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.
Reuters – Activist hedge fund firm TCI, which launched an attack on ABN AMRO in 2007 that helped trigger the Dutch bank’s sale, has seen profits surge 73 percent but warned this year will be tougher.
The Children’s Investment Fund Management (UK) LLP reported profit available for sharing among members of 555.9 million pounds for the year to end-August 2008, up from 321.0 million pounds a year before.
Reuters – Activist hedge fund firm TCI, which launched an attack on ABN AMRO in 2007 that helped trigger the Dutch bank’s sale, has seen profits surge 73 percent but warned this year will be tougher.
The Children’s Investment Fund Management (UK) LLP reported profit available for sharing among members of 555.9 million pounds for the year to end-August 2008, up from 321.0 million pounds a year before.
The firm paid 484.3 million pounds to its charity CIFF (The Children’s Investment Fund Foundation), up from 271.4 million pounds a year before.
Wall Street Journal – Some numbers are so big you just have to stand back and admire them. An investment banker claiming $550 million of fees in a single year is just such a number.
The number is staggering for an industry in which a great year means an investment banker brought in $25 million in fees and $40 million of fees makes a Wall Streeter a star.
Then there is Merrill Lynch banker Andrea Orcel laying claim to bringing in more than 13 times that for his firm, or $550 million in fees, according to this Wall Street Journal article by our colleague Susanne Craig. That earned Orcel a 2008 bonus of $33.6 million–down just a smidge from the $38 million he received in the M&A boom year of 2007.
Investment bankers’ bonuses are based in large part on the credit the individual bankers claim for the deals they worked on. As today’s Page One Journal article notes, Orcel won a big one-time bonus of $12 million in 2007 just for advising the Royal Bank of Scotland Group-led $101 billion acquisition of Dutch bank ABN Amro.
The Herald – Toscafund, the hedge fund that was a catalyst for the sale of ABN Amro, made £158m profit in 2007 when Royal Bank of Scotland led the disastrous £49bn acquisition of the Dutch bank.
The investment firm, whose holding company is chaired by former Royal Bank chief Sir George Mathewson, enjoyed a spectacular increase in earnings which appears to have been helped by a surge in the value of ABN Amro.
The revelation of Toscafund’s success may stoke fresh controversy about hedge funds. These have been accused of causing massive problems for the UK’s banks with investment policies focused on making short-term gains.
Forbes – Patrick Degorce, a founder and partner at high-profile activist hedge fund firm The Children’s Investment Fund (TCI), has left the company, a spokeswoman told Reuters on Friday.
Degorce was in the public eye in early 2007 when he wrote a high-profile letter on behalf of shareholder TCI to Dutch bank ABN Amro criticising its ‘terrible shareholder return’ and calling on it to look at a break-up, spin-off, sale or merger of units or the business as a whole.
ABN was later sold to a consortium led by Royal Bank of Scotland for about 70 billion euros ($95.73 billion).
Reuters – Belgian-Dutch financial services group Fortis said on Wednesday it had sold former ABN AMRO unit International Asset Management IAM.L as part of a strategy to bolster its balance sheet.
Fortis said in a statement it had sold London-based fund-of-hedge-funds manager IAM to its management, supported by certain third party investors.
The deal would not have a material impact on Fortis’ net profit per share but would give some solvency relief, it said.
Fortis two weeks ago announced a programme to shore up its finances by 8.3 billion euros (6.6 billion pounds), partly by selling assets, after buying parts of former rival ABN AMRO.
