Times Online – Every week at least one British hedge fund is considering winding up its funds as catastrophic investment performance puts the sector under unprecedented pressure, an industry expert said yesterday.

Andrew Shrimpton, the former head of hedge fund regulation at the Financial Services Authority who now runs Kinetic, a consultancy, said: “The credit crisis is definitely kicking in for the hedge fund industry now. We are being approached by hedge funds considering voluntary fund liquidations on a weekly basis.”

His remarks came as CQS, one of London’s best-known hedge funds, wrote to its investors to say that its flagship $4.25billion CQS Fund had fallen 9.42 per cent for the year to date. Michael Hintze, its chief executive and senior investment officer, told investors that senior management at CQS were meeting as often as three times a day to monitor the fund and take action over its exposures where necessary. The fund, which specialises in convertible arbitrage – or small price differentials between bonds and underlying equities – is down more than 11 per cent for the year.

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West Palm Beach (HedgeCo.net) – AA platform for asset managers and advisers to create SICAV SIF funds in Luxembourg has been launched by KMG SICAV SIF. The platform caters to all asset classes, including hedge funds. There are no restrictions on leverage.

Thee process allows managers to focus on investment management, the process allows managers to focus on investment management. . The platform takes care of incorporation, custody, transfers and administration. In addition it can also offer a Luxembourg address and office for the fund, organise annual general meetings of shareholders and supply investors with statements, day-to-day management and general organization as well as order placing and execution, investment performance reports, promotion and distribution and corporate branding.

The open-architecture platform provides a faster route to market with funds established and open for capital within a few weeks rather than months, which it usually takes for a traditional fund. The platform can also provide all back office support, administration and other services for funds.

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Alex Akesson
Email: alex@hedgeco.net

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Reuters – A federal jury in Atlanta on Wednesday convicted former hedge fund manager Kirk Wright on charges of scamming investors, including former professional athletes, out of $150 million, the Justice Department said.

Kirk was found guilty on charges of mail fraud, securities fraud and money laundering relating to the 2006 collapse of his Atlanta-based investment firm, International Management Associates (IMA), the Justice Department said.

IMA also had offices in New York, Los Angeles and Las Vegas and thousands of clients. Evidence presented in his two-week trial showed Wright had been lying to investors since 2001 about investment performance and their account balances, the Justice Department said.

The government presented as evidence fabricated records and material showing he diverted investors’ money for personal use, including cash for himself and family members, luxury cars, jewelry, house renovations and a $500,000 wedding.

IMA collapsed in 2006, after several investors requested distribution, received bad checks and filed lawsuits. The investor group included several former National Football League players who were among victims who testified at the trial.

"A measure of justice was served today for the hundreds of investor-victims in the stunning collapse of International Management Associates," U.S. Attorney David Nahmias said. "Those victims poured more than $150 million into Wright’s hedge funds over the years, only to find in 2006 that the money was gone and that Wright had lied to them for years."

Wright could receive a sentence of up to 710 years in prison, a fine of up to $16 million and restitution for victims’ loses. He remains in custody and is scheduled for sentencing on Aug. 26.

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