The events of 2008 were dramatic everywhere in the world, but particularly so in Russia. Despite the decline of -72.2% for the MSCI Index in 2008, the Pharos Russia Fund produced a positive 3 year annualized return of 1.3% with 24.8% volatility as compared to the MSCI Russia Index.
The Pharos Russia Fund's 5 year returns also show a strong outperformance against the MSCI Russia Index. The 11 year period of January 1998 through December 2008, which encompasses two market meltdowns and many other mini-crises, the Pharos Russia Fund has returned a total of 100.33%, against a gain of only 3.81% for the MSCI Russia Index.
"Our long history in the Russian financial markets through good times and bad times helps guide our investment philosophy and makes us mindful of the periodic crises that hit the market," Pharos says, "We seek to maximize our investor's returns over the medium term, and one of the most important aspects of that is to protect against severe losses in times of crisis."
Their flagship fund, Pharos Russia Fund, has been the most resilient performer in the Russia & CIS universe in 2008 and in January 09, Pharos Russia was up +0.4% whereas the Russian market RTS was down -15.3% and the MSCI Russia down -11.6%.
The market conditions in Russia deteriorated in an accelerating fashion once the May holiday revelry had ended. The commodity cycle reversed as economic indicators began to reflect the demand destruction caused by the slowing of credit availability. Waves of deleveraging of the global financial system soon followed. Russia suffered initially as the commodity focused investors sold positions, and again as investors generally sold down positions to reduce leverage. The last victim was the Russian oligarch.
The typical Russian billionaire was in fact a house of cards having taken on massive debt against the assets underlying his personal holdings. The publicly traded assets became subject universally to margin calls by international banks, while private assets found their mezzanine financing had evaporated. The result was a flashpoint in late-September when several of the largest local financial groups had become technically insolvent. The markets were frozen for a couple of days while the government intervened to provide liquidity and arrange shotgun marriages.
By this time, Pharos said, they had adjusted their positions to reflect the bankruptcy of Lehman Brothers and the growing instability of global markets. "While our overlay gave investors protection against a collapsing market, we realized that the fundamental structure of the markets was changing, and that our risk management concerns had to change."
"As the financial crisis continued, we were concerned about other effects on the market. Our experience in the 1998 crisis taught us that markets can get caught in downward spirals. We were particularly concerned that most Russian market players were fully invested and many were highly leveraged. This was a situation ripe for forced selling and further dramatic market declines."
While this tale of misadventure is unsurprising for an emerging market, it has also become the dangerous reality in the US and other developed markets as well, Pharos said.
"In Russia, there are a few key triggers that we are looking for before investing fully into the market. In past letters, we have identified credit normalization and commodity price stabilization as the two necessary, but perhaps not sufficient, conditions for Russia's bear market to end. While we do not expect credit availability to reach the extreme levels of the last few years, basic credit does need to flow again for companies to move out of crisis mode and for trade to resume in a normal manner. The Russian government has taken admirable steps to deal with the shutdown of credit, and after a slow start is now using the large reserves built up during the commodity boom to supply credit to Russian corporations that need help rolling over their debt."
The instability of the Russian markets will continue so long as oil prices remain unstable. At this stage, the oil price determines the fair value of the ruble, which, in turn, dictates the future course of Russia's economic growth, however, Pharos believes that the key to success from here is sizing positions to adjust for volatility, while being prepared to act quickly once signs of stability emerge.
1 Feb 2009
Contributing Factors To Hedge Funds' 2008 Failure
Credit Suisse Tremont Index LLC released a new research piece, 'One for the History Books: Hedge Fund Performance in 2008', a review of the factors which contributed to hedge funds’ dismal -19% return in 2008
The report discusses the impact of events such as the fall of Lehman Brothers, the short sale ban and the scandal surrounding Bernard Madoff, offering insight into the impact of each event on individual sectors and the hedge fund industry as a whole. The piece also offers some comparisons to past market downturns, periods in which strategies saw severe declines in assets under management and how performance was impacted in the years that followed.
Some key takeaways from the report include:
The Broad Index, a diversified, asset weighted hedge fund index comprised of 496 underlying hedge funds (as of December 31, 2008), was down 19% for the year, marking 2008 the worst year in the history of the Broad Index.
It is estimated that the hedge fund industry lost approximately 29% of assets in 2008, totaling $582 billion, representing the first time in six years that the hedge fund industry has seen net asset losses.
One in five funds within the Broad Index posted positive returns for the year, with almost one in seven posting returns in the double digits.
The report discusses the impact of events such as the fall of Lehman Brothers, the short sale ban and the scandal surrounding Bernard Madoff, offering insight into the impact of each event on individual sectors and the hedge fund industry as a whole. The piece also offers some comparisons to past market downturns, periods in which strategies saw severe declines in assets under management and how performance was impacted in the years that followed.
Some key takeaways from the report include:
The Broad Index, a diversified, asset weighted hedge fund index comprised of 496 underlying hedge funds (as of December 31, 2008), was down 19% for the year, marking 2008 the worst year in the history of the Broad Index.
It is estimated that the hedge fund industry lost approximately 29% of assets in 2008, totaling $582 billion, representing the first time in six years that the hedge fund industry has seen net asset losses.
One in five funds within the Broad Index posted positive returns for the year, with almost one in seven posting returns in the double digits.
30 Jan 2009
Hedge Fund Manager to Appear in Court
Hedge fund manager Arthur Nadel is scheduled for a bail hearing in federal court in Tampa this afternoon.
Nadel faces a federal charge of securities and wire fraud after using “manipulative and deceptive devices” to bilk investors out of hundreds of millions. Shortly after the infamous arrest of Bernard Madoff, Nadel’s family reported him missing on January 14.
The day Nadel disappeared, he was expected to disburse $50 million in redemptions to investors from the six total funds he managed. Nadel reportedly wrote a letter to his wife before he missing.
According to the criminal complaint, Nadel’s fraud dates back to at least 2003 and has affected over 100 victims nationwide. There is also a civil complaint filed against Nadel by the U.S. Securities and Exchange Commission, who alleges that he transferred $1.25 million into secret bank accounts.
Nadel faces a federal charge of securities and wire fraud after using “manipulative and deceptive devices” to bilk investors out of hundreds of millions. Shortly after the infamous arrest of Bernard Madoff, Nadel’s family reported him missing on January 14.
The day Nadel disappeared, he was expected to disburse $50 million in redemptions to investors from the six total funds he managed. Nadel reportedly wrote a letter to his wife before he missing.
According to the criminal complaint, Nadel’s fraud dates back to at least 2003 and has affected over 100 victims nationwide. There is also a civil complaint filed against Nadel by the U.S. Securities and Exchange Commission, who alleges that he transferred $1.25 million into secret bank accounts.
29 Jan 2009
Green Alternative Investment Software To Be Developed
CommodityPoint, a utilities analyst and consulting firm of UtiliPoint International, is partnering with Global Change Associates, convergence of energy and environmental financial markets specialist, to undertake a multi-client research project and to produce a study report around emissions trading & monitoring software.
“Green trading has now become established and various 'green' commodities are now actively traded by a variety of participants including carbon, SOx and Nox as well as RECs (Renwable Energy Credits). Investor interest in trading these commodities is at an all time high. Consequently there is a growing demand for software products that will support these trading and risk management activities as well as in those software products that monitor and help manage emissions," said Dr. Gary M. Vasey of CommodityPoint. "Indeed, as forecast in our book 'Trends in Energy Trading, Transaction and Risk Management Software - a Primer' (Booksurge, 2006), these two software categories are morphing as the two software markets collide."
“The emerging greenhouse gas market is now ripe for software solutions on an enterprise level. Today, the environmental software space is quite small. It is estimated at $100 million with many small companies developing and extending their domain expertise into this area and beyond energy company applications (energy companies have had to comply with environmental laws in many jurisdictions for over a decade),“ said Mr. Peter C. Fusaro of Global Change Associates Inc.“The need to measure and manage greenhouse gas emissions data is becoming a new area of business development for software companies especially with impending federal greenhouse gas laws in the United States."
“Green trading has now become established and various 'green' commodities are now actively traded by a variety of participants including carbon, SOx and Nox as well as RECs (Renwable Energy Credits). Investor interest in trading these commodities is at an all time high. Consequently there is a growing demand for software products that will support these trading and risk management activities as well as in those software products that monitor and help manage emissions," said Dr. Gary M. Vasey of CommodityPoint. "Indeed, as forecast in our book 'Trends in Energy Trading, Transaction and Risk Management Software - a Primer' (Booksurge, 2006), these two software categories are morphing as the two software markets collide."
“The emerging greenhouse gas market is now ripe for software solutions on an enterprise level. Today, the environmental software space is quite small. It is estimated at $100 million with many small companies developing and extending their domain expertise into this area and beyond energy company applications (energy companies have had to comply with environmental laws in many jurisdictions for over a decade),“ said Mr. Peter C. Fusaro of Global Change Associates Inc.“The need to measure and manage greenhouse gas emissions data is becoming a new area of business development for software companies especially with impending federal greenhouse gas laws in the United States."
28 Jan 2009
Deephaven's Hedge Fund Bought by Stark Investments
Deephaven Capital Management signed a deal on Tuesday to sell the assets of its flagship hedge fund, Knight Capital Group Inc., to Stark Investments.
The founders, Brian Stark and Mike Roth, will give Deephaven investors the option to become investors in Stark Funds by contributing their share of their Deephaven Fund portfolio positions, they said in a letter to shareholders. Deephaven in October suspended withdrawals from its $1.6 billion Deephaven Global Multi-Strategy funds after being overwhelmed by investor redemption requests.
"We believe this agreement is advantageous for Stark's and Deephaven's investors, and we are excited about the prospect of retaining their high quality investor base," Mike Roth said, "In strategically managing the business, we have put ourselves in a position to capitalize upon these types of situations. We will continue to be on the lookout for additional opportunities that complement our strategic plan and strengthen our organization."
Stark has headquarters in Milwaukee, Miami, London and Hong Kong.
The founders, Brian Stark and Mike Roth, will give Deephaven investors the option to become investors in Stark Funds by contributing their share of their Deephaven Fund portfolio positions, they said in a letter to shareholders. Deephaven in October suspended withdrawals from its $1.6 billion Deephaven Global Multi-Strategy funds after being overwhelmed by investor redemption requests.
"We believe this agreement is advantageous for Stark's and Deephaven's investors, and we are excited about the prospect of retaining their high quality investor base," Mike Roth said, "In strategically managing the business, we have put ourselves in a position to capitalize upon these types of situations. We will continue to be on the lookout for additional opportunities that complement our strategic plan and strengthen our organization."
Stark has headquarters in Milwaukee, Miami, London and Hong Kong.
27 Jan 2009
Eze & Reuters Sponsor Obama Hedge Fund Strategy Panel
Hedge fund tech. provider Eze Castle Integration and Thomson Reuters are sponsoring a panel to discuss hedge fund strategies and regulatory considerations for the Obama administration, the 'Obama Administration & Hedge Fund Strategies panel'.
Hedge funds and investment firms are discussing whether the Obama administration will have a positive or negative impact on existing hedge fund strategies.
Moderated by Daniel Burns, Reuters U.S. Financial Markets Editor, the panel also includes Reuters correspondents Jeff Mason and Jennifer Ablan and hedge fund managers Dan Castro, Chief Risk Officer of Huxley Capital and Theresa R. Patti, CFA, Managing Director of QFS Asset Management.
The Obama Administration & Hedge Fund Strategies panel will take place in New York City on Wednesday, January 28, from 5:30 – 7:30 p.m., at the Thomson Reuters office at 3 Times Square, New York.
Hedge funds and investment firms are discussing whether the Obama administration will have a positive or negative impact on existing hedge fund strategies.
Moderated by Daniel Burns, Reuters U.S. Financial Markets Editor, the panel also includes Reuters correspondents Jeff Mason and Jennifer Ablan and hedge fund managers Dan Castro, Chief Risk Officer of Huxley Capital and Theresa R. Patti, CFA, Managing Director of QFS Asset Management.
The Obama Administration & Hedge Fund Strategies panel will take place in New York City on Wednesday, January 28, from 5:30 – 7:30 p.m., at the Thomson Reuters office at 3 Times Square, New York.
Eurekahedge Forecasts More Hedge Fund Launches in 2009
Hedge funds returned a healthy 1% in January, wrapping up a tumultuous 2008 at -12.3%, according to Eurekahedge. Hedge fund assets fell $380 billion or 20% in 2008, from just under $1.9 trillion to just over $1.5 trillion.
Eurekahedge's forecast expects to see more hedge fund start-ups in the near future, given the increasing number of people moving out of investment banks (whether voluntarily or otherwise) to venture into the hedge fund space.
In terms of returns, hedge funds are in a better position to generate superior returns than most other conventional managers and market players, owing to the flexibility that hedge fund managers enjoy, the Eurekahedge report says, their ability to identify new trends and investment ideas and act on them promptly.
"We anticipate trend-following strategies to continue benefiting from market movements across the currency and commodity markets, as they had through most of 2008. We expect the equity markets to remain volatile and range-bound over the next few months, but long/short managers could potentially benefit from pockets of opportunities (even if short-term ones) on both the long and the short side, given the uncertainty around the 4Q08 earnings reports and deeply discounted valuations across most sectors."
Eurekahedge's forecast expects to see more hedge fund start-ups in the near future, given the increasing number of people moving out of investment banks (whether voluntarily or otherwise) to venture into the hedge fund space.
In terms of returns, hedge funds are in a better position to generate superior returns than most other conventional managers and market players, owing to the flexibility that hedge fund managers enjoy, the Eurekahedge report says, their ability to identify new trends and investment ideas and act on them promptly.
"We anticipate trend-following strategies to continue benefiting from market movements across the currency and commodity markets, as they had through most of 2008. We expect the equity markets to remain volatile and range-bound over the next few months, but long/short managers could potentially benefit from pockets of opportunities (even if short-term ones) on both the long and the short side, given the uncertainty around the 4Q08 earnings reports and deeply discounted valuations across most sectors."
FX Trading Grows 250% as Investors Look For Alternative to Hedge Fund Trading
Deutsche Bank's foreign exchange (FX) trading platform, dbFX.com, reported a surge in customer numbers in 2008 as FX grew as an asset class of choice for investors amid the financial crisis.
The trading platform saw customer numbers increase by over 250%, as investors looked to FX as an alternative, and uncorrelated, asset class to equities and bonds. Volumes also notably increased from 2007, as investors took advantage of significant volatility in the market.
From a currency perspective, the EUR/USD was the most popular currency pair on the platform accounting for 41% of all trades, versus 20% of volume the previous year.
"Retail FX’s popularity as an asset class truly soared in 2008 from a customer and trading perspective," Betsy Waters, Global Director of dbFX.com, commented, "Looking ahead, we’re very bullish about the long term prospects for retail FX. As active traders become disenchanted with the equity markets they will turn to the FX markets for trading opportunities. In many countries, retail traders can only buy and hold equities, while FX markets offer the ability to buy and sell currencies based on your market views."
"Ultimately, FX is proven to be uncorrelated to bond and equity markets so it’s no surprise that retail investors are looking to FX, which is a proven asset class with institutional investors as a means of generating returns.” Waters concluded.
The trading platform saw customer numbers increase by over 250%, as investors looked to FX as an alternative, and uncorrelated, asset class to equities and bonds. Volumes also notably increased from 2007, as investors took advantage of significant volatility in the market.
From a currency perspective, the EUR/USD was the most popular currency pair on the platform accounting for 41% of all trades, versus 20% of volume the previous year.
"Retail FX’s popularity as an asset class truly soared in 2008 from a customer and trading perspective," Betsy Waters, Global Director of dbFX.com, commented, "Looking ahead, we’re very bullish about the long term prospects for retail FX. As active traders become disenchanted with the equity markets they will turn to the FX markets for trading opportunities. In many countries, retail traders can only buy and hold equities, while FX markets offer the ability to buy and sell currencies based on your market views."
"Ultimately, FX is proven to be uncorrelated to bond and equity markets so it’s no surprise that retail investors are looking to FX, which is a proven asset class with institutional investors as a means of generating returns.” Waters concluded.
26 Jan 2009
Hedge Fund Operational Due Diligence - Book Review
Informative book by Jason Scharfman on, well, pretty much everything you need to run a hedge fund, from risk management to disaster recovery, all need-to-know material for both investors and hedge fund analysts.
Included are examples of past hedge fund management mistakes, showing exactly where the managers went wrong, and how to avoid downfalls such as the ‘but everyone is doing it’ excuse, among others.
Technical though understandable, Scharfman also expains the reliance on technology that is becoming ever more apparent in hedge funds, the dangers of phantomware, and questions that should be asked before commiting to any new technology.
I liked this book for the simple reason that it explains just about everything, almost like a handbook, the index makes an excellent resource.
Since writing the book he has left his position at Morgan Stanley and now runs an operational due diligence consulting firm called Corgentum Consulting. Corgentum works with hedge funds and investors to diagnose and mitigate operational risk at hedge funds and improve upon the of the operational due diligence process.
Available at Amazon
Included are examples of past hedge fund management mistakes, showing exactly where the managers went wrong, and how to avoid downfalls such as the ‘but everyone is doing it’ excuse, among others.
Technical though understandable, Scharfman also expains the reliance on technology that is becoming ever more apparent in hedge funds, the dangers of phantomware, and questions that should be asked before commiting to any new technology.
I liked this book for the simple reason that it explains just about everything, almost like a handbook, the index makes an excellent resource.
Since writing the book he has left his position at Morgan Stanley and now runs an operational due diligence consulting firm called Corgentum Consulting. Corgentum works with hedge funds and investors to diagnose and mitigate operational risk at hedge funds and improve upon the of the operational due diligence process.
Available at Amazon
Gates Donates Despite Economic Distress
In a letter scheduled to be released today, January 26th, Bill Gates is offering insight to the world both about the current financial crisis as well as what his foundation has been able to do despite it.
