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.
Bloomberg – Wall Street is suiting up for a battle to protect one of its richest fiefdoms, the $592 trillion over-the-counter derivatives market that is facing the biggest overhaul since its creation 30 years ago.
Five U.S. commercial banks, including JPMorgan Chase & Co., Goldman Sachs Group Inc. and Bank of America Corp., are on track to earn more than $35 billion this year trading unregulated derivatives contracts. At stake is how much of that business they and other dealers will be able to keep.
“Business models of the larger dealers have such a paucity of opportunities for profit that they have to defend the last great frontier for double-digit, even triple-digit returns,” said Christopher Whalen, managing director of Torrance, California-based Institutional Risk Analytics, which analyzes banks for investors.
New York Times Blogs – A closely watched report by Goldman Sachs found that hedge funds made an outsize bet on financial stocks in the second quarter, The Wall Street Journal reported.
The Goldman “Hedge Fund Trend Monitor” said hedge funds increased their ownership in financial stocks by 55 percent to $70 billion, compared with the previous quarter.
HedgeCo.net (West Palm Beach) – Man Investments’ seeding fund, RMF Global Emerging Managers, has completed its second incubation deal of the last two months, providing a cornerstone investment of $50 million for Hong Kong’s Minerva Macro Fund.
In July RMF GEM invested $50 million in the flagship product of 5:15 Capital Management, an unrelated fixed income arbitrage manager based in Connecticut.
Minerva is managed by Stanley Ku, who founded the Hong Kong office of hedge fund Fortress Investment Group and most recently managed $750 million for Fortress’ Drawbridge Global Macro Fund. Dorothy Lau, Minerva’s risk and business manager, formerly worked for JP Morgan and Goldman Sachs.
“Stanley Ku’s work at Fortress and Goldman Sachs has made him a very well respected money manager in Asia,” said Hans Hurschler, head of Man Investments’ hedge fund Ventures. “We believe that Minerva has the potential to generate solid, stable returns and that it may attract substantial assets.”
Minerva is a discretionary global macro fund, focused on Asia. It trades only highly liquid instruments such as interest rate or bond futures, foreign exchange forwards and equity index futures or sector ETFs. The entire portfolio is designed to be liquidated in 48 hours.
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West Palm Beach (HedgeCo.net) – Encouraged by a promising investment environment and accelerated investment pace, New York-based special opportunities fund, Atalaya Capital Management LP, today announced that it has expanded its team, adding three investment professionals and a marketing professional.
“Recent positive changes in our target investment markets have prompted Atalaya to bolster our professional platform in order to capitalize on market conditions and new opportunities,” said Ivan Q. Zinn, Founding Partner & Chief Investment Officer.
Josh Ufberg joined as a Principal from Goldman Sachs’ Special Situations Group, while Rana Mitra and Alex Wang have joined the team responsible for the sourcing and purchase of private credit assets as Senior Associate and Associate, respectively. Ashley Fochtman joined the Firm as a Vice President and will be working in a business development capacity. Previously, Ms. Fochtman worked in hedge fund marketing and at Goldman Sachs as an energy derivatives analyst.
Founded by Mr. Zinn in 2006, Atalaya focuses on the opportunistic purchase of senior secured credit from forced sellers, failed financial institutions and sellers in need of liquidity such as banks, commercial finance companies, and other financial and investment institutions.
About Atalaya Capital Management
Atalaya Capital Management is an alternative investment firm focused on investing in small and middle market credit opportunities. Since inception in early 2006, the Firm has successfully invested over $1 billion through (1) the opportunistic purchase of private, senior secured credit from forced sellers, failed financial institutions and sellers in need of liquidity, and (2) proprietary ‘new issue’ credit investments including DIP loans and other senior secured financings.
Bloomberg – John Paulson, the hedge-fund manager whose wagers against the U.S. housing market helped him earn an estimated $2.5 billion last year, bought Bank of America Corp. and Goldman Sachs Group Inc. stock in the second quarter, while adding to stakes in gold companies.
His firm, Paulson and Co., bought 168 million shares of Charlotte, North Carolina-based Bank of America valued at $2.2 billion as of June 30, according to a filing yesterday with the U.S. Securities and Exchange Commission. It was the biggest new purchase in the second quarter for Paulson, 53, and made him the bank’s fourth-largest owner.
Bloomberg – President Barack Obama sent Congress his plan to rein in the $592 trillion over-the-counter derivatives industry, a measure that would cut into a profitable market for banks led by Goldman Sachs Group Inc. and JPMorgan Chase & Co.
