunities in each of their industries."
Man Group, best-known for its hedge fund activities, believes its brokerage business is being overlooked and would be worth far more as a separate company. Man Financial's Managing Director Kevin Davis will become CEO of the new group. Chris Smith will be chief operating officer and deputy CEO, while Amy Butte will be chief financial officer. The non-executive chairman will be Alison Carnwath.
Man group has funds under management of more than $61 billion as of January. The listing of a majority interest in the unit, Man Financial, will take place in the third quarter of 2007, subject to market conditions remaining favorable, the firm said. It will be renamed MF Global following the separation, which is subject to shareholder approval, and net proceeds will be returned to shareholders later in the year.
A Man Group spokesman said; "Man regularly reviews the structure of its business, in line with our commitment to achieve superior returns for our shareholders...... Separation will allow each business to focus even more effectively on their separate growth strategies and take advantage of the significant business development opportunities in each of their industries."
Man Group, best-known for its hedge fund activities, believes its brokerage business is being overlooked and would be worth far more as a separate company. Man Financial's Managing Director Kevin Davis will become CEO of the new group. Chris Smith will be chief operating officer and deputy CEO, while Amy Butte will be chief financial officer. The non-executive chairman will be Alison Carnwath.
French Candidate Disapproves of Hedge Fund Strategies
French Interior Minister and presidential candidate Nicolas Sarkozy criticized hedge funds as an example of undesirable speculation, saying he didn't approve of companies...."that buy up a company, sell it off in pieces, sack 25% of the staff in the meantime, collect 25% profit and create zero wealth."
Sarkozy said, "I don't want a speculative capitalism. I want a capitalism that creates riches." He added that a second topic for European debate would be "moralizing" the region's model of financial capitalism. Speaking during a television debate he argued that a weaker Euro should be a tool to help European industry: "We've built the second currency in the world and we're the only region in the world that obstinately refuses to put our currency to the service of jobs and growth. It can't last," he said.
Sarkozy is widely viewed by admirers as France's best hope for economic reform, but he has sought to temper a reputation for unpopular liberalism by emphasizing the role of the state and leaping to the defense of French industrial champions. In common with other French politicians, he has also called repeatedly for a change in the European Central Bank's mandate, to include growth and jobs among its criteria when setting interest rates.
On Sunday, he accepted that those demands, requiring unanimous agreement, were unrealistic. But said that if elected, he would ask his finance minister to call a Eurogroup meeting with Eurozone colleagues to discuss exchange rate strategy and "convince our partners to move forward."
Sarkozy said, "I don't want a speculative capitalism. I want a capitalism that creates riches." He added that a second topic for European debate would be "moralizing" the region's model of financial capitalism. Speaking during a television debate he argued that a weaker Euro should be a tool to help European industry: "We've built the second currency in the world and we're the only region in the world that obstinately refuses to put our currency to the service of jobs and growth. It can't last," he said.
Sarkozy is widely viewed by admirers as France's best hope for economic reform, but he has sought to temper a reputation for unpopular liberalism by emphasizing the role of the state and leaping to the defense of French industrial champions. In common with other French politicians, he has also called repeatedly for a change in the European Central Bank's mandate, to include growth and jobs among its criteria when setting interest rates.
On Sunday, he accepted that those demands, requiring unanimous agreement, were unrealistic. But said that if elected, he would ask his finance minister to call a Eurogroup meeting with Eurozone colleagues to discuss exchange rate strategy and "convince our partners to move forward."
30 Mar 2007
NFL Hedge Fund Case To Proceed as Planned
A federal judge in Atlanta ruled that the NFL players who entrusted their funds to Kirk Sean Wright, CEO of hedge fund International Management Associates of Atlanta, may move forward with their case over lost investments.
The FBI in association with the IRS, DOJ and SEC investigated why requests by current and former NFL players for their funds were ignored. The amount of the loss of funds in question is about $20 million. The investigation resulted in charges against Mr. Wright and a trial date is pending.
"It's a tremendous victory for our clients and all former and current players," said their lawyer, Jim Evangelista, of the law firm Motley Rice.
The ruling means the case will go to the discovery phase, in which the players' attorneys will seek documents and depositions of NFL officials about why they recommended the now-bankrupt and defunct hedge fund.
The players accuse the NFL and union of breach of fiduciary duty for approving the services of Kirk Wright and Nelson Keith Bond, co-heads of the bankrupt hedge fund, without doing background checks. Wright was ordered on Feb. 12 to pay the U.S. Securities and Exchange Commission $20 million in its lawsuit over the failed fund.
Wright and his hedge fund are accused of collecting between $115 million and $185 million from at least 500 investors since 1997 and misleading some of them through false statements and documents to believe the value of those investments was increasing.
The FBI in association with the IRS, DOJ and SEC investigated why requests by current and former NFL players for their funds were ignored. The amount of the loss of funds in question is about $20 million. The investigation resulted in charges against Mr. Wright and a trial date is pending.
"It's a tremendous victory for our clients and all former and current players," said their lawyer, Jim Evangelista, of the law firm Motley Rice.
The ruling means the case will go to the discovery phase, in which the players' attorneys will seek documents and depositions of NFL officials about why they recommended the now-bankrupt and defunct hedge fund.
The players accuse the NFL and union of breach of fiduciary duty for approving the services of Kirk Wright and Nelson Keith Bond, co-heads of the bankrupt hedge fund, without doing background checks. Wright was ordered on Feb. 12 to pay the U.S. Securities and Exchange Commission $20 million in its lawsuit over the failed fund.
Wright and his hedge fund are accused of collecting between $115 million and $185 million from at least 500 investors since 1997 and misleading some of them through false statements and documents to believe the value of those investments was increasing.
Top Ten Global Hedge Fund Firms
1. JPMorgan Asset Management, including Highbridge Capital Management, main offices in N.Y. Assets under management; $34 billion as of Jan '07.
2. Goldman Sachs Asset Management, also in New York, USA. AUM $32.53 billion.
3. Bridgewater Associates, Westport, USA. $30.2 billion.
4. D. E. Shaw Group, N.Y. $26.3 billion.
5. Farallon Capital Management, San Francisco, USA. $26.2 billion.
6. Renaissance Technologies Corp. East Setauket, USA. $24 billion.
7. Och-Ziff Capital Management, N.Y. $21 billion.
8. Cerberus Capital Management, N.Y. $19.15 billion.
9. Barclays Global Investors, San Francisco, USA. $18.9 billion.
10. Man Investments Limited (AHL single-manager strategies only) London, UK. AUM $18.8 billion.
The statistics represent single-manager hedge funds only. Funds of funds, which are tracked by InvestHedge, are not included in the $2 trillion calculations.
2. Goldman Sachs Asset Management, also in New York, USA. AUM $32.53 billion.
3. Bridgewater Associates, Westport, USA. $30.2 billion.
4. D. E. Shaw Group, N.Y. $26.3 billion.
5. Farallon Capital Management, San Francisco, USA. $26.2 billion.
6. Renaissance Technologies Corp. East Setauket, USA. $24 billion.
7. Och-Ziff Capital Management, N.Y. $21 billion.
8. Cerberus Capital Management, N.Y. $19.15 billion.
9. Barclays Global Investors, San Francisco, USA. $18.9 billion.
10. Man Investments Limited (AHL single-manager strategies only) London, UK. AUM $18.8 billion.
The statistics represent single-manager hedge funds only. Funds of funds, which are tracked by InvestHedge, are not included in the $2 trillion calculations.
Global Hedge Funds now Over 2 Trillion in Assets
Assets in global hedge funds have now reached more than $2 trillion according to new research compiled by HedgeFund Intelligence, publisher of the newsletters and databases of EuroHedge, AsiaHedge, South AfricaHedge and InvestHedge, as well as the U.S.-based magazine Absolute Return.
The findings of this research, which is published in a new Global Review from HedgeFund Intelligence, shows a rise in global hedge fund assets from just over $1.5 trillion in January 2006 to $2.079 trillion by January of this year - a rate of growth in assets of just over 30% in the past year.
According to the latest research from InvestHedge - which tracks investors in hedge funds - an increasing proportion of this money is coming from institutional investors, with the majority of the assets allocated to hedge funds (over $1 trillion) now coming via the fund of funds sector.
The HedgeFund Intelligence research process was completed with the latest EuroHedge asset survey, which showed that assets in European hedge funds had reached almost $460 billion by January of this year - up from $325 billion the year before, and at the fastest rate of growth in the past year (about 40%) among the major regions around the world.
The latest AsiaHedge asset survey showed that combined assets in Asia-Pacific hedge funds had reached $147 billion (including Asia-Pacific funds managed from the U.S. and Europe) - up from $115 billion the year before.
In the U.S., HedgeFund Intelligence calculated that total hedge fund assets have now reached almost $1.5 trillion - including some $1.198 trillion accounted for the Absolute Return Billion Dollar Club alone (which was up from about $850 billion a year earlier).
After adjusting for a small amount of double-counting (such as for funds managed in one region but investing into another), the combined assets of hedge funds in the U.S., Europe and the Asia-Pacific now stand at $2.006 trillion. Adding in other regions - including Canada, Latin America and South Africa - takes the combined total to $2.079 trillion.
The findings of this research, which is published in a new Global Review from HedgeFund Intelligence, shows a rise in global hedge fund assets from just over $1.5 trillion in January 2006 to $2.079 trillion by January of this year - a rate of growth in assets of just over 30% in the past year.
According to the latest research from InvestHedge - which tracks investors in hedge funds - an increasing proportion of this money is coming from institutional investors, with the majority of the assets allocated to hedge funds (over $1 trillion) now coming via the fund of funds sector.
The HedgeFund Intelligence research process was completed with the latest EuroHedge asset survey, which showed that assets in European hedge funds had reached almost $460 billion by January of this year - up from $325 billion the year before, and at the fastest rate of growth in the past year (about 40%) among the major regions around the world.
The latest AsiaHedge asset survey showed that combined assets in Asia-Pacific hedge funds had reached $147 billion (including Asia-Pacific funds managed from the U.S. and Europe) - up from $115 billion the year before.
In the U.S., HedgeFund Intelligence calculated that total hedge fund assets have now reached almost $1.5 trillion - including some $1.198 trillion accounted for the Absolute Return Billion Dollar Club alone (which was up from about $850 billion a year earlier).
After adjusting for a small amount of double-counting (such as for funds managed in one region but investing into another), the combined assets of hedge funds in the U.S., Europe and the Asia-Pacific now stand at $2.006 trillion. Adding in other regions - including Canada, Latin America and South Africa - takes the combined total to $2.079 trillion.
29 Mar 2007
Study Shows Hedge Funds are not Understood by Investors
According to a new Spectrem Perspective report released today, "Alternative Investments: Are They a Priority for Affluent Portfolios?", just 18% of affluent investors, defined as having more than $500,000 in investable assets, say they understand hedge funds. Structured products are understood by only 15% of these investors and private placements come in at 19%.
At the same time, just 9% of affluent investors say they are interested in hedge funds. A similar 9% express interest in structured products, with 10% interested in venture capital, 11% in private placements and 11% in futures.
"While hedge funds have been in the news like no other financial product recently, affluent investors still don't feel they understand these alternative investments. This gap in understanding corresponds with a distinct lack of interest in hedge funds and other alternative investments such as structured products and private placements.
Financial services providers offering these products need to be proactive in educating affluent investors about their risks and rewards. Given their lack of interest, it seems unlikely these investors will step forward themselves seeking more information," said Catherine S. McBreen, Managing Director of Spectrem Group.
When asked which of five specific alternative products were the riskiest, affluent investors selected hedge funds (39%), followed by commodities (32%), precious metals (14%), private equity (8%) and REITS (7%).
The Spectrem Perspective(TM) report, "Alternative Investments: Are They a Priority for Affluent Portfolios?" is based on telephone interviews conducted in late 2006 with 514 affluent households, defined as those with more than $500,000 of investable assets. The margin of error is plus or minus 4.3 percentage points.
At the same time, just 9% of affluent investors say they are interested in hedge funds. A similar 9% express interest in structured products, with 10% interested in venture capital, 11% in private placements and 11% in futures.
"While hedge funds have been in the news like no other financial product recently, affluent investors still don't feel they understand these alternative investments. This gap in understanding corresponds with a distinct lack of interest in hedge funds and other alternative investments such as structured products and private placements.
Financial services providers offering these products need to be proactive in educating affluent investors about their risks and rewards. Given their lack of interest, it seems unlikely these investors will step forward themselves seeking more information," said Catherine S. McBreen, Managing Director of Spectrem Group.
When asked which of five specific alternative products were the riskiest, affluent investors selected hedge funds (39%), followed by commodities (32%), precious metals (14%), private equity (8%) and REITS (7%).
The Spectrem Perspective(TM) report, "Alternative Investments: Are They a Priority for Affluent Portfolios?" is based on telephone interviews conducted in late 2006 with 514 affluent households, defined as those with more than $500,000 of investable assets. The margin of error is plus or minus 4.3 percentage points.
28 Mar 2007
Hedge Fund Faces Fines of up to $25 Million
A hedge fund accused of defrauding mutual funds of $2.4 million in 2003 could face additional fines under a proposed plea agreement filed Tuesday in U.S. District Court in Philadelphia.
The guilty plea would mark the first criminal case in U.S. history against a hedge fund for deceptive market timing. Traders can calculate their purchases to take advantage of the lag in time before the mutual fund is updated. Many mutual funds have established methods to detect market-timing and ban those that engage in the practice.
Among other things, the U.S. attorney's office said that Gerbasio and Beacon Rock set up more than 30 accounts to evade detection. Under the agreement, in which Beacon Rock Capital LLC is to plead guilty to one count of securities fraud, a judge may levy a fine of up to $25 million, although the guidelines for such a violation call for a range of $1.26 million to $2.52 million, said Derek Cohen, an assistant U.S. attorney in Philadelphia.
Beacon Rock Capital also has agreed to forfeit $475,905 as a result of a "market-timing" scheme that netted the hedge fund $2.4 million. The plea agreement is scheduled for a hearing on April 4. In exchange for the company's guilty plea and cooperation, the government is agreeing not to prosecute the two principals, Blake Singer and Bryant Jaksic.
The guilty plea would mark the first criminal case in U.S. history against a hedge fund for deceptive market timing. Traders can calculate their purchases to take advantage of the lag in time before the mutual fund is updated. Many mutual funds have established methods to detect market-timing and ban those that engage in the practice.
Among other things, the U.S. attorney's office said that Gerbasio and Beacon Rock set up more than 30 accounts to evade detection. Under the agreement, in which Beacon Rock Capital LLC is to plead guilty to one count of securities fraud, a judge may levy a fine of up to $25 million, although the guidelines for such a violation call for a range of $1.26 million to $2.52 million, said Derek Cohen, an assistant U.S. attorney in Philadelphia.
Beacon Rock Capital also has agreed to forfeit $475,905 as a result of a "market-timing" scheme that netted the hedge fund $2.4 million. The plea agreement is scheduled for a hearing on April 4. In exchange for the company's guilty plea and cooperation, the government is agreeing not to prosecute the two principals, Blake Singer and Bryant Jaksic.
Hedge Fund Film Review
"Blood Diamond" was a well spent couple of hours, DiCaprio was convincing in his role as a Rhodesian "soldier of fortune" and of course theres the well meaning reporter played by Jennifer Connelly.
Quite realistic in its cruelty and bloodshed, it could be classified as fairly disturbing. Djimon Hounsou plays the father and husband of a lost family who alone knows the whereabouts of a stone that will give each of them what they want.
Financed by hedge fund firm Stark Investments, the film has an Oscar nomination, and is causing quite a stir in the world of diamonds. "People wouldn't buy a diamond if they knew it cost someone their hand." Says Maddy Bowen (Connelly) while wading through the bloody aftermath of a raid by child soldiers in the Sierra Leone.
Other hedge fund movies also in the Oscar running this season; "Poseidon." also by Stark Investments, "The Pursuit of Happyness" by hedge fund Relativity Media and "Borat." by hedge fund Dune Capital Management.
Quite realistic in its cruelty and bloodshed, it could be classified as fairly disturbing. Djimon Hounsou plays the father and husband of a lost family who alone knows the whereabouts of a stone that will give each of them what they want.
Other hedge fund movies also in the Oscar running this season; "Poseidon." also by Stark Investments, "The Pursuit of Happyness" by hedge fund Relativity Media and "Borat." by hedge fund Dune Capital Management.
27 Mar 2007
Cayman Islands & Hedge Funds
Approximately 80% of the world's hedge funds are believed to be domiciled in the Cayman Islands. As a result, Cayman Islands hedge fund companies and service providers, such as law firms, accounting firms, and administrators, are employing innovative recruiting techniques to attract and retain professionals.
Some representatives from Cayman-based firms, such as Maples and Calder, KPMG, and Walkers, are talking from their own experience about the new topics on the Cayman agenda, such as onshore vs. offshore employment, how working in offshore financial centers seem to be a preferred career move for hedge fund professionals.
Incentives such as weather and lifestyle are attracting employees to the Caymans, a sophisticated work and family support system encourages them to stay. There have also been recent programs set up by the Cayman private sector firms, aimed at employing local citizens to work in the financial sector.
