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.
HedgeCo.net (West Palm Beach) – Hedge fundprime broker Merlin Securities and financial tech group Gerson Lehrman, announced an exclusive research partnership which will allow Merlin to provide emerging managers with access to Gerson Lehrman Group’snetwork of more than 200,000 experts. As a result of the partnership, Gerson Lehrman Group’s platform will be much more accessible to fund managers with assets of up to $150 million.
”We are very pleased to announce this exclusive partnership with Gerson Lehrman Group,” Stephan Vermut, founder and managing partner of Merlin Securities, said, ”Gerson Lehrman Group is a trusted name and resource for generating alpha, and as leaders in our respective markets, the combination of Gerson Lehrman Group’s worldrenowned expert network with Merlin’s prime, multi-prime and analytical solutions represents an extremely powerful offering for emerging managers.”
”The decision to offer services to emerging managers was a natural one,” Alexander Saint-Amand, president and chief executive officer of Gerson Lehrman Group, said, ”Like our current clients, emerging managers greatly value the sophisticated expertise offered through our global network. We are excited to be working with Merlin as our partner in providing Gerson Lehrman Group services to emerging managers.”
Merlin was recognized as the #1 prime broker for funds less than $1 billion by Alpha magazine’s 2008 hedge fundservice provider survey for the second year running. Merlin was also the top-ranked non-algorithmic-driven firm and second overall among brokerages trading NYSE stocks as measured by arrival price, according to the 2008 Elkins/McSherry annual transaction cost survey.
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Reuters – Hedge fund assets will continue to shrink this year, falling as much as two-thirds from their 2007 peak, but investors will return and assets will rebound when the economy revives, Alex Ehrlich, global head of prime services at Swiss bank UBS, said on Monday.
Last year was the hedge fund industry’s worst ever, as asset values plunged and investors pulled out record amounts of cash. These trends, which forced hundreds of funds to close their doors and some to impose redemption curbs, are likely to continue this year before the industry rebounds, Ehrlich said at the Reuters Private Equity and Hedge Funds Summit in New York.
"All this proves is that the hedge fund industry is cyclical," he said. "But the idea of the death of the hedge fund industry is crazy. The industry will rebound, though it will not rebound to peak levels."
Ehrlich, who runs one of the world’s largest prime brokerages, said that in just the past year hedge fund assets have fallen from roughly $2 trillion to as low as $1 trillion.
The China Post – Asia-Pacific banks, brokerages, insurers and private equity firms are more optimistic about mergers and acquisitions as they seek to expand following a decline in asset prices, according to PricewaterhouseCoopers LLP.
About 42 percent of financial institutions in the region expect to make an acquisition over the next year, compared with 38 percent a year earlier, according to a PwC survey of 215 senior executives conducted in Jan. and Feb. Still, 83 percent of the respondents expect the global credit crunch and economic slump to last for another one to two years.
West Palm Beach (HedgeCo.net) – Chris Gillick, currently an associate editor with Trader Monthly and Dealmaker magazines, has agreed to join NetSalonFX as an adviser, principal/branch manager, and regulatory liaison, having just completed his NASD Series 30 exam.
As an editor for Trader Monthly and Dealmaker, he has covered the hedge fund industry, brokerages, private equity and investment banking. In 2008, he helped produce several widely followed industry lists such as the Trader Monthly 100, the Trader Monthly Top 30 Under 30, the Dealmaker Top 40 Under 40, and Dealmaker’s Party Crashers, featuring the top women in private equity.
"I am happy to have Chris aboard," Says Lance A. Perry, CEO of NetSalonFX and its parent company, NetSalon Software Development Inc, "He brings great credibility as a financial professional with deep knowledge of the foreign exchange market, and as a journalist covering so many sectors of the financial world. He’s going to be a great asset to our clients."
"I’m very much looking forward to working with the NetSalonFX team," says Gillick. "I’m excited to get my into the trading world while still pursuing my passion of journalism."
NetSalonFX’s clients are all accredited investors, whom Gillick is accustomed to conversing with regularly in his coverage of the world of high finance. "I have had the privilege of meeting people in every corner of the world of finance, including introducing brokers in the foreign exchange market. Unfortunately not all IBs have the best intentions when selling their products. However, NetSalonFX has done a great job of screening out unqualified investors and building a community of traders who understand fully the great risks, and rewards, of the foreign exchange market."
