Each business day HedgeCo.Net keeps you informed with the top hedge fund industry news, opinion and insight from around the globe. From the latest hedge fund launches, to the impact of regulation, competition, and investor activism - we track the topics and people that make a difference to you.
New York (HedgeCo.net) – The Highland Companies, backed by Boston-based hedge fund Baupost Group, is seeing local opposition to its new Canadian mega-quarry plans.
The group of protesters yesterday passed the half-way mark of their 5 day, 119 kilometer march. The group of residents, farmers and representatives have been walking with signs and flags saying “Stop the Quarry,” since a rally at Queen’s Park in Toronto last Friday.
The proposed site is located in prime farmland in Ontario’s potato-growing region known for a rare type of soil that is particularly suited to potato cultivation, the locals say. If allowed to proceed it would be the second-largest US owned quarry.
“It will destroy productive farmland and threaten the headwaters of three important rivers – the Grand, the Nottawasaga and the Pine- water sources for one million people.” Carl Cosack, a local cattle and horse rancher, said.
“200 feet below the water table is deeper than Niagara Falls and will require the extraction of 600 million litres of water per day. They claim it will not have a negative impact, it’s simply not credible,” said Cosack.
The local farmers plan to finish the march with a rally on Tuesday afternoon at a potato farm next to the proposed quarry site on Highway 124.
“The (company) application runs more than 3,100 pages, and took five years and 20 consulting firms to create,” says area cattle rancher and horse trainer Carl Cosack, a rally participant. “The public was given 45 days to respond.”
Under Ontario law, an environmental assessment is not required for a mega-quarry.
New York (HedgeCo.net) – NY-based Medley Capital LLC has announced the acquisition of credit hedge fund manager Viathon Capital LP and all its related entities.
“This transaction combines the analytical and credit strengths of the two organizations.” Brook Taube, Managing Partner at Medley said.
“Having known the Medley team for some time, I am excited about the opportunity to leverage our combined resources and to grow the firm’s investment management and advisory franchise,” Robert Comizio, Viathon founder, added.
Medley is a U.S. registered investment adviser with $1.4 billion of assets under management in private investment funds and hedge funds
Predominantly focused on companies in North America and Europe, Viathon invests in fundamental and event driven opportunities across the credit spectrum.
New York (HedgeCo.net) – Hedge fund giant Man Group plc., yesterday entered into an agreement to take full ownership through its US subsidiaries of Ore Hill Partners LLC and Ore Hill Partners Capital Management LLC (together, Ore Hill).
“We are extremely excited to add Ore Hill to the GLG platform.” Raffaele Costa, Man’s Head of Sales for North America and Europe, said, “This solidifies our position as a leading credit manager in addition to our already strong equity strategies. Ore Hill is a well established manager, with a strong track record over nine years and they will spearhead our expansion into US credit.”
Man’s relationship with Ore Hill dates from 2008, when it bought a stake of approximately 50% in Ore Hill, a credit-focused, event-driven hedge fund and structured product manager based in New York. Ore Hill will remain as an investment adviser but the operations will be integrated into and managed as part of GLG, Man’s discretionary investment management platform.
Ore Hill manages a series of hedge funds with funds under management of approximately $800 million, of which previously Man has consolidated 50%. Upon completion, these funds will be fully consolidated into Man’s funds under management. Ore Hill also manages a $1.1 billion structured product.
New York (HedgeCo.net) – $7.5 billion hedge fund investor Magnetar Capital announced that Lightfoot Capital Partners, LP has entered into a definitive agreement to sell its interests in International Resource Partners LP, a metallurgical and steam coal company, to James River Coal Company in a cash transaction valued at $475 million. The transaction is expected to close in the first half of 2011, subject to various closing conditions.
Magnetar, together with partners, formed Lightfoot in 2007 to pursue investments in energy- related businesses and assets. Lightfoot led an investor group in 2007 to acquire Central Appalachian coal assets through IRP and build it into a leading eastern United States coal company with an international presence. Lightfoot is the general partner and largest limited partner of IRP. Since acquiring IRP, Lightfoot’s management team has been instrumental in driving significant value to the company.
The agreement represents an attractive realization for Magnetar and supersedes prior plans to complete an initial public offering of IRP. Magnetar plans to continue expanding the scope and scale of its energy and natural resource platform, and will continue to support Lightfoot’s future growth plans.
Editing by Alex Akesson
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New York (HedgeCo.net) – Cayman Islands hedge fund firm, DMS Management Ltd, has opened a representative office in the Asia-Pacific region: DMS Management (Hong Kong) Limited. Supported by DMS’ Cayman office, the hedge fund firm hopes to strengthen the relationships between Hong Kong and Cayman Islands service providers.
