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.
Guardian – French Bank Societe Generale’s Lyxor Asset Management expects to double the assets under management in its managed accounts platform to about $25 billion by the end of the year, reclaiming ground it lost in 2008′s wave of redemptions, a senior executive said on Wednesday.
Inflows into Lyxor’s managed account platforms have risen more than 50 percent so far in 2009, taking its total assets under management to $20 billion after they halved in 2008, Antoine Broquereau, head of structuring and alternative investment solutions at Societe Generale Corporate Investment Banking.
New York Times – The investment banking chief of HSBC Holdings said he sees a “significant opportunity” to boost revenue from hedge funds after the collapse of Lehman Brothers last year, Bloomberg News reported.
At a Nomura Holdings conference today, Stuart Gulliver said, “We’ve seen a number of hedge funds moving their accounts to HSBC because their main concern is getting their money back. We can give people leverage in a segregated account, so they don’t have the operational risk that came out when Lehman Brothers failed.”
Bloomberg – Stuart Gulliver, HSBC Holdings Plc’s investment banking chief, said he sees a “significant opportunity” to boost revenue from hedge funds after Lehman Brothers Holdings Inc.’s collapse last year.
“We’ve seen a number of hedge funds moving their accounts to HSBC because their main concern is getting their money back,” Gulliver, HSBC’s head of global banking and markets unit, told investors at a Nomura Holdings Inc. conference in London today. “We can give people leverage in a segregated account, so they don’t have the operational risk that came out when Lehman Brothers failed.”
About 700 clients of Lehman’s European division, including MKM Longboat Capital Advisors LLP and GLG Partners Inc., lost control of assets when the investment bank filed the biggest bankruptcy in U.S. history last year. PricewaterhouseCoopers LLP, Lehman’s U.K. administrator, said last month it may take a decade to distribute $9 billion owed to creditors.
Bloomberg – The office of Kenneth Moelis in Los Angeles is a shrine to an investment banking career spent catering to the rich. Shelves and a table groan under the weight of dozens of Lucite deal tombstones featuring companies controlled by Carl Icahn, John Kluge, Donald Trump, Steve Wynn, Sam Zell and other business-section boldface names.
“My job is to be ready when the bat phone rings,” says Moelis, 51, perched on the edge of a leather chair. He’s referring to the hot line used in the 1960s-era Batman television series. Reinforcing the point, a framed architectural drawing of the fictional Wayne Manor that housed Batman’s wealthy alter ego, Bruce Wayne, leans against a table.
Boston Globe – French bank BNP Paribas’s revenues from corporate and investment banking nearly doubled in the second quarter as robust investor demand boosted revenues from the bank’s fixed income business unit.
BNP Paribas’s CIB revenues totaled 3.351 billion euros ($4.82 billion) for the quarter, up 81 percent from the second quarter of 2008, and following record revenues of 3.696 billion euros in the first quarter of 2009.
”Once again, fixed income revenues were exceptional,” said David Thebault, head of quantitative sales trading, at Global Equities, in Paris.
Bloomberg – Hedge funds may increase assets by more than 8 percent this year as clients led by pension plans and rich families invest $50 billion of the cash they held while financial markets fell, according to a report by Barclays Plc.
Investors have about 14 percent of their assets in cash, according to the survey released today by Barclays Capital, the investment-banking unit of London-based Barclays. Almost 80 percent plan to allocate money to hedge funds in 2009.
“We are seeing that investors are now realizing that hedge funds are surviving as a compelling investment proposition and as an important segment of the broader asset-management industry,” Andrea Gentilini, the New York-based author of the report, said in a telephone interview.
Reuters – Hedge fund and traditional money management firms hard hit by last year’s market meltdown are poised for a surge of mergers and acquisitions to bolster depleted assets and widen sources of revenue.
"We’re going to see a massive wave of consolidation across the entire asset management industry, over the next 12 to 24 months," Brian Reilly, Barclays Capital’s head of asset management investment banking, told a gathering of hedge fund executives at the SkyBridge Alternatives Conference.
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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Reuters – Top former Merrill Lynch executives, including two former CEOs, invested in hedge funds that lost money with alleged fraudster Bernard Madoff, becoming the highest-level Wall Street victims of the scandal to date, the Wall Street Journal reported on Thursday.
Former chief executives Daniel Tully and David Komansky and former investment-banking chief Barry Friedberg personally invested in the funds, set up by former Merrill brokerage chief John Steffens, the paper said, citing people familiar with the matter.
Bernard L. Madoff Investment Securities LLC collapsed after the 70-year-old Wall Street trader was arrested and charged on December 11 last year with securities fraud.
Madoff, a former chairman of the Nasdaq stock market, is under house arrest and 24-hour surveillance in his luxury Manhattan penthouse apartment as criminal and civil investigators probe his global operations that purportedly lost $50 billion.
The firm comprised a brokerage and an investment division that Madoff ran separately in the same New York building.
Atlanta Journal Constitution – Unlike the nation’s banks, hedge funds haven’t been lining up for government bailouts in the wake of losses they can’t handle. But the funds do share one Wall Street problem: a huge mismatch between the short-term funds they take in and the long-term bets they make. Without a rethink of their business models, many in the hedge fund business risk going the way of the investment banking dodo.
Recall the nightmare on Wall Street. Going into 2008, America’s five big investment banks held trillions of dollars in long-term and illiquid assets that were financed largely by short-term borrowings. That did not work out so well. Two of them disappeared. Another was swallowed by a traditional bank, and the last two had to don the sober garb of regulated, deposit-taking banks to survive.
Reuters Shanghai- Ten new China-focused private equity funds raised $12 billion (six billion pounds) in the second quarter, but poor market conditions have forced foreign funds to delay exits of their investments through IPOs and secondary offerings, consultant firm Zero2IPO said on Thursday.
The second-quarter figure is up 107.6 percent from the same period of 2007 but down nearly 40 percent from the first quarter of this year, according to the firm’s quarterly report.
Some 8.1 percent of capital raised by the 10 funds in the second quarter, or $972 million, target investments in Chinese property markets despite China’s tight monetary policy, which may hurt its real estate industry.
