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.
Democrat and Chronicle – The former chairman of the state Liberal Party was accused Wednesday of receiving at least $800,000 from the state pension fund as a kickback for helping elect former Comptroller Alan Hevesi and Hevesi’s son.
Raymond B. Harding, who for decades was the face of the now-defunct party, was charged with multiple felonies in violation of the Martin Act, the state securities-fraud statute, Attorney General Andrew Cuomo announced.
StreetInsider.com – Connecticut State Treasurer Denise Nappier is moving forward with a plan to invest in hedge funds after losing $5 billion of pension assets this year.
Nappier will begin allocating up to 8% of the $20 billion she oversees for public sector employees and teachers into hedge funds after the state’s investment advisory council approved the plan later today.
Ironically, Connecticut, which has many of the world’s largest hedge funds, is one of the few states that doesn’t invest its public pension in the asset class.
The three retirement funds Nappier controls are heading for the worst annual performance since at least 1991, according to treasurer’s office data. Bloomberg reported asset values fell 19.5% to $20.7 billion from $25.9 billion between July 1 and the end of October.
Bloomberg – D.E. Shaw & Co. LP, the investment firm run by David Shaw, and Farallon Capital Management LLC limited withdrawals by clients, joining more than 80 hedge-fund managers to impose restrictions in the past two months.
D.E. Shaw, which oversees $36 billion, capped redemptions from its Composite and Oculus funds, said two people familiar with the New York-based company. Farallon, a $30 billion firm based in San Francisco, did the same with its biggest fund after investors asked to get back more than 25 percent of their money.
The firms are two of the biggest to block withdrawals, known as putting up gates, so they aren’t forced to liquidate investments at distressed prices to raise cash. New York-based Fortress Investment Group LLC said yesterday it froze an $8 billion fund after getting redemption requests for 40 percent of its assets. Tudor Investment Corp., the Greenwich, Connecticut, firm run by Paul Tudor Jones, locked the $10 billion BVI Global fund last week ahead of plans to split the fund into two.
West Palm Beach (HedgeCo.net) – One of the world’s largest hedge funds has temporarily halted redemptions according to reports. Tudor Investment Corp’s flagship portfolio, has been reported to have halted redemptions so they can segregate difficult-to-sell assets in the fund from those they can offload more easily.
Bloomberg reports that the move was made by the the fund to avoid having to raise cash in falling markets to pay out withdrawing investors. Tudor Investment Corp, the hedge fund manager established by Paul Tudor Jones, was also reported by Bloomberg as having temporarily suspended redemptions from the portfolio.
Tudor is reportedly allotting to the investors in Tudor BVI Global shares in Legacy, with a view to selling the assets in Legacy over time to hand money back to those clients.
Founded in 1980 by Paul Tudor Jones II, the firm currently manages $15.4 billion. The firm’s investment strategies include global macro trading, fundamental equity investing in the U.S. and Europe, emerging markets, venture capital, commodities, event driven strategies and technical trading systems.
Alex Akesson
Editor for 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!
West Palm Beach (HedgeCo.net) – Hedge fund expert Tony Glickman has joined GlobeOp Financial Services as as global head of Risk Services. Glickman will report to Vernon Barback, GlobeOp president and COO, and will be based in the company’s New York City office. He will also join GlobeOp’s Operating Committee.
"Tony’s experience in leading hedge funds and financial risk management teams creates an in-depth understanding of our clients’ requirements for risk reporting services," said Vernon Barback. "The current turbulent market underlines the importance of risk measurement, analytics and reporting to hedge funds and investors alike. This presents GlobeOp with significant opportunities. We look forward to Tony’s leadership and vision in further strengthening our risk expertise and services as the market evolution continues."
Glickman brings more than 25 years of financial market-related experience to GlobeOp. He began his career as a proprietary trader at Bankers Trust and at Chemical Bank. He also served as head of proprietary trading, and later as treasurer and head of portfolio risk management, during eight years with the Canadian Imperial Bank of Commerce (CIBC). Prior to and following CIBC, he launched and led funds specializing in bond arbitrage, volatility-arbitrage and global macro strategies. In addition, he has served extensively as a consultant to asset managers, public pension funds, central bankers and regulators on strategic risk management issues.
Glickman earned an MBA in finance from the Stern School of Business of New York University, where he was a University Fellow.
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West Palm Beach (HedgeCo.net) – Hedge fund technology and administration provider GlobeOp Financial Services has been ranked in both the FinTech 100 and the RiskTech 100.
"Technology is central to GlobeOp’s hedge fund services and this dual recognition is timely as current market uncertainty underlines the value of a robust, risk-driven technology infrastructure to fund managers and their investors," said Bob Schwartz, GlobeOp chief technology officer. "Our platform represents more than 500 man-years of development. Just as client services benefit from the Wall Street experience of GlobeOp’s senior management, we also apply front office technology techniques to operations processing to achieve risk reduction benefits for our clients."
Addressing current market challenges for hedge funds, Vernon Barback, GlobeOp chief operating officer added, "New market fundamentals – such as risk diversification and cost-efficiency – are accelerating the outsourcing trend as a means of mitigating operational risk. The FinTech 100 and RiskTech 100 rankings are useful benchmarks as funds seek independent, un-conflicted service providers, which can combine technology management and innovation, deep domain knowledge in operations and risk measurement, scalable infrastructure and a healthy balance sheet."
The FinTech 100, published by American Banker and research firm Financial Insights, ranked GlobeOp in 51st position after analyzing more than 400 companies who derive more than a third of revenues from financial services.
