ValueAct Capital Management, a group of hedge funds based in San Fransisco, announced yesterday that they have agreed to buy Catalina Marketing Corp at $1.7 billion in cash or $32.10 a share, a 7.5% premium over the company's closing price of $29.85.
The hedge fund group also agreed to assume $135-million in debt from the St. Petersburg company known for its printers that dispense coupons and color ads in store checkout counters. ValueAct is also Catalina's biggest shareholder.
ValueAct is known for its activist slant and their strategy is to buy large stakes in undervalued companies and then work with the management to boost performance. Founded in 2000, the hedge fund manages some $1.5 billion on behalf of institutional and wealthy individual investors.
Dick Buell, chief executive officer of Catalina said that going private will allow the company to invest aggressively and grow with long-term goals, without the fear of Wall Street backlash.
The company said it expects the deal to close in the next several months, subject to approval by stockholders. Catalina joins a growing trend of public companies looking to go private.
9 Mar 2007
New Hedge Fund Platform
SuperDerivatives announced the launch of First Cross-Asset, Turnkey Derivatives Platform for Hedge Funds and Asset Managers.
SD-Funds said in a press release that the platform is a breakthrough in hedge-fund technology. It includes all pre-trade and post-trade activities with features specifically designed for hedge fund and asset managers, covering all assets and derivatives classes. Backward testing of strategies allows accurate retroactive performance comparison of alternative derivatives trading strategies, based on detailed historical 12-year market data.
"We've created an extremely rich multi-asset solution for hedge funds and asset managers,..I am certain that SD-Funds will have a huge, positive impact on the hedge fund and asset management industries." said David Gershon, President and CEO of SuperDerivatives.
SD-Funds said in a press release that the platform is a breakthrough in hedge-fund technology. It includes all pre-trade and post-trade activities with features specifically designed for hedge fund and asset managers, covering all assets and derivatives classes. Backward testing of strategies allows accurate retroactive performance comparison of alternative derivatives trading strategies, based on detailed historical 12-year market data.
"We've created an extremely rich multi-asset solution for hedge funds and asset managers,..I am certain that SD-Funds will have a huge, positive impact on the hedge fund and asset management industries." said David Gershon, President and CEO of SuperDerivatives.
8 Mar 2007
Hedge Funds To Oust "Grand Theft Auto" CEO
Shares in the makers of the video game "Grand Theft Auto", Take-Two shot up nearly 8%, from $1.34, to $18.95 yesterday. The increase came immediately after investors including Steven Cohen's SAC Capital Advisors LLC and David Shaw's D.E. Shaw & Co., both hedge fund managers, announced the plan to remove the embattled video-game designer's CEO in a regulatory filing.
A group of high-profile hedge funds that collectively control about 46% of Take-Two Interactive Software has launched a proxy battle to "review the employment status" of CEO Paul Eibeler and CFO Karl Winters.
In addition to the management changes, the hedge fund group also is seeking to appoint a total of six board members. They plan to present their nominees at Take-Two's March 23 board meeting. The slate includes media honcho Strauss Zelnick, Benjamin Feder, Jon Moses, Michael Dornemann and Michael James Sheresky.
"Management has sort of lost the faith of the investor community,'' said Todd Mitchell, a Kaufman Brothers LP analyst in New York, in an interview. "A shake up would be a positive thing,'' said Mitchell. The investor group began forming in early February after veteran activist Carl Icahn floated the idea of agitating for change. At one point in 2006, he had 2.8 million shares.
Take-Two also remains the subject of a criminal investigation by the New York district attorney’s office regarding stock options backdating and possibly broader issues. The S.E.C. also has started an informal investigation into the video game company.
A group of high-profile hedge funds that collectively control about 46% of Take-Two Interactive Software has launched a proxy battle to "review the employment status" of CEO Paul Eibeler and CFO Karl Winters.
In addition to the management changes, the hedge fund group also is seeking to appoint a total of six board members. They plan to present their nominees at Take-Two's March 23 board meeting. The slate includes media honcho Strauss Zelnick, Benjamin Feder, Jon Moses, Michael Dornemann and Michael James Sheresky.
"Management has sort of lost the faith of the investor community,'' said Todd Mitchell, a Kaufman Brothers LP analyst in New York, in an interview. "A shake up would be a positive thing,'' said Mitchell. The investor group began forming in early February after veteran activist Carl Icahn floated the idea of agitating for change. At one point in 2006, he had 2.8 million shares.
Take-Two also remains the subject of a criminal investigation by the New York district attorney’s office regarding stock options backdating and possibly broader issues. The S.E.C. also has started an informal investigation into the video game company.