Leading the Hong Kong team is David Lyons, Director, where he oversees all aspects of client service delivery, across multiple product lines, for Hong Kong and Asia-Pacific clientele. He also spearheads business development opportunities and the growth of DMS’ infrastructure in Hong Kong.
Lyons previously served as a Senior Associate in the Cayman office, where he was heavily involved in business development across Asia.
“Purpose-built to enable us to serve the needs of the modern-day hedge fund, our Hong Kong office facilitates real-time service and ensures stronger client relationships.” DMS Managing Director David Bree, said, “Our heightened presence in the Asia-Pacific market further builds our strength and depth across multiple jurisdictions, and complements our expanding strategic locations, in addition to our headquarters in the Cayman Islands, including Brazil and Ireland. By extending our commitment and coverage in the Asia-Pacific region, we will be able to provide continued seamless integration with the Cayman Islands and are confident that this move will only further reinforce DMS’ internationally-renowned reputation as the industry leader in fund governance.”
New York (HedgeCo.net) – Hedge fund manager Investcorp’s US-based real estate arm has made over $100 million in acquisitions in the past 30 days.
The most recent of three purchases made by Investcorp over the past 30 days was the Coral Palm Plaza, a 135,672 square foot shopping center located in Coral Springs with a total value of approximately $105 million.
The first was the acquisition, in January, of Princeton Forrestal Village, a 550,000 square foot mixed-use development in Princeton, New Jersey. The second was the acquisition earlier this month, in joint venture with Global Fund Investments, of Shops at Tech Ridge, a 332,845 square foot retail power center in Austin, Texas.
Following this acquisition, Investcorp now owns 24 shopping centers in the State of Texas.
New York (HedgeCo.net) – Alternative investment and hedge fund advisor Ramius Value and Opportunity Advisors LLC, a subsidiary of Ramius LLC., (Ramius) has challenged the board of top touch technology company Immersion to elect a new Director. Ramius also nominated a list of directors for presentation at Immersion’s 2011 annual meeting of shareholders.
“As Immersion’s largest shareholder, we have continually tried to work cooperatively to enhance the composition of the Board for the benefit of all shareholders. “Ramius Managing Director Peter Feld said in a letter to the members of the Board of Directors of Immersion Corporation, “Unfortunately, our efforts have been rebuffed at every turn. Meanwhile, the current Board has overseen extremely poor long-term operating and stock price performance.”
Ramius owns approximately 8.8% of the shares outstanding. In the letter, the hedge fund advisor outlined its views regarding the weak long-term operating and stock price performance and the need for change on the Board of Directors.
Ramius claims the current Director has no experience in technology and was placed in the position due to direct ties to the Chairman of Immersion, Jack Salticha. Only 27% of Immersion’s shareholders voted to support his election to the Board at the 2010 annual meeting.
“Since the end of 2007, Immersion has burned through approximately $78 million of cash, equivalent to $2.77 per share or 46% of the Company’s current stock price. For this substantial investment, which included over $30 million in research and development expenses, revenues have increased by a dismal $1.5 million or 5%,” the letter said.
Dialectic Capital, the second largest shareholder of Immersion, publicly disclosed that they too had nominated a slate of directors for election at the 2011 annual meeting.
“This should be a wake up call to the Board.” Ramius said, “Your shareholders are not happy.”
New York (HedgeCo.net) – Hedge fund investment firm, Ritchie Capital Management, L.L.C., has filed a petition for a Writ of Certiorari (a formal written order seeking judicial review), asking the U.S. Supreme Court to review decisions of the Minnesota Federal District Court and Eighth Circuit Court of Appeals denying restitution to the victims of Thomas Petters’ $3.5 billion hedge fund Ponzi scheme.
The case, opened on December 1, 2010, seeks enforcement of victims’ rights conferred by the Mandatory Victim Restitution Act of 1996 (MVRA) and the Crime Victims Rights Act of 2004 (CVRA).
“This is a cautionary tale for all Americans, and it is very troubling to consider the potential abuses that hard working individuals could face when a sophisticated investment fund with significant resources can be relieved of its rights without due process,” said Thane Ritchie, founder of Ritchie Capital Management. “Many of the people involved in this case have either manipulated the law or turned a blind eye to manipulation by others, and as a result have thwarted the efforts of innocent victims to recover their legitimate property. We will continue to fight for the rights of our investors – which include factory workers, teachers and other hard working Americans through their retirement funds – who are the ultimate victims of the Petters Ponzi scheme and now the mishandling of remaining assets.”