Matthew Bishop, New York Bureau Chief and American Business Editor for The Economist conducted the interview, where Gates said his foundation’s assets may be shrinking, but it is increasing its giving in 2009, from $3.3 billion last year to $3.8 billion—the biggest ever annual budget for a charitable foundation.
Much of this will go towards finding ways to reduce deaths from the 20 diseases that kill the most people in poor countries, according to the Economist. Gates has high hopes that the number of children who die each year can be cut by half, to 5m, within 20 years, just as it was cut by half in the past half-century. Polio will soon be eradicated, he believes, and deaths from malaria can fall by half by 2015.
In a year of economic distress and record losses, optimism and generosity are still central to Gates, he says in the interview. With projected increases in giving in 2009, The Bill and Melinda Gates Foundation will continue to focus on healthcare issues around the world as well as education reforms.
Similarly, he says he is optimistic that Barack Obama’s administration will make progress on school reform, pointing to the extra spending on schools contained in Mr Obama’s economic stimulus package and the fact that the new education secretary, Arne Duncan, welcomed Gates-funded charter schools in Chicago.
Matthew Bishop, New York Bureau Chief and American Business Editor for The Economist conducted the interview, where Gates said his foundation’s assets may be shrinking, but it is increasing its giving in 2009, from $3.3 billion last year to $3.8 billion—the biggest ever annual budget for a charitable foundation.
Much of this will go towards finding ways to reduce deaths from the 20 diseases that kill the most people in poor countries, according to the Economist. Gates has high hopes that the number of children who die each year can be cut by half, to 5m, within 20 years, just as it was cut by half in the past half-century. Polio will soon be eradicated, he believes, and deaths from malaria can fall by half by 2015.
In a year of economic distress and record losses, optimism and generosity are still central to Gates, he says in the interview. With projected increases in giving in 2009, The Bill and Melinda Gates Foundation will continue to focus on healthcare issues around the world as well as education reforms.
Similarly, he says he is optimistic that Barack Obama’s administration will make progress on school reform, pointing to the extra spending on schools contained in Mr Obama’s economic stimulus package and the fact that the new education secretary, Arne Duncan, welcomed Gates-funded charter schools in Chicago.
23 Jan 2009
EUEC Workshop fo Carbon Hedge Funds
Two prominent carbon and CDM Experts, Peter C. Fusaro, Dr. Prabhu Dayal are presenting the 'EUEC 2009' in Phoenix, Arizona, the Carbon Trading course includes practical case studies for the design and development of CDM Projects and Certified Emission Reductions (CERs).
Aletrnative investment strategist, Global Change Associates, says the workshop will provide insights on the state of carbon trading markets and finance in the US and Europe and what some of the investment opportunities are in this emerging asset class for investors.
Case studies of renewable energy projects being developed by C TRADE in the Philippines will be used to illustrate the certification process for CERs, where methane gas emissions are avoided and electric power generated using waste methane bio-digester gas recovered from animal manure.
Fusaro is a Global Change Associates carbon expert and best selling author of "What Went Wrong at Enron", Dayal is President of C TRADE and Chair for EUEC.
Aletrnative investment strategist, Global Change Associates, says the workshop will provide insights on the state of carbon trading markets and finance in the US and Europe and what some of the investment opportunities are in this emerging asset class for investors.
Case studies of renewable energy projects being developed by C TRADE in the Philippines will be used to illustrate the certification process for CERs, where methane gas emissions are avoided and electric power generated using waste methane bio-digester gas recovered from animal manure.
Fusaro is a Global Change Associates carbon expert and best selling author of "What Went Wrong at Enron", Dayal is President of C TRADE and Chair for EUEC.
Veteran of U.S. Secret Service Heads Up AlphaMetrix’s Financial Investigations Group
To root out fraud and to give investors increased confidence that their assets are being managed with institutions of integrity and honesty, AlphaMetrix formally introduced AlphaMetrix Financial Investigations, LLC, run by David Fisher, a 24-year veteran of the US Secret Service.
AlphaMetrix is a research and investment platform for managed futures and other liquid alpha strategies with approximately $1.7 billion on the platform.
“Under David's leadership, the alternative investment company seeks to set a new standard for the due diligence on financial institutions,” the company said in a letter received by HedgeCo, “first focusing on those on the AlphaMetrix platform, and later as a third-party provider of due diligence services.”
Fisher has a strong domestic and international investigative background in financial fraud, background investigations, security planning and electronic crimes. In addition to responsibilities associated with the Secret Service’s well-known role protecting the President, Vice President and visiting Heads of State, Fisher also brings extensive experience from the agency’s core investigative mission into financial institution fraud, computer and telecommunications fraud, false identification documents, access device fraud, advance fee fraud, electronic funds transfers and money laundering.
“AlphaMetrix has always been known for our deep trading manager research capabilities, and the new Financial Investigations group takes that to an even higher level, with comprehensive background checks and reviews of operational risk,” said Aleks Kins, CEO of AlphaMetrix.
“This type of due diligence work takes a consummate professional, so we are particularly excited to have someone of David Fisher’s caliber on board to build AlphaMetrix Financial Investigations into a thriving organization,” he added.
AlphaMetrix is a research and investment platform for managed futures and other liquid alpha strategies with approximately $1.7 billion on the platform.
“Under David's leadership, the alternative investment company seeks to set a new standard for the due diligence on financial institutions,” the company said in a letter received by HedgeCo, “first focusing on those on the AlphaMetrix platform, and later as a third-party provider of due diligence services.”
Fisher has a strong domestic and international investigative background in financial fraud, background investigations, security planning and electronic crimes. In addition to responsibilities associated with the Secret Service’s well-known role protecting the President, Vice President and visiting Heads of State, Fisher also brings extensive experience from the agency’s core investigative mission into financial institution fraud, computer and telecommunications fraud, false identification documents, access device fraud, advance fee fraud, electronic funds transfers and money laundering.
“AlphaMetrix has always been known for our deep trading manager research capabilities, and the new Financial Investigations group takes that to an even higher level, with comprehensive background checks and reviews of operational risk,” said Aleks Kins, CEO of AlphaMetrix.
“This type of due diligence work takes a consummate professional, so we are particularly excited to have someone of David Fisher’s caliber on board to build AlphaMetrix Financial Investigations into a thriving organization,” he added.
22 Jan 2009
Novices Given $1 Million to Start a Hedge Fund on TV
Avanta is making its UK television debut with Million Dollar Traders on BBC2. Aired for 3 weeks in January, the series will play out at Avanta's Austin Friars business centre in London.
The program gives eight ordinary people a million dollars and two weeks of intensive training to help prepare them to launch their own hedge fund and try to make their fortune in the stocks and shares market.
The traders set up camp in one of the buildings grade A office suites, buying and selling in the stock market in an attempt to make their millions.
Avanta was formed in 2004 by David Alberto, previously with Regus and former Managing Director at MWB Business Exchange. The company offers unbranded office space with advanced and competitively priced technology. In the UK it currently manages over 670,000 sq ft of office space in prime locations in London, the Thames Valley, Manchester, Birmingham and Edinburgh. Avanta’s first international business centre in New Delhi, India opened in September 2008 and a further two centres are now open in Mumbai.
The program gives eight ordinary people a million dollars and two weeks of intensive training to help prepare them to launch their own hedge fund and try to make their fortune in the stocks and shares market.
The traders set up camp in one of the buildings grade A office suites, buying and selling in the stock market in an attempt to make their millions.
Avanta was formed in 2004 by David Alberto, previously with Regus and former Managing Director at MWB Business Exchange. The company offers unbranded office space with advanced and competitively priced technology. In the UK it currently manages over 670,000 sq ft of office space in prime locations in London, the Thames Valley, Manchester, Birmingham and Edinburgh. Avanta’s first international business centre in New Delhi, India opened in September 2008 and a further two centres are now open in Mumbai.
Fidelity Launches Indian Fund of Hedge Funds
Fidelity International is launching the Fidelity Wealth Builder Fund through it's Indian asset management arm, the new fund is an open ended fund of funds scheme offering asset allocation options with three plans.
The investment objective of the fund is to seek to generate reasonable returns based on the plan selected with minimum and maximum asset allocation between debt and equity. The fund manager will use a two-tier investment approach – asset allocation and fund selection – to invest in Fidelity’s funds. The NFO will be open from January 14 to February 5, 2009. The Fund will open for ongoing purchases and redemptions from March 2, 2009
“Asset allocation decisions can drive as much as 91.5% of investment returns variability, as studies have shown." Ashu Suyash, Managing Director and Country Head - India, Fidelity International, said, "In the current market conditions of heightened volatility, a fund like the Fidelity Wealth Builder Fund provides investors a convenient route to benefit from disciplined asset allocation. We are in an environment where attractive returns are likely in the bond market and there is potential for bear-market rallies in equities on the back of increasingly attractive valuations.”
Ms. Suyash added, “To encourage investors who have turned risk averse, the Fidelity Wealth Builder Fund is a fund with no entry load. Whether investors invest through their advisers or directly, they will not be charged an entry load. Moreover, the Fund also offers investors free switch-in and switch-out facility between the Plans, if, over time, investors’ outlook for debt and equity changes.”
The Fund will offer Growth and Dividend options. A dividend is proposed to be declared, subject to availability of distributable surplus, on a Quarterly basis under Plan A and Plan B. Under Plan C, the dividend may be declared by the Trustee, at its discretion, from time to time subject to the availability of distributable surplus.
The minimum initial investment is Rs.5000.($100K )Investors can invest in the Fidelity Wealth Builder Fund even through the SIP route with a minimum amount of Rs. 500 per installment with the total of all installments not being less than Rs.5000. In addition, the systematic transfer and systematic withdrawal plans are also available.
FIL Fund Management Private Limited is the Indian arm of Fidelity International, one of the world's leading global investment management companies with operations in 23 countries and more than $197.9 billion in assets under management.
The investment objective of the fund is to seek to generate reasonable returns based on the plan selected with minimum and maximum asset allocation between debt and equity. The fund manager will use a two-tier investment approach – asset allocation and fund selection – to invest in Fidelity’s funds. The NFO will be open from January 14 to February 5, 2009. The Fund will open for ongoing purchases and redemptions from March 2, 2009
“Asset allocation decisions can drive as much as 91.5% of investment returns variability, as studies have shown." Ashu Suyash, Managing Director and Country Head - India, Fidelity International, said, "In the current market conditions of heightened volatility, a fund like the Fidelity Wealth Builder Fund provides investors a convenient route to benefit from disciplined asset allocation. We are in an environment where attractive returns are likely in the bond market and there is potential for bear-market rallies in equities on the back of increasingly attractive valuations.”
Ms. Suyash added, “To encourage investors who have turned risk averse, the Fidelity Wealth Builder Fund is a fund with no entry load. Whether investors invest through their advisers or directly, they will not be charged an entry load. Moreover, the Fund also offers investors free switch-in and switch-out facility between the Plans, if, over time, investors’ outlook for debt and equity changes.”
The Fund will offer Growth and Dividend options. A dividend is proposed to be declared, subject to availability of distributable surplus, on a Quarterly basis under Plan A and Plan B. Under Plan C, the dividend may be declared by the Trustee, at its discretion, from time to time subject to the availability of distributable surplus.
The minimum initial investment is Rs.5000.($100K )Investors can invest in the Fidelity Wealth Builder Fund even through the SIP route with a minimum amount of Rs. 500 per installment with the total of all installments not being less than Rs.5000. In addition, the systematic transfer and systematic withdrawal plans are also available.
FIL Fund Management Private Limited is the Indian arm of Fidelity International, one of the world's leading global investment management companies with operations in 23 countries and more than $197.9 billion in assets under management.
Morningstar Reviews 2008's Losses and Gains
In their summary of hedge fund performance for the fourth quarter and full year of 2008 as well as asset flows through November, Morningstar reported that 2008's low returns wiped out the last two years gains.
Investors lost their appetite for hedge funds in 2008, Morningstar says, as the vehicles intended to deliver absolute returns were forced to resort to relative claims of success.
"In 2008, hedge fund managers generally failed to deliver," said Morningstar Hedge Fund Analyst Nadia Papagiannis. "The average hedge fund may have lost less than the stock market, thanks in part to large cash allocations, but this level of performance was not why investors agreed to pay 2% management fees and 20% performance fees."
Hedge fund inflows peaked in June 2007 and bottomed in October 2008, when more than $21 billion left the industry. In November 2008, another $19.4 billion flowed out of hedge funds, setting the year-to-date outflows at more than $44 billion.
The number of funds dropping out of Morningstar`s database increased more than 150% in 2008 from 2007—1,158 single-manager funds and 490 funds of funds were removed in 2008 compared to 434 single-manager funds and 208 funds of funds in 2007. (Funds are removed from Morningstar’s database if the fund liquidates, if the manager wishes to stop reporting returns, or if funds fail to report returns for six months.)
Emerging market equities proved to be the worst strategy in 2008, along with convertible arbitrage funds, which took a big hit in 2008.
The best-performing strategy this year was global trend following, a systematic strategy that tracks price trends in liquid derivatives such as futures, options, and currency forwards.
Morningstar has approximately 8,400 hedge funds and funds of hedge funds in its database.
Investors lost their appetite for hedge funds in 2008, Morningstar says, as the vehicles intended to deliver absolute returns were forced to resort to relative claims of success.
"In 2008, hedge fund managers generally failed to deliver," said Morningstar Hedge Fund Analyst Nadia Papagiannis. "The average hedge fund may have lost less than the stock market, thanks in part to large cash allocations, but this level of performance was not why investors agreed to pay 2% management fees and 20% performance fees."
Hedge fund inflows peaked in June 2007 and bottomed in October 2008, when more than $21 billion left the industry. In November 2008, another $19.4 billion flowed out of hedge funds, setting the year-to-date outflows at more than $44 billion.
The number of funds dropping out of Morningstar`s database increased more than 150% in 2008 from 2007—1,158 single-manager funds and 490 funds of funds were removed in 2008 compared to 434 single-manager funds and 208 funds of funds in 2007. (Funds are removed from Morningstar’s database if the fund liquidates, if the manager wishes to stop reporting returns, or if funds fail to report returns for six months.)
Emerging market equities proved to be the worst strategy in 2008, along with convertible arbitrage funds, which took a big hit in 2008.
The best-performing strategy this year was global trend following, a systematic strategy that tracks price trends in liquid derivatives such as futures, options, and currency forwards.
Morningstar has approximately 8,400 hedge funds and funds of hedge funds in its database.
21 Jan 2009
GLG Partners Adds Pendragon Hedge Fund Managers
Global alternative asset manager, GLG Partners LP, is teaming up with two of the founding partners of London hedge fund Pendragon Capital, Kaveh Sheibani and Julian Harvey Wood, to focus on event driven strategies.
In addition, GLG Partners LP will become the investment manager of the funds and accounts managed by Pendragon Capital. Before founding and managing Pendragon Capital with Gordon Lawson, Kaveh and Julian had worked together managing European proprietary trading in equities at Salomon Brothers (subsequently Citigroup).
"Kaveh and Julian are both highly experienced, event driven professionals and we expect that this team will greatly enhance and expand GLG's own event driven franchise," Emmanuel Roman, Co-CEO of GLG commented.
As of September 30, 2008, GLG managed net AUM of over $17 billion.
In addition, GLG Partners LP will become the investment manager of the funds and accounts managed by Pendragon Capital. Before founding and managing Pendragon Capital with Gordon Lawson, Kaveh and Julian had worked together managing European proprietary trading in equities at Salomon Brothers (subsequently Citigroup).
"Kaveh and Julian are both highly experienced, event driven professionals and we expect that this team will greatly enhance and expand GLG's own event driven franchise," Emmanuel Roman, Co-CEO of GLG commented.
As of September 30, 2008, GLG managed net AUM of over $17 billion.
20 Jan 2009
Independent Hedge Fund Management Key to Investor Trust
The recent wave of scandal related to hedge funds and funds of funds has made investors think twice about investing in self-administrated funds, see 'Andrew Schneider on Nadel Funds'.
Dermot Butler, Chairman of alternative fund administrator, Custom House Group, said, “In today’s new investment environment, more than ever hedge funds and funds-of-funds must have independent outside administrators as a foundation to help rebuild investor confidence and attract new investment capital.”
Fund administrators, such as the $35 billion Custom House Group, provide a range of services to funds and fund-of-funds including (but not limited to), fund accounting, portfolio valuation, NAV calculation and shareholder services as well as anti-money laundering services and reconciliation services and record-keeping functions.
“In anything less than an independent fund administration relationship, there is at the very least a perception that a conflict of interest may exist that could prevent objective verification of a fund’s investment activities and even the existence of underlying assets in a given fund, let alone an objective and accurate valuation of the fund's assets,” Butler said. “This perceived conflict may occur when an outside administrator is affiliated with a financial institution, with an investment manager, or when the administrator is associated with a hedge fund itself.”
“As stand-alone companies, independent administrators have no affiliations to any outside financial entities, et ergo, no such conflicts exist,” he concluded.
Dermot Butler, Chairman of alternative fund administrator, Custom House Group, said, “In today’s new investment environment, more than ever hedge funds and funds-of-funds must have independent outside administrators as a foundation to help rebuild investor confidence and attract new investment capital.”
Fund administrators, such as the $35 billion Custom House Group, provide a range of services to funds and fund-of-funds including (but not limited to), fund accounting, portfolio valuation, NAV calculation and shareholder services as well as anti-money laundering services and reconciliation services and record-keeping functions.
“In anything less than an independent fund administration relationship, there is at the very least a perception that a conflict of interest may exist that could prevent objective verification of a fund’s investment activities and even the existence of underlying assets in a given fund, let alone an objective and accurate valuation of the fund's assets,” Butler said. “This perceived conflict may occur when an outside administrator is affiliated with a financial institution, with an investment manager, or when the administrator is associated with a hedge fund itself.”
“As stand-alone companies, independent administrators have no affiliations to any outside financial entities, et ergo, no such conflicts exist,” he concluded.
Excerpts and Commentary on Ben McGrath’s "The Dystopians" – Jan 26th, New Yorker
"Bad times are boom times for some."
