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.
New York (HedgeCo.net) – Hedge fund manager Thane Ritchie announced that he has been wrongly blocked from meeting with The Chicago Newspaper Guild and developing a coalition offer to buy the Sun-Times Media Group. A Chicago Newspaper Guild representative stated that until today, the union had no idea of Ritchie’s interest, much less its desire to work with the Guild in devising a Private Equity/Union coalition bid.
“The American newspaper is not just another recession driven victim industry like autos or housing,” Ritchie said, “its ink is the lifeblood of our political system and democracy, as our Founding Fathers emphasized by enshrining only this commercial endeavor by name in our Constitution.”
Despite requests to set up such a meeting, Ritchie was told that it was against Federal labor laws for a potential bidder to have a conversation with the Guild, which represents many of those employed at Chicago’s #2 daily and associated sister publications, according to Steve Denari of Third Millennium Group strategic consultants, Ritchie’s point man looking at the investment.
When Ritchie heard of this blockage, he became personally involved and retained labor experts to review it. “This is a travesty — why shouldn’t forward looking private equity sources be able to form a coalition offer with a union, which represents the largest set of stakeholders here? The only bidder reportedly has made it clear that not only do they refuse to negotiate with the Guild, but that they would actually like to withdraw their bid unless the Guild gives in on everything.”
Herald Tribune – Two investors who lost $750,000 in the implosion of Scoop Management have filed a lawsuit against investment managers Neil and Chris Moody, who ran the Valhalla Investment Partners L.P. hedge fund.
Bruce M. Bell and Richard G. Levine, represented by Sarasota attorney Morgan Bentley, allege that the Moodys knew that the hedge funds were an investment scheme.
The latest lawsuit is along the lines of one Bentley filed on behalf of Fort Lauderdale investor Louis Paolino, who says he lost $6 million in the Moodys’ Viking Fund LLC.
Oregon Live – Oregon won the first round in a $36 million court battle against the former investment manager of its college fund by keeping the lawsuit out of federal court.
U.S. District Judge Michael Hogan ruled that the case be remanded to the Marion County Circuit Court, rejecting an attempt by OppenheimerFunds to avoid the jurisdiction of an Oregon court.
Attorney General John Kroger and Treasurer Ben Westlund have sued OppenheimerFunds for $36 million, saying it falsely promoted a high-risk college investment plan as "conservative." OppenheimerFunds’ Core Bond Fund, valued at $89 million in the state’s College Savings Plan last September, caused big losses in eight of 15 Oregon college investment portfolios, including those labeled conservative or ultraconservative.
HedgeCo.net (West Palm Beach) – Alternative investment manager, Global Fund Exchange, has hired A. Michael D’Arpino as Director of Business Development, a new position at the firm. D’Arpino joins Global Fund Exchange from hedge fund manager Clinton Group, Inc.
"We are very excited to have Michael join our team," said Lauralouise Duffy, CEO, Global Fund Exchange Group. "He brings a wealth of hedge fund and Wall Street broker-dealer experience, outstanding leadership capabilities and the expert analytical, planning and communications skills that are so critically important to our investors."
Prior to joining Global Fund Exchange, D’Arpino was Managing Director, Clinton Group, Inc., where he held responsibility for all marketing functions including identifying and mitigating business and operational risks, compliance, business development and investor relations.
"I am pleased to join Global Fund Exchange, which is comprised of a unique group of industry veterans dedicated to providing a distinct approach to alternative and traditional energy opportunities globally through the Earth Wind & Fire Funds," said D’Arpino. "The firm’s strategy, using a multi-manager global macro approach to investing across the entire spectrum of energy and resources, represents a compelling opportunity for investors who seek access to the alternative energy and renewable resources sectors while offering the benefits of diversified and uncorrelated portfolios."
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Seeking Alpha – During the past week, almost 15 percent of investors have expressed a specific interest in India-focused funds. When compared with the first week of the second quarter, this percentage is almost double. In a recent article in Hedge Funds India (see, “Hedge Fund Managers Cautious: Focus on China and India,” June 22, 2009), Seppo Leskinen, an investment manager stated
I think the shift of the world’s economies has gone to China and India and these BRIC (Brazil, Russia, India and China) economies. They are the new economy superpowers in the economic world.
A study by HedgeFund.net (HFN) seems to support this opinion. HFN found that since the first of the year, India-focused hedge funds have produced average returns of 19.6 percent. The same study also estimated that between late 2005 and September 2008, the total assets allocated to India-focused hedge funds increased from $2.8 billion to almost $14 billion. This increase of close to 500 percent shows that hedge fund investors have been looking for more exposure to India.
HedgeCo.net (West Palm Beach) – ALTIN, the London and Swiss-listed fund of hedge funds, has released a full disclosure of its underlying investments and weightings. ALTIN has adopted a position of total transparency, and holds one of the world’s longest track records as an exchange-listed fund of hedge funds.