Hedge Fund N.I.R. Group Scores Highest %Increase
As combined assets at the largest U.S. hedge funds finally crossed the trillion-dollar mark, some are doing better than others. According to the bi-annual hedge fund survey by industry publication, Absolute Return, N.Y.-based NIR Group scored the biggest increase in raw percentages, a 789% increase.
The firm, run by Corey Ribotsky, manages a handful of Roslyn, N.Y. hedge funds with $630 million under management and approximately $622 million in PIPEinvestments.
Ribotsky also launched a credit opportunities fund last year. Under his direction, the firm raised more than $3 billion for the fund, expanding to $3.62 billion from $407 the previous year earlier, a 789% increase.
Ribotsky, 36, is the Managing Member of N.I.R. Group, LLC, a boutique investment management firm. Mr. Ribotsky has been investing in public companies since 1992. Prior to becoming a member of N.I.R., Mr. Ribotsky was a member of the investment management firm, The Rainmaker Group, LLC located in Red Bank, New Jersey.
The N.I.R. Group has offices in Roslyn, New York. Both R&C Advisors, LLC and R&C Investors, LLC are based in New York.
The firm, run by Corey Ribotsky, manages a handful of Roslyn, N.Y. hedge funds with $630 million under management and approximately $622 million in PIPEinvestments.
Ribotsky also launched a credit opportunities fund last year. Under his direction, the firm raised more than $3 billion for the fund, expanding to $3.62 billion from $407 the previous year earlier, a 789% increase.
Ribotsky, 36, is the Managing Member of N.I.R. Group, LLC, a boutique investment management firm. Mr. Ribotsky has been investing in public companies since 1992. Prior to becoming a member of N.I.R., Mr. Ribotsky was a member of the investment management firm, The Rainmaker Group, LLC located in Red Bank, New Jersey.
The N.I.R. Group has offices in Roslyn, New York. Both R&C Advisors, LLC and R&C Investors, LLC are based in New York.
7 Mar 2007
Hedge Funds Driving Bank Stocks Up 50%
Hedge funds have acquired around 7% in Landesbank Berlin, the hedge funds hope to profit following the sales process, as the new majority stakeholder will be obliged to make minority shareholders a buyout offer, a report said.
The unnamed hedge funds are positioned to profit from the sale regardless of who buys the bank and their acquisitions have pushed the price up more than 50% to €7.57 in the past six months. The price values the bank at €7.6bn ($10bn), far more than its €4bn to €5bn price-tag.
The city state must sell its 81% stake in Landesbank Berlin by the end of this year to conform with EU directives. The sale is being closely watched in the financial sector because Landesbank Berlin owns Berliner Sparkasse and therefore represents the first real opportunity for private banks to enter the previously protected public savings bank sector.
"The free-float is firmly in the hands of hedge funds by now," said one adviser to a potential bidder, who declined to be named.
However, the small free-float, and the lack of liquidity has deterred hedge funds from taking big stakes while political risk has prevented the shares rising higher, according to one hedge fund adviser.
The unnamed hedge funds are positioned to profit from the sale regardless of who buys the bank and their acquisitions have pushed the price up more than 50% to €7.57 in the past six months. The price values the bank at €7.6bn ($10bn), far more than its €4bn to €5bn price-tag.
The city state must sell its 81% stake in Landesbank Berlin by the end of this year to conform with EU directives. The sale is being closely watched in the financial sector because Landesbank Berlin owns Berliner Sparkasse and therefore represents the first real opportunity for private banks to enter the previously protected public savings bank sector.
"The free-float is firmly in the hands of hedge funds by now," said one adviser to a potential bidder, who declined to be named.
However, the small free-float, and the lack of liquidity has deterred hedge funds from taking big stakes while political risk has prevented the shares rising higher, according to one hedge fund adviser.
Hedge Fund Citadel Buys Bankrupt Company
Citadel Investment Group has topped Credit Suisse in an auction, agreeing to pay about $180 million for bankrupt ResMAE Mortgage Corp.
Citadel, a $13.4 billion Chicago-based hedge fund, said they will allow ResMAE, the bankrupt subprime mortgage lender, to work as an autonimous unit and allow founders Jack Mayesh and Ed Resendez to stay in control of the company. Subprime loans are offered to borrowers with spotty credit and lower incomes, the sector has descended into crisis as interest rates climbed from record lows.
ResMAE filed for bankruptcy in February, the firm said in the filing that it planned to sell most of its assets to Credit Suisse. However, hedge fund Citadel offered to pay $22.4 million, a break-up fee of up to $1.5 million plus ResMAE loans for 98.5% of their face value, or roughly $160 million.
U.S. Bankruptcy Judge Kevin Carey in Wilmington, Delaware, approved the sale on Monday afternoon, "Our financial support of ResMAE during this reorganization will allow one of the industry's leaders to remain appropriately capitalized to meet the needs of this very important market," Citadel's Ken Griffin said in a statement.