Hedge funds returned some 13% in 2006, compared with the 15.8% return of the S&P 500 Index, according to industry tracker Hedge Fund research, Inc. of Chicago.
Email me or leave a comment if you want more info on contacting these people, the hedge funds listed above have offered to speak or give advice on moving to the Caymans.
Some representatives from Cayman-based firms, such as Maples and Calder, KPMG, and Walkers, are talking from their own experience about the new topics on the Cayman agenda, such as onshore vs. offshore employment, how working in offshore financial centers seem to be a preferred career move for hedge fund professionals.
Incentives such as weather and lifestyle are attracting employees to the Caymans, a sophisticated work and family support system encourages them to stay. There have also been recent programs set up by the Cayman private sector firms, aimed at employing local citizens to work in the financial sector.
Hedge funds returned some 13% in 2006, compared with the 15.8% return of the S&P 500 Index, according to industry tracker Hedge Fund research, Inc. of Chicago.
Email me or leave a comment if you want more info on contacting these people, the hedge funds listed above have offered to speak or give advice on moving to the Caymans.
British Hedge Funds Back Up TCI In Dutch Bank Attack
ABN Amro Holding NV said last week it was in preliminary discussions with Barclays about creating a company worth more than $160 billion, this comes after pressure from activist hedge fund TCI asking to split up of the Dutch bank.
Activist hedge funds Polygon and Centaurus are said to be supporting TCI's demands and have also built a stake in ABN in order to pressure the bank into the sale.
The Children's Investment Fund Management(TCI), a $3.8 billion hedge fund, announced in a letter to Dutch bank ABN AMRO last month that they believe the bank is undervalued and should sell some of its assets, merge with another bank, or even sell off the whole business.
In 2005 TCI was part of a group of activist investors who criticized Deutsche Börse for its $2.5 billion bid for the London Stock Exchange, eventually causing Werner Seifert, the chief executive to resign. It turns out TCI, which owned 8% of Deutsche Börse, actively recruited some powerful partners, including Atticus Capital, Merrill Lynch, and Fidelity Investments, in order to facilitate the move. Centaurus is one of the activist shareholders that was embroiled in a dispute with Dutch companies Stork NV and Royal Ahold NV last year, and Polygon Investment Partners is a British equity fund that was involved in the sale of Dutch publisher VNU.
TCI said, "We believe that this strategy would not only create significant shareholder value but also would best serve all the stakeholders who otherwise would suffer over the long term from the structurally declining competitive position of ABN AMRO,......In 2006 they again committed to cut costs and they have so far failed to deliver," the hedge fund said.
Activist hedge funds Polygon and Centaurus are said to be supporting TCI's demands and have also built a stake in ABN in order to pressure the bank into the sale.
The Children's Investment Fund Management(TCI), a $3.8 billion hedge fund, announced in a letter to Dutch bank ABN AMRO last month that they believe the bank is undervalued and should sell some of its assets, merge with another bank, or even sell off the whole business.
In 2005 TCI was part of a group of activist investors who criticized Deutsche Börse for its $2.5 billion bid for the London Stock Exchange, eventually causing Werner Seifert, the chief executive to resign. It turns out TCI, which owned 8% of Deutsche Börse, actively recruited some powerful partners, including Atticus Capital, Merrill Lynch, and Fidelity Investments, in order to facilitate the move. Centaurus is one of the activist shareholders that was embroiled in a dispute with Dutch companies Stork NV and Royal Ahold NV last year, and Polygon Investment Partners is a British equity fund that was involved in the sale of Dutch publisher VNU.
TCI said, "We believe that this strategy would not only create significant shareholder value but also would best serve all the stakeholders who otherwise would suffer over the long term from the structurally declining competitive position of ABN AMRO,......In 2006 they again committed to cut costs and they have so far failed to deliver," the hedge fund said.
26 Mar 2007
Asian Regulators Discuss Hedge Funds
About 40 securities regulators from around Asia and the Pacific are meeting this week to discuss hedge funds.
The regional seminar on Collective Investment Schemes/Hedge Funds is taking place in Beijing today through the 30th as part of the APEC Financial Regulators Training Initiative. The regulators are coming from India, Indonesia, Malaysia, Pakistan, Singapore, Thailand and the People's Republic of China.
Min Tang, Deputy Country Director and Chief Economist for ADB's office in Beijing said "It is important to strengthen financial regulation in the region through these cost-effective programs for bank supervisors and securities regulators."
"On behalf of the China Securities Regulatory Commission, I welcome the opportunity" said Dr. Sun Jie, Director General of the commission's Department of Fund Supervision. "It presents a forum for regulators to discuss and learn from the expertise of developed countries like the United States and Australia, which have been developing their regulatory framework for Collective Investment Schemes over many years."
In May 1998, the APEC Finance Ministers Meeting endorsed the establishment of the APEC Financial Regulators Training Initiative to enhance training efforts for national and regional financial regulators within Asia.
ADB, based in Manila, is dedicated to reducing poverty in the Asia and Pacific region through pro-poor sustainable economic growth, social development, and good governance. Established in 1966, it is owned by 64 members - 46 from the region. In 2005, it approved loans and grants for projects totaling $6.95 billion, and technical assistance amounting to $198.8 million.
The regional seminar on Collective Investment Schemes/Hedge Funds is taking place in Beijing today through the 30th as part of the APEC Financial Regulators Training Initiative. The regulators are coming from India, Indonesia, Malaysia, Pakistan, Singapore, Thailand and the People's Republic of China.
Min Tang, Deputy Country Director and Chief Economist for ADB's office in Beijing said "It is important to strengthen financial regulation in the region through these cost-effective programs for bank supervisors and securities regulators."
"On behalf of the China Securities Regulatory Commission, I welcome the opportunity" said Dr. Sun Jie, Director General of the commission's Department of Fund Supervision. "It presents a forum for regulators to discuss and learn from the expertise of developed countries like the United States and Australia, which have been developing their regulatory framework for Collective Investment Schemes over many years."
In May 1998, the APEC Finance Ministers Meeting endorsed the establishment of the APEC Financial Regulators Training Initiative to enhance training efforts for national and regional financial regulators within Asia.
ADB, based in Manila, is dedicated to reducing poverty in the Asia and Pacific region through pro-poor sustainable economic growth, social development, and good governance. Established in 1966, it is owned by 64 members - 46 from the region. In 2005, it approved loans and grants for projects totaling $6.95 billion, and technical assistance amounting to $198.8 million.
Trading Bonuses & Hedge Fund Sales
A major new survey of salary and bonus packages awarded to stock market traders globally reveals Monday that those operating in the Middle East achieved the highest percentage increases ahead of their counterparts in London and on Wall Street.
The sixth annual Napier Scott survey, conducted among 3,000 front office traders and sales people, reveals that Middle East packages increased by 25-30% while those in the UK went up by 17-22%, and only 10-15% in the US.
Shaun Springer, CEO of Napier Scott Executive Search, of London, said: 'The hike in Middle East salaries and bonus reflects the growing appetite for more sophisticated financial products and increasing pressure for talented professionals in this market.
Hedge Funds sales continue to be the principal area of hiring within the marketing functions although less pronounced than in 2005. The survey is the first to be published post the 2007 bonus round.
While those in trading enjoyed the highest percentage increase, and in terms of people moves in asset classes, Equity Derivatives have been the most active. They have also enjoyed the highest percentage increase in salary packages for sales and trading.
"Talk of capping City bonuses can only be counter productive. If those operating in the markets are not allowed to make these profits, from which their remuneration packages are based, they will be moved elsewhere by their banks or indeed, the whole operation."
Springer said that although he was confident that London's supremacy as the global financial center would continue, he doubts bonus levels in the UK would continue to increase at the same rate as in recent years. There is the possibility of this year's bonuses exceeding those of 2008. Since 2002 when many City bonuses were virtually halved following 9/11 and a series of stock market shocks, packages have doubled.
The sixth annual Napier Scott survey, conducted among 3,000 front office traders and sales people, reveals that Middle East packages increased by 25-30% while those in the UK went up by 17-22%, and only 10-15% in the US.
Shaun Springer, CEO of Napier Scott Executive Search, of London, said: 'The hike in Middle East salaries and bonus reflects the growing appetite for more sophisticated financial products and increasing pressure for talented professionals in this market.
Hedge Funds sales continue to be the principal area of hiring within the marketing functions although less pronounced than in 2005. The survey is the first to be published post the 2007 bonus round.
While those in trading enjoyed the highest percentage increase, and in terms of people moves in asset classes, Equity Derivatives have been the most active. They have also enjoyed the highest percentage increase in salary packages for sales and trading.
"Talk of capping City bonuses can only be counter productive. If those operating in the markets are not allowed to make these profits, from which their remuneration packages are based, they will be moved elsewhere by their banks or indeed, the whole operation."
Springer said that although he was confident that London's supremacy as the global financial center would continue, he doubts bonus levels in the UK would continue to increase at the same rate as in recent years. There is the possibility of this year's bonuses exceeding those of 2008. Since 2002 when many City bonuses were virtually halved following 9/11 and a series of stock market shocks, packages have doubled.
23 Mar 2007
BISYS Wins European Hedge Fund Award
At the inaugural Who’s Who of European Hedge Fund Lawyers awards dinner, BISYS Alternative Investment Services, received the Best Single / Multi-Strategy Hedge Fund Administrator award. This ceremony celebrated the leading service providers in the European hedge fund industry.
This prestigious honor was based on BISYS' commitment to clients, business growth, investment in technology, strategic partnerships and strong client feedback. BISYS' strategic partners - Linedata Services' Beauchamp and RiskMetrics Group, also won awards for Best Hedge Fund Technology Supplier and Best Risk Management Software Supplier, respectively.
"We are delighted about winning this award, which is a tribute to the commitment of our dedicated service teams," said Ronan Daly, president of BISYS Hedge Fund Services, who accepted the award on behalf of BISYS. "
BISYS Alternative Investment Services is a global provider of administrative, accounting, advisory, and tax services for the alternative investment industry with over $275 billion in assets under administration. BISYS has approximately 500 clients and over 1,500 funds, including hedge funds, private equity funds, fund-of-funds, and other alternative investment products. BISYS Alternative Investment Services is a division of The BISYS Group, Inc.Study Shows Institutional Investors are Comfortable With Hedge Fund Investing
State Street Corporation released its third institutional investor hedge fund study, the study was conducted late last year in conjunction with the 2006 Global Absolute Return congress.
According to the study, more than half of respondents indicated that their governing bodies are more comfortable investing in hedge funds today than they were 12 months ago. Reinforcing this interest, more than half of boards also spend 15% or more of their time on the subject. Asset owners participating in the study included representatives from global pensions with investable assets totaling more than $1 trillion.
According to the study, more than half of respondents indicated that their governing bodies are more comfortable investing in hedge funds today than they were 12 months ago. Reinforcing this interest, more than half of boards also spend 15% or more of their time on the subject. Asset owners participating in the study included representatives from global pensions with investable assets totaling more than $1 trillion.
"The findings of our study reinforce the industry trend we've been witnessing among our client base − investment boards are overwhelmingly accepting that hedge funds are a viable option for their investment allocations," said Gary Enos, executive vice president and head of State Street's alternative investment servicing business. "They are also discovering the various ways hedge funds can be incorporated into portfolios based upon investors' risk appetite, return targets and overall investment objectives."
Results also show that the percentage of asset owners investing in alternatives increased significantly over last year. This year, only 4% of asset owners indicated they have no hedge fund investments, down from 16% last year.
Nearly half cited a need for additional reporting and analysis on the part of hedge fund managers and more rigorous due diligence practices. In addition, the same number also agreed that obtaining an accurate valuation of hedge fund holdings can be problematic.
"The tools, methods and best practices for managing risk will further develop as hedge funds become a tried and true staple of institutional portfolios," said Enos. "Particularly in light of regulatory pressure and changes in accounting practices, asset owners will continue to push hedge fund managers and third-party service providers, such as administrators, to develop and deliver enhanced risk and transparency solutions."
State Street Corporation provides institutional investors with research and trading services. With $11.9 trillion in assets under custody and $1.7 trillion in assets under management, State Street operates in 26 countries and more than 100 geographic markets worldwide.22 Mar 2007
SEC Returns $38 Million To Hedge Fund Investors
The Securities and Exchange Commission today announced in a press release the distribution of approximately $38 million in Fair Funds to approximately 810 mutual funds that were victims of fraudulent market timing and late trading by the Veras hedge funds.
The funds distributed reflect the entirety of the disgorgement and civil penalties paid by the Veras hedge funds and their principals to settle charges of unlawful market timing and late trading brought by the SEC.
The Sarbanes-Oxley Act of 2002 gave the SEC authority to increase the amount of money returned to harmed investors by allowing civil penalties to be included in Fair Fund distributions. To date, the SEC has distributed over $1 billion in Fair Funds.
Linda Chatman Thomsen, Director of the Division of Enforcement, said, “Today’s distribution marks another significant step in the Commission’s vigorous program to return money to investors injured by mutual fund trading abuses.”
On Dec. 22, 2005, the SEC brought settled administrative proceedings against the Veras Capital Master Fund, VEY Partners Master Fund, Veras Investment Partners, LLC, Kevin D. Larson, and James R. McBride for their participation in a fraudulent market timing and late trading scheme. Respondents consented to entry of the settlement order without admitting or denying the SEC’s findings.
The settlement order found that from January 2002 through September 2003, respondents used deceptive techniques to continue market timing in mutual funds that previously had detected and restricted, or that otherwise would not have permitted, the Veras hedge funds’ trading.
The settlement order provided for distribution of the Fair Fund directly to the mutual funds affected by Veras’ misconduct. The settlement funds are being distributed by the U.S. Treasury directly to the affected mutual funds pursuant to the distribution plan approved by the SEC on Oct. 4, 2006.
The funds distributed reflect the entirety of the disgorgement and civil penalties paid by the Veras hedge funds and their principals to settle charges of unlawful market timing and late trading brought by the SEC.
The Sarbanes-Oxley Act of 2002 gave the SEC authority to increase the amount of money returned to harmed investors by allowing civil penalties to be included in Fair Fund distributions. To date, the SEC has distributed over $1 billion in Fair Funds.
Linda Chatman Thomsen, Director of the Division of Enforcement, said, “Today’s distribution marks another significant step in the Commission’s vigorous program to return money to investors injured by mutual fund trading abuses.”
On Dec. 22, 2005, the SEC brought settled administrative proceedings against the Veras Capital Master Fund, VEY Partners Master Fund, Veras Investment Partners, LLC, Kevin D. Larson, and James R. McBride for their participation in a fraudulent market timing and late trading scheme. Respondents consented to entry of the settlement order without admitting or denying the SEC’s findings.
The settlement order found that from January 2002 through September 2003, respondents used deceptive techniques to continue market timing in mutual funds that previously had detected and restricted, or that otherwise would not have permitted, the Veras hedge funds’ trading.
The settlement order provided for distribution of the Fair Fund directly to the mutual funds affected by Veras’ misconduct. The settlement funds are being distributed by the U.S. Treasury directly to the affected mutual funds pursuant to the distribution plan approved by the SEC on Oct. 4, 2006.
Londinium Emerging Markets Fund Of Hedge Fund Launch
Redi & Partners has announced the launch of its first fund of emerging markets hedge fund, the Londinium JPM Emerging Market Fund by investment manager JPMorgan.
The Londinium JPM Emerging Markets Fund was created after a six months study of the economic prospects of emerging countries. Redi & Partners, as Investment Advisor, has selected 19 funds out of a universe of 200 funds, the selections were made through research, direct contacts and personal interviews.
Launched on the 15th of March, 2007, the fund is based in France, where new regulations issued by the French Authorities are attracting the establishment of new hedge funds at the expense of off-shore tax havens.
The initial allocation to each fund has been limited to 5% to create a broad base. Great attention has been placed in studying the strategies and styles of trading of each fund to avoid concentration of the same and reduce the volatility of the new fund of hedge funds. Some of the markets include, Greater China, Eastern Europe, including Russia, Kazakhstan, the Baltic republics, Romania and Bulgaria, India, Brazil, Japan, as well the Pacific market.
BNP Paribas is administrator, with their securities services branch as custodian. JPMorgan is responsible for negotiating the investments in the funds. Preference has been given to hedge funds and long only funds wherever a real hedging was possible.
Funds of hedge funds have seen a 29% increase in 2006, and the trend is expected to continue in 2007. The Londinium JPM Emerging Market Fund will work with the emerging markets equity, cash futures arbitrage, volatility arbitrage, statistical arbitrage, merger arbitrage and convertible bond arbitrage. As well as managed accounts specialized in currency instruments, debt and debt related financial securities linked to global emerging countries.
The unique fund aims at offering the highest level of negotiating power, security, transparency and independence of controls. The pro-forma performance of the basket shows an annualised rate of return of 26.97%, with an annualized volatility of 8.73%. Outperforming by almost twice as much the CSFB/Tremont Emerging Markets Index (+15.36%).
