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.
CityWire – Hedge fund giant GLG Partners has launched a fund to exploit the debt problems across European corporations, according to report in the Financial Times.
GLG, one of the world’s largest alternative asset managers, is said to have started trading the distressed strategy earlier this month. The strategy has been employed in the firm’s credit and market neutral funds since last July.
According to the Financial Times, the fund will be managed by Galia Velimukhametova, who joined the firm last summer from $16 billion (£10 billion) hedge fund King Street Capital where she was a managing director and responsible for European strategies.
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.
New York Times – Dubai’s once-heralded trophy assets now look more like lead weights, Breakingviews says. Istithmar World, one of the investment vehicles controlled by the emirate, has a portfolio that was estimated to be worth $9 billion last year. It includes a stash of big Western names, including Cirque du Soleil, Standard Chartered, GLG Partners, Perella Weinberg and Barneys New York.
Now they could all be sold as part of a restructuring. The fund picked up most of its assets at the height of the boom, but the portfolio itself is of mixed quality. Istithmar spent $825 million in 2007 to snap up Barneys, the retailer now on the cusp of bankruptcy. It holds 20 percent of the Canadian acrobatic performance group Cirque du Soleil and stakes of about 3 percent each in Standard Chartered, the global bank; a hedge fund, GLG; and the investment boutique Perella Weinberg. These are still valuable, even if they might be under water.
Times Online – GLG Partners, the London-based hedge fund, is on the point of losing a star fund manager this weekend in a situation that mirrors the high-profile departure of another top manager, Greg Coffey, last year.
Robert Donald, who manages part of the $1.5 billion (£1.3 billion) European fund with Pierre Lagrange, is planning to leave GLG after six years to work with the legendary financier George Soros.
However, sources close to New York-listed GLG said the situation was still live. ”He has not formally resigned, though he has indicated his desire to leave,” one said.
Reuters – GLG Partners, among the world’s largest hedge-fund managers, is launching an oil production company that will be listed on the London Stock Exchange this fall, people familiar with the plans said on Monday.
GLG, based in London but listing its own stock in New York, intends to seed a venture called Lothian, that will be floated on the London Stock Exchange in September and then acquire oil production assets worldwide. Lothian would begin with a market value of about $500 million, said the sources, who were not authorized to speak for attribution because the venture is still in the planning phases.
West Palm Beach (HedgeCo.net) – Alpha Magazine unveiled the 2009 Europe Hedge Fund top 50, showing that that Europe was not immune to investor angst over hedge funds. A wave of investor withdrawals shapes the magazine’s annual ranking of the 50 biggest European single-manager hedge fund firms, as total assets fell to $285 billion as of January 1, 2009, from $405 billion a year earlier, a 30% drop.
Europe’s hedge fund business may be looking at an encouraging longer-term picture, however. The region boasts five of the world’s 20 biggest hedge fund firms — led by two London-based powerhouses, Brevan Howard Asset Management and Man Investments.
Brevan Howard’s total assets surged from $21 billion at the end of 2007 to $26.8 billion when this year began, elevating the firm from third to first in Alpha’s 2009 Europe Hedge Fund 50. Man Investments had a similarly strong year; its overall assets grew from $20.9 billion to $24.4 billion, lifting the firm two rungs to second place.
The two top European hedge fund firms in last year’s ranking have been taken down a few notches. Barclays Global Investors falls from No. 1 to No. 3, and GLG Partners drops from No. 2 to No. 8; the firms saw their assets drop, respectively, 35% and 52%.
Alpha’s Europe Hedge Fund Top 5
Rank Firm Total Capital ($ millions) 1 Brevan Howard Asset Management $26,840 2 Man Investments 24,400 3 Barclays Global Investors 17,000 4 BlueBay Asset Management 16,700 5 Bluecrest Capital Management 13,273
For Alpha’s 2009 Europe Hedge Fund 50, data was gathered through questionnaires completed by hedge fund managers, supplemented by extensive Alpha staff research. We provide each manager’s total assets under management as of January 1, 2009, unless otherwise indicated. Where possible, we also show assets at the individual fund level, with 2008 net returns, for the five biggest funds run by a firm.