The proposal issued yesterday would pressure derivatives users such as banks and hedge funds to move away from opaque customized contracts by imposing higher capital and margin requirements on the instruments. Standardized derivatives would be moved to regulated exchanges or trading platforms and sent through official clearinghouses, according to the draft measure.
Bloomberg – Erik Verhaar, a former energy trader at Ospraie Management LLC and Deutsche Bank AG, started a hedge fund this week in the Netherlands as investors are returning to commodities.
His new Falckon Capital BV bets on U.K. natural gas and European power, emissions, coal and oil and has attracted one investor so far, Verhaar said yesterday in an interview.
Verhaar, 46, started at Cargill Inc. in 1987 as a cocoa trader and worked for Goldman Sachs Inc. and Nuon NV before joining Deutsche Bank in London in 2000, advancing to managing director for gas and power. He joined Ospraie’s biggest commodities fund in March 2008, six months before it closed in September last year. Verhaar’s energy investments at Ospraie gained 15 percent net of fees while he was there, he said.
HedgeCo.net (West Palm Beach) – Swiss based hedge fund and FoHFs provider, Infonic AG, has expanded to the US by establishing a New York office. Infonic named IT specialist Nolan Phillips as Chief Operating Officer, and financial expert, Bridget Piraino, Head of Global Marketing & Sales.
“I’m delighted to welcome Nolan Phillips and Bridget Piraino to the executive team. Adding to the depth of our management team demonstrates Infonic’s commitment to becoming the trusted operational backbone of the institutional hedge fund investor industry,” said Tom Furrer, Infonic’s CEO. “With the establishment of a New York office we will expand our presence delivering innovative products and dedicated client services to asset managers and administrators of funds of hedge funds.”
Nolan has held executive and consulting positions at Coopers and Lybrand, Union Bank of Switzerland, Société Générale, Bankers Trust, IQ Financial Systems and Bank of Bermuda, Alternative Investments Program.
Piraino’s career has included Aregon International, the UK financial data delivery system provider, and Goldman Sachs and Co’s Fixed Income Research group. She held senior technical management and financial services marketing positions with Sybase, TIBCO Financial Systems and SeeBeyond.
Headquartered in Switzerland with offices in Zurich and New York, Infonic AG is the provider of HedgeSphere, a product suite for operations of funds of hedge funds.
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Salon – John R. Talbott is a former investment banker with Goldman Sachs and the author of "The 86 Biggest Lies on Wall Street," "Contagion," "Obamanomics," and "The Coming Crash in the Housing Market."
Simon Johnson, the former chief economist of the International Monetary Fund (IMF), is the co-founder of the Baseline Scenario, a Web site tracking the ongoing financial crisis. He is one of the most visible public commentators on the ongoing financial crisis and its causes.
From June to July of 2009, Talbott and Johnson held an e-mail conversation on the following topic:
Khaleej Times – Hedge fund assets may be on the rebound after a year of massive redemptions, Goldman Sachs Group Inc Chief Financial Officer David Viniar told analysts on Tuesday, although the prime brokerage business will remain under pressure.
“Assuming (hedge fund) performance stays OK — which it has been through the first half of this year — it feels like we are pretty much through the redemption cycle, and it actually looks like you are going to start to see some money flowing into hedge funds,” he said during a conference call.
The hedge fund business suffered record withdrawals at the end of 2008 as markets imploded, sending the industry’s assets under management down by about 40 percent.
Reuters India – Nomura Holdings plans to launch a global prime brokerage business by September as the financial crisis creates room for new players to offer lucrative services to hedge funds, a senior executive said on Monday.
The move shows how Japan’s biggest investment bank, which scooped the European, Middle Eastern and Asian units of bankrupt Lehman Brothers, is muscling into an industry once dominated by Goldman Sachs and Morgan Stanley.
HedgeCo.net (West Palm Beach) – Viathon Capital, LP has officially launched the Whitewater Master Fund, LP, a credit opportunity fund focused on non-correlated absolute returns.
Employing a fundamental, credit-intensive research process in order to identify long and short investment opportunities in the United States and Europe, the hedge fund’s objective is to seek long term capital appreciation by investing in high yield and investment grade corporate bonds and bank debt.
As part of this launch, Viathon Capital has affiliates of Citigroup Alternative Investments, LLC (CAI) as its seed investor in this new fund. The fund launched in May of 2009 with $50 million in capital and had a net return of +0.92 % for the month of May and estimates +2.10% for June bringing it’s inception to date return to approximately +3.02%.
Viathon Capital’s team includes four investment professionals and two trade support/back office personnel with backgrounds from Marathon Asset Management, Goldman Sachs, Merrill Lynch, Neuberger Berman, SAC/Sigma, Providence Investment Management and Lehman Brothers.
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!
