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 – Highland Capital Management LP, the Dallas-based investment firm that’s liquidating its main hedge fund, was sued by attorneys Schulte Roth and Zabel LLP for allegedly not paying $2.83 million in legal fees.
The New York-based law firm initiated a lawsuit in New York state court yesterday, listing what it said were unpaid invoices from June 2008 to this month.
“We believe Schulte Roth overbilled the firm and its funds for legal services,” Highland said in an e-mailed statement. “Highland has paid Schulte Roth nearly $1 million in good faith, and has made every effort to resolve this issue with them.”
Reuters – A portfolio run by Man Group, the world’s biggest listed hedge fund firm, has invested $50 million (30 million pounds) in a new start-up fund run by three former Brevan Howard traders.
Man’s RMF Global Emerging Managers strategy has put money with 5:15 Capital Management, a Greenwich, Connecticut-based fixed income arbitrage firm set up this month and named after a song from The Who’s 1973 album Quadrophenia.
Man will take a share of revenue from the firm, whose founders also worked together at Greenwich Capital Markets.
Bloomberg – Justin Klintberg, a former manager at Marble Bar Asset Management LLP, has started his own Asia- focused hedge fund to trade stocks affected by events such as rights issues, spinoffs, mergers and acquisitions.
Kima Capital Management Pty, named after the Greek word for wave, began investment July 3 and has the capacity to manage $250 million in the Pan Asian Long/Short Equity Fund, Klintberg, its 36-year-old chief investment officer, said in an interview from Melbourne yesterday.
Bloomberg – Justin Klintberg, a former manager at Marble Bar Asset Management LLP, has started his own Asia- focused hedge fund to trade stocks affected by events such as rights issues, spinoffs, mergers and acquisitions.
Kima Capital Management Pty, named after the Greek word for wave, began investment July 3 and has the capacity to manage $250 million in the Pan Asian Long/Short Equity Fund, Klintberg, its 36-year-old chief investment officer, said in an interview from Melbourne yesterday.
Bloomberg – Platypus Capital Management is liquidating its long-short Asian and Australian hedge funds, citing difficulties in a “post-Madoff world.”
The Sydney-based firm, with about $42 million in assets, will return funds to investors, saying it didn’t have a “viable size in the industry as it currently exists,” partners Chris Talbot, Derek Sicklen and Charles Magri wrote in a letter to investors obtained by Bloomberg. Sicklen confirmed the contents in a telephone interview today.
Reuther – A group of wealthy clients who invested $50 million with two hedge funds felled by last year’s credit crisis are accusing Highland Capital Management’s partners of having lied about key facts.
LV Highland Credit Feeder Fund LLC, an investment vehicle managed by Long Vue Advisors in Boston, and several charitable foundations and wealthy individuals filed the lawsuit on Wednesday in a U.S. district court in Dallas.
The group is charging that the Dallas-based hedge fund firm and its co-founders James Dondero and Mark Okada and three other partners were dishonest about other clients’ requests to exit the funds at a time of increasing market turmoil.
Bloomberg – Three traders from Brevan Howard Asset Management LLP and RBS Greenwich Capital Markets started a government-bond hedge fund named for one of their favorite songs by the Who.
5:15 Capital Management LLC, named for the track “5:15” on the British rockers’ 1973 album “Quadrophenia,” will begin trading today with about $60 million, according to Morris Sachs, one of the founders, who said the fund will grow to $100 million. Joining him at the Greenwich, Connecticut-based fund are E.G. Fisher, 40, and Rob Wahl, 42.
“We’re all Who fans and love that tune,” Sachs, the fund’s chief risk officer, said in a telephone interview. “What are we going to do, try to find another name for the Greek god of money?”
West Palm Beach (HedgeCo.net) – Bull Path Capital Management recently announced the conversion of one of its long-short hedge funds into a long-short equity mutual fund the ‘Bull Path Long Short Fund’ (BPFCX).