Other hedge funds are also expanding into this area, in July, hedge fund Fortress Investment Group LLC paid $554.3 million for the subprime lending arm of Dallas-based homebuilder Centex Corp. Then in December, Fortress also bought Champion Mortgage's loan- underwriting business from KeyCorp.
Since its founding as a $4.6 million convertible arbitrage fund in 1990, Citadel has grown into a sophisticated alternative investment institution. The hedge fund has seven main areas of focus including equities, fixed income and energy trading.
Citadel, a $13.4 billion Chicago-based hedge fund, said they will allow ResMAE, the bankrupt subprime mortgage lender, to work as an autonimous unit and allow founders Jack Mayesh and Ed Resendez to stay in control of the company. Subprime loans are offered to borrowers with spotty credit and lower incomes, the sector has descended into crisis as interest rates climbed from record lows.
ResMAE filed for bankruptcy in February, the firm said in the filing that it planned to sell most of its assets to Credit Suisse. However, hedge fund Citadel offered to pay $22.4 million, a break-up fee of up to $1.5 million plus ResMAE loans for 98.5% of their face value, or roughly $160 million.
U.S. Bankruptcy Judge Kevin Carey in Wilmington, Delaware, approved the sale on Monday afternoon, "Our financial support of ResMAE during this reorganization will allow one of the industry's leaders to remain appropriately capitalized to meet the needs of this very important market," Citadel's Ken Griffin said in a statement.
Other hedge funds are also expanding into this area, in July, hedge fund Fortress Investment Group LLC paid $554.3 million for the subprime lending arm of Dallas-based homebuilder Centex Corp. Then in December, Fortress also bought Champion Mortgage's loan- underwriting business from KeyCorp.
Since its founding as a $4.6 million convertible arbitrage fund in 1990, Citadel has grown into a sophisticated alternative investment institution. The hedge fund has seven main areas of focus including equities, fixed income and energy trading.
6 Mar 2007
Survey Shows US Hedge Funds to Hold $1,200 Billion In Assets
The biannual survey of US hedge funds shows that 241 firms, each managing more than $1bn, held a combined total of nearly $1,200bn as of January 1.
According to a new survey conducted by Absolute Return magazine, money continued to flow steadily into alternative investments last year, causing the combined assets of the largest US hedge funds to climb well above the $1,000bn mark.
That is about $215bn more than the top 218 firms were managing this past summer and $347bn more than the top 207 firms were running at the beginning of last year. The huge increases last year came in spite of hedge fund closures, including that of $9.1bn Amaranth Advisors, which erased $35bn from the market.
The biggest new launch of last year, Convexity Capital Management, joined the top-60 US hedge funds in its first year, making it the most successful hedge fund launch in history, raising $6.3bn.
The top 20 firms, which held $258bn last January, now manage nearly $386bn. There are now 29 firms that run more than $10bn, up from 16 last year, and well ahead of the 12 that managed such large huge sums in July 2005.
In the number one spot JPMorgan unseated Goldman Sachs as the world's largest manager of hedge fund assets, with $34bn under management.
According to a new survey conducted by Absolute Return magazine, money continued to flow steadily into alternative investments last year, causing the combined assets of the largest US hedge funds to climb well above the $1,000bn mark.
That is about $215bn more than the top 218 firms were managing this past summer and $347bn more than the top 207 firms were running at the beginning of last year. The huge increases last year came in spite of hedge fund closures, including that of $9.1bn Amaranth Advisors, which erased $35bn from the market.
The biggest new launch of last year, Convexity Capital Management, joined the top-60 US hedge funds in its first year, making it the most successful hedge fund launch in history, raising $6.3bn.
The top 20 firms, which held $258bn last January, now manage nearly $386bn. There are now 29 firms that run more than $10bn, up from 16 last year, and well ahead of the 12 that managed such large huge sums in July 2005.
In the number one spot JPMorgan unseated Goldman Sachs as the world's largest manager of hedge fund assets, with $34bn under management.
5 Mar 2007
Hedge Fund Manager Merger Creates the World's No 2 Visitor Attraction Company
Some of the biggest brand names in the global theme park market today announced a partnership of two rapidly growing businesses, The Tussauds Group and Merlin Entertainments Group, making them the world's second biggest attractions operator after Disney.
Merlin Entertainments Group is known for theme parks such as Legoland, Sealife and several others. The company is controlled by hedge fund manager Blackstone Group.
On the merger with Merlin, international investment company Dubai International Capital LLC said, "Tussauds and Merlin are very complementary businesses and there is an obvious commercial logic in bringing them together."
The Tussauds Group is controlled by Dubai International which is known for its $1.23 billion acquisition of Travelodge, its $1 billion stake in DaimlerChrysler, and the $1.2 billion acquisition of Doncasters Group.
