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.
The Guardian – Bayswater Asset Management, a computer-driven hedge fund shut down last year after big losses during the credit crisis, has relaunched after revamping its risk management controls, its new backers said on Wednesday. San Francisco-based Bayswater had initially been backed at its launch in 2004 with $25 million from Man Global Strategies, part of hedge fund giant Man Group.
However, its strategy of trying to exploit inefficiencies in global markets lost 12 percent in the six months to September 2007 and it returned money to investors after being caught out by a vicious circle of deleveraging in July and August that hit many computer-driven funds. The firm has now relaunched with large-scale changes to its risk management system and added a manual override, according to Revere Capital Advisors, which has seeded the fund with an initial $10 million and also plans to buy an equity stake in the firm, a spokesman said.
Herald Tribune – At a bail hearing in which Arthur G. Nadel was sent back to his cell to come up with better co-signers, a federal judge heard from the receiver in the case about a previously unknown multimillion-dollar hedge fund account controlled by Nadel in the Cayman Islands.
Receiver Burton Wiand, a Tampa lawyer, testified that he had discovered a hedge fund in the Caymans that at one point contained $15 million. He was able to follow $5 million back to one of the six funds at Nadel’s Scoop Management in Sarasota. The whereabouts of the remaining $10 million is unclear.
VC Circle – UK fund of funds CDC Group Plc has committed $10 million to Rabo Equity Advisors’ India Agri Business Fund. This investment is part of CDC’s new investment policy which came into effect on January1, 2009, according to which, the lender will invest in the world’s poorest nations. About 75% of its investments will go into countries with an annual gross national income per head of less than $905.
Wall Street Journal – The new commissioner of the Food and Drug Administration is among the wealthiest Obama administration appointees, with income of at least $10 million in 2008 thanks mostly to her husband, a hedge-fund executive, according to financial disclosure forms.
Margaret Hamburg and her husband, Peter Fitzhugh Brown, must divest themselves of several hedge-fund holdings as well as some of Mr. Brown’s inherited drug-company stocks so Dr. Hamburg can take the post as the nation’s top food and drug regulator. Mr. Brown is a lieutenant to hedge-fund magnate James Simons.
West Palm Beach (HedgeCo.net) – The Connecticut-based hedge fund manager who had his assets frozen by the SEC last month, Francesco Rusciano, was released to the custody of his parents on a $500,000 bond after a federal court hearing.
According to the SEC’s complaint, Francesco Rusciano solicited investments for two hedge funds, Ponta Negra Fund I, LLC and Ponta Negra Offshore Fund I, LTD, which is the principal of Ponta Negra Group, LLC, located at his residence in Stamford, Conn.
The hedge fund manager also sent out an e-mail to investors saying that his Ponta Negra hedge funds had $59 million in assets under management as of February 2009. According to the SEC’s complaint, the hedge funds had less than $10 million.
The SEC says that Rusciano forged brokerage account statements to make it appear that another hedge fund account had more than $43 million in assets, when it had less than $3 million.
"Rusciano went to great lengths to deceive investors, and the SEC is committed to ensuring that money managers who provide inaccurate information to investors and fail to uphold their fiduciary duties are held responsible for their misconduct," said Rose Romero, Director of the SEC’s Fort Worth Regional Office.
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West Palm Beach (HedgeCo.net) – The SEC has frozen the assets of a Connecticut-based hedge fund manager, alleging that he forged documents, promised false returns, and misrepresented assets managed by the funds to illicitly raise more than $30 million from investors.
According to the SEC’s complaint, Francesco Rusciano solicited investments for two hedge funds he controls, Ponta Negra Fund I, LLC and Ponta Negra Offshore Fund I, LTD, which is the principal of Ponta Negra Group, LLC, located at his residence in Stamford, Conn.
The hedge fund manager also sent out an e-mail to investors saying that his Ponta Negra hedge funds had $59 million in assets under management as of February 2009. According to the SEC’s complaint, the hedge funds had less than $10 million.
