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.
International Herald Tribune – The mergers and acquisitions business is about to take a deep dive.
For most of the financial crisis, it has remained surprisingly buoyant. This was partly because there was a lot of business to be done selling troubled banks like Merrill Lynch, HBOS and Fortis.
There was also the overhang of deals from the bubble era. But in the past week, two such megadeals – the miner BHP Billiton’s hostile bid for a rival, Rio Tinto, and the planned leveraged buyout of Bell Canada – have come apart at the seams.
As the financing squeeze tightens, other deals could follow suit.
Financing Verizon Wireless’s acquisition of Alltel is proving to be a strain. Verizon Wireless has issued bonds and is looking to raise some bank debt. But the company may have to pay a high price.
New York Post – The JPMorgan Chase CEO is seeing the coffers of the bank he runs being filled with "billions of dollars a day" coming from hedge funds that have pulled their cash from Morgan Stanley and Goldman Sachs, according to several large hedge-fund managers and other Wall Street sources.
The flood of new business has actually caused a bottleneck at the banking giant, as the prime brokerage unit scrambles to quickly conduct due diligence and credit checks to set up new clients, a source close to the bank said.
Most of JPMorgan’s new clients are being serviced through the old Bear Stearns prime brokerage force, which was a key part of Dimon’s acquisition of the fallen brokerage firm.
A spokesman for JPMorgan confirmed that the bank has seen a significant jump in volume and "they are managing it well."
He also said the bank is maintaining firm due diligence and credit-review procedures.
Wall Street Journal – Hedge fund Elliott Associates LP made public a letter to Republic Services Inc. in which it said the company’s board wasn’t doing its duty by fully considering the raised $6.73 billion takeover bid from Waste Management Inc.
The fund, which said it is a "meaningful" shareholder in the company, asserted the Waste Management bid was more favorable to shareholders than Republic’s proposed acquisition of Allied Waste Industries Inc., initially valued at $6.24 billion in stock.
The size of Elliott’s stake couldn’t be determined, and an official wasn’t available for comment.
The hedge fund urged Republic’s board, in a letter dated Aug. 28 and released Friday, to "vigorously negotiate the best possible deal from Waste Management," maintaining the Waste Management proposal of $37 a share "can reasonably be expected to lead to an offer that is superior to Republic’s no-premium merger with Allied."
Fortis has closed three small hedge funds in the aftermath of its acquisition of part of ABN Amro and merger of the Belgian and Dutch banks’ asset management operations, according to a report in the Financial Times.
The Fortis European long/short fund, which had €120m ($167m) under administration, was shut after the decision to rope in the ABN European equity team, led by Andrew King.
The convertible arbitrage fund was shut in order to free up staff to focus on the enlarged long-only convertible bond funds. The final fund, a US long/short fund, was shut at the end of last year, the FT report said.
New York Post – Hedge fund executive Hunter Biden has had anything but a quiet introduction to his career in finance.
The 38-year-old son of Democratic vice presidential candidate Sen. Joe Biden is caught up in several lawsuits regarding the acquisition and operation of Paradigm Companies, an investment firm that operates a fund of funds – a hedge fund that invests in other hedge funds.
Biden also appears to be feuding with partner James Park, the son-in-law of the Rev. Sun Myoung Moon, Court papers show.
Biden, also a Washington lobbyist, took control of Paradigm in August 2006 and was, for a brief period, its president – getting paid $1.2 million a year despite no experience in the sector, according to charges in one of the suits.
Months later, Anthony Lotito, a consultant, sued Biden, James Biden, his uncle, and Paradigm for allegedly cheating Lotito out of fees related to the purchase. Biden has denied the charges and the suit is awaiting trial.
Hedge fund executive Hunter Biden has had anything but a quiet introduction to his career in finance.
The 38-year-old son of Democratic vice presidential candidate Sen. Joe Biden is caught up in several lawsuits regarding the acquisition and operation of Paradigm Companies, an investment firm that operates a fund of funds – a hedge fund that invests in other hedge funds.
Biden also appears to be feuding with partner James Park, the son-in-law of the Rev. Sun Myoung Moon, Court papers show.
Biden, also a Washington lobbyist, took control of Paradigm in August 2006 and was, for a brief period, its president – getting paid $1.2 million a year despite no experience in the sector, according to charges in one of the suits.
Months later, Anthony Lotito, a consultant, sued Biden, James Biden, his uncle, and Paradigm for allegedly cheating Lotito out of fees related to the purchase. Biden has denied the charges and the suit is awaiting trial.
Reuters Tokyo- Tokio Marine Holdings Inc plans to buy non-life insurer Philadelphia Consolidated Holding Corp for about $4.7 billion (2.4 billion pounds), in the largest acquisition by a Japanese financial firm in the United States.
Tokio Marine, Japan’s largest non-life insurer, said it would pay $61.5 in cash for each share of Philadelphia Consolidated Holding, a 73 percent premium to the issue’s closing price on Tuesday of $35.55.
Tokio Marine President Shuzo Sumi told Reuters earlier this month that he was looking at opportunities to acquire U.S. and European competitors to expand outside Japan, where it generates four-fifths of its profits.
Reuters- John Templeton, a pioneering mutual fund manager, global investor and billionaire philanthropist, died of pneumonia in a hospital in the Bahamas on Tuesday, a spokeswoman at his foundation said. He was 95.
Templeton, who started his career on Wall Street in 1937, created several successful international funds before selling Templeton Funds in 1992 to Franklin Resources for $440 million (223 million pounds) in what was then the largest acquisition of an independent mutual fund company.
He remained deeply involved in his business until he was nearly 80, when he shifted focus to philanthropy. "People keep noticing that I’m 79 years old, and ask me what would happen if I would die," he told Reuters in an interview in 1992 while negotiating the sale of his firm.
RTT News- Pipeline company Crestwood Midstream Partners LLC said Wednesday that Blackstone Group and its hedge fund GSO Capital Partners L.P. have acquired ownership interests in the company.
Houston, Texas-based Crestwood noted that as part of the deal, Blackstone and GSO, along with Kayne Anderson and Crestwood Management, LLC, have combined to provide it with $500 million in equity capital commitments in order to help it pursue the acquisition and development of North American midstream assets and businesses. The funding represents an increase from the existing $150 million in equity capital commitments.
Through their investment in Crestwood, Blackstone and GSO intend to capitalize on the significant growth opportunity in the midstream sector of the energy industry, which is supported by record supply development in many regions of the U.S., broad-based investment in new energy infrastructure projects and potential consolidation opportunities that may emerge in the coming years.
West Palm Beach (HedgeCo.Net)- Francis Koenig, Chairman of AdultVest Inc., announced the acquisition of iPorn.com. The acquisition coincides with the firm’s online marketplace topping $7 Billion in available capital for adult industry related investments.
"We are very excited about the acquisition… Investors in our Priapus Investment Fund, LLC are extremely pleased to be a part of this landmark purchase. We have very big plans for iPorn. This acquisition is a natural fit." says Koenig.
With AdultVest growing at the rate of $300 Million per week, they last year launched the Bacchus Investment Fund and the Priapus Investment Fund, both also aimed at attracting the open-minded investor and the billions of dollars spent on adult entertainment in North America every year.
Koening says, "Transparency and liquidity builds credibility and investor confidence, which ultimately drives the price of a company higher. I believe this is the formula to unlocking value in some of the adult industry’s hidden gems. Wait till you see what we have in store."
Another feature that will appeal to investors, Koening says, is that the firm does not take its performance fee until 100% of the capital is returned to its clients.