The Blackstone Group has raised a total of more then $67 billion for hedge fund and alternative investments since its formation. The group is currently investing its fifth general private equity fund with commitments of $15.6 billion. Other private equity investments in the leisure sector have included Universal Studios in Orlando, and Six Flags Theme Park.
Merlin Entertainments Group is known for theme parks such as Legoland, Sealife and several others. The company is controlled by hedge fund manager Blackstone Group.
On the merger with Merlin, international investment company Dubai International Capital LLC said, "Tussauds and Merlin are very complementary businesses and there is an obvious commercial logic in bringing them together."
The Tussauds Group is controlled by Dubai International which is known for its $1.23 billion acquisition of Travelodge, its $1 billion stake in DaimlerChrysler, and the $1.2 billion acquisition of Doncasters Group.
The Blackstone Group has raised a total of more then $67 billion for hedge fund and alternative investments since its formation. The group is currently investing its fifth general private equity fund with commitments of $15.6 billion. Other private equity investments in the leisure sector have included Universal Studios in Orlando, and Six Flags Theme Park.
High Fees Reduce the Attractiveness of Hedge Funds
A recent study on the effect of the fees that hedge funds charge, “Portfolio Efficiency With Performance Fees,” was conducted by Mark Kritzman, president and chief executive of Windham Capital Management, a Boston-based money management firm.
Mr. Kritzman’s study shows that hedge funds’ high fees make it unlikely that investors will improve their long-term performance by putting money into hedge funds. Focusing on the standard fee arrangement in the industry, known as “2 and 20″, which is to charge 2% of assets under management and 20% of profits above a predetermined benchmark, Mr Kritzman found that the combined impact of such fees is so high as to greatly reduce the attractiveness of hedge funds.
In an interview with the New York Times, Mr Kritzman said the fees’ effect on the portfolio was so sizable because of the “asymmetry penalty” resulting from the 20% cut of profits that the hedge funds earn. The funds do not share in investor losses, but they reap a large share of the profits.
The study was similarly disparaging about funds of hedge funds, saying he found it difficult to justify any allocation to funds of hedge funds, because they earn fees above and beyond those earned by the hedge funds in which they invest, typically 1% of funds under management and 10% of profits above a benchmark. The bottom line, Mr. Kritzman told the New York Times, is this: “Because of fees, the optimal allocation to a group of hedge funds is a lot lower than you might think it should be.”
Mr. Kritzman’s study shows that hedge funds’ high fees make it unlikely that investors will improve their long-term performance by putting money into hedge funds. Focusing on the standard fee arrangement in the industry, known as “2 and 20″, which is to charge 2% of assets under management and 20% of profits above a predetermined benchmark, Mr Kritzman found that the combined impact of such fees is so high as to greatly reduce the attractiveness of hedge funds.
In an interview with the New York Times, Mr Kritzman said the fees’ effect on the portfolio was so sizable because of the “asymmetry penalty” resulting from the 20% cut of profits that the hedge funds earn. The funds do not share in investor losses, but they reap a large share of the profits.
The study was similarly disparaging about funds of hedge funds, saying he found it difficult to justify any allocation to funds of hedge funds, because they earn fees above and beyond those earned by the hedge funds in which they invest, typically 1% of funds under management and 10% of profits above a benchmark. The bottom line, Mr. Kritzman told the New York Times, is this: “Because of fees, the optimal allocation to a group of hedge funds is a lot lower than you might think it should be.”
2 Mar 2007
Disclosure Ruling Has Hedge Funds Retreating
Judge Allan Gropper of the U.S. Bankruptcy Court in New York this week ordered a group of hedge funds that were demanding the formation of a shareholders committee to disclose all of their holdings in the airline, when they were purchased and for how much.
Soon after the disclosure ruling the hedge fund shareholders withdrew their motion to have a say in the payment deals after the Northwest Airline Corp reorganization. Hedge funds are known for their fiercely guarded trading secrets and so far have succeeded in resisting regulation.
The shareholder group led by Owl Creek hedge fund has said it holds a total of 30% of Northwest's stock and about $164.7 million in claims. Northwest said shareholders will receive nothing and existing shares will be canceled upon the carrier’s exit from bankruptcy.
Gropper's ruling would enforce Bankruptcy Rule 2019, which says parties in a Chapter 11 case acting as a group must disclose certain information about their holdings. The decision requires the 13 investment funds on the official committee to make public information about trading patterns, holdings and pricing, which hedge funds have labored for decades to keep secret.
Soon after the disclosure ruling the hedge fund shareholders withdrew their motion to have a say in the payment deals after the Northwest Airline Corp reorganization. Hedge funds are known for their fiercely guarded trading secrets and so far have succeeded in resisting regulation.