The article starts off with US resident Dmitry Orlov, from Leningrad, who has been living on a semi-self-sustainable boat in a form 'bourgeois survivalism' for 2 ½ years, riding a bicycle and skipping the TV.
After the downfall of the Soviet Union he learned a lesson for future reference: “When faced with a collapsing economy, one should stop thinking of wealth in terms of money.”
In his 2008 book, “Reinventing Collapse: The Soviet Example and American Prospects,” Orlov identifies the ingredients of what he calls “superpower collapse soup” — a severe shortfall in the production of crude oil, a worsening foreign-trade deficit, an oversized military budget, and crippling foreign debt.
“We don’t have a long wait before sail-based transport is the only option,” he said, anticipating dire environmental conditions. Should the need to raise chickens arise, Orlov and his wife will "set sail and relocate to a more rural base of operations," where the boat, Hogfish, which has a flat bottom, can double as a trailer home.
In 2006, Orlov published an online manifesto, “The New Age of Sail,” where he writes that sailing has the additional benefit of providing “isometric exercise similar to a Pilates workout,” because of the constant jostling of the sea. “People who live aboard are rarely overweight.”
In a blog that he maintains, Club Orlov, he categorises his readers into three basic cultural categories;
1. “back-to-the-land types,” united in their opposition to industrial agriculture;
2. “peak oilers,” who worry about the shock effects on energy markets of reaching the maximum global crude-extraction rate; and all-around Cassandras, and
3. “people who sometimes derisively are called doomers.” (The doomers are currently enjoying a little less derision, which is a mixed blessing, because it is axiomatic among true believers that mainstream respect means that it is too late for anything to be done.)
Orlov has recently acquired a fourth audience, composed of financial professionals, who have been, as he said, “bolstering my gut feeling that the United States is bankrupt.” A number of them have placed orders for multiple copies of his book, and he took some pleasure in imagining them passing it on to their friends and families this past holiday season as a grim kind of stocking stuffer.
Also mentioned is Jim Sinclair and his website: jsmineset.com, on which he posts daily blitzes of commentary with headers like “What Happens in Iceland Doesn’t Always Stay in Iceland.”
Ben McGrath meets James Howard Kunstler, author of “The Geography of Nowhere,” and “World Made by Hand,” which is set in a small town north of Albany, where the residents have no oil, no coffee, no spices, no mail delivery, and only sporadic electricity, but marijuana cultivation is booming and they’re growing “buds the size of plums.”
Also recommended for dystopians are Cormac McCarthy’s “The Road,” and Nassim Nicholas Taleb’s best-selling book “The Black Swan,” about the inevitability of unforeseeable events.
“I’d say an emergency meeting of the G7 is pretty much the front entrance,” Kunstler said. “Although who would have thought Iceland would be the first to go?...... Capitalism and human ingenuity persist; it’s only the economic incentives that change."
Kunstler likes to say that the United States has “a railroad system that the Bulgarians would be ashamed of,” and told a joke involving orders from the Treasury Secretary, Henry Paulson, to his underlings, to “buy the Dow,” in order to stave off consumer panic.
Three days after the Presidential election, in Montpelier, Vermont, at a convention of nearly two hundred “neo-Luddites, anarchists, socialists, freegans, steampunks, homeschoolers, folksingers, knitters and yak farmers”, Knustler called himself “an emissary from a place you may someday regard as foreign: New York State. . . . For the moment, we remain sister and brother states in a nation that is enduring a convulsion.”
He declared that the airline industry as we know it will not exist within forty-eight months, or by the end of President Obama’s first term.
These were people whose solution to the imminent death of the American dream was secession: a Vermont Independence Convention, sponsored by the Second Vermont Republic, a “nonviolent citizens’ network and think tank opposed to the tyranny of Corporate America and the U.S. Government.”
Also speaking were Chellis Glendinning, the author of “My Name Is Chellis and I’m in Recovery from Western Civilization,” and Lynette Clark, the chair of the Alaskan Independence Party,
The speeches were accompanied by comic and musical interludes from the Bread & Puppet Theatre, whose members wore bear costumes and danced around with plungers, and by the singing of the Vermont secession anthem: “It’s Vermonters to the lifeboats, this is a sinkin’ ship....”
Alex Akesson
Editor for HedgeCo.net
Along these lines I would also recommend reading: "Game Over" how to prosper in a shattered economy – by Stephen Leeb.
The article starts off with US resident Dmitry Orlov, from Leningrad, who has been living on a semi-self-sustainable boat in a form 'bourgeois survivalism' for 2 ½ years, riding a bicycle and skipping the TV.
After the downfall of the Soviet Union he learned a lesson for future reference: “When faced with a collapsing economy, one should stop thinking of wealth in terms of money.”
In his 2008 book, “Reinventing Collapse: The Soviet Example and American Prospects,” Orlov identifies the ingredients of what he calls “superpower collapse soup” — a severe shortfall in the production of crude oil, a worsening foreign-trade deficit, an oversized military budget, and crippling foreign debt.
“We don’t have a long wait before sail-based transport is the only option,” he said, anticipating dire environmental conditions. Should the need to raise chickens arise, Orlov and his wife will "set sail and relocate to a more rural base of operations," where the boat, Hogfish, which has a flat bottom, can double as a trailer home.
In 2006, Orlov published an online manifesto, “The New Age of Sail,” where he writes that sailing has the additional benefit of providing “isometric exercise similar to a Pilates workout,” because of the constant jostling of the sea. “People who live aboard are rarely overweight.”
In a blog that he maintains, Club Orlov, he categorises his readers into three basic cultural categories;
1. “back-to-the-land types,” united in their opposition to industrial agriculture;
2. “peak oilers,” who worry about the shock effects on energy markets of reaching the maximum global crude-extraction rate; and all-around Cassandras, and
3. “people who sometimes derisively are called doomers.” (The doomers are currently enjoying a little less derision, which is a mixed blessing, because it is axiomatic among true believers that mainstream respect means that it is too late for anything to be done.)
Orlov has recently acquired a fourth audience, composed of financial professionals, who have been, as he said, “bolstering my gut feeling that the United States is bankrupt.” A number of them have placed orders for multiple copies of his book, and he took some pleasure in imagining them passing it on to their friends and families this past holiday season as a grim kind of stocking stuffer.
Also mentioned is Jim Sinclair and his website: jsmineset.com, on which he posts daily blitzes of commentary with headers like “What Happens in Iceland Doesn’t Always Stay in Iceland.”
Ben McGrath meets James Howard Kunstler, author of “The Geography of Nowhere,” and “World Made by Hand,” which is set in a small town north of Albany, where the residents have no oil, no coffee, no spices, no mail delivery, and only sporadic electricity, but marijuana cultivation is booming and they’re growing “buds the size of plums.”
Also recommended for dystopians are Cormac McCarthy’s “The Road,” and Nassim Nicholas Taleb’s best-selling book “The Black Swan,” about the inevitability of unforeseeable events.
“I’d say an emergency meeting of the G7 is pretty much the front entrance,” Kunstler said. “Although who would have thought Iceland would be the first to go?...... Capitalism and human ingenuity persist; it’s only the economic incentives that change."
Kunstler likes to say that the United States has “a railroad system that the Bulgarians would be ashamed of,” and told a joke involving orders from the Treasury Secretary, Henry Paulson, to his underlings, to “buy the Dow,” in order to stave off consumer panic.
Three days after the Presidential election, in Montpelier, Vermont, at a convention of nearly two hundred “neo-Luddites, anarchists, socialists, freegans, steampunks, homeschoolers, folksingers, knitters and yak farmers”, Knustler called himself “an emissary from a place you may someday regard as foreign: New York State. . . . For the moment, we remain sister and brother states in a nation that is enduring a convulsion.”
He declared that the airline industry as we know it will not exist within forty-eight months, or by the end of President Obama’s first term.
These were people whose solution to the imminent death of the American dream was secession: a Vermont Independence Convention, sponsored by the Second Vermont Republic, a “nonviolent citizens’ network and think tank opposed to the tyranny of Corporate America and the U.S. Government.”
Also speaking were Chellis Glendinning, the author of “My Name Is Chellis and I’m in Recovery from Western Civilization,” and Lynette Clark, the chair of the Alaskan Independence Party,
The speeches were accompanied by comic and musical interludes from the Bread & Puppet Theatre, whose members wore bear costumes and danced around with plungers, and by the singing of the Vermont secession anthem: “It’s Vermonters to the lifeboats, this is a sinkin’ ship....”
Alex Akesson
Editor for HedgeCo.net
Along these lines I would also recommend reading: "Game Over" how to prosper in a shattered economy – by Stephen Leeb.
Obama's Stimulus Package - New Yorker Review
I received an advance copy of an article from the financial pages of next weeks New Yorker, "A Smarter Stimulus", where James Surowiecki describes the pros and cons of Obama's plan to include more than a hundred billion dollars in individual tax rebates in his stimulus package.
Although his promised tax cuts are a surefire political winner, he has also earned criticism from both ends of the political spectrum, Surowiecki writes, "Skeptics on both sides worry that most people will save the rebate rather than spend it."
In the past, as in 2001, less than half of the tax rebate was estimated to have been spent, the article says. And while the results of last year’s rebate seem to have been somewhat more encouraging, much of it still went unspent.
Surowiecki also explains how people will either on spend or save depending on where the money comes from, "Casino winnings are more likely to be spent than, say, money from an inheritance." he says, "A key factor is whether people think of a windfall as wealth or as income. If they think of it as wealth, they’re more likely to save it, and if they think of it as income they’re more likely to spend it."
The article concludes: "On its own, Obama’s rebate plan isn’t going to resurrect the economy. But it’s a policy that works with people as they are, rather than as we imagine they should be. And that’s a stimulus in itself."
Available from January 26th, "A Smarter Stimulus" by James Surowiecki, New Yorker.
Although his promised tax cuts are a surefire political winner, he has also earned criticism from both ends of the political spectrum, Surowiecki writes, "Skeptics on both sides worry that most people will save the rebate rather than spend it."
In the past, as in 2001, less than half of the tax rebate was estimated to have been spent, the article says. And while the results of last year’s rebate seem to have been somewhat more encouraging, much of it still went unspent.
Surowiecki also explains how people will either on spend or save depending on where the money comes from, "Casino winnings are more likely to be spent than, say, money from an inheritance." he says, "A key factor is whether people think of a windfall as wealth or as income. If they think of it as wealth, they’re more likely to save it, and if they think of it as income they’re more likely to spend it."
The article concludes: "On its own, Obama’s rebate plan isn’t going to resurrect the economy. But it’s a policy that works with people as they are, rather than as we imagine they should be. And that’s a stimulus in itself."
Available from January 26th, "A Smarter Stimulus" by James Surowiecki, New Yorker.
Third Party Administrators to Improve Hedge Fund Transparency
In an example of how hedge funds and CTAs are turning to third-party administrators with an eye on offering their investors improved transparency, hedge fund and FoHF provider Spectrum Global Fund Administration has teamed up with with AlphaMetrix LLC, a managed futures investment platform.
AlphaMetrix says it chose Spectrum for their "ability to easily provide estimated daily NAVs and to facilitate semi-monthly liquidity, critical differentiators at a time of heightened investor sensitivity regarding alternative investments." The platform will provide investors with access, research and real-time performance reporting to managed futures funds and commodity trading advisors (CTAs).
“The AlphaMetrix value proposition is built on what we call ‘TLC,’ which stands for transparency, liquidity and custody,” said Aleks Kins, founder and CEO of AlphaMetrix. “In partnering with Spectrum, we have selected the only fund administrator that can produce the estimated daily NAV reporting our clients demand, and handle the increased complexity associated with more frequent liquidity.”
Currently, client assets allocated over the AlphaMetrix Platform total approximately $1.7 billion, which includes both direct investments and managed account tracking.
AlphaMetrix says it chose Spectrum for their "ability to easily provide estimated daily NAVs and to facilitate semi-monthly liquidity, critical differentiators at a time of heightened investor sensitivity regarding alternative investments." The platform will provide investors with access, research and real-time performance reporting to managed futures funds and commodity trading advisors (CTAs).
“The AlphaMetrix value proposition is built on what we call ‘TLC,’ which stands for transparency, liquidity and custody,” said Aleks Kins, founder and CEO of AlphaMetrix. “In partnering with Spectrum, we have selected the only fund administrator that can produce the estimated daily NAV reporting our clients demand, and handle the increased complexity associated with more frequent liquidity.”
Currently, client assets allocated over the AlphaMetrix Platform total approximately $1.7 billion, which includes both direct investments and managed account tracking.
Hedge Fund Manager SVM Launches Long/Short Fund
Privately-owned investment management company, SVM Asset Management, is seeking approval from the Financial Services Authority for the launch of the long/short SVM UK Absolute Alpha Fund, which has a similar investment approach to their SVM Saltire fund, which returned +19.7% in 2008.
The fund, if approved, will have the flexibility to move from a net long to a net short position differentiating it from other absolute return funds, the company says. Managed by Colin McLean, returns will be driven by stock selection and the net position of the fund will be determined by whether the manager has more long or short stock ideas at the time.
"In 2008 just 31 of the stocks in the FTSE All Share ended the year higher, and 580 were down. It is therefore not surprising that few long only managers were able to profit," McLean says, "Without question this year will be challenging for the economy. However, at a company level there will be winners and losers and fundamental stock picking skills will be required to identify them."
The focus will be on generating positive returns over the long term rather than positive performance each month, as such SVM believes the appropriate time frame for investing in the new fund is at least three years.
Based in Edinburgh, SVM focuses principally on global fund of funds, UK and European equities.
The fund, if approved, will have the flexibility to move from a net long to a net short position differentiating it from other absolute return funds, the company says. Managed by Colin McLean, returns will be driven by stock selection and the net position of the fund will be determined by whether the manager has more long or short stock ideas at the time.
"In 2008 just 31 of the stocks in the FTSE All Share ended the year higher, and 580 were down. It is therefore not surprising that few long only managers were able to profit," McLean says, "Without question this year will be challenging for the economy. However, at a company level there will be winners and losers and fundamental stock picking skills will be required to identify them."
The focus will be on generating positive returns over the long term rather than positive performance each month, as such SVM believes the appropriate time frame for investing in the new fund is at least three years.
Based in Edinburgh, SVM focuses principally on global fund of funds, UK and European equities.
16 Jan 2009
HK Fund to team up with Paulson Hedge Fund in Offshore Launch
One of Hong Kong’s largest independent financial institutions, Sun Hung Kai Financial, is teaming up with hedge fund Paulson & Co, launching a distressed asset investment fund, according to a Reuters report.
John Paulson will act as the new $100 million offshore fund's investment manager. The fund will only be open to professional investors and will feed into Paulson’s existing “recovery fund”, which invests in distressed financial assets, according to the report.
With approximately $29 billion in assets under management Paulson hedge fund has offices in New York, London and Hong Kong. Sun Hung Kai has over HK$50 billion ($6.45 billion) in assets under management, together, the funds plan to invest globally, but are focused mainly on the United States.
Rizal Wijono, Managing Director at SHK Fund Management Limited, the Sun Hung Kai's asset management business said, “There is a lot of turmoil in the U.S., which is Paulson’s home market. They’ve been looking at a approximately 100 financial institutions who they think are going to be the survivors and the failures,” he said, “To date, they’re looking into Asia, but they haven’t identified potential positions yet. If you’re looking for maximum appreciation, the obvious place is the developed world.”
John Paulson will act as the new $100 million offshore fund's investment manager. The fund will only be open to professional investors and will feed into Paulson’s existing “recovery fund”, which invests in distressed financial assets, according to the report.
With approximately $29 billion in assets under management Paulson hedge fund has offices in New York, London and Hong Kong. Sun Hung Kai has over HK$50 billion ($6.45 billion) in assets under management, together, the funds plan to invest globally, but are focused mainly on the United States.
Rizal Wijono, Managing Director at SHK Fund Management Limited, the Sun Hung Kai's asset management business said, “There is a lot of turmoil in the U.S., which is Paulson’s home market. They’ve been looking at a approximately 100 financial institutions who they think are going to be the survivors and the failures,” he said, “To date, they’re looking into Asia, but they haven’t identified potential positions yet. If you’re looking for maximum appreciation, the obvious place is the developed world.”
Bankrupt Tulsa Execs Receive Over $3 Milllion in Bonuses
A pair of SemGroup LP executives are the only two administrators named to receive bonuses from both the bankrupt Tulsa company and its publicly held and struggling subsidiary, SemGroup Energy Partners LP, tulsaworld.com first reported Thursday.
Pete Schwiering and Jerry Parsons were named among 10 SemGroup LP leaders slated to receive up to $3.8 million in combined incentives if the Tulsa-based company meets or exceeds certain criteria, according to bankruptcy court records in Delaware. The incentives are designed to keep employees on board while SemGroup LP sells off assets or emerges from Chapter 11 protection.
Schwiering and Parsons both could gain up to $468,750 in additional pay under the SemGroup LP incentive plan. Schwiering heads up SemCrude oil operations, while Parsons leads the company's SemMaterials asphalt unit.
Last month, SemGroup Energy Partners' compensation committee approved bonus pay for five executives, including CEO Kevin Foxx, Schwiering and Parsons, according to a Securities and Exchange Commission filing.
Parsons' bonus pay for his SGLP asphalt work totaled $215,000, while Schwiering received an additional $120,000 for leading the public company's crude oil operations, according to reports.
The parent SemGroup filed for bankruptcy protection July 22 after admitting its traders lost $2.4 billion in failed oil futures transactions. The company also owes $2.5 billion to banks and other lenders and up to $1 billion to oil and gas producers who sold their product on credit, according to reports.
Hedge funds Manchester Securities and Alerian Capital Management gained SGLP board control when the parent company defaulted on a $150 million loan, and the public firm tried to find other, third-party customers for its storage and pipeline services.
SemGroup Energy Partners is not a debtor in the bankruptcy case, but it suffers from its own credit default and cash-flow challenges, records show. Schwiering has worked for SemGroup since 2000, the year that it was founded. Parsons joined SemGroup in 2006. Neither SemGroup LP or SGLP spokesmen could be reached for comment.
