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.
Nasdaq – Bank of America Corp.’s (BAC) securities unit must defend an investor lawsuit over whether it aided and abetted Lancer Management Group LLC in deceiving investors about the value of two British Virgin Islands hedge funds‘ holdings.
In an order dated Thursday, U.S. District Judge Shira Scheindlin in Manhattan denied the Charlotte, N.C., bank’s motion for summary judgment in a case brought by investors in hedge funds Lancer Offshore Inc. and OmniFund Ltd.
Caribbean Net News – The UK Serious Fraud Office is investigating sales of credit-default swaps and structured-finance products, including collateralized debt obligations, prior to the credit crisis, following up an earlier investigation into a hedge fund and a related British Virgin Islands-registered company.
The SFO is looking into whether banks sold such products with flawed valuations, said Sam Jaffa, a spokesman for the government agency in London. No specific companies or credit rating agencies have been targeted under the investigation, he said.
“We’re looking generically at what might give us a cause for concern or a possible lead for finding out more,” Jaffa said in an e-mail Monday. “There’s no suggesting that across- the-board valuations were flawed. However, how valuations are arrived at, what is bundled into the funds and how they were sold are areas of interest.”
HedgeCo.net (West Palm Beach) – Hedge fund law firm Conyers Dill & Pearman was named Offshore Law Firm of the Year at 2009 The Lawyer Awards. According to the judges’ criteria, the award is presented to the firm which demonstrates superior strategic clarity, growth of market share, technical legal excellence and quality of service. Conyers fulfilled each of those categories and the firm was commended for an “outstanding year”.
Christopher Johnson-Gilbert, managing partner of Conyers’ London office, collected the award at the ceremony which was held at Grosvenor House and attended by over 1000 lawyers. Johnson-Gilbert commented: “We are delighted to receive this award, which reflects the hard work of everyone across the firm over the past year in providing the highest quality legal advice on the leading offshore jurisdictions of the Cayman Islands, British Virgin Islands, Bermuda and Mauritius. Our strategic purpose and our balanced business model have seen continued success even in times of global difficulties.”
The past year has been one of significant expansion for Conyers during which it has advised on a number of high profile deals, consolidated its position in relation to the BRIC markets with new offices in Moscow and São Paolo, and the addition of a Mauritius office and a global Mauritius practice. Conyers has also gained market share in the Cayman Islands and British Virgin Islands, and maintained its dominance in the Bermuda market. Conyers continues to expand with new hires, and now numbers nearly 600 staff with over 150 lawyers located in 11 offices worldwide.
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Greenwich Time – Fairfield Sentry Ltd., seeking to recover more than $919 million in fees related to investments involving Bernard Madoff, sued the Fairfield Greenwich Group hedge fund that lost $7 billion in Madoff’s fraud.
Fairfield Sentry, based in the British Virgin Islands, said in a complaint filed May 29 in New York State Supreme Court in Manhattan that it is the largest victim of the fraud perpetrated by Bernard Madoff.
The fund seeks to recover more than $919 million in investment management and performance fees that it paid to Fairfield Greenwich based on inflated net asset value reports of its investments with Bernard L. Madoff Investment Securities LLC.
Fairfield Greenwich, led by Greenwich resident Walter Noel, claimed it had $16 billion of assets under management, $7.3 billion of which was purportedly in Fairfield Sentry Ltd., according to the complaint.
West Palm Beach (HedgeCo.net) – Over 100 of São Paulo’s senior legal and business executives attended a launch function held by offshore financial law firm Conyers Dill & Pearman, in celebration of the formation of their new Brazil partnership.
The event was held on at the newly re-opened Casa Fasano Jardins on Haddock Lobo.
While addressing the audience Conyers Chairman, John Collis, spoke of the firm’s international growth. "Over the past decade, Conyers has seen a marked increase in the use of offshore structures by South and Latin American clients, as well as clients seeking to do business in those regions. The decision to open in São Paulo is part of the firm’s strategy of positioning itself in the world’s leading financial centres in order to provide responsive, timely and thorough advice to clients."
“We are pleased to have the regulatory approval to move ahead with the São Paulo office, which will facilitate even greater personal contact with our clients.” Alan Dickson, managing partner of Conyers’ São Paulo office, said.
The new São Paulo office is located on Rua Jeronimo Da Veiga, 384 and will provide general corporate, company and commercial advice, with particular emphasis on investment funds, public company listings, initial public offerings and holding company incorporations providing clients with direct access to the jurisdictions of the Cayman Islands, British Virgin Islands, Bermuda and Mauritius.
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West Palm Beach (HedgeCo.net) – British Virgin Islands based hedge fund manager Tranen Capital took the lead in the Fixed Income – Asset-Backed Lending category for March 2009 with a return of 2.49%.
In addition to the March performance, the fund, ‘Tranen Capital Alternative Investment Fund Ltd.’ posted a YTD (through April) change in NAV of 11.5%.
“Investors are keenly aware of the dismal and unstable returns from the major financial markets. They are demanding alternatives and absolute returns. The Barclay ranking certainly highlights the strategy’s excellent returns but more importantly, it demonstrates that the funds’ performance is non-correlated to financial markets. The Fund’s NAV has increased 27% since July 2008, which has been independently determined by our actuaries, Data Life, and confirmed by our Administrator Commonwealth Fund Services. Additionally, we have also recently delivered our first independent audit to investors," says Kenneth Landgaard, Portfolio Manager.
