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 – Ronnie Wu, chief investment officer of the $400 million hedge fund of funds house Penjing Asset Management Ltd., will start a pool of money dedicated to providing early investments to new hedge funds next month.
It aims to make five to six investments with the flagship Penjing Asia Fund by year-end, he said in an interview yesterday. The new pool will begin with about $25 million from Wu’s family and friends and then raise capital from investors after the initial money has been deployed.
Houston Chronicle – A London-based hedge fund manager and its chief investment officer have agreed to a nearly $18 million settlement resolving U.S. regulators’ allegations that one of its funds defrauded U.S. mutual funds and investors through trading practices such as market-timing.
The Securities and Exchange Commission and Headstart Advisers Ltd. on Monday separately announced a settlement in which the firm neither admitted nor denied allegations covering the period September 1998 through September 2003.
Headstart Fund Ltd., a hedge fund that had been incorporated in the Bahamas and is now defunct, will pay a $17 million penalty to resolve a complaint the SEC brought in April 2008. London-based Headstart Advisers will pay an additional $200,000, and Chief Investment Officer Najy N. Nasser will pay $600,000. The firm and Nasser are also barred from future violations of antifraud provisions of U.S. securities laws.
West Palm Beach (HedgeCo.net) – Arden Asset Management LLC, a leading independent fund of hedge funds manager, and J.P. Morgan today announced an agreement under which Arden will manage a $1.1 billion proprietary hedge fund of funds portfolio for J.P. Morgan’s investment banking division, effective July 1, 2009. J.P. Morgan’s investment bank has agreed to seed several new Arden funds and invest in one of Arden’s current flagship funds with these assets.
As part of the agreement, a team led by Shakil Riaz, Chief Investment Officer of J.P. Morgan’s proprietary hedge fund of funds program since inception in 1995, will join Arden. Mr. Riaz will become a member of the Arden Investment Committee and continue his investment leadership role for new funds seeded by the J.P. Morgan assets. The existing Arden funds and customized accounts will continue to be managed by Arden senior investment professionals and Investment Committee members: Averell H. Mortimer, Chairman; Henry P. Davis, Managing Director and Head of US Manager Research; Ian P. McDonald, Managing Director and Head of European and Asian Manager Research; and Matthew Bianco, Managing Director and Head of Risk Management.
“Arden’s high quality institutional infrastructure and well-established investment processes were important in our decision to select the firm to manage these assets,” said Robert Case, head of Principal Investment Management for J.P. Morgan’s investment bank. “Partnering with Arden, which has a proven track record of managing absolute return programs through many market cycles, enables us to continue participation in this attractive asset class, while better managing our overall capital commitments.”
Averell Mortimer, Arden President and Chief Executive Officer, said, “We are pleased to partner with J.P. Morgan on this unique venture, which we believe will create significant value for both Arden investors and J.P. Morgan in the years to come. Importantly, this initiative further strengthens our organization and brings additional specialization and expertise to Arden’s global investment program. We warmly welcome Shakil and his colleagues to Arden and believe investors will benefit from their market experience and long-term investment record as we develop new strategies to meet the expanding needs of our sophisticated institutional clientele.”
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Reuters – The current rebound in stock markets is a bear rally and could turn by September, according to hedge fund manager Hugh Hendry, who has recently cut exposure to agricultural stocks.
Hendry, who is partner and chief investment officer at Eclectica Asset Management, said that while stock markets have rallied in recent months on hopes for an economic upturn, developed economies are still heading for a 1930s-style depression.
"To date we are maintaining the profile of the economic contraction that we witnessed in the 1930s. Nothing as yet has changed that profile. It’s still a profile of concern to me," he told Reuters on the sidelines of the GAIM 2009 conference in Monaco.
Stuff – Hedge fund firm Pure Capital plans to launch a range of funds, including products playing food and carbon markets.
Anthony Limbrick, chief investment officer of the New Zealand-based firm, told Reuters the Pure Carbon fund, which will be seeded with the firm’s money, will trade in the European carbon market and have an initial capacity of $US20 ($NZ32) million.
He said the fund will aim to grow as the carbon market evolves, but is also ready to exploit the possibility of a slump in the segment.
"We think there’s a 30 percent chance the market collapses … That could create a `fat tail’ (a very rare event with major consequences) for us to make money," he said in an interview at the GAIM 2009 hedge fund conference.
Bloomberg – China Investment Corp., the nation’s $200 billion sovereign wealth fund, may invest as much as $500 million in hedge funds including those run by Blackstone Group LP, said two people familiar with the matter.