Pete Schwiering and Jerry Parsons were named among 10 SemGroup LP leaders slated to receive up to $3.8 million in combined incentives if the Tulsa-based company meets or exceeds certain criteria, according to bankruptcy court records in Delaware. The incentives are designed to keep employees on board while SemGroup LP sells off assets or emerges from Chapter 11 protection.
Schwiering and Parsons both could gain up to $468,750 in additional pay under the SemGroup LP incentive plan. Schwiering heads up SemCrude oil operations, while Parsons leads the company's SemMaterials asphalt unit.
Last month, SemGroup Energy Partners' compensation committee approved bonus pay for five executives, including CEO Kevin Foxx, Schwiering and Parsons, according to a Securities and Exchange Commission filing.
Parsons' bonus pay for his SGLP asphalt work totaled $215,000, while Schwiering received an additional $120,000 for leading the public company's crude oil operations, according to reports.
The parent SemGroup filed for bankruptcy protection July 22 after admitting its traders lost $2.4 billion in failed oil futures transactions. The company also owes $2.5 billion to banks and other lenders and up to $1 billion to oil and gas producers who sold their product on credit, according to reports.
Hedge funds Manchester Securities and Alerian Capital Management gained SGLP board control when the parent company defaulted on a $150 million loan, and the public firm tried to find other, third-party customers for its storage and pipeline services.
SemGroup Energy Partners is not a debtor in the bankruptcy case, but it suffers from its own credit default and cash-flow challenges, records show. Schwiering has worked for SemGroup since 2000, the year that it was founded. Parsons joined SemGroup in 2006. Neither SemGroup LP or SGLP spokesmen could be reached for comment.
15 Jan 2009
December Investor Survey finds Managment fees too High
When surveyed about what they think about fee levels and value for money offered by investment managers, investors believe that managment fees are too high.
Two surveys were conducted by bfinance in December, questioning institutional investors and asset managers from Europe, North America, and the Gulf Region.
"The results indicate that pension funds believe investment management fees are too high and need to come down, and a majority of managers seem to agree." David Vafai, CEO of bfinance commented.
With regards to hedge fund and fund of hedge fund fee levels, pension funds generally feel that all fees need to be reduced. 77% of respondents state their first priority is for lower base fees, followed by 52% who indicate their desire for performance fees to be reduced and for there to be an increase in hurdle rates. Also, 65% of investors say that these performance fees should be calculated over a four or five year period.
"Clearly, investors are still willing to pay performance fees to reward long-term skill but are no longer willing to pay active fees for beta or for 'luck'", commented Olivier Cassin, Managing Director, Research and Development for bfinance.
Hedge fund managers agree that fees would likely go down and indicate they expect the median level for base fees for FoHFs to decline 9% to 95bps and for the median level of performance fees for hedge funds to decline 25% to 13%.
Vafai concluded, "Although the study indicates disenchantment with the industry in general, and disenchantment with Fund of Hedge Funds and GTAA managers comes out particularly clearly, the study also rather paradoxically suggests that allocations to FoHFs, as well GTAA, Infrastructure, Real Estate and Private Equity FoFs are set to increase in the future. This confirms the results of our recent study on the impact of the crisis on pension fund asset allocation"
Two surveys were conducted by bfinance in December, questioning institutional investors and asset managers from Europe, North America, and the Gulf Region.
"The results indicate that pension funds believe investment management fees are too high and need to come down, and a majority of managers seem to agree." David Vafai, CEO of bfinance commented.
With regards to hedge fund and fund of hedge fund fee levels, pension funds generally feel that all fees need to be reduced. 77% of respondents state their first priority is for lower base fees, followed by 52% who indicate their desire for performance fees to be reduced and for there to be an increase in hurdle rates. Also, 65% of investors say that these performance fees should be calculated over a four or five year period.
"Clearly, investors are still willing to pay performance fees to reward long-term skill but are no longer willing to pay active fees for beta or for 'luck'", commented Olivier Cassin, Managing Director, Research and Development for bfinance.
Hedge fund managers agree that fees would likely go down and indicate they expect the median level for base fees for FoHFs to decline 9% to 95bps and for the median level of performance fees for hedge funds to decline 25% to 13%.
Vafai concluded, "Although the study indicates disenchantment with the industry in general, and disenchantment with Fund of Hedge Funds and GTAA managers comes out particularly clearly, the study also rather paradoxically suggests that allocations to FoHFs, as well GTAA, Infrastructure, Real Estate and Private Equity FoFs are set to increase in the future. This confirms the results of our recent study on the impact of the crisis on pension fund asset allocation"
14 Jan 2009
Alternative Investment Specialist Joins Canadian Hedge Fund Manager
Todd Groome is joining Diversified Global Asset Management (DGAM) as a Managing Director, effective February 1, 2009. Responsible for business development, Groome will also advise the investment team on macro investment themes and the global economic and policy environment.
"I am extremely pleased to join DGAM, a firm that is known for its expertise in hedge fund investing, its focus on business and operational integrity, and its leading edge thinking in a variety of investment areas, including in particular DGAM's strong commitment to building strategic relationships with its clients." Todd Groome said." Groome will be based out of DGAM's Toronto office.
With a wealth of experience in capital markets in both the public and private sectors, previously positioned as Managing Director and Head of the Financial Institutions Groups of Deutsche Bank and Credit Suisse in London, managing the European High Yield origination business for a period of time.
He also worked with Merrill Lynch and was a consultant to Hovde Capital Advisors, a hedge fund and merchant banking operation in Washington, focusing on financial institutions.
In December, 2008, Groome was named non-Executive Chairman of the Alternative Investment Management Association ("AIMA"), with effect from January 1, 2009.
George Main, CEO of DGAM, commented further, saying "I am delighted that Todd Groome will be joining the firm. Todd's deep experience, insights and stature in the global financial community will be invaluable assets as we take DGAM into our next growth phase."
"I am extremely pleased to join DGAM, a firm that is known for its expertise in hedge fund investing, its focus on business and operational integrity, and its leading edge thinking in a variety of investment areas, including in particular DGAM's strong commitment to building strategic relationships with its clients." Todd Groome said." Groome will be based out of DGAM's Toronto office.
With a wealth of experience in capital markets in both the public and private sectors, previously positioned as Managing Director and Head of the Financial Institutions Groups of Deutsche Bank and Credit Suisse in London, managing the European High Yield origination business for a period of time.
He also worked with Merrill Lynch and was a consultant to Hovde Capital Advisors, a hedge fund and merchant banking operation in Washington, focusing on financial institutions.
In December, 2008, Groome was named non-Executive Chairman of the Alternative Investment Management Association ("AIMA"), with effect from January 1, 2009.
George Main, CEO of DGAM, commented further, saying "I am delighted that Todd Groome will be joining the firm. Todd's deep experience, insights and stature in the global financial community will be invaluable assets as we take DGAM into our next growth phase."
13 Jan 2009
Hedge Fund Editor to Join NetSalonFX as Adviser
Chris Gillick, currently an associate editor with Trader Monthly and Dealmaker magazines, has agreed to join NetSalonFX as an adviser, principal/branch manager, and regulatory liaison, having just completed his NASD Series 30 exam.
As an editor for Trader Monthly and Dealmaker, he has covered the hedge fund industry, brokerages, private equity and investment banking. In 2008, he helped produce several widely followed industry lists such as the Trader Monthly 100, the Trader Monthly Top 30 Under 30, the Dealmaker Top 40 Under 40, and Dealmaker's Party Crashers, featuring the top women in private equity.
"I am happy to have Chris aboard," Says Lance A. Perry, CEO of NetSalonFX and its parent company, NetSalon Software Development Inc, "He brings great credibility as a financial professional with deep knowledge of the foreign exchange market, and as a journalist covering so many sectors of the financial world. He's going to be a great asset to our clients."
"I'm very much looking forward to working with the NetSalonFX team," says Gillick. "I'm excited to get my into the trading world while still pursuing my passion of journalism."
NetSalonFX's clients are all accredited investors, whom Gillick is accustomed to conversing with regularly in his coverage of the world of high finance. "I have had the privilege of meeting people in every corner of the world of finance, including introducing brokers in the foreign exchange market. Unfortunately not all IBs have the best intentions when selling their products. However, NetSalonFX has done a great job of screening out unqualified investors and building a community of traders who understand fully the great risks, and rewards, of the foreign exchange market."
As an editor for Trader Monthly and Dealmaker, he has covered the hedge fund industry, brokerages, private equity and investment banking. In 2008, he helped produce several widely followed industry lists such as the Trader Monthly 100, the Trader Monthly Top 30 Under 30, the Dealmaker Top 40 Under 40, and Dealmaker's Party Crashers, featuring the top women in private equity.
"I am happy to have Chris aboard," Says Lance A. Perry, CEO of NetSalonFX and its parent company, NetSalon Software Development Inc, "He brings great credibility as a financial professional with deep knowledge of the foreign exchange market, and as a journalist covering so many sectors of the financial world. He's going to be a great asset to our clients."
"I'm very much looking forward to working with the NetSalonFX team," says Gillick. "I'm excited to get my into the trading world while still pursuing my passion of journalism."
NetSalonFX's clients are all accredited investors, whom Gillick is accustomed to conversing with regularly in his coverage of the world of high finance. "I have had the privilege of meeting people in every corner of the world of finance, including introducing brokers in the foreign exchange market. Unfortunately not all IBs have the best intentions when selling their products. However, NetSalonFX has done a great job of screening out unqualified investors and building a community of traders who understand fully the great risks, and rewards, of the foreign exchange market."
Eze's Virtual Hotel Suites
Hedge fund manager, Eze Castle Integration has introduced a web version of its "hedge fund hotel" for small hedge funds with fewer than 10 people.
The company introduced the fully managed physical suite in November 2007 and the Eze says that the new offering has many of the same options now, over the Internet, using Citrix servers and thin clients. Users pay a monthly subscription fee for this hosted platform using their own desktops and basic networking.
"We act as a cloud," says Bob Guilbert, managing director. "As we add more applications to our back end data center, we'll enable clients to get things like CRM services, accounting services and anything else that might be necessary to run a back office operation. The benefit of this solution is they don't have to build out an IT infrastructure, they don't have to build out a data center. That makes it very easy for them to become operational."
The company introduced the fully managed physical suite in November 2007 and the Eze says that the new offering has many of the same options now, over the Internet, using Citrix servers and thin clients. Users pay a monthly subscription fee for this hosted platform using their own desktops and basic networking.
"We act as a cloud," says Bob Guilbert, managing director. "As we add more applications to our back end data center, we'll enable clients to get things like CRM services, accounting services and anything else that might be necessary to run a back office operation. The benefit of this solution is they don't have to build out an IT infrastructure, they don't have to build out a data center. That makes it very easy for them to become operational."
12 Jan 2009
Directory of Commodity Exchange Traded Funds Launched by Energy Hedge Fund Center
The Energy Hedge Fund Center, an online community focused on energy and environmental alternative investments, has launched a Directory of Commodity-focused Exchange Traded Funds that will appeal to ordinary investors. The Directory lists Exchange Traded Funds, Exchange Traded Notes and Exchange Traded Commodities in Excel format.
"Over the last several years there has also been an explosion of Exchange Traded instruments accessible by ordinary investors that are designed to provide exposure to commodities," reports Dr. Gary M. Vasey, Co-Principal of EHFC. "This directory is designed as a single source for investors interested in these vehicles."
"The financial crisis has driven more business to exchanges and ETFs. We expect more growth in this sector next year," said Peter Fusaro, Co-Principal, Energy Hedge Fund Center.
"Over the last several years there has also been an explosion of Exchange Traded instruments accessible by ordinary investors that are designed to provide exposure to commodities," reports Dr. Gary M. Vasey, Co-Principal of EHFC. "This directory is designed as a single source for investors interested in these vehicles."
"The financial crisis has driven more business to exchanges and ETFs. We expect more growth in this sector next year," said Peter Fusaro, Co-Principal, Energy Hedge Fund Center.
Debt Crisis for New York Times Hedge Fund Shareholders
Some analysts are saying that the mighty New York Times might be headed down the same path as the bankrupt Tribune Company, owner of the Chicago Tribune and Los Angeles Times.
Hedge fund shareholders, Harbinger Capital Partners Funds ("Harbinger") and Firebrand Partners ("Firebrand") own 19% of The New York Times Company, and the outlook does not look good. NYT is approximately $1 billion in debt, the result of its move to a new building on Eighth Avenue a couple of years ago.
Harbinger Capital Partners has grown to one of the 15 largest hedge funds, by assets, in America. Firebrand Partners is an operational activist firm that invests in publicly-traded companies whose brand equity represents significant upside relative to their market capitalization.
The New York Times Company includes The New York Times, the International Herald Tribune, The Boston Globe and 15 other daily newspapers.
Hedge fund shareholders, Harbinger Capital Partners Funds ("Harbinger") and Firebrand Partners ("Firebrand") own 19% of The New York Times Company, and the outlook does not look good. NYT is approximately $1 billion in debt, the result of its move to a new building on Eighth Avenue a couple of years ago.
Harbinger Capital Partners has grown to one of the 15 largest hedge funds, by assets, in America. Firebrand Partners is an operational activist firm that invests in publicly-traded companies whose brand equity represents significant upside relative to their market capitalization.
The New York Times Company includes The New York Times, the International Herald Tribune, The Boston Globe and 15 other daily newspapers.
Northern Arizona Land Eyed by Hedge Funds
Rolling Hills Ranches, LLC has has been in talks with a number of investors and hedge funds in recent weeks, engaging experts from the Master Planned Communities group of Kitchell Construction to provide planning oversight for further commercial development of the Rolling Hills Ranches community.
Von Jenson, General Manager, Rolling Hills Ranches, says, "If you're invested in stocks to retire on.... you'll definitely need a nice place to retire - Rolling Hills Ranches in northern Arizona is a great place to ease into a fresh lifestyle to enjoy yourself."
Kitchell is a diversified corporation providing general contracting, construction management and real estate development services to public and private sector clients from offices in Arizona, California and Nevada.
Rolling Hills Ranches is a developed ranch community located in northern Arizona. The ranch is comprised of lots suitable for home building or ranching and is ideal for those who wish to enjoy a rural lifestyle. Power and water are available and the community is bordered by paved roads on two sides.
Von Jenson, General Manager, Rolling Hills Ranches, says, "If you're invested in stocks to retire on.... you'll definitely need a nice place to retire - Rolling Hills Ranches in northern Arizona is a great place to ease into a fresh lifestyle to enjoy yourself."
Kitchell is a diversified corporation providing general contracting, construction management and real estate development services to public and private sector clients from offices in Arizona, California and Nevada.
Rolling Hills Ranches is a developed ranch community located in northern Arizona. The ranch is comprised of lots suitable for home building or ranching and is ideal for those who wish to enjoy a rural lifestyle. Power and water are available and the community is bordered by paved roads on two sides.
8 Jan 2009
Millennium Outsources all Fund Managment to GlobeOp
Millennium Management LLC, a global multi-strategy investment management firm with over $11 billion in assets under management, has outsourced fund administration to hedge fund manager GlobeOp Financial Services.
GlobeOp became administrator of record for all three Millennium funds on January 1, 2009 (Millennium USA, LP, Millennium International, Ltd., and Millennium Global Estate, LP).
“We are sending a strong signal about our commitment to transparency and the independent validation of Millennium’s portfolio positions, asset pricing and expense allocation by appointing GlobeOp as an independent administrator, and by increasing our online investor portfolio reporting,” said Terry Feeney, co-president and chief operating officer of Millennium. “This is also consistent with our strategy of enabling our fund investment professionals to concentrate their energies on what they do best - managing portfolios – supported by the trading, operational, technology and risk management infrastructure which is essential in this industry. The quality of the services GlobeOp has provided since 2006 was key to our appointing them as our independent administrator.”
“We welcome this opportunity to strengthen our relationship with Millennium by providing independent fund administration services,” said Vernon Barback, GlobeOp president and chief operating officer. “We will quickly demonstrate to Millennium’s investors the value of our robust and scalable technology platform, 24/5 global support network, and process controls affirmed by SAS 70 Type ll certification.
Established in 2000, GlobeOp serves more than 180 clients worldwide, representing $95billion in assets under administration. As an independent financial technology specialist, GlobeOp provides automated, integrated middle and back-office administration to hedge funds and asset management firms—including banks, insurance companies, mutual & pension funds and proprietary traders.
GlobeOp became administrator of record for all three Millennium funds on January 1, 2009 (Millennium USA, LP, Millennium International, Ltd., and Millennium Global Estate, LP).
“We are sending a strong signal about our commitment to transparency and the independent validation of Millennium’s portfolio positions, asset pricing and expense allocation by appointing GlobeOp as an independent administrator, and by increasing our online investor portfolio reporting,” said Terry Feeney, co-president and chief operating officer of Millennium. “This is also consistent with our strategy of enabling our fund investment professionals to concentrate their energies on what they do best - managing portfolios – supported by the trading, operational, technology and risk management infrastructure which is essential in this industry. The quality of the services GlobeOp has provided since 2006 was key to our appointing them as our independent administrator.”
“We welcome this opportunity to strengthen our relationship with Millennium by providing independent fund administration services,” said Vernon Barback, GlobeOp president and chief operating officer. “We will quickly demonstrate to Millennium’s investors the value of our robust and scalable technology platform, 24/5 global support network, and process controls affirmed by SAS 70 Type ll certification.
Established in 2000, GlobeOp serves more than 180 clients worldwide, representing $95billion in assets under administration. As an independent financial technology specialist, GlobeOp provides automated, integrated middle and back-office administration to hedge funds and asset management firms—including banks, insurance companies, mutual & pension funds and proprietary traders.
7 Jan 2009
Rival Launches RRSP Fund
Canadian hedge fund manager Rival Capital Management Inc., announced the launch of the Rival North American RRSP Growth Fund, an RRSP eligible fund that will invest in the current Rival North American Growth Fund LP.
The new fund plans to buy units in the current fund instead of holding individual securities, the fund enables accredited investors who wish to make RRSP investments to gain access to the Firm’s flagship Fund through their RRSP.
