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The Tribune – The more than $8.8 million judgment awarded to clients of Jeffrey Forrest has been paid, six months after a financial regulatory agency determined that the former San Luis Obispo investment adviser had misrepresented a risky hedge fund as being safe.
Forrest, who owned WealthWise LLC, and Associated Securities, an El Segundo-based broker-dealer with which his firm had been registered to sell securities, abandoned their appeal of the judgment in federal court, according to Phil Aidikoff, a Beverly Hills attorney representing the group of WealthWise investors.
Wall Street Journal – Some high-profile Bain Capital credit-investment funds are choking on losses of as much as 50%, said people familiar with the matter, the latest revelation in a day of shake-ups across the hedge-fund business.
The private-equity firm’s credit affiliate, Sankaty Advisors LLC, has lost between 40% and 50% across two funds that bought up highly secured corporate loans, these people said. The two vehicles had roughly $4 billion in assets just a few weeks ago, and used a relatively low amount of borrowed money to fund their investments.
Steep losses have also hit London hedge fund Centaurus Capital LP, which Wednesday offered its investors a chance to cut their fees. And, at Tudor Investment Corp., one of the oldest and best-regarded hedge funds, fund manager James Pallotta finalized a plan to run his own firm separate from longtime colleague Paul Tudor Jones.
MarketWatch – James Pallotta, vice chairman and managing director of U.S. public equities at Tudor Investment Corp., is leaving the giant hedge fund firm and plans to launch the Raptor Global Funds unit he runs as a separate business, according to a letter Tudor sent to investors this week.
Pallotta will spin off Raptor at the end of 2008 and set up a new, independent firm that will initially focus on public equity investments, Tudor explained. Over time, Raptor will branch out into private investments too, the firm added in the letter, a copy of which was obtained by MarketWatch.
"Tudor will support Jim in the creation of his new firm and anticipates that it will invest capital in new funds Jim launches," Paul Tudor Jones II, chairman of Tudor, wrote in the letter. "We expect there will be many opportunities for collaboration on investments in future years."
A spokesman for Tudor said the firm declined to comment.
Pallotta will continue to manage the Raptor Global and Altar Rock Funds as well as a portion of Tudor’s main BVI Global Fund. On Jan. 1, 2009, the management of the Raptor Global Funds will transition to the new firm.