The shareholder group led by Owl Creek hedge fund has said it holds a total of 30% of Northwest's stock and about $164.7 million in claims. Northwest said shareholders will receive nothing and existing shares will be canceled upon the carrier’s exit from bankruptcy.
Gropper's ruling would enforce Bankruptcy Rule 2019, which says parties in a Chapter 11 case acting as a group must disclose certain information about their holdings. The decision requires the 13 investment funds on the official committee to make public information about trading patterns, holdings and pricing, which hedge funds have labored for decades to keep secret.
Citigroup Exec Quits to Launch Hong Kong Hedge Fund
Ajay Kapur, a top Citigroup executive is leaving the firm to found his own hedge fund, according to reports.
Kapur is returning to Hong Kong, where he has residency rights, to set up a hedge fund called First Horse Capital with Niall MacLeod and two other members of Kapur's team that also left Citigroup. Kapur's new fund will invest in equities globally.
Kapur said the results of investment models that he and his team had devised were "pretty good." and that, "I just thought that one should eat one's own cooking,"Kapur said from London. The fund is based in Hong Kong in order to get information from China, India, Japan, "you need to be closer and on the ground." he said.
Asian hedge funds returned 16.1% last year, compared to the 11.5% gains of their counterparts in North America and 11.35% in Europe, according to indexes run by Eurekahedge, a company in Singapore that tracks the industry.
Kapur has followed a well-worn path from investment banking to hedge funds, other Wall Street advisers have also joined Asia-based hedge funds and buyout firms. In January, the chairman of J.P. Morgan Asia Pacific, Ralph Parks, joinedOaktree Capital Management, a Los Angeles hedge fund with more than $33 billion in assets.
First Horse Capital, named for the Indian cavalry regiment Kapur's father served in, will invest in stocks worldwide. Kapur declined to say how much money he's raised for First Horse Capital.
Kapur is returning to Hong Kong, where he has residency rights, to set up a hedge fund called First Horse Capital with Niall MacLeod and two other members of Kapur's team that also left Citigroup. Kapur's new fund will invest in equities globally.
Kapur said the results of investment models that he and his team had devised were "pretty good." and that, "I just thought that one should eat one's own cooking,"Kapur said from London. The fund is based in Hong Kong in order to get information from China, India, Japan, "you need to be closer and on the ground." he said.
Asian hedge funds returned 16.1% last year, compared to the 11.5% gains of their counterparts in North America and 11.35% in Europe, according to indexes run by Eurekahedge, a company in Singapore that tracks the industry.
Kapur has followed a well-worn path from investment banking to hedge funds, other Wall Street advisers have also joined Asia-based hedge funds and buyout firms. In January, the chairman of J.P. Morgan Asia Pacific, Ralph Parks, joinedOaktree Capital Management, a Los Angeles hedge fund with more than $33 billion in assets.
First Horse Capital, named for the Indian cavalry regiment Kapur's father served in, will invest in stocks worldwide. Kapur declined to say how much money he's raised for First Horse Capital.
1 Mar 2007
Hedge Fund Shareholders Withdraw from Northwest Deal
Hedge fund shareholders withdrew their motion to have a say in the payment deals after the Northwest Airline Corp reorganization, surprising U.S. Bankruptcy Judge Allan Gropper. The hedge fund committee claims that Jugde Gropper has not allowed an investigation into whether Northwest plans to merge with Delta.
The temporary committee of hedge fund investors tried to subpoena rival airlines that may have held merger talks with Northwest, in a effort to prove that it is worth more than it claims. Northwest said shareholders will receive nothing and existing shares will be canceled upon the carrier’s exit from bankruptcy.
The shareholder group led by the Owl Creek hedge fund has been fighting Northwest’s claims that there won’t be enough cash to pay the shareholders after the bankruptcy reorganization.
Northwest Airlines said it had a net loss of $349 million for January. Revenue was $892 million, the carrier said in a filing with U.S. Bankruptcy Court in New York.
Northwest Airlines said that it expected to be worth roughly $7 billion when it emerged from bankruptcy later this year and that it would pay unsecured creditors roughly three-quarters of what they were owed.
The temporary committee of hedge fund investors tried to subpoena rival airlines that may have held merger talks with Northwest, in a effort to prove that it is worth more than it claims. Northwest said shareholders will receive nothing and existing shares will be canceled upon the carrier’s exit from bankruptcy.
The shareholder group led by the Owl Creek hedge fund has been fighting Northwest’s claims that there won’t be enough cash to pay the shareholders after the bankruptcy reorganization.
Northwest Airlines said it had a net loss of $349 million for January. Revenue was $892 million, the carrier said in a filing with U.S. Bankruptcy Court in New York.
