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.
Reuters – A portfolio run by Man Group, the world’s biggest listed hedge fund firm, has invested $50 million (30 million pounds) in a new start-up fund run by three former Brevan Howard traders.
Man’s RMF Global Emerging Managers strategy has put money with 5:15 Capital Management, a Greenwich, Connecticut-based fixed income arbitrage firm set up this month and named after a song from The Who’s 1973 album Quadrophenia.
Man will take a share of revenue from the firm, whose founders also worked together at Greenwich Capital Markets.
Reuther – A group of wealthy clients who invested $50 million with two hedge funds felled by last year’s credit crisis are accusing Highland Capital Management’s partners of having lied about key facts.
LV Highland Credit Feeder Fund LLC, an investment vehicle managed by Long Vue Advisors in Boston, and several charitable foundations and wealthy individuals filed the lawsuit on Wednesday in a U.S. district court in Dallas.
The group is charging that the Dallas-based hedge fund firm and its co-founders James Dondero and Mark Okada and three other partners were dishonest about other clients’ requests to exit the funds at a time of increasing market turmoil.
Bloomberg – Marc Andreessen, who helped kick off the Internet boom 15 years ago by co-founding Netscape Communications Corp., is starting a $300 million venture capital fund to foster Silicon Valley startups.
Andreessen, 37, and partner Ben Horowitz, 43, will seek investment opportunities and spend between $50,000 and $50 million on each, Andreessen said in an interview. The fund will concentrate on things he knows, such as the Internet and information technology, rather “clean tech, biotech, electric cars and rocket ships,” he said.
Bloomberg – Helios Capital Management Pte, the hedge-fund manager once backed by Tudor Investment Corp., plans to start a “Slumdog Millionaire” fund that will buy underperforming shares of Indian companies.
“We want to find slumdogs from the Indian equity markets who have the potential of becoming millionaires,” Samir Arora, founder of Singapore-based Helios Capital, said in an interview.
The firm plans to raise about $50 million by the end of July for its long-only Helios India Jai Ho Fund, Arora said. “Jai Ho,” which means “victory” in Hindi, is the Oscar- winning theme song from “Slumdog Millionaire,” a feel-good tale of a Mumbai orphan’s escape from poverty that scooped eight Academy Awards, including best picture, this year in Los Angeles.
Reuters India – SkyBridge Capital, a firm that provides money for early-stage hedge funds, on Friday said it invested $50 million (33 million pounds) in WyeTree Asset Management Ltd, a London-based fund focused on distressed mortgage securities.
WyeTree seeks out distressed residential mortgage assets that may be oversold for technical reasons, SkyBridge said. WyeTree is currently investing in U.S. subprime mortgages, but in time will also seek assets in other markets.
Miami Herald – The Obama administration’s bid for $50 million to move prisoners from the Guantánamo Bay detention facility was left out of the Democratic-authored emergency war spending bill unveiled Monday.
Defense Secretary Robert Gates had sought the funds in case the U.S. wanted to build or retrofit an alternative facility for the detainees in the United States. He called the funds ”a hedge” in case the government wanted to start construction.
However, when Democrats in the House of Representatives released their spending package Monday for funding the Iraq and Afghanistan wars and related expenses, the $50 million for Guantánamo was missing.
West Palm Beach (HedgeCo.net) – U.S. hedge fund manager MTM Global Financial Services is looking for an offshore hedge fund partner. In order to raise approximately $50 million in capital for a REIT fund focused on newer US residential real estate in state income tax free Florida, Texas, Nevada and Washington.
The fund manager says, "By creating a joint venture with an offshore mutual fund, hedge fund, or high net worth individual, MTM Global Financial Services will provide the acquisition services, along with the day to day operation of the real estate rental portfolios."
"This is a straight up deal, with huge upside, that will offer transparency and integrity for the investors." the President of MTM Global Financial Services said, "we seek a joint venture partner, that is results driven, that values their reputation, and knows a good thing when they see one. We think this could become a lucrative long term enterprise for all involved."