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
New York (HedgeCo.Net) – Gabriel Capital and founder Ezra Merkin have been sued for their exposure to Ponzi-schemer Bernard Madoff by a disdained investor.
Scott Berrie, who has $500,000 tied up in one of Gabriel’s funds, claims that Gabriel lied to investors when they marketed that they hold a “diverse portfolio of securities,” which “falsely implied that the general partner was actively pursuing the partnership’s strategy in a prudent manner by using numerous and diverse investments.”
Berrie also alleges that Merkin, who heads up GMC financing arm GMAC LLC, neglected at least 27 percent of its investments, the chunk of which was invested with Madoff.
Berrie filed a class-action lawsuit yesterday in a federal court in Manhattan.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
New York (HedgeCo.Net) – SEC Chairman Christopher Cox has launched a probe into his own agency after it surfaced that complaints made to employees regarding the possible misconduct of Bernard Madoff were never investigated.
Saying that specific allegations had been made to certain members of the SEC staff since at least 1999, Cox expressed his disdain that nobody had apparently followed up with the complaints of what eventually became a $50 billion Ponzi scheme.
“I am gravely concerned by the apparent multiple failures over at least a decade to thoroughly investigate these allegations or at any point to seek formal authority to pursue them,” Cox said.
The probe will be headed by Inspector General H. David Kotz and will look into the SEC’s internal policies and focus on areas of improvement, in addition to delving into the agency’s personal contacts with members of the Madoff family and business.
Cox also said that any agency staff members who had close personal contacts with Mr. Madoff will not participate in the SEC’s investigation of his company.
Cox confirmed in his statement what officials said last week following the arrest of Madoff; that he kept false books and other documentation to cover up his scheme to investors.
Madoff used new capital coming into his firm to pay returns to existing clients. He was arrested last week after confessing to his sons that his company, Bernard L. Madoff Investment Securities, was a “one big lie,” and a “giant Ponzi scheme," duping many large and reputable hedge funds and financial institutions.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
New York (HedgeCo.Net) – Chicago-based Citadel Investment Group has frozen redemptions from its two largest hedge funds after investors moved to withdraw $1.2 billion, according to a letter sent to clients on Friday.
The letter, signed by CEO Kenneth Griffin, informed investors that withdraws in the Kensington and Wellington Funds may resume as early as March 31st. The funds, which manage about $10 billion making them the firms largest, have lost 49.5 percent of their value this year through December 5th.
“We have not made this decision lightly,” Griffin said. “We recognize how a suspension impacts our investors, especially those with current financial obligations of their own to meet.”
The letter also stated that Citadel will absorb a large portion of the funds’ expenses, something that clients usually are responsible for, in the range of 3 to 4 percent of assets.
While Citadel’s two largest funds may be struggling to get through the year, three other funds in the Citadel family which manage about $3 billion, have climbed 40 percent this year.
This marks only the second year since the firm’s launch in 1990 that Citadel will report a loss. The only other loss was posted in 1994, at 4 percent. Hedge funds as a whole have had posted one of the worst years to date, losing 18 percent on average, according to data compiled by Chicago-based Hedge Fund Research.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
West Palm Beach (HedgeCo.net) - Hong Kong-based hedge fund manager PMA has chosen to more than triple the number of users of PerTrac CMS in the company’s Hong Kong, Tokyo, New York, London, and Dubai offices.
PerTrac CMS is an alternative investment workflow management solution used for investor relations, capital raising and investment management workflows.
"PMA’s marketing reach has expanded significantly over the last 12 months and we now has marketing teams based in our Dubai and London offices as well as representations in New York," noted PMA Chief Technology Officer Shane McPherson.
PMA was established in July 2002 to provide investment advisory and investment with assets over $2 billion, PMA currently has over 70 professionals employed in Hong Kong, Sydney, London and Dubai, and became a member of the SPARX group in April 200, the largest publicly listed asset manager in Asia.
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
New York (HedgeCo.Net) – Marc Dreier was denied bail on Thursday after prosecutors estimated the New York attorney swindled more than $380 million out of investors in his elaborate scheme that targeted hedge funds.