The investments in Managed Accounts 15%, with weekly liquidity, plus the cash 5% totaling 20% allow the Londinium JPM Emerging Markets Fund to flexibly modify its profile, especially in case of unexpected market events, in one week.
For more information, contact; info@redi.co.uk
The Londinium JPM Emerging Markets Fund was created after a six months study of the economic prospects of emerging countries. Redi & Partners, as Investment Advisor, has selected 19 funds out of a universe of 200 funds, the selections were made through research, direct contacts and personal interviews.
Launched on the 15th of March, 2007, the fund is based in France, where new regulations issued by the French Authorities are attracting the establishment of new hedge funds at the expense of off-shore tax havens.
The initial allocation to each fund has been limited to 5% to create a broad base. Great attention has been placed in studying the strategies and styles of trading of each fund to avoid concentration of the same and reduce the volatility of the new fund of hedge funds. Some of the markets include, Greater China, Eastern Europe, including Russia, Kazakhstan, the Baltic republics, Romania and Bulgaria, India, Brazil, Japan, as well the Pacific market.
BNP Paribas is administrator, with their securities services branch as custodian. JPMorgan is responsible for negotiating the investments in the funds. Preference has been given to hedge funds and long only funds wherever a real hedging was possible.
Funds of hedge funds have seen a 29% increase in 2006, and the trend is expected to continue in 2007. The Londinium JPM Emerging Market Fund will work with the emerging markets equity, cash futures arbitrage, volatility arbitrage, statistical arbitrage, merger arbitrage and convertible bond arbitrage. As well as managed accounts specialized in currency instruments, debt and debt related financial securities linked to global emerging countries.
The unique fund aims at offering the highest level of negotiating power, security, transparency and independence of controls. The pro-forma performance of the basket shows an annualised rate of return of 26.97%, with an annualized volatility of 8.73%. Outperforming by almost twice as much the CSFB/Tremont Emerging Markets Index (+15.36%).
The investments in Managed Accounts 15%, with weekly liquidity, plus the cash 5% totaling 20% allow the Londinium JPM Emerging Markets Fund to flexibly modify its profile, especially in case of unexpected market events, in one week.
For more information, contact; info@redi.co.uk
21 Mar 2007
Give him a place to stand, and he will move the world.
Hedge funds may give investors the ability to operate free from the shackles of the usual emotions and psychology of the marketplace
read more | digg story
read more | digg story
Investcorp Launches Early Stage Fund & Wins Hedge Fund Award
Bahrain-based $5 billion hedge fund Investcorp has won the Institutional Hedge Fund Manager award at the inaugural Hedge Funds World Awards in Dubai. The awards are designed to recognise and encourage excellence in the Middle East hedge fund industry.
The award comes at a time when Investcorp is marketing to GCC investors its new Investcorp Early Stage Fund, which invests in newly formed hedge funds, the firm said in a statement. The initial portfolio will be composed of approximately 15-20 managers with targeted returns of 12-14% with annualized volatility of 5-7% over the medium term. The fund offers quarterly liquidity with a one-year lock up period.
Investcorp's co-heads Deepak Gurnani and Ibrahim Gharghour expressed their delight at receiving this industry recognition. "It is an outstanding tribute to be recognised by our industry peers at this leading event," said Mr Gurnani.
"We see this as a testament to the achievements of the past 10 years in pioneering acceptance of hedge funds as an asset class for institutions in the region, and in building a strong business based on superior performance grounded in an industry-leading risk management process."
Mr Gharghour said that the award reflected the fund's substantial progress in widening its business, through current initiatives such as its strategic partnership with London-based WMG. Investcorp and five other hedge funds were selected from over 20 finalists representing leading global hedge fund firms.
Since 1996, Investcorp has invested with more than 50 hedge funds within the first 12 months of their launch and now manage approximately $1 billion in early stage investments.
The award comes at a time when Investcorp is marketing to GCC investors its new Investcorp Early Stage Fund, which invests in newly formed hedge funds, the firm said in a statement. The initial portfolio will be composed of approximately 15-20 managers with targeted returns of 12-14% with annualized volatility of 5-7% over the medium term. The fund offers quarterly liquidity with a one-year lock up period.
Investcorp's co-heads Deepak Gurnani and Ibrahim Gharghour expressed their delight at receiving this industry recognition. "It is an outstanding tribute to be recognised by our industry peers at this leading event," said Mr Gurnani.
"We see this as a testament to the achievements of the past 10 years in pioneering acceptance of hedge funds as an asset class for institutions in the region, and in building a strong business based on superior performance grounded in an industry-leading risk management process."
Mr Gharghour said that the award reflected the fund's substantial progress in widening its business, through current initiatives such as its strategic partnership with London-based WMG. Investcorp and five other hedge funds were selected from over 20 finalists representing leading global hedge fund firms.
Since 1996, Investcorp has invested with more than 50 hedge funds within the first 12 months of their launch and now manage approximately $1 billion in early stage investments.
20 Mar 2007
Mother & Son Team Charged With Hedge Fund Scheme
U.S. Attorney Kevin J. O’Connor announced that a federal grand jury in New Haven NY returned a four-count Indictment charging Ayferafat Yalincak, also known as "Jackie Yalincak," and "Irene Kelly," age 50, and her son, Hakan Yalincak, also known as "Hagen Yalincak," age 21, both Turkish citizens, with operating a multi-million dollar investment hedge fund fraud scheme.
The conspiracy charge carries a maximum term of imprisonment of five years and a fine of up to $250,000. Each wire fraud charge carries a maximum term of imprisonment of 20 years and a fine of up to $250,000.
According to documents filed with the Court and statements made in court, Ayferafat Yalincak and Hakan Yalincak solicited approximately $7 million from several investors for their fake hedge fund. Ayferafet Yalincak, 52, pleaded guilty last year to conspiracy to commit wire fraud, but tried to downplay her role in the hedge fund scheme she attributed to her 22-year-old son, Hakan.
Prosecutors say Hakan Yalincak charmed his way into the exclusive world of Greenwich high finance by posing as an heir to a wealthy Turkish family. He moved counterfeit checks and brokered deals with a Kuwaiti financier. Ayferafet Yalincak told a federal judge last year that she attended meetings with investors and allowed her son to present her as a member of an exceedingly wealthy Turkish family who was going to invest millions in his hedge fund.
Prosecutors say Ayferafet Yalincak was responsible for an intended loss of $5.3 million and an actual loss of $3.9 million after some of the money was returned to investors.
"This mother and son team are alleged to have defrauded several sophisticated investors out of a substantial sum of money," U.S. Attorney O’Connor stated. "This Office places a high priority on investigating and vigorously prosecuting investor fraud schemes. This investigation is ongoing." The case has been investigated by the U.S. Postal Inspection Service and the Federal Bureau of Investigation.
The conspiracy charge carries a maximum term of imprisonment of five years and a fine of up to $250,000. Each wire fraud charge carries a maximum term of imprisonment of 20 years and a fine of up to $250,000.
According to documents filed with the Court and statements made in court, Ayferafat Yalincak and Hakan Yalincak solicited approximately $7 million from several investors for their fake hedge fund. Ayferafet Yalincak, 52, pleaded guilty last year to conspiracy to commit wire fraud, but tried to downplay her role in the hedge fund scheme she attributed to her 22-year-old son, Hakan.
Prosecutors say Hakan Yalincak charmed his way into the exclusive world of Greenwich high finance by posing as an heir to a wealthy Turkish family. He moved counterfeit checks and brokered deals with a Kuwaiti financier. Ayferafet Yalincak told a federal judge last year that she attended meetings with investors and allowed her son to present her as a member of an exceedingly wealthy Turkish family who was going to invest millions in his hedge fund.
Prosecutors say Ayferafet Yalincak was responsible for an intended loss of $5.3 million and an actual loss of $3.9 million after some of the money was returned to investors.
"This mother and son team are alleged to have defrauded several sophisticated investors out of a substantial sum of money," U.S. Attorney O’Connor stated. "This Office places a high priority on investigating and vigorously prosecuting investor fraud schemes. This investigation is ongoing." The case has been investigated by the U.S. Postal Inspection Service and the Federal Bureau of Investigation.
Investec-Blackfish Hedge Fund Launch
Investec Bank and Blackfish Capital Management launched a long/short natural resources hedge fund on March 1 with a plan to raise $300 million over the next six to 12 months from undervalued stocks in the mining and resources sector.
With a $40 million Equity at Launch, the Blackfish-Investec Resources Special Situations Fund's prime broker is Goldman Sachs, with Walkers as Law firm and Butterfield Bank as administrator, Kinetic Partners will Audit the new hedge fund.
The Blackfish-Investec Resources Special Situations Fund is domiciled in the Cayman Islands. Targeted primarily at institutional investors, the the hedge fund strategy will be to achieve absolute returns through strategic investments in the small to mid-cap resources sector focused on value opportunities on the long and short side. The manager will trade the underlying commodities to provide a hedge to the market, actively managing commodity price risk.
Investec and Blackfish have each invested $20 million into the fund as seed capital. The hedge fund investment team is led by Martyn Konig, chief executive of Blackfish Capital Management and George Rogers, head of commodities and resource finance at Investec Bank.
Established in 1974, Investec is a specialist international banking group that provides a diverse range of financial products and services to a niche client base in the UK and Australia as well as South Africa, its country of origin, and various other countries. Investec Bank (UK) is a unit of South African banking group Investec Plc.
With a $40 million Equity at Launch, the Blackfish-Investec Resources Special Situations Fund's prime broker is Goldman Sachs, with Walkers as Law firm and Butterfield Bank as administrator, Kinetic Partners will Audit the new hedge fund.
The Blackfish-Investec Resources Special Situations Fund is domiciled in the Cayman Islands. Targeted primarily at institutional investors, the the hedge fund strategy will be to achieve absolute returns through strategic investments in the small to mid-cap resources sector focused on value opportunities on the long and short side. The manager will trade the underlying commodities to provide a hedge to the market, actively managing commodity price risk.
Investec and Blackfish have each invested $20 million into the fund as seed capital. The hedge fund investment team is led by Martyn Konig, chief executive of Blackfish Capital Management and George Rogers, head of commodities and resource finance at Investec Bank.
Established in 1974, Investec is a specialist international banking group that provides a diverse range of financial products and services to a niche client base in the UK and Australia as well as South Africa, its country of origin, and various other countries. Investec Bank (UK) is a unit of South African banking group Investec Plc.
19 Mar 2007
Give him a place to stand, and he will move the world
Actually, the title is the name of the picture, it has nothing to do with the story, I just like it. The article is called "Investing: Hedge funds: market angels or demons?"
The article is from Bloomberg, asking whether hedge funds really the disruptive, destabilizing force their critics make them out to be, or do they help make the financial markets run smoother?
It says, "The beauty of hedge funds is their ability, at least in theory, to operate free from the shackles of the usual emotions and psychology of the marketplace."
A measure of cold calculation may be just what is wanted when most investors get caught up in the emotions of a turbulent market. While the herd is stampeding in one direction, nobody is better equipped than hedge funds to get a little movement going the other way.
Interesting poem.
Chapman Hedge Fund Files Against eSpeed Inc.
Activist hedge fund Chapman Capital, filed a 13-D filing with the Securities and Exchange Commission in a bid to put electronic trading network eSpeed Inc. on the market.
Robert Chapman said his hedge fund, which is eSpeed's biggest shareholder with 9.3%, has begun contacting eSpeed’s competitors to gauge interest in the firm, which has suffered a disappointing recent trading performance.
In its SEC filing, the hedge fund wrote; "Chapman Capital announced its demand that eSpeed maximise shareholder value via a change of control transaction." It also asked the SEC to compel the eSpeed board of directors to convert the company's B shares into A shares. Holders of B shares have 10 votes per share, A shares just one vote.
The hedge fund also said it communicated to Howard Lutnick, the chairman, chief executive and president of eSpeed, its "strong assertion" that, given his "demonstrated failure to perform in his capacity as CEO", eSpeed's long-term shareholder value "should be maximised via a full-scale auction" and that "the company’s ownership base has conveyed a nearly uniform desire for eSpeed’s Class A shares to be maximized through a change-of-control transaction."
Chapman Capital is a $300 million dollar L.A. based hedge fund run by Robert Chapman. Chapman is founder of the "13-D filing" that most activist hedge funds use today. Over the past 10 years, Chapman Capital has agitated successfully for the restructuring or sale of over 20 publicly-traded companies.
Robert Chapman said his hedge fund, which is eSpeed's biggest shareholder with 9.3%, has begun contacting eSpeed’s competitors to gauge interest in the firm, which has suffered a disappointing recent trading performance.
In its SEC filing, the hedge fund wrote; "Chapman Capital announced its demand that eSpeed maximise shareholder value via a change of control transaction." It also asked the SEC to compel the eSpeed board of directors to convert the company's B shares into A shares. Holders of B shares have 10 votes per share, A shares just one vote.
The hedge fund also said it communicated to Howard Lutnick, the chairman, chief executive and president of eSpeed, its "strong assertion" that, given his "demonstrated failure to perform in his capacity as CEO", eSpeed's long-term shareholder value "should be maximised via a full-scale auction" and that "the company’s ownership base has conveyed a nearly uniform desire for eSpeed’s Class A shares to be maximized through a change-of-control transaction."
Chapman Capital is a $300 million dollar L.A. based hedge fund run by Robert Chapman. Chapman is founder of the "13-D filing" that most activist hedge funds use today. Over the past 10 years, Chapman Capital has agitated successfully for the restructuring or sale of over 20 publicly-traded companies.
16 Mar 2007
IceCapital Launches Alternative Fund
IceCapital Fund Management Company Ltd. announced in a press release on Wednesday that it has launched a new non-UCITS mutual fund, IceCapital Alternative Beta, which offers hedge fund like return, in liquid and risk-transparent form. The fund is the first of its kind in Finland and one of the earliest in Europe.
UCITS - Undertakings for Collective Investment in Transferable Securities - is the name given by the European Union (EU) to pan-European investment funds.
The fund is based on latest research on so-called alternative risk premiums. The strategy is to invest in alternative market risk factors, or alternative betas, with which it is possible to form a portfolio that closely tracks the average performance of hedge funds. At the same time the investor receives extra return, or risk premium, as compensation for risk while benefiting from better diversification than in the traditional equity and bond investments.
"The very fast growth of IceCapital's asset management business is due to quick innovativeness. IceCapital Alternative Beta fund is yet another example of that. At the same time, the fund's broad core-satellite range of investments is supplemented with an attractive active investment", says Managing Director, Jyri Viskari.
Mutual Fund IceCapital Alternative Beta starts on 14 March 2007. The minimum investment amount is 100.000 Euros and the fund is open weekly. The portfolio manager of the fund is ICECAPITAL Asset Management Ltd’s Chief Investment Officer Mikael Simonsen.
IceCapital Asset Management and IceCapital Fund Management are part of the independent IceCapital Group, which focuses on investment banking, asset management and private equity. The group currently manages assets reaching 2 billion Euros.
UCITS - Undertakings for Collective Investment in Transferable Securities - is the name given by the European Union (EU) to pan-European investment funds.
The fund is based on latest research on so-called alternative risk premiums. The strategy is to invest in alternative market risk factors, or alternative betas, with which it is possible to form a portfolio that closely tracks the average performance of hedge funds. At the same time the investor receives extra return, or risk premium, as compensation for risk while benefiting from better diversification than in the traditional equity and bond investments.
"The very fast growth of IceCapital's asset management business is due to quick innovativeness. IceCapital Alternative Beta fund is yet another example of that. At the same time, the fund's broad core-satellite range of investments is supplemented with an attractive active investment", says Managing Director, Jyri Viskari.
Mutual Fund IceCapital Alternative Beta starts on 14 March 2007. The minimum investment amount is 100.000 Euros and the fund is open weekly. The portfolio manager of the fund is ICECAPITAL Asset Management Ltd’s Chief Investment Officer Mikael Simonsen.
IceCapital Asset Management and IceCapital Fund Management are part of the independent IceCapital Group, which focuses on investment banking, asset management and private equity. The group currently manages assets reaching 2 billion Euros.
F&C to Launch More Hedge Funds "As the Need Arises"
F&C Asset Management PLC is planning on launching its first private equity fund of funds product for institutional investors. The new fund will invest in event-driven hedge funds, which bet on M&A, share buy-backs and other corporate events.
The new fund will invest in between 20 and 40 hedge funds selected and monitored by F&C Partners. Alain Grisay, F&C's CEO, said at a press conference: "We are near the completion of our first new European private equity limited partnership." The first soft closing for the fund is expected in a couple of weeks and initial institutional commitment could be in the region of E130 million ($173 million).
F&C is also pursuing alternative investments such as hedge funds with a global diversified fixed income products. "Further hedge funds will be launched as and when we identify the right opportunity", he said. This is part of a three-year plan to focus on specialised and high-fee fund management activities such as hedge funds and LDI's (Liability Driven Investments).
Earlier this month a new portable alpha fund was launched using long/short bets on assets, markets and currencies through the use of derivatives.
"We are convinced that this product has the potential to achieve significant scale," Grisay said. The results for the new strategic plan will be visible by 2009, the CEO pledged.