ALTIN has reduced its cash allocation from 14% on 1 March 2009 to 6.3% on 1 July 2009, as part of an active investment programme into hedge funds to benefit from the current investment opportunities. The portfolio, featuring more than 30 underlying funds representing 10 different strategies, is particularly well diversified and boasts a positive performance of +5.18%[1] to date in 2009.
Only approximately 20% of funds held by ALTIN have restricted redemptions of one form or another. This relatively low proportion does not affect ALTIN as, being a fixed-capital investment company, it is not faced with redemption requests.
The portfolio’s great liquidity allows the investment manager to perform a dynamic management and benefit from the current investment opportunities. The manager has thus launched a significant investment programme in the past months.
ALTIN AG was launched in December 1996 and has been listed on the Swiss Stock Exchange since its inception as well as on the London Stock Exchange since 2001. ALTIN is a multi-strategy fund of hedge funds investing in more than 30 hedge funds representing various investment styles. The Company holds one of the world’s longest track records as an exchange-listed fund of hedge funds. Its objective is to generate an absolute annual return in US dollars terms with lower volatility than equity markets.
ALTIN is managed by 3A SA (Alternative Asset Advisors), a management firm specialised in alternative investments and member of the SYZ & CO Group.
3A currently manages more than USD 2.1 billion in hedge fund assets. 3A also provides alternative research and due-diligence services on an additional USD 4 billion in alternative investments.
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Reuters – Castle Alternative Invest, a Swiss-listed fund of hedge funds, plans to list in London to improve the liquidity of its shares, its investment manager LGT Capital Partners said on Tuesday.
The fund, which has assets of more than $500 million (315 million pounds) and which is on a discount to net asset value of 27 percent, will list its shares in London from June 5. The shares will be traded in U.S. dollars.
Jamaica Observer – A Jamaican investment manager in the Cayman Islands has been charged in the collapse of four hedge funds based in the Caribbean offshore financial centre.
Robert Christopher Girvan was charged with forgery, obtaining a money transfer by deception and producing a false document, the Royal Cayman Islands Police Services said in a statement.
Girvan, 48, of Jamaica, made a brief appearance before a magistrate Tuesday but did not enter a plea. He was released on bail and ordered to appear back in court on May 26.
Albany Times Union – A group of upstate unions claims it lost nearly $1 billion in pension and other benefit funds after an investment manager placed the money with Bernard Madoff Investment Securities LLC.
Now, the unions have filed a class-action lawsuit against the adviser, Syracuse-based J.P. Jeanneret Associates Inc. and against White Plains-based Beacon Associates Management, which operated funds that invested pension money with Madoff.
AltAssets – Abbott Capital Management, a US-based independent investment manager, announced today that it has met its target for the Abbott Capital Private Equity Fund VI, having raised over $1bn.
Like Abbott’s previous funds, the investment strategy for ACE VI is to invest in a range of venture capital and growth equity, buy-out and special situations funds within the US and other developed markets.
West Palm Beach (HedgeCo.net) – At the MFA Legal, Compliance and Operations Seminar in New York last week, SEC staff described its examination and enforcement priorities for the foreseeable future with respect to hedge funds and investment advisers.
According to a letter obtained by HedgeCo, the SEC staff said that as part of their examination of hedge funds and investment advisers, the SEC intends to contact investors, verifying that the hedge fund/investment manager is providing the same statement information to both the client and SEC staff.
The concern here is that the manager might be providing one set of statements to the SEC for exam purposes and another set of statements to the clients that contain materially different account balances or performance information.
This aspect of the exam program may have significant investor relationship implications for fund managers. When questioned, the SEC staff members indicated that they may issue a press release stating that this aspect will be part of examinations going forward.
The SEC staff indicated that fund managers may run the risk of obstructing the examination by getting ahead of the process and communicating directly with investors ahead of SEC staff.
The SEC also warned investors about con-artists who may use the names of SEC employees to mislead, trick and conduct "emergency" examinations.
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Reuters – A hedge fund manager overstated values by hundreds of millions of dollars, set up a phony accounting firm and showed uniformly positive returns for nine years to defraud investors, U.S. authorities said on Wednesday.
James Nicholson, 42, founder of Westgate Capital Management LLC of New York, was arrested and criminally charged with securities fraud and bank fraud in causing losses of as much as $100 million since 2004, prosecutors and the FBI said.
He appeared in U.S. Magistrate’s Court in Manhattan where a judge set bail of $10 million secured by five co-signors and three properties. The judge ordered Nicholson released when he meets those conditions, but he would be under house arrest with electronic monitoring.
Prosecutor Joshua Klein told the court the purported fraud could effect 372 investors. "There is a potential additional hundreds of millions of dollars involved and we have no idea where that money is," Klein said.
Nicholson’s attorney Ira Sorkin said in court that his client was not a risk of flight and that home detention was sufficient to ensure court appearances.
Sorkin, a veteran securities attorney, represents Bernard Madoff, the once-respected Wall Street trader and investment manager arrested and charged in December with a purported $50 billion global fraud.
Investigators say they have uncovered several frauds across the United States in recent months following the market meltdown.