Tranen Capital’s strategy is to trade life insurance policies in the Life Markets Space, more commonly referred to as the Life Settlements Market. The Life Markets Space enables seniors to sell their life insurance contracts for more than the cash surrender value than they would otherwise receive from the Insurance Company. The credit crisis has helped create more supply as Seniors (65 or older) are looking for other ways to generate cash. In fact, the life settlements market is expected to grow to over $160 billion over the next several years, according to a Sanford Bernstein report.
Arthur Bowen, Director and in-house counsel explained, “The growth in the life settlement market confirms the validity of this asset class and we continue to see great interest from institutional investors. These sophisticated investors understand the strategy and they appreciate that Tranen has gone to great lengths to provide an institutional quality product with a great level of transparency.”
Tranen Capital offers qualified offshore investors access to the Tranen Capital Alternative Investment Fund Ltd. with a 1% acquisition fee and a 20% incentive fee. The minimum investment is $100k.
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West Palm Beach (HedgeCo.net) – The UK Serious Fraud Office, (SFO) Friday conducted searches on two residential properties (one in Kent, the other in Surrey) assisted by the City of London Police, in connection with its investigation into an alleged fraud involving the recently collapsed hedge fund, Weavering Capital.
Two men, aged 43 and 45, were arrested and have been taken to a police station for questioning.
Hedge fund Weavering Capital launched in March 2009, acting as investment advisor to a Cayman Islands incorporated hedge fund, Weavering Macro Fixed Income Fund Limited. The Macro Fund was understood to have funds under management of around $639 million in late 2008.
The investigation is currently focused, the SFO said, on certain interest rate swap transactions between the Macro Fund and a company registered in the British Virgin Islands, Weavering Capital Fund Limited, which appears to be a related third party, which inflated the apparent Net Asset Value of the Macro Fund. More details to be released as the case proceeds.
Alex Akesson
Editor for HedgeCo.Net Email: alex@hedgeco.net
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West Palm Beach (HedgeCo.net) – Cayman Islands law firm Conyers Dill & Pearman now has the official approval and licensing permission for a São Paulo partnership by the the Brazilian Bar Association.
As the only offshore firm to have an office in Brazil, the São Paulo practice will initially focus on investment funds, public company listings and holding company incorporations, providing clients with direct access to the key jurisdictions of the Cayman Islands, British Virgin Islands, Bermuda and Mauritius.
The São Paulo launch solidifies Conyers’ presence in the fast-growing BRIC markets. In March 2008, the firm became the first and only offshore firm to have an office in Russia with the launch of its Moscow office. In October 2008, Conyers established a presence in Mauritius, a preferred jurisdiction for structuring investments in India, and added the provision of Mauritius legal advice to its roster of jurisdictions to service the Indian, Middle Eastern and African markets.
"Even in this challenging economic climate, the prospects for leading Brazilian businesses in global commerce are immense." Conyers Chairman John Collis commented, "The firm’s entry into Brazil and the other major BRIC (Brazil, Russia, India, and China) markets is part of our strategy to provide responsive advice to our clients in the world’s key financial centres and reinforces our strength as a leader in the market for offshore legal services."
Established in 1928, Conyers has over 550 staff and 150 lawyers specialising in the financial laws of Anguilla, Bermuda, British Virgin Islands, Cayman and Mauritius Islands, Dubai, Hong Kong, London, Moscow, Singapore and now São Paulo.
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Insurance giant Aviva could end the practice of lending shares to hedge funds in a move against short-selling.
Aviva shares were battered on the stock market earlier this month – losing 40pc of their value in two days – amid claims that short-sellers were looking to make quick profits by driving down the company’s share price.
Now Aviva directors are said to favour bringing to an end the company’s involvement in lending shares from its own investment portfolio to hedge funds.
West Palm Beach (HedgeCo.net) – Pioneers in the field of offshore law, Conyers Dill & Pearman, (Conyers) is expanding its Cayman Islands presence with three new associates as attorneys-at-law. Stephen Leontsinis has joined the Litigation team, while Tania Dons and Preetha Pillai have joined the Corporate Department.
“Our superior investment funds and litigation capabilities have reinforced our reputation as a preferred firm to partner with in transactions of this nature." Richard Finlay, Managing Partner of Conyers’ Cayman Islands office, "We continue to expand our team in line with our strategic plans to build on the strengths and capabilities of our Cayman Islands practice. We are proud of our reputation as global leader which attracts such depth of talent and are delighted to have Stephen, Tania and Preetha join us.”
Since its establishment in July 2003, Conyers’ Cayman Islands office has grown into a full service practice with a current complement of 20 lawyers and 60 staff. The growth of the Cayman Islands practice complements Conyers’ continued growth globally. Last year, the firm opened three new offices in Moscow, Mauritius and São Paulo, as well as making several key hires. Today, Conyers comprises of over 550 staff in 11 jurisdictions with more than 150 lawyers.
With over 150 lawyers, Conyers Dill & Pearman advises on the laws of Anguilla, Bermuda, British Virgin Islands, Cayman Islands and Mauritius from those islands and from Dubai, Hong Kong, London, Moscow, and Singapore. The firm has earned clients’ trust, loyalty and respect by consistently providing responsive, timely and thorough advice on all aspects of offshore corporate and commercial law, commercial litigation and private client matters.
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