The new fund will invest in between 20 and 40 hedge funds selected and monitored by F&C Partners. Alain Grisay, F&C's CEO, said at a press conference: "We are near the completion of our first new European private equity limited partnership." The first soft closing for the fund is expected in a couple of weeks and initial institutional commitment could be in the region of E130 million ($173 million).
F&C is also pursuing alternative investments such as hedge funds with a global diversified fixed income products. "Further hedge funds will be launched as and when we identify the right opportunity", he said. This is part of a three-year plan to focus on specialised and high-fee fund management activities such as hedge funds and LDI's (Liability Driven Investments).
Earlier this month a new portable alpha fund was launched using long/short bets on assets, markets and currencies through the use of derivatives.
"We are convinced that this product has the potential to achieve significant scale," Grisay said. The results for the new strategic plan will be visible by 2009, the CEO pledged.
15 Mar 2007
Lehman Brothers buys 20% of Hedge Fund
Lehman Brothers Holdings Inc. announced on Tuesday that it had bought a 20% stake in hedge fund D.E. Shaw Group, which was formed in 1988 and has about $29 billion in aggregate investment capital. The hedge fund has more than 1,000 employees across the United States and internationally.
D.E. Shaw uses computer programs to find discrepancies in prices among securities. It also invests in distressed debt and makes bets on broad economic trends using stocks, bonds, currencies and commodities.
Lehman Brothers, traditionally seen as a bond house, has invested heavily in alternative investments in recent years, they have minority ownership in four other hedge funds, Spinnaker Capital Group, GLG Partners LP, Ospraie Management LP and Marble Bar Asset Management.
Lehman manages $225 billion, including $9 billion in alternative-investment assets such as hedge funds. That doesn't include money at the firms in which it has minority stakes. Last year, the firm generated $1.4 billion in revenue from asset management, or 8% of total revenue.
The price of the stake wasn't disclosed, though the New York-based firms said in a statement today it would be tied to hedge fund D.E. Shaw's performance.
D.E. Shaw uses computer programs to find discrepancies in prices among securities. It also invests in distressed debt and makes bets on broad economic trends using stocks, bonds, currencies and commodities.
Lehman Brothers, traditionally seen as a bond house, has invested heavily in alternative investments in recent years, they have minority ownership in four other hedge funds, Spinnaker Capital Group, GLG Partners LP, Ospraie Management LP and Marble Bar Asset Management.
Lehman manages $225 billion, including $9 billion in alternative-investment assets such as hedge funds. That doesn't include money at the firms in which it has minority stakes. Last year, the firm generated $1.4 billion in revenue from asset management, or 8% of total revenue.
The price of the stake wasn't disclosed, though the New York-based firms said in a statement today it would be tied to hedge fund D.E. Shaw's performance.
Hedge Fund Index up for Febuary
According to hedge fund index provider Greenwich Alternative Investments LLC., their Global Hedge Fund Index returned +0.61% in February.
The Greenwich Investable Hedge Fund Index closely tracked the Global Index, returning +0.45% in February and +1.79% year to date, within two basis points of the Global Index return of +1.81% for the year.
“Hedge funds’ downside protection, coupled with their ability to capture market upside, continues to translate into superior risk-adjusted returns." says Ben Rossman, general manager of Greenwich, "Long-biased managers were able to mitigate the effects of February’s declining equities to end the month in positive territory," he said in a press release.
By comparison, both Greenwich Hedge Fund Indices are ahead of the major equity and bond indices for 2007: S&P 500, MSCI World Equity Index, and the FTSE 100 posted returns of -1.96% (-0.48% YTD), -0.65% (+0.46% YTD), and -0.51% (-0.79% YTD), while the Lehman Aggregate Bond Index posted +1.54% (+1.50% YTD). Performance was positive across 12 of the 13 hedge fund strategies followed by the Global Index, with 96% of reporting funds outperforming the S&P 500.
During the last five years the Greenwich Global Hedge Fund Index has produced annualized returns of +9.54% with a maximum drawdown of -4.55%, outperforming the S&P 500, MSCI World Equity Index, and FTSE 100 which have had respective annualized returns of +6.81%, +9.13%, and +3.88%, with more severe drawdowns of -20.15%, -17.24%, and -29.40%.”
Greenwich Alternative Investments, LLC (and its affiliates) manages one of the world's largest hedge fund databases and is among the oldest providers of hedge fund indices, asset management services and research to institutional investors worldwide.
The Greenwich Investable Hedge Fund Index closely tracked the Global Index, returning +0.45% in February and +1.79% year to date, within two basis points of the Global Index return of +1.81% for the year.
“Hedge funds’ downside protection, coupled with their ability to capture market upside, continues to translate into superior risk-adjusted returns." says Ben Rossman, general manager of Greenwich, "Long-biased managers were able to mitigate the effects of February’s declining equities to end the month in positive territory," he said in a press release.
By comparison, both Greenwich Hedge Fund Indices are ahead of the major equity and bond indices for 2007: S&P 500, MSCI World Equity Index, and the FTSE 100 posted returns of -1.96% (-0.48% YTD), -0.65% (+0.46% YTD), and -0.51% (-0.79% YTD), while the Lehman Aggregate Bond Index posted +1.54% (+1.50% YTD). Performance was positive across 12 of the 13 hedge fund strategies followed by the Global Index, with 96% of reporting funds outperforming the S&P 500.
During the last five years the Greenwich Global Hedge Fund Index has produced annualized returns of +9.54% with a maximum drawdown of -4.55%, outperforming the S&P 500, MSCI World Equity Index, and FTSE 100 which have had respective annualized returns of +6.81%, +9.13%, and +3.88%, with more severe drawdowns of -20.15%, -17.24%, and -29.40%.”
Greenwich Alternative Investments, LLC (and its affiliates) manages one of the world's largest hedge fund databases and is among the oldest providers of hedge fund indices, asset management services and research to institutional investors worldwide.
13 Mar 2007
Union leaders to Develop International Response to Growth of Hedge Funds
Amid the spectacular growth of hedge funds investments, trade union leaders from more than 20 countries are to meet at OECD Headquarters in Paris on the 16 March to discuss the impact of hedge funds on employees’ job security and pensions.
In recent weeks the unions have had concerns about the employment impact of buy-outs and questions about hedge fund transparency, corporate governance and sustainability.
Concerns have also been raised at the increasing amounts of pension fund money being invested in private equity and in hedge funds and the working women and men whose employment, rights and working conditions may be threatened by the behavior of these funds.
"We are looking at the feasibility of an international response that includes information and consultation rights for workers and appropriate regulation and taxation by governments." said John Evans, General Secretary of the Trade Union Advisory Committee to the OECD, co-organizers of the event.
TUAC said in a press release, "Union concern has mounted at the employment impact of buyouts by what are often shadowy investors using borrowed money. Concerns have also been raised at the increasing amounts of pension fund money being invested in private equity and in hedge funds."
Speakers will include experts from the OECD as well as John Monks, General Secretary of the European Trade Union Confederation and Ron Blackwell, Chief Economist of the American Trade Union Center, the AFL-CIO. The TUAC represents 66 million workers in 56 affiliated trade union organizations in the 30 OECD member countries.
In recent weeks the unions have had concerns about the employment impact of buy-outs and questions about hedge fund transparency, corporate governance and sustainability.
Concerns have also been raised at the increasing amounts of pension fund money being invested in private equity and in hedge funds and the working women and men whose employment, rights and working conditions may be threatened by the behavior of these funds.
"We are looking at the feasibility of an international response that includes information and consultation rights for workers and appropriate regulation and taxation by governments." said John Evans, General Secretary of the Trade Union Advisory Committee to the OECD, co-organizers of the event.
TUAC said in a press release, "Union concern has mounted at the employment impact of buyouts by what are often shadowy investors using borrowed money. Concerns have also been raised at the increasing amounts of pension fund money being invested in private equity and in hedge funds."
Speakers will include experts from the OECD as well as John Monks, General Secretary of the European Trade Union Confederation and Ron Blackwell, Chief Economist of the American Trade Union Center, the AFL-CIO. The TUAC represents 66 million workers in 56 affiliated trade union organizations in the 30 OECD member countries.
Activist Hedge Fund To Sell Stocks in Gartmore
Activist hedge fund Carrousel Capital had agreed to sell its shares in £386 million ($744.8 million) Gartmore European Investment Trust, refusing the option of a tender offer to close out its position at a tight discount. The hedge fund currently owns 28.03% of Gartmore and is its biggest shareholder.
Carrousel Capital said in informal talks with Gartmore that the hedge fund had plans to buy into the trust, then restructure it into an umbrella fund which could offer a range of investment mandates. However, Gartmore's European shareholders voted against proposals by Carrousel to put three new directors on the board to carry out the plan.
Bruno Sanglé-Ferrière, CEO of Carrousel said in a letter to shareholders, "Carrousel is not seeking, and has never sought, control of the fund. Neither is it seeking to wind-up the fund as has been suggested in some quarters. Carrousel's interest in the fund has already had a beneficial effect. Shareholders have seen the NAV discount narrow from 9% to less than 3% since we invested."
However, after the vote to sell the hedge fund's entire holding he said, "It's not a change of strategy. We tried to put people on the board and we failed. We want to put that behind us and close that chapter."
Carrousel Capital said in informal talks with Gartmore that the hedge fund had plans to buy into the trust, then restructure it into an umbrella fund which could offer a range of investment mandates. However, Gartmore's European shareholders voted against proposals by Carrousel to put three new directors on the board to carry out the plan.
Bruno Sanglé-Ferrière, CEO of Carrousel said in a letter to shareholders, "Carrousel is not seeking, and has never sought, control of the fund. Neither is it seeking to wind-up the fund as has been suggested in some quarters. Carrousel's interest in the fund has already had a beneficial effect. Shareholders have seen the NAV discount narrow from 9% to less than 3% since we invested."
However, after the vote to sell the hedge fund's entire holding he said, "It's not a change of strategy. We tried to put people on the board and we failed. We want to put that behind us and close that chapter."
12 Mar 2007
Judge Orders Hedge Fund Disclosure In Northwest Case
Judge Allan Gropper of the U.S. Bankruptcy Court in New York ordered hedge funds to disclose the details of their holdings in Northwest Airlines. "Any interest that individual committee members may have in keeping this information confidential is overridden."
Gropper's ruling enforces Bankruptcy Rule 2019, which says parties acting as a group must disclose certain information about their holdings. The decision requires the 13 hedge funds on the committee to make public information about trading patterns, holdings and pricing, which hedge funds, as a rule, prefer to keep secret.
The judge denied a request by the hedge fund committee, led by Owl Creek, who argued that forcing sophisticated investors to disclose trade information may hurt the secondary market for trading claims and equity. Gropper gave the funds until Wednesday to publicly state their stakes in Northwest, along with when and at what price they bought the securities.
Northwest Airlines said that it expected to be worth roughly $7 billion when it emerged from bankruptcy later this year and that it would pay unsecured creditors roughly three-quarters of what they were owed. The unsecured creditors also objected to sealing the documents, arguing that the public had a right to know how the hedge funds came to own about $264.7 million in claims, 30% of the airline's stock.
The hedge fund group collectively owns about 23 million Northwest shares, according to a court filing in January.
Gropper's ruling enforces Bankruptcy Rule 2019, which says parties acting as a group must disclose certain information about their holdings. The decision requires the 13 hedge funds on the committee to make public information about trading patterns, holdings and pricing, which hedge funds, as a rule, prefer to keep secret.
The judge denied a request by the hedge fund committee, led by Owl Creek, who argued that forcing sophisticated investors to disclose trade information may hurt the secondary market for trading claims and equity. Gropper gave the funds until Wednesday to publicly state their stakes in Northwest, along with when and at what price they bought the securities.
Northwest Airlines said that it expected to be worth roughly $7 billion when it emerged from bankruptcy later this year and that it would pay unsecured creditors roughly three-quarters of what they were owed. The unsecured creditors also objected to sealing the documents, arguing that the public had a right to know how the hedge funds came to own about $264.7 million in claims, 30% of the airline's stock.
The hedge fund group collectively owns about 23 million Northwest shares, according to a court filing in January.
Hedge Fund Analyst Claims Flaws in SEC Rules
Hedge Fund Analyst Justin Meyer submitted public comments on an SEC Rule Proposal that would change the standards for who could invest in a hedge fund, raising the minimum net worth values.
Meyer is the Senior research analyst for IncreMental Advantage, a Princeton-based best practices think tank that publishes and speaks on breaking developments in issues ranging from hedge funds to water utilities. He said, "The idea behind accredited investors is a good one, but the concept is flawed," said Meyer. "The SEC wants to equate net worth, or investable income with investment acumen. The two simply are not related."
In the existing public comments, there is a frequently-seen criticism of this proposed rule: the idea that investable income is equal to investment ability (or put another way, that money does not equal intelligence.)
Hedge funds are growing more and more sophisticated every day. There is no denying this, Meyer said, "It makes sense for the Commission to want to protect investors who might not be able to make a fully informed decision no matter how much information they are given, to ensure that those who are investing in funds that trade in high-risk ventures are not going to go broke if this investment fails."
Mr. Meyer continued, discussing what really mattered in hedge fund investing, saying that due diligence was the most important thing. "The rule is meant to ensure that someone investing in a 'risky' investment understands that risk and can absorb it if they lose their money."
"However, the key to understanding risk isn't having $5 million or $10 million. It's examining the investment and looking at who you are entrusting your money to, looking at how much risk they are taking on with the investment and how they manage the risk." Meyer said.
Meyer is the Senior research analyst for IncreMental Advantage, a Princeton-based best practices think tank that publishes and speaks on breaking developments in issues ranging from hedge funds to water utilities. He said, "The idea behind accredited investors is a good one, but the concept is flawed," said Meyer. "The SEC wants to equate net worth, or investable income with investment acumen. The two simply are not related."
In the existing public comments, there is a frequently-seen criticism of this proposed rule: the idea that investable income is equal to investment ability (or put another way, that money does not equal intelligence.)
Hedge funds are growing more and more sophisticated every day. There is no denying this, Meyer said, "It makes sense for the Commission to want to protect investors who might not be able to make a fully informed decision no matter how much information they are given, to ensure that those who are investing in funds that trade in high-risk ventures are not going to go broke if this investment fails."
Mr. Meyer continued, discussing what really mattered in hedge fund investing, saying that due diligence was the most important thing. "The rule is meant to ensure that someone investing in a 'risky' investment understands that risk and can absorb it if they lose their money."
"However, the key to understanding risk isn't having $5 million or $10 million. It's examining the investment and looking at who you are entrusting your money to, looking at how much risk they are taking on with the investment and how they manage the risk." Meyer said.
9 Mar 2007
Major Shareholder Hedge Fund Buys Company
ValueAct Capital Management, a group of hedge funds based in San Fransisco, announced yesterday that they have agreed to buy Catalina Marketing Corp at $1.7 billion in cash or $32.10 a share, a 7.5% premium over the company's closing price of $29.85.
The hedge fund group also agreed to assume $135-million in debt from the St. Petersburg company known for its printers that dispense coupons and color ads in store checkout counters. ValueAct is also Catalina's biggest shareholder.
ValueAct is known for its activist slant and their strategy is to buy large stakes in undervalued companies and then work with the management to boost performance. Founded in 2000, the hedge fund manages some $1.5 billion on behalf of institutional and wealthy individual investors.
Dick Buell, chief executive officer of Catalina said that going private will allow the company to invest aggressively and grow with long-term goals, without the fear of Wall Street backlash.
The company said it expects the deal to close in the next several months, subject to approval by stockholders. Catalina joins a growing trend of public companies looking to go private.
The hedge fund group also agreed to assume $135-million in debt from the St. Petersburg company known for its printers that dispense coupons and color ads in store checkout counters. ValueAct is also Catalina's biggest shareholder.
ValueAct is known for its activist slant and their strategy is to buy large stakes in undervalued companies and then work with the management to boost performance. Founded in 2000, the hedge fund manages some $1.5 billion on behalf of institutional and wealthy individual investors.
Dick Buell, chief executive officer of Catalina said that going private will allow the company to invest aggressively and grow with long-term goals, without the fear of Wall Street backlash.
The company said it expects the deal to close in the next several months, subject to approval by stockholders. Catalina joins a growing trend of public companies looking to go private.
New Hedge Fund Platform
SuperDerivatives announced the launch of First Cross-Asset, Turnkey Derivatives Platform for Hedge Funds and Asset Managers.
SD-Funds said in a press release that the platform is a breakthrough in hedge-fund technology. It includes all pre-trade and post-trade activities with features specifically designed for hedge fund and asset managers, covering all assets and derivatives classes. Backward testing of strategies allows accurate retroactive performance comparison of alternative derivatives trading strategies, based on detailed historical 12-year market data.
"We've created an extremely rich multi-asset solution for hedge funds and asset managers,..I am certain that SD-Funds will have a huge, positive impact on the hedge fund and asset management industries." said David Gershon, President and CEO of SuperDerivatives.
