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.
West Palm Beach (HedgeCo.net) – Citadel Securities has added three former Merrill Lynch and Goldman Sachs senior investment bankers to the hedge fund company, at the same time launching Citadels Investment Banking division.
Todd Kaplan joined Citadel in March, he will assume the role of Head of Investment Banking for Citadel Securities. Brian Maier joins as Head of Industry Groups and Carl Mayer joins as Head of Leveraged Finance.
“By bringing Todd to Citadel Securities to head up our banking effort, we are executing our strategy of developing a leading, fully integrated, client-facing franchise across investment banking and institutional sales and trading," Rohit D’Souza, CEO of Citadel Securities said "Todd and his team are outstanding investment bankers with strong relationships who have experience across a broad spectrum of capital markets areas."
Commenting on the opportunities for Citadel in the marketplace, Kaplan said, "Now more than ever, corporations are looking for sound, actionable advice. With Citadel Securities’ unique set of assets, I look forward to building our investment banking operation as we provide innovative products and services to a broad group of clients in an increasingly complex environment.”
“We have the foundation of an exceptional team of esteemed banking professionals,” said D’Souza. “Together we will be able to deliver fully developed world class capabilities to meet our clients’ needs.”
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24/7 Wall St. – Citigroup has gone to the Treasury to beg for bonuses for some of its most important traders, people who make the banks extraordinary amounts of money. The Treasury’s reaction will probably be that it wants to stay out of a fight with Congress and avoid negative public opinion and will turn the request down.
That would be a mistake.
Wall St.’s primary argument for keeping a high level of compensation for its best investment bankers and traders is that, if they leave, overall losses at banks could get worse. People can be profit centers. The most successful ones help offset the red ink created by the series of poor decisions that big financial firms made about mortgage-backed paper and commercial credit loans. It is easy to assess the value of the best traders by looking at a bank’s books.
West Palm Beach (HedgeCo.net) – Dow Jones & Company has added London based hedge fund manager Paul Sharma as telecommunications, media and technology columnist, and NY’s award winning Donna Childs, as a financial services columnist.
"The appointments of Paul and Donna are part of our overarching strategy to enhance our editorial teams with top industry talent. We are drawing on the hedge fund and banking communities to deepen Dow Jones’s reporting and commentary on companies, industries and events for investment bankers and corporate advisors," said Adam Smallman, global managing editor for investment banking coverage at Dow Jones Newswires. "During this time of great change in markets, our editorial focus is firmly on delivering to investment bankers the intelligence that powers deals and transactions. With their industry experience, Paul and Donna will offer a unique perspective on firms, sectors and events for our investment banker readership."
Sharma was a partner at a London-based hedge fund, Cheyne Capital Management, where he managed a telecommunications value fund. Prior to that, he was the director of telecommunications sales at HSBC and spent four years as vice president and lead telecommunications analyst at J.P. Morgan in London.
Before joining Dow Jones, Ms. Childs led the microfinance firm Childs Capital LLC, which she founded in 1998. Prior to this, she was president and chief operating officer of ERC Financial Market Products in New York, an investment banker in the financial institutions group of Goldman Sachs and a director at Swiss Reinsurance Company in Zurich. Ms. Childs has won multiple awards throughout her career, including the National Association of Women Business Owners’ ‘2007 Woman Business Owner of the Year’. She was named one of the ‘40 under 40′ rising stars of New York in 2005 by Crain’s New York Business.
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ShareCast – Private equity group BlueGem is to take a 40% stake in stockbroker Panmure Gordon in a move that will inject £17.3m of capital into the broker.Panmure Gordon has placed 72m new shares with BlueGem at 24p per share.
The acquisition of the stake represents BlueGem’s fourth investment and its first in the financial services sector. The company was formed in late 2006 by experienced investment bankers and fund managers to make investments in mid-market companies, predominantly in the UK and Italy.
The net proceeds from the placing will ‘significantly strengthen the company’s balance sheet’, the company said, giving it regulatory assets in excess of £40m, more than three times more than its required regulatory capital.
Wall Street Journal – Some numbers are so big you just have to stand back and admire them. An investment banker claiming $550 million of fees in a single year is just such a number.
The number is staggering for an industry in which a great year means an investment banker brought in $25 million in fees and $40 million of fees makes a Wall Streeter a star.
Then there is Merrill Lynch banker Andrea Orcel laying claim to bringing in more than 13 times that for his firm, or $550 million in fees, according to this Wall Street Journal article by our colleague Susanne Craig. That earned Orcel a 2008 bonus of $33.6 million–down just a smidge from the $38 million he received in the M&A boom year of 2007.
Investment bankers’ bonuses are based in large part on the credit the individual bankers claim for the deals they worked on. As today’s Page One Journal article notes, Orcel won a big one-time bonus of $12 million in 2007 just for advising the Royal Bank of Scotland Group-led $101 billion acquisition of Dutch bank ABN Amro.
Times Online - Some of Britain’s most powerful fund managers are setting aside billions of pounds to fund cash calls from sound companies hamstrung by a lack of bank lending.
Investment bankers say that they have been inundated with calls from Britain’s biggest institutional investors over the past few weeks offering billions of pounds to fund the right recapitalisation deals. The institutional investors, corporate brokers say, are insisting that they be shown deals before private equity funds that are also waiting to snap up bargains.
Scottish Widows Investment Partnership, owned by Lloyds Banking Group, and M&G, owned by Prudential, the insurer, are among big investors ready to take up equity or debt of UK plc, whose shares have slumped in the past year. The FTSE all-share index is down almost 30 per cent over the period.