Northwest Airlines said that it expected to be worth roughly $7 billion when it emerged from bankruptcy later this year and that it would pay unsecured creditors roughly three-quarters of what they were owed.
Ritchie to Sell Flagship Hedge Fund
Ritchie Capital Management Ltd has been struggling for two years now with below-average returns and the word is out that the company plans to sell its flagship hedge fund to equal partners in the venture, Reservoir Capital Group and Coller Capital.
Ritchie Capital, which oversees about $2.8 billion including borrowed money, will liquidate its Multistrategy Global Fund and return cash to investors. The company told investors that the Ritchie Capital Management flagship multi-strategy hedge fund had about $730 million in assets in mid-2006.
Richie is negotiating to sell the flagship hedge fund's assets to Reservoir, the $3 billion hedge fund investor, and Coller, which manages about $3.5 billion, in a deal that could be worth more than $1 billion. According to the deal with Coller, the current chief executive, Thane Ritchie, may continue to manage the fund after the sale.
Chicago-based Ritchie, a diversified hedge fund group that faced an extended period of under performance and investor demands for capital returns, has been in exclusive talks with Reservoir and Coller for several months to buy the flagship fund, sources have said.
Ritchie Capital, which oversees about $2.8 billion including borrowed money, will liquidate its Multistrategy Global Fund and return cash to investors. The company told investors that the Ritchie Capital Management flagship multi-strategy hedge fund had about $730 million in assets in mid-2006.
Richie is negotiating to sell the flagship hedge fund's assets to Reservoir, the $3 billion hedge fund investor, and Coller, which manages about $3.5 billion, in a deal that could be worth more than $1 billion. According to the deal with Coller, the current chief executive, Thane Ritchie, may continue to manage the fund after the sale.
Chicago-based Ritchie, a diversified hedge fund group that faced an extended period of under performance and investor demands for capital returns, has been in exclusive talks with Reservoir and Coller for several months to buy the flagship fund, sources have said.
27 Feb 2007
Hedge Funds Looking For Direct Access to MTS
Following reports that hedge funds such as Citadel and Vega are trying to gain direct access to the pan-European bond exchange network MTS, the European Primary Dealers Association (EPDA) reported that it has not yet decided whether to allow third parties to access its platform, but the group has reportedly set up a committee to consider admitting hedge funds as members.
They do warn however, that third party participation in the electronic markets could undermine the current structure and introduce greater risks.
MTS is an abbreviation for Mercato dei Titoli di Stato, which translates to "Market for Government Bonds". The technology of the Italian based MTS platform is the Telematico system, a sophisticated electronic platform specifically designed for the trading of fixed income instruments. It replaces the expensive and often time-consuming process of trading over-the-counter.
According to a recent FT report, these moves are showing how powerful the hedge fund industry is becoming and also highlights the dispute over the current structure of the euro-zone government bond markets.
In a discussion paper circulated Tuesday, the EPDA said, "While issuers have influence over their primary dealerships, primary dealers may not be in a position to exercise control over third parties,.............They would be squeezed between the commercial pressure of their prime brokerage business and the inability to regulate the activity of third parties trading in the primary dealers' name. Lack of control could give rise to potential misbehavior by rogue traders."
They do warn however, that third party participation in the electronic markets could undermine the current structure and introduce greater risks.
MTS is an abbreviation for Mercato dei Titoli di Stato, which translates to "Market for Government Bonds". The technology of the Italian based MTS platform is the Telematico system, a sophisticated electronic platform specifically designed for the trading of fixed income instruments. It replaces the expensive and often time-consuming process of trading over-the-counter.
According to a recent FT report, these moves are showing how powerful the hedge fund industry is becoming and also highlights the dispute over the current structure of the euro-zone government bond markets.
In a discussion paper circulated Tuesday, the EPDA said, "While issuers have influence over their primary dealerships, primary dealers may not be in a position to exercise control over third parties,.............They would be squeezed between the commercial pressure of their prime brokerage business and the inability to regulate the activity of third parties trading in the primary dealers' name. Lack of control could give rise to potential misbehavior by rogue traders."
Hedge Fund Mega-Investor Expands To U.S.
In a effort to strengthen its presence in the United States, BNP Paribas Securities Services announced that it has expanded its hedge fund administration operations to include services within the United States. BNP Paribas has EUR 570 billion ($754.8 billion)in assets invested in over 4,480 hedge funds worldwide and EUR 3.43 trillion ($4.54 trillion) in assets under management.
Located in King of Prussia, Pennsylvania, the hedge fund administration team is headed by Andrew Dougherty, Chief Operating Officer for fund administration in the United States.
