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 HK – Triple A Partners, an alternative fund firm specialising in seeding new managers, said on Tuesday it would invest an initial $20 million in a new hedge fund launched by Hong Kong’s Enhanced Investment Products Ltd.
Triple A, also known as Asia Alternative Asset Partners, said it had bought a minority equity interest in EIP as well and signed a deal to distribute their existing and future funds globally.
EIP, which has more than $200 million of assets under management, operates using a rare marriage of passive and alternative investing, creating market tracking index funds its EIP Overlay Fund can use to source stock for complex trades.
Reuters HK – David Bonderman, one of the the most influential figures in the U.S. private equity industry, said on Thursday his firm, buyout giant TPG Capital TPG.UL, wanted to buy debt assets offloaded by troubled hedge funds.
Bonderman, speaking at the Asian Venture Capital Journal (AVCJ) conference, also said a global recession would be deep and prolonged, and the U.S. housing market would probably fall further.
"When people are giving you debt that is grossly mis-priced, you opt to take it," he said at the conference in Hong Kong.
Volatile markets have forced hedge funds to sell off assets and securities to pay back investors who are keen to scale back on risk and hold cash.
But private equity firms typically have long-term investors, with up to 10-year lock-up periods.
Bloomberg – At 5-foot-4 and 48 years, Nissim “The Miracle” Tse is the shortest and oldest of 34 boxers signed up for this year’s Hong Kong Hedge Fund Fight Nite.
Calling himself “a financial warrior,” Tse likens boxing to his daytime job as a co-founder and head of trading for Hong Kong-based Pi Investment Management Ltd., a unit of London hedge fund manager RAB Capital Plc.
“It’s mental, it’s physical, it’s crazy, it’s stressful,” Tse said in an interview. “But it all happens very quickly, just like you are managing a hedge fund.”
The annual charity fight tonight, in its second year, takes place amid the most severe financial crisis since the 1930s and with the hedge fund industry bracing for its biggest annual loss since Hedge Fund Research Inc. started to keep data in 1990.
The fight night aims to raise HK$1 million ($129,000) to repair children’s facial deformities and combat crime and juvenile delinquency in low-income and immigrant communities. The event beat the same target last year.
Reuters HK – Share prices were sharply lower at mid-morning, with the key index briefly slipping below the 12,000 level, on global recession fears and worries about hedge fund redemptions.
Dealers noted concerns that the Japanese yen’s surge against the US dollar will force more unwinding of positions by some funds as they seek to repay yen-denominated loans.
China banks were sharply lower after China Construction Bank (CCB) and Industrial and Commercial Bank of China (ICBC) reported disappointing third-quarter results.
Commodity firms slumped on ongoing worries that a global economic downturn will reduce demand for energy and raw materials.
Reuters HK – Asian hedge fund managers are waiting with dread to see if tough new short selling restrictions sweep across the region after Australia and Taiwan joined U.S. and UK regulators in cracking down on the practice.
Major Asian markets, such as Japan and Hong Kong, have so far held their fire. But industry executives, many angry with the recent restrictions, said the combination of market volatility and politics makes the outcome impossible to predict.
"My fundamental view is that it is utterly idiotic. In the current market environment, the priority I would have thought would be to encourage liquidity," said Peter Douglas, founder of Singapore-based hedge fund consultancy GFIA.
"Most regulators that I’ve met have been fundamentally quite sensible people, so you have to make the assumption this is driven a mixture of politics and public opinion. And that makes it very difficult to predict the course."
Reuters HK – Gulf utility stocks should be approached with caution given their need for high capital investment in the next few years and limited pricing power, the manager of the Evolvence MENA Hedge Fund said on Wednesday.
But shares of Gulf banks offer some of the region’s best investment opportunities given high earnings growth and their leverage to booming local economies, said Kamal Fayad, the Dubai-based manager of the $50 million (28 million pounds) fund.
"We are pretty bullish on financials in the region … the spreads are pretty high," he told Reuters in an interview in Hong Kong, where he was attending a hedge fund conference.
"Just look at their results the last couple of years. Their results are increasing by an average of 20 to 30 percent."
Washington Post – State-controlled Korea Development Bank (KDB) proposed buying 25 percent of Lehman Brothers (LEH.N) for up to $5.3 billion, a newspaper reported, but other Korean banks rumored to be joining a KDB bid consortium denied they were involved.
Daily Chosun Ilbo also reported on Wednesday that top European bank HSBC Holdings (HSBA.L) (0005.HK), several U.S. hedge funds and an unidentified Chinese bank were among other potential buyers of Lehman, the fourth-ranked U.S. investment bank.
KDB had confirmed on Tuesday it was in talks with Lehman over a possible joint investment with other Korean banks, but declined to give details of its negotiations. On Wednesday, it said it was still unsure whether there would be a deal.
"Korea Development Bank has considered M&A deals in foreign investment banks including Lehman Brothers, and asset management companies, as part of its privatization and competitiveness efforts, but nothing has been decided yet," it said in a statement.
Reuters HK- SAIL Advisors Ltd, one of Asia’s largest homegrown fund of hedge fund managers, said on Wednesday it hired former Goldman Sachs Group Inc managing director Vincent Duhamel as its new chief executive.
Hong Kong-based Duhamel will replace Eliza Lau, who previously served as both chief executive and chief investment officer. SAIL said Lau would remain as CIO and continue to oversee its portfolios. The Hong Kong-based firm had about $2.5 billion in assets under management as of the end of June.
Duhamel, who will start as CEO on September 17, was with Goldman in Asia from 2005 until earlier this year.
The Canadian executive initially ran its asset management business in the region, before the role was taken over by Oliver Bolitho. He moved on to help lead the unit’s sovereign wealth fund and central bank strategy.
MSN UK News- The Hong Kong media says a 63-year-old U.S. citizen has received a longer jail term for masterminding a HK$363 million, or US$46.49 million or euro30 million, hedge fund fraud.
The South China Morning Post reported Wednesday that a court added 26 months to Charles Schmitt’s sentence. It says Schmitt was sentenced in 2006 to 4 1/2 years in prison after he pleaded guilty to 19 charges for forging financial statements.
A three-judge panel at the Court of Appeal is quoted as saying that the original sentence was "manifestly inadequate."
