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 – Pinpoint Investment Advisor Ltd., a hedge fund manager of $560 million, returned as much as four times its Asian peers this year through July with profits from a rebound in Chinese stocks and debt securities.
The $70 million Pinpoint Opportunities Fund, which gained 85 percent in the period, invested about half its assets in convertible and high-yield bonds, including those of Chinese property developers, said Duanmu Yongshan, Pinpoint’s Hong Kong- based chief marketing officer. The $300 million Pinpoint China Fund returned nearly 51 percent in the period, he said.
Bloomberg – Pinpoint Investment Advisor Ltd., a hedge fund manager of $560 million, returned as much as four times its Asian peers this year through July with profits from a rebound in Chinese stocks and debt securities.
The $70 million Pinpoint Opportunities Fund, which gained 85 percent in the period, invested about half its assets in convertible and high-yield bonds, including those of Chinese property developers, said Duanmu Yongshan, Pinpoint’s Hong Kong- based chief marketing officer. The $300 million Pinpoint China Fund returned nearly 51 percent in the period, he said.
MSN India – Fund managers are aggressively selling the India theme to overseas investors. After Singapore-based Helios Capital’s fund manager Samir Arora’s India-focused Slumdog Millionaire Equity Fund, domestic brokerage firm India Infoline, run by Nirmal Jain, and Atlantis Investment Advisor headed by Vinay Gairola have launched India-focused off-shore funds.
While Gairola is trying to sell his India Alfa Fund to investors in West Asia, Singapore-based fund managers of India Infoline—Deepesh Pandey, the erstwhile deputy CIO of Mirae Asset, and Manish Srivastava, ex-fund manager of Halbis (HSBC Global Asset Management) — have conducted roadshows for the ‘Mumbai’ Fund in Hong Kong and US markets. Both are long-short equity funds and are likely to raise nearly $100 million.
Seeking Alpha – Grail Advisors, LLC, the investment advisor that launched the Grail American Beacon Large Cap Value Fund (GVT) last month, has filed with the SEC to launch four additional ETFs. Grail notes that these four funds will be the first actively-managed ETFs to use a single-manager approach.
Unlike traditional ETFs, managers of these funds will have discretion on a daily basis to choose securities consistent with the ETF’s objective. With the launch of these funds, Grail will establish itself as the leader in the actively-managed ETF arena.
"Our goal from the outset was to bring traditional, active fund managers to the ETF marketplace," said William Thomas, chief executive of Grail Advisors. With these funds, that day has come "a lot sooner than even the most enthusiastic proponent of the ETF structure could have imagined."
West Palm Beach (HedgeCo.net) – The UK Serious Fraud Office, (SFO) Friday conducted searches on two residential properties (one in Kent, the other in Surrey) assisted by the City of London Police, in connection with its investigation into an alleged fraud involving the recently collapsed hedge fund, Weavering Capital.
Two men, aged 43 and 45, were arrested and have been taken to a police station for questioning.
Hedge fund Weavering Capital launched in March 2009, acting as investment advisor to a Cayman Islands incorporated hedge fund, Weavering Macro Fixed Income Fund Limited. The Macro Fund was understood to have funds under management of around $639 million in late 2008.
The investigation is currently focused, the SFO said, on certain interest rate swap transactions between the Macro Fund and a company registered in the British Virgin Islands, Weavering Capital Fund Limited, which appears to be a related third party, which inflated the apparent Net Asset Value of the Macro Fund. More details to be released as the case proceeds.
Alex Akesson
Editor for HedgeCo.Net Email: alex@hedgeco.net
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24/7 Wall St. – According to a civil suit filed today by the Securities Exchange Commission in the Southern District Court of New York, John-Paul Rorech, a bond salesman at Deutsche Bank Securities, and Reanto Negrin, a former portfolio manager at hedge fund investment advisor Millennium Partners L.P., were charged with insider trading in credit default swaps of VNU N.V. VNU, now Nielsen Company, is a Dutch media conglomerate that owns Nielsen Media and other media businesses.
According to Scott W. Friestad, Deputy Director of the SEC’s Division of Enforcement, “This is the first insider trading enforcement action involving credit default swaps.”
Los Angeles Times – When a well-known investment advisor gave the Securities and Exchange Commission some unsolicited advice this week about protecting investors in hedge funds, he had already been talking to the agency about his own behavior.