Investing primarily from both a long and short perspective in small and midcap growth stocks listed in Canada and the US, the fund’s investment process is centered around a top-down disciplined technical and fundamental approach. The fund employs a rigorous proprietary screening process to identify stocks exhibiting certain technical and fundamental characteristics that Rival considers key to identifying long term performance.
Tony Warzel, Chief Investment Officer and head of the Rival investment team is primarily responsible for stock selection as well as overall portfolio management of the Rival North American Growth Fund.
With approximately $14.9 million in assets under management, Rival Capital was founded in 2006. It is a niche investment management firm that provides pooled fund portfolio management services to accredited investors.
The new fund plans to buy units in the current fund instead of holding individual securities, the fund enables accredited investors who wish to make RRSP investments to gain access to the Firm’s flagship Fund through their RRSP.
Investing primarily from both a long and short perspective in small and midcap growth stocks listed in Canada and the US, the fund’s investment process is centered around a top-down disciplined technical and fundamental approach. The fund employs a rigorous proprietary screening process to identify stocks exhibiting certain technical and fundamental characteristics that Rival considers key to identifying long term performance.
Tony Warzel, Chief Investment Officer and head of the Rival investment team is primarily responsible for stock selection as well as overall portfolio management of the Rival North American Growth Fund.
With approximately $14.9 million in assets under management, Rival Capital was founded in 2006. It is a niche investment management firm that provides pooled fund portfolio management services to accredited investors.
Chairman of Hedge Funds Care to Ring the NASDAQ Closing Bell
President and Chairman of Hedge Funds Care (HFC), John Budzyna, will preside over the Closing Bell to mark the 11th Annual New York Open Your Heart to the Children Benefit to be held at Cipriani 42nd Street on February 11, 2009.
Hedge fund industry professionals established HFC, a charitable organisation focused on assisting young victims of abuse, in 1998. Since that time, chapters have opened in New York, San Francisco, Chicago, Atlanta, Boston, Denver, Toronto, Cayman, and most recently in London.
The organisation comprises those companies with interests in hedge funds, including investment managers, investors, prime brokers, attorneys, accountants, administrators and information providers.
Hedge fund industry professionals established HFC, a charitable organisation focused on assisting young victims of abuse, in 1998. Since that time, chapters have opened in New York, San Francisco, Chicago, Atlanta, Boston, Denver, Toronto, Cayman, and most recently in London.
The organisation comprises those companies with interests in hedge funds, including investment managers, investors, prime brokers, attorneys, accountants, administrators and information providers.
5 Jan 2009
Finvest Launches Private Equity Fund
After being awarded $2.5 billion in allocation for investment in private equity, hedge fund manager Finvest Asset Management, announced the launch of a private equity initiative. Finvest is also separately dedicating $300 million to a fund of funds.
The $2.5 billion capital allocation to Finvest is being made by a European family office seeking to increase its exposure in the private equity space.
Targeting companies which are listed on the main boards in Northern American and European markets, the fund will seek to allocate capital to between 25 and 100 companies, with each allocation ranging in a value of between $10 million and $250 million.
The new fund's time horizon will be between 3-5 years, although liquidity will be an important criterion assessing risk. Companies below a $200 million market capitalization will not be discounted, however, the fund will be favorably disposed towards companies with higher market capitalization levels, and which exhibit a high percentage of outstanding shares. The model which is being applied by Finvest is slightly different to the typical private equity structure, which generally would consider stakes in private companies which are not listed and perhaps seek to extract value through an IPO.
The team at the Finvest Private Equity fund indicated that their due diligence turn around period is quite aggressive. "While we are not looking to cut corners on due diligence, we are looking to fast track the allocation process, so that we can take advantage of a market which has been beaten to shreds," said Finvest portfolio strategist Mayer Greenwald.
"We do not have an agenda to take control or necessarily secure a controlling interest in the firm. We typically would base an interest in a company on the fact that management know what they are doing, and understand their area of endeavor better than others. Our philosophy is to provide company management with additional capital, and give them the opportunity to continue running with the ball. Obviously, we appreciate regular feedback on progress or challenges which are being faced in the industry." Greenwald concluded.
The $2.5 billion capital allocation to Finvest is being made by a European family office seeking to increase its exposure in the private equity space.
Targeting companies which are listed on the main boards in Northern American and European markets, the fund will seek to allocate capital to between 25 and 100 companies, with each allocation ranging in a value of between $10 million and $250 million.
The new fund's time horizon will be between 3-5 years, although liquidity will be an important criterion assessing risk. Companies below a $200 million market capitalization will not be discounted, however, the fund will be favorably disposed towards companies with higher market capitalization levels, and which exhibit a high percentage of outstanding shares. The model which is being applied by Finvest is slightly different to the typical private equity structure, which generally would consider stakes in private companies which are not listed and perhaps seek to extract value through an IPO.
The team at the Finvest Private Equity fund indicated that their due diligence turn around period is quite aggressive. "While we are not looking to cut corners on due diligence, we are looking to fast track the allocation process, so that we can take advantage of a market which has been beaten to shreds," said Finvest portfolio strategist Mayer Greenwald.
"We do not have an agenda to take control or necessarily secure a controlling interest in the firm. We typically would base an interest in a company on the fact that management know what they are doing, and understand their area of endeavor better than others. Our philosophy is to provide company management with additional capital, and give them the opportunity to continue running with the ball. Obviously, we appreciate regular feedback on progress or challenges which are being faced in the industry." Greenwald concluded.
Hedge Fund Manager Waives Managment Fees
Renaissance Institutional Futures, a $3 billion futures fund run by hedge fund management company, Renaissance Technologies, has waived all it's management fees for 2009, even if the fund delivers good results in 2009, according to the Wall Street Journal.
Renaissance told investors in a end-of-year letter that the futures fund was waiving it's 1% fixed management fee following poor performance in 2008. The discount is estimated by the Journal to save investors $30 million.
Renaissance Technologies was started in 1982 by James Simons, Renaissance currently has approximately $20 billion in assets under management. The company operates in East Setauket, Long Island, New York, near Stony Brook University. Administrative functions are handled out of offices in Manhattan.
Renaissance told investors in a end-of-year letter that the futures fund was waiving it's 1% fixed management fee following poor performance in 2008. The discount is estimated by the Journal to save investors $30 million.
Renaissance Technologies was started in 1982 by James Simons, Renaissance currently has approximately $20 billion in assets under management. The company operates in East Setauket, Long Island, New York, near Stony Brook University. Administrative functions are handled out of offices in Manhattan.
2 Jan 2009
Altos Places Hedge Fund Shareholders on Board
French IT services group Atos Origin is holding a shareholder meeting on Feb. 10, making board changes and initiating a plan to speed up recovery spearheaded by its new chief executive Thierry Breton.
Atos Origin is replacing it's current structure for a single managing board headed by a Chairman and CEO, according to a Reuters report.
Benoit d'Angelin, who represents hedge fund Centaurus on Atos's current supervisory board, will not seek a seat on the new board, Centaurus recently cut its direct stake in Atos in September to 6.66% from around 12%, selling its shares to PAI Partners.
PAI Partners, which is Atos's main shareholder with a 22.61% holding, would now have three representatives on Atos's new board, the list showed. Centaurus, together with Pardus Capital, forced board changes at Atos Origin last year after a long-running battle between the company and the activist hedge funds. The two funds still own a combined 16.71% of Atos capital.
Pardus, which sources have said has no plans to sell its stake in Atos, will keep its representative on Atos's new board, Behdad Alizadeh.
Meanwhile Jean-Paul Bechat, the former head of Safran's managing board, and LVMH executive Nicolas Bazire, will sit on the new board as independent members.
Atos Origin gave the following composition of the 12-member board, which has yet to be approved by shareholders:
Rene Abate, former chairman of Boston consulting Group; Bedhad Alizadeh, Partner, Pardus Capital Management; Nicolas Bazire, LVMH Exec Committee member, Acquisitions; Jean-Paul Bechat, former head of Safran Managing Board; Thierry Breton, Atos Origin Chief Executive; Dominique Megret, Chairman of Pai Partners; Bertrand Meunier, Head of Investments at Pai Partners; Michel Paris, Senior Partner at Pai Partners; Vernon Sankey, former Chair and CEO of Reckitt & Colman, UK; Jean-Philippe Thierry, AGF Chairman; also on the list is one independent member, who has yet to be named and one representative of the workers holding Atos shares.
Atos Origin is replacing it's current structure for a single managing board headed by a Chairman and CEO, according to a Reuters report.
Benoit d'Angelin, who represents hedge fund Centaurus on Atos's current supervisory board, will not seek a seat on the new board, Centaurus recently cut its direct stake in Atos in September to 6.66% from around 12%, selling its shares to PAI Partners.
PAI Partners, which is Atos's main shareholder with a 22.61% holding, would now have three representatives on Atos's new board, the list showed. Centaurus, together with Pardus Capital, forced board changes at Atos Origin last year after a long-running battle between the company and the activist hedge funds. The two funds still own a combined 16.71% of Atos capital.
Pardus, which sources have said has no plans to sell its stake in Atos, will keep its representative on Atos's new board, Behdad Alizadeh.
Meanwhile Jean-Paul Bechat, the former head of Safran's managing board, and LVMH executive Nicolas Bazire, will sit on the new board as independent members.
Atos Origin gave the following composition of the 12-member board, which has yet to be approved by shareholders:
Rene Abate, former chairman of Boston consulting Group; Bedhad Alizadeh, Partner, Pardus Capital Management; Nicolas Bazire, LVMH Exec Committee member, Acquisitions; Jean-Paul Bechat, former head of Safran Managing Board; Thierry Breton, Atos Origin Chief Executive; Dominique Megret, Chairman of Pai Partners; Bertrand Meunier, Head of Investments at Pai Partners; Michel Paris, Senior Partner at Pai Partners; Vernon Sankey, former Chair and CEO of Reckitt & Colman, UK; Jean-Philippe Thierry, AGF Chairman; also on the list is one independent member, who has yet to be named and one representative of the workers holding Atos shares.
31 Dec 2008
Hedge Fund Manager Acquires Long-only Fund Arm from Credit Suisse
Hedge fund manager, Aberdeen Asset Management PLC, has entered into an agreement with Credit Suisse to acquire their £40 billion ($58 billion) long-only asset management arm, making Aberdeen the the UK’s largest listed fund manager.
Credit Suisse sold the fund arm for approximately 240 million shares in Aberdeen, valued at £250 million ($363 million). The closing of the deal is to take place on 30 June 2009, subject to shareholder and regulatory approval.
Aberdeen’s largest hedge fund shareholder, Martin Hughes, Chief Executive of Toscafund, said, “Toscafund has already confirmed its support for this transformational acquisition, which has been made possible by the excellent operating platform offered by Aberdeen. Toscafund believes that the transaction is of clear benefit to the clients and shareholders of Aberdeen Asset Management and Credit Suisse.”
The acquired business is a long-only traditional asset manager with a leading presence in Europe, Asia and Australasia. It offers a broad product range, diversified predominantly across fixed income, money market and equities, with a variety of investment styles that will be integrated into Aberdeen’s investment processes. Its products are sold primarily to third party clients, with a significant minority of assets sourced through Credit Suisse’s Private Banking division, one of the world’s largest wealth managers.
Aberdeen has agreed an extension of the existing distribution agreement with Credit Suisse, this will give Aberdeen greater access to the banking network of Credit Suisse.
With the new acquisition, Aberdeen has opportunity to achieve greater scale in certain markets where the Group already has a presence, such as the UK, Australia, Germany, Switzerland and Japan. The Acquisition will also strengthen Aberdeen’s offering in certain product areas
“The acquisition confirms Aberdeen’s position as a leading global asset manager and provides us with greater access to the distribution network of Credit Suisse and its Private Banking division, one of the world’s largest wealth managers." Martin Gilbert, Chief Executive of Aberdeen, said, “This transaction fits perfectly within our strategy, a key part of which has been to make earnings enhancing acquisitions which give the business critical mass in our core competencies, complementing our organic growth."
“Given our proven track record of integrating businesses, we are well placed to ensure a smooth transition of the Credit Suisse assets to Aberdeen. We look forward to welcoming our new colleagues and clients, and also to welcoming Credit Suisse as a significant shareholder in Aberdeen. We believe that this transaction will be for the long-term benefit of all our shareholders.”
Credit Suisse sold the fund arm for approximately 240 million shares in Aberdeen, valued at £250 million ($363 million). The closing of the deal is to take place on 30 June 2009, subject to shareholder and regulatory approval.
Aberdeen’s largest hedge fund shareholder, Martin Hughes, Chief Executive of Toscafund, said, “Toscafund has already confirmed its support for this transformational acquisition, which has been made possible by the excellent operating platform offered by Aberdeen. Toscafund believes that the transaction is of clear benefit to the clients and shareholders of Aberdeen Asset Management and Credit Suisse.”
The acquired business is a long-only traditional asset manager with a leading presence in Europe, Asia and Australasia. It offers a broad product range, diversified predominantly across fixed income, money market and equities, with a variety of investment styles that will be integrated into Aberdeen’s investment processes. Its products are sold primarily to third party clients, with a significant minority of assets sourced through Credit Suisse’s Private Banking division, one of the world’s largest wealth managers.
Aberdeen has agreed an extension of the existing distribution agreement with Credit Suisse, this will give Aberdeen greater access to the banking network of Credit Suisse.
With the new acquisition, Aberdeen has opportunity to achieve greater scale in certain markets where the Group already has a presence, such as the UK, Australia, Germany, Switzerland and Japan. The Acquisition will also strengthen Aberdeen’s offering in certain product areas
“The acquisition confirms Aberdeen’s position as a leading global asset manager and provides us with greater access to the distribution network of Credit Suisse and its Private Banking division, one of the world’s largest wealth managers." Martin Gilbert, Chief Executive of Aberdeen, said, “This transaction fits perfectly within our strategy, a key part of which has been to make earnings enhancing acquisitions which give the business critical mass in our core competencies, complementing our organic growth."
“Given our proven track record of integrating businesses, we are well placed to ensure a smooth transition of the Credit Suisse assets to Aberdeen. We look forward to welcoming our new colleagues and clients, and also to welcoming Credit Suisse as a significant shareholder in Aberdeen. We believe that this transaction will be for the long-term benefit of all our shareholders.”
Silk Invest / Danfonds Team to Launch 2 new Hedge Funds
Specialist asset management firm, Silk Invest Ltd, has acquired Danfonds Frontier Fund SPC., a Cayman based hedge fund, in an all equity deal, Silk Invest also bought majority share in Danfonds Frontier Fund SPC, which will be renamed Silk Invest Frontier Fund SPC, Danfonds Investment Management (Cayman) Limited will be renamed Silk Invest (Cayman) Limited.
The new team will launch two Luxembourg UCITS funds, African Lions and Arab Falcons, in the first quarter of 2009. The Silk Invest Frontier Fund SPC will be relaunched in the second quarter of 2009 after finalizing the new offering memorandum and the various counterparty agreements.
Zin Bekkali, CEO of Silk Invest, comments that “the deal is a uniquely structured combination of talents that complements our new African and Middle Eastern fund platform.” Following the transaction, Daniel Broby, CEO of Danfonds, will become the Chief Investment Officer of Silk Invest.
Daniel Broby says that the deal “is perfectly timed from an investor perspective. There is now immense opportunity in frontier markets as a resultof the dramatic declines caused by the credit crisis; to which these economies are partially immune.”
Dr Heinz Hockmann, the Chairman of Silk Invest, notes that “The synergies between the Silk African Lions Fund, the Silk Arab Falcons Fund and the Danfonds Frontier Fund were immediately obvious. Our aim was always to become the most credible frontier markets specialist. With this deal we can demonstrate to our investors, more than ever, that we have an unrivalled frontier markets team, managing a unique investment offering across different asset classes.”
The new team will launch two Luxembourg UCITS funds, African Lions and Arab Falcons, in the first quarter of 2009. The Silk Invest Frontier Fund SPC will be relaunched in the second quarter of 2009 after finalizing the new offering memorandum and the various counterparty agreements.
Zin Bekkali, CEO of Silk Invest, comments that “the deal is a uniquely structured combination of talents that complements our new African and Middle Eastern fund platform.” Following the transaction, Daniel Broby, CEO of Danfonds, will become the Chief Investment Officer of Silk Invest.
Daniel Broby says that the deal “is perfectly timed from an investor perspective. There is now immense opportunity in frontier markets as a resultof the dramatic declines caused by the credit crisis; to which these economies are partially immune.”
Dr Heinz Hockmann, the Chairman of Silk Invest, notes that “The synergies between the Silk African Lions Fund, the Silk Arab Falcons Fund and the Danfonds Frontier Fund were immediately obvious. Our aim was always to become the most credible frontier markets specialist. With this deal we can demonstrate to our investors, more than ever, that we have an unrivalled frontier markets team, managing a unique investment offering across different asset classes.”
27 Dec 2008
Morrison & Foerster Hire NY Hedge Fund Lawyer Among Others
Morrison & Foerster LLP announced the election of ten new lawyers into their partnership, including specialists in venture capital, hedge funds, bio-technology, patents, corporate transactions and chapter 11 bankruptcy, among others. Their election is effective January 1, 2009.
“We have elected an exceptional group of lawyers to the partnership. This year’s newly elected partners reflect continued investment in our distinguishing practice strengths and our international reach,” said Keith Wetmore, Chairman of Morrison & Foerster. “Our new partners have demonstrated a commitment to client service and legal excellence. We are confident that they will make tremendous contributions to our clients’ success and our Firm’s progress in the years ahead.”
Elected as Partner Thomas M. Devaney, a member of the Business Department, will be resident in the New York office. Devaney specializes in private equity fund formation and investment, representing a variety of domestic and international private equity funds, including real estate funds, venture capital funds, and debt funds, in addition to hedge funds with a broad range of investment strategies.
The other lawyers elected as Partners are; Anders T. Aannestad, Jonathan Bockman, Christopher B. Eide, James M. Halstead, Rebekah Kaufman, David E. Melaugh, James J. Mullen III, Ph.D., Norman S. Rosenbaum, and Ivan G. Smallwood, a resident in the Tokyo office.
