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Dallas Morning News – There are 200 hedge funds in this area, putting the Dallas area third behind only New York and San Francisco in the number of hedgies. Most have offices in the Crescent, Preston Center and in Plano.
Hedge funds – a kind of mutant mutual fund for the wealthy – have been blamed for much of what ails Western Civilization, but make no mistake, they remain one of Dallas’ most thriving industries that no one ever heard of.
Ed Easterling, senior fellow of the alternative investments center at SMU’s Cox School of Business and a hedge fund manager himself, said the average hedge fund dropped just over 20 percent last year. The total assets in the Dallas funds dropped from a high of about $30 billion to about $20 billion today.
Dallas Morning News – An investor in a Perot family hedge fund has sued the Perot Family Trust and several related parties, saying they grossly mismanaged the fund, which went bust in November after starting the year with $2.5 billion in net assets.
Southern Avenue Partners LP said the fund – Bermuda-chartered Parkcentral Global Hub Ltd. – collapsed despite reassurances to investors that its trading strategies would protect it from deep losses. The hedge fund didn’t hedge, the complaint alleges.
"As a result of defendants’ breach of fiduciary duty, the Global Fund imploded," said the lawsuit, referring to Parkcentral Global Hub. "The Global Fund’s net asset value went from over $2.5 billion to less than zero.
Dallas Morning News – To bank employees monitoring the hedge fund’s collapse, the e-mailed instructions were emphatic.
"No securities, or cash, FOR ANY REASON are allowed to be sent out from JP Morgan."
At issue that morning last November were the accounts of Parkcentral Global Hub Ltd., a Bermuda-chartered fund run from Plano and Dallas by the Perot family, one of the richest families in the world. J.P. Morgan Chase & Co. was the fund’s banker and a trading partner.
Dallas Morning News – An Amarillo charitable foundation is suing Dallas-based Highland Capital Management LP to recover more than $1.8 million from a Highland hedge fund that was shut down in October after heavy losses.
The Mary E. Bivins Foundation, which focuses on helping the elderly, had asked to withdraw its investment from a fund called Highland Credit Strategies in March.
Highland agreed to return more than $1.9 million as of July 1 but said it would pay the money back over nine months, the foundation said in a lawsuit filed last month in Amarillo. It has given back only $80,000 so far, the lawsuit said.
New York (HedgeCo.Net) – Hedge Fund Davidson Kempner Capital Management has declared a proxy victory after replacing all but one of the board members of the Sun-Times Media Group.
Davidson Kempner, who owns a 6% share in the parent company of the Chicago Sun-Times, expressed its discontent with the current board, blaming them for the financial woes of the company.
Hedge funds are no strangers to shaking up boards of companies in which they invest, many times in order to gain a strategic position where they can be involved in management and the decision making process in hopes of garnering higher returns for shareholders.
"Through the provision of these consents, the stockholders have made clear their desire and support for a board of directors that is made up of professionals experienced in publishing and restructuring," said Davidson Kempner. "Given the operating and financial challenges before Sun-Times, we believe that the reconstituted board has the better potential to guide and lead Sun-Times."
The new slate includes Jeremy Halbreich, former General Manager for the Dallas Morning News and executives Michael Katzenstein and Robert Schmitz. Robert Poole, who holds an 11% stake in the company, will remain on the board. The hedge fund has also vocalized their desire to dump current CEO Cyrus Freidheim.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
