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.
Baltimore Business Journal – Former Aether Systems CEO David Oros has launched a $3 million hedge fund called Global Domain Vector Fund LLC, according to a Securities and Exchange Commission filing.
Oros is managing director and chief administrative officer of Baltimore’s Global Domain Partners LLC. He is joined by Jonathan Caplis, a director at Global Domain, as a managing member of the hedge fund, the filing says.
The fund was incorporated in 2005 and its first sale took place April 1, according to the Aug. 19 filing. It is accepting a minimum of $500,000 from outside investors.
CNBC – Fortress Investment Group LLC has named former Fannie Mae CEO Daniel H. Mudd as its new CEO, effective Aug. 11.
Mudd, a Fortress board member, takes over for co-founder and majority shareholder Wesley Edens. Edens will remain with the alternative asset manager as co-chairman, a title he will share with Peter L. Briger.
Fortress said late Sunday that the personnel change will allow Edens, along with Briger, Michael Novogratz, Robert Kauffman and Randal Nardone, to concentrate on managing existing investments and finding new investment opportunities. The four executives will continue to own about 70 percent of the company.
Bloomberg – The two main regulators of U.S. financial markets should merge, the chief executive of America’s largest options exchange says in remarks to be delivered to a congressional panel on Friday.
William Brodsky, CEO of the Chicago Board Options Exchange (CBOE), says in a written statement that there is a "compelling need for the merger" of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
Korea Herald – The CEO of Korea Investment Corp. said yesterday the company would invest $1 billion in inflation-hedging assets such as price-linked bonds, commodities and real estate assets as part of its exit strategy, amid rising concerns over possible "hyper inflation." The nation’s sovereign wealth fund received $3 billion from the Finance Ministry in July, of which it will spend $2 billion in investing in traditional overseas bonds and stocks, and the remaining $1 billion in new alternative investments like inflation-hedging assets.
With the $3 billion included, the KIC now manages a $27.8 billion fund, of which $17 billion came from the Bank of Korea and 10.8 billion from the Finance Ministry.
Crain – For years, Dan Loeb was the hedge fund world’s hanging judge, firing off blistering letters to hapless chief executives that condemned them for their shortcomings.
“Do what you do best,” he hissed in a 2005 letter to a soon-to-be-gone CEO. “Retreat to your waterfront mansion in the Hamptons. … The matter of repairing the mess you have created should be left to professional management.”
How times change. After years of posting average gains of 27%, Mr. Loeb’s Third Point hedge fund crashed to earth last year with a shattering 33% loss. In response, many investors grabbed their money and ran, driving assets under management to less than $2 billion from more than $5 billion previously. Now it’s Mr. Loeb who’s left to clean things up—or face oceanfront exile.
Reuters – Bank of America CEO Kenneth Lewis is facing a $35 billion headache this morning after financial regulators informed the bank that was the figure it need to find now to pass the so-called stress test for viable financial institutions, the Wall Street Journal and New York Times report.
BoA already has received $45 billion in capital from the federal government, some of it to cover the disastrous purchase of Merrill Lynch.
Memphis Commercial Appeal – It was only a few years ago, but to William Kenley, those were the good old days.
"That was a time when you could throw a dart at what you were going to invest in and do pretty well," Kenley, 44, said of the "fringe" money he used to manage himself. "It’s a whole different ballgame today."
Because the game has changed, Kenley, CEO of Methodist North Hospital, now relies heavily on Chirag Chauhan, a partner in The Barnett Group.
"Chirag and I have had numerous conversations" about strategy, said Kenley. "It’s a frustrating time. We’ve had a diversified approach and it’s good to be diversified, but the whole universe is down."
Mail Tribune – The Treasury Department on Thursday defended the viability of its $1 trillion plan to get soured mortgage investments off of banks’ books after JPMorgan Chase’s chief executive said the company won’t participate in the program.
Some analysts said comments by JPMorgan Chase & Co. CEO Jamie Dimon could spell trouble for Treasury’s program, which is aimed at what many view as the heart of the current financial crisis — toxic assets that are weighing on banks’ balance sheets and preventing them from resuming more normal lending to consumers and businesses.
AllAfrica.com – The Financial Services Board (FSB) has begun work on legislation to control hedge funds, which played a critical role in the global economic meltdown.
FSB CEO Dube Tshidi said yesterday the aim with the legislation, a first for SA, was to limit risk and achieve greater transparency. A dedicated team was working quite fast on the project which could be finished next year.
Hedge fund managers are required only to be registered and meet certain conditions such as to be fit and proper persons, but Tshidi said it was necessary to regulate the funds themselves.
New York Daily News – The hedge fund industry has a public relations problem these days and you have to be a millionaire to invest in one anyway, but there’s a new fund for more modest investors that can offer similar benefits.
The IQ Hedge Multi-Strategy Tracker Exchange-Traded Fund doesn’t actually invest in hedge funds, but attempts to replicate their performance.
The fund does this by holding other ETFs that own various asset classes, including stocks, bonds, currencies and commodities.
Adam Patti, CEO of IndexIQ, the company behind the new fund, said it even enjoys some advantages over hedge funds, including the ability to sell on a moment’s notice. Hedge funds typically offer limited times to sell.
Reuters – For years, U.S. hedge fund managers have worried that their loosely regulated and secretive industry would one day face tougher regulations.
"It was inevitable that this would happen," said Brad Alford, founder of Alpha Capital Management, an advisory firm that invests in hedge funds. "From the time Congress had the industry’s top hedge fund managers testify late last year, we knew something was coming."
