Credit Crunch Hedge Fund Killers - Movie Debut

West Palm Beach (HedgeCo.net) - Playing a hedge fund banker turned killer, Dougray Scott stars in the 'credit crunch' movie: New Town Killers. It being shown for the first time in Scotland tonight as part of the Glasgow Film Festival's fifth anniversary.

Filmed in Edinburgh's streets, according to UK's DailyRecord, the movie is high octane, violent and bloody. New Town Killers was made for only £1 million and with perfect timing, as it has already been dubbed the first credit-crunch movie of 2009.

It shows Dougray as a cold-hearted hedge fund banker who turns killer for kicks, playing a 12-hour game of hunt, hide and seek with underprivileged people, according to the paper.

"In creating a scenario where the well-heeled and privileged prey on the poor and deprived, director Richard Jobson is clearly wearing political concerns on his sleeve in his latest film, and is to be admired for it." Says Michael Hayden, of the British Film Institute, "Yet New Town Killers is not bleeding-heart social commentary, but an ambitious and kinetic thriller, a tension-packed joyride through Edinburgh streets; it is obvious Jobson knows the city well, and that he loves it, he presents it wonderfully."

Also in the film is James Anthony Pearson, Joy Division guitarist and actress Liz White, in debt and playing the banker's game for cash. It also stars Joely Richardson, Vanessa Redgrave, Eddie Izzard, Jason Priestley and Brian Cox as Dougray's dad, Dennis.

Dougray said, "The fact that Jobson wrote this before all the banking collapses is incredible. The film gets a cinema release in June.

- Alexis Akesson

Mexican Hedge Fund Takes Over Canadian Mining Company

Canadian mining, development and exploration company, Frontera Copper Corporation, has agreed, due to the recent downturn in the copper market, to Mexican hedge fund Invecture's hostile take over bid.

After determining that the hedge fund, Invecture Group, S.A. de C.V's, offer was superior to the offer previously received from Southern Copper Corporation, the Company's financial advisor, RBC Capital Markets, said that from a financial point of view, the hedge fund's offer is fair to Frontera shareholders.

Frontera's principal activity is the production of copper cathode from the Piedras Verdes run-of-mine heap-leach copper operation in Sonora, Mexico. Based on the January 1, 2008 ore reserves and the estimated recoverable copper contained on the leach pads at December 31, 2007, approximately 1 billion pounds of copper is projected to be produced over the remaining 17-year life of the operation.

Betsy Waters on Basics of Investment Strategy at NY Traders Expo

dbFX Global Director Betsy Waters will moderate a panel discussion entitled, “Investing in Managed Accounts: The What, How, and Why,” during the International Traders Expo, the largest and only expo designed exclusively for active traders. The workshop will be held on Sunday, February 22, 2009 at 1:15 p.m. at New York’s Marriott Marquis.

“The panel discussion will be an excellent opportunity for investors to understand what they should consider before engaging an account manager to execute their FX investments,” said Waters. “Workshop participants will leave the session with a keen understanding of how managed accounts work and how they can benefit from working with a professional manager, as well as how to identify and interview a prospective manager, and what fees and costs are associated with managed accounts.”

Waters will be joined on the panel by Robert Sharpe, Founder and CEO of SolomonFX; Patrick Lafferty, President, Capital Trading Group; David Johnson, Founder, Global Capital Investments, and; Marc Zupicich, financial advisor for Morgan Stanley.

Hedge Funds Need Help in Recovering Losses: Fiduciary Experts Say

Independent forensic professionals, Chris McConnell and Eric Steinwald are two are finding themselves in increasing demand as hedge funds and other investors turn to experts for help in recovering from losses caused by fraud, Ponzi schemes, stock market or real estate market losses.

"Any asset, at any time, may bercome subject to fiduciary duty standards, "McConnell said, "Fiduciary duty is not simply a good idea or a best practice; rather, it's the highest standard known under the law."