The RiskTech 100, published by Chartis Research, recognizes leading global technology firms active in risk management services. Ranking 52nd, GlobeOp earned one of the highest scores for innovation in the RiskTech 100, and strong scores for core technology, customer satisfaction and organizational strength. The 2008 report identified 100 leading companies from 3,200 initial candidates, more than 800 risk technology buyer surveys, and interviews with vendors and buyers across 15 countries.
GlobeOp today serves over 180 clients worldwide, representing $108 billion in assets under administration (AuA). With headquarters in London and New York, GlobeOp employs 1,800 people on three continents, offices are also located in Dublin, Ireland, George Town, Cayman Islands, Harrison, NY, Hartford, CT, and Mumbai (Bombay), India.
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Reuters – As many hedge funds suffer big losses and anxious investors yank out their money, the town synonymous with the riches of their recent glory is now hurting.
In Greenwich, Connecticut, the luxury car dealers are quiet, the prices of mansions are declining and the retailers who have made a good living serving its wealthy residents are complaining about a sudden drop in business.
"Everything is down. We started to see it in the summer, but October is when the bottom caved in," said James McArdle, whose family has run McArdle’s Florist and Garden Center in Greenwich for 98 years. "Housing sales are down and so that always cuts into our market. Fewer buyers, fewer makeovers."
Norwalk Advocate – Hedge fund manager Steven Cohen is no stranger to the Planning and Zoning Commission.
The panel has approved many additions to his Crown Lane estate since he bought it in 1998 for $14 million. The founder of SAC Capital in Stamford is back before the commission.
At its Dec. 16 meeting, the panel will likely review a preliminary site plan for two additions, totaling 1,145 square feet, to the 35,085-square-foot mansion on 14 acres Cohen and his wife Alexandra.
Already larger than the town’s recommended maximum volume of 150,000 cubic feet and boasting an ice rink and indoor pool, 30 Crown Lane would gain a breakfast room, a garden room and a "His" dressing room, as well as more storage, from the proposed construction.
Both additions would be built over existing impervious surfaces, avoiding increased runoff, and Cohen has received a green light from the town’s Engineering Division.
Boston Globe – Evergreen Solar Inc. got a shock when Lehman Brothers Holdings Inc. went bankrupt last month: The solar panel maker lost control of almost 31 million shares of its stock.
How that happened is the subject of a lawsuit the Marlborough company filed yesterday against Lehman and the defunct investment bank’s new owner, Barclays Capital. It also sheds light on the kinds of complex deals that had become common on Wall Street before the market meltdown.
Evergreen, when it needed to raise money in July to build a plant at the old Fort Devens site, arranged a $375 million bond deal with Lehman. But there was a catch. As part of the transaction, Evergreen had to lend Lehman 30.9 million shares of its own stock – so that hedge funds could borrow them and short them, or bet the stock would fall. That’s right: Evergreen had to provide its own shares for hedge funds to short.
New York Observer – On a recent Friday afternoon, Terry Betteridge, owner of Betteridge Jewelers (est. 1897), was discussing the state of business on sun-drenched Greenwich Avenue in Greenwich, Conn., as the world at large continued to gasp and gawk at the loop-de-loops provided courtesy of the Dow and S&P.
“Our business was still up a month ago over the previous year, and the previous year was record stuff,” said Mr. Betteridge. “It’s the last couple of weeks when it got really quiet, because everyone is shell-shocked. It’s a lot like it was on 9/11, when you’d think the door is locked.”
Outside on the avenue—an almost mile-long stretch of luxury storefronts—distinct breeds of shoppers were in motion: young moms in yoga pants pushing double-wide strollers; squealing packs of teenage girls in tank tops; and dignified older women with immovable bobs striding purposefully into Saks Fifth Avenue or local high-end department store Richards. Lexus SUVs and Mercedes sedans purred up and down the street, directed by Greenwich’s throwback traffic cops, who, in place of unsightly stoplights, make eye contact and personally invite pedestrians to cross the street. A Subway sandwich shop had the flat-screen tuned to CNBC, which was reporting that Lehman bonds had just been valued at 8.625 cents on the dollar
Bloomberg – Hedge fund managers, after enduring the industry’s worst month in a decade, are seeking to explain to investors what went wrong and what they are doing about it.
“We clearly underestimated several things, most importantly the tsunami of redemptions that are being delivered to hedge funds as investors line up to get out of these funds as well as record outflows from equity mutual funds,” Jeffrey Gendell, who runs Greenwich, Connecticut-based Tontine Associates LLC, wrote in an Oct. 1 letter to clients.
“I am not a nervous person by nature, but should have been under the circumstances,” wrote Gendell, whose Tontine Partners LP fund plunged 59 percent in September, leaving it down 67 percent for the year, according to investors. Gendell, 49, had expected shares of steel, engineering, airline and chemical companies to appreciate because of falling oil prices. Instead they plummeted.
Norwalk Advocate – Some hedge funds are reducing their management and incentive fees to keep investors for longer periods during turbulent times on Wall Street.
Typically, hedge fund managers require investors to lock their money into a hedge fund for a year while charging a 2 percent management fee and keeping 20 percent of hedge-fund profits as an incentive fee – if it reaches a pre-determined point.
Camels Capital LLC, a Greenwich-based hedge fund, and Ore Hill, a New York-based fund, among others, have restructured these terms to keep investors.
"Ourselves, Ore Hill and a few other funds have taken a step to do that in this period of liquidity to lock in investors," said Richard Brendan, chief executive officer for Camels Capital. "We’ve been able to lock in our investors for a period of time to participate in opportunities with them."
Brennan would not comment on the specifics of the agreement between the hedge fund and his investors.
Scott Baker, a principal with Greenwich-based hedge fund investment firm Cookpine Capital, said many hedge funds are coming up with innovative ways to secure investor capital for longer periods.
