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.
CNBC – About half of the investors in T. Boone Pickens’ energy-oriented equity hedge fund have asked to withdraw their money on the heels of losses of about 60 percent this year, the Wall Street Journal said, citing people close to the matter.
Pickens and his investment fund have lost $2 billion since peaking in late June, Pickens told the CBS program ’60 Minutes’ on Sunday.
His fund, BP Capital, will have about $400 million to $500 million after expected withdrawals, the Journal said.
A few weeks ago, Pickens moved the fund almost entirely into cash to help ride out the volatility in the energy patch, the paper said, citing people close to the matter.
West Palm Beach (HedgeCo.net) – Iraq and the Babylon Fund sailed fairly unscathed through the panicky financial markets in September, according to CEO Robert Torkelund.
“Our strategy to focus on sticky money instead of any cheap hot money flow, has paid off so far,” says Torkelund, “Iraqi investments are not for the faint-hearted, of course. A financial crisis more or less, now and then, is business-as-usual for many of our experienced pre-frontier institutional investors. In fact, Babylon Fund’s AUM is still on the rise – early this month reaching ATH – and no redemptions have been requested so far."
There was less to celebrate in absolute terms though, as the monthly return came in at a negative 5.9% m/m. (another -3.5% for mid-month Oct). The fund’s losses in September were primarily a result of the bear sentiment. For example, Iraqi bonds lost heavily, with its USD-yields spiralling back into double-digit territory, as did all oil prospecting companies.
Inside Iraq, markets stayed mainly flat in September: Top 15 companies by Mcap, making up a full 70% of total Mcap, lost a few percentages on average. The diversification process from other Mid-Eastern investors, which was anticipated during the Dubai boom times already, seems instead to have started now instead.
The Babylon fund is a high risk $23.6 million investment fund with a $100.000 minimum investment. Managed by Godvig Capital and Björn Englund the fund has a 2% management fee.
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Wall Street Journal – Deutsche Börse AG’s supervisory board reaffirmed the stock-exchange operator’s business model Friday, defying activist hedge funds that had been seeking a change in strategy after this year’s steep fall in the company’s share price.
"The ongoing implementation and continuation of the existing strategy of the integrated business model including its further development [are] the best conditions to further increase value for all shareholders and customers of the group," Deutsche Börse said in a statement after an extraordinary supervisory board meeting.
The company has three main businesses: its Eurex derivatives arm, a share-trading platform called Xetra, and Clearstream, which handles post-trade processing.
Deutsche Börse shares rose 0.8% to €63.44 ($90.19) Friday. Its stock has fallen more than 50% this year.
The board meeting was convened after the company’s biggest investors — activist hedge funds The Children’s Investment Fund LLP and Atticus Capital LP, which together control 19% of votes in Deutsche Börse — joined forces to explore options for creating shareholder value at the company. The hedge funds haven’t presented any formal proposals.
TORONTO – Introduction Capital announced today that Horizons BetaPro ETFs, Felcom Data Services Inc. and JovVentures Inc. have signed on as the partner sponsors for its third annual forum for global sophisticated investors interested in the Canadian hedge fund market entitled “Canadian Hedge Fund Managers Speak with Investors”. Horizons BetaPro ETFs, managed by BetaPro Management Inc., are showing their support for this forum for the second year in a row.
“We are proud to associate our company with a forum dedicated to supporting the Canadian hedge fund industry,” said Howard J. Atkinson, President of BetaPro. “It is a good fit for us, given that BetaPro is a significant provider of ETFs products in Canada and that ETFs are used by both institutional and private investors globally.”
About Horizons BetaPro ETFs:
Horizons BetaPro ETFs are managed by BetaPro Management Inc., Canada’s sole provider of investment tools allowing investors to profit when the market is rising or falling, or to reduce their risk by hedging their existing market exposure. BetaPro currently manages the largest product offering of any Canadian ETF provider with approximately $1.8 billion amongst 28 ETFs.
About Felcom Data Services Inc.:
Felcom Data Services Inc. (FDS) has been providing Fund Accounting and Transfer Agency services to investment fund manufacturers since 2001, and offers a total solution to address all investment product administrative requirements. FDS has greater than $3.6 Billion in Assets under Administration for 30 Customers, and services more than 250 different products.
FDS can manage the Fund Valuation & Accounting and Transfer Agent & Registrar needs of any sized firm. Where necessary, FDS can develop customized solutions and interfaces or other technological requirements with the support of our system providers. The company also provides Relationship Management with their specialized Strategic Partner Vendors. FDS is able to provide an immediate total administration solution for established product manufacturers or a phased-in implementation approach to suit a “start-up” Customer’s growth over time.
