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.
New York (HedgeCo.net) – Northern Trust has been named the Best Overall Hedge Fund Administrator by HFMWeek in the magazine’s inaugural U.S. Service Provider Awards. The awards recognize companies that have outperformed their peers during 2008-2009 and demonstrated financial progress, growth and genuine innovation.
“Northern Trust was recognized for the strength of its service offering and for demonstrating business momentum and product innovation during a challenging period for the hedge fund industry,” said Lucy Guest, senior publishing executive for HFMWeek.
“The importance of a Third Party Administrator is now being disseminated throughout the industry so that all funds, including start ups, are embracing the need for the service.” Joe Goldstein, Managing Partner at G&S Fund Services, said. “Prior to Madoff, start up and smaller funds were reluctant to use third party administrators even though we provided them with a higher quality of financial management at a lower cost.”
What Goldstein sees as a change in the industry is that the necessity of a hedge fund administrator is now understood by investors. “This change is contributing to the growth of the hedge fund administration business, as funds who were reluctant to use hedge fund administrators are now either turning over their financial administration to a third party, or at very least using them to review and confirm their NAV calculations.” Goldstein said.
Northern Trust has a growing hedge fund servicing business, with assets under administration of $75.5 billion as of June 30, 2009, an increase of 54 percent over the prior year. Northern Trust services nearly 300 hedge funds worldwide as of June 2009, and in the previous 12 months had provided global operations services to more than 120 new fund launches and transitions.
“We’re delighted to be recognized as best overall administrator as it validates our approach of blending innovative technology, strong process and automation with the exceptional service standards that set Northern Trust apart from our competitors,” said Matt Ward, Head of Fund Administration-North America for Northern Trust. “Ultimately this is a service business and our experienced and attentive people are the real strength of our offering.”
Guardian.co.uk – My coverage of Raj Rajaratnam, the Wall Street hedge fund manager accused of orchestrating a sophisticated insider trading ring with tipsters at firms such as IBM and Intel, has prompted an email from an acquaintance of the accused who says the Sri Lankan-born billionaire is not the “ogre” he is being made out to be.
Vijay Dandapani, chief executive of a budget hospitality company in Manhattan called Apple Core Hotels, writes to say that he was invited by Rajaratnam on a cricket trip a few years back and has since seen him “off and on” in New York.
“I do know Raj, though not well, and find it hard to believe that he is the ogre he is being made out to be,” says Dandapani.
Reuters – It appears nothing — not losses, redemption gates or lofty fees — can deter the rich from stashing their cash in hedge funds.
A year after crumbling markets triggered losses and fund managers drew fire for blocking redemptions, wealthy investors have not abandoned hedge funds, according to private bankers and wealth managers attending the Reuters Global Wealth Management Summit this week.
“We see continued dedication to hedge funds,” said Catherine Keating, chief executive of JP Morgan Chase & Co’s U.S. private bank, which advises families whose combined assets total $350 billion.
TimesOnline – It is understood that one chief executive was offered a flat tax rate of 10 per cent on his personal income if he relocated the company to Geneva and lived there, as long as he provided a forecast of earnings for the next ten years.
Although Switzerland is known for its flexible approach to taxation for individuals who meet strict criteria, such unsolicited approaches have happened recently and are the latest effort by Swiss authorities to capitalise on the worldwide financial crisis and the increasingly punishing tax regime for high earners in Britain. Other countries, including Panama, are also taking steps to boost their appeal to wealthy individuals.
Reuters – Adaptec Inc, target of a proxy war led by Warren Lichtenstein’s Steel Partners, said on Tuesday the activist hedge fund wants to gut the data storage technology company, shed assets and create an acquisition vehicle fueled by Adaptec’s stash of cash.
More than three weeks after Lichtenstein began soliciting shareholder votes to remove Adaptec’s chief executive and shrink the board to seven seats from nine, Adaptec’s board responded by questioning Steel’s motives and calling attention to Lichtenstein’s own setbacks of the past year.
St Petersberg Times – A New York hedge fund wrested control of the Creative Loafing newspaper chain Tuesday, promising to keep the weekly tabloids running in Tampa, Sarasota, Atlanta, Chicago, Charlotte, N.C., and Washington, D.C.
