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.
Forbes – Barneys New York Inc is eyeing a debt restructuring or bankruptcy filing under which its owner, Dubai’s Istithmar World Capital, may lose control of the high-end retailer, Bloomberg reported, citing people familiar with the matter.
Hedge fund Perry Capital LLC has been approached by Holt Renfrew, the Toronto-based department-store chain, about a joint offer for control of Barneys, according to the report.
West Palm Beach (HedgeCo.net) – Hedge fund manager Meridian Global Fund Services Group has launched a hedge fund consulting affiliate team with Joyce E. Heinzerling as head.
The affiliate, Meridian Fund Advisers LLC, will provide hedge fund regulatory and corporate governance best practices advice to hedge funds both within and outside of the Meridian Global client base. In this capacity, Heinzerling will work side by side with her extensive network of leaders in the hedge fund legal and accounting fields.
“As President of Meridian Fund Advisers, Ms. Heinzerling will lead the development and delivery of our new hedge fund consulting affiliate, and help bring us to a position of distinction in the hedge fund administration industry in terms of a value add for our clients," said Randy Troy, President of Meridian Fund Services (USA) LLC.
"Meridian Fund Advisers essentially has been established to broaden and strengthen our dedication to clients in an effort to provide the highest level of client service in light of the increasingly complex issues that now arise in the hedge fund industry resulting from the heightened regulatory environment and exposure to litigation," Mr. Troy added.
Heinzerling joins Meridian Fund Advisers after serving nine years as General Counsel, CCO and Head of Operational Due Diligence at Archery Capital LLC, an investment adviser to emerging manager funds of funds. Prior to joining Archery Capital, Ms Heinzerling spent fourteen years in private practice advising hedge funds, venture capital funds, private equity funds, and mutual funds.
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Bizjournals.com – A Massachusetts federal court has ordered a British man to pay $2.78 million in restitution, interest and penalties for orchestrating a scheme to defraud more than 60 investors who invested in his phony hedge fund operation based in Boston.
TheSecurities and Exchange Commission said Wednesday that Glenn Manterfield, a principal at Lydia Capital LLC, was originally charged in April 2007 for allegedly defrauding clients who had invested $34 million in a Lydia Capital fund — the so-called Lydia Capital Alternative Investment Fund.
Reuters – Pension funds will likely funnel more money into hedge funds and become a powerful engine of growth for the industry in the coming months, a hedge fund industry veteran said on Wednesday.
"We are finding that corporate pension funds are looking at hedge funds for allocations for their equity exposures, said Carrie McCabe, chief executive of Lasair Capital LLC, a firm that creates portfolios of hedge funds for clients.
McCabe, who cemented her reputation in the hedge fund industry while running Blackstone Alternative Asset Management and FRM Americas, described a real urgency to pension funds’ desire to beef up their returns with hedge funds in a hurry.
InvestmentNews – Three former investment managers in Boston are planning to launch a hedge fund in April, according to a report published by FINalternatives, a news service of Stone Street Media LLC.
The firm, Vernon Square Capital LLC, is developing a market-neutral hedge fund, the New York-based news service said.
Based in Boston, the firm was founded by Robert Earl, formerly of The Goldman Sachs Group Inc. of New York, and Richard Weed and Geoff Kelly, both formerly of Putnam Investments of Boston.
Bloomberg – Ray Dalio’s Bridgewater Associates Inc. overtook JPMorgan Chase & Co. to become the biggest U.S. hedge-fund manager, even as the firm lost assets during the industry’s worst year, according to a survey.
Bridgewater, based in Westport, Connecticut, managed $38.6 billion on Jan. 1, down 11 percent from July, according to Absolute Return magazine. New York-based JPMorgan, which owns Highbridge Capital Management LLC, ranked second at $32.9 billion, a decline of 26 percent.
“The bulk of hedge funds were delivering returns that were highly correlated with the market,” said Sharath Sury, chief executive officer of S4 Capital LLC, a Chicago-based firm that advises clients on investing. “So when the markets fell, so did their assets.”
Investment returns dropped an average of 19 percent last year, the most on record, according to data compiled by Chicago- based Hedge Fund Research Inc. Hedge-fund assets shrank to $1.2 trillion at the end of 2008 from the June peak of $1.9 trillion on the market losses and investor withdrawals, according to Morgan Stanley analyst Huw van Steenis in London.
Assets at U.S. hedge funds that managed at least $1 billion each fell 32.3 percent in the second half to $1.1 trillion, according to Absolute Return, which is published by London-based HedgeFund Intelligence Ltd.
Bloomberg – Looking for a new definition of a hedge fund? How about an organization that takes 20 percent of the profits on your money in the good times, then refuses to let you have it back when the weather turns rough?
We all know the hedge-fund industry had a terrible 2008. With a few honorable exceptions, its promises of being able to deliver steady, positive returns in either a rising or falling market turned out to be empty.
Yet, in many cases, the industry has taken a bad situation and made it worse. Many funds have placed limits on withdrawals that investors can make. In effect, people are locked into a falling asset.
That is a big mistake. In any investment business, the return of capital is far more important than the return on capital. By forcing investors to keep their money tied up during a bad year, the hedge funds are damaging their own reputation, and it may well never recover.
There are numerous examples of funds limiting withdrawals.
Citadel Investment Group LLC said last month it was stopping year-end withdrawals from its two biggest funds after investors sought to take out $1.2 billion, or 12 percent of assets.
Magnetar Capital LLC took similar action after its largest fund lost 30 percent of its value in the year through November.
Cerberus Capital Management LP last month limited redemptions from a hedge fund that lost 16 percent of its value.
Bloomberg – Magnetar Capital LLC, the $8 billion hedge-fund firm co-run by former Citadel Investment Group LLC trader Alec Litowitz, limited withdrawals from its biggest fund after it lost 30 percent this year through November, according to two people familiar with the fund.
The restrictions, known as gates, were triggered after clients sought to pull more than 15 percent of their money from the firm’s $4.8 billion multistrategy fund, said the people, who asked not to be identified because the information is private.
Hedge funds including D.E. Shaw & Co. LP and Farallon Capital Management LLC this month imposed gates so they wouldn’t be forced to raise cash by liquidating assets at distressed prices. Magnetar, based in Evanston, Illinois, told clients who asked for redemptions by Dec. 31 that they will get 10 percent of their requests in cash and 5 percent in shares of its two credit funds, the people said.