McConnell, AIFA of Fiduciary Forensics, has over 25 years of experience in the field and is an acknowledged fiduciary expert in the securities, compensation and valuation fields based upon actual, inside hands-on Wall Street securities industry experience. Steinwald is a principal of Steinwald and Kaufmann, a Brentwood/Los Angeles, California tax and forensics accounting CPA firm, and also has 25 years of experience of serving financial clients. Together, the two bring over 50 years of unmatched expertise to plaintiffs who experience suspicious investment losses of any kind.

"Courts often hold trustees and/or third party investment fiduciaries (banks, brokers, trust companies, investment advisers, hedge funds, and even custodians) may be liable, measured against the expert investment standard regarding personal liability. "McConnell said, "The amount of potential fraud, loss of income, and/or insurance claims looks to increase dramatically as investors face staggering losses. We are ready to help as many people as we can to avoid potential financial catastrophe."

The difference between proving liability and recovering damages and loss is in the actual details, which often provide the edge for success.

Obama's Stimulus Package Approved by Senate

President Barack Obama's $838 billion stimulus plan was approved by the U.S. Senate as part of a plan of action the Senate hopes will revive the collapsing US economy.

$100 billion is to be alotted to hedge funds or other investors, giving them incentive to purchase so-called toxic assets. President Obama welcomed the 61-37 vote as "good news. It's a good start."

Outlining a few details of how the administration would spend the remaining $350 billion of the $700 billion bank bailout program, Treasury Secretary Timothy Geithner separately announced a new public-private partnership to help strengthen banks.

"Critical parts of our financial system are damaged," Geithner said. "The financial system is working against recovery and that's the dangerous dynamic we need to change."

In a related government commitment of financial support, the Federal Reserve broadened a program designed to boost resources for consumer credit and small business loans - from $200 billion up to $1 trillion. Additionally, Obama has campaigned to include funds for school construction in the bill.

Conyers Expands Cayman Islands Team

Pioneers in the field of offshore law, Conyers Dill & Pearman, (Conyers) is expanding its Cayman Islands presence with three new associates as attorneys-at-law. Stephen Leontsinis has joined the Litigation team, while Tania Dons and Preetha Pillai have joined the Corporate Department.

“Our superior investment funds and litigation capabilities have reinforced our reputation as a preferred firm to partner with in transactions of this nature." Richard Finlay, Managing Partner of Conyers’ Cayman Islands office, "We continue to expand our team in line with our strategic plans to build on the strengths and capabilities of our Cayman Islands practice. We are proud of our reputation as global leader which attracts such depth of talent and are delighted to have Stephen, Tania and Preetha join us.”

Since its establishment in July 2003, Conyers’ Cayman Islands office has grown into a full service practice with a current complement of 20 lawyers and 60 staff. The growth of the Cayman Islands practice complements Conyers’ continued growth globally. Last year, the firm opened three new offices in Moscow, Mauritius and São Paulo, as well as making several key hires. Today, Conyers comprises of over 550 staff in 11 jurisdictions with more than 150 lawyers.

With over 150 lawyers, Conyers Dill & Pearman advises on the laws of Anguilla, Bermuda, British Virgin Islands, Cayman Islands and Mauritius from those islands and from Dubai, Hong Kong, London, Moscow, and Singapore. The firm has earned clients’ trust, loyalty and respect by consistently providing responsive, timely and thorough advice on all aspects of offshore corporate and commercial law, commercial litigation and private client matters.

IAS presents a ‘Forensic’ approach to Due Diligence

In response to the recent need to restore confidence and liquidity in the mortgage market, Integrated Asset Services, LLC (IAS), a default management and residential collateral valuation company, is introducing iCDA Credit Due Diligence Analytics.

Expecting clients from hedge funds, mutual funds, private investors, government agencies, ratings agencies, and mortgage originators, IAS calls their system a “surgically precise” review of borrower credit worthiness, collateral valuation, and compliance for loan buyers.

