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.
Reuters Dubai- Bahrain-based investment bank Investcorp’s INVB.BH profit in the six months to June 30 fell to about a third of the year-ago period as asset-based income dropped on global economic woes.
The company, which generates most of its income from investing Gulf Arab wealth in the West, made $63.3 million in the period, down 71.5 percent from $222.49 million in the year-earlier period.
The Bahrain- and London-listed firm made net income of $151.1 million in the fiscal year to June 30 compared with $302.3 million in the previous fiscal year, it said in a statement on Thursday.
Wealth Bulletin- In January, 14 of the UK’s largest hedge funds, including Man Group, Brevan Howard and Gartmore, backed the Hedge Fund Working Group’s best-practice standards.
These aim to improve governance and disclosure and to promote transparent and independent valuation.
Six months on, however, only one, unnamed, hedge fund beyond the 14 working group members, has signed up to the code.
Sir Andrew Large, chairman of the working group, believes it is unrealistic to expect hedge funds to sign up immediately.
Reuters UK- Roughly three dozen U.S. hedge funds have opened for business so far this year, 50 percent less than the same period last year, according to data released on Tuesday that underscored how tough it is to launch one of these portfolios now.
But the data also shows investors, like pension funds, endowments and wealthy individuals, are still flocking to these loosely regulated funds in search of better returns as the credit crisis and slower economic growth dents performance.
According to numbers compiled by trade magazine Absolute Return, the 35 new funds began trading with a total of $19.5 billion (9.9 billion pounds) in the first six months of 2008. That compares with 72 funds launched with $14 billion in the first half of 2007.
Reuters- Beleaguered Swiss bank UBS is considering the sale of Paine Webber, the heart of its U.S. wealth management business, according to sources with direct knowledge of the matter.
UBS is under pressure from the Swiss financial watchdog and from one of its top shareholders, Olivant, to overhaul its business after more than $37 billion (18 billion pounds) in writedowns during the credit turmoil.
The bank’s management, led by Chief Executive Marcel Rohner, is also grappling with the U.S. trial of a former employee for helping a billionaire client hide $200 million.
Guardian.co.uk- Foreign sovereign wealth investors are targeting London’s hedge fund industry as they seek to boost returns on their vast savings, much of it generated from trade with the west in oil and other commodities.
The hedge funds have seen billions of pounds pour into their investment plans at a time when the industry desperately needs cash to replace debt funding that collapsed during the credit crunch.
According to a survey by the magazine Hedge Fund Manager Week, the rapidly expanding group known as fund of hedge funds are the main beneficiary of investments from sovereign wealth funds. Assets in fund of hedge funds, which spread their investments across a range of individual projects, have grown 10% in the last six months to £700bn.
Fortis Prime Fund Solutions topped the table of funds, with assets under administration of £107bn. Total industry assets have reached £2.2tn, according to the magazine’s annual Hedge Fund Assets Under Administration survey.
New York Post- Phil Falcone’s Harbinger Capital Partners – the hedge fund that won a battle to land board seats at The New York Times Co. – is expanding its size and presence to capitalize on its newfound clout.
Falcone is seeking to use the reputation gained from the Times fight and winning bets against subprime to springboard Harbinger, which now has $25 billion in assets, toward new goals, according to people familiar with the situation.
On the heels of gains this year of close to 30 percent, Falcone is looking to attract $4 billion over the next six months, The Post has learned.
Sydney Morning Herald- The waste management business Transpacific has attempted to snuff out concerns about its ability to service its $2.6 billion of debts, arguing that the market has failed to recognise its "incredible cash flow" and the value of its landfill sites.
After spending six months appeasing investor concerns over the group’s debt exposure, the executive chairman, Terry Peabody, said landfill sites were "another great asset of the company that I don’t think very many people realise".
He told ABC TV’s Inside Business that Transpacific could realise up to $100 million from its 26 hectare Tullamarine tip in Melbourne, which has come to the end of its life.
Financial Times – Hedge funds have more than $2,900bn under management, according to a survey of valuers of their assets, sharply up on last year in spite of the credit crunch and a series of high-profile problems in the industry.
The survey of assets under administration by Hedge Fund Manager Week, a trade magazine, showed