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HedgeCo.net – CHICAGO,February 28, 2007 — R.J. O’Brien and Associates, Inc. (RJO), the nation’s largest independent futures brokerage, announced today that its revenues climbed 30% during the fourth quarter of 2006, as compared with the fourth quarter 2005 results. Year end revenues are up over 50%.
“We accomplished many objectives during 2006 including record revenues, record earnings and record customer assets, all topping any previous quarter or year end result,†said Gerald F. Corcoran, CEO. “We are also well positioned to achieve our 2007 goals which include the completion of several significant acquisitions.”
RJO has enjoyed strong growth on a consistent basis for more than 10 years. Customer assets topped $2.0 billion for the first time in the firm’s 93-year history during the third quarter, and rose to $2.1 billion by year end.
“In addition to operating our core business successfully, we also used 2006 to prepare RJO for future growth,†said Ms. Colleen Mitchell, RJO’s President. “For example, we recently completed the acquisition and integration of the JWH Global Trust, a public commodity pool with over $125 million in customer assets, and we opened our first sales office in New York.â€Â
RJO has grown nearly 10-fold since 1999 when customer assets were $215 million. In 2006, the firm ranked 14th in the annual Futures magazine rankings of the “Top 50 Brokers†in the derivatives industry. The firm has set revenue records in each of the past 10 years.
RJO added the Intercontinental Exchange (ICE) to its list of global clearing capabilities during 2006 and is on track to becoming a full clearing member of the Sydney Futures Exchange (SFE) during 2007.
About R.J. O’Brien
R.J. O’Brien is the largest independent futures brokerage in the United States. A privately owned Futures Commission Merchant (FCM), RJO is also one of the oldest futures brokerage firms, dating to 1914. RJO is a founding member of the Chicago Mercantile Exchange and is a full clearing member of: the Chicago Board of Trade (CBOT); the New York Mercantile Exchange (NYMEX and COMEX divisions); the New York Board of Trade (NYBOT); Eurex AG; Eurex US; EuronextLIFFE; and Intercontinental Exchange (ICE). RJO offers the latest in order entry technology coupled with 24-hour execution and clearing on every futures exchange worldwide. RJO services a nationwide network of more than 250 introducing brokers and some of the world’s largest financial, industrial and agricultural institutions. For further information, please visit www.rjobrien.com.
For further information:
Colleen Mitchell President R.J. O’Brien 222 South Riverside Plaza, Suite 900 Chicago, Illinois 60606 (312) 373-5000
PR Contact: Meg Bode Bode & Associates, Inc. (516) 869-6610
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.
New York-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 bondmarkets.
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.”
BOSTON- Hedge funds have risen at an average annual rate of 8.4 percent since 2000, less than half the gains of the 1990s, according to data compiled by Hedge Fund Research in Chicago. Vanguard Group’s flagship mutual fund tracking the Standard & Poor’s 500-stock index climbed 15.6 percent last year, compared with the 6 percent drop of Goldman Sachs Group’s biggest hedge fund, whose management fees are about 10 times steeper.
The subpar performance is not stopping the world’s largest financial institutions, including UBS in Zurich and J.P. Morgan Chase in New York, from chasing higher fees by offering copycat hedge funds to people with as little as $1,000 to invest. Assets of the so-called long-short funds almost doubled to $16.5 billion in the United States in the past two years, according to Financial Research of Boston, which tracks money flows.
US hedge funds have enjoyed “tremendous” growth and gained more financial muscle, but the trillion-dollar industry of private capital pools doesn’t need fresh regulation, a senior Treasury official said Tuesday.
Treasury under secretary for domestic finance, Robert Steel, said US financial regulators had moved to boost oversight of hedge funds, but he stressed that new regulations were not needed to enhance policing.
“We reject calling for more regulation just for regulation’s sake,” Steel, a former Goldman Sachs executive, said in a speech at the Treasury.
Private equity firms are blackballing or banning credit hedge funds from participating in the leveraged loans and high yield bonds that back their buyouts and recapitalisations. The move is the latest sign of growing tensions between the two.
While blackballing is not unusual, the practice suggests battle lines are being drawn between private equity sponsors and the hedge fund industry.
The head of a European high yield capital markets department in London said: “There has been a long history of private equity firms and hedge funds at odds with each other in the private mezzanine market but the tension has spilled over into other segments of the leveraged finance and high-yield arena.â€Â
“It’s fair to say that many, if not all, financial sponsors – including the most powerful – have a blacklist of hedge funds they do not want investing in leveraged loans or other subordinated financing supporting their buyouts or recapitalisations,†he said.
Private equity sponsors and hedge funds raise money from the same wealthy individuals and large institutional investors by promising lucrative returns. But they take different approaches to trading bonds and loans on the capital markets, which lie at the heart of the clash.
HedgeCo.Net (New York) – 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.â€Â
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.
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HedgeCo.Net (New York) – DaimlerChrysler announced this month it was considering all options for Chrysler, including a split, but withoutChrysler, 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.
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HedgeCo.Net (New York) – 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.
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CA-Hedge funds seem to be everywhere latelyâ€â€shifting assets into venture capital, capturing headlines, growing assets.
Now a study points to a reason: There are lots more of them. The number of single-manager hedge funds increased to 13,675 at year-end 2006, a 69 percent increase from the 8,100 funds in 2005, PerTrac Financial Solutions reported.
The study, which analyzed 56,000 investment records from 12 hedge fund databases, placed assets under management for single-manager funds at a whopping $1.41 trillion as of Dec. 31, 2006. That was even higher than the $1.2 trillion reported in a survey by the Hennessee Group consultancy as of Oct. 31.
About 250 funds have more than $1 billion under management, PerTrac reported, while more than one-third of single-manager funds have less than $25 million.
Collecting figures on hedge funds can be a tricky business. No single regulatory body governs the industry, and hedge funds are domiciled around the world. Among single-manager funds, 36 percent were single-manager funds based in the United States, while 64 percent were offshore.
WASHINGTON – The Bush administration and top financial regulators pledged increased vigilance over hedge funds Thursday but stopped short of proposing any new regulations to control thetrillion-dollar industry.
Instead, the President’s Working Group composed of administration officials and various market regulators put forward a set of guidelines they said would enhance information about the largely secretive investment pools.
“These guidelines should serve as a foundation to enhance vigilance and market discipline further, which will strengthen investor protection and guard against systemic risk,†Treasury Secretary Henry M. Paulson, the head of the working group, said in a statement.
According to a number of reports, one of the Cayman Islands’ leading financial products, hedge funds, is not as lucrative as many have supposed, but its popularity remains at an all time high.
Noted for the risky and exotic nature of their investments, hedge funds actually performed worse last year than the much more conservative Standard & Poor’s 500 Index, which tracks the biggest corporations listed on the New York Stock Exchange. David Marchant, the editor of OffshoreAlert, a leading newsletter on the ins and outs of in the world of offshore finance, reported on this statistic.
Hedge funds returned some 13 percent in 2006, compared with the 15.8 percent return of the S&P 500 Index, according to industry tracker Hedge Fund research, Inc., of Chicago.
