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.
Reuther – A group of wealthy clients who invested $50 million with two hedge funds felled by last year’s credit crisis are accusing Highland Capital Management’s partners of having lied about key facts.
LV Highland Credit Feeder Fund LLC, an investment vehicle managed by Long Vue Advisors in Boston, and several charitable foundations and wealthy individuals filed the lawsuit on Wednesday in a U.S. district court in Dallas.
The group is charging that the Dallas-based hedge fund firm and its co-founders James Dondero and Mark Okada and three other partners were dishonest about other clients’ requests to exit the funds at a time of increasing market turmoil.
Telegraph.co.uk – RIT Capital Partners, Lord Rothschild’s investment vehicle, had £36.5m ($58.3m) allocated to Atticus at the end of March 2008, but the company’s latest annual report shows the money has been entirely withdrawn.
The trust had invested in Atticus since 2000, and the holding was its largest single hedge fund investment last year.
Reuters – UK asset manager Bramdean Alternatives named Petersfield Asset Management Limited on Tuesday, as the bidder to rival the proposal by property tycoon Vincent Tchenguiz’s investment vehicle, Elsina, to oust its current board.
Bramdean said in a statement that Petersfield Asset Management Limited, is beneficially owned by Nicola Horlick, who founded Bramdean Alternatives in 2005.
Forbes – Following are some of the companies exposed to the alleged $50 billion securities fraud by Wall Street pioneer Bernard Madoff:
* AUSTIN CAPITAL MANAGEMENT – The company managed money for the Massachusetts state pension fund, which lost $12 million with Madoff, the pension fund said.
* BALOISE-Holding AG – The Swiss insurer will have to writedown $13 million after investing in hedge fund Kingate Global, which in turn invested in Madoff’s investment vehicle.
New York (HedgeCo.Net) – New York University is the latest victim in Bernard Madoff’s web of lies, claiming it lost $24 million in a fund of fund that invested with the infamous Ponzi schemer.
According to a complaint filed Christmas Eve in a Manhattan court, J. Esra Merkin invested NYU’s money with Madoff through two of his funds, Gabriel Capital LP and Ariel Fund Ltd., without telling investors and without performing proper due diligence.
Gabriel Capital, which manages approximately $1.5 billion, is planning to liquidate in light of the Madoff losses and because the fund posted losses this year of around 39 percent. A Manhattan judge has barred Merken from liquidated Ariel until a hearing set for January 6th. NYU said it had about $94 million invested in the Ariel Fund.
NYU spokesman John Beckham explained that Merkin “was explicitly told this was not a proper investment vehicle,” when he brought up Madoff. According to NYU however, Merkin had already invested the money with him.
Madoff was arrested on December 11th after an alleged confession to his sons in which he admitted that his firm was one “giant Ponzi scheme.” It is estimated that investors will lose a total of $50 billion, making this the largest Wall Street scam in history.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
