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.
The Boston Globe – Hedge funds are having their best year since 1998, yet most fund managers still are well below their peaks before the market’s meltdown last year, industry analysts said.
Hedge fund assets rose 2.5 percent in July, contributing to a 9.9 percent climb over the first seven months of the year, and the best year-to-date results since 1998, Credit Suisse/Tremont Hedge Fund Index said.
Examiner – There is a global movement towards the harmonization of best practices and standards in the hedge fund industry amongst investors, hedge funds, funds of hedge funds, policymakers, service providers and regulatory authorities. In response to the global financial crisis, the G20 agrees on the need to extend regulation and oversight to all systemically important firms, including hedge funds.
Organizations such as the Alternative Investment Management Association (AIMA), Hedge Fund Standards Board (HFSB), International Organization of Securities Commissions (IOSCO), Managed Funds Association (MFA) and the Asset Managers’ Committee of the President’s Working Group (PWG) have individually published viewpoints on how a system of best standards and practices should be adopted.
Boston Globe – French bank BNP Paribas’s revenues from corporate and investment banking nearly doubled in the second quarter as robust investor demand boosted revenues from the bank’s fixed income business unit.
BNP Paribas’s CIB revenues totaled 3.351 billion euros ($4.82 billion) for the quarter, up 81 percent from the second quarter of 2008, and following record revenues of 3.696 billion euros in the first quarter of 2009.
”Once again, fixed income revenues were exceptional,” said David Thebault, head of quantitative sales trading, at Global Equities, in Paris.
Boston Globe – It’s been a bad few months for New York financier J. Ezra Merkin. First, his hedge funds lost $2.4 billion in the Bernard Madoff swindle. Then, he lost his post as chairman of GMAC Financial Services.
Now, he’s parting with his prized art collection.
Bombarded by lawsuits accusing him of fraud, Merkin and his wife have arranged to sell their impressive collection of paintings by abstract expressionist Mark Rothko, as well as some valuable sculptures by Alberto Giacometti, according to legal papers filed yesterday.
An anonymous buyer has agreed to pay $310 million for the trove, the filing said.
Boston Globe – State Street Corp., which specializes in serving institutional investors and wealthy customers, said Thursday it has been selected to provide hedge fund administration services for about $6 billion in assets advised by Caxton Associates.
State Street’s hedge fund administration company International Fund Services will provide accounting, fund administration, tax and risk services to five master-feeder fund structures managed by New York-based Caxton Associates and affiliates.
"Our decision to select IFS as our independent fund administrator was based on their long and significant experience servicing highly sophisticated and complex hedge funds in the industry," said John G. Forbes, chief operating officer of Caxton Associates.
Reuters – Improving markets and a need to recoup 2008 losses will prompt investors to pour $50 billion (30 billion pounds) into hedge funds this year and slow redemptions, Barclays Capital said in a report on Tuesday.
More than 300 investors surveyed by Barclays’ prime brokerage unit reported stashing, on average, 14 percent of their portfolios in cash. Nearly 80 percent of these investors said they plan to start putting some of that cash back into hedge funds.
"In spite of dramatic changes in the investor landscape, certain investors were ready to deploy their cash balances aggressively once markets stabilized," Brian Reilly, a Barclays Capital managing director, said in a statement.
Boston Globe – Prominent hedge fund firm Pequot Capital told investors on Wednesday it will shut down because of a reopened government probe into possible insider trading.
"Public disclosures about the continuing investigation have cast a cloud over the firm and have become a source of personal distraction," the firm’s founder Arthur Samberg, long one of the hedge fund industry’s best-known managers, wrote in a letter obtained by Reuters.
"With the situation increasingly untenable for the firm and for me, I have concluded that Pequot can no longer stay in business as an investment adviser."
Boston Globe – He is a close political ally and prodigious fund-raiser for state Treasurer Timothy P. Cahill. When a blue-chip New York financial firm was trying to persuade Cahill and his staff to award it a lucrative contract to manage state pension money, it hired Anthony S. Rust to push their cause.
In the end, the payday was a big one for everyone involved. Ivy Asset Management was awarded the contract in 2004 to manage $393 million in state pension funds, a deal that would net it about $18.3 million in fees, according to state records. Ivy paid Rust an estimated $2.3 million for brokering the deal, according to the records.
Boston Globe – The trustee liquidating Bernard Madoff’s defunct money-management firm sued three Fairfield Greenwich Group hedge funds, seeking the return of $3.54 billion withdrawn before Madoff’s massive fraud unraveled.
The trustee, Irving Picard, filed the so-called clawback lawsuit yesterday in federal court in Manhattan, seeking damages that would be used to repay victims of a $65 billion Ponzi scheme at Madoff’s New York-based money-management firm.
Starting in 1995, the Fairfield funds invested about $4.5 billion with Bernard L. Madoff Investment Securities LLC, or BLMIS, through 242 wire transfers, Picard said in the complaint. The funds are Fairfield Sentry Ltd., Greenwich Sentry LP, and Greenwich Sentry Partners LP.
West Palm Beach (HedgeCo.net) – Hedge fund and non-local donors are behind political activist Sam Yoon, candidate for mayor of Boston, according to the Boston Globe.
South Korea born, Yoon is already among the most prominent Korean-Americans in elected office, along with the mayors of Irvine, Calif., and Edison, N.J. He has used his stature to raise his profile as a political activist, the paper reported.
A Korean-American hedge fund manager in New Jersey last gear gave $100,000 with which Yoon founded a political action group, Asian Political Leadership Fund.
The paper said that Yoon spent $60,000 from the fund to run ads in Asian-language newspapers for candidates nationwide, including Hubert Vo, a Vietnamese-American state representative in Texas; Ashwin Madia, an Indian-American Iraq war veteran who ran unsuccessfully for Congress in Minnesota; and Barack Obama.
Alex Akesson
Editor for HedgeCo.Net Email: alex@hedgeco.net
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Boston Globe – The trustee in the bankruptcy case of swindler Bernard L. Madoff has told a hedge fund business owned by Massachusetts Mutual Life Insurance Co. to return money that it received from Madoff over the past six years.
Responding to a Boston Globe inquiry, bankruptcy trustee Irving Picard confirmed that he had sent a so-called clawback letter to Tremont Group Holdings Inc.
Tremont is among more than 225 former Madoff investors who have received such letters from Picard, on the grounds that the money belonged to other investors, because Madoff never generated any real investment profits. Picard wants to recoup the disbursed funds to have more money to repay investors for their losses. He has threatened to sue anyone who doesn’t return the funds.
Boston Globe – Secretary of State William F. Galvin is investigating Massachusetts Mutual Life Insurance Co.’s relationship with a hedge fund operation that lost $3.3 billion to admitted swindler Bernard L. Madoff.
Galvin, who oversees the state Securities Division, said his office is looking into MassMutual as part of an ongoing probe of investment firms that placed clients’ funds with Madoff. The division is examining whether MassMutual did enough to safeguard its customers’ money.
Springfield-based MassMutual owns Tremont Advisers Inc., a Rye, N.Y., hedge fund firm that sustained the second-biggest loss of all the confessed swindler’s clients.