SD-Funds said in a press release that the platform is a breakthrough in hedge-fund technology. It includes all pre-trade and post-trade activities with features specifically designed for hedge fund and asset managers, covering all assets and derivatives classes. Backward testing of strategies allows accurate retroactive performance comparison of alternative derivatives trading strategies, based on detailed historical 12-year market data.
"We've created an extremely rich multi-asset solution for hedge funds and asset managers,..I am certain that SD-Funds will have a huge, positive impact on the hedge fund and asset management industries." said David Gershon, President and CEO of SuperDerivatives.
8 Mar 2007
Hedge Funds To Oust "Grand Theft Auto" CEO
Shares in the makers of the video game "Grand Theft Auto", Take-Two shot up nearly 8%, from $1.34, to $18.95 yesterday. The increase came immediately after investors including Steven Cohen's SAC Capital Advisors LLC and David Shaw's D.E. Shaw & Co., both hedge fund managers, announced the plan to remove the embattled video-game designer's CEO in a regulatory filing.
A group of high-profile hedge funds that collectively control about 46% of Take-Two Interactive Software has launched a proxy battle to "review the employment status" of CEO Paul Eibeler and CFO Karl Winters.
In addition to the management changes, the hedge fund group also is seeking to appoint a total of six board members. They plan to present their nominees at Take-Two's March 23 board meeting. The slate includes media honcho Strauss Zelnick, Benjamin Feder, Jon Moses, Michael Dornemann and Michael James Sheresky.
"Management has sort of lost the faith of the investor community,'' said Todd Mitchell, a Kaufman Brothers LP analyst in New York, in an interview. "A shake up would be a positive thing,'' said Mitchell. The investor group began forming in early February after veteran activist Carl Icahn floated the idea of agitating for change. At one point in 2006, he had 2.8 million shares.
Take-Two also remains the subject of a criminal investigation by the New York district attorney’s office regarding stock options backdating and possibly broader issues. The S.E.C. also has started an informal investigation into the video game company.
A group of high-profile hedge funds that collectively control about 46% of Take-Two Interactive Software has launched a proxy battle to "review the employment status" of CEO Paul Eibeler and CFO Karl Winters.
In addition to the management changes, the hedge fund group also is seeking to appoint a total of six board members. They plan to present their nominees at Take-Two's March 23 board meeting. The slate includes media honcho Strauss Zelnick, Benjamin Feder, Jon Moses, Michael Dornemann and Michael James Sheresky.
"Management has sort of lost the faith of the investor community,'' said Todd Mitchell, a Kaufman Brothers LP analyst in New York, in an interview. "A shake up would be a positive thing,'' said Mitchell. The investor group began forming in early February after veteran activist Carl Icahn floated the idea of agitating for change. At one point in 2006, he had 2.8 million shares.
Take-Two also remains the subject of a criminal investigation by the New York district attorney’s office regarding stock options backdating and possibly broader issues. The S.E.C. also has started an informal investigation into the video game company.
Hedge Fund N.I.R. Group Scores Highest %Increase
As combined assets at the largest U.S. hedge funds finally crossed the trillion-dollar mark, some are doing better than others. According to the bi-annual hedge fund survey by industry publication, Absolute Return, N.Y.-based NIR Group scored the biggest increase in raw percentages, a 789% increase.
The firm, run by Corey Ribotsky, manages a handful of Roslyn, N.Y. hedge funds with $630 million under management and approximately $622 million in PIPEinvestments.
Ribotsky also launched a credit opportunities fund last year. Under his direction, the firm raised more than $3 billion for the fund, expanding to $3.62 billion from $407 the previous year earlier, a 789% increase.
Ribotsky, 36, is the Managing Member of N.I.R. Group, LLC, a boutique investment management firm. Mr. Ribotsky has been investing in public companies since 1992. Prior to becoming a member of N.I.R., Mr. Ribotsky was a member of the investment management firm, The Rainmaker Group, LLC located in Red Bank, New Jersey.
The N.I.R. Group has offices in Roslyn, New York. Both R&C Advisors, LLC and R&C Investors, LLC are based in New York.
The firm, run by Corey Ribotsky, manages a handful of Roslyn, N.Y. hedge funds with $630 million under management and approximately $622 million in PIPEinvestments.
Ribotsky also launched a credit opportunities fund last year. Under his direction, the firm raised more than $3 billion for the fund, expanding to $3.62 billion from $407 the previous year earlier, a 789% increase.
Ribotsky, 36, is the Managing Member of N.I.R. Group, LLC, a boutique investment management firm. Mr. Ribotsky has been investing in public companies since 1992. Prior to becoming a member of N.I.R., Mr. Ribotsky was a member of the investment management firm, The Rainmaker Group, LLC located in Red Bank, New Jersey.
The N.I.R. Group has offices in Roslyn, New York. Both R&C Advisors, LLC and R&C Investors, LLC are based in New York.
7 Mar 2007
Hedge Funds Driving Bank Stocks Up 50%
Hedge funds have acquired around 7% in Landesbank Berlin, the hedge funds hope to profit following the sales process, as the new majority stakeholder will be obliged to make minority shareholders a buyout offer, a report said.
The unnamed hedge funds are positioned to profit from the sale regardless of who buys the bank and their acquisitions have pushed the price up more than 50% to €7.57 in the past six months. The price values the bank at €7.6bn ($10bn), far more than its €4bn to €5bn price-tag.
The city state must sell its 81% stake in Landesbank Berlin by the end of this year to conform with EU directives. The sale is being closely watched in the financial sector because Landesbank Berlin owns Berliner Sparkasse and therefore represents the first real opportunity for private banks to enter the previously protected public savings bank sector.
"The free-float is firmly in the hands of hedge funds by now," said one adviser to a potential bidder, who declined to be named.
However, the small free-float, and the lack of liquidity has deterred hedge funds from taking big stakes while political risk has prevented the shares rising higher, according to one hedge fund adviser.
The unnamed hedge funds are positioned to profit from the sale regardless of who buys the bank and their acquisitions have pushed the price up more than 50% to €7.57 in the past six months. The price values the bank at €7.6bn ($10bn), far more than its €4bn to €5bn price-tag.
The city state must sell its 81% stake in Landesbank Berlin by the end of this year to conform with EU directives. The sale is being closely watched in the financial sector because Landesbank Berlin owns Berliner Sparkasse and therefore represents the first real opportunity for private banks to enter the previously protected public savings bank sector.
"The free-float is firmly in the hands of hedge funds by now," said one adviser to a potential bidder, who declined to be named.
However, the small free-float, and the lack of liquidity has deterred hedge funds from taking big stakes while political risk has prevented the shares rising higher, according to one hedge fund adviser.
Hedge Fund Citadel Buys Bankrupt Company
Citadel Investment Group has topped Credit Suisse in an auction, agreeing to pay about $180 million for bankrupt ResMAE Mortgage Corp.
Citadel, a $13.4 billion Chicago-based hedge fund, said they will allow ResMAE, the bankrupt subprime mortgage lender, to work as an autonimous unit and allow founders Jack Mayesh and Ed Resendez to stay in control of the company. Subprime loans are offered to borrowers with spotty credit and lower incomes, the sector has descended into crisis as interest rates climbed from record lows.
ResMAE filed for bankruptcy in February, the firm said in the filing that it planned to sell most of its assets to Credit Suisse. However, hedge fund Citadel offered to pay $22.4 million, a break-up fee of up to $1.5 million plus ResMAE loans for 98.5% of their face value, or roughly $160 million.
U.S. Bankruptcy Judge Kevin Carey in Wilmington, Delaware, approved the sale on Monday afternoon, "Our financial support of ResMAE during this reorganization will allow one of the industry's leaders to remain appropriately capitalized to meet the needs of this very important market," Citadel's Ken Griffin said in a statement.
Other hedge funds are also expanding into this area, in July, hedge fund Fortress Investment Group LLC paid $554.3 million for the subprime lending arm of Dallas-based homebuilder Centex Corp. Then in December, Fortress also bought Champion Mortgage's loan- underwriting business from KeyCorp.
Since its founding as a $4.6 million convertible arbitrage fund in 1990, Citadel has grown into a sophisticated alternative investment institution. The hedge fund has seven main areas of focus including equities, fixed income and energy trading.
Citadel, a $13.4 billion Chicago-based hedge fund, said they will allow ResMAE, the bankrupt subprime mortgage lender, to work as an autonimous unit and allow founders Jack Mayesh and Ed Resendez to stay in control of the company. Subprime loans are offered to borrowers with spotty credit and lower incomes, the sector has descended into crisis as interest rates climbed from record lows.
ResMAE filed for bankruptcy in February, the firm said in the filing that it planned to sell most of its assets to Credit Suisse. However, hedge fund Citadel offered to pay $22.4 million, a break-up fee of up to $1.5 million plus ResMAE loans for 98.5% of their face value, or roughly $160 million.
U.S. Bankruptcy Judge Kevin Carey in Wilmington, Delaware, approved the sale on Monday afternoon, "Our financial support of ResMAE during this reorganization will allow one of the industry's leaders to remain appropriately capitalized to meet the needs of this very important market," Citadel's Ken Griffin said in a statement.
Other hedge funds are also expanding into this area, in July, hedge fund Fortress Investment Group LLC paid $554.3 million for the subprime lending arm of Dallas-based homebuilder Centex Corp. Then in December, Fortress also bought Champion Mortgage's loan- underwriting business from KeyCorp.
Since its founding as a $4.6 million convertible arbitrage fund in 1990, Citadel has grown into a sophisticated alternative investment institution. The hedge fund has seven main areas of focus including equities, fixed income and energy trading.
6 Mar 2007
Survey Shows US Hedge Funds to Hold $1,200 Billion In Assets
The biannual survey of US hedge funds shows that 241 firms, each managing more than $1bn, held a combined total of nearly $1,200bn as of January 1.
According to a new survey conducted by Absolute Return magazine, money continued to flow steadily into alternative investments last year, causing the combined assets of the largest US hedge funds to climb well above the $1,000bn mark.
That is about $215bn more than the top 218 firms were managing this past summer and $347bn more than the top 207 firms were running at the beginning of last year. The huge increases last year came in spite of hedge fund closures, including that of $9.1bn Amaranth Advisors, which erased $35bn from the market.
The biggest new launch of last year, Convexity Capital Management, joined the top-60 US hedge funds in its first year, making it the most successful hedge fund launch in history, raising $6.3bn.
The top 20 firms, which held $258bn last January, now manage nearly $386bn. There are now 29 firms that run more than $10bn, up from 16 last year, and well ahead of the 12 that managed such large huge sums in July 2005.
In the number one spot JPMorgan unseated Goldman Sachs as the world's largest manager of hedge fund assets, with $34bn under management.
According to a new survey conducted by Absolute Return magazine, money continued to flow steadily into alternative investments last year, causing the combined assets of the largest US hedge funds to climb well above the $1,000bn mark.
That is about $215bn more than the top 218 firms were managing this past summer and $347bn more than the top 207 firms were running at the beginning of last year. The huge increases last year came in spite of hedge fund closures, including that of $9.1bn Amaranth Advisors, which erased $35bn from the market.
The biggest new launch of last year, Convexity Capital Management, joined the top-60 US hedge funds in its first year, making it the most successful hedge fund launch in history, raising $6.3bn.
The top 20 firms, which held $258bn last January, now manage nearly $386bn. There are now 29 firms that run more than $10bn, up from 16 last year, and well ahead of the 12 that managed such large huge sums in July 2005.
In the number one spot JPMorgan unseated Goldman Sachs as the world's largest manager of hedge fund assets, with $34bn under management.
5 Mar 2007
Hedge Fund Manager Merger Creates the World's No 2 Visitor Attraction Company
Some of the biggest brand names in the global theme park market today announced a partnership of two rapidly growing businesses, The Tussauds Group and Merlin Entertainments Group, making them the world's second biggest attractions operator after Disney.
Merlin Entertainments Group is known for theme parks such as Legoland, Sealife and several others. The company is controlled by hedge fund manager Blackstone Group.
On the merger with Merlin, international investment company Dubai International Capital LLC said, "Tussauds and Merlin are very complementary businesses and there is an obvious commercial logic in bringing them together."
The Tussauds Group is controlled by Dubai International which is known for its $1.23 billion acquisition of Travelodge, its $1 billion stake in DaimlerChrysler, and the $1.2 billion acquisition of Doncasters Group.
The Blackstone Group has raised a total of more then $67 billion for hedge fund and alternative investments since its formation. The group is currently investing its fifth general private equity fund with commitments of $15.6 billion. Other private equity investments in the leisure sector have included Universal Studios in Orlando, and Six Flags Theme Park.
Merlin Entertainments Group is known for theme parks such as Legoland, Sealife and several others. The company is controlled by hedge fund manager Blackstone Group.
On the merger with Merlin, international investment company Dubai International Capital LLC said, "Tussauds and Merlin are very complementary businesses and there is an obvious commercial logic in bringing them together."
The Tussauds Group is controlled by Dubai International which is known for its $1.23 billion acquisition of Travelodge, its $1 billion stake in DaimlerChrysler, and the $1.2 billion acquisition of Doncasters Group.
The Blackstone Group has raised a total of more then $67 billion for hedge fund and alternative investments since its formation. The group is currently investing its fifth general private equity fund with commitments of $15.6 billion. Other private equity investments in the leisure sector have included Universal Studios in Orlando, and Six Flags Theme Park.
High Fees Reduce the Attractiveness of Hedge Funds
A recent study on the effect of the fees that hedge funds charge, “Portfolio Efficiency With Performance Fees,” was conducted by Mark Kritzman, president and chief executive of Windham Capital Management, a Boston-based money management firm.
Mr. Kritzman’s study shows that hedge funds’ high fees make it unlikely that investors will improve their long-term performance by putting money into hedge funds. Focusing on the standard fee arrangement in the industry, known as “2 and 20″, which is to charge 2% of assets under management and 20% of profits above a predetermined benchmark, Mr Kritzman found that the combined impact of such fees is so high as to greatly reduce the attractiveness of hedge funds.
In an interview with the New York Times, Mr Kritzman said the fees’ effect on the portfolio was so sizable because of the “asymmetry penalty” resulting from the 20% cut of profits that the hedge funds earn. The funds do not share in investor losses, but they reap a large share of the profits.
The study was similarly disparaging about funds of hedge funds, saying he found it difficult to justify any allocation to funds of hedge funds, because they earn fees above and beyond those earned by the hedge funds in which they invest, typically 1% of funds under management and 10% of profits above a benchmark. The bottom line, Mr. Kritzman told the New York Times, is this: “Because of fees, the optimal allocation to a group of hedge funds is a lot lower than you might think it should be.”
Mr. Kritzman’s study shows that hedge funds’ high fees make it unlikely that investors will improve their long-term performance by putting money into hedge funds. Focusing on the standard fee arrangement in the industry, known as “2 and 20″, which is to charge 2% of assets under management and 20% of profits above a predetermined benchmark, Mr Kritzman found that the combined impact of such fees is so high as to greatly reduce the attractiveness of hedge funds.
In an interview with the New York Times, Mr Kritzman said the fees’ effect on the portfolio was so sizable because of the “asymmetry penalty” resulting from the 20% cut of profits that the hedge funds earn. The funds do not share in investor losses, but they reap a large share of the profits.
The study was similarly disparaging about funds of hedge funds, saying he found it difficult to justify any allocation to funds of hedge funds, because they earn fees above and beyond those earned by the hedge funds in which they invest, typically 1% of funds under management and 10% of profits above a benchmark. The bottom line, Mr. Kritzman told the New York Times, is this: “Because of fees, the optimal allocation to a group of hedge funds is a lot lower than you might think it should be.”
2 Mar 2007
Disclosure Ruling Has Hedge Funds Retreating
Judge Allan Gropper of the U.S. Bankruptcy Court in New York this week ordered a group of hedge funds that were demanding the formation of a shareholders committee to disclose all of their holdings in the airline, when they were purchased and for how much.
Soon after the disclosure ruling the hedge fund shareholders withdrew their motion to have a say in the payment deals after the Northwest Airline Corp reorganization. Hedge funds are known for their fiercely guarded trading secrets and so far have succeeded in resisting regulation.
The shareholder group led by Owl Creek hedge fund has said it holds a total of 30% of Northwest's stock and about $164.7 million in claims. Northwest said shareholders will receive nothing and existing shares will be canceled upon the carrier’s exit from bankruptcy.
Gropper's ruling would enforce Bankruptcy Rule 2019, which says parties in a Chapter 11 case acting as a group must disclose certain information about their holdings. The decision requires the 13 investment funds on the official committee to make public information about trading patterns, holdings and pricing, which hedge funds have labored for decades to keep secret.
Soon after the disclosure ruling the hedge fund shareholders withdrew their motion to have a say in the payment deals after the Northwest Airline Corp reorganization. Hedge funds are known for their fiercely guarded trading secrets and so far have succeeded in resisting regulation.
The shareholder group led by Owl Creek hedge fund has said it holds a total of 30% of Northwest's stock and about $164.7 million in claims. Northwest said shareholders will receive nothing and existing shares will be canceled upon the carrier’s exit from bankruptcy.