The newly launched mutual fund ranks #1 of 811 funds on total annualized returns in the Lipper Mid-Cap Universe for the 5 years ending March 31, 2009, may be a “perfect consideration as a core investment for many investors.” He believes the long-short category will increasingly capture investors’ attention because of its typically lower risk levels than long-only funds. BPFCX has also received a top Lipper Leader rating of 5 for capital preservation against all equity mutual funds (9,360 funds).
“Investors have been traumatized by the events of the past 18 months, including the sobering performance of many long-only, ‘buy and hold’ strategies, and wondering how and when they can reenter the market,” said Rob Kaimowitz, portfolio manager of the Fund and founder of Bull Path Capital Management. “We believe investors will be attracted to the performance characteristics of long-short funds which aim to capture the market’s upside while mitigating risk in a market sell-off.”
“Until recently, there have been few mutual funds focused on long-short, and we are one of the few tested strategies in the market today,” noted Kaimowitz. “We believe this strategy makes sense for both individual and institutional investors with a medium- to long-term view of the market.”
In addition, Kaimowitz says investors who may have previously considered long-short hedge funds should consider investing in this strategy through a mutual fund structure owing to such benefits as lower minimum investments, lower fees, full transparency and the assets being held in a trust bank.
“There has been increasing pressure on hedge funds to provide lower fees, greater liquidity and increased portfolio transparency,” noted Kaimowitz. “A mutual fund structure addresses these issues quite well.”
The Bull Path Long Short Fund adopts a strategy developed and run by Bull Path Capital Management since 2002. “One of the hallmarks of our strategy is our ability to reinvest our knowledge through our rigorous, concentrated fundamental analysis in establishing both long and short positions,” said Kaimowitz. “This ability serves us well as we seek to provide investors with consistent returns and high levels of alpha.”
The Bull Path Long Short Fund is available in A and C Class shares with a $1,000 minimum investment or a $500 minimum with participation in the automatic investment plan. The I share requires a minimum of $100,000 or a $50,000 minimum with participation in the automatic investment plan.
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Financial Standard – US-based hedge fund BlueMountain Capital Management hopes its forecast 20 per cent plus returns, lower fees and new liquidity rules will appeal to local super funds allocating new money into alternative strategies.
Hedge funds are a hard sell these days following the sector’s nightmare run in the past two years. But if there is a silver lining to the market carnage, it is that the hedge funds that did survive adopted their business model to a new norm.
Reuters – Mellon Capital Management, which invests money for pension funds and others, plans to launch a new hedge fund in August, a top executive said on Tuesday.
The new portfolio, which is slated to become the group’s flagship hedge fund offering, will invest in currencies, commodities, stocks, bonds and derivatives.
"This will be the first time that Mellon Capital will offer clients a commodity alpha source," said Eric Goodbar, the firm’s hedge fund strategist.
June 16 (Bloomberg) — Arvind Raghunathan , former head of Deutsche Bank AG’s global arbitrage business, will open his new hedge-fund firm next month with more than $1 billion, a sign that investors are trickling back after record losses last year.
Roc Capital Management LP’s assets will include $500 million in a separate account from Deutsche Bank, according to people familiar with the New York-based firm, who asked not to be identified because the information is private. It’s the largest hedge-fund startup this year, one of at least eight expected to raise more than $250 million each, according to brokers who provide credit and lend securities to managers.
The ventures are being set up by executives who left banks that scaled back trading to conserve capital, or hedge funds whose 2008 losses will limit bonuses for at least another year. Investors see them as an opportunity to get in early with the next George Soros or Paul Tudor Jones, who have outperformed rivals for most of their careers.
Sarasota Herald-Tribune – Richard W. Fields says he has come up with a win-win financial strategy for the downturn. He is investing in lawsuits.
Not in trip-and-fall cases, mind you, but in disputes that are far larger, more costly and potentially more lucrative, often pitting major corporations against each other.
Mr. Fields is chief executive of Juridica Capital Management. which runs a fund that invests in one side of a lawsuit in exchange for a share of any winnings.
