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West Palm Beach (HedgeCo.net) – UK fund manager, River & Mercantile, is launching an Equity Income Fund with the aim to invest in the best ideas generated by their UK team.
Hedge fund manager Richard Staveley is taking the lead with a philosophy which involves analyzing companies based on their potential, valuation and timing. In other words, he is looking for the potential growth opportunities in companies throughout their life cycle; companies that are attractively valued; and companies with earnings upgrades as the timing of these upgrades can have a positive impact on share prices.
Staveley qualified as a Chartered Accountant with PriceWaterhouseCoopers in 1999, before joining the hedge fund boutique Bradshaw Asset Management as an Assistant Fund Manager. In 2001 he moved to SGAM and became Head of UK Small Company investments in 2002. Richard joined River and Mercantile in August 2006. He holds the CFA designation. Richard is Research Director with responsibility for the team research function. As a Fund Manager he will be focused on the UK Unconstrained and Small/Mid Cap strategies.
At launch the fund is expected to yield approximately 5.1% and it will invest in companies of all sizes. In order to monitor risk, it will however invest no more than 15% in smaller companies and no more than 30% in medium sized companies. It can invest up to 100% in larger companies if this is where the manager finds the best opportunities.
River and Mercantile is a new long only investment management boutique. The business was incorporated in 2006 as a Limited Liability Partnership with significant management interest. The cornerstone investor is Pacific Investments which is owned by Sir John Beckwith.
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Chicago Tribune – Citadel Investment Group is covering "a substantial portion" of its operating expenses this year, a break from passing those costs on to clients, Katie Spring, a spokeswoman for the Chicago-based hedge fund, said Thursday.
"We felt it was the right thing to do." Spring said, citing Citadel’s "long-standing relationship with our investors."
Citadel declined to specify how much of the costs it would absorb, but estimates range from $200 million to $300 million. When management fees were high relative to returns in 2005, Citadel founder Ken Griffin reimbursed investors. The hedge fund will again start charging its standard fees in January.
Citadel’s two largest funds have suffered losses of almost 50 percent through November. Assets under management total around $13 billion and clients have requested about $1 billion worth of redemptions. Hedge funds typically finance operations by taking 2 percent of assets, then retaining 20 percent of profits to pay employee performance bonuses. Citadel bills investors for expenses, which can represent as much as 8 percent of assets, and keeps 20 percent of profits. Among expenses charged to investors are annual bonuses to Citadel employees, according to people familiar with the hedge fund.
Law.com – As Marc S. Dreier was being arrested for attempting to defraud hedge funds of more than $100 million, some of the 10 affiliates of Dreier LLP were peeling off and others were trying to hold the firm together even as money for insurance and some operating expenses is frozen.
Declarations filed Monday by the Securities and Exchange Commission in connection with a civil case it brought against Dreier also indicated that some firm attorneys were concerned that escrow accounts, which Dreier controlled, had been depleted.
One named partner of an affiliated firm, Vincent Pitta of Pitta & Dreier, stated in a declaration that the firm could not meet its expenses. The reason, Pitta said, was that he and Dreier were the sole signatories to the firm’s operating account, and Pitta had only limited authority to approve spending.