About JovVentures Inc.:
JovVentures Inc., a wholly owned subsidiary of JovFunds Management Inc., is an incubation platform for financial services companies. With a focus on Canadian private equity and emerging hedge fund managers, JovVentures has developed a robust institutional platform across an array of services and functions including on-shore and off-shore capital raising, middle office workflow, legal registration and marketing.
The forum will provide global investors with direct access to 16 of Canada’s most prominent hedge fund managers including Salida Capital, Front Street Capital and Sprott Asset Management. Managers will present an overview of their firm, fund strategy, risk management approach and market outlook to an audience of fund of funds, family offices, institutions and high net worth individuals from around the world. The forum will be held on September 25th, 2008 at the St. Andrew’s Club & Conference Centre in Toronto, Ontario, Canada.
About Introduction Capital:
Introduction Capital is a boutique firm that brokers strategic business relationships between sophisticated global investors and Canadian hedge fund managers. The firm tracks over 100 hedge funds in Canada and offers global investors the perfect place to “start” their Canadian manager search. Introduction Capital encourages offshore investors to visit Canada by creating full manager meeting itineraries on their behalf. Over $150 million in investor capital has been introduced to Canadian hedge fund managers through Introduction Capital since it was founded in 2004 by Karen Azlen. Introduction Capital is a member of the Canadian Chapter of AIMA and is registered with the Ontario Securities Commission as a Limited Market Dealer.
Attendance to the forum is by invitation only with limited seating. For inquiries, information on attending or interview requests please contact Karen Azlen, CEO, Introduction Capital Inc. at 416-849-1927 or k.azlen@introcap.com. Please visit our website at www.introcap.com.
Blayney Chronicle- Chris Cuffe cannot escape his tag as the $33 million man. But six years after the former head of Colonial First State left the funds manager with a notorious golden handshake, he is back in the business – only this time doing it for charity.
What is more, he has convinced 15 leading fund management companies also to work pro bono, potentially forgoing more than $1million a year in fees for a good cause.
Mr Cuffe, now executive director of the non-profit organisation Social Ventures Australia (SVA), set up the Third Link Growth Fund with two aims: to provide retirees and other investors with a high-growth investment fund and to contribute almost all the fees received from investors to SVA.
Mr Cuffe today announces the names of the fund managers he has chosen to work free, among them Goldman Sachs JBWere, Colonial First State, Perennial Investment Partners and Pengana Capital.
New York (HedgeCo.Net) – Bear Stearns has triumphed in a case involving disgruntled investors seeking $141 million for the losses they incurred following the collapse of the Manhattan Investment Fund Ltd., a hedge fund where Bear served as the prime broker.
The fund, which filed for Bankruptcy in 2000, started experiencing losses almost immediately after its launch in 1995. After shorting technology stocks to no avail, fund manager Michael Berger issued false documentation showing profits and gains and ultimately collected $575 million from investors. Berger pleaded guilty in 2000 to securities fraud.
The suit against Bear Stearns was an attempt to hold hedge funds’ prime brokers responsible for investigating fraudulent clients. However, it was ruled that Bear Stearns had acted in good faith. The eight person jury in Manhattan concluded on June 27th that Bear was not liable for failing to see the discrepancies in the hedge fund’s books.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com
Reuters India- A Chinese fund manager has won a lunch with famed U.S. investor Warren Buffett after bidding $2.11 million for the opportunity in a charity auction, more than three times what the lunch fetched last year.
Zhao Danyang, who runs Hong Kong-based Pureheart China Growth Investment Fund, had the winning bid in the eBay Inc auction that ended late on Friday.
Proceeds of the lunch with the 77-year-old chairman of Berkshire Hathaway Inc benefit Glide, a nonprofit foundation in San Francisco that offers programs for the poor, hungry and homeless.
Mohnish Pabrai, an Irvine, California-based investor, paid $650,100 for the right to dine with Buffett last year.
Buffett began donating lunches in 2000 after his wife Susan introduced him to the Rev. Cecil Williams, who founded Glide and runs the Glide Memorial United Methodist Church. The auctions, including the current one, have grossed more than $4 million for the organization. Last year’s winning bidder paid $650,000 for lunch with Buffett.
New York Times- Christopher Cooper-Hohn and his wife, Jamie, follow a simple economic formula: he makes money, and she gives it away.
Mr. Cooper-Hohn runs the Children’s Investment Fund, or T.C.I., a successful — and controversial — hedge fund that has become a gadfly to corporate giants like CSX, the American railroad. Ms. Cooper-Hohn leads an affiliated charity, the Children’s Investment Fund Foundation, which uses some of the profits that T.C.I. earns to finance programs for underprivileged children.
