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.
Bloomberg – Tudor Investment Corp., the firm run by Paul Tudor Jones, temporarily suspended redemptions from the $10 billion BVI Global Fund Ltd. as it splits the hedge fund into two, according to a person familiar with the matter.
Tudor is planning to put hard-to-sell investments, mostly corporate bonds and loans from emerging markets, into a new fund called Legacy, said the person, who asked not to be identified because the information is private. BVI Global, which started in 1986, would focus on easier-to-trade stocks, bonds, commodities and currencies.
More than 80 firms have liquidated funds, restricted redemptions or segregated assets following stock-market declines and a credit freeze that started with rising defaults on U.S. subprime mortgages. Emerging-markets securities have fallen as commodity prices plunged and investors shunned riskier assets on concern the global economy is entering a recession. The MSCI Emerging Markets Index has dropped 58 percent this year.
Seeking Alpha – A report making the rounds today detailed managers’ Form 13-F filings. This report shows what managers own. Their holdings of U.S. stocks by and large plummeted. The decline in the size of the positions could be from market share losses or the sale of a position, or most likely, both.
Atticus Capital reduced its holdings from $8.1 billion to $510 million. Tudor Investment from $5.7 billion to $453 million. SAC Capital Advisors said its holdings of U.S.-based stocks (and options and converts) were $7.7 billion vs. $14.4 billion last quarter. Moore Capital said the "value of its 13-F securities fell 69% to $1.4 billion." And on and on.
Wall Street Journal – Some high-profile Bain Capital credit-investment funds are choking on losses of as much as 50%, said people familiar with the matter, the latest revelation in a day of shake-ups across the hedge-fund business.
The private-equity firm’s credit affiliate, Sankaty Advisors LLC, has lost between 40% and 50% across two funds that bought up highly secured corporate loans, these people said. The two vehicles had roughly $4 billion in assets just a few weeks ago, and used a relatively low amount of borrowed money to fund their investments.
Steep losses have also hit London hedge fund Centaurus Capital LP, which Wednesday offered its investors a chance to cut their fees. And, at Tudor Investment Corp., one of the oldest and best-regarded hedge funds, fund manager James Pallotta finalized a plan to run his own firm separate from longtime colleague Paul Tudor Jones.
MarketWatch – James Pallotta, vice chairman and managing director of U.S. public equities at Tudor Investment Corp., is leaving the giant hedge fund firm and plans to launch the Raptor Global Funds unit he runs as a separate business, according to a letter Tudor sent to investors this week.
Pallotta will spin off Raptor at the end of 2008 and set up a new, independent firm that will initially focus on public equity investments, Tudor explained. Over time, Raptor will branch out into private investments too, the firm added in the letter, a copy of which was obtained by MarketWatch.
"Tudor will support Jim in the creation of his new firm and anticipates that it will invest capital in new funds Jim launches," Paul Tudor Jones II, chairman of Tudor, wrote in the letter. "We expect there will be many opportunities for collaboration on investments in future years."
A spokesman for Tudor said the firm declined to comment.
Pallotta will continue to manage the Raptor Global and Altar Rock Funds as well as a portion of Tudor’s main BVI Global Fund. On Jan. 1, 2009, the management of the Raptor Global Funds will transition to the new firm.
Reuters – Hedge-fund pioneer Paul Tudor Jones and veteran stock picker James Pallotta are mulling changes to their 15-year partnership, including a possible parting of ways that could affect their $18 billion fund empire, the Wall Street Journal reported Thursday.
A split between Pallotta and Jones, the veteran trader who started Tudor Investment Corp, would mark the end of one of the most successful and well-known hedge-fund duos in history, the paper said.
Jones has talked privately in recent weeks about the possibility of restructuring his firm in a way that could result in a separation with Pallotta, the Journal said, citing people familiar with the discussions.
Times Online- They may be partly responsible for the mess the banks are in but bankers are not sticking around for the clean-up. Many top bankers have lost confidence in their institutions and are quietly heading for the exit. The smart ones, it seems, are going to hedge funds.
GLG, Europe’s largest hedge fund, recently poached Goldman Sachs partner and top trader Driss Ben-Brahim. The bank was “not amused” by Ben-Brahim’s defection, according to one source.
Karim Abdel-Motaal and Bart Turtelboom, the global co-heads of emerging markets at Morgan Stanley, were also snapped up by GLG.
Last week, Fauchier Partners, a fund of hedge funds, announced the appointment of Jamie Kermisch. Also from Morgan Stanley, he has been in investment banking for 19 years. This follows high-level recruitment by Citadel, Tudor Investment and CQS, which has already drafted in some 45 people this year.
West Palm Beach (HedgeCo.Net)- The Managed Funds Association MFA and CME Group (CME), a Strategic Partner member, recently arrived back from a jointly arranged trip to meet with Chinese government officials, policy makers and financial services representatives.
The MFA and CME co-sponsored a conference, "Global Markets and the Role of Alternative Investments" was held in June with the Tianjin Municipal People’s Government and China Foreign Exchange Administration Magazine.
"The conference agenda helped us to continue a dialogue about the important role of alternative investments in the capital markets and to strengthen relationships in China as its economy and financial markets grow." Richard H. Baker, MFA President and CEO, said.
Members who participated in the conference included; Citadel Investment Group, L.L.C.; Fairfield Greenwich Group (FGG); Harbinger Capital Partners Funds; Moore Capital Management, LLC; Tudor Investment Corporation; the D.E. Shaw Group; Paulson & Co., Inc.; and S.A.C. Capital Advisors, LLC.
"MFA’s visit to China is part of its ongoing international outreach with policy makers and its mission to provide information about the global alternative investment industry." MFA said.
MFA is the voice of the global alternative investment industry. Its members include professionals in hedge funds, funds of funds and managed futures funds. MFA Members represent the majority of the largest hedge fund groups in the world who manage a substantial portion of the approximately $2 trillion invested in absolute return strategies.