CIC aims to allocate $6 billion to hedge funds by the end of 2009, company adviser Felix Chee said two days ago at the GAIM International hedge fund conference at Monaco’s Grimaldi Forum. Chee, who is a special adviser to the chief investment officer of CIC, said he will initially run CIC’s hedge fund and proprietary trading effort.
The move adds to signs of improved confidence by CIC Chairman Lou Jiwei, who said in December that he didn’t “dare to invest in financial institutions” after losing money on investments in Blackstone and Morgan Stanley. CIC raised its stake in Morgan Stanley earlier this month by buying an additional $1.2 billion shares.
Bloomberg – Felix Chee, an adviser to China’s $200 billion sovereign wealth fund, said it aims to make investments in hedge funds.
“We will have a preference for managed accounts,” he said in an interview today at the GAIM International hedge fund conference at Monaco’s Grimaldi Forum. “The platform would like a core of single-manager funds and fund-of-funds.”
Chee, who said he will initially run China Investment Corp.’s hedge fund and proprietary trading effort, is a special adviser to the chief investment officer of CIC.
“It’ll be across the spectrum of strategies,” he said. “We’re looking for the best managers and a handful of fund of funds, and when I say handful I mean five or less.”
June 17 (Bloomberg) – Felix Chee, an adviser to China’s $200 billion sovereign wealth fund, said it aims to make investments in hedge funds.
“We will have a preference for managed accounts,” he said in an interview today at the GAIM International hedge fund conference at Monaco’s Grimaldi Forum. “The platform would like a core of single-manager funds and fund-of-funds.”
Chee, who said he will initially run China Investment Corp.’s hedge fund and proprietary trading effort, is a special adviser to the chief investment officer of CIC.
“It’ll be across the spectrum of strategies,” he said. “We’re looking for the best managers and a handful of fund of funds, and when I say handful I mean five or less.”
Chee previously managed the University of Toronto’s endowment, where he managed a portfolio of about $1 billion in hedge fund assets. Asked if he was daunted by the prospect of running a $200 billion portfolio, he said “I try not to look at the zeros.”
SAIL Advisors, a Hong Kong-based fund of hedge funds operator, said on Monday it will take over the management of three ING (ING.AS) funds in a move that will see a senior ING executive join the Hong Kong firm.
Under a complex deal, SAIL will "sub-advise" three fund of hedge funds managed by New York-based ING Alternative Asset Management, raising the Hong Kong firm’s assets under management to $2.4 billion (1.46 billion pounds) from $1.7 billion previously.
Harold Yoon, chief investment officer and head of ING fund of hedge funds, will also join SAIL as CIO and be based in Hong Kong, while SAIL will set up an office in New York.
Bloomberg – Yale University and Harvard University may have to cut investments in hedge funds and private equity because the risks of holding the hard-to-sell assets outweigh the returns, said Bill Gross, co-chief investment officer of Pacific Investment Management Co.
“The Yale and Harvard portfolios, which have succeeded enormously over the past 10 or 20 years in terms of the emphasis on illiquidity and private investments and risk-taking — you have to question that model,” Gross said yesterday at an industry conference in Chicago.
The two Ivy League schools had more than half of their endowments in hedge funds, private equity, real estate and hard assets such as commodities at June 30. Gross, who manages the $150 billion Pimco Total Return Fund, the world’s biggest bond mutual fund, recommended in March buying securities that provide stable income this year rather than more speculative and illiquid investments, as slowing economic growth and higher unemployment depress returns.
Bloomberg – Indea Capital Pte, an India-focused hedge fund that manages about $300 million, plans to buy shares even if India’s election results disappoint investors, said Chief Investment Officer Raj Mishra.
The ruling Congress party-led coalition and the main opposition-led group may have each failed to secure enough votes to form a government, based on exit polls after a five- week election that ended May 13.
“The bias is to buy when there’s a post-election decline rather than to panic,” said Singapore-based Mishra, whose six- year-old Absolute Return Fund has returned an average 14.75 percent annually since it was set up. “Once the election is complete and we have better clarity about the strength of the government, then probably potential long-term investors will feel more comfortable.”
Bloomberg – Blackstone Group LP, the world’s biggest buyout company, canceled a plan to start a hedge fund that initially aimed to invest as much as $1 billion in Asian companies affected by events such as mergers and reorganizations.
Blackstone decided not to proceed with the Asian event- driven fund “after a review of the market environment and our strategic priorities globally,” New York-based Blackstone spokesman Peter Rose said in an e-mail. The fund was to be managed by Blackstone A.M.N. Advisors.
Most of about 17 A.M.N. team members, including Chief Investment Officer Aaron Nieman, left after the March decision, said four people familiar with the matter, declining to be identified because the information isn’t public. The rest have been transferred to other Blackstone departments, they said. Rose declined to comment on specific personnel.