In a bankruptcy auction in Tampa, Atalaya Capital Management’s $5 million bid blew away the field. Creative Loafing’s longtime owners, the Eason family, opened the bidding by offering $2.32 million, but didn’t counter when Atalaya upped the ante.
Ben Eason, effectively removed as chief executive of the chain Tuesday, vowed to start afresh this week with a new online publication based in Tampa. Eason had run family publications for close to 20 years.
First Post – German prosecutors are investigating executives at the sportscar firm over allegations of share-manipulation.
Porsche denied any disclosure irregularities but many hedge funds and investment management firms were left wrong-footed after it made a shock announcement that it held more than 50 per cent of VW’s shares. German regulator BaFin dropped its initial investigation but re-opened it after claims that the incident was bringing the entire German stock market into disrepute.
Ex-chief executive Wendelin Wiedeking is among the Porsche figures being investigated by the German authorities over share manipulation claims. Yesterday Porsche’s headquarters were raided in the course of investigations into recent trading activities.The allegations revolve around the failed takeover of Volkswagen, during which Porsche took large positions in VW stock. Prosecutors allege that inside information was leaked in pursuit of the failed bid.
New York Times – Russell Herman, the chief executive of the hedge fund firm Dawson-Herman Capital Management, is the latest manager to shutter his fund after heavy losses last year and differences with the firm’s founder, Jonathan Dawson.
Mr. Herman told clients in a letter last week that he was shutting the Southport Millennium Funds and returning capital to investors. The move was first reported by Dealbreaker.com on Friday. The firm currently has about $902 million of capital under management after reaching a height of $3.2 billion at the beginning of 2008.
Like many in the hedge fund industry, Dawson-Herman suffered big losses last year. The main Southport fund was down more than 35 percent and has failed to make up for the losses this year. “We have not been able to build the portfolios with high conviction ideas and themes to the degree that is satisfactory to me and in line with our historical standards,” Mr. Herman said in the letter.
This is London – It also led many in the City to believe the Bank favours a weak currency, prompting a series of downbeat forecasts today. “I’m super bearish on the pound,” said Hans-Guenter Redeker, the London-based head of foreign exchange at BNP Paribas.
“The Bank of England has made it clear it can’t afford a stronger currency.” He forecast the pound would fall to $1.50 in 12 months.
John Taylor, chief executive of New York hedge fund FX Concepts, said sterling will “get crushed” and sink as low as $1.45 in the coming months.
“The fundamentals in the UK are certainly not pretty,” he said. “It’s a race for the least ugly of the candidates, and I would argue that the US is going to be the least ugly for a while.” Others were more upbeat and said the measures taken by the Bank and the Government to ease the slowdown will boost sterling. HSBC predicted the pound would rise to $1.75 by the end of next year — midway between the high of $2.12 in November 2007 and the low of $1.38 in March this year.
Forbes – Investor Timothy Barakett on Tuesday said Atticus Capital, which suffered some of the hedge fund industry’s steepest losses last year, is closing two of its three funds and will return $3 billion to shareholders.
The Atticus founder and chief executive told investors in a letter that he is closing down his flagship fund, Atticus Global, and the $600 million Atticus Trading fund ’solely’ for personal reasons.
Reuters – Thames River Capital is hoping to launch two investment grade credit strategies later this year and is looking at how best to target the U.S. institutional market, chief executive Charlie Porter told Reuters.
The independent fund house, which manages $11.5 billion (6.9 billion pounds) in traditional long-only and hedge-fund-style products, has been adding to its investment team to support new products, and hopes to scoop up rivals weighed down by the financial crisis.
Reuters UK – Thames River Capital is hoping to launch two investment grade credit strategies later this year and is looking at how best to target the U.S. institutional market, chief executive Charlie Porter told Reuters.
The independent fund house, which manages $11.5 billion (6.9 billion pounds) in traditional long-only and hedge-fund-style products, has been adding to its investment team to support new products, and hopes to scoop up rivals weighed down by the financial crisis.
"Whenever you have periods of turmoil and tumult, interesting opportunities are thrown up," Porter said in an interview.