Alleging that Dreier fooled “the most sophisticated investors in the world,” prosecutor Jonathan Streeter convinced Judge Douglas Eaton that he may be a flight risk. Streeter emphasized the fact that Dreier has extensive contacts around the world where the money may be hidden. Dreier’s legal team had sought a $10 million bail package with house arrest.
Streeter said the alleged fraud had been in the works since January 2006 and called Dreier a “Houdini of impersonation and false pretenses.”
It was first estimated that Dreier duped about $113 million from investors by selling fake notes tied to a bogus real estate development company based in New York. He then allegedly covered up the scheme by producing false documentation and financial statements. While it was first believed that only a few prominent big-name hedge funds were targeted, new evidence supports the theory that Dreier may have targeted many more funds.
His firm, Dreier LLP, also suddenly had millions missing from its client escrow accounts. According to court papers, Dreier is the only one authorized to make transfers from these accounts. Strangely enough, Dreier transferred $10 million to a personal account from the escrow account via telephone while being held in a Canadian jail last week for criminal impersonation charges.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
New York (HedgeCo.Net) – Former chairman of the Nasdaq Stock Market Bernard Madoff was arrested yesterday and accused of orchestrating a ponzi scheme that bilked some $50 billion out of investors, authorities say.
The founder of Bernard L. Madoff Investment Securities allegedly has been running the scheme for years, using new money coming into the fund to pay returns to other investors, keeping up the façade of an admirable performance. In his alleged confession to the FBI, Madoff took the blame, saying he “paid investors with money that wasn’t there.”
According to the SEC complaint, Madoff informed two senior employees at his firm yesterday that he was “finished,” and that his business is “all just one big lie,” and “basically, a giant Ponzi scheme.” He also allegedly admitted that the firm was insolvent and had been for years.
“We are alleging a massive fraud – both in terms of scope and duration,” said Linda Chatman Thomsen, Director of the SEC’s Division of Enforcement. “We are moving quickly and decisively to stop the fraud and protect remaining assets for investors and we are working closely with the criminal authorities to hold Mr. Madoff accountable.”
Madoff, 70, posted bail at $10 million, backed by his Manhattan apartment and guaranteed by his wife.
"Bernard Madoff is a longstanding leader in the financial services industry," his lawyer Dan Horwit told reporters outside the Manhattan courtroom. "We will fight to get through this unfortunate set of events."
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
New York (HedgeCo.Net) – Hedge funds may not be having their best year, but whoever said they lost their glamour obviously didn’t attend the HedgeCo Holiday Networking Event.
About 650 guests piled into Nikki Beach on Manhattan’s east side last Wednesday evening, drinking dirty martinis and partying into the early hours of the morning. For some, the event presented a sort of rare opportunity in the current times; a chance to network within the industry without the imminent reminder that nothing is guaranteed.
“For months, all you hear about is lagging numbers, layoffs and huge bailouts. Just for a night, I wanted everyone to forget all that. I think everyone was long overdue for a good time!” says Evan Rapoport, Co-Founder of HedgeCo Networks and organizer of the event.
"After a few hours of mingling, the tables that run down the middle of the place were transformed into a catwalk-type dance floor," said Cathy Eidorowicz, who also helped organize the event. "Everyone just kind of let loose and partied the night away, there was surprisingly a really good vibe in the air."
While some were there strictly to party, others used the event as a glorified job fair. With so many in the industry under one large white tent, it didn’t hurt to flash a resume while moods were merry. Especially when Wall Street job losses are expected to hit 48,000 by the end of next year
While hedge funds were once thought to manage around $3 trillion in assets, new estimates put that number closer to $1 trillion. Rapoport believes that although hedge funds have taken a hit, a stronger and more resilient industry is around the corner.
“The build-up is going to be much stronger," he said. Once we weed out the negative effects of over-leveraging, we are going to see a more stable, albeit smaller industry emerge.”
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
West Palm Beach (HedgeCo.net) - US-based Stream Asset Management announced the launch of a credit dislocation fund and a multi-strategy credit hedge fund, the company said in a press statement.
The move is part of Gulf Stream’s aggressive expansion strategy to capitalise on current market opportunities. To further support the firm’s growth, Gulf Stream has also opened a New York City office, the statement added.
Earlier this year, Istithmar World Capital, the private equity and alternative investment arm of Istithmar World, acquired a majority stake in Gulf Stream. Gulf Stream Asset Management is majority owned by Istithmar World Capital.
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