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.
Telegraph.co.uk – The chatter was that Harbinger, a powerful US hedge fund run by Philip Falcone, has built a small stake in African Minerals and has been talking to London brokers in recent days about picking up more stock. Harbinger declined to comment.
If Harbinger has built a stake in the company, it is not clear what the hedge fund’s intentions are for African Minerals. The group runs a variety of strategies. Sometimes the investment fund acts as a passive, long-only investor. However, Harbinger also has a reputation for being activist and occasionally bids for companies. Last year, for example, Harbinger made a takeover approach for blue-chip satellite services group Inmarsat, which slipped 6.3 to 495.2p.
Mr Falcone is well known in City circles. The trader hit the headlines when it emerged that Harbinger was one of the main hedge funds to have shorted HBOS before the Government orchestrated the bank’s emergency merger with Lloyds, now Lloyds Banking Group.
MONACO (Reuters) – Former Insight Investment fund managers Patrick Armstrong and Ana Cukic-Armstrong have launched a new fund management business that will invest in a broad range of assets and seek to beat inflation.
The firm, Armstrong Investment Managers, will try to combine hedge fund-style flexibility with the liquidity and lower fees of traditional asset management. It will launch funds for retail, high net worth and pension fund investors at the end of the summer, Patrick Armstrong told Reuters on Tuesday.
The pair were co-heads of the multi-asset group at Insight Investment, now owned by Lloyds Banking Group. They ran around 1.2 billion pounds in assets including the Diversified Target Return fund, which over the past three years fell 2 percent, beating an average 11 percent fall among peer funds.
"We think there is a middle ground between traditional funds and hedge funds," Armstrong said. "Hedge funds have been opaque, illiquid and had very high charges."
Independent – The collapse of Lloyds’ share price on Friday afternoon was deeply upsetting – and not just for shareholders in the bank.
Two weeks ago, those annoying folk at Paulson & Co, the hedge fund that has made a fortune from the credit crunch, took a sizeable short position in the bank. It looked like a duff bet: having sold Lloyds short at about 65p, the fund watched as the bank’s share price climbed to about 125p. And then the HBOS loss was disclosed and Lloyds plunged to 61p on Friday. That calamitous drop will have earned Paulson tens of millions of pounds. Darn it.
Bankers at the Japanese investment bank Nomura are cock-a-hoop at having earned fat fees advising Chinalco on its £200bn investment in the mining giant Rio Tinto. For various cultural and historical reasons, it is pretty unusual for Japanese companies to win work from China, so this was a breakthrough deal for Nomura. It was secured by the mining team that Nomura acquired when it bought bits of Lehman last year. In every cloud there’s a silver lining.
Times Online - Some of Britain’s most powerful fund managers are setting aside billions of pounds to fund cash calls from sound companies hamstrung by a lack of bank lending.
Investment bankers say that they have been inundated with calls from Britain’s biggest institutional investors over the past few weeks offering billions of pounds to fund the right recapitalisation deals. The institutional investors, corporate brokers say, are insisting that they be shown deals before private equity funds that are also waiting to snap up bargains.
Scottish Widows Investment Partnership, owned by Lloyds Banking Group, and M&G, owned by Prudential, the insurer, are among big investors ready to take up equity or debt of UK plc, whose shares have slumped in the past year. The FTSE all-share index is down almost 30 per cent over the period.
Guardian Unlimited – Billionaire hedge fund manager John Paulson has made a £100m profit by betting that the Royal Bank of Scotland’s share price would fall dramatically, according to calculations by the Guardian, adding fuel to the debate about the impact of short-selling on bank stocks.
New York-based Paulson, who made more than $3bn by betting against the US housing market, now appears to be profiting from positions placed on the assumption that bank shares would tumble in the aftermath of the market chaos caused by the demise of the sub-prime mortgage industry.
His hedge fund, Paulson & Co, was one of the few to trade through the ban imposed on short-selling by the Financial Services Authority in September to protect the rescue takeover of HBOS by Lloyds TSB.
Wall Street Journal – Experts say hedge funds are not responsible for the wholesale selloff in U.K. financial stocks which saw shares in the four remaining major banks dive to record lows earlier this week and prompted renewed calls to the U.K. financial regulator to reintroduce a ban on the short-selling of financial stocks.
While Lloyds Banking Group (LYG), HSBC Holdings PLC and Royal Bank of Scotland Group PLC (RBS) all closed in positive territory Wednesday with Barclays PLC (BCS) only down 0.07%, all four had had massive falls Monday and Tuesday.
