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.
The Australian- The SEC’s decision to take a hard line on the illegal practice of naked short-selling is a band-aid attempt to fix a problem that is plaguing most stock markets in various guises, but at least it is having a go.
The order lasts 30 days and covers 19 stocks, including the Wall Street jockeys Merrill Lynch, Lehman Brothers and troubled mortgage giants Fannie Mae and Freddie Mac.
In sharp contrast, the Australian Government has dragged its heels on short-selling abuses and isn’t expected to make any announcements until the second quarter of the year.
Meanwhile, stocks are being bludgeoned on the ASX as hedge funds borrow stocks from our super funds to attack companies. They are doing it with ease because there is little buyer support in the market, little transparency on covered short-selling, no capital gains tax and small fees charged on share lending.
MSN MoneyCentral- A British hedge fund said Monday it will accept the Japanese government’s rejection of its proposal to raise its stake in a major utility — although it added that it still doesn’t agree with the reasoning behind the order.
The Children’s Investment Master Fund had proposed raising its stake in J-Power — Japan’s largest electricity wholesaler — to as much as 20 percent from 9.9 percent. The government rejected that proposal earlier this year, citing potential disruptions to public order.
The fund has contested the decision as lacking transparency and including incorrect information and false premises.
But it said the government was unlikely to change its mind. The fund will now instead focus on improving corporate governance at J-Power, it said in a statement.
Times Online- Proper consultation is the rock upon which good regulation is founded. And for the Financial Services Authority, consultation is in its DNA. So when it does the unthinkable and drops a bombshell without warning or discussion — as last week with the announcement of the Short Selling Instrument — people are bound to be left shellshocked and confused, especially if they are lawyers under pressure from clients to advise on what needs to be done.
Designed, allegedly, to bring greater transparency to the market in the aftermath of the recent rights issues shambles by HBOS and Bradford & Bingley, the measure could have been called the “short notice instrument” because there were mere days between its announcement and its operational effect. The FSA’s justification for the move was that market conditions gave rise to increased potential for market abuse and therefore “immediate measures” were necessary to “maintain market confidence and prevent potential abuse during rights issues”.
Scotsman- Mysterious global hedge funds which hope to profit from betting that the price of HBOS shares will continue to plummet emerged from the shadows yesterday.
On the first day of new rules to bring greater transparency to "short selling", three previously secretive funds were forced to declare their stake in the Edinburgh-based bank.
Under the new regulations, US-based investment firm Harbert Management Corporation (HBC) revealed it had shorted 3.3 per cent of HBOS shares – around £340 million – through its Harbinger hedge fund.
Independant- European Union Financial Services Commissioner Charlie McCreevy has defended hedge funds in relation to the fallout from the US subprime mortgage market collapse.
The move comes in tandem with a report commissioned by French President Nicolas Sarkozy which states that France should join a German initiative asking the European Union’s executive arm to propose measures boosting hedge fund transparency.
Berlin has been pushing for the creation of a code of conduct for hedge funds within the group of Eight club of industrialised nations, even though regulators show little appetite for imposing tougher rules on the industry. Mr McCreevy is considered a general critic of regulation in financial markets.
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.
