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.
Independent – Hedge funds Apollo and Octavian have been quietly building up a position in ProSieben, one of Europe’s biggest commercial broadcasters. The move could lead to a showdown with private equity owners Permira, the Damon Buffini-run giant, and Kohlberg Kravis & Roberts (KKR). Lord Hollick, who was chief executive at former Daily Express owner United Business Media, represents KKR on the ProSieben board.
It is understood that Apollo and Permira have been buying the struggling German broadcaster’s debt on the cheap. Sources suggested that the pair had been paying only around 30cents for every euro of debt, allowing them to become, in effect, major creditors. "Apollo and Octavian have been buying up debt that is trading at distressed levels and I can see them taking on Permira and KKR over the direction of ProSieben," said a source.
Financial Times – New Star has closed two of its hedge funds after withdrawals of the crisis-hit fund manager’s internal capital left them too small to survive.
The manager has shut its three-year-old Firefly fund after Harry Tyser, its manager, quit in December, as well as the six-year-old Apollo fund.
New Star was seized by its banks in December in a debt-for-equity swap and has agreed a sale to larger rival Henderson in a stunning fall from grace for the previously high-flying group.
The closures come as hundreds of hedge funds are expected to shut this year, according to analysts and investors. Many small funds are being closed as their growth prospects recede, while larger funds are shrinking – and some are closing – as they face sizeable withdrawals by their clients.
Guardian Unlimited – Three "distressed debt investors" – hedge fund Polygon, restructuring specialist Oaktree and private equity firm Alchemy – have taken control of Countrywide, Britain’s biggest residential estate agent, which was bought by US private equity firm Apollo less than two years ago for about £1bn, mostly financed by debt. Together, they have taken a majority stake for one-third of the price paid by Apollo.
Distressed debt investors, which specialise in buying financial instruments relating to troubled companies at rock-bottom prices, have been saying for two years that buying debt on the "secondary market" – where company loans are traded after the original lender has sold the debt on – was too expensive. Now, they appear to be judging it the right time to move back in.
Times Online – Oaktree Capital Management, a specialist investor that targets heavily indebted companies owned by buyout groups, has sealed its first big investment in Britain.
The American-based Oaktree, which has just under €1.8 billion (£1.6 billion) to spend on distressed European companies, said on Tuesday that it had signed a deal to buy a large stake in Countrywide, the estate agency chain taken private for £1 billion at the height of the buyout boom by Apollo, the US private equity fund.
The deal, in which lenders to Countrywide will write off nearly £600 million of its debt mountain, will raise hopes that distressed investors could begin to make an impact on Britain’s stalled buyout market.
