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.
Bloomberg – Alberto Micalizzi, founder of the hedge fund firm Dynamic Decisions Capital Management Ltd., said allegations that he invested in worthless bonds are unfounded and investors will recover close to 100 percent of their money.
The firm’s main hedge fund, with a net asset value of $550 million as of Dec. 31, is being liquidated in the Cayman Islands after investors raised questions about some of its holdings. The U.K. Serious Fraud Office, which prosecutes white-collar crime, opened a probe into the London-based firm last week after the matter was referred to it by the Financial Services Authority.
New York (HedgeCo.net) – A draft copy of a law obtained by Ruters from the European Commission is looking at how hedge funds are paid, and may ask hedge fund managers to prove that the pay structure does not encourage risk-taking.
The pay structure recommended by the Swedish contingent of the European Commission demands a balance for the amount that hedge fund managers get paid as salary and bonuses. Among other conditions, the new law demands that “variable remuneration” spread over “at least three years” and in cases where the “variable element is particularly high”, then 60pc of the pay should be deferred.
“Because of these looming hedge fund regulations put forward by the European Commission, we very likely to see London lose its reputation as a hedge fund hot spot. ” said Andrew Schneider, Co-founder of HedgeCo Networks.
BlueCrest Capital Management, the $15.4 billion hedge fund has joined Europe’s largest hedge fund, Brevan Howard Asset Management LLP, to announce the creation of offices in Switzerland. BlueCrest Capital management is planning to move a 50 of their 300 employees from their London office to a Geneva based office which will not be under the jurisdiction of the European Commission.
Hedge funds are demanding an alteration to the proposal.
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Bloomberg – Lucidus Capital Partners LLP, a new joint-venture of hedge fund manager Bruce Kovner’s Caxton Associates LLC, has raised about $500 million for a high-yield debt hedge fund, three people familiar with the situation said.
Darryl Green, chief executive officer of Caxton Europe Asset Management in London, will co-manage the fund with Geoffrey Sherry, a Caxton portfolio manager based in New York, said the people, who declined to be identified because the information is private. The pair will continue to run a $1 billion high-yield bond fund for Caxton, the people said.
Caxton will have a 25 percent stake in the new firm with the balance held by Green, Sherry and other staff members, the people said. The fund will use Caxton’s infrastructure and controls to help attract institutional investors reluctant to put money into a startup fund firm.
Reuters – Francois Barthelemy has had a tough year. The F&C Partners manager saw assets under management in his hedge funds slump by 80 percent as the financial crisis gripped, and revived performance is yet to bring new inflows.
Speaking to Reuters in his office high above the railway tracks into London’s Liverpool Street station, Barthelemy is hopeful for a market recovery which lasts into 2010, but still rails at the knee-jerk response as markets were jolted.
“People panicked and started to leave this space in droves,” Barthelemy said.
BBC News – The UK has “particular difficulties” regulating hedge funds “to put it politely”, Mr Steinbrueck told the weekly German news magazine.
“There clearly is a lobby in London that wants to defend its competitive advantage tooth and claw,” Mr Steinbrueck told Stern magazine. Germany and France have led calls for more restrictions on banks, which have been resisted by the US and UK.
Reuters – Internet auction and services company EBay Inc has reached a deal to sell its online telephony unit Skype to a group of private investors, the New York Times said, citing two people briefed on its plans.
Andreessen Horowitz, a new venture capital firm headed by the Netscape co-founder Marc Andreessen, is likely to be among the investors in the group, the paper cited the people as saying.
London-based Index Ventures and Silver Lake Partners may also be involved in the deal, one of the people told the paper.
Reuters – Opportunistic property investment firm NewRiver Retail said on Monday it would list in September with a capitalisation of 25 million pounds, two months after suspending a planned 250 million pounds float.
NewRiver expects its shares to be admitted to London’s Alternative Investment Market on September 1, it said in a statement. The shares would also be admitted to the Channel Islands Stock Exchange.
Reuters – The UK Railways Pension Schemes, one of the UK’s largest plans, has invested 65 million pounds in London-based asset manager Goodhart Partners’ global long-short equity fund of hedge funds.
Railpen Investments, the fund manager of the industry-wide scheme with assets of over 15 billion pounds, has some 8 percent of its assets in hedge fund strategies.
”Goodhart’s Long-Short fund offers large institutions exposure to small and specialist hedge fund managers, with the degree of governance and due diligence these allocations require,” said Paul Jeffries, an investment analyst at Railpen.
Evening Standard – A prominent hedge fund manager has claimed that gold investment is proving popular in the US over fears about inflation.
Moonraker, a London-based independent firm, has managed over $330 million worth of assets at BDO Stoy Hayward Investment Management since September 2003.
The company carried out a survey of 22 US hedge fund managers and found that 20 have bought gold bullion because they expect quantitative easing to push prices higher. Read Complete Article
Commodity Online – A prominent hedge fund manager has claimed that gold investment is proving popular in the US over fears about inflation.
Moonraker, a London-based independent firm, has managed over $330 million worth of assets at BDO Stoy Hayward Investment Management since September 2003.
The company carried out a survey of 22 US hedge fund managers and found that 20 have bought gold bullion because they expect quantitative easing to push prices higher.
Caribbean Net News – The UK Serious Fraud Office is investigating sales of credit-default swaps and structured-finance products, including collateralized debt obligations, prior to the credit crisis, following up an earlier investigation into a hedge fund and a related British Virgin Islands-registered company.
The SFO is looking into whether banks sold such products with flawed valuations, said Sam Jaffa, a spokesman for the government agency in London. No specific companies or credit rating agencies have been targeted under the investigation, he said.
“We’re looking generically at what might give us a cause for concern or a possible lead for finding out more,” Jaffa said in an e-mail Monday. “There’s no suggesting that across- the-board valuations were flawed. However, how valuations are arrived at, what is bundled into the funds and how they were sold are areas of interest.”
Bloomberg – The European Union’s plan to regulate hedge funds will cost the bloc’s pension industry about 25 billion euros ($36 billion) a year, the Alternative Investment Management Association said.
The proposed law would drive pension funds toward more traditional assets such as equities and bonds or cut the returns on their investments in hedge funds and private equity, London- based AIMA, the largest trade group representing the industry, said in a statement today.
“This is an estimated figure but it shows the potentially enormous impact that the directive could have on Europe’s pension funds and in the longer term, Europe’s pensioners,” AIMA Chief Executive Officer Andrew Baker said in the statement.
