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.
Barrons – A big question surrounding BlackRock’s $13.5 billion purchase of Barclays Global Investors, including its iShares exchange-traded-funds business, is how effectively a passive management group can work with an active one.
The combined firm will have more than 9,000 employees in 24 countries. Barclays will retain a 19.9% stake in the firm, which will manage a combined total of $2.7 trillion in assets.
"For two large, successful asset managers, it’s never an easy task to integrate," says Charles Rauch, analyst at Standard & Poor’s, which lowered its long-term credit rating on BlackRock a notch, to single-A-plus, citing "real" integration risk, among other things. However, some of the risk is mitigated by the fact that BlackRock and BGI have few overlapping operations, he adds.
West Palm Beach (HedgeCo.net) – "Alpha" released the results of the 2009 Hedge Fund 100, the magazine’s eighth annual ranking of the world’s biggest single-manager hedge fund firms. Although most hedge fund managers in 2008 couldn’t escape the carnage from what many have called the worst financial crisis since the Great Depression, their industry overall lost less money than did other investors. For their part, the firms in the Hedge Fund 100 managed a combined $1.03 trillion in assets at the beginning of this year, down from the record $1.35 trillion that the world’s 100 largest firms managed at the end of 2007.
Bridgewater Associates leads the Hedge Fund 100 with $38.6 billion in assets under management. The Westport, Connecticut-based firm, which was founded by Raymond Dalio more than 30 years ago, grew by more than $2 billion in assets last year, based on the strength of its Pure Alpha Strategy hedge fund, which was up 8.7 percent in 2008. New York-based JPMorgan — the world’s biggest hedge fund firm a year ago — saw its assets fall 26.4 percent, to $32.9 billion, in large part because of redemptions and poor investment performance at its Highbridge Capital Management group.
Redemptions have been a challenge for most hedge fund firms, even those that managed to deliver positive returns in 2008, as investors have looked to raise cash where they can. In the fourth quarter of last year, hedge funds saw a net outflow of $152 billion, with most of the assets coming out of bigger firms. In recognition of this new reality, "Alpha" changed the methodology for the Hedge Fund 100, using firm and fund asset totals as of January 1, 2009 (in the past the magazine collected December 31 data). To qualify for "Alpha’s" 2009 Hedge Fund 100, a firm needed at least $4 billion in assets under management, compared with the $6.25 billion minimum a year ago.
The ten biggest hedge funds managed a combined $264 billion at the start of 2009, down nearly 12 percent from year-end 2007.
"Alpha’s" Hedge Fund 100 Top 10
Rank Firm Total Capital ($ millions) 1 Bridgewater Associates 38,600 2 JPMorgan Asset Management 32,893 3 Paulson & Co. 29,000 4 D.E. Shaw & Co. 28,600 5 Brevan Howard Asset Management 26,840 6 Man Investments 24,400 7 Och-Ziff Capital Management Group 22,100 8 Soros Fund Management 21,000 9 Goldman Sachs Asset Management 20,585 10 Farallon Capital Management 20,000 10 Renaissance Technologies Corp. 20,000 To view the complete rankings for the Hedge Fund 100, visit www.alphamagazine.com
Times Online – The verdant olive groves of northeastern Corfu, which obscure the stuccoed villas and the view of yachts moored along the coast, are not a world used to celebrity attention. This is precisely why they are a regular haunt of the reclusive wealthy.
On the only road between Aghios Stefanos and Kerasia, is the villa of Jacob and Serena Rothschild, scions of the banking dynasty. The odd snippet of life beyond the walls has crept into the public domain – it boasts a marble enclosed pool, artificial waterfalls and, according to the owner, “one of the most spectacular marine views in the world”. But for a decade it has remained a secluded retreat for the Rothschilds, free from prying outside eyes.
The return of Lord Mandelson, the Rothschilds’ close friend, to government at the start of this month has, however, sparked an extraordinary firestorm that has put events on the island this summer at centre stage. These tit-for-tat allegations have devastating consequences for the reputations – and the friendships – of those involved.
Bizjournals.com – A Minneapolis hedge fund has sued Petters Group Worldwide, alleging it was defrauded out of $60 million in a deal involving “imaginary televisions.”
Interlachen Harriet Investments, a Cayman Islands-based unit of Minneapolis-based Interlachen Capital Group, filed the suit Wednesday, saying that it gave $60 million to Petters Co. Inc. to purchase electronic merchandise such as televisions. PCI, a unit of Petters Group Worldwide, was to resell the televisions at a profit. Interlachen alleges that PCI never purchased any merchandise, and used the investment to fund former CEO Tom Petters’ other business ventures, pay down debt and for personal use.
The suit is similar to federal allegations made last week that Petters and several associates bought and sold nonexistent goods with investors’ money for more than a decade by creating the image of a successful retail business.