Gropper's ruling would enforce Bankruptcy Rule 2019, which says parties in a Chapter 11 case acting as a group must disclose certain information about their holdings. The decision requires the 13 investment funds on the official committee to make public information about trading patterns, holdings and pricing, which hedge funds have labored for decades to keep secret.
Citigroup Exec Quits to Launch Hong Kong Hedge Fund
Ajay Kapur, a top Citigroup executive is leaving the firm to found his own hedge fund, according to reports.
Kapur is returning to Hong Kong, where he has residency rights, to set up a hedge fund called First Horse Capital with Niall MacLeod and two other members of Kapur's team that also left Citigroup. Kapur's new fund will invest in equities globally.
Kapur said the results of investment models that he and his team had devised were "pretty good." and that, "I just thought that one should eat one's own cooking,"Kapur said from London. The fund is based in Hong Kong in order to get information from China, India, Japan, "you need to be closer and on the ground." he said.
Asian hedge funds returned 16.1% last year, compared to the 11.5% gains of their counterparts in North America and 11.35% in Europe, according to indexes run by Eurekahedge, a company in Singapore that tracks the industry.
Kapur has followed a well-worn path from investment banking to hedge funds, other Wall Street advisers have also joined Asia-based hedge funds and buyout firms. In January, the chairman of J.P. Morgan Asia Pacific, Ralph Parks, joinedOaktree Capital Management, a Los Angeles hedge fund with more than $33 billion in assets.
First Horse Capital, named for the Indian cavalry regiment Kapur's father served in, will invest in stocks worldwide. Kapur declined to say how much money he's raised for First Horse Capital.
Kapur is returning to Hong Kong, where he has residency rights, to set up a hedge fund called First Horse Capital with Niall MacLeod and two other members of Kapur's team that also left Citigroup. Kapur's new fund will invest in equities globally.
Kapur said the results of investment models that he and his team had devised were "pretty good." and that, "I just thought that one should eat one's own cooking,"Kapur said from London. The fund is based in Hong Kong in order to get information from China, India, Japan, "you need to be closer and on the ground." he said.
Asian hedge funds returned 16.1% last year, compared to the 11.5% gains of their counterparts in North America and 11.35% in Europe, according to indexes run by Eurekahedge, a company in Singapore that tracks the industry.
Kapur has followed a well-worn path from investment banking to hedge funds, other Wall Street advisers have also joined Asia-based hedge funds and buyout firms. In January, the chairman of J.P. Morgan Asia Pacific, Ralph Parks, joinedOaktree Capital Management, a Los Angeles hedge fund with more than $33 billion in assets.
First Horse Capital, named for the Indian cavalry regiment Kapur's father served in, will invest in stocks worldwide. Kapur declined to say how much money he's raised for First Horse Capital.
1 Mar 2007
Hedge Fund Shareholders Withdraw from Northwest Deal
Hedge fund shareholders withdrew their motion to have a say in the payment deals after the Northwest Airline Corp reorganization, surprising U.S. Bankruptcy Judge Allan Gropper. The hedge fund committee claims that Jugde Gropper has not allowed an investigation into whether Northwest plans to merge with Delta.
The temporary committee of hedge fund investors tried to subpoena rival airlines that may have held merger talks with Northwest, in a effort to prove that it is worth more than it claims. Northwest said shareholders will receive nothing and existing shares will be canceled upon the carrier’s exit from bankruptcy.
The shareholder group led by the Owl Creek hedge fund has been fighting Northwest’s claims that there won’t be enough cash to pay the shareholders after the bankruptcy reorganization.
Northwest Airlines said it had a net loss of $349 million for January. Revenue was $892 million, the carrier said in a filing with U.S. Bankruptcy Court in New York.
Northwest Airlines said that it expected to be worth roughly $7 billion when it emerged from bankruptcy later this year and that it would pay unsecured creditors roughly three-quarters of what they were owed.
The temporary committee of hedge fund investors tried to subpoena rival airlines that may have held merger talks with Northwest, in a effort to prove that it is worth more than it claims. Northwest said shareholders will receive nothing and existing shares will be canceled upon the carrier’s exit from bankruptcy.
The shareholder group led by the Owl Creek hedge fund has been fighting Northwest’s claims that there won’t be enough cash to pay the shareholders after the bankruptcy reorganization.
Northwest Airlines said it had a net loss of $349 million for January. Revenue was $892 million, the carrier said in a filing with U.S. Bankruptcy Court in New York.
Northwest Airlines said that it expected to be worth roughly $7 billion when it emerged from bankruptcy later this year and that it would pay unsecured creditors roughly three-quarters of what they were owed.
Ritchie to Sell Flagship Hedge Fund
Ritchie Capital Management Ltd has been struggling for two years now with below-average returns and the word is out that the company plans to sell its flagship hedge fund to equal partners in the venture, Reservoir Capital Group and Coller Capital.
Ritchie Capital, which oversees about $2.8 billion including borrowed money, will liquidate its Multistrategy Global Fund and return cash to investors. The company told investors that the Ritchie Capital Management flagship multi-strategy hedge fund had about $730 million in assets in mid-2006.
Richie is negotiating to sell the flagship hedge fund's assets to Reservoir, the $3 billion hedge fund investor, and Coller, which manages about $3.5 billion, in a deal that could be worth more than $1 billion. According to the deal with Coller, the current chief executive, Thane Ritchie, may continue to manage the fund after the sale.
Chicago-based Ritchie, a diversified hedge fund group that faced an extended period of under performance and investor demands for capital returns, has been in exclusive talks with Reservoir and Coller for several months to buy the flagship fund, sources have said.
Ritchie Capital, which oversees about $2.8 billion including borrowed money, will liquidate its Multistrategy Global Fund and return cash to investors. The company told investors that the Ritchie Capital Management flagship multi-strategy hedge fund had about $730 million in assets in mid-2006.
Richie is negotiating to sell the flagship hedge fund's assets to Reservoir, the $3 billion hedge fund investor, and Coller, which manages about $3.5 billion, in a deal that could be worth more than $1 billion. According to the deal with Coller, the current chief executive, Thane Ritchie, may continue to manage the fund after the sale.
Chicago-based Ritchie, a diversified hedge fund group that faced an extended period of under performance and investor demands for capital returns, has been in exclusive talks with Reservoir and Coller for several months to buy the flagship fund, sources have said.
27 Feb 2007
Hedge Funds Looking For Direct Access to MTS
Following reports that hedge funds such as Citadel and Vega are trying to gain direct access to the pan-European bond exchange network MTS, the European Primary Dealers Association (EPDA) reported that it has not yet decided whether to allow third parties to access its platform, but the group has reportedly set up a committee to consider admitting hedge funds as members.
They do warn however, that third party participation in the electronic markets could undermine the current structure and introduce greater risks.
MTS is an abbreviation for Mercato dei Titoli di Stato, which translates to "Market for Government Bonds". The technology of the Italian based MTS platform is the Telematico system, a sophisticated electronic platform specifically designed for the trading of fixed income instruments. It replaces the expensive and often time-consuming process of trading over-the-counter.
According to a recent FT report, these moves are showing how powerful the hedge fund industry is becoming and also highlights the dispute over the current structure of the euro-zone government bond markets.
In a discussion paper circulated Tuesday, the EPDA said, "While issuers have influence over their primary dealerships, primary dealers may not be in a position to exercise control over third parties,.............They would be squeezed between the commercial pressure of their prime brokerage business and the inability to regulate the activity of third parties trading in the primary dealers' name. Lack of control could give rise to potential misbehavior by rogue traders."
They do warn however, that third party participation in the electronic markets could undermine the current structure and introduce greater risks.
MTS is an abbreviation for Mercato dei Titoli di Stato, which translates to "Market for Government Bonds". The technology of the Italian based MTS platform is the Telematico system, a sophisticated electronic platform specifically designed for the trading of fixed income instruments. It replaces the expensive and often time-consuming process of trading over-the-counter.
According to a recent FT report, these moves are showing how powerful the hedge fund industry is becoming and also highlights the dispute over the current structure of the euro-zone government bond markets.
In a discussion paper circulated Tuesday, the EPDA said, "While issuers have influence over their primary dealerships, primary dealers may not be in a position to exercise control over third parties,.............They would be squeezed between the commercial pressure of their prime brokerage business and the inability to regulate the activity of third parties trading in the primary dealers' name. Lack of control could give rise to potential misbehavior by rogue traders."
Hedge Fund Mega-Investor Expands To U.S.
In a effort to strengthen its presence in the United States, BNP Paribas Securities Services announced that it has expanded its hedge fund administration operations to include services within the United States. BNP Paribas has EUR 570 billion ($754.8 billion)in assets invested in over 4,480 hedge funds worldwide and EUR 3.43 trillion ($4.54 trillion) in assets under management.
Located in King of Prussia, Pennsylvania, the hedge fund administration team is headed by Andrew Dougherty, Chief Operating Officer for fund administration in the United States.
BNP Paribas has recently enhanced its global portfolio by expanding its hedge fund administration businesses in Spain, Italy and France. From its offices in 18 countries, BNP Paribas works closely with its clients to provide comprehensive middle and back-office solutions to hedge funds and fund of hedge funds firms worldwide, including Asia and emerging markets.
Frederic Perard, Head of Global Fund Services at BNP Paribas Securities Services commented: "Our fully-integrated client services and operations team, which specializes in master-feeder structures, partnership accounting and high-volume trading portfolios, delivers added-value services to our clients. Our service offering is well-positioned to serve middle-market managers across various locations who seek an independent administrator to handle their multiple prime brokerage relationships."
BNP Paribas Securities Services is a leading securities services provider to the world's financial institutions, with a local presence in all key European markets as well as in the US and Australasia. With 4,200 staff in 18 countries, BNP Paribas Securities Services has over 700 clients, including 8 of the world's top 10 investment managers, and a global custody network covering 90 markets.
Located in King of Prussia, Pennsylvania, the hedge fund administration team is headed by Andrew Dougherty, Chief Operating Officer for fund administration in the United States.
BNP Paribas has recently enhanced its global portfolio by expanding its hedge fund administration businesses in Spain, Italy and France. From its offices in 18 countries, BNP Paribas works closely with its clients to provide comprehensive middle and back-office solutions to hedge funds and fund of hedge funds firms worldwide, including Asia and emerging markets.
Frederic Perard, Head of Global Fund Services at BNP Paribas Securities Services commented: "Our fully-integrated client services and operations team, which specializes in master-feeder structures, partnership accounting and high-volume trading portfolios, delivers added-value services to our clients. Our service offering is well-positioned to serve middle-market managers across various locations who seek an independent administrator to handle their multiple prime brokerage relationships."
BNP Paribas Securities Services is a leading securities services provider to the world's financial institutions, with a local presence in all key European markets as well as in the US and Australasia. With 4,200 staff in 18 countries, BNP Paribas Securities Services has over 700 clients, including 8 of the world's top 10 investment managers, and a global custody network covering 90 markets.
DaimlerChrysler Wary Of Possible Hedge Fund Takeover
DaimlerChrysler announced this month it was considering all options for Chrysler, including a split, but without Chrysler, the Daimler group could be more of a takeover target for hedge funds.
According to CNN Money, the likelihood of an unsolicited approach, such as a hedge fund takeover, was still low but had gone up to 20% from 10%.
One person familiar with the situation said Chief Financial Officer Bodo Uebber had routinely played down suggestions that hedge funds could team up to buy DaimlerChrysler because he felt such a wolf pack would be unable to agree on strategy and goals.
"But should it come to pass that Chrysler is split off from Daimler, then Daimler would be an interesting target," the source said. A complete split-up of the cars, trucks and vans businesses would then be "a real danger."
DaimlerChrysler declined comment on prospects for being acquired if it divests Chrysler but has said in the past the best defense against takeovers was good financial performance. The company has a market capitalization of $79 billion.
According to CNN Money, the likelihood of an unsolicited approach, such as a hedge fund takeover, was still low but had gone up to 20% from 10%.
One person familiar with the situation said Chief Financial Officer Bodo Uebber had routinely played down suggestions that hedge funds could team up to buy DaimlerChrysler because he felt such a wolf pack would be unable to agree on strategy and goals.
"But should it come to pass that Chrysler is split off from Daimler, then Daimler would be an interesting target," the source said. A complete split-up of the cars, trucks and vans businesses would then be "a real danger."
DaimlerChrysler declined comment on prospects for being acquired if it divests Chrysler but has said in the past the best defense against takeovers was good financial performance. The company has a market capitalization of $79 billion.
26 Feb 2007
Hedge Funds World Conference in Dubai
The 8th annual Hedge Funds World Middle East Conference is being held at the Madinat Jumeirah in Dubai. Sponsored by Man investments, the event will play host to some of the biggest names in the alternative asset industry, reflecting growing regional demand for these products.
Some of the key topics include; New business in emerging markets, such as Asia, India and Latin America, the future of hedge funds and manager selection, fund selection and best practice portfolio construction.
The event provides specialist workshops, and there will be 50 leading speakers. The Hedge Funds World Middle East 2007 website boasts an 8 year track record, intensively researched to deliver in-depth insight into the hedge fund universe and the latest trends and investment styles.
To attend; http://www.terrapinn.com/2007/hfwme/
Some of the key topics include; New business in emerging markets, such as Asia, India and Latin America, the future of hedge funds and manager selection, fund selection and best practice portfolio construction.
The event provides specialist workshops, and there will be 50 leading speakers. The Hedge Funds World Middle East 2007 website boasts an 8 year track record, intensively researched to deliver in-depth insight into the hedge fund universe and the latest trends and investment styles.
To attend; http://www.terrapinn.com/2007/hfwme/
British Rail Pension Fund Plans to Invest One Billion In Hedge Funds
Railpen, one of the largest pension funds in Britain with £18 billion ($35.3 billion) in assets under management is planning to move at least £540 million ($1 billion) into hedge funds this year.
Chris Hitchen, Railpen chief executive, said they are planning on having £1.4 billion ($2.7 billion) invested in hedge funds by December, increasing their exposure from 5% to 8%.
“We have been divesting our equity portfolio to buy other asset classes, such as private equity, property, hedge funds and infrastructure,” Mr Hitchen said. “We went into infrastructure assets last year, but they’re somewhat overheated, so we’re trying to make sure we don’t put all our money in at the same time.”
According to the Times Online, a recent NAPF survey indicated that 11% of pension funds had invested in hedge funds by the end of 2006, up from 8% the previous year. There were also rises in the amount of money that pension funds invested in property, private equity and venture capital as part of a wider move out of equities in 2006.
He said that despite concerns about the stability of the hedge fund industry, the funds could provide returns that were more stable than equities.
Chris Hitchen, Railpen chief executive, said they are planning on having £1.4 billion ($2.7 billion) invested in hedge funds by December, increasing their exposure from 5% to 8%.
“We have been divesting our equity portfolio to buy other asset classes, such as private equity, property, hedge funds and infrastructure,” Mr Hitchen said. “We went into infrastructure assets last year, but they’re somewhat overheated, so we’re trying to make sure we don’t put all our money in at the same time.”
According to the Times Online, a recent NAPF survey indicated that 11% of pension funds had invested in hedge funds by the end of 2006, up from 8% the previous year. There were also rises in the amount of money that pension funds invested in property, private equity and venture capital as part of a wider move out of equities in 2006.
He said that despite concerns about the stability of the hedge fund industry, the funds could provide returns that were more stable than equities.
23 Feb 2007
Hedge Funds Charged With Fraud
A Washington hedge fund manager has been charged with defrauding Maryland investors of $9 million by soliciting money for his hedge funds, LaJon Corp, LaJon Capital Management, LaJon Capital Advisors and LaJon Capital Fund.
Attorney General Douglas F. Gansler froze the assets of Williams's hedge funds, saying that John H. Williams of Upper Marlboro violated eight civil statutes of state security laws.
Williams lured investors with free lunch seminars and hid losses with fake statements, the state attorney general's office said. Williams became involved in the scheme after meeting a Canadian hedge fund trader, Stephen Chesnowitz, in an Internet chat room, according to a court filing by Gansler's office.
According to The Washington Post, the two traders sent out mass mailings advertising a free "gourmet meal" and the opportunity to "earn excellent returns with a guarantee against market risk." More than 150 people, mainly from Montgomery and Prince George's counties, attended the seminars and gave Williams a total of $9 million. He transferred the money to Chesnowitz's hedge funds in Canada and the Cayman Islands.
Investors could log onto a Web site to check how the hedge funds were doing, and online statements showed that their investments were profitable. But that was not true. On April 28, 2006, alone, the hedge fund piled up $626,380 in losses, the filing said. Williams, "knowing the money was gone . . . continued to take fees" based on phantom returns, the court filing said. In total, Williams paid himself $586,000 for managing the investments.
Maryland officials said they are trying to figure out how much Williams lost in his trades and whether there is anything left to return to investors. Most of the money has been transferred out of the country to Chesnowitz's firms.
Attorney General Douglas F. Gansler froze the assets of Williams's hedge funds, saying that John H. Williams of Upper Marlboro violated eight civil statutes of state security laws.