BNP Paribas has recently enhanced its global portfolio by expanding its hedge fund administration businesses in Spain, Italy and France. From its offices in 18 countries, BNP Paribas works closely with its clients to provide comprehensive middle and back-office solutions to hedge funds and fund of hedge funds firms worldwide, including Asia and emerging markets.
Frederic Perard, Head of Global Fund Services at BNP Paribas Securities Services commented: "Our fully-integrated client services and operations team, which specializes in master-feeder structures, partnership accounting and high-volume trading portfolios, delivers added-value services to our clients. Our service offering is well-positioned to serve middle-market managers across various locations who seek an independent administrator to handle their multiple prime brokerage relationships."
BNP Paribas Securities Services is a leading securities services provider to the world's financial institutions, with a local presence in all key European markets as well as in the US and Australasia. With 4,200 staff in 18 countries, BNP Paribas Securities Services has over 700 clients, including 8 of the world's top 10 investment managers, and a global custody network covering 90 markets.
Located in King of Prussia, Pennsylvania, the hedge fund administration team is headed by Andrew Dougherty, Chief Operating Officer for fund administration in the United States.
BNP Paribas has recently enhanced its global portfolio by expanding its hedge fund administration businesses in Spain, Italy and France. From its offices in 18 countries, BNP Paribas works closely with its clients to provide comprehensive middle and back-office solutions to hedge funds and fund of hedge funds firms worldwide, including Asia and emerging markets.
Frederic Perard, Head of Global Fund Services at BNP Paribas Securities Services commented: "Our fully-integrated client services and operations team, which specializes in master-feeder structures, partnership accounting and high-volume trading portfolios, delivers added-value services to our clients. Our service offering is well-positioned to serve middle-market managers across various locations who seek an independent administrator to handle their multiple prime brokerage relationships."
BNP Paribas Securities Services is a leading securities services provider to the world's financial institutions, with a local presence in all key European markets as well as in the US and Australasia. With 4,200 staff in 18 countries, BNP Paribas Securities Services has over 700 clients, including 8 of the world's top 10 investment managers, and a global custody network covering 90 markets.
DaimlerChrysler Wary Of Possible Hedge Fund Takeover
DaimlerChrysler announced this month it was considering all options for Chrysler, including a split, but without Chrysler, the Daimler group could be more of a takeover target for hedge funds.
According to CNN Money, the likelihood of an unsolicited approach, such as a hedge fund takeover, was still low but had gone up to 20% from 10%.
One person familiar with the situation said Chief Financial Officer Bodo Uebber had routinely played down suggestions that hedge funds could team up to buy DaimlerChrysler because he felt such a wolf pack would be unable to agree on strategy and goals.
"But should it come to pass that Chrysler is split off from Daimler, then Daimler would be an interesting target," the source said. A complete split-up of the cars, trucks and vans businesses would then be "a real danger."
DaimlerChrysler declined comment on prospects for being acquired if it divests Chrysler but has said in the past the best defense against takeovers was good financial performance. The company has a market capitalization of $79 billion.
According to CNN Money, the likelihood of an unsolicited approach, such as a hedge fund takeover, was still low but had gone up to 20% from 10%.
One person familiar with the situation said Chief Financial Officer Bodo Uebber had routinely played down suggestions that hedge funds could team up to buy DaimlerChrysler because he felt such a wolf pack would be unable to agree on strategy and goals.
"But should it come to pass that Chrysler is split off from Daimler, then Daimler would be an interesting target," the source said. A complete split-up of the cars, trucks and vans businesses would then be "a real danger."
DaimlerChrysler declined comment on prospects for being acquired if it divests Chrysler but has said in the past the best defense against takeovers was good financial performance. The company has a market capitalization of $79 billion.
26 Feb 2007
Hedge Funds World Conference in Dubai
The 8th annual Hedge Funds World Middle East Conference is being held at the Madinat Jumeirah in Dubai. Sponsored by Man investments, the event will play host to some of the biggest names in the alternative asset industry, reflecting growing regional demand for these products.
Some of the key topics include; New business in emerging markets, such as Asia, India and Latin America, the future of hedge funds and manager selection, fund selection and best practice portfolio construction.
The event provides specialist workshops, and there will be 50 leading speakers. The Hedge Funds World Middle East 2007 website boasts an 8 year track record, intensively researched to deliver in-depth insight into the hedge fund universe and the latest trends and investment styles.
To attend; http://www.terrapinn.com/2007/hfwme/
Some of the key topics include; New business in emerging markets, such as Asia, India and Latin America, the future of hedge funds and manager selection, fund selection and best practice portfolio construction.
The event provides specialist workshops, and there will be 50 leading speakers. The Hedge Funds World Middle East 2007 website boasts an 8 year track record, intensively researched to deliver in-depth insight into the hedge fund universe and the latest trends and investment styles.
