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West Palm Beach (HedgeCo.net) – The UK Serious Fraud Office, (SFO) Friday conducted searches on two residential properties (one in Kent, the other in Surrey) assisted by the City of London Police, in connection with its investigation into an alleged fraud involving the recently collapsed hedge fund, Weavering Capital.
Two men, aged 43 and 45, were arrested and have been taken to a police station for questioning.
Hedge fund Weavering Capital launched in March 2009, acting as investment advisor to a Cayman Islands incorporated hedge fund, Weavering Macro Fixed Income Fund Limited. The Macro Fund was understood to have funds under management of around $639 million in late 2008.
The investigation is currently focused, the SFO said, on certain interest rate swap transactions between the Macro Fund and a company registered in the British Virgin Islands, Weavering Capital Fund Limited, which appears to be a related third party, which inflated the apparent Net Asset Value of the Macro Fund. More details to be released as the case proceeds.
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Times Online – The role of the City of London as one of the world’s preeminent financial centres came under attack for the second time in two weeks yesterday, this time from proposed EU rules for private equity and hedge funds.
The EU wants private equity firms with more than €500 million under management and hedge funds with more than €100 million of funds to file detailed financial information with the Financial Services Authority. Private equity firms will also need to file figures relating to debt, risk and cash.
If the European Parliament approves the proposed legislation, about 1,000 British companies – owned by private equity firms either headquartered or with an office in the EU and with more than €500 million under management – would be saddled with annual compliance costs estimated at about £30,000.
The Australian – Some of the City of London’s shrewdest hedge fund investors, who made millions of pounds betting that UK bank shares would fall, have turned their guns on insurers amid heightened worry about the financial strength of the sector
Lansdowne Partners, which spent three years gambling on the collapse of Northern Rock, and made huge profits when the bet paid off in the fourth year, has gambled tens of millions that the share prices of four household-name insurance companies will fall.
Lansdowne, founded in 1998 by Paul Ruddock and Steven Heinz, has disclosed that it had a short position in Prudential, Britain’s No 2 insurer, worth about £10.5 million ($24 billion); a £26.2 million bet against Aviva, owner of Norwich Union; and further gambles against Legal & General (L&G) and Old Mutual. With the exception of the Pru, insurers’ shares have continued to fall.
Asia Times Online – During the end of the 1970s into the 1980s, British Conservative prime minister Margaret Thatcher and the City of London financial interests who backed her introduced wholesale measures of privatization, state budget cuts, moves against labor and deregulation of the financial markets.
They did so in parallel with similar moves in the US initiated by advisers around Reagan. The claim was that hard medicine was needed to curb inflation and that the bloated state bureaucracy was a central problem.
Reuters – Nigeria’s buoyant real economy and strong domestic liquidity will limit the damage caused by hedge funds and portfolio investors pulling money out of the country as the global financial crisis bites, analysts say.
The sheer size of Nigeria’s economy means it has been the main beneficiary outside South Africa of a rush to invest in Africa in recent years. Hedge funds and private equity firms from Asia, the United States and Europe have all put money into its equities and bond markets.
That means that, on paper, sub-Saharan Africa’s second biggest economy is one of the most vulnerable on the continent as institutional investors around the world struggle with tightening credit lines and become more risk-averse.
"We have certainly moved away from the situation where everyone was scrambling to get something in Nigeria, where everyone needed exposure to Nigeria," said Razia Khan, head of Africa research at Standard Chartered in London.
Reuters – Nigeria’s buoyant real economy and strong domestic liquidity will limit the damage caused by hedge funds and portfolio investors pulling money out of the country as the global financial crisis bites, analysts say.
The sheer size of Nigeria’s economy means it has been the main beneficiary outside South Africa of a rush to invest in Africa in recent years. Hedge funds and private equity firms from Asia, the United States and Europe have all put money into its equities and bond markets.
That means that, on paper, sub-Saharan Africa’s second biggest economy is one of the most vulnerable on the continent as institutional investors around the world struggle with tightening credit lines and become more risk-averse.
"We have certainly moved away from the situation where everyone was scrambling to get something in Nigeria, where everyone needed exposure to Nigeria," said Razia Khan, head of Africa research at Standard Chartered in London.