“This case has disturbing implications for all Americans’ property rights.” Brenda Grantland, lead counsel, said, “The receivership order took away victims’ civil rights to sue the defendants to recover their losses, promising the victims restitution from the criminal case instead, and then the sentencing judge denied restitution and gave the money to the government. The victim’s rights to recover their losses from Petters and his codefendants were permanently suspended.”
The MVRA made restitution mandatory whenever federal courts sentence defendants convicted of fraud, unless the court finds that the burden “on the sentencing process” of deciding the restitution issues outweighs the victims’ need for restitution. In deciding that the interests of the victims here, several of whom claimed losses in the hundreds of millions of dollars, were outweighed by the burden on the court, the district court judge said the victims had alternative remedies they could pursue to try to obtain relief.
The hedge fund manager also asked the Supreme Court to reverse the Eight Circuit’s decision to deny the firm’s petitions for relief filed with the Court of Appeals because it failed to state any reason at all for such denial – in violation of a provision of the CVRA, which requires the appellate court to issue a written opinion detailing the reasons for its decision if it denies a victim’s petition for relief.
Unlike most victims of fraud, the victims of Petters’ fraud could not sue the hedge fund manager, his companies or his co-defendants to recoup their losses. At the outset of the Petters’ prosecution, the government filed a civil injunction and receivership action, and the court froze all the defendants’ assets, putting them under the control of a court-appointed Receiver (Petters’ lawyer), and imposed a stay preventing anyone from suing the defendants or their companies. That litigation stay remains in effect today.
The often-stated purpose of the receivership was to preserve assets for victim restitution, but now, as a result of the sentencing judge’s orders denying all restitution, the assets held by the Receiver will go to the federal government in forfeiture.
When the district court denied restitution on the ground that “alternative avenues of recovery are available to victims,” it was relying on the victims’ ability to file claims in the bankruptcy cases of Petters’ companies, and to petition the Department of Justice for “remission” from the assets forfeited to the government. Neither remedy is an equivalent substitute for restitution. Bankruptcy by its nature is an incomplete remedy, with creditors and victims getting pennies on the dollar at best. Remission is a matter of executive grace, decided by a Justice Department official without a hearing.
There is no judge, and no judicial review of the agency’s decisions. Law enforcement agencies may be paid out of the pool of assets before any victims are compensated. In contrast, the MVRA requires restitution judgments for the full amount of each identified victim’s losses, without consideration of the defendants’ financial condition. Even when there are insufficient assets to pay the awards in full, restitution judgments are enforceable against the defendants for 20 years, and can tap future earnings, inheritances, and money defendants receives from any sources.
New York (HedgeCo.net) – Zurich-based activist hedge fund manager Helvetia Wealth has expanded its influence in Scotland with the acquisition of Dunedin Independent, Scotland’s largest independently-owned financial advisor (IFA). With GBP350 million ($539 million) in AUM, Dundein is ranked in the top 100 wealth management companies in the UK.
“With offices also in Liechtenstein, Geneva, London, Hamburg, Mauritius, Dublin and Glasgow, Helvetia Wealth AG now has an increased asset base of CHF 1.5-billion ($1.47 billion), with the UK earmarked as one of the group’s key markets,” Helvetia CEO Kamil Stender, said. “Employing the latest methodologies in wealth management, we are well positioned to service the rapidly growing demand for wealth management services. This demand is the result of globalisation and the increased prosperity it engenders.”
“There are now in excess of 7.6 million high net worth individuals worldwide. Since 2002, this market has grown at a rate of 7.5% p.a. And total assets under management now exceed CHF 36Trillion ($35.5 trillion).” Stender said.
“The enlarged group features two prominent IFA firms in Scotland, Dunedin Independent plc and City Gate Money Managers. In addition, Helvetia owns a controlling stake in London-based TAM Asset Management with a London Stock Exchange brokerage licence allowing us to execute our own trades faster at better margins.” Yuill Irvine, MD at Dunedin Independent said, “The amalgamation will introduce a range of cost attractive synergies for Helvetia and attractive efficiencies for all three firm’s clients as well as offering our clients access to Swiss banking facilities.”
A team from law firm HBJ Gateley Wareing acted on behalf of the shareholders of Dunedin Independent.
New York (HedgeCo.net) – BNY Mellon, a leading global financial services company, has completed its purchase of I(3) Advisors of Toronto, an independent wealth strategy company with more than C$3.8 billion in assets under advisement. This transaction represents BNY Mellon’s first wealth management acquisition in Canada. Terms of the deal were not disclosed.
“This partnership enables BNY Mellon and I(3) to provide even greater service and trusted guidance to help our clients achieve their financial goals,” said BNY Mellon Wealth Management CEO Larry Hughes. “Together, we will be able to build on the success of I(3) to offer a whole new level of service to wealthy investors. Canada’s high net-worth market represents a very attractive opportunity for BNY Mellon as we accelerate our global expansion and seize new opportunities in dynamic markets.”