To attend; http://www.terrapinn.com/2007/hfwme/
British Rail Pension Fund Plans to Invest One Billion In Hedge Funds
Railpen, one of the largest pension funds in Britain with £18 billion ($35.3 billion) in assets under management is planning to move at least £540 million ($1 billion) into hedge funds this year.
Chris Hitchen, Railpen chief executive, said they are planning on having £1.4 billion ($2.7 billion) invested in hedge funds by December, increasing their exposure from 5% to 8%.
“We have been divesting our equity portfolio to buy other asset classes, such as private equity, property, hedge funds and infrastructure,” Mr Hitchen said. “We went into infrastructure assets last year, but they’re somewhat overheated, so we’re trying to make sure we don’t put all our money in at the same time.”
According to the Times Online, a recent NAPF survey indicated that 11% of pension funds had invested in hedge funds by the end of 2006, up from 8% the previous year. There were also rises in the amount of money that pension funds invested in property, private equity and venture capital as part of a wider move out of equities in 2006.
He said that despite concerns about the stability of the hedge fund industry, the funds could provide returns that were more stable than equities.
Chris Hitchen, Railpen chief executive, said they are planning on having £1.4 billion ($2.7 billion) invested in hedge funds by December, increasing their exposure from 5% to 8%.
“We have been divesting our equity portfolio to buy other asset classes, such as private equity, property, hedge funds and infrastructure,” Mr Hitchen said. “We went into infrastructure assets last year, but they’re somewhat overheated, so we’re trying to make sure we don’t put all our money in at the same time.”
According to the Times Online, a recent NAPF survey indicated that 11% of pension funds had invested in hedge funds by the end of 2006, up from 8% the previous year. There were also rises in the amount of money that pension funds invested in property, private equity and venture capital as part of a wider move out of equities in 2006.
He said that despite concerns about the stability of the hedge fund industry, the funds could provide returns that were more stable than equities.
23 Feb 2007
Hedge Funds Charged With Fraud
A Washington hedge fund manager has been charged with defrauding Maryland investors of $9 million by soliciting money for his hedge funds, LaJon Corp, LaJon Capital Management, LaJon Capital Advisors and LaJon Capital Fund.
Attorney General Douglas F. Gansler froze the assets of Williams's hedge funds, saying that John H. Williams of Upper Marlboro violated eight civil statutes of state security laws.
Williams lured investors with free lunch seminars and hid losses with fake statements, the state attorney general's office said. Williams became involved in the scheme after meeting a Canadian hedge fund trader, Stephen Chesnowitz, in an Internet chat room, according to a court filing by Gansler's office.
According to The Washington Post, the two traders sent out mass mailings advertising a free "gourmet meal" and the opportunity to "earn excellent returns with a guarantee against market risk." More than 150 people, mainly from Montgomery and Prince George's counties, attended the seminars and gave Williams a total of $9 million. He transferred the money to Chesnowitz's hedge funds in Canada and the Cayman Islands.
Investors could log onto a Web site to check how the hedge funds were doing, and online statements showed that their investments were profitable. But that was not true. On April 28, 2006, alone, the hedge fund piled up $626,380 in losses, the filing said. Williams, "knowing the money was gone . . . continued to take fees" based on phantom returns, the court filing said. In total, Williams paid himself $586,000 for managing the investments.
Maryland officials said they are trying to figure out how much Williams lost in his trades and whether there is anything left to return to investors. Most of the money has been transferred out of the country to Chesnowitz's firms.
Attorney General Douglas F. Gansler froze the assets of Williams's hedge funds, saying that John H. Williams of Upper Marlboro violated eight civil statutes of state security laws.
Williams lured investors with free lunch seminars and hid losses with fake statements, the state attorney general's office said. Williams became involved in the scheme after meeting a Canadian hedge fund trader, Stephen Chesnowitz, in an Internet chat room, according to a court filing by Gansler's office.
According to The Washington Post, the two traders sent out mass mailings advertising a free "gourmet meal" and the opportunity to "earn excellent returns with a guarantee against market risk." More than 150 people, mainly from Montgomery and Prince George's counties, attended the seminars and gave Williams a total of $9 million. He transferred the money to Chesnowitz's hedge funds in Canada and the Cayman Islands.
Investors could log onto a Web site to check how the hedge funds were doing, and online statements showed that their investments were profitable. But that was not true. On April 28, 2006, alone, the hedge fund piled up $626,380 in losses, the filing said. Williams, "knowing the money was gone . . . continued to take fees" based on phantom returns, the court filing said. In total, Williams paid himself $586,000 for managing the investments.
Maryland officials said they are trying to figure out how much Williams lost in his trades and whether there is anything left to return to investors. Most of the money has been transferred out of the country to Chesnowitz's firms.
Subscribe to:
Posts (Atom)