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.
Reuters – Bank of America Corp’s primary investment management unit is drawing lower than expected bids after its likeliest suitor, BlackRock Inc, inked a blockbuster deal to buy Barclays Global Investor, the Financial Times reported, citing people close to the matter.
Bank of America has been trying to sell its Boston-based Columbia Management unit since earlier this year, but the bank has so far not announced a deal for the unit.
The company is hoping to get at least $3 billion from a sale of Columbia Management, but bids so far have come in closer to $2 billion, the paper said, citing the people.
Bloomberg – Dear investor, our statutory obligations demand that we update you on how well we’ve taken care of your money here at Coin-Toss Investment Management.
Attached to this missive is a picture illustrating our fund’s performance this year, showing how wonderfully our back- to-basics approach is working after the derivatives-inspired lunacy of recent years. We’re calling our new strategy “mark- to-flatline” — slow and steady, it sure beats floundering on the double-black expert slopes of last year’s chaotic madness.
Reuters – The fund management arm of Swedish banking group SEB is planning to launch a global credit hedge fund in the autumn to take advantage of mis-pricing opportunities in the credit markets.
Peter Branner, global head of investment management at SEB, said the fund would use leverage and take long and short positions in the investment grade and high yield credit markets where the turbulence of the financial crisis has thrown up undervalued and overvalued assets.
SEB will target institutional and private banking clients for the fund, he told Reuters at the Fund Forum industry conference.
Bloomberg – Colonial First State, Australia’s biggest asset manager, may seek an alliance with a hedge fund to offer customers a strategy capable of profiting in rising or falling markets.
The manager of about A$130 billion ($103 billion) has A$4 billion of client money in five boutique funds. Sydney-based Colonial started the alliance business in 2002 to broaden the range of strategies offered and has tie-ups with firms such as the Al Gore-backed Generation Investment Management LLP.
“We don’t have anyone who specializes in absolute returns,” Graham Hand, Colonial’s general manager of funding and alliances, said in an interview in Sydney. “If we can get the right idea working, that would compliment what we’re doing. So we’re looking at a few possible deals in that space.”
Bloomberg – Flowering Tree Investment Management Pte, set up by the co-founder of New York-based Sansar Capital Management LLC, plans to grow its Asian equities hedge fund by about 20 times its starting capital within the next two years.
The Singapore-based fund made its first bets on rising and falling stocks in Asia outside Japan last month, starting with $12.5 million sourced from founding members, family and friends, founder Rajesh Sachdeva, 40, said in an interview yesterday. It will grow to $15 million to $16 million by July, and plans to reach $200 million to $300 million in two years.
Reuters – International Standard Asset Management, the hedge fund firm headed by former Man Group chief executive Stanley Fink, has hired former RAB Capital director Rod Barker to help build the business.
Barker, who resigned from RAB at the end of 2007 to become co-chief executive of Renaissance Investment Management, started at ISAM on Monday as a director and partner with responsibility for business development, ISAM said in a statement on Tuesday.
Greenwich Time – Fairfield Sentry Ltd., seeking to recover more than $919 million in fees related to investments involving Bernard Madoff, sued the Fairfield Greenwich Group hedge fund that lost $7 billion in Madoff’s fraud.
Fairfield Sentry, based in the British Virgin Islands, said in a complaint filed May 29 in New York State Supreme Court in Manhattan that it is the largest victim of the fraud perpetrated by Bernard Madoff.
The fund seeks to recover more than $919 million in investment management and performance fees that it paid to Fairfield Greenwich based on inflated net asset value reports of its investments with Bernard L. Madoff Investment Securities LLC.
Fairfield Greenwich, led by Greenwich resident Walter Noel, claimed it had $16 billion of assets under management, $7.3 billion of which was purportedly in Fairfield Sentry Ltd., according to the complaint.
Bloomberg – Yale University and Harvard University may have to cut investments in hedge funds and private equity because the risks of holding the hard-to-sell assets outweigh the returns, said Bill Gross, co-chief investment officer of Pacific Investment Management Co.
“The Yale and Harvard portfolios, which have succeeded enormously over the past 10 or 20 years in terms of the emphasis on illiquidity and private investments and risk-taking — you have to question that model,” Gross said yesterday at an industry conference in Chicago.
The two Ivy League schools had more than half of their endowments in hedge funds, private equity, real estate and hard assets such as commodities at June 30. Gross, who manages the $150 billion Pimco Total Return Fund, the world’s biggest bond mutual fund, recommended in March buying securities that provide stable income this year rather than more speculative and illiquid investments, as slowing economic growth and higher unemployment depress returns.
Washington Post – About half a dozen investment managers have put forward bids, ranging between $400 million to $800 million, for troubled insurer American International Group’s asset management business, the Wall Street Journal reported, citing people familiar with the matter.
Private equity firms Ashmore Investment Management, Hellman & Friedman LLC, Rhone Group and TA Associates as well as mutual fund manager Franklin Templeton and asset manager Southgate Alternative Investments are among those who have shown interest, the Journal said in a report on its website.
Bloomberg – Two years ago, German investment adviser Dieter Kaiser had to board a plane bound for New York to speak with senior U.S. hedge-fund executives.
These days, those same managers visit Kaiser, the director of investment management for Feri Institutional Advisers GmbH, at his office in Bad Homburg, about 10 miles (16 kilometers) from Frankfurt.
“We’re seeing hedge-fund managers here, and they’re wearing ties now,” said Kaiser, 31, whose firm has allocated about $1 billion to private funds for its clients.
Ginga Service Sector Fund, the third-best performing Japan-focused hedge fund in 2008, held its ranking in January by investing only in the telecommunications and services companies.
The 3.4 billion yen ($36 million) fund, advised by Tokyo- based Stats Investment Management Co., returned 0.7 percent last month, extending its 13 percent advance in 2008, according to a letter to investors.
Average losses in the $1.4 trillion hedge-fund industry reached 19 percent in 2008, the worst on record, as the biggest market declines since the Great Depression slashed asset values and caused investors to withdraw their money, according to Chicago-based Hedge Fund Research Inc.
Times Online – The Massachusetts Pension Reserves Investment Management Board, which oversees $38 billion, voted to fire hedge-fund firm Austin Capital Management after losing $12 million with alleged Ponzi scheme operator Bernard Madoff.
The state pension board also decided at a meeting in Boston today to dismiss Ivy Asset Management, the hedge-fund unit of Bank of New York Mellon Corp., because several senior managers have left the firm. About $430 million in pension assets were invested with Ivy and $130 million with Austin, the board said.
Austin invested pension assets with Tremont Partners, the hedge-fund unit of Massachusetts Mutual Life Insurance Co. Tremont placed money through its Rye Select Broad Market Prime Fund LP with Madoff, the New York financier accused of fraud in a scheme that may have cost clients $50 billion.
