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 China Post – Asia-Pacific banks, brokerages, insurers and private equity firms are more optimistic about mergers and acquisitions as they seek to expand following a decline in asset prices, according to PricewaterhouseCoopers LLP.
About 42 percent of financial institutions in the region expect to make an acquisition over the next year, compared with 38 percent a year earlier, according to a PwC survey of 215 senior executives conducted in Jan. and Feb. Still, 83 percent of the respondents expect the global credit crunch and economic slump to last for another one to two years.
The Herald – Toscafund, the hedge fund that was a catalyst for the sale of ABN Amro, made £158m profit in 2007 when Royal Bank of Scotland led the disastrous £49bn acquisition of the Dutch bank.
The investment firm, whose holding company is chaired by former Royal Bank chief Sir George Mathewson, enjoyed a spectacular increase in earnings which appears to have been helped by a surge in the value of ABN Amro.
The revelation of Toscafund’s success may stoke fresh controversy about hedge funds. These have been accused of causing massive problems for the UK’s banks with investment policies focused on making short-term gains.
BusinessWeek – The market for exotic securities hasn’t entirely gone away. It’s just gone underground—-six feet under, to be precise.
Hedge fund Davidson Kempner Capital Management is plunging into life settlements—a market in which speculators buy-up unwanted life insurance policies from wealthy individuals looking to score some quick cash. The $10 billion New York-based fund is planning on selling so-called “death bonds” to overseas investors, as part of a plan to potentially raise cash to finance its life settlements acquisition business.
Bloomberg – Hedge fund Eastbourne Capital Management LLC nominated five directors to the board of Amylin Pharmaceuticals Inc. and is supporting a slate put forward by investor Carl Icahn, after it “lost confidence” in leadership of the maker of the Byetta diabetes drug.
Eastbourne, which owns 12.5 percent of San Diego-based Amylin, said in a letter to management yesterday that the company’s board needs to be “significantly strengthened” after the stock fell almost 80 percent since Oct. 5, 2007. In November, Eastbourne said it was talking with Amylin about options including “a possible acquisition by a third party.”
Bloomberg – Bank of America Corp., the largest U.S. bank by assets, received a $138 billion emergency lifeline from the government to support its acquisition of Merrill Lynch & Co. and prevent the global financial crisis from deepening.
The U.S. will invest $20 billion in Bank of America and guarantee $118 billion of assets “as part of its commitment to support financial-market stability,” the Treasury Department, Federal Reserve and Federal Deposit Insurance Corp. said in a joint statement shortly after midnight in Washington.
Bloomberg – Deephaven Capital Management LLC, the hedge-fund unit of stockbroker Knight Capital Group Inc., froze a $1.6 billion fund after investors asked to get back 30 percent of their money.
Withdrawals from the Deephaven Global Multistrategy Fund were suspended so managers wouldn’t be forced to sell assets in falling stock and debt markets, the Minnetonka, Minnesota-based firm said yesterday in a letter to investors. Lenders and trading partners also imposed stricter financing requirements, according to the letter.
Deephaven Global, which trades a variety of securities including bonds and commodities, follows RAB Capital Plc, Ore Hill Partners LLC and Highland Capital Management LP in limiting withdrawals amid the worst financial crisis since the Great Depression. The fund lost 15 percent this year through September, and Deephaven estimated it has fallen an additional 10 percent this month. The fund has returned an average of 16 percent annually since opening in 1994.
“This level of redemptions in the current market environment forces the question of whether such redemptions can be processed in the ordinary course without disadvantaging both continuing and later redeeming investors,” said the letter, signed by Colin Smith, Deephaven’s chief executive officer .
