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 – The Hedge Fund Standards Board, the body set up to develop voluntary standards in the industry, said on Wednesday it now represents about half of hedge fund assets in Europe.
The announcement comes as hedge funds attempt to head off tougher regulation in the wake of turmoil in the global financial system.
The industry has come under intense scrutiny, most notably for the impact of short-selling employed by many managers. In September, regulators in the U.S. and Europe imposed a temporary ban on shorting financial stocks.
Ten new signatories to the HFSB include Blackrock Investment Management UK, New Star Asset Management and Sabre Fund Management. They join 14 existing members including Man Group Plc, the world’s largest hedge fund manager, GLG Partners and Marshall Wace.
Sydney Morning Herald – BNP Paribas SA, France’s biggest bank, agreed to take control of Fortis in Belgium and Luxembourg for 14.5 billion euros ($26 billion), completing a breakup of the lender after a government rescue failed.
BNP Paribas will pay 9 billion euros in stock and 5.5 billion euros in cash for 75% of Fortis Bank Belgium, all of the Belgian insurance operations and 67% of Fortis’s bank in Luxembourg, the Paris-based bank said in a e-mailed statement today. Fortis’s risky assets will be split off into a separate entity.
“It means excellent conditions for buying a network with a government guaranty,” said Emmanuel Soupre, a fund manager who helps oversee about $31 billion, including BNP Paribas shares, at Neuflize OBC Asset Management in Paris. “It’s like buying a home with all the works at the expenses of the old landlord.”
Emirates Business 24/7 – Cheap they may be, but not all cash-rich Gulf investors are up for buying distressed assets in the US.
Such a move historically was a good way to make a profit. A good fund manager can buy up distressed assets for pennies on the dollar and figure out ways to sell them down the road for nickels or dimes on the dollar.
It’s a reasonable business proposition, and there are a handful of cases where investors made big profits from buying distressed assets following bursting bubbles. But with a global meltdown on the horizon, not everyone is willing to take a risk.
Dubai Group, a financial conglomerate of Dubai Holding, for one is planning to launch a fund of funds in the first half of 2009 to invest in the US and European markets. The fund, according to Tom Volpe, its group chief executive would not buy distressed assets but rather focus on traditional asset management and private equities. "Are we going to buy distressed assets? The answer is, ‘No’," he told Emirates Business.
International Herald Tribune – Lehman Brothers said Monday that it would sell for $2.15 billion much of its money management business, including its prized Neuberger Berman asset management unit, to Bain Capital and Hellman & Friedman.
The sale of the business, more than a month in the making, has been among the biggest outstanding issues for Lehman, which filed for bankruptcy protection two weeks ago. Barclays of Britain bought Lehman’s United States capital markets division. Nomura Holdings of Japan is buying many of Lehman’s assets in Europe, the Middle East and Asia.
Before Lehman collapsed, it had proposed selling off a major stake in its investment management division, which includes Neuberger, as an integral part of a self-help plan. Then, it expected to fetch bids that would have valued the unit as high as $7 billion.
The Independent – Stanley Fink, the so-called godfather of UK hedge funds, has made a dramatic return to the industry after retiring from Man Group, the largest alternatives manager in the world, only two months ago.
Mr Fink confirmed yesterday that he had been appointed chief executive of International Standard Asset Management, an alternative asset manager with about £200m under management. The fund also announced the appointment of the former Labour Party fundraiser Lord Levy as chairman.
The London-based trading group said Mr Fink will assume responsibility for the operational management of the business to build a significant hedge fund presence, while both will use their extensive network of wealthy contacts to boost the fund’s assets under management.
International Standard Fund was set up by the former Merrill Lynch gold trader Roy Sher, a friend of Mr Fink, in 2003, and is mainly backed by private investors. Mr Sher said the big-name appointments should help the firm to win market mandates ahead of its hedge fund rivals.
Daily Telegraph – Stanley Fink, the former boss of Man Group, who became one of the City’s best-known financiers, is teaming up with Lord "Cashpoint" Levy to make a spectacular comeback to the hedge fund industry he quit last year.
