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.
New York Times Blogs – Selling a controlling stake in Phibro won’t cut it for Citigroup, Breakingviews writes.
Sure, it would probably quell some of the uproar around the flashpoint that put Citi’s full ownership of Phibro, a commodities trading unit, under public scrutiny: the $100 million bonus due to Phibro’s boss, Andrew J. Hall, this year. But the debate has since moved on to whether such a venture belongs in Citi’s portfolio of businesses at all. That is hard for the bank to justify.
Times Online – Alistair Darling has warned that he will impose tougher regulation to avoid a repeat of the banking crisis amid fears of a return of the bonus-driven, risk-taking culture in the City.
The Chancellor told The Independent newspaper that bankers who are too complacent will be “brought back to earth” by new legislation.
An important White Paper on the banking sector, due next week, will grant new powers to the Bank of England and the Financial Services Authority (FSA), Mr Darling said.
He promised “new tools” for the regulatory bodies to strengthen their powers, which could mean that the FSA will be able to extend its reach to hedge funds, some of the riskiest investment funds.
Reuters – Star commodity traders, once synonymous with high-profile banks, are leaving for little-known investment firms that let them work and earn in ways iconic Wall Street firms no longer can.
The financial crisis and its amplifying threat on risk taking, bonus and pay at major financial institutions is causing big names like Goldman Sachs and Morgan Stanley to lose some of their best commodity talents to relatively obscure hedge funds — even start-ups — that promise more.
Reuters – Star commodity traders, once synonymous with high-profile banks, are leaving for little-known investment firms that let them work and earn in ways iconic Wall Street firms no longer can.
The financial crisis and its amplifying threat on risk taking, bonus and pay at major financial institutions is causing big names like Goldman Sachs and Morgan Stanley to lose some of their best commodity talents to relatively obscure hedge funds — even start-ups — that promise more.
Financial Times – The top three executives at GLG Partners, until recently Europe’s biggest hedge fund, have cut their salaries to $1 (69p) as the global financial turmoil puts pressure on senior managers to waive their pay.
Noam Gottesmann and Pierre Lagrange, the "G" and "L" in GLG, and Manny Roman, co-chief executive with Mr Gottesmann, said in a regulatory filing that they had agreed to take $1 in salary from April to the end of the year. They receive no bonus, although all are big shareholders.
Reuters – Electricite de France SA is close to an agreement to buy half the nuclear power business of Constellation Energy Group Inc (CEG.N) for $4.5 billion, Bloomberg reported, citing people familiar with the situation.
Approval by Constellation‘s board, subject to some conditions, may be announced as early as this week, Bloomberg said quoting a source who remained anonymous because the talks are private.
In September, Berkshire Hathaway Inc’s (BRKa.N) (BRKb.N) unit MidAmerican Energy Holdings agreed to pay $4.7 billion, or $26.50 a share, for U.S. power company Constellation, which was on the brink of bankruptcy.
Reuters – General Electric Co plans to raise $15 billion through stock sales — including $3 billion from Warren Buffett — to improve liquidity and give it the option of more acquisitions at a time of intense market turmoil, the U.S. conglomerate said on Wednesday.
The news helped to erase some of the day’s slide in GE shares, which fell more than 9 percent earlier, but was not enough to push them into positive territory. Investors remained worried about the troubles at GE’s vast finance arm — which has businesses ranging from loans to mid-sized business to investing in real estate.
It was the second big strategic investment by Buffett’s Berkshire Hathaway Inc in the battered finance sector in as many weeks. Last week Berkshire said it would invest $5 billion in Wall Street’s Goldman Sachs Group Inc.
Reuters India- A Chinese fund manager has won a lunch with famed U.S. investor Warren Buffett after bidding $2.11 million for the opportunity in a charity auction, more than three times what the lunch fetched last year.
Zhao Danyang, who runs Hong Kong-based Pureheart China Growth Investment Fund, had the winning bid in the eBay Inc auction that ended late on Friday.
Proceeds of the lunch with the 77-year-old chairman of Berkshire Hathaway Inc benefit Glide, a nonprofit foundation in San Francisco that offers programs for the poor, hungry and homeless.
Mohnish Pabrai, an Irvine, California-based investor, paid $650,100 for the right to dine with Buffett last year.
Buffett began donating lunches in 2000 after his wife Susan introduced him to the Rev. Cecil Williams, who founded Glide and runs the Glide Memorial United Methodist Church. The auctions, including the current one, have grossed more than $4 million for the organization. Last year’s winning bidder paid $650,000 for lunch with Buffett.
