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.
Wall Street Journal Blogs – From its 17th-floor offices in the New Beijing Poly Plaza building, the monolithic landmark commissioned by the state-owned conglomerate China Poly Group Corp., China’s massive sovereign-wealth fund has established itself as a prime destination for overseas hedge-fund managers hoping to come home with big checks in their pockets.
Droves of hedge-fund and private-equity fund managers have made the pilgrimage since last year, when China Investment Corp. moved into its new offices, which is itself just two years old.
CIC, established in 2007, wields control over $200 billion, making it one of the world’s youngest but biggest sovereign-wealth funds. It also is emerging as one of the new hedge-fund emperors, a source of fresh cash for an industry thirsty for it.
New York Times Blogs – Actor Javier Bardem has turned down a role in the sequel to Oliver Stone’s seminal 1980s treatise on greed, “Wall Street.” The Oscar winner was to have played the world’s villain du jour: a hedge fund manager. Forbes reported that the actor’s publicist said he turned down the role due to scheduling conflicts.
It was reported in June that Mr. Bardem was circling the project although he was not yet officially cast. Starring in the film are Michael Douglas, who will reprise his role as Gordon Gekko, and Shia LaBeouf. Shooting is expected to start next month.
New York Times Blogs – Of all the gloomy economic indicators since the Wall Street collapse, perhaps the most startling one seen by New Jersey residents is this: Gov. Jon S. Corzine with his hand out.
Mr. Corzine, whose investments include significant holdings in private equity and hedge funds, famously spent $60 million of his own money on a record-shattering Senate race in 2000, then $43 million more laying siege to Trenton four years ago.
New York Times Blogs – In his court testimony on Wednesday in New York, Mr. Wilson — formerly a senior executive of Silver Point Capital, a hedge fund specializing in distressed-debt investments — described some of the negotiation process that shaped G.M.’s bankruptcy case. The administration’s auto task force had decided upon an asset sale plan by mid-May, as G.M. began a debt-exchange offer with its bondholders as part of a government-supported restructuring plan.
By pursuing an asset sale, G.M. could be assured of greater speed, certainty and the ability to shed unwanted liabilities, Mr. Wilson said.
Because the government was essentially G.M.’s lender of last resort, it could effectively dictate what it found acceptable as a turnaround plan, Mr. Wilson testified.
Reuters Blogs – The big winner in the Obama administration’s financial regulatory reform package is the beaten-up hedge fund industry.
Hedge funds get a particularly “light touch” when it comes to government oversight in the Obama plan. Essentially, the administration is calling for a reinstatment of a Securities and Exchange Commisison rules that requires managers to register with the agency as investment advisors. The rule was overturned by the federal courts, but many large hedge funds remained registered with the SEC–even though they weren’t required to do so.
New York Times Blogs – E*Trade Financial is in talks with Citadel Investment Group, the hedge fund that is its largest shareholder, about a deal to shore up the struggling brokerage firm’s balance sheet, The Wall Street Journal reported, citing people familiar with the matter.
The two companies have been in negotiations for weeks to find a solution to E*Trade’s financial problems, The Journal said, adding that terms of the deal were unknown.
On Tuesday, E*Trade announced that Citadel Chief Executive Kenneth C. Griffin would be joining the firm’s finance and risk-oversight committee.
New York Times Blogs – John Paulson, the hedge fund manager who reaped a windfall betting against the U.S. housing market before the credit crunch, is now hoping to ride to riches on the property industry’s recovery, The Telegraph reported.
Mr. Paulson’s firm, Paulson & Company, is in the early stages of raising money for a new private equity fund, Paulson Real Estate Recovery Fund, the newspaper said.
West Palm Beach (HedgeCo.net) – Convertible Arbitrage: Shifting Gears (more found here at HedgeCo/blogs) discusses the strategy’s ability to generate positive returns both during the declines in equity markets in January and February, as well as during the global market rallies in March and April.
Convertible Arbitrage went from being one of the worst-performing strategies in the Credit Suisse/Tremont Hedge Fund Index (“Broad Index”) in 2008, to one of the best-performing strategies in the first quarter of this year. Many believe that the fundamental and technical reasons for convertibles’ devaluation in 2008 may correct as credit markets begin to stabilize and if deleveraging continues to abate.
Wall Street Journal Blogs – Wasim Rehman, the 28-year-old head of risk controls at the hedge fund manager Marshall Wace, has resigned from the partnership and plans to retire from the investment industry.
In a statement to the market this morning, Marshall Wace said Rehman would continue as a consultant to the company, initially full-time as chairman of the firm’s quantitative oversight committee, but then becoming part-time and “thereby fulfilling his desire to pursue other opportunities outside of the industry.”
New York Times Blogs – Swiss private bank Union Bancaire Privée, one of the largest European hedge-fund investors, offered Thursday to buy back $700 million of its clients’ Bernard L. Madoff-related investments at half what they originally paid.
The bank, based in Geneva, will offer to pay clients the equivalent of 50 percent of the cost of their investment in five equal annual payments, plus 2 percent interest, Jérôme Koechlin, a UBP spokesman, told Bloomberg News. The first payment would be made on Dec. 31, he added.
‘‘The bank has decided to make a goodwill gesture,’’ the company said in an e-mailed statement. This is ‘‘designed to reinforce its partnership with its clients by offering a comprehensive financial package.’’