“We have elected an exceptional group of lawyers to the partnership. This year’s newly elected partners reflect continued investment in our distinguishing practice strengths and our international reach,” said Keith Wetmore, Chairman of Morrison & Foerster. “Our new partners have demonstrated a commitment to client service and legal excellence. We are confident that they will make tremendous contributions to our clients’ success and our Firm’s progress in the years ahead.”
Elected as Partner Thomas M. Devaney, a member of the Business Department, will be resident in the New York office. Devaney specializes in private equity fund formation and investment, representing a variety of domestic and international private equity funds, including real estate funds, venture capital funds, and debt funds, in addition to hedge funds with a broad range of investment strategies.
The other lawyers elected as Partners are; Anders T. Aannestad, Jonathan Bockman, Christopher B. Eide, James M. Halstead, Rebekah Kaufman, David E. Melaugh, James J. Mullen III, Ph.D., Norman S. Rosenbaum, and Ivan G. Smallwood, a resident in the Tokyo office.
24 Dec 2008
Blackstone Makes Single Manager Hedge Fund Changes to Ensure Profitability
The Blackstone Group is making changes to the single manager hedge funds businesses within its Marketable Alternative Asset Management (MAAM) segment.
Blackstone is consolidating its distressed securities fund onto a single operating platform and moving Blackstone Kailix Advisors, the investment manager of Blackstone’s long/short equities fund, which will be spun off to its management team led by Manish Mittal, who intends to form a new fund as an independent entity.
Commenting on the changes, Tony James, President and Chief Operating Officer of Blackstone, said, “We believe these measures will enable us to operate more profitably in the current environment. Although these funds have performed better than the S&P 500 and other global market averages, we expect that adverse fundraising conditions in the hedge fund industry will prevent these two initiatives from scaling up to a size where they are meaningful for our business on a stand alone basis.”
Blackstone will be an investor in the new fund and investors in the existing fund will be offered the option of investing in the new fund on a preferred basis as their interests in the existing fund are liquidated. Although the existing fund has outperformed global equities measures, its size does not make it a core strategic business for Blackstone and it is not anticipated that this will change in the near term. The fund has not imposed any gates or liquidity restrictions on investors.
“We continue to have a significant commitment to the hedge fund business," James continued, "The current market turmoil with its associated dislocation of asset prices presents us with a multitude of compelling opportunities to invest capital. It is during times like these that we need to be especially disciplined to focus both our people and our capital on the largest opportunities.”
Blackstone is consolidating its distressed securities fund onto a single operating platform and moving Blackstone Kailix Advisors, the investment manager of Blackstone’s long/short equities fund, which will be spun off to its management team led by Manish Mittal, who intends to form a new fund as an independent entity.
Commenting on the changes, Tony James, President and Chief Operating Officer of Blackstone, said, “We believe these measures will enable us to operate more profitably in the current environment. Although these funds have performed better than the S&P 500 and other global market averages, we expect that adverse fundraising conditions in the hedge fund industry will prevent these two initiatives from scaling up to a size where they are meaningful for our business on a stand alone basis.”
Blackstone will be an investor in the new fund and investors in the existing fund will be offered the option of investing in the new fund on a preferred basis as their interests in the existing fund are liquidated. Although the existing fund has outperformed global equities measures, its size does not make it a core strategic business for Blackstone and it is not anticipated that this will change in the near term. The fund has not imposed any gates or liquidity restrictions on investors.
“We continue to have a significant commitment to the hedge fund business," James continued, "The current market turmoil with its associated dislocation of asset prices presents us with a multitude of compelling opportunities to invest capital. It is during times like these that we need to be especially disciplined to focus both our people and our capital on the largest opportunities.”
23 Dec 2008
Hedge Funds Take Bullish Position On Gold
In the last week, leading up to today, (Tuesday) hedge funds and other "large speculators" took their largest bullish position (when compared with the number of bearish bets) since early August.
Commercial traders such as refineries, mints, wholesalers and bullion banks, took their smallest bull position in 19 weeks, as they sold the "long" contracts bought by speculative players.
This has returned the balance of bull/bear positions in December to what has been considered the norm for the last four years, with over 85% of speculative position betting on a rise.
Last week also saw the outstanding number of open contracts in Gold Futures and options rise more than 9%, but it remained one-third below the record set in Jan. 2008.
"If gold can close the year above its January 2008 open, it will be one of the few positive asset stories of the year," notes new analysis from Mitsui, the precious metals dealer in London, "from a wealth preservation perspective at least."
"With the Bernanke printing press set to move into overdrive next year," Mitsui said regarding the future of Gold in 2009, "along with the not so pretty reality of negative real interest rates, it is difficult to put together a positive thesis for the US Dollar," Mitsui said, "In such a climate, gold could flourish."
Commercial traders such as refineries, mints, wholesalers and bullion banks, took their smallest bull position in 19 weeks, as they sold the "long" contracts bought by speculative players.
This has returned the balance of bull/bear positions in December to what has been considered the norm for the last four years, with over 85% of speculative position betting on a rise.
Last week also saw the outstanding number of open contracts in Gold Futures and options rise more than 9%, but it remained one-third below the record set in Jan. 2008.
"If gold can close the year above its January 2008 open, it will be one of the few positive asset stories of the year," notes new analysis from Mitsui, the precious metals dealer in London, "from a wealth preservation perspective at least."
"With the Bernanke printing press set to move into overdrive next year," Mitsui said regarding the future of Gold in 2009, "along with the not so pretty reality of negative real interest rates, it is difficult to put together a positive thesis for the US Dollar," Mitsui said, "In such a climate, gold could flourish."
19 Dec 2008
NAZRA Hedge Fund Return Index Surges
The Ernst and Young New Zealand Absolute Return index surged to a new high in November 2008, gaining +1.502% for the month, putting year-to-date performance at +17.597%, and year-on-year performance at +21.104%.
As with October, it was the trend-following, tail risk, volatility and commodity managers that saw positive returns, whilst global equities were weaker in line with global equity indices.
New Zealand Absolute Return Association (NZARA) Chairman Anthony Limbrick, who is also Chief Investment Officer of hedge fund Pure Capital (a contributing manager), said “we are close to completing our first calendar year of record-keeping for the index and it is heartening to see such a strong ensemble performance from the constituent managers”.
The Ernst and Young New Zealand Absolute Return Index is based on a concept of simple averages i.e. each of the eight constituent managers presents an “NZARA Average”, an average of the performance of all their funds or programs that are available for new money. In some cases a manager is presenting an average of several products. This collection of averages is then compiled again as a simple average to create the index. Ernst and Young compiles the index but is not a verification agent and does not guarantee the veracity of the performance numbers presented by the individual managers.
The index documentation was compiled by law firm Minter Ellison Rudd Watts.
As with October, it was the trend-following, tail risk, volatility and commodity managers that saw positive returns, whilst global equities were weaker in line with global equity indices.
New Zealand Absolute Return Association (NZARA) Chairman Anthony Limbrick, who is also Chief Investment Officer of hedge fund Pure Capital (a contributing manager), said “we are close to completing our first calendar year of record-keeping for the index and it is heartening to see such a strong ensemble performance from the constituent managers”.
The Ernst and Young New Zealand Absolute Return Index is based on a concept of simple averages i.e. each of the eight constituent managers presents an “NZARA Average”, an average of the performance of all their funds or programs that are available for new money. In some cases a manager is presenting an average of several products. This collection of averages is then compiled again as a simple average to create the index. Ernst and Young compiles the index but is not a verification agent and does not guarantee the veracity of the performance numbers presented by the individual managers.
The index documentation was compiled by law firm Minter Ellison Rudd Watts.
18 Dec 2008
Lawfirm Examines Hedge Fund Misrepresentation for Investors Benifit
Class action law firm Bernstein Liebhard LLP said that dozens of investors, who have lost hundreds of millions of dollars by investing in Madoff Investment Securities through hedge funds and other collective investment funds, have consulted and sought the advice of the firm.
Bernstein Liebhard is investigating whether, among other things, these investment funds conducted proper due diligence before investing heavily in Madoff Securities, and whether these funds ignored the warning signs that Madoff was conducting a large-scale fraud. Bernstein Liebhard is also investigating whether these funds misrepresented to investors the concentration of the funds' investments in Madoff Securities.
On December 11, 2008, Madoff was arrested by federal authorities who say Madoff admitted to operating a $50 billion Ponzi scheme in which Madoff used the principal investments of new clients to pay fictitious "returns" to other clients. The criminal action against Madoff is pending in the Southern District of New York, 08-Mag-2735. Although Madoff had only a few individual clients that invested directly with him, individuals and institutions across the world invested indirectly and sometimes unknowingly in Madoff's scheme through "feeder funds" - such as Fairfield Sentry Ltd. (run by the Fairfield Greenwich Group), Rye Select Fund (run by Tremont Group Holdings), and Kingate Global Fund (run by FIM Advisers LLP) - whose sole purpose was to funnel money to Madoff Securities. Hedge funds and funds of funds invested heavily with Madoff's feeder funds (including Fairfield) despite many warning signs that the consistent returns Madoff delivered were too good to be true.
"Hedge fund, fund of funds managers, or other collective investment fund that lost money as a result of its investment in Madoff Securities, may have a right of action to recoup losses," Bernstein Liebhard says "We has assembled a team of former government prosecutors, former SEC trial attorneys, and investigators to analyze the various legal claims available to investors injured by the Madoff scheme.
Bernstein Liebhard is one of the preeminent plaintiffs' class action law firms in the country, having pursued hundreds of securities and consumer cases and recovering approximately $2 billion for its clients. It has been named to The National Law Journal's "Plaintiffs' Hot List" in each of the last six years.
Bernstein Liebhard is investigating whether, among other things, these investment funds conducted proper due diligence before investing heavily in Madoff Securities, and whether these funds ignored the warning signs that Madoff was conducting a large-scale fraud. Bernstein Liebhard is also investigating whether these funds misrepresented to investors the concentration of the funds' investments in Madoff Securities.
On December 11, 2008, Madoff was arrested by federal authorities who say Madoff admitted to operating a $50 billion Ponzi scheme in which Madoff used the principal investments of new clients to pay fictitious "returns" to other clients. The criminal action against Madoff is pending in the Southern District of New York, 08-Mag-2735. Although Madoff had only a few individual clients that invested directly with him, individuals and institutions across the world invested indirectly and sometimes unknowingly in Madoff's scheme through "feeder funds" - such as Fairfield Sentry Ltd. (run by the Fairfield Greenwich Group), Rye Select Fund (run by Tremont Group Holdings), and Kingate Global Fund (run by FIM Advisers LLP) - whose sole purpose was to funnel money to Madoff Securities. Hedge funds and funds of funds invested heavily with Madoff's feeder funds (including Fairfield) despite many warning signs that the consistent returns Madoff delivered were too good to be true.
"Hedge fund, fund of funds managers, or other collective investment fund that lost money as a result of its investment in Madoff Securities, may have a right of action to recoup losses," Bernstein Liebhard says "We has assembled a team of former government prosecutors, former SEC trial attorneys, and investigators to analyze the various legal claims available to investors injured by the Madoff scheme.
Bernstein Liebhard is one of the preeminent plaintiffs' class action law firms in the country, having pursued hundreds of securities and consumer cases and recovering approximately $2 billion for its clients. It has been named to The National Law Journal's "Plaintiffs' Hot List" in each of the last six years.
17 Dec 2008
Hedge My Job
It looks like the market for financial `dream jobs´ may have actually perked up amidst the financial turmoil of the past few months.
Investment managers saw a 22% increase in job offers as rival firms take advantage of the increasing number of financial services workers looking for a job by "snapping up the cream of the crop on much less than they would have been able to 6 months ago," according to Powerchex Limited.
Hedge fund and insurance companies also made more employment offers than 6 months ago as those companies who have been able to remain stable through the turmoil prepare to put themselves at the head of the pack to take advantage of any economic recovery.
Here is another site I came across, it looks pretty new, but I'll keep tabs on it through this blog as I think it has potenital; www.hedgemyjob.com
Investment managers saw a 22% increase in job offers as rival firms take advantage of the increasing number of financial services workers looking for a job by "snapping up the cream of the crop on much less than they would have been able to 6 months ago," according to Powerchex Limited.
Hedge fund and insurance companies also made more employment offers than 6 months ago as those companies who have been able to remain stable through the turmoil prepare to put themselves at the head of the pack to take advantage of any economic recovery.
Here is another site I came across, it looks pretty new, but I'll keep tabs on it through this blog as I think it has potenital; www.hedgemyjob.com
Conference in Brussels on Carbon Capture & Storage
Platts 3rd Annual European Carbon Capture and Storage (CCS) conference is assembling the CCS community to discuss and review CCS projects in their various stages and look to uncover opportunities in what will become a changed regulatory environment to ensure CCS lives up to its potential.
Some of the issues to be covered include, delivering EU Regulatory Framework, finance and investment, public perception, international CCS case-studies and storage selection and liability among others. Some leading companies are also planning to highlight their latest CCS projects.
Carbon Capture and Storage has developed in a short space of time from coal-fired power’s much-heralded saving grace, to Europe’s energy policy catchphrase to real, on-the-ground pilot project status.
With these first-stage investments underway, the energy industry is closer than ever to a genuine assessment of CCS’ viability. CSS says they are looking for updates from the major actors - how are the pilot projects progressing? Is there an adequate spread of projects in the pipeline to test all potential technologies?
Some of the issues to be covered include, delivering EU Regulatory Framework, finance and investment, public perception, international CCS case-studies and storage selection and liability among others. Some leading companies are also planning to highlight their latest CCS projects.
Carbon Capture and Storage has developed in a short space of time from coal-fired power’s much-heralded saving grace, to Europe’s energy policy catchphrase to real, on-the-ground pilot project status.
With these first-stage investments underway, the energy industry is closer than ever to a genuine assessment of CCS’ viability. CSS says they are looking for updates from the major actors - how are the pilot projects progressing? Is there an adequate spread of projects in the pipeline to test all potential technologies?
16 Dec 2008
AIMB Launched by Hedge Fund Restructuring Advisors
Alternative money managers and hedge fund restructuring advisers, Grisons Peak and IGS, have formed a joint venture to launch the Alternative Investment Merchant Banking (AIMB). The AIMB is to advise on M&A and restructuring deals for firms in the alternative assets industry, the business will be co-led by Paul Sullivan, Partner of Grisons Peak, and John Godden, CEO of IGS Group..
“With a 30% decline in AUM and an expected 50% decrease in the number of Fund managers and no incentive fees for 2008," John Godden, CEO of IGS Group, said, "we will see a continuing surge in merger and acquisitions activity as the Hedge Fund industry goes into an accelerated Darwinian phase. The alternative assets industry has traditionally been formed of boutiques which make for particular and complex merger issues requiring specialist knowledge of both Hedge Funds and M&A expertise.”
“The reduction in AUM in 2008 and the expected continuation of this trend in 2009 will increase the pressure on the owners and managers of alternative investment firms. Many of these firms will seek partners in order to improve profitability and increase their attractiveness to investors.” Paul Sullivan, Partner of Grisons Peak, concluded.
The 50:50 joint venture AIMB targets UK and European deals deal involving single fund managers with AUM of between $250m to $750m or Fund of Hedge Fund managers with AUM of between $400m and $1bn.
“With a 30% decline in AUM and an expected 50% decrease in the number of Fund managers and no incentive fees for 2008," John Godden, CEO of IGS Group, said, "we will see a continuing surge in merger and acquisitions activity as the Hedge Fund industry goes into an accelerated Darwinian phase. The alternative assets industry has traditionally been formed of boutiques which make for particular and complex merger issues requiring specialist knowledge of both Hedge Funds and M&A expertise.”
“The reduction in AUM in 2008 and the expected continuation of this trend in 2009 will increase the pressure on the owners and managers of alternative investment firms. Many of these firms will seek partners in order to improve profitability and increase their attractiveness to investors.” Paul Sullivan, Partner of Grisons Peak, concluded.
The 50:50 joint venture AIMB targets UK and European deals deal involving single fund managers with AUM of between $250m to $750m or Fund of Hedge Fund managers with AUM of between $400m and $1bn.
FactSet Anounces 2008 Global Revenues
FactSet Research Systems Inc. announced the first quarter results ending November 30, 2008, showed revenue increase to $155.6 million, an increase of 16% compared to the prior year.
Operating income for the first quarter advanced to $51.3 million, up 21% from $42.5 million in the same period of fiscal 2008. Net income rose to $35.6 million as compared to $29.4 million a year ago. Diluted earnings per share increased to $0.73, up from $0.58 in the same period of fiscal 2008. Included in the just completed first quarter were income tax benefits of $1.4 million or $0.03 per diluted share related to the reenactment of the U.S. Federal R&D credit in October 2008, retroactive to January 1, 2008. The first quarter of fiscal 2009 marked the first full quarter of operations for FactSet Fundamentals. FactSet Fundamentals increased revenues by $0.8 million and reduced diluted earnings per share by $0.03 per share.
Philip A. Hadley, Chairman and CEO said, "Our earnings results in the first quarter clearly demonstrate the strength of FactSet's business model. In the most turbulent three moths for our clients in decades, FactSet was able to find productivity solutions for them and grow both our ASV and EPS."
ASV increased $7.0 million when excluding currency effects during the first quarter and rose 14.5% or $78.4 million over the prior year. Including foreign exchange, ASV increased $5.2 million during the quarter.
ASV was $620 million at November 30, 2008. Of this total, 79% of ASV is derived from buy-side institutions and the remainder derives from the sell-side firms who perform M&A advisory work and equity research. Many sources are predicting that the current market turmoil will result in a reduction of the number of hedge funds. The contribution from hedge funds to FactSet's total ASV is 6%. ASV at any given point in time represents the forward-looking revenues for the next 12 months from all annual subscription services currently being supplied to clients.
The Company will host a conference call today, December 16, 2008 at 11:00 a.m. (EST) to review the first quarter fiscal 2009 earnings release. To listen, please visit the investor relations section of the Company's website at www.factset.com.