June Ntazinda remains CEO of I(3) Advisors and reports to BNY Mellon Wealth Management Executive Vice President Don Heberle, who oversees the firm’s international business. “June and the I(3) team are well-known and highly respected in Canada and we look forward to bringing additional research capabilities in alternatives investments and services to their clients.”
“BNY Mellon Wealth Management is the ideal partner for us not only because of our shared commitment to client service, but also because of BNY Mellon’s powerful global resources,” Ntazinda said. “Working together we aim to broaden and enhance I(3)’s investment services and fuel the next phase of the firm’s growth.”
Ntazinda noted that the transaction will offer several advantages to I(3) clients, including:
– Broader global asset management opportunities
– Increased access to alternative investment opportunities such as hedge funds
– Enhanced technology and reporting capabilities
– Expanded banking and wealth planning services
Formerly Ernst and Young’s wealth management arm in Canada, I(3) Advisors was established in 2005 under the leadership of Ntazinda. The firm has grown its assets under advisement from C$1.8 billion to more than C$3.8 billion and has earned recognition as a Canadian independent investment counselor with an integrated and holistic approach to wealth management.
BNY Mellon’s acquisition in Canada is another step in the international expansion of its wealth management business. BNY Mellon has a robust presence in Canada, including:
– CIBC Mellon offices in Toronto, London (Ontario), Calgary, Halifax,
Montreal and Vancouver
– BNY Mellon Asset Management Canada
– BNY Mellon Asset Servicing in Toronto
– Eagle Investment Systems in Toronto and Montreal
BNY Mellon Wealth Management is among the nation’s leading wealth managers, with more than two centuries of experience in providing investment management, wealth and estate planning, and private banking services to financially successful individuals and families, their family offices and business enterprises, charitable gift programs, and endowments and foundations. It is among the top 10 U.S. wealth managers with about US$150 billion in private client assets and an extensive network of offices in the U.S. and internationally.
Editing by Alex Akesson
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New York (HedgeCo.net) – $7.4 billion global alternative investment firm, SkyBridge Capital (SkyBridge) has completed its acquisition of the fund of hedge funds, hedge fund seeding and hedge fund advisory businesses from Citi Alternative Investments LLC (CAI).
The hedge fund manager now offers investment services across Commingled Funds of Funds Products; Custom Portfolios; Hedge Fund Seeding and Hedge Fund Advisory Services. Terms of the transaction were not disclosed.
Raymond Nolte, who has led the hedge fund group at CAI since 2005, joins SkyBridge as a managing partner and chief investment officer. He brings with him a team of more than 20 professionals.
“We are excited to announce completion of this deal and to welcome the new team members to SkyBridge,” said Anthony Scaramucci, founder of SkyBridge Capital. “Our comprehensive suite of investment offerings, backed by an experienced, hands-on global team and thoughtful and thorough approach to risk management, offers great opportunity to a diverse set of investors.”
James Greenberg, founder of Sandton Partners, LLC, a New York-based advisory firm, acted as the exclusive financial advisor to SkyBridge on the acquisition. “The combined SkyBridge/Citi Alternative Investments business led by Scaramucci, Prince and Nolte, is uniquely positioned to serve as one of the most scalable global alternative platforms.”
New York (HedgeCo.net) – Hedge fund giant Man Group has created a hedge fund managing $63 billion after acquiring rival $23.7 billion hedge fund GLG Partners in a $1.6 billion in deal.
Man Group held a presentation today at 9.30am (UK time) at the Thomson Reuters Building.
“I am delighted to announce Man’s proposed acquisition of GLG to create a diversified, world-leading alternative investment manager with $63 billion in funds under management.” Jon Aisbitt, Chairman of Man, said, “It is central to Man’s stated strategy of acquiring high quality discretionary investment management capability to broaden our range of diversified, liquid strategies for the benefit of our investors.”
The acquisition will be implemented by way of a merger, creating a diversified, world-leading alternative investment manager with an emphasis on liquid strategies, positioned to benefit from the expected continued growth in onshore hedge funds globally. The deal will be closed by the end of September.
“The structure of the transaction allows us to retain vital focus and commitment to performance whilst integrating Man’s leading structuring and distribution capabilities to the advantage of investors and shareholders alike.” Peter Clarke, Chief Executive of Man, said, “We have deployed surplus capital in an earnings enhancing transaction to access savings, balance our investment strategies, and created a powerful business from which we can grow organically.
New York (HedgeCo.net) – The Highland Companies, backed by Boston-based hedge fund Baupost Group, is seeing local opposition to its new Canadian mega-quarry plans.
