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Minneapolis Star Tribune - Hedge fund manager Whitebox Advisors won’t let customers cash out, according to a national publication that follows the lightly regulated industry that manages money for affluent individuals and institutions.
The Minneapolis firm, which runs about $4 billion in investor assets through several funds and strategies, is drafting a letter to investors that explains recent investment losses and constraints and the terms under which investors may redeem some of their money, according to the Oct. 22 edition of Hedge Fund Alert.
The publication, which circulates among investment managers, said Goldman Sachs put Whitebox in a box earlier this month by requiring that the firm double the amount of collateral it puts up against margin loans used to trade convertible bonds. That puts Whitebox in a temporary squeeze because it must put up more of its own capital and devalued holdings against its margin accounts, which are trading accounts that use borrowed money in part to invest.
Washington Post - Central banks in the United States, Europe and Japan will consider taking foreign-denominated assets as collateral in an effort to provide liquidity for battered financial markets, the Nikkei newspaper said on Sunday.
Currently most central banks only accept assets denominated in their home currency as collateral, the paper said. If central banks were to accept assets denominated in other currencies, cash-strapped firms would be able to get funds easier, it said.
Six central banks, including the U.S. Federal Reserve, the Bank of Japan, the European Central Bank, and the Bank of England are discussing a potential rule change, the Nikkei said.
The paper did not quote any sources and no one was immediately available at the Bank of Japan for comment, however BOJ Governor Masaaki Shirakawa said earlier this week the move was under consideration.
New York (HedgeCo.Net) - Victory Park Capital, a Chicago-based hedge fund, has received a vote of confidence from FRM Capital Advisors in the form of a major investment. Victory Park Capital plans on expanding their asset-based lending fund in hopes of taking advantage of the favorable market conditions associated with this kind of strategy.
“We are delighted to have the opportunity to partner with such an experienced team,” says FRM Chief Executive Clive Peggram. “We believe it is a very good time in the credit cycle to pursue an asset-based lending strategy.”
Victory Park Capital Advisors was founded last year and provides asset-backed loans to companies who are in need of financing and can’t always turn to the bank. Asset based lending is a popular strategy in today’s current market turmoil with the large amount of high rises and other developments being constructed. High interest rates are usually tacked on the loans, while the building is put up as collateral.
“We’re very pleased to form a relationship with Victory Park Capital,” says Blaine Tomlinson, FRM’s founder and group chairman. “As an established and experienced team, they are in an excellent position to capitalize on the attractive financing opportunities available to those who have capital to deploy.”
FRM Capital Advisors is active in the hedge fund seeding industry, seeking out potential opportunity among new funds. Hedge fund seeding is a great way for new funds to get the capital needed to get off the ground. Companies who provide the financing will work out some sort of the deal with the fund, perhaps sharing in the profits once the fund starts posting returns.
“We are incredibly excited about our relationship with FRM Capital Advisors and we are gratified that it has concluded that our team and strategy warrant such a significant investment,” said Victory Park Managing Principle Richard Levy.
FRM is a global fund of hedge funds group with over $15 billion of assets under management.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com
Bloomberg- John Devaney is liquidating hedge funds at his United Capital Markets Holdings Inc. after failing to meet a margin call from Deutsche Bank AG.
Deutsche Bank seized and auctioned off collateral after the Horizon group of funds failed to meet the bank’s demands, according to a letter to clients obtained by Bloomberg News yesterday. The funds were frozen a year ago because of wrong-way bets on mortgage securities.
“The survival of the funds and any potential recovery for their investors has been dependent on these lenders continuing their relationships with the funds,” Devaney wrote in the letter dated July 9. United Capital is based in Key Biscayne, Florida.
New York Post- Taxpayers are all but certain to take a hit on the securities the Federal Reserve accepted as part of JPMorgan Chase’s takeover of Bear Stearns, according to a report by a hedge fund that is an investor in JPMorgan.
The reports comes as the Fed said last week said it valued the bundle of assets it accepted as collateral for the $28.8 billion loan at $28.9 billion as of June 26.
That’s a drop of 3.7 percent from earlier this year.
JPMorgan is on the hook for just the first $1.15 billion of value below the loan amount - with the taxpayers having to make good for any additional deterioration in value of the collateral.
"We expect that the loss will exceed the $1 billion exposure for JPM," the hedge fund said in the report, a copy of which has been seen by The Post on the basis of not identifying the name of the fund.
New York (HedgeCo.Net) - Former Pacific Investment Management Co. portfolio manager John Brynjolfsson is rumored to be starting his own hedge fund in the near future.
Ronald Solberg of Viking Asset Management will team up with Brynjolfsson to run Armored Wolf LLC, which will “vary weightings among real asset sectors and securities based on a top-down assessment of the investing environment,” according to the firm’s website.
Prior to venturing out on his own, Brynjolfsson managed the $14.4 billion Commodity Real Return Strategy Fund at Pimco and has been with the firm since 1989. The Commodity Real Return Strategy Fund employed swap agreements to gain exposure to changes in a broad index of commodity futures prices, using portfolio assets as collateral.
Brynjolfsson also ran the firm’s $15.5 billion Real Return Fund. Both funds saw impressive gains in 2007 during a year when many hedge funds were suffering.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com