About FactSet
FactSet Research Systems Inc. combines integrated financial information, analytical applications, and client service to enhance the workflow and productivity of the global investment community. The Company, headquartered in Norwalk, Connecticut, was formed in 1978 and now conducts operations from more than twenty-three locations worldwide.
Operating income for the first quarter advanced to $51.3 million, up 21% from $42.5 million in the same period of fiscal 2008. Net income rose to $35.6 million as compared to $29.4 million a year ago. Diluted earnings per share increased to $0.73, up from $0.58 in the same period of fiscal 2008. Included in the just completed first quarter were income tax benefits of $1.4 million or $0.03 per diluted share related to the reenactment of the U.S. Federal R&D credit in October 2008, retroactive to January 1, 2008. The first quarter of fiscal 2009 marked the first full quarter of operations for FactSet Fundamentals. FactSet Fundamentals increased revenues by $0.8 million and reduced diluted earnings per share by $0.03 per share.
Philip A. Hadley, Chairman and CEO said, "Our earnings results in the first quarter clearly demonstrate the strength of FactSet's business model. In the most turbulent three moths for our clients in decades, FactSet was able to find productivity solutions for them and grow both our ASV and EPS."
ASV increased $7.0 million when excluding currency effects during the first quarter and rose 14.5% or $78.4 million over the prior year. Including foreign exchange, ASV increased $5.2 million during the quarter.
ASV was $620 million at November 30, 2008. Of this total, 79% of ASV is derived from buy-side institutions and the remainder derives from the sell-side firms who perform M&A advisory work and equity research. Many sources are predicting that the current market turmoil will result in a reduction of the number of hedge funds. The contribution from hedge funds to FactSet's total ASV is 6%. ASV at any given point in time represents the forward-looking revenues for the next 12 months from all annual subscription services currently being supplied to clients.
The Company will host a conference call today, December 16, 2008 at 11:00 a.m. (EST) to review the first quarter fiscal 2009 earnings release. To listen, please visit the investor relations section of the Company's website at www.factset.com.
About FactSet
FactSet Research Systems Inc. combines integrated financial information, analytical applications, and client service to enhance the workflow and productivity of the global investment community. The Company, headquartered in Norwalk, Connecticut, was formed in 1978 and now conducts operations from more than twenty-three locations worldwide.
15 Dec 2008
Hong Kong Hedge Fund Triples Investor Relation Technology
Hong Kong-based hedge fund manager PMA has chosen to more than triple the number of users of PerTrac CMS in the company's Hong Kong, Tokyo, New York, London, and Dubai offices.
PerTrac CMS is an alternative investment workflow management solution used for investor relations, capital raising and investment management workflows.
"PMA's marketing reach has expanded significantly over the last 12 months and we now has marketing teams based in our Dubai and London offices as well as representations in New York," noted PMA Chief Technology Officer Shane McPherson.
PMA was established in July 2002 to provide investment advisory and investment with assets over $2 billion, PMA currently has over 70 professionals employed in Hong Kong, Sydney, London and Dubai, and became a member of the SPARX group in April 200, the largest publicly listed asset manager in Asia.
PerTrac CMS is an alternative investment workflow management solution used for investor relations, capital raising and investment management workflows.
"PMA's marketing reach has expanded significantly over the last 12 months and we now has marketing teams based in our Dubai and London offices as well as representations in New York," noted PMA Chief Technology Officer Shane McPherson.
PMA was established in July 2002 to provide investment advisory and investment with assets over $2 billion, PMA currently has over 70 professionals employed in Hong Kong, Sydney, London and Dubai, and became a member of the SPARX group in April 200, the largest publicly listed asset manager in Asia.
Salus Alpha Hedge Funds Not Exposed To Madoff Strategy
Vienna based hedge fund manager Salus Alpha Group Services GmbH said that any exposure to Madoff funds were systematically prevented by the proprietary investment approach of their funds at all times.
"I am not shocked that Madoff did blow up but I am shocked that so many obviously unqualified naive fund of hedge fund managers who are obviously doing no due diligence nor do they understand hedge fund strategies do manage so much amounts of money and wonder why this happened to them" said Oliver Prock, CIO of Salus Alpha.
"We never invested into US and UK hedge funds which work under the rules of 'don’t ask, don’t tell'," the hedge fund manager said, "We always scrutinized this model by one simple question to the biggest hedge fund manager?. A 'No' always meant that there are problems behind such as in the Madoff situation."
The investment approach of Salus Alpha consists of state of the art due diligence and executing investments as managed accounts only, which the fund manager says has prevented and will prevent the company at from investing into Illusion Alpha.
"We did not get any inquiry form existing investors since they know that all funds Salus Alpha manages are fully regulated under UCITS III and do invest in liquid alpha strategies through managed accounts only and are therefore protected at all times," Salus Alpha concluded.
"I am not shocked that Madoff did blow up but I am shocked that so many obviously unqualified naive fund of hedge fund managers who are obviously doing no due diligence nor do they understand hedge fund strategies do manage so much amounts of money and wonder why this happened to them" said Oliver Prock, CIO of Salus Alpha.
"We never invested into US and UK hedge funds which work under the rules of 'don’t ask, don’t tell'," the hedge fund manager said, "We always scrutinized this model by one simple question to the biggest hedge fund manager?. A 'No' always meant that there are problems behind such as in the Madoff situation."
The investment approach of Salus Alpha consists of state of the art due diligence and executing investments as managed accounts only, which the fund manager says has prevented and will prevent the company at from investing into Illusion Alpha.
"We did not get any inquiry form existing investors since they know that all funds Salus Alpha manages are fully regulated under UCITS III and do invest in liquid alpha strategies through managed accounts only and are therefore protected at all times," Salus Alpha concluded.
Dow Jones Hedge Fund Strategy Benchmark Review
West Palm Beach (HedgeCo.net) - In the monthly report from Dow Jones Indexes on the performance of Hedge Fund Strategy Benchmarks, only one of four strategies, merger arbitrage, posted net-of-fee gains in November.
After hedge funds experienced two of the most volatile months in market history, merger arbitrage emerged with a small positive net-of-fee gain in November, returning 0.15%. The small gain held YTD performance for merger arbitrage at approximately the same level as last month, down about -9%.
Convertible arbitrage was hit the hardest with a loss of -4.80%, followed by event driven and distressed securities, which were down -6.35% and -7.47%, respectively, for November.
The equity market neutral and equity long/short benchmarks were suspended at the start of the month as a result of the temporary risk mitigation measures taken by the investment manager of the managed account platform that supports the Dow Jones Hedge Fund Strategy Benchmarks. It has not been determined when calculation of these benchmarks will resume.
On a float-adjusted basis, the Dow Jones Wilshire 5000, the only broad measure of the domestic equity market, lost -8% (-8.15% on a full-cap basis) in November decreasing its YTD return to -38.30% (-38.37% on a full-cap basis).
The fixed income asset class, as measured by the Dow Jones Corporate Bond Index was up 4.88% this month and its cumulative return is down -5.99% for the year. Finally, the Dow Jones Wilshire Global Index, the broadest measure of global equity market, lost -6.73% for the month decreasing its YTD return to -44.68% for 2008.
November 2008 figures for the Dow Jones Hedge Fund Strategy Benchmarks are based on daily estimates net of fees.
After hedge funds experienced two of the most volatile months in market history, merger arbitrage emerged with a small positive net-of-fee gain in November, returning 0.15%. The small gain held YTD performance for merger arbitrage at approximately the same level as last month, down about -9%.
Convertible arbitrage was hit the hardest with a loss of -4.80%, followed by event driven and distressed securities, which were down -6.35% and -7.47%, respectively, for November.
The equity market neutral and equity long/short benchmarks were suspended at the start of the month as a result of the temporary risk mitigation measures taken by the investment manager of the managed account platform that supports the Dow Jones Hedge Fund Strategy Benchmarks. It has not been determined when calculation of these benchmarks will resume.
On a float-adjusted basis, the Dow Jones Wilshire 5000, the only broad measure of the domestic equity market, lost -8% (-8.15% on a full-cap basis) in November decreasing its YTD return to -38.30% (-38.37% on a full-cap basis).
The fixed income asset class, as measured by the Dow Jones Corporate Bond Index was up 4.88% this month and its cumulative return is down -5.99% for the year. Finally, the Dow Jones Wilshire Global Index, the broadest measure of global equity market, lost -6.73% for the month decreasing its YTD return to -44.68% for 2008.
November 2008 figures for the Dow Jones Hedge Fund Strategy Benchmarks are based on daily estimates net of fees.
11 Dec 2008
UAE Asset Manager Launches Hedge Funds
US-based Stream Asset Management announced the launch of a credit dislocation fund and a multi-strategy credit hedge fund, the company said in a press statement.
The move is part of Gulf Stream's aggressive expansion strategy to capitalise on current market opportunities. To further support the firm's growth, Gulf Stream has also opened a New York City office, the statement added.
Earlier this year, Istithmar World Capital, the private equity and alternative investment arm of Istithmar World, acquired a majority stake in Gulf Stream. Gulf Stream Asset Management is majority owned by Istithmar World Capital.
The move is part of Gulf Stream's aggressive expansion strategy to capitalise on current market opportunities. To further support the firm's growth, Gulf Stream has also opened a New York City office, the statement added.
Earlier this year, Istithmar World Capital, the private equity and alternative investment arm of Istithmar World, acquired a majority stake in Gulf Stream. Gulf Stream Asset Management is majority owned by Istithmar World Capital.
10 Dec 2008
Africa Roundtable Hedge Fund Update
The Opalesque South Africa Roundtable was held November 10th 2008 in their Cape Town Office. There, the participants also discussed the particularities of investing in Africa (ex-South Africa).
South Africa's equity and fixed income markets displayed exemplary robustness during 2008. Many global allocators may not be aware that the South African financial market infrastructure matches or exceeds its "first world" counterparts in many respects.
The equity and fixed income markets demonstrated exemplary robustness throughout the turbulences of 2008: no short-selling ban, no trading halt and no failed trades. Offshore investors can benefit from efficient and proven ways to get pure South African alpha without taking currency risk.
During the Roundtable, portfolio managers explained new ways to construct hedges, and informed on new and upcoming products. How global investors can benefit from the "Africa story", which is probably the largest opportunity set in the new investment paradigm called "frontier investing"? How do you deal with restricted liquidity, and is Africa really uncorrelated?
The following experts participated in the Opalesque South Africa Roundtable: James Gubb, Founding Partner of Clear Horizon Capital St. John Bungey, Partner, Praesidium Capital Management James Addo, Portfolio Manager, Finch Asset Management Simone Lowe, Portfolio Manager, Thames River Capital Andy Pfaff, Founding Partner of Trendline Funds Ian Hamilton, Founder, IDS Group Ryan Proudfoot, Co-Head RMB Prime Broking Warren Chapman, Head of Peregrine Prime Broking Kevin Ewer, Portfolio Manager, Blue Ink Investments.
South African hedge fund managers and hedge fund investors share surprising insights. For example, - South African single strategy hedge funds offer transparency "far superior to anything anywhere else", according to investors - South African hedge funds suffered their first - and only until that point - net redemptions in October 2008, but only 2.5% of total assets - South Africa is the first country in the world that actually distinguishes between normal fund managers and hedge fund managers, with higher criteria required for hedge fund managers.
South Africa's equity and fixed income markets displayed exemplary robustness during 2008. Many global allocators may not be aware that the South African financial market infrastructure matches or exceeds its "first world" counterparts in many respects.
The equity and fixed income markets demonstrated exemplary robustness throughout the turbulences of 2008: no short-selling ban, no trading halt and no failed trades. Offshore investors can benefit from efficient and proven ways to get pure South African alpha without taking currency risk.
During the Roundtable, portfolio managers explained new ways to construct hedges, and informed on new and upcoming products. How global investors can benefit from the "Africa story", which is probably the largest opportunity set in the new investment paradigm called "frontier investing"? How do you deal with restricted liquidity, and is Africa really uncorrelated?
The following experts participated in the Opalesque South Africa Roundtable: James Gubb, Founding Partner of Clear Horizon Capital St. John Bungey, Partner, Praesidium Capital Management James Addo, Portfolio Manager, Finch Asset Management Simone Lowe, Portfolio Manager, Thames River Capital Andy Pfaff, Founding Partner of Trendline Funds Ian Hamilton, Founder, IDS Group Ryan Proudfoot, Co-Head RMB Prime Broking Warren Chapman, Head of Peregrine Prime Broking Kevin Ewer, Portfolio Manager, Blue Ink Investments.
South African hedge fund managers and hedge fund investors share surprising insights. For example, - South African single strategy hedge funds offer transparency "far superior to anything anywhere else", according to investors - South African hedge funds suffered their first - and only until that point - net redemptions in October 2008, but only 2.5% of total assets - South Africa is the first country in the world that actually distinguishes between normal fund managers and hedge fund managers, with higher criteria required for hedge fund managers.
Neuberger Berman to buy Lehman Holdings
Due to their recent share decrease, Lehman Brothers Holdings Inc. has agreed to sell majority interest to asset manager Neuberger Berman. The transaction will create a new, independent investment management company to be called Neuberger Investment Management, managing approximately $160 billion of assets as of 30 November 2008.
Lehman Brothers Private Equity Partners Limited (LBPE) and certain of its affiliates will be a part of this transaction. The sale is subject to final Bankruptcy Court approval, and closing is expected in the first quarter of 2009.
LBPE's Board of Directors believes this transaction will significantly benefit the Company by providing the management team of the Investment Manager a strong platform from which to continue managing LBPE's high quality private equity portfolio and support the long term success of the Company.
LBPE will also host a conference call later this week for investors and analysts to discuss the Investment Manager update and the Company's performance. An updated investor presentation will be published on the Company's Web site prior to the conference call on 12 December 2008.
Lehman Brothers Private Equity Partners Limited (LBPE) and certain of its affiliates will be a part of this transaction. The sale is subject to final Bankruptcy Court approval, and closing is expected in the first quarter of 2009.
LBPE's Board of Directors believes this transaction will significantly benefit the Company by providing the management team of the Investment Manager a strong platform from which to continue managing LBPE's high quality private equity portfolio and support the long term success of the Company.
LBPE will also host a conference call later this week for investors and analysts to discuss the Investment Manager update and the Company's performance. An updated investor presentation will be published on the Company's Web site prior to the conference call on 12 December 2008.
Are Managed Forex Accounts Suitable for Short-term Hedge Fund Investors?
In an interview with Geneva based Forex trader and currency specialist Robert Paulson, he said; "Trading the Forex market is for serious investors seeking alternative investment opportunities."
Clients pulling out of hedge funds due to the current state of affairs has raised questions about short term options and the possibility that investors may find a managed account more suitable.
"Understanding the dynamics of diversification and proper asset allocation is an easy formula to understand. To some investors currency trading is considered a “must” and a “cannot do with out” investment class. In Forex there are no “bull markets” or “bear markets”, having the mobility to trade virtually anywhere in the world is essential when it comes to proper investing.”
Currently operating a managed account program in Geneva, Paulson said he is looking to Dubai and the UAE for the next wave of investors, "The dynamics of the current investment environment offers opportunity for those with a realistic appetite for risk. The Foreign Exchange (Forex) markets have been an asset class most enjoyed by the informed. With over a trillion dollars being traded each day opportunity is mentioned often. In the current financial environment we hear about stock markets falling, commodities selling off and real estate prices dropping. What we don’t hear much about is where serious money is being made."
Making money has never been easy and respectable returns are often taken for granted. To achieve consistency one must thoroughly analyze, track, and monitor economic conditions around the globe.
Paulson also warned, "There is an enormous amount of time needed to ensure intelligent representation in a fast moving environment. One should understand that where there is a loss there is also a profit, zero-sum is not a game but a way of life. It is also a breeding ground for those who understand."
Clients pulling out of hedge funds due to the current state of affairs has raised questions about short term options and the possibility that investors may find a managed account more suitable.
"Understanding the dynamics of diversification and proper asset allocation is an easy formula to understand. To some investors currency trading is considered a “must” and a “cannot do with out” investment class. In Forex there are no “bull markets” or “bear markets”, having the mobility to trade virtually anywhere in the world is essential when it comes to proper investing.”
Currently operating a managed account program in Geneva, Paulson said he is looking to Dubai and the UAE for the next wave of investors, "The dynamics of the current investment environment offers opportunity for those with a realistic appetite for risk. The Foreign Exchange (Forex) markets have been an asset class most enjoyed by the informed. With over a trillion dollars being traded each day opportunity is mentioned often. In the current financial environment we hear about stock markets falling, commodities selling off and real estate prices dropping. What we don’t hear much about is where serious money is being made."
Making money has never been easy and respectable returns are often taken for granted. To achieve consistency one must thoroughly analyze, track, and monitor economic conditions around the globe.
Paulson also warned, "There is an enormous amount of time needed to ensure intelligent representation in a fast moving environment. One should understand that where there is a loss there is also a profit, zero-sum is not a game but a way of life. It is also a breeding ground for those who understand."
Ronaldo Hermoso Appointed Director of Hedge Funds at OakRun
Hedge fund manager OakRun Capital announced the appointment of Rolando Hermoso as director of funds. Their newly launched Short Term High Yield Fund also delivered November annualized yield of 9.58%.
Hermoso has over 27 years in the investment banking industry at various senior executive levels specializes primarily in the structuring, marketing and the execution of structured finance products. With 10 years at the Bank of America he was also Head of the Investment Bank for Citicorp for Venezuela and the Antilles. He holds Masters degrees in Management and Operations Research from Stanford University and B.S. degrees in applied mathematics and physics.
The Cayman Islands exempted fund launched on October 1st and came in at 9.48% annualized in its first month. The fund's objective is to generate above average current income with a lower overall credit risk profile and maintain a stable NAV.
"We do not believe that simply managing for relative performance is satisfactory to our clients or ourselves." says Scott Rhodenizer, Founder, CEO, and Chief Investment Officer, "While we work to outperform the markets, we strive to do so without excessive risk."