The SEC says that Rusciano forged brokerage account statements to make it appear that another hedge fund account had more than $43 million in assets, when it had less than $3 million.
"Rusciano went to great lengths to deceive investors, and the SEC is committed to ensuring that money managers who provide inaccurate information to investors and fail to uphold their fiduciary duties are held responsible for their misconduct," said Rose Romero, Director of the SEC’s Fort Worth Regional Office.
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Indopia – Britain’s leading entrepreneurs are considering to leave the country as a mark of protest against UK Chancellor Alistair Darling’s new 50 per cent tax rate, a media report says.
" Hugh Osmond, the pubs to insurance entrepreneur, is thinking about a move to Switzerland. Peter Hargreaves, the 10 million-pound-a-year co-founder of Hargreaves Lansdown, the financial adviser, is looking at the Isle of Man or Monaco," the Sunday Times said adding," More are likely to follow."
As per the latest budget, from next year anyone earning more than 150,000 pounds a year will have to pay 50 per cent as income tax. The move replaced the 45 per cent tax bracket threatened in the pre-budget report last November.
Businessmen have warned that raising taxes on the rich would do nothing to boost the exchequer, as the wealthy can always find ways to avoid it.
Reading Eagle – Five leaders of a New York City church with a branch in Kenhorst have been accused of defrauding worshippers and other investors of more than $10 million in a hedge fund scam.
Federal authorities claim the men, senior members of Local Christian Assembly, purposely sought to exploit people at the church in Queens.
Wall Street Journal – Prosecutors said $160 million is unaccounted for in a Ponzi scheme allegedly run by hedge-fund manager James Nicholson.
At a bail hearing Thursday, Assistant U.S. Attorney Maria E. Douvas said the government’s investigation showed that $293 million was invested with Mr. Nicholson, who was president and general partner of Westgate Capital Management LLC. Of that, $160 million is unaccounted for, Ms. Douvas said.
Prosecutors had alleged that Mr. Nicholson, of Saddle River, N.J., falsely represented to investors that the firm had assets under management ranging from $600 million to $900 million.
At Thursday’s hearing, U.S. Magistrate Judge Ronald L. Ellis in Manhattan didn’t change the bail conditions set for Mr. Nicholson — a $10 million personal recognition bond, with five co-signers and secured by three pieces of property. He also would be subject to home detention and electronic monitoring.
Charlotte Business Journal – In early 2008, Jim Morgan and his partners at Covenant Capital sent a gloomy letter to their investors.
After a couple of disappointing years, the letter said, the hedge-fund firm was preparing to close. It told investors how they could retrieve their funds.
While a handful of investors took their money, a number asked Morgan, now chief executive of Krispy Kreme Doughnuts Inc., and his team to continue.
They did. And Covenant went on to have one of its best years in 2008, even as the market was collapsing.
Covenant’s fund finished 2008 up 12%, while the S&P 500 ended the year down 38% and the Dow Jones Industrial Average dropped 34%.
With less than $10 million in assets, the firm is now reopening the fund to new investors as well as accepting additional capital from existing investors.
Reuters – Fortress Investment Group LLC , one of the few publicly traded U.S. alternative asset managers, said on Monday its quarterly loss more than quadrupled, hurt by writedowns in some private equity funds.
The net loss was $140 million, or $1.50 per share, compared with a reported net loss of about $29 million, or 43 cents, a year earlier, New York-based Fortress said.
Results reflected a $265 million loss in principal investments. This included a $228 million for investments in private equity firms, a $27 million loss on investments in hedge funds, and $10 million of interest expenses.
Forbes – CSX Corp. said a New York Federal Court has approved a settlement in which the railroad operator will be paid $11 million by two activist shareholder hedge funds over alleged securities law violations.
CSX said late Friday it will receive $10 million from TCI, which manages The Children’s Master Investment Fund, and $1 million from 3G Capital Management, less $550,000 in attorney’s fees and other expenses.