Williams lured investors with free lunch seminars and hid losses with fake statements, the state attorney general's office said. Williams became involved in the scheme after meeting a Canadian hedge fund trader, Stephen Chesnowitz, in an Internet chat room, according to a court filing by Gansler's office.
According to The Washington Post, the two traders sent out mass mailings advertising a free "gourmet meal" and the opportunity to "earn excellent returns with a guarantee against market risk." More than 150 people, mainly from Montgomery and Prince George's counties, attended the seminars and gave Williams a total of $9 million. He transferred the money to Chesnowitz's hedge funds in Canada and the Cayman Islands.
Investors could log onto a Web site to check how the hedge funds were doing, and online statements showed that their investments were profitable. But that was not true. On April 28, 2006, alone, the hedge fund piled up $626,380 in losses, the filing said. Williams, "knowing the money was gone . . . continued to take fees" based on phantom returns, the court filing said. In total, Williams paid himself $586,000 for managing the investments.
Maryland officials said they are trying to figure out how much Williams lost in his trades and whether there is anything left to return to investors. Most of the money has been transferred out of the country to Chesnowitz's firms.
21 Feb 2007
Fund of Hedge Funds Launches Trust
Fund of hedge funds manager, Gottex Fund Management, announced that they intend to launch a publicly listed closed-ended investment company, Gottex Market Neutral Trust, which will be listed on London’s main market.
All proceeds from a placing and offer for subscription, net of working capital requirements, will be invested in a portfolio of underlying hedge funds, it added. No numbers were provided.
The company's initial investment rationale, methodology and portfolio management will be consistent with that of Gottex Market Neutral Fund, a conservative open ended fund of hedge funds that seeks consistent returns with a low correlation to the major stock and bond market, it has been managed by GFM since 1999.
JPMorgan Cazenove is the group’s financial adviser, book runner and sponsor.
All proceeds from a placing and offer for subscription, net of working capital requirements, will be invested in a portfolio of underlying hedge funds, it added. No numbers were provided.
The company's initial investment rationale, methodology and portfolio management will be consistent with that of Gottex Market Neutral Fund, a conservative open ended fund of hedge funds that seeks consistent returns with a low correlation to the major stock and bond market, it has been managed by GFM since 1999.
JPMorgan Cazenove is the group’s financial adviser, book runner and sponsor.
Activist Hedge Fund Wants Dutch Bank To Sell Assets
The Children's Investment Fund Management, a $3.8 billion hedge fund launched in 2003, announced in a letter to Dutch bank ABN AMRO that they believe the bank is undervalued and should sell some of its assets, merge with another bank, or even sell off the whole business.
TCI Fund Management takes its name from the money it donates to children's charities. The hedge fund, which said it owns more than 1% of ABN AMRO, asked shareholders to vote on its proposals at a shareholder meeting scheduled for April 26.
In 2005 TCI was part of a group of activist investors who criticized Deutsche Börse for its $2.5 billion bid for the London Stock Exchange, eventually causing Werner Seifert, the chief executive to resign. It turns out TCI, which owned 8% of Deutsche Börse, actively recruited some powerful partners, including Atticus Capital, Merrill Lynch, and Fidelity Investments, in order to facilitate the move.
In a letter first published by Reuters, the hedge fund said, "We believe that this strategy would not only create significant shareholder value but also would best serve all the stakeholders who otherwise would suffer over the long term from the structurally declining competitive position ofABN AMRO,......In 2006 they again committed to cut costs and they have so far failed to deliver," the hedge fund said.
TCI was founded by money manager Christopher Hohn, a 39-year-old graduate of Southampton University. It is said that Mr Hohn set up the hedge fund so that half of TCI's annual assets go to charity as a way of motivating himself.
TCI Fund Management takes its name from the money it donates to children's charities. The hedge fund, which said it owns more than 1% of ABN AMRO, asked shareholders to vote on its proposals at a shareholder meeting scheduled for April 26.
In 2005 TCI was part of a group of activist investors who criticized Deutsche Börse for its $2.5 billion bid for the London Stock Exchange, eventually causing Werner Seifert, the chief executive to resign. It turns out TCI, which owned 8% of Deutsche Börse, actively recruited some powerful partners, including Atticus Capital, Merrill Lynch, and Fidelity Investments, in order to facilitate the move.
In a letter first published by Reuters, the hedge fund said, "We believe that this strategy would not only create significant shareholder value but also would best serve all the stakeholders who otherwise would suffer over the long term from the structurally declining competitive position ofABN AMRO,......In 2006 they again committed to cut costs and they have so far failed to deliver," the hedge fund said.
TCI was founded by money manager Christopher Hohn, a 39-year-old graduate of Southampton University. It is said that Mr Hohn set up the hedge fund so that half of TCI's annual assets go to charity as a way of motivating himself.
20 Feb 2007
Senator Obama Targets Hedge Funds and Offshore Investors
Senator Barack Obama has backed legislation that would require hedge funds to require their offshore clients to establish anti-money laundering programs in the same way as other US financial institutions, under regulations to be issued by the Treasury Department.
It is not immediately clear whether the move will increase the transparency of US-owned assets in offshore accounts, but the legislation is being set up with the hopes of curbing tax evasion. The US has in the past years signed tax information exchange agreements with Aruba, the Bahamas, Bermuda, the British Virgin Islands, the Cayman Islands, Guernsey, Jersey and the Isle of Man.
Obama has joined senators Carl Levin and Norm Coleman in introducing legislation aimed at stopping offshore tax haven and tax shelter abuses. Says Obama: "This is a basic issue of fairness and integrity. We need to crack down on individuals and businesses that abuse our tax laws so that those who work hard and play by the rules aren't disadvantaged."
They believe the loss to the Treasury from offshore tax evasion could amount to $100 billion a year. They say abusive tax shelters add tens of billions of dollars more.
"This bill provides a powerful set of new tools to clamp down on offshore tax and tax shelter abuses. None of these offshore schemes would work without the secrecy that prevents US agencies from enforcing our laws. Our bill offers innovative ways to combat offshore secrecy." Levin says.
The bill would strengthen detection of offshore activities by requiring US financial institutions that open accounts for foreign entities controlled by US clients, open accounts or establish entities in offshore secrecy jurisdictions for US clients to report such actions to the IRS.
It is not immediately clear whether the move will increase the transparency of US-owned assets in offshore accounts, but the legislation is being set up with the hopes of curbing tax evasion. The US has in the past years signed tax information exchange agreements with Aruba, the Bahamas, Bermuda, the British Virgin Islands, the Cayman Islands, Guernsey, Jersey and the Isle of Man.
Obama has joined senators Carl Levin and Norm Coleman in introducing legislation aimed at stopping offshore tax haven and tax shelter abuses. Says Obama: "This is a basic issue of fairness and integrity. We need to crack down on individuals and businesses that abuse our tax laws so that those who work hard and play by the rules aren't disadvantaged."
They believe the loss to the Treasury from offshore tax evasion could amount to $100 billion a year. They say abusive tax shelters add tens of billions of dollars more.
"This bill provides a powerful set of new tools to clamp down on offshore tax and tax shelter abuses. None of these offshore schemes would work without the secrecy that prevents US agencies from enforcing our laws. Our bill offers innovative ways to combat offshore secrecy." Levin says.
The bill would strengthen detection of offshore activities by requiring US financial institutions that open accounts for foreign entities controlled by US clients, open accounts or establish entities in offshore secrecy jurisdictions for US clients to report such actions to the IRS.
19 Feb 2007
Major Hedge Fund Shareholder Proposes Restructuring of Trust
Hedge fund Carrousel Capital has submitted proposals for a restructuring or merger of the Gartmore European investment trust, of which Carrousel owns 28.03% and is its largest shareholder.
Bruno Sangle-Ferriere, founder of British-based Carrousel, said he would make an announcement to the Stock Exchange on Friday or early next week.
Carrousel Capital said in informal talks with Gartmore that the hedge fund aims to buy into undervalued closed-end funds, restructuring it into an umbrella fund which could offer a range of investment mandates and which could take over or merge with other funds.
Gartmore Chairman Rodney Dennis said on Thursday. "We have had a couple of meetings (with Carrousel), but we've been unable to get a clear idea of what's being proposed,"
Over the past five years Gartmore European's net asset value has risen 72%, compared with a 51% return from the FTSE World Europe excluding UK index. "Performance has been very good, it's on a very tight discount, the manager is highly regarded and shareholders are happy. It is a bit mysterious that there is even an issue around Gartmore European," Dennis said.
Gartmore Chairman John von Spreckelsen and director Bruno Merki retired in September. The trust said at the time that the changes were due to corporate governance pressures and not the result of shareholder pressure.
Bruno Sangle-Ferriere, founder of British-based Carrousel, said he would make an announcement to the Stock Exchange on Friday or early next week.
Carrousel Capital said in informal talks with Gartmore that the hedge fund aims to buy into undervalued closed-end funds, restructuring it into an umbrella fund which could offer a range of investment mandates and which could take over or merge with other funds.
Gartmore Chairman Rodney Dennis said on Thursday. "We have had a couple of meetings (with Carrousel), but we've been unable to get a clear idea of what's being proposed,"
Over the past five years Gartmore European's net asset value has risen 72%, compared with a 51% return from the FTSE World Europe excluding UK index. "Performance has been very good, it's on a very tight discount, the manager is highly regarded and shareholders are happy. It is a bit mysterious that there is even an issue around Gartmore European," Dennis said.
Gartmore Chairman John von Spreckelsen and director Bruno Merki retired in September. The trust said at the time that the changes were due to corporate governance pressures and not the result of shareholder pressure.
Hedge Fund Investcorp to Sell Off Investment Company
It was announced today in a press release by Eurazeo that global hedge fund manager Investcorp has finalized a deal to sell APCOA, the leading pan-European manager of parking services, for an enterprise value of €885 million (1.16+ billion dollars), to Eurazeo. The closing of the transaction, subject to the relevant competition authority approval, should take place during the second quarter of 2007.
APCOA has operations in 13 countries, primarily Germany, Great Britain and Scandinavia. In 2006 APCOA had sales of €489 million ($642.5 million), up 7% on 2005.
Thilo Sautter, head of the German private equity practice at Investcorp: “We are delighted with the sale of APCOA to Eurazeo, after having led the successful transformation of APCOA to the leading European car park operator. Eurazeo is an excellent shareholder for APCOA and will provide APCOA with the necessary resources to continue the international expansion and support the growth strategy initiated under Investcorp’s stewardship.”
Peter Fischer, CEO of APCOA, said: “Over the past three years we have, together with Investcorp, developed and implemented a successful strategy to become the leading European car park operator....Our portfolio is well suited for selective bolt-on acquisitions and our network will benefit from expansion into new markets.”
With more than €6 billion in diversified assets and a market capitalisation of €5.8 billion, Eurazeo is one of the leading listed European investment companies. Eurazeo is a majority or key shareholder in companies such as Europcar, Rexel, B&B Hôtels and ANF. Eurazeo also holds significant stakes in Danone, Véolia and Air Liquide.
Investcorp is a leading provider and manager of alternative investment products. It has offices in New York, London and Bahrain. Investcorp has five lines of business: private equity, hedge funds, real estate, venture capital and Gulf growth capital. Founded in 1982, Investcorp has grown to become one of the largest and most diverse alternative investment managers in terms of both product offerings and geography. It currently has over $10 billion in invested assets under management.
APCOA has operations in 13 countries, primarily Germany, Great Britain and Scandinavia. In 2006 APCOA had sales of €489 million ($642.5 million), up 7% on 2005.
Thilo Sautter, head of the German private equity practice at Investcorp: “We are delighted with the sale of APCOA to Eurazeo, after having led the successful transformation of APCOA to the leading European car park operator. Eurazeo is an excellent shareholder for APCOA and will provide APCOA with the necessary resources to continue the international expansion and support the growth strategy initiated under Investcorp’s stewardship.”
Peter Fischer, CEO of APCOA, said: “Over the past three years we have, together with Investcorp, developed and implemented a successful strategy to become the leading European car park operator....Our portfolio is well suited for selective bolt-on acquisitions and our network will benefit from expansion into new markets.”
With more than €6 billion in diversified assets and a market capitalisation of €5.8 billion, Eurazeo is one of the leading listed European investment companies. Eurazeo is a majority or key shareholder in companies such as Europcar, Rexel, B&B Hôtels and ANF. Eurazeo also holds significant stakes in Danone, Véolia and Air Liquide.
Investcorp is a leading provider and manager of alternative investment products. It has offices in New York, London and Bahrain. Investcorp has five lines of business: private equity, hedge funds, real estate, venture capital and Gulf growth capital. Founded in 1982, Investcorp has grown to become one of the largest and most diverse alternative investment managers in terms of both product offerings and geography. It currently has over $10 billion in invested assets under management.
16 Feb 2007
Heads of US Hedge Fund Study Group Warn Against Over Regulation
Ben Bernanke, chairman of the US federal reserve, has warned against over regulation of the hedge fund industry. Bernanke said that U.S. authorities must take care not to stifle financial innovation by over-regulating the derivatives and hedge fund industries.
"I would be very reluctant to get involved in heavy-handed, direct regulation of hedge funds," Bernanke told the Senate Banking Committee in response to a question during semi-annual testimony on monetary policy.
"One of their key characteristics is that they are very nimble," Bernanke said. "That is good for the economy, because they help create liquidity in markets, they help to spread risks around more broadly, and a regulatory regime that inhibited that flexibility and nimbleness would eliminate a lot of the economic benefits."
U.S Treasury Secretary Henry Paulson called for market discipline, rather than government regulation, to address risks of the rising global hedge fund business at the G7 meeting. "Market discipline, focusing on risk management of regulated counter parties, is the most effective way to address potential systemic risk concerns."
Paulson and Bernanke work together as heads of the President's Working Group on Financial Markets, working with the Securities and Exchange Commission and the Commodities Futures Trading Commission to study the hedge fund industry. "The group continues to assess developments in markets, disclosure and counterpart risk management," Paulson said.
Paulson also said he's convinced "hedge funds provide considerable benefits to financial markets and our economies," but they also can present potential challenges and risks.
"It is in the U.S. interest to promote a thriving, competitive global hedge fund industry that facilitates price discovery and promotes liquidity in financial markets, while maintaining investor protection and promoting financial stability," Paulson said.
"I would be very reluctant to get involved in heavy-handed, direct regulation of hedge funds," Bernanke told the Senate Banking Committee in response to a question during semi-annual testimony on monetary policy.
"One of their key characteristics is that they are very nimble," Bernanke said. "That is good for the economy, because they help create liquidity in markets, they help to spread risks around more broadly, and a regulatory regime that inhibited that flexibility and nimbleness would eliminate a lot of the economic benefits."
U.S Treasury Secretary Henry Paulson called for market discipline, rather than government regulation, to address risks of the rising global hedge fund business at the G7 meeting. "Market discipline, focusing on risk management of regulated counter parties, is the most effective way to address potential systemic risk concerns."
Paulson and Bernanke work together as heads of the President's Working Group on Financial Markets, working with the Securities and Exchange Commission and the Commodities Futures Trading Commission to study the hedge fund industry. "The group continues to assess developments in markets, disclosure and counterpart risk management," Paulson said.
Paulson also said he's convinced "hedge funds provide considerable benefits to financial markets and our economies," but they also can present potential challenges and risks.
"It is in the U.S. interest to promote a thriving, competitive global hedge fund industry that facilitates price discovery and promotes liquidity in financial markets, while maintaining investor protection and promoting financial stability," Paulson said.
Hedge Fund Survey Shows Established Names Have More Chance of Success
The Absolute Return New Funds Survey for 2006, published in the February issue of Absolute Return magazine, shows that new hedge fund launches in the U.S. slowed for the second year in a row. Last year, the 86 largest hedge fund launches raised $31 billion, down from $34 billion raised by 82 funds during 2005 and $40 billion by 81 funds in 2004.
Most of the launches were in the first six months of the year. But after the equity market meltdown last spring and summer hammered hedge funds, and Amaranth Advisors went bust last fall, raising money got harder for new funds.
Only 29 funds raising at least $50 million - the minimum required to be included in the survey - launched during the second half of the year. These funds raised a mere $6.2 billion, or 20% of the total.
For the year, six new funds raised more than $1 billion. The biggest launch of the year, Convexity Capital, set a new record in terms of assets for its $6.3 billion fund launch last February. Convexity was founded by Jack Meyer, the former Harvard University endowment money manager superstar.
The second largest launch in 2006 was Old Lane Management’s Old Lane fund launched in April with $3.7 billion. It finished the year with roughly the same amount. The giant multistrategy fund’s founders include Vikram Pandit, John Havens and Guru Ramakrishnan - a high-profile trio from Morgan Stanley.
A closer look at the alpha-pack points to two ongoing themes: Billion-dollar megalaunches are alive and well - but only for the right pedigree. Seven of the top ten launches were new funds by established players, more evidence that the big, established names will continue to get bigger.
The trend for larger megalaunches in the past few years is likely to continue if institutional investors - pensions and endowments more so than funds of funds - continue to wade into hedge funds.
Most of the launches were in the first six months of the year. But after the equity market meltdown last spring and summer hammered hedge funds, and Amaranth Advisors went bust last fall, raising money got harder for new funds.