“iCDA is designed to expose both the risk and merit of an asset beyond the historic origination and compliance guidelines," John Coughlin, VP of Capital Markets for IAS said, "Using our suite of analytic tools to forecast performance, we can identify exit strategies and recommend loan modifications and repayment plans for your assets.”

“We’ve combined IAS’s expert default professional services with innovative new technology and a few key alliances to provide a robust, single-source solution,” says Robert Vanderbilt, First Vice President for Integrated Asset Services. "We have to think the integrity of our approach and the fullness of our product will go a long way toward getting the mortgage market moving again,” said Vanderbilt.

Hedge Fund Veteran Acts to Improve Fund Transparency

Mike Griffin of Spectrum Global Fund Administration has launched the a hedge fund website that he believes will improve hedge fund transparancy, HedgeACT.com.

“As a former hedge fund executive, I know first-hand how important transparency is during the capital allocation process,” said Michael Griffin, founder and CEO of HedgeACT and Chief Operating Officer of Fenchurch Capital Management from 1985 to 1998. “This is a difficult time for many hedge fund investors, and we think that giving them better information will make the entire analysis and allocation process much better for everyone involved.”

The “ACT” in HedgeACT.com refers to the site’s three key benefits for the hedge fund community, including Analytics, Capital Introduction and Transparency.

Providing investors with free access to hundreds of data points and analytics for over 7,500 hedge funds, HedgeAct's data is licensed from Morningstar.

Additionally, hedge funds and hedge fund administrators will have the ability to augment this data with their own timely, vetted information on fund performance, track record and other important investor criteria.

Pelorus Advisors Offer Risk Service Exclusively To Hedge Funds

As investors look to independent and unbiased hedge fund risk due diligence, Pelorus Advisors has decided to launch an operational risk management service for hedge fund investors. Unlike other due diligence firms, Pelorus only offers its risk due diligence service to hedge fund investors.

“It’s an enormous conflict of interest for diligence teams to be compensated by the same hedge funds they cover,” said Jeff Rathgeber, co-founder and partner of Pelorus. “The hedge fund community has seen more than enough target-sponsored ‘independent’ report cards. We'll let other risk management firms issue their seals of approval based on manager-supplied data.”

Pelorus is staffed by a team of hedge fund experts that have spent years operating inside complicated hedge fund structures. “It is only from this vantage point that an advisory firm gains the experience needed to identify the true risks that hide within hedge funds,” said Ken McGee, Managing Director of Pelorus’ Hedge Fund Practice Group. “It is exactly this kind of experience that is missing from most hedge fund due diligence firms. In our opinion, this lack of inside experience is what moves most firms away from being Hedge Fund Risk Experts and moves them into the category of Data Regression Analysts.”

“A clear distinction that separates Pelorus Advisors from other firms is that we don’t harvest massive amounts of publicly available data, crunch it, and issue armchair reports to investors,” said Rathgeber. “Nor do we merely rely on data that is supplied by the target hedge funds we audit. Instead, we conduct in-depth, on-site engagements to dig deep into a hedge fund's operations and run through its control structure to ensure that our clients’ investments are properly protected.”

Arkanar Financial Global Macro Hedge Fund Launch

Alternative investment consultant and director, Bob Torkelund has announced the launch of a Cayman regulated fund, the Arkanar Global Macro SP. The fund is being monitored and the due diligence work done by the Cayman regulator before the launch took place.

The initial offering period runs throughout February 2009, with a minimum investment of $10.000.

Torkelund said, “The fund is easy dealing and settlement: we have organised electronic clearing via Clearstream/Euroclear ‘payment against delivery’ which makes the fund available to most European and international banks in line with other international securities.”

The fund has a 20% high water mark performance fee and 0.5% per quarter as management fee and an expected annual return of 15–20%.

Torkelund is director of global retail sales, marketing and operations for several boutique fund managers. He was also responsible for the formulation and execution of Threadneedle Investments and has become a serious player in Continental Europe.