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EatrhTimes – In response to investor demand for greater transparency as well as pending new legislation, Grant Thornton LLP’s Financial Services practice is launching Hedge Fund Internal Control, Governance and Regulatory Compliance Services. These services will help funds attract new investors who might be wary of alternative investments in light of recent news. It will also assist funds in attracting and retaining investors and assets and help them prepare for pending legislation.
By the fourth quarter, Congress is expected to pass The Hedge Fund Transparency Bill of 2009, which would require investment companies or advisers that are exempt from normal registration, but have at least $50 million in assets under management (AUM), to register with the SEC. “Those funds that have already registered must be prepared for additional oversight and a more aggressive examination and enforcement agenda; those funds that have not yet registered may be required to create a complete internal control and compliance infrastructure in order to be prepared for the regulatory examination process,” said Jack Katz, national managing partner of Grant Thornton’s Financial Services practice. In addition to developing the internal control, compliance and governance facilities to comply with the new rules, firms may also be required to establish an anti-money laundering program and report suspicious activities.
New York (HedgeCo.Net) – Hedge fund assets, which were once estimated to reach almost $3 trillion, finished the year at around $1.8 trillion, according to research conducted by London-based HedgeFund Intelligence.
The report contends the fall in assets happened almost entirely in the second half of 2008, as markets took a beating and many hedge funds were forced to close shop. In addition, hedge fund firms that manage $1 billion or more fell from 395 in mid-2008 to 311 at year’s end. Also contributing to the fall was the fact that new fund launches didn’t come close to filling the void left by failed funds. While just 55 new funds were launched last year in the United States with assets of $50 million or more, 200 hedge funds were shut down or liquidated.
Hedge funds as a whole posted their worst year to date in 2008, with the average fund losing about 19 percent, according to data compiled by Chicago-based Hedge Fund Research. The firm also reported hedge funds are already experiencing a better year, with the average fund gaining 0.39 percent in January and falling a mere 0.51 in February, though still outperforming the stock market.
HedgeFund Intelligence predicts that assets may drop another 20 percent or more in the coming months, before leveling off sometime during this year.
According to their data, Bridgewater Associates is the largest hedge fund based on assets under management, with $38.6 billion. Coming in second, JP Morgan manages $32.9 billion, while John Paulson’s Paulson & Co. slid into third place with $29 billion in assets under management.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net 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! Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com
West Palm Beach (HedgeCo.net) – 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.
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New York (HedgeCo.Net) – Investors in South Florida are fearing the worst, with all eyes turned to Michael Riolo, a Boca Raton resident who may have bilked over $50 million out of investors.
Riolo regularly distributed performance reports to his investors showing admirable returns. Now, three investors are claiming that it was all a sham. Donald Gory, Anthony Leonardo and Nicholas Gory of Broward County have filed a suit against Riolo, claiming he stole more than $1 million from them.
According to the suit, Riolo allegedly conducted a “Madoff-like Ponzi scheme” through his two companies, LaSalle International Clearing Corp. and Sterling Wentworth Currency Group. The investors said they were recently informed that the firms had become insolvent. They are asking the judge to freeze his assets and ban him from transferring any funds.
It seems that wealthy Florida residents have been hit hard by financial scams in recent months. Bernard Madoff, the infamous Ponzi-schemer who lost $50 billion of investor’s money, was a part-time Palm Beach resident who garnered the trust and money of many elite Floridians.
Money manager Arthur Nadel of Sarasota is still missing, along with $350 million, after being exposed as a fraud in what authorities are now dubbing the “mini-Madoff.”
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
Arlington Heights Daily Herald – A missing hedge fund manager who owed investors a $50 million payout told his wife in a note he felt guilty about mismanaging people’s money, and threatened to kill himself, according to a sheriff’s report released Tuesday.
However, the Sarasota County Sheriff’s Office said it believes Arthur G. Nadel planned his disappearance and that it was ending its search for him.
The Federal Bureau of Investigation will continue to investigate complaints from investors who were expecting Nadel to deliver the $50 million redemption on Jan. 15, the day after he disappeared.