Hermoso has over 27 years in the investment banking industry at various senior executive levels specializes primarily in the structuring, marketing and the execution of structured finance products. With 10 years at the Bank of America he was also Head of the Investment Bank for Citicorp for Venezuela and the Antilles. He holds Masters degrees in Management and Operations Research from Stanford University and B.S. degrees in applied mathematics and physics.
The Cayman Islands exempted fund launched on October 1st and came in at 9.48% annualized in its first month. The fund's objective is to generate above average current income with a lower overall credit risk profile and maintain a stable NAV.
"We do not believe that simply managing for relative performance is satisfactory to our clients or ourselves." says Scott Rhodenizer, Founder, CEO, and Chief Investment Officer, "While we work to outperform the markets, we strive to do so without excessive risk."
9 Dec 2008
Hedge Fund Launched in '07 Completes Successful 1st Year
The DM Swiss Equity Asymmetric Fund has successfully completed its first year of operation realising a net gain for its investors +2.67%.
"We are extremely pleased to see the fund successfully navigate its way through one of the most challenging environments for investors in living memory." Marc-Etienne Rouge, partner at Delman SA said, "Launching a new fund is a difficult task at the best of times, but to do so, and so successfully in this type of environment is remarkable and a credit to our entire team."
The DM Swiss Equity Asymmetric Fund employs a conservative long/short fundamental stock picking strategy to the Swiss equity market and is co-managed by Urs Heinimann and Adrian Peter at Mirabaud & Cie, Zurich. Both Urs and Adrian are Swiss equity specialists having spent their careers focussed on the sector.
"The performance of the fund this year is a solid endorsement of the skills of the managers and a strong validation of the strategy. We firmly believe that the type of environment we are likely to encounter going forward will be one in which the strategy continues to outperform," added Marc-Etienne.
Delman SA, is a Geneva based company specialising in the creation and the delegation of managed funds, Delman launched the DM Swiss Equity Asymmetric Fund on 30th November 2007 in partnership with Mirabaud and Cie.
"We are extremely pleased to see the fund successfully navigate its way through one of the most challenging environments for investors in living memory." Marc-Etienne Rouge, partner at Delman SA said, "Launching a new fund is a difficult task at the best of times, but to do so, and so successfully in this type of environment is remarkable and a credit to our entire team."
The DM Swiss Equity Asymmetric Fund employs a conservative long/short fundamental stock picking strategy to the Swiss equity market and is co-managed by Urs Heinimann and Adrian Peter at Mirabaud & Cie, Zurich. Both Urs and Adrian are Swiss equity specialists having spent their careers focussed on the sector.
"The performance of the fund this year is a solid endorsement of the skills of the managers and a strong validation of the strategy. We firmly believe that the type of environment we are likely to encounter going forward will be one in which the strategy continues to outperform," added Marc-Etienne.
Delman SA, is a Geneva based company specialising in the creation and the delegation of managed funds, Delman launched the DM Swiss Equity Asymmetric Fund on 30th November 2007 in partnership with Mirabaud and Cie.
Alternative Investors Form Joint Venture to Expand Africa's Telecommunications Infrastructure
Satellite communications company Intelsat is launching a joint venture with a South African alternative investor group led by Convergence Partners.
The joint venture plans to finance, build and launch a new satellite, Intelsat New Dawn, featuring a payload optimized to deliver wireless back haul, broadband and television programming to the continent of Africa, it is expected to enter service in early 2011.
The group recently concluded agreements for financing of the project, which is expected to cost around $250 million. The project is to be funded approximately 15% with equity and 85% with debt, the debt being in the form of non-recourse project financing provided by African institutions. Pre-orders for satellite capacity currently total more than $350 million, with some contracts for up to 15 years of service on the satellite.
"Today marks an important milestone in the development of Africa's infrastructure," Andile Ngcaba, Chairman of Convergence Partners said, "The New Dawn joint venture, with its optimized satellite and African-led financing, represents a solution for Africa by Africa. Over the course of this satellites life, it will provide world-class connectivity, allowing businesses to grow and rural communities to connect. Convergence Partners believes that investments in African projects of this nature can offer superior returns while also accelerating the socio-economic development of the continent."
The joint venture plans to finance, build and launch a new satellite, Intelsat New Dawn, featuring a payload optimized to deliver wireless back haul, broadband and television programming to the continent of Africa, it is expected to enter service in early 2011.
The group recently concluded agreements for financing of the project, which is expected to cost around $250 million. The project is to be funded approximately 15% with equity and 85% with debt, the debt being in the form of non-recourse project financing provided by African institutions. Pre-orders for satellite capacity currently total more than $350 million, with some contracts for up to 15 years of service on the satellite.
"Today marks an important milestone in the development of Africa's infrastructure," Andile Ngcaba, Chairman of Convergence Partners said, "The New Dawn joint venture, with its optimized satellite and African-led financing, represents a solution for Africa by Africa. Over the course of this satellites life, it will provide world-class connectivity, allowing businesses to grow and rural communities to connect. Convergence Partners believes that investments in African projects of this nature can offer superior returns while also accelerating the socio-economic development of the continent."
Hedge Fund Trian Partners to Hold Over 50 Million Fast Food Shares
Hedge fund Trian Partners said that they will buy about 49.4 million shares of fast-food operator Wendy's/Arby's Group for $4.15 per share, or about $205 million.
The hedge fund and their affiliates now own about 21.6% of Wendy's/Arby's, or 52.1 million shares, up from its previous 11.1% stake. In November, Trian Fund Management L.P., led by billionaire investor Nelson Peltz, Peter W. May and Edward P. Garden, said it would buy shares of the fast-food restaurant business for about $4.15 per share.
The deal was subject to certain conditions, including that there would not be a decline of more than 10% in the Dow Jones Industrial average or the S&P 500 index after Nov. 5. Another condition was that Wendy's/Arby's shares would not lose 10% of their value.
Triarc Cos. Inc., which operates Arby's and was run by billionaire investor Nelson Peltz, bought Wendy's in a deal that closed in September.
The hedge fund and their affiliates now own about 21.6% of Wendy's/Arby's, or 52.1 million shares, up from its previous 11.1% stake. In November, Trian Fund Management L.P., led by billionaire investor Nelson Peltz, Peter W. May and Edward P. Garden, said it would buy shares of the fast-food restaurant business for about $4.15 per share.
The deal was subject to certain conditions, including that there would not be a decline of more than 10% in the Dow Jones Industrial average or the S&P 500 index after Nov. 5. Another condition was that Wendy's/Arby's shares would not lose 10% of their value.
Triarc Cos. Inc., which operates Arby's and was run by billionaire investor Nelson Peltz, bought Wendy's in a deal that closed in September.
8 Dec 2008
Oxford Funding adds $40 Million in New Properties to its Hedge Fund
Oxford Funding Corp. has signed a letter of intent to acquire $40 million in new properties into its hedge fund, The Oxford Opportunistic Mortgage Fund, Ltd.
The assets are being acquired from ARCOA Capital Partners, LP, a Houston-based investment company. Larry Ramming, Managing Partner of ARCOA, stated, "We expect Oxford to manage and maximize these assets for us as the economy turns around. This should be a win-win for both our investors and Oxford's shareholders."
Oxford plans to manage this portfolio of properties to maturity or sale. CEO Ron Redd said, "We expect this to be the first step in a series of profitable asset acquisitions over the next several months. We have demonstrated our ability to help Americans stay in their homes and protect equity values while making attractive returns for our company," Redd added. "This is a big step forward in our plan to build value for our shareholders by acquiring assets at attractive values and managing them to realize profits," he concluded.
Oxford Funding is an asset resolution company, engaging in the purchase and management of bulk mortgage loan portfolios in the United States. It buys loan portfolios secured by real estate on a wholesale basis at discounts to face value, and resells the assets on a retail basis with margins. The company acquires mortgage portfolios from banks, mortgage companies, and lenders; restructures and services the loans; and then re-packages the loans for resale. It also acquires performing, under-performing, and non-performing loans.
The assets are being acquired from ARCOA Capital Partners, LP, a Houston-based investment company. Larry Ramming, Managing Partner of ARCOA, stated, "We expect Oxford to manage and maximize these assets for us as the economy turns around. This should be a win-win for both our investors and Oxford's shareholders."
Oxford plans to manage this portfolio of properties to maturity or sale. CEO Ron Redd said, "We expect this to be the first step in a series of profitable asset acquisitions over the next several months. We have demonstrated our ability to help Americans stay in their homes and protect equity values while making attractive returns for our company," Redd added. "This is a big step forward in our plan to build value for our shareholders by acquiring assets at attractive values and managing them to realize profits," he concluded.
Oxford Funding is an asset resolution company, engaging in the purchase and management of bulk mortgage loan portfolios in the United States. It buys loan portfolios secured by real estate on a wholesale basis at discounts to face value, and resells the assets on a retail basis with margins. The company acquires mortgage portfolios from banks, mortgage companies, and lenders; restructures and services the loans; and then re-packages the loans for resale. It also acquires performing, under-performing, and non-performing loans.
Canada's Hedge Funds Care Group Raise $150K for Kids
Canada's hedge fund industry gathered in November to raise $150,000 in support of Hedge Funds Care Canada (HFCC), dedicated exclusively to the treatment and prevention of child abuse and neglect.
"The Canadian hedge fund industry is particularly devoted to philanthropic causes, and this cause resonates, even more so in these difficult economic times," said Corey Goldman, President and Director of Hedge Funds Care Canada. "Hard times bring stress, and stress causes pain but there is no reason that any child should be exposed to physical or psychological trauma, maltreatment or neglect."
HFCC is part of a larger alliance of hedge fund industry professionals that comprise New York-based Hedge Funds Care, including prime brokers, attorneys, accountants, information providers, investors and managers. They have raised approximately $31 million through annual benefits in Toronto, New York, San Francisco, Chicago, Atlanta, Boston, Denver, London and the Cayman Islands.
"The Canadian hedge fund industry is particularly devoted to philanthropic causes, and this cause resonates, even more so in these difficult economic times," said Corey Goldman, President and Director of Hedge Funds Care Canada. "Hard times bring stress, and stress causes pain but there is no reason that any child should be exposed to physical or psychological trauma, maltreatment or neglect."
HFCC is part of a larger alliance of hedge fund industry professionals that comprise New York-based Hedge Funds Care, including prime brokers, attorneys, accountants, information providers, investors and managers. They have raised approximately $31 million through annual benefits in Toronto, New York, San Francisco, Chicago, Atlanta, Boston, Denver, London and the Cayman Islands.
Experts Discuss Hedge Funds at "Fighting the Tape" Seminar
Top financial industry leaders and more than 200 attendees gathered in New York late last week discuss the volatile hedge fund market and provide insights on distressed funds.
Sponsored by global offshore law firm Walkers, the "Fighting the Tape" seminar included a wide variety of speakers offered a comprehensive look at the changes in the market over the past year, as well as predictions for what the alternative investment funds industry can expect in the months ahead.
The experts anticipate a new era of hedge fund regulation, greater flexibility and versatility in hedge fund offering documents, broader discretion for fund managers, and continued growth in many of the world's key economies such as China, India, Russia, Brazil, the Middle East, and South Korea.
Investment manager George Hall, founder and president of The Clinton Group gave his personal views on the financial crisis and what the market might see under President-elect Barack Obama. While he felt it was too early to say how the "Obama factor" might influence the hedge fund industry, Mr. Hall said that he hoped the new President would make good choices when selecting his Treasury Secretary and a leader for the SEC.
"The true impact of the US credit crisis will not be tangible for many months to come," Yolanda McCoy, head of the Investments and Securities Division at the Cayman Islands Monetary Authority (CIMA) said, although she was able to confirm that to date they were aware of a total of 340 Cayman funds that had been impacted by the problems with Lehman Brothers, Merrill Lynch, and AIG, with more than 200 of those affected by issues with Lehman.
Professor Jeffrey Rosensweig, director of the Global Perspectives Program at Goizueta Business School at Emory University, closed the seminar with insights into the investment opportunities presented by this current stage in the cycle, shifting the focus from New York and London to emerging markets such as Brazil, Russia, China, the Middle East and India.
"The world adds 100 people every 42 seconds," Professor Rosensweig said, "and 98% of that population growth is in the emerging markets." Pointing to the expectation of long-term continued economic expansion in these regions, Professor Rosensweig said this massive population growth, combined with a move out of poverty in these regions, presents real future opportunities for investors.
Sponsored by global offshore law firm Walkers, the "Fighting the Tape" seminar included a wide variety of speakers offered a comprehensive look at the changes in the market over the past year, as well as predictions for what the alternative investment funds industry can expect in the months ahead.
The experts anticipate a new era of hedge fund regulation, greater flexibility and versatility in hedge fund offering documents, broader discretion for fund managers, and continued growth in many of the world's key economies such as China, India, Russia, Brazil, the Middle East, and South Korea.
Investment manager George Hall, founder and president of The Clinton Group gave his personal views on the financial crisis and what the market might see under President-elect Barack Obama. While he felt it was too early to say how the "Obama factor" might influence the hedge fund industry, Mr. Hall said that he hoped the new President would make good choices when selecting his Treasury Secretary and a leader for the SEC.
"The true impact of the US credit crisis will not be tangible for many months to come," Yolanda McCoy, head of the Investments and Securities Division at the Cayman Islands Monetary Authority (CIMA) said, although she was able to confirm that to date they were aware of a total of 340 Cayman funds that had been impacted by the problems with Lehman Brothers, Merrill Lynch, and AIG, with more than 200 of those affected by issues with Lehman.
Professor Jeffrey Rosensweig, director of the Global Perspectives Program at Goizueta Business School at Emory University, closed the seminar with insights into the investment opportunities presented by this current stage in the cycle, shifting the focus from New York and London to emerging markets such as Brazil, Russia, China, the Middle East and India.
"The world adds 100 people every 42 seconds," Professor Rosensweig said, "and 98% of that population growth is in the emerging markets." Pointing to the expectation of long-term continued economic expansion in these regions, Professor Rosensweig said this massive population growth, combined with a move out of poverty in these regions, presents real future opportunities for investors.
5 Dec 2008
PureWave Secures 12 Million with help of 4 Venture Funds
PureWave Networks Inc. has raised $12 million in Series B funding. ATA Ventures and Leapfrog Ventures were joined by venture funds Allegis Capital and Benhamou Global Ventures.
Two new funds, ATA Ventures and Leapfrog Ventures, have joined PureWave’s existing investors in completing the funding round. The Series B funding will allow PureWave to commercially introduce its advance beam forming WiMAX base stations in North America, the APAC region and other selected markets and to expand its operations.
”PureWave’s strong balance sheet in this challenging economic environment, together with our leading edge product offering, will be the foundation of our future growth,” said Gideon Ben-Efraim, PureWave’s CEO and Chairman. “WiMAX and LTE infrastructure are the big growth opportunity in the mobile infrastructure market today and we are positioning the company to be a major player in this space.”
PureWave, a Silicon Valley Company, is the world’s leading supplier of high-performance adaptive beamforming 4G base-stations currently supporting standard WiMAX devices, enabling delivery of quadruple-play services (Voice, Video, Data, Mobile).
Leapfrog is an early stage technology investor based in Menlo Park, CA. The principals have collectively been involved in over 60 venture investments. Leapfrog is currently investing from its second fund, which commenced its activity in 2005.
Two new funds, ATA Ventures and Leapfrog Ventures, have joined PureWave’s existing investors in completing the funding round. The Series B funding will allow PureWave to commercially introduce its advance beam forming WiMAX base stations in North America, the APAC region and other selected markets and to expand its operations.
”PureWave’s strong balance sheet in this challenging economic environment, together with our leading edge product offering, will be the foundation of our future growth,” said Gideon Ben-Efraim, PureWave’s CEO and Chairman. “WiMAX and LTE infrastructure are the big growth opportunity in the mobile infrastructure market today and we are positioning the company to be a major player in this space.”
PureWave, a Silicon Valley Company, is the world’s leading supplier of high-performance adaptive beamforming 4G base-stations currently supporting standard WiMAX devices, enabling delivery of quadruple-play services (Voice, Video, Data, Mobile).
Leapfrog is an early stage technology investor based in Menlo Park, CA. The principals have collectively been involved in over 60 venture investments. Leapfrog is currently investing from its second fund, which commenced its activity in 2005.
4 Dec 2008
Mark Thompson Hired by CME as Hedge Fund Director
Derivatives exchange group CME has hired Mark H. Thompson Jr. as Director of hedge funds. Thompson, 37, will be responsible for serving as the company's primary liaison to the East Coast hedge fund community and developing hedge fund business within the region across all CME Group product lines. He will be based out of New York and will report to Tina Lemieux, Managing Director of hedge funds and broker services.
Thompson joins CME Group from UBS Securities LLC where he most recently served as a member of the macro/cross asset sales team. In this role, he was responsible for serving as the single point of contact for macro, long/short, transition and asset managers for all derivatives and cash products and performing cross-asset idea generation and research for clients. He also served as a member of the bank's global futures and options sales team. His background also includes operations and analyst roles with Moore Capital Management and Banque Paribas.
CME Group is the world's largest and most diverse derivatives exchange. Building on the heritage of CME, CBOT and NYMEX, CME Group serves the risk management needs of customers around the globe. As an international marketplace, CME Group brings buyers and sellers together on the CME Globex electronic trading platform and on trading floors in Chicago and New York.
Thompson joins CME Group from UBS Securities LLC where he most recently served as a member of the macro/cross asset sales team. In this role, he was responsible for serving as the single point of contact for macro, long/short, transition and asset managers for all derivatives and cash products and performing cross-asset idea generation and research for clients. He also served as a member of the bank's global futures and options sales team. His background also includes operations and analyst roles with Moore Capital Management and Banque Paribas.
CME Group is the world's largest and most diverse derivatives exchange. Building on the heritage of CME, CBOT and NYMEX, CME Group serves the risk management needs of customers around the globe. As an international marketplace, CME Group brings buyers and sellers together on the CME Globex electronic trading platform and on trading floors in Chicago and New York.
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