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 – The list of investors filing billion dollar claims against Lehman Brothers illustrates the global damage caused by its collapse, with companies from the United States, Europe and Abu Dhabi making some of the largest demands.
Barclays Bank, Morgan Stanley, GLG Partners, The Abu Dhabi Investment Authority and the Reserve Primary Fund are among the companies that took the largest losses from debt and derivatives held with Lehman Brothers, according to claims.
Hedgetracker – In this week’s hedge fund hire report, we look at firms that have recently added industry veterans to their teams. The investment firms covered in this report include: Harbinger Capital, SAC Capital Advisors and Crestwood Advisors.
First off is Philip Falcone’s Harbinger Capital Partners LLC. The activist hedge fund manager has hired Brad Kwong as a Managing Director in its New York office. Prior to joining Harbinger, Mr. Kwong spent almost 5 years at Tremblant Capital. Earlier in his career, he worked in the fixed division of Kidder Peabody, in addition to lengthy stints in the sports industry as CEO of Worldzap and Managing Director of the National Hockey League in Europe.
Reuters – HSBC Holdings Plc, Europe’s biggest bank, is to unveil plans to enter into the European exchange traded fund (ETF) market with its first launch, the Financial Times said on Monday.
”We believe our future is linked to indexation and ETFs and not just active management,” Farley Thomas, global head of wholesale distribution at HSBC Global Asset Management, told the newspaper.
Reuters UK – Hedge funds have increased their bets on a fall in voting shares in Europe’s biggest carmaker Volkswagen, according to data on Tuesday, despite the heavy losses suffered by such funds last year.
Hedge funds shorting VW were caught out in October when VW shares more than quadrupled after Porsche announced it had effective control of 74.1 percent of VW.
This left less than 6 percent tradeable in the market and saw funds scrambling to cover their positions.
Citywire.co.uk – Fund selector Christian Lundström, from Independent Investment Group in Sweden, is welcoming the evolution of the Ucits III space which is seeing more and more hedge fund groups entering the area.
Last week, HSBC Asset Management’s Farley Thomas warned on the trend of hedge fund groups launching Ucits-compliant funds, saying ‘Ucits is about trust, so retail fund firms in Europe should be protective of Ucits. Will the hedge fund firms be there to hold retail investors’ hands when things go wrong?’
While there may be fears for retail investors accessing such funds, many selectors are greeting the changes with open arms. Lundström is excited by the opportunity to access strategies which can ‘generate portfolio returns with low or even negative correlation to equities and commodities.’
Bloomberg – Asia has been good to hedge funds this year. The Eurekahedge Asian Hedge Fund Index climbed 4.2 percent in July, while funds in North America and Europe rose 2.1 percent and 1.9 recent, respectively. Preliminary reports show Asian funds are up 18.7 percent this year, compared with 13.7 in North America and 11.8 in Europe, according to Eurekahedge Pte.
The Singapore-based research firm’s findings may not be the tonic they appear — not if Hong Kong billionaire Li Ka-shing has anything to say about it.
Bloomberg – The European Union’s plan to regulate hedge funds will cost the bloc’s pension industry about 25 billion euros ($36 billion) a year, the Alternative Investment Management Association said.
The proposed law would drive pension funds toward more traditional assets such as equities and bonds or cut the returns on their investments in hedge funds and private equity, London- based AIMA, the largest trade group representing the industry, said in a statement today.
“This is an estimated figure but it shows the potentially enormous impact that the directive could have on Europe’s pension funds and in the longer term, Europe’s pensioners,” AIMA Chief Executive Officer Andrew Baker said in the statement.
European Voice – Europe may be laying the foundations for the next financial bubble, through its monetary, industrial and regulatory policies.
In the midst of the worst crisis in half a century, it is easy to forget that the real problem is not the bust but what preceded it: a boom filled with bad investments.
The boom was a natural consequence of too much easy money for too long. That policy was itself a response to the bursting of the dotcom bubble, to which Alan Greenspan and the Federal Reserve responded by cutting interest rates from 6.5% to 1% – and keeping them that low for a whole year. The result was a market drowned in cheap money.
The Australian – The move wades the US into a fierce battle between the UK and other parts of Europe over how tough regulation should be. Some nations, led by Germany and France, are calling for wholesale regulation of financial services in the wake of last fall’s crisis, but the UK says that overly stringent rules would damage its large financial sector and close off US and other funds to European investors.
The US and UK are lining up to change the European Union’s proposed Alternative Investment Funds Directive, a sweeping bid to overhaul regulation of hedge funds, private equity and other alternative investment funds.
Copenhagen Post – The largest business deal in the country?s history could turn into a stock market selloff by the five capital funds that purchased telecommunications company TDC for a record sum in 2006.
The largest business deal in the country’s history could turn into a stock market selloff by the five capital funds that purchased telecommunications company TDC for a record sum in 2006.
The 68 billion kroner acquisition gave the investors control of 88 percent of the shares in the country’s largest telecom and shareholders a 40 percent premium on the value of the shares. At the time, it was Europe’s largest leverage buyout.
Reuters AlertNet – The newly elected European parliament starts its five-year term on Tuesday in a combative mood which could slow the passage of laws intended to fight Europe’s worst economic crisis in decades. At its first session since an election in June, the assembly will put off for at least two months a vote on reappointing European Commission President Jose Manuel Barroso, although he is backed by all 27 European Union governments.
