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HedgeCo.net (West Palm Beach) – CEO and CIO of Hall Capital Partners, Kathryn Hall, will be awarded the 100 Women in Hedge Funds 2009 Industry Leadership Award at its New York Gala, on November 18, 2009.
Each year, the organization identifies a woman whose professional talent, business ethic, and passion for investing help define and advance the hedge fund industry’s standards of excellence. This year’s theme is Education and net proceeds from the NY Gala will be given to Computers for Youth.
Hall Capital Partners LLC was founded by Hill as Laurel Management Company in 1994, it currently manages more than $17 billion in assets. Hall formerly served as a General Partner of HFS Management Partners (predecessor to Farallon Capital Partners) and an early advisor to hedge fund investors.
"Katie stands out for her long history of working closely with investors to navigate the difficult landscape of hedge fund investing. She has bona fides as both an investor and hedge fund manger, and that experience gives her an especially insightful perspective in the current turbulent market," noted Lauren Malafronte, Director, Barclays Capital and Board member of 100 Women in Hedge Funds Foundation. "Katie has a well-established reputation for communication with investors; her leadership in this area makes her a role model for so many women in the industry.
Past awardees include Sonia Gardner, Avenue Capital; Jane Mendillo, Harvard Management Company; and Anne Dinning, D. E. Shaw group.
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Reuters – Lawrence Summers, a top economic adviser to U.S. President Barack Obama, was paid about $5.2 million (3.48 million pounds) by hedge fund D.E. Shaw in the past year, financial disclosure forms released by the White House showed on Friday.
Summers, a former U.S. Treasury secretary and Harvard University president, also was paid $2.7 million in speaking fees by a range of organizations and companies, including several troubled Wall Street financial firms, they showed.
New York (HedgeCo.Net) – Lawrence Summers, who is currently serving as Director of President Obama’s National Economic Council, made millions from his days working as a managing director for hedge fund D.E. Shaw & Co.
The New York-based hedge fund, which oversees about $36 billion in capital, paid the former Treasury Secretary about $5.2 million over the course of 16 months starting in 2006. And that’s not including bonuses.
According to a financial disclosure released by the White House on Friday, Summers also raked in around $2.7 million in speaking fees for appearances at banks like Citigroup and Goldman Sachs. Lehman Brothers Holdings Inc., who collapsed last year, paid Summers over $67,000 for one appearance this past July.
For an administration that wants to convey their dedication and support of increased regulation and the all-out war on corruption and excessive executive pay in corporate America, many feel the President may be choosing individuals who don’t necessarily share that view, at least not privately.
Carol Browner, the White House Energy Policy Coordinator, is another member of the administration no stranger to hedge funds. She still holds an interest in Albright Capital Management LLC, a hedge fund founded by former Secretary of State Madeleine Albright. Browner said her holdings were worth between $450,000 and $1 million, and said she earned $450,000 last year by working for Albright Group LLC, a related consulting firm. She is still owed between $350,000 and $750,000 in member distributions.
David Axelrod, former Chief Strategist for the Obama campaign and now the President’s Senior Advisor, was paid a $1.55 million salary when he worked for a public affairs firm. According to those same disclosures, White House Chief of Staff Rahm Emanuel held about 1,000 shares of American International Group, Inc., although he claims he currently does not hold any shares of the company that was bailed out by taxpayer funded government aid.
Despite the big pay days, the conflicts of interest that potentially exist may play a bigger role in public dismay. In addition to his $3.9 million salary at a law firm, Deputy White House National Security Adviser Thomas Donilon represented clients such as Citigroup, Goldman Sachs and hedge fund Apollo Management LLP. He also worked for Fannie Mae from 1999 to 2005.
“It just may be the reason that money keeps being thrown at banks and companies who have proven they are undeserving, is because the administration, like every single other administration, is stacked full of the same, rich people who would rather dole out money to their own than to the Americans who really need it,” said one blogger who remained anonymous.
The White House contends there is no current conflict of interest with any cabinet member. Speaking of Summers, White House spokesman Ben LaBolt said he “has been at the forefront of this administration’s work to shore up our nation’s financial system and to put in place a regulatory framework that will strengthen the financial system.”
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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Bloomberg – The global hedge fund industry may shrink by 11 percent this year as funds liquidate and investor withdrawals persist, a Deutsche Bank AG survey said.
Industry assets may fall to $1.33 trillion by December, according to 68 percent of the 1,000 investors surveyed by Germany’s largest bank last month. The respondents, which hold a combined $1.1 trillion of hedge-fund assets, on average expect outflows from the industry to accelerate to $168 billion this year, 8 percent faster than last year.
The deepest financial crisis since the 1930s led to the worst average hedge-fund performance in history last year, prompting funds managed by Citadel Investment Group LLC and D.E. Shaw & Co. LP. to limit withdrawals to stem record outflows.
“If 2008 was a story about performance of hedge funds, 2009 is very much going to be a story about restructuring,” said Sean Capstick, Deutsche Bank’s London-based global head of capital introduction. “Our survey indicates redemptions will continue as a phenomenon for the foreseeable future.”
In a March 13 note to investors, Sanford C. Bernstein & Co. analyst Brad Hintz forecast hedge-fund assets to fall 18 percent this year, dropping below $1 trillion before a recovery in 2013.
The HFRI Fund Weighted Composite Index retreated 18 percent in 2008, its steepest annual decline. Still, that was less than half the 42 percent slump of the MSCI World Index.
Bloomberg – Like plenty of financial players, hedge funds are taking a beating.
Many once-high-flying managers have been swamped by losses. Others have abandoned the business after discovering it wasn’t such an easy path to riches. Even some of the biggest firms — Citadel Investment Group LLC, D.E. Shaw Group and Tudor Investment Corp., among others — have had to block investors from withdrawing money.
This is great news for, well, hedge funds and their investors.
The retrenchment might force hedge funds, lightly regulated investment pools, to rediscover what they once were — small, guerrilla investors focused on returns, not artery-clogging management fees.
Bloomberg – Magnetar Capital LLC, the $8 billion hedge-fund firm co-run by former Citadel Investment Group LLC trader Alec Litowitz, limited withdrawals from its biggest fund after it lost 30 percent this year through November, according to two people familiar with the fund.
The restrictions, known as gates, were triggered after clients sought to pull more than 15 percent of their money from the firm’s $4.8 billion multistrategy fund, said the people, who asked not to be identified because the information is private.
Hedge funds including D.E. Shaw & Co. LP and Farallon Capital Management LLC this month imposed gates so they wouldn’t be forced to raise cash by liquidating assets at distressed prices. Magnetar, based in Evanston, Illinois, told clients who asked for redemptions by Dec. 31 that they will get 10 percent of their requests in cash and 5 percent in shares of its two credit funds, the people said.
Los Angeles Times – The hedge fund industry can only exist because investors believe their fund managers will deliver above-average returns over time, despite the portfolios’ hefty fees.
Master investor Warren Buffett, who has long derided those fees, now has made an interesting bet with a firm that runs so-called funds-of-hedge-funds: He’ll beat their net returns over the next decade simply by owning a mutual fund that tracks the Standard & Poor’s 500 index.
The bet is the subject of this article in Fortune magazine by Buffett’s long-time friend, writer Carol Loomis.
Buffett is going up against Protégé Partners LLC, a New York-based money manager that picks hedge funds for its clients.
Loomis writes: "Each side put up roughly $320,000. The total funds of about $640,000 were used to buy a zero-coupon Treasury bond that will be worth $1 million at the bet’s conclusion." Whichever side wins, the proceeds will go to charity.