About half an hour before Charles J. Gradante issued a public call Wednesday for the SEC to "reduce fraud and systemic risk" in the hedge fund industry, the SEC charged him with failure to perform due diligence on the Bayou hedge funds — one of the industry’s biggest scams in recent years.
New York (HedgeCo.Net) – The Securities and Exchange Commission charged Texas businessman Robert Allen Stanford yesterday along with three of his companies for running a fraudulent $8 billion investment scheme.
"We are alleging a fraud of shocking magnitude that has spread its tentacles throughout the world," said Rose Romero, Regional Director of the SEC’s Fort Worth Regional Office.
According to the allegations, Stanford International Bank sold approximately $8 billion of so-called “certificates of deposit” under the pretense they would yield extremely high interest rates thanks to SIB’s unique and one-of-a kind investment strategy. These CD’s were peddled as safe under the false notion that the bank re-invests the funds in liquid instruments while being under the constant supervision of 20 analysts and Antiguan regulators.
U.S. District Judge Reed O’Connor issued a temporary restraining order and appointed a receiver to the assets, which have all been frozen.
“Stanford and the close circle of family and friends with whom he runs his businesses perpetrated a massive fraud based on false promises and fabricated historical return data to prey on investors," said Linda Chatman Thomsen, Director of the SEC’s Division of Enforcement. "We are moving quickly and decisively in this enforcement action to stop this fraudulent conduct and preserve assets for investors."
The companies involved in the scheme include Antigua-based Stanford International Bank, broker-dealer Stanford Group Company and investment advisor Stanford Capital Management, both based in Houston. In addition, the SEC charged SIB CFO James Davis and CIO of Stanford Financial Group Laura Pendergest-Holt for their involvement in the scam.
The SEC also slammed Stanford with a second charge, relating to a mutual fund scheme. According to the complaint, Stanford Allocation Strategy was created to help SGC rake in $1.2 billion by using doctored performance reports to help sway investors. The bogus data helped Stanford’s company grow from managing $10 million in 2004 to over $1 billion.
Stanford, 58, known in the Caribbean as “Sir Allen” after being knighted there in 2006, has an estimated personal net worth of $2.2 billion, according to Forbes.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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New York (HedgeCo.Net) – As the investigation continues into what has turned out to be the largest fraud in history, more and more investors are coming forward who saw the red flags early, refusing to do business with Bernard Madoff.
According to a report published by the Independent, investigators are now hearing stories from many banks and investors who believed early on that Mr. Madoff had been faking his stellar track record. These investors complained to the Securities and Exchange Commission, only to have the agency merely give him a slap on the wrist.
According to a complaint sent to the SEC in 2005 by Boston accountant Harry Markopolos, a few hedge fund managers who did business with Madoff Investment Securities were weary that Madoff was “eating the losses” and doctoring returns.
Markopolos also allegedly warned the SEC that Madoff was in fact, running a giant Ponzi scheme. This of course, turned out to be the case when he was arrested last week after confessing to his sons that Madoff Investment Securities was essentially “one big lie,” and had bilked about $50 billion out of trusting investors.
Other red flags included the fact that his returns were steady and always on the up and up, posting returns of over 10 percent a year, while most legit funds experience some sort of down time. In addition, his company used a small, relatively unknown auditing firm whose list of clients was not very impressive.
The SEC forced Madoff to register as an investment advisor in 2006, which he did while avoiding further scrutiny. Investment advisors are not subject to routine SEC investigations; rather they are performed based on their potential risk.
Many believe he was able to evade investigations due to in part to his high-profile role on Wall Street. As one of the founders of the Nasdaq stock exchange, he regularly advised the SEC on electronic trading issues.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
West Palm Beach (HedgeCo.net)- Hedge fund managers, gurus and ‘Out of the box’ guest speakers are gathering at the Grimaldi Forum to debate distressed investing issues and macro strategies for 2008.
The 14th Annual Gaim International 2008, a global hedge fund industry conference is being held tomorrow through Thursday in Monaco. The conference has 40 slots over 3 days and will cover issues such as the state of the world economy to strategy and hedge fund philanthropy.
1100 investors, distributors and asset managers are expected at the hedge fund industry’s flagship conference, attracting the largest proportion of asset allocators in hedge funds than any other alternatives event.
Hedge fund experts are scheduled to speak at the meeting, and the guest speakers include former holder of the land speed record, Richard Noble.
The conference is taking place as the $2.6 trillion hedge fund industry confronts poor returns and investor outflows and searches for a follow-up to the favored strategy for 2007, which was taking bets on the explosion in subprime loans.