Only 29 funds raising at least $50 million - the minimum required to be included in the survey - launched during the second half of the year. These funds raised a mere $6.2 billion, or 20% of the total.
For the year, six new funds raised more than $1 billion. The biggest launch of the year, Convexity Capital, set a new record in terms of assets for its $6.3 billion fund launch last February. Convexity was founded by Jack Meyer, the former Harvard University endowment money manager superstar.
The second largest launch in 2006 was Old Lane Management’s Old Lane fund launched in April with $3.7 billion. It finished the year with roughly the same amount. The giant multistrategy fund’s founders include Vikram Pandit, John Havens and Guru Ramakrishnan - a high-profile trio from Morgan Stanley.
A closer look at the alpha-pack points to two ongoing themes: Billion-dollar megalaunches are alive and well - but only for the right pedigree. Seven of the top ten launches were new funds by established players, more evidence that the big, established names will continue to get bigger.
The trend for larger megalaunches in the past few years is likely to continue if institutional investors - pensions and endowments more so than funds of funds - continue to wade into hedge funds.
14 Feb 2007
G7 Meeting Calls for Closer Monitoring of Hedge Funds
The two-day G7 meeting in Essen concluded with a call for the monitoring of hedge funds worldwide and urged talks with the industry. They said energy efficiency and diversification, particularly renewable forms, remains an economic priority. They also reiterated concerns about volatility in foreign exchange markets.
The G7 is comprised of official representatives from Britain, Canada, France, Germany, Italy, Japan, and the United States. The group released their conclusion that the world's major developed economies show solid growth, but foreign exchange fluctuations, the rising power of hedge funds and dwindling energy supplies are a concern.
"We are confident that the implications of these developments will be recognized by market participants and will be incorporated into their assessment of risks," the statement said, which was released after the G-7 participants ended their two-day meeting.
"Given the strong growth of the hedge fund industry and the instruments they trade, we need to be vigilant," the statement added, also saying that the group will talk with the private sector and hedge fund operators and would ask the Financial Stability Forum to update its 2000 report on hedge funds.
The G7 is comprised of official representatives from Britain, Canada, France, Germany, Italy, Japan, and the United States. The group released their conclusion that the world's major developed economies show solid growth, but foreign exchange fluctuations, the rising power of hedge funds and dwindling energy supplies are a concern.
"We are confident that the implications of these developments will be recognized by market participants and will be incorporated into their assessment of risks," the statement said, which was released after the G-7 participants ended their two-day meeting.
"Given the strong growth of the hedge fund industry and the instruments they trade, we need to be vigilant," the statement added, also saying that the group will talk with the private sector and hedge fund operators and would ask the Financial Stability Forum to update its 2000 report on hedge funds.
Investcorp Launches Early Stage Fund for Hedge Fund Investors
Investcorp, the global asset manager specializing in alternative investments with a $5 billion hedge fund program, has announced the launch of the Investcorp Early Stage Fund.
Early stage funds are typically set up by experienced money managers who have recently left other hedge funds or investment banks, or by managers who have existing hedge funds and are launching a new vehicle to focus on different strategies.
The initial portfolio will be composed of approximately 15-20 managers with targeted returns of 12-14% with annualized volatility of 5-7% over the medium term. The fund offers quarterly liquidity with a one-year lock up period.
Deepak Gurnani, Managing Director and co-head of the Investcorp Hedge Funds program said: "The Early Stage Fund is a unique investment opportunity which provides access to promising early stage funds, while minimizing the potential issues investors face in investing with such funds. Investors will have the benefit of immediate diversification, with quarterly liquidity and an anticipated attractive return and volatility relationship over the medium term."
Since 1996, Investcorp has invested with more than 50 hedge funds within the first 12 months of their launch and now manage approximately $1 billion in early stage investments.
Early stage funds are typically set up by experienced money managers who have recently left other hedge funds or investment banks, or by managers who have existing hedge funds and are launching a new vehicle to focus on different strategies.
The initial portfolio will be composed of approximately 15-20 managers with targeted returns of 12-14% with annualized volatility of 5-7% over the medium term. The fund offers quarterly liquidity with a one-year lock up period.
Deepak Gurnani, Managing Director and co-head of the Investcorp Hedge Funds program said: "The Early Stage Fund is a unique investment opportunity which provides access to promising early stage funds, while minimizing the potential issues investors face in investing with such funds. Investors will have the benefit of immediate diversification, with quarterly liquidity and an anticipated attractive return and volatility relationship over the medium term."
Since 1996, Investcorp has invested with more than 50 hedge funds within the first 12 months of their launch and now manage approximately $1 billion in early stage investments.
13 Feb 2007
SEC slammed over hedge fund 'wealth' test
Everyone, from politicians to the press, both here and abroad, has been shrieking in increasing apocalyptic terms about the myriad dangers that big, bad hedge funds pose to poor, small investors. Why not protect those poor, small non-accredited and presumably unnatural people from themselves? Heh, here are some answers from those "unnatural people"
read more | digg story
read more | digg story
F&C To Launch Global Hedge Fund
F&C Asset Management announced on Monday that they are launching a global diversified fixed income hedge fund, called the F&C Tourmaline fund.
The hedge fund is to be run by a team of three, Sanjay Joshi, Rabbani Wahhab and Mario Nicolaou, and quantitative analyst Shilen Shah. They hired the team of fixed income hedge fund managers from London & Capital.
Last month F&C had announced their interest in expanding their hedge fund presence, saying they had plans to increase their investments in hedge funds.
"This is an important development for F&C Alternative Investments and a mark of F&C's ambition to grow our hedge fund presence. We will continue to actively look for further opportunities," Fernando Ribeiro, head of investments, said in a note.
At the end of last month shares in F&C fell heavily after the firm said it would rebase its 2007 dividend to allow increased investment in higher-margin new products.
F&C Management Ltd is a European investment house quoted on the London Stock Exchange with €154.6 billion (over $200 billion) under management and offices throughout Europe.
The hedge fund is to be run by a team of three, Sanjay Joshi, Rabbani Wahhab and Mario Nicolaou, and quantitative analyst Shilen Shah. They hired the team of fixed income hedge fund managers from London & Capital.
Last month F&C had announced their interest in expanding their hedge fund presence, saying they had plans to increase their investments in hedge funds.
"This is an important development for F&C Alternative Investments and a mark of F&C's ambition to grow our hedge fund presence. We will continue to actively look for further opportunities," Fernando Ribeiro, head of investments, said in a note.
At the end of last month shares in F&C fell heavily after the firm said it would rebase its 2007 dividend to allow increased investment in higher-margin new products.
F&C Management Ltd is a European investment house quoted on the London Stock Exchange with €154.6 billion (over $200 billion) under management and offices throughout Europe.
Hedge Fund Head Ordered to Pay Back $20 Million
The SEC released the details of the fines U.S. District Court Judge Charles Pannell ordered against hedge fund manager Kirk Wright yesterday. Pannell ordered nearly $20 million in fines and penalties for defrauding investors through his hedge fund, International Management Associates LLC.
The judge entered a default judgment against Wright ordering the repayment of $17 million, interest of $2.7 million and an imposed a civil penalty of $120,000, the SEC said in the statement.
Wright's hedge fund came under scrutiny eventually for it's unusually consistent high returns, vague descriptions of investment strategies, aggressive marketing, no auditing, and secretive behavior by the manager.
From 1997 through early 2006, Wright raised as much as $185 million from 500 investors through a "fraudulent scheme" involving seven hedge funds that he managed through IMA, the SEC said in a lawsuit filed a year ago.
Wright was also spending too much for his funds, it was noted, a lavish wedding reception, the $55,000 engagement ring his bride wore, the entertainment suites at Atlanta Falcon football games, Atlanta Hawk basketball games, concerts, a Bentley, a Jaguar, an Aston Martin, a BMW, and a Lamborghini, and as proof of his investment returns, only photocopied spreadsheets.The firm also sent out quarterly statements misrepresenting the amount of money in those funds and their performance.
Wright was arrested in May on mail-fraud charges, He's in an Atlanta detention center awaiting a criminal trial related to the 21 counts of mail fraud and three counts of securities fraud, each carrying a maximum sentence of 20 years behind bars.
Original story; Fake Hedge Funds Cost Investors Millions
The judge entered a default judgment against Wright ordering the repayment of $17 million, interest of $2.7 million and an imposed a civil penalty of $120,000, the SEC said in the statement.
Wright's hedge fund came under scrutiny eventually for it's unusually consistent high returns, vague descriptions of investment strategies, aggressive marketing, no auditing, and secretive behavior by the manager.
From 1997 through early 2006, Wright raised as much as $185 million from 500 investors through a "fraudulent scheme" involving seven hedge funds that he managed through IMA, the SEC said in a lawsuit filed a year ago.
Wright was also spending too much for his funds, it was noted, a lavish wedding reception, the $55,000 engagement ring his bride wore, the entertainment suites at Atlanta Falcon football games, Atlanta Hawk basketball games, concerts, a Bentley, a Jaguar, an Aston Martin, a BMW, and a Lamborghini, and as proof of his investment returns, only photocopied spreadsheets.The firm also sent out quarterly statements misrepresenting the amount of money in those funds and their performance.
Wright was arrested in May on mail-fraud charges, He's in an Atlanta detention center awaiting a criminal trial related to the 21 counts of mail fraud and three counts of securities fraud, each carrying a maximum sentence of 20 years behind bars.
Original story; Fake Hedge Funds Cost Investors Millions
8 Feb 2007
Hedge Funds & Oil Predictions
OilandGasStockNews.com, an investor and industry news portal released the oil and gas trends predicted for hedge funds this year.
In the ‘Insiders Corner" Michael Brush said "Investors had big bets on energy stocks, but now that crude oil has fallen 9% this year and 30% since last summer, hedge funds are heading for the exits. Is there any end in sight?"
Predicting the cold weather trends that have set in, the Insiders Corner also reminded investors of other factors, besides the weather, that support higher energy prices including “Tensions in the Middle East”, but the eerily warm weather in much of the U.S. is about to "turn on a dime," predicts AccuWeather.com forecaster Joe Bastardi.
Michael Brush, author of “Lessons From the Front Line”, is an award winning financial writer that writes a weekly market column for MSN Money as well as the ‘Insiders Corner’ for InvestorIdeas.com Mr. Brush has also covered business and investing for the New York Times, Money magazine and the Economist Group.
As far as where oil is currently trading, Eden Energy Corporation President and CEO Don Sharpe comments, “We expect oil prices to strengthen throughout the remainder of the year as geopolitical risks reemerge due to actions in Nigeria, Iran and other volatile parts of the oil producing world."
OilandGasStockNews.com is a global investor and industry research portal for the oil and gas sector.
In the ‘Insiders Corner" Michael Brush said "Investors had big bets on energy stocks, but now that crude oil has fallen 9% this year and 30% since last summer, hedge funds are heading for the exits. Is there any end in sight?"
Predicting the cold weather trends that have set in, the Insiders Corner also reminded investors of other factors, besides the weather, that support higher energy prices including “Tensions in the Middle East”, but the eerily warm weather in much of the U.S. is about to "turn on a dime," predicts AccuWeather.com forecaster Joe Bastardi.
Michael Brush, author of “Lessons From the Front Line”, is an award winning financial writer that writes a weekly market column for MSN Money as well as the ‘Insiders Corner’ for InvestorIdeas.com Mr. Brush has also covered business and investing for the New York Times, Money magazine and the Economist Group.
As far as where oil is currently trading, Eden Energy Corporation President and CEO Don Sharpe comments, “We expect oil prices to strengthen throughout the remainder of the year as geopolitical risks reemerge due to actions in Nigeria, Iran and other volatile parts of the oil producing world."
OilandGasStockNews.com is a global investor and industry research portal for the oil and gas sector.
Hedge Fund Makes Over $83 Million Off YouTube Sale
The numbers are in, Google revealed in a filing with the Securities and Exchange Commission just how much the hedge fund investors, founders and early employees of YouTube made when it was bought by Google for $1.65 billion last year.
Artis Capital Management, a San Francisco hedge fund was co-investor with Sequoia Capital, the venture capitalists that took a chance with the tiny YouTube project. Artis and several other hedge funds affiliated with them were listed as having received 176,621 shares, valued at $83 million.
Sequoia Capital invested close to $11.5 million in You Tube, is now listed as owning 941,027 shares, which are valued at more than $442 million. The filing also lists Sequoia Capital XI Principals Fund owning 102,376 shares, valued at more than $48 million, and Sequoia Technology Partners XI with 29,724 shares, valued at nearly $14 million. A total of $504 million.
The company's three founders also made extraordinary amounts, YouTube's chief executive Chad Hurley received shares worth more than $345 million. Another founder, Steven Chen, received shares worth more than $326 million. The third founder of YouTube, Jawed Karim, who left the company early on to pursue a graduate degree in computer science, received more than $64 million in shares. Some of these shares have been deposited in trusts for the young founders.
Artis Capital Management, a San Francisco hedge fund was co-investor with Sequoia Capital, the venture capitalists that took a chance with the tiny YouTube project. Artis and several other hedge funds affiliated with them were listed as having received 176,621 shares, valued at $83 million.
Sequoia Capital invested close to $11.5 million in You Tube, is now listed as owning 941,027 shares, which are valued at more than $442 million. The filing also lists Sequoia Capital XI Principals Fund owning 102,376 shares, valued at more than $48 million, and Sequoia Technology Partners XI with 29,724 shares, valued at nearly $14 million. A total of $504 million.
The company's three founders also made extraordinary amounts, YouTube's chief executive Chad Hurley received shares worth more than $345 million. Another founder, Steven Chen, received shares worth more than $326 million. The third founder of YouTube, Jawed Karim, who left the company early on to pursue a graduate degree in computer science, received more than $64 million in shares. Some of these shares have been deposited in trusts for the young founders.
7 Feb 2007
SEC Examines Hedge Fund Tip-Offs
The Securities and Exchange Commission is investigating whether hedge funds are being tipped off about buy and sell orders placed by mutual funds.
The Federal regulators that are conducting the probe, have asked approximately 10 major Wall Street banks for trading information from the last two weeks of September 2006, at the close of the third quarter.
It's become difficult for hedge fund managers to make money without access to sensitive information, so the SEC examiners will try to determine whether big buy and sell orders placed with the banks by mutual funds in that period triggered any suspicious front-running activity in those same stocks by hedge fund managers or other traders.
Lori Richards, director of the SEC's Office of Compliance, Inspections and Examinations, confirmed that her office was looking into the matter. "We're always concerned about information leakage in the market which could harm investors," she said.
Details of the investigation first appeared Tuesday in the New York Times, which said that the SEC request for information had gone out in mid-January.
The Federal regulators that are conducting the probe, have asked approximately 10 major Wall Street banks for trading information from the last two weeks of September 2006, at the close of the third quarter.
It's become difficult for hedge fund managers to make money without access to sensitive information, so the SEC examiners will try to determine whether big buy and sell orders placed with the banks by mutual funds in that period triggered any suspicious front-running activity in those same stocks by hedge fund managers or other traders.
Lori Richards, director of the SEC's Office of Compliance, Inspections and Examinations, confirmed that her office was looking into the matter. "We're always concerned about information leakage in the market which could harm investors," she said.
Details of the investigation first appeared Tuesday in the New York Times, which said that the SEC request for information had gone out in mid-January.
5 Feb 2007
Kennedy Closes Deal With Hedge Fund for 119 Hurricane Struck Homes
Trinity Development Partners along with equity partner Stillwater Capital Partners, a NY-based hedge fund, closed a $23.3 million deal with private lender Kennedy Funding for a waterfront real estate purchase in West Palm Beach, Florida.
The loan comes after back-to-back Hurricanes Frances and Jeanne pounded the area relentlessly in 2004, and Hurricane Wilma added further damage in 2005, turning the 30-story dream community into a nightmare of a business deal for the 119 homes involved.
The hedge fund partners cosed the $23.3 million deal with Kennedy Funding of Hackensack, NJ, borrowing the funds for a complete renovation. Jeffrey Wolfer, President and Co-CEO of Kennedy Funding said, "With this many unique and unusual circumstances, a loan like this wouldn't meet the criteria of traditional lenders.......That's why it's called situational lending-we consider each situation individually and evaluate it as such.
The loan comes after back-to-back Hurricanes Frances and Jeanne pounded the area relentlessly in 2004, and Hurricane Wilma added further damage in 2005, turning the 30-story dream community into a nightmare of a business deal for the 119 homes involved.
The hedge fund partners cosed the $23.3 million deal with Kennedy Funding of Hackensack, NJ, borrowing the funds for a complete renovation. Jeffrey Wolfer, President and Co-CEO of Kennedy Funding said, "With this many unique and unusual circumstances, a loan like this wouldn't meet the criteria of traditional lenders.......That's why it's called situational lending-we consider each situation individually and evaluate it as such.
Stillwater Capital Partners is a provider of alternative investment services with over $600 million in assets under management. The hedge fund performs independent research that provides the potential for clients to preserve and grow their capital using a risk-controlled approach to investing.
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