The partnership has made the Cooper-Hohns the most generous philanthropists in Britain. Last weekend, their foundation reported a £439 million ($856 million) jump in funds for fiscal 2007, reflecting £324 million in donations from T.C.I. and the Cooper-Hohns.
Bloomberg – Bear Stearns Cos. didn’t investigate the financial health of a hedge-fund client that later collapsed because its claim of an annual 20 percent return on investment “made perfect sense,” a former executive at the firm said.
Bear Stearns was sued in 2001 by a bankruptcy trustee on behalf of creditors of the now-defunct Manhattan Investment Fund Ltd. U.S. Trustee Helen Gredd alleged New York-based Bear Stearns was liable in part for $400 million in investor losses because it didn’t properly inspect the fund’s books, according to a complaint originally filed in a Manhattan bankruptcy court.
A senior Bear Stearns executive learned in 1998 that the fund was claiming a 20 percent return when the securities firm’s records showed a $190 million loss, the trustee said in court papers. The executive, Fred Schilling, was head of prime brokerage sales in 1998 when an investor in the hedge fund praised its returns to him at a cocktail party, he said.
“With the information I had, that Ernst & Young was a third-party administrator, and there were other prime brokers involved, it made perfect sense,” Schilling, referring to the New York-based auditor, testified today during a trial of the case in Manhattan federal court. The executive said he learned an affiliate of the accounting firm aggregated losses and gains from other parties to arrive at the final return rate.
Under U.S. bankruptcy law, if Gredd can prove the securities firm failed to diligently investigate the fund, she can recover around $141 million on behalf of creditors.
Bear Stearns spokeswoman Elizabeth Ventura declined to comment.
New York (HedgeCo.Net) – The proxy battle waged by two hedge funds against railroad operator CSX is far from over, despite a ruling against the funds last week.
TCI, who runs the Children’s Investment Fund of Britain, and 3G Capital Partners, continue in their quest to elect 5 nominees to the board of CSX, citing lack of railroad experience among the current 12 members. The hedge funds have a combined 8.7% share in CSX.
A Manhattan court recently ruled that the two hedge funds had violated disclosure regulations, though there was nothing the judge could do to stop the funds from voting their shares at the company’s annual meeting on June 25, much to the dismay of CSX.
The ruling also stated that, “any penalties for defendants’ violations must come by way of the Securities and Exchange Commission or the Department of Justice.” CSX may appeal the decision.
The hedge funds wish to gain seats on the board in order to gain a strategic vantage point from inside the company. Funds may do this in an attempt to gain higher returns for shareholders.
“Michael Ward, the Chairman and CEO of CSX, wondered why we haven’t just taken our profits and sold our shares, much as the board and management of CSX have done over the past two years. If we believed that CSX already had achieved its full operating potential, that’s exactly what we would do. However, in our view, CSX has only just begun to improve…” said the hedge funds in a recent letter to shareholders, prompting them to send in their proxy cards.
Alexandre Behring from 3G and Chris Hohn from TCI are two of nominees looking to gain seats. The other three hopefuls are not affiliated with the funds, but have experience in the railroad industry, something that the fund’s believe is crucial to the value of the company.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com
MANILA (Reuters) - A unit of investment fund Ashmore Group said on Friday it has offered to buy the remaining 60 percent stake in Philippine oil refiner Petron for nearly $827 million, which would give it full control of the company.
SEA Refinery Holdings B.V., a company owned by Ashmore Investment Management Limited, agreed to buy a 40 percent stake in Petron for $550 million from Saudi Aramco earlier this year.
West Palm Beach (HedgeCo.Net)- Francis Koenig, Chairman of AdultVest Inc., announced the acquisition of iPorn.com. The acquisition coincides with the firm’s online marketplace topping $7 Billion in available capital for adult industry related investments.
"We are very excited about the acquisition… Investors in our Priapus Investment Fund, LLC are extremely pleased to be a part of this landmark purchase. We have very big plans for iPorn. This acquisition is a natural fit." says Koenig.
With AdultVest growing at the rate of $300 Million per week, they last year launched the Bacchus Investment Fund and the Priapus Investment Fund, both also aimed at attracting the open-minded investor and the billions of dollars spent on adult entertainment in North America every year.
Koening says, "Transparency and liquidity builds credibility and investor confidence, which ultimately drives the price of a company higher. I believe this is the formula to unlocking value in some of the adult industry’s hidden gems. Wait till you see what we have in store."
Another feature that will appeal to investors, Koening says, is that the firm does not take its performance fee until 100% of the capital is returned to its clients.
