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Bloomberg - Banque Safdie SA, the Geneva-based wealth manager that withdrew money invested with Bernard Madoff three years before his alleged Ponzi scheme unraveled, said the scandal will mean more hedge fund regulation.
“What Madoff has done is highlight the lack of regulation,” Safdie Chief Executive Officer Claude Le Ber said in an interview from Geneva this week. “There’s going to be a shake out. Even before Madoff, the hedge fund industry was seeing redemptions and wasn’t producing absolute returns.”
Bloomberg - Paolo Pellegrini, the hedge-fund manager who helped Paulson & Co. make more than $3 billion in 2007 on bets the U.S. housing bubble would burst, resigned to start his own fund, a person familiar with the matter said.
Pellegrini, 52, a manager of Paulson’s credit opportunities funds, left on Dec. 31 in an “amicable” departure, said Armel Leslie, a spokesman for New York-based Paulson & Co. John Paulson, founder of the firm, which oversees $36 billion, couldn’t be reached for comment.
Paulson and Pellegrini became convinced in 2006 that investors were overvaluing mortgage-backed securities whose risk for losses they or credit rating firms had misjudged, according to client letters obtained by Bloomberg News. The firm’s credit opportunities funds soared about sixfold in 2007 as mortgage defaults rose and the value of the securities declined.
Bloomberg - William Ackman’s hedge fund that invests in Target Corp. fell 68 percent last year, more than double the loss by the second-largest U.S. discount chain.
Pershing Square IV declined 7.7 percent in December alone, according to a letter to investors from Pershing Square Capital Management LP. Ackman and Pershing spent about $2 billion in 2007 for a stake in Minneapolis-based Target. Ackman has since pressed Target to buy back shares, sell its credit-card unit and extract more value from its real estate.
Ackman, who controls 9.5 percent of Target, proposed last year that the company place the land under Target stores into a real estate investment trust that would lease the property back to the retailer. The New York-based investor has argued that such a move would free up cash for the company and result in a higher valuation.
Pershing Square IV’s loss last year followed a decline of 43 percent in 2007. The fund is structured so its returns to investors double the stock’s movement.
Bloomberg - The biggest-ever decline in commodities turned Pierre Andurand and Chris Levett into this year’s heroes for investors.
Andurand’s $1.1 billion BlueGold Capital Management LLP hedge fund in London almost tripled between its February debut and November by betting on higher oil prices in the first half of 2008 and then reversing the strategy, the 31-year-old manager said. Levett’s $3 billion London-based Clive Capital LLP returned 44 percent in the first 11 months of the year.
The first bear market in commodities since 2001, as measured by the UBS Bloomberg CMCI Index, cut investments in raw materials to $144 billion from a peak of $270 billion in the second quarter, Barclays Capital estimates. While the CMCI rose almost fivefold from 2001 to 2008, beating stocks and bonds, commodities measured by the Reuters/Jefferies CRB Index fell 53 percent since June and are heading for the worst year in five decades.
Bloomberg - When Manhattan lawyer Marc Dreier needed to apply a patina of reality to allegedly bogus promissory notes he was pitching to hedge funds, he used Mission Impossible- type tricks.
As the U.S. Attorneys Office in Manhattan tells it, he would lie his way into an accounting firm’s or real estate developer’s offices as if he had business there.
He then would use their conference rooms for meetings with hedge-fund officials to make it seem the accountants or developers were in on the deal, according to the feds.
Appropriating the accounting firm’s letterhead, he fabricated financial statements and forged audit letters, prosecutors and the Securities and Exchange Commission allege. He would arrange conference calls between hedge-fund representatives and someone pretending to be the chief executive of Solow Realty, the developer and former Dreier client whose fake notes the feds say Dreier was trying to sell.
Bloomberg - Jeffrey Gendell, whose investment firm Tontine Associates LLC is liquidating two hedge funds after losses of more than 60 percent this year, plans to start a new fund in February.
The Tontine Total Return Fund will invest in stocks believed to be undervalued and won’t use borrowed money, Gendell said in a letter to investors. Steve Bruce, a spokesman for Greenwich, Connecticut-based Tontine, declined to comment.
Tontine, started by Gendell 12 years ago, had been one of the industry’s best performers, with its four funds returning an average of 38 percent annually since inception through 2007. The firm last month said it was unwinding Tontine Capital Partners LP, a fund that plunged 77 percent this year through October, and Tontine Partners LP, which fell 67 percent through September.
Times Online- Arpad Busson was 10 minutes late. As the 44-year-old financier (who is also actress Uma Thurman’s boyfriend) hobbled through the door of his Mayfair boardroom, it became apparent why.
“I’ve done my back in,” said Busson, in a hoarse French accent. The injury is an old one acquired on the ski slopes.
Born in France and educated “between France and Switzerland”, Busson skied as soon as he could walk. At the age of 13 he begged his mother to let him go professional — in downhill racing — but she wouldn’t allow it.