Known as the "Godfather" of British hedge funds, Fink is to become chief executive of International Standard Asset Management (ISAM), a small London-based commodities trader. Lord Levy, the former Labour treasurer who was Tony Blair’s special envoy to the Middle East, is to be chairman of the group.
It will be Levy’s first high-profile role since being embroiled in Labour’s cash-for-honours’ scandal two years ago.
The pair plan to build ISAM, which currently has two funds trading in gold and fixed income, into a substantial player in the hedge fund world.
The return of Fink will be a major talking point in the City.
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.
Reuters – Blackstone and Kohlberg Kravis Roberts & Co are each looking to buy parts of Lehman’s real estate and asset management units, sources familiar with the situation said on Friday, sparking a broad rebound in financial stocks.
The real estate unit of Lehman Brothers Holdings Inc, which includes property and some asset-backed securities, could be worth about $5 billion (2.8 billion pounds), the sources said.
Lehman shares jumped 5.3 percent after the Reuters report. That helped lift the S&P financial index , which had slipped earlier on Friday, by 1.8 percent.
"Lehman has been so shredded in terms of confidence that anything like this is something that can ignite a upward movement at any point," said Michael Holland, founder of money manager Holland & Co LLC.
New York Post – Former Goldman Sachs exec Steve Mandis has left the $12 billion hedge fund Halcyon Asset Management – one of the oldest hedge funds on Wall Street, according to an investor letter.
Mandis was vice chairman and chief investment officer at Halcyon Structured Asset Management LP, a lending subsidiary of Halcyon that he helped co-found about four years ago with about $1 billion in capital.
According to an investor letter issued Tuesday and obtained by The Post, Mandis’ departure is "effective immediately," and the firm expects to announce a succession plan "as soon as possible."
Although the official reason for Mandis’ departure could not be learned, people familiar with the matter said his lending subsidiary had been performing poorly and was drawing the ire of some of the firm’s biggest institutional investors.
HedgeFund.Net – Swiss funds-of-funds firm Gottex Fund Management is launching a fund that will emulate the investment principles of U.S. “super endowments.”
The new fund will emulate the investment principles of successful U.S. university endowment funds, such as Harvard and Princeton. It will allocate about 65% to alternative investments. The alternative part of the portfolio will cut across all asset classes: hedge funds, private equity, commodities, long-only equity, fixed income, real estate and other real assets.
Harvard Management, long the model for university endowment funds currently with about $35 billion in assets, increased more than 20% year over year in 2007.
William Landes is helming the new fund. Landes joined Gottex from Boston-based 2100 Capital, his hedge fund specialty firm that Old Mutual Asset Management bought in 2005. Before that Landes was a money manager at Putnam Investments, which helped incubate 2100 Capital.
CityWire – Premier Asset Management has hired former Thames River hedge fund specialist Chris Wright to take control of the Premier Dividend Fund from Paul Branigan.
Branigan, who also manages an absolute return growth mandate and is chief investment officer of Premier, is handing over to Wright as he wishes to concentrate on his other duties at the group.
Wright, who managed a number of hedge funds for Thames River, joins Premier on 1 September.
Wright is expected to restructure the Dividend Fund when he arrives, which could see it employ a similar strategy to the one used by the Schroder Income Maximiser Acc fund.
Managing director of sales and marketing, Simon Weldon, said: ‘Chris brings a lot of pan European equity experience with him and has been on both sides of the buy-sell fence so we are confident he will make an excellent addition to the team.
Guardian Unlimited – Hedge funds are buying into power supplier Scottish & Southern Energy in hopes of a bid for the company, currently valued at over £12bn.
The latest fund to have bought shares is Centaurus, headed by Frenchman Bernard Oppetit, who is understood to have made millions via a recent investment in British Energy.
It caused a splash in the UK in 2006 when it blocked a bid for engineering company Amec from private equity group Texas Pacific on the grounds that it was too low.
Centaurus has been joined at SSE by other hedge funds such as Lansdowne, GLG and Odey Asset Management.
Oppetit is known in the City as a canny investor and has built up Centaurus into a £5bn fund after leaving BNP Paribas, where he was head of proprietary trading. On its website, Centaurus says: ‘We develop a close and constructive ongoing dialogue with the executives of the companies that we invest in, and focus on achieving an in-depth fundamental understanding of their businesses.’
