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.
Boston Globe – French bank BNP Paribas’s revenues from corporate and investment banking nearly doubled in the second quarter as robust investor demand boosted revenues from the bank’s fixed income business unit.
BNP Paribas’s CIB revenues totaled 3.351 billion euros ($4.82 billion) for the quarter, up 81 percent from the second quarter of 2008, and following record revenues of 3.696 billion euros in the first quarter of 2009.
”Once again, fixed income revenues were exceptional,” said David Thebault, head of quantitative sales trading, at Global Equities, in Paris.
Marketwatch – When the $9.2 billion Connecticut hedge fund Amaranth Advisors collapsed in 2006, securities attorneys jumped all over each other to express gleefully how the markets absorbed such a mega-fund failure.
In fact, the markets did soak up the implosion fairly well.
However, two and a half years later, policymakers aren’t so sure the volatile and fragile markets of 2009 could handle another mega-hedge fund collapse.
FT Alphaville – Centaurus Capital is running down its flagship hedge fund after investors with the London activist failed to back an emergency restructuring. Centaurus, founded by former BNP Paribas traders Bernard Oppetit and Randy Freeman, will now repay the bulk of investors in the $1.2bn Centaurus Alpha fund, with only a handful expected to remain.
The failure to persuade half the investors to lock up their money until June, in return for lower fees, is a surprise as others – including the flagship funds of RAB Capital and Henderson – have won investor backing for similar proposals.
Times Online – The European Parliament will support calls tomorrow for Europe-wide legislation aimed at making the inner workings of hedge funds and private equity more transparent.
The proposals – championed by Poul Nyrup Rasmussen, the Socialist MEP and a former Danish Prime Minister – call for clear rules for these financial players, whose influence on the economic landscape is increasing.
MEPs want the European Commission to present, before the end of the year, legally binding minimum transparency rules on how investments are financed. These rules would also cover the qualifications of managers, possible conflicts of interest, registration of hedge funds and disclosure of ownership structures.
Peter Skinner, a Labour MEP and the party’s spokesman on financial services, said yesterday: “Current self-regulation attitudes are not enough to arrive at satisfactory conclusions, especially in the light of the current crisis. This is an important step to tackle current problems, including lack of transparency.”
New York Post – The Securities and Exchange Commission met last night in emergency session to consider requiring hedge funds to disclose their short positions and institutional traders to secure their records in anticipation of subpoenas.
Under the proposals, managers with more than $100 million invested in securities would have to issue reports of their daily short positions.
The meeting came after the SEC adopted two regulations that go into effect today that will force traders and brokers to actually borrow shares used in all short sales, amid concern that so-called "naked short sales" are driving down prices by flooding markets with sell orders.
New Zealand Herald – Eyebrows were raised this week when New York hedge- fund Elliott International nominated two Kiwi businessman – including recently appointed Infratil director Mark Tume – to join the Telecom board.
Telecom is on the fringes of the media world but National Party proposals for a huge broadband rollout will have an enormous impact on media and suggest Telecom will have a big role in media infrastructure.
And Elliott’s press release – linking the nomination of Tume and Mark Cross to Elliott’s calls for a wider structural break-up of Telecom – have added to questions about the way ahead for New Zealand’s biggest publicly listed company.
Should Tume win a place on the board he would bolster the bridge between two big infrastructure companies – Telecom and Infratil.
FierceFinance- Hedge fund regulation is a hot topic right now. But we’ve heard only a little about that perennial issue: whether retail investors should be allowed more–or less–access to funds. Current proposals, driven by the credit crunch, would make it harder to qualify as an accredited investor. AllAboutAlpha suggests that current proposals would result in a drop in the pool of retail assets by about 50 percent.
Perhaps this is not a bad time to revisit the idea. The age-old thought has been that most retail investors generally lack the sophistication necessary to really invest safely in hedge funds. But AllAboutAlpha notes a recent article by Houman Shadab of George Mason University that argues retail investors are actually hurt by restrictions on investing in hedge funds. He makes a number of good points, one of which is the idea that most hedge funds are not as complex as publicly traded corporations. In some cases, understanding various financial and other companies requires a certain amount of knowledge.
Bloomberg- J-Power shareholders defeated a proposal by U.K. hedge fund TCI for the company to double its dividend, ending a monthlong proxy battle and sending the stock to its biggest decline since February.
Shareholders of Electric Power Development Co., the official name of Japan’s largest power wholesaler, rejected all five proposals by the investment company including limiting cross- shareholdings and doubling the yearly dividend at the utility’s annual general meeting in Tokyo today. The investors approved the board’s proposal to raise the payout by 10 yen to 70 yen.
Today’s vote marks the end of a public spat between the utility and The Children’s Investment Fund Management (UK) LLP, as the utility’s largest shareholder is officially known. The verdict undermines efforts by an increasing number of foreign investors pushing Japanese companies to improve shareholder returns that are less than half of those in the U.S.
Reuters- Activist hedge funds have struck their first victory in France, building on successes in Britain and the Netherlands, where their aggressive tactics have forced several companies to bend to their will.
Centaurus Capital and Pardus Capital Management got their way at French IT services company Atos Origin on Wednesday, with the ouster of chairman Didier Cherpitel and appointment of Jean-Philippe Thierry as chief executive and the creation of a strategy committee.
The hedge funds had been at odds with Atos management for months, culminating in the company adjourning its annual shareholders’ meeting last week to prevent a vote on the funds’ proposals.