Hedge Fund MC Subpoenad by Feds

Wall Street's highest-ranking woman, Erin Callan, was subpoenaed by a federal grand jury, along with 24 other Lehman executives regarding the collapse of Lehman Brothers, according to the New York Post.

Now in seclusion, the NYP says she taking a five-month personal leave. Callan joined Credit Suisse five months ago after being ousted as CFO of collapsed investment bank Lehman Brothers.

NYP excerpt: "At Lehman, Callan had been an admired public face of Lehman's whirlwind dance with hedge fund chiefs, but then-CEO Dick Fuld blamed her for Lehman's collapse, and pushed her out just months before the firm imploded, wiping out billions for investors and employees."

Madoff Hedge Fund Shut Down by Luxembourg Regulators

Swiss bank UBS AG's money manager, Luxalpha, was one of the main European hedge funds that gave money to US money manager Bernard Madoff, it is now being shut down by CSSF, Luxembourg's financial supervisors.

The Luxalpha assets were frozen in January, in what appears to be the first court action in Europe. Another private investor in a second UBS-run feeder fund, Luxembourg Investment Fund-US Equity Plus, is also considering legal action against the Swiss bank.

People with knowledge of the situation claimed that the two Luxembourg funds were not actively marketed by the bank and were set up at the request of clients to send money to Madoff. One of the Luxalpha board members, Rene-Thierry Magon de la Villehuchet, committed suicide in December after loosing $1.4 billion in his Madoff investments.

Hedge Fund Manager to head up River & Mercantile Fund Launch

UK fund manager, River & Mercantile, is launching an Equity Income Fund with the aim to invest in the best ideas generated by their UK team.

Hedge fund manager Richard Staveley is taking the lead with a philosophy which involves analyzing companies based on their potential, valuation and timing. In other words, he is looking for the potential growth opportunities in companies throughout their life cycle; companies that are attractively valued; and companies with earnings upgrades as the timing of these upgrades can have a positive impact on share prices.

Staveley qualified as a Chartered Accountant with PriceWaterhouseCoopers in 1999, before joining the hedge fund boutique Bradshaw Asset Management as an Assistant Fund Manager. In 2001 he moved to SGAM and became Head of UK Small Company investments in 2002. Richard joined River and Mercantile in August 2006. He holds the CFA designation. Richard is Research Director with responsibility for the team research function. As a Fund Manager he will be focused on the UK Unconstrained and Small/Mid Cap strategies.

At launch the fund is expected to yield approximately 5.1% and it will invest in companies of all sizes. In order to monitor risk, it will however invest no more than 15% in smaller companies and no more than 30% in medium sized companies. It can invest up to 100% in larger companies if this is where the manager finds the best opportunities.

River and Mercantile is a new long only investment management boutique. The business was incorporated in 2006 as a Limited Liability Partnership with significant management interest. The cornerstone investor is Pacific Investments which is owned by Sir John Beckwith.

Tuckerbrook to Provide Daily Transparency to Hedge Fund Clients

In the wake of the Madoff scandal, Tuckerbrook Alternative Investments is offering its hedge fund investors the daily market value of assets in their capital accounts.

"In light of the impact 2008 is having on the hedge fund business, transparency is the most important enhancement the industry can embrace," John Hassett, Managing Principal of Tuckerbrook, said, "Tuckerbrook has always used third-party prime brokers, administrators and auditors in order to provide independent verification of fund activity, so it made sense to us to have daily asset transparency reports distributed directly from Citi Hedge Fund Services, to underscore the importance of both independent asset pricing and more frequent transparency. Although unique in the industry now, we would expect this level of reporting to become standard practice in the future."

Moses Grader, Chief Operating Officer of Tuckerbrook, said, "Ninety percent or more of all hedge fund investments are in commingled fund structures, with only the largest investors having daily accountability through separately managed accounts. Daily transparency at the client-account level, delivered by a trusted third party, is a major step up in accountability to those investors that don't have an SMA."

Russian Hedge Fund Pharos Reports on the Russian Investment Landscape

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.

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.

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.

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."

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.

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.