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 – Global fund of hedge funds firm FRM Capital Advisors (FCA) said on Tuesday it will invest up to $60 million in New York-based asset manager WestSpring’s first fund.
Specialist hedge fund seeder FCA said the investment is part of a strategic tie up with WestSpring, which is scheduled to launch the fund in September. The firm will try to combine fundamental and quantitative approaches to credit analysis.
‘We are confident in WestSpring’s ability to build a high quality alternative investment business and we believe this strategic relationship is a great opportunity for our investors,’ said Clive Peggram, chief executive of FCA.
Reuters – Quarterly profit at asset manager Sprott Inc was down by half as some hedge funds were hurt by rallying stock prices, while the company said opportunities still exist on the long side of the market.
Eric Sprott, who is president and chief executive of Sprott Inc and a consummate Bay Street bear, said some hedge funds did not fare well during the quarter due to the "massive rally in the market," and as short positions were hurt by the upswing in stock prices.
A short position is the sale of a borrowed security with the expectation that the asset will fall in value.
Reuters India – Global fund of hedge funds firm FRM Capital Advisors said on Tuesday it will invest up to $60 million in New York-based asset manager WestSpring’s first fund.
Specialist hedge fund seeder FCA said the investment is part of a strategic tie up with WestSpring, which is scheduled to launch the fund in September. The firm will try to combine fundamental and quantitative approaches to credit analysis.
”We are confident in WestSpring’s ability to build a high quality alternative investment business and we believe this strategic relationship is a great opportunity for our investors,” said Clive Peggram, chief executive of FCA.
Reuters – A brash Kuwaiti financier facing a fraud suit by U.S. authorities was found dead Sunday in an apparent suicide that sent shockwaves through the Gulf Arab financial sector.
A security source told Reuters that Hazem Al-Braikan appeared to have died from a single gunshot wound to the side of the head, while a policeman standing outside Braikan’s house said the well-connected financier, 37, had shot himself.
Braikan was the chief executive of Al Raya Investment, which is 10 percent owned by Citigroup Inc, and had been at the center of a financial scandal that erupted last week.
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).
New York Times Blogs – A move by the European Commission to adopt proposed regulation for hedge funds could end up igniting a transatlantic regulatory war, one of Britain’s hedge fund veterans warned in an interview with The Financial Times.
Stanley Fink, the former chief executive of Man Group dubbed the “godfather” of the British hedge fund industry, told the newspaper that tightened regulation being proposed by the commission would be “very restrictive” for non-EU funds, and could provoke retaliation by large swaths of the industry located outside the EU.
New York Times – Jean-Pierre Aguilar, a pioneer in hedge fund investing in Europe and chief executive and co-founder of Capital Fund Management, died in a gliding accident over the weekend, the company said in a letter to investors Sunday. He was 49.
The accident, which occurred late Saturday morning near the airport of Barcelonnette, a town in the French Alps about 12 miles, or 20 kilometers, from the Italian border, also killed Mr. Aguilar’s co-pilot, Michel Fache, 56, president of the local gliding club, according to the local newspaper La Provence.
Reuters – Hedge fund firm Polar Capital reported a fall in assets but has seen net inflows in recent months and said on Wednesday it was looking "more aggressively" at buying firms in distress.
Polar said assets under management fell to $1.54 billion at end-May from $3.1 billion at end-March 2008, although there has been a small rise since the end of March this year.
Chief executive Mark Kary told Reuters the firm had seen "small net inflows" since end-March, particularly into its global macro strategy and European long/short equity funds.
Wealth Bulletin – Geneva’s public prosecutor said he has launched a criminal investigation into allegations that Banco Santander SA’s hedge-fund unit misled investors when it funneled their money into Bernard L. Madoff’s Ponzi scheme.
The formal investigation was opened following a complaint by Geneva Partners, an independent investment fund that bought financial products from Santander’s Geneva-based hedge-fund unit, Optimal Investment Services SA.
Dario Zanni, Geneva’s public prosecutor, said the inquiry would look at whether Optimal’s former chief executive, Manuel Echeverria, did the fact-finding claimed in the firm’s documents. "We have some suspicion about his [work]," Mr. Zanni said. "We are not sure he was doing his job compliant with his duties."
Independent – Hedge funds Apollo and Octavian have been quietly building up a position in ProSieben, one of Europe’s biggest commercial broadcasters. The move could lead to a showdown with private equity owners Permira, the Damon Buffini-run giant, and Kohlberg Kravis & Roberts (KKR). Lord Hollick, who was chief executive at former Daily Express owner United Business Media, represents KKR on the ProSieben board.
It is understood that Apollo and Permira have been buying the struggling German broadcaster’s debt on the cheap. Sources suggested that the pair had been paying only around 30cents for every euro of debt, allowing them to become, in effect, major creditors. "Apollo and Octavian have been buying up debt that is trading at distressed levels and I can see them taking on Permira and KKR over the direction of ProSieben," said a source.
New York Times Blogs – E*Trade Financial is in talks with Citadel Investment Group, the hedge fund that is its largest shareholder, about a deal to shore up the struggling brokerage firm’s balance sheet, The Wall Street Journal reported, citing people familiar with the matter.
The two companies have been in negotiations for weeks to find a solution to E*Trade’s financial problems, The Journal said, adding that terms of the deal were unknown.
On Tuesday, E*Trade announced that Citadel Chief Executive Kenneth C. Griffin would be joining the firm’s finance and risk-oversight committee.
Seeking Alpha – Grail Advisors, LLC, the investment advisor that launched the Grail American Beacon Large Cap Value Fund (GVT) last month, has filed with the SEC to launch four additional ETFs. Grail notes that these four funds will be the first actively-managed ETFs to use a single-manager approach.
Unlike traditional ETFs, managers of these funds will have discretion on a daily basis to choose securities consistent with the ETF’s objective. With the launch of these funds, Grail will establish itself as the leader in the actively-managed ETF arena.
"Our goal from the outset was to bring traditional, active fund managers to the ETF marketplace," said William Thomas, chief executive of Grail Advisors. With these funds, that day has come "a lot sooner than even the most enthusiastic proponent of the ETF structure could have imagined."