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West Palm Beach (HedgeCo.Net) – Hedge fund GLG Partners has completed its private offering of $214 million aggregate of dollar-denominated convertible subordinated notes due 2014.
The notes bear interest at a rate of 5.00% per year and rank junior in right of payment to all of GLG’s existing and future senior indebtedness.
Noam Gottesman, chairman and co-CEO of GLG, Emmanuel Roman, co-CEO, and Pierre Lagrange, senior managing director of GLG Partners L.P. — each a director of GLG — purchased collectively $30 million of the notes from the initial purchasers as part of this offering, through certain of their affiliates.
The notes are convertible, at the option of the holder, into shares of GLG’s common stock at an initial conversion rate of 268.8172 shares per $1,000 principal amount of notes, subject to certain adjustments. The initial conversion rate is equivalent to a conversion price of around $3.72 per share.
GLG used a portion of the net proceeds from the offering of the notes to acquire a portion of the indebtedness outstanding under its credit agreement in a transaction that closed concurrently with the closing of the note offering. Around $285 million of $570 million principal amount of loans outstanding under the credit facility were acquired at 60% of par value.
The company said that any proceeds not used to acquire its outstanding indebtedness will be used by GLG for general corporate purposes to the extent permitted under the credit agreement.
New York-based GLG Partners is a hedge fund manager that manages equity and fixed income portfolios and investment funds. The firm also invests in public equity fixed income, and in alternative markets through options, futures and convertibles.
Bloomberg – Moore Capital Management LLC is seeking to raise as much as $500 million for two new hedge funds run by Greg Coffey, the top-ranked money manager who joined the company last year after quitting GLG Partners Inc., according to an investor.
The funds, both focused on emerging markets, started trading April 1, said the investor, who asked not to be identified because the information is private. Fees are 2 percent of assets, standard for the industry, and 25 percent of investment gains, more than the typical 20 percent.
Financial Times – The top three executives at GLG Partners, until recently Europe’s biggest hedge fund, have cut their salaries to $1 (69p) as the global financial turmoil puts pressure on senior managers to waive their pay.
Noam Gottesmann and Pierre Lagrange, the "G" and "L" in GLG, and Manny Roman, co-chief executive with Mr Gottesmann, said in a regulatory filing that they had agreed to take $1 in salary from April to the end of the year. They receive no bonus, although all are big shareholders.
Bloomberg - GLG Partners Inc., the hedge-fund firm founded as a unit of Lehman Brothers Holdings Inc., and Och- Ziff Capital Management Group LLC reported lower fourth-quarter profits as their funds posted losses.
GLG’s profit excluding acquisition costs dropped 78 percent to $28.2 million, or 9 cents a share, from $127 million, or 38 cents, a year earlier, the London-based company said in a statement today. That compares with an average estimate of 6 cents a share, according to four analysts surveyed by Bloomberg. Assets fell to $15 billion from $17.3 billion in September and $24.6 billion a year earlier, dragged down by losses.
Reuters – Hedge fund GLG Partners reported a further drop in assets on Thursday and said the cycle of investor redemptions in the industry was not yet over despite its funds’ performance perking up in January.
The London-based, New York-listed firm, which last year saw star manager Greg Coffey depart, said assets under management fell 13 percent during the fourth quarter to $15 billion (10.2 billion pounds), as small inflows were negated by large performance losses.
Reuters - Two years ago, investors scrambled to snap up shares in elite hedge fund firms, eager for a piece of the lucrative action. What they got instead were big losses.
Starting in early 2007, when hedge fund and private equity firms were minting cash, four private investment firms cracked open the door to let in small investors. Fortress Investment Group LLC, Och-Ziff Capital Management Group, Blackstone Group LP and GLG Partners Inc led a new class of firms that let ordinary investors ride the wave of hedge fund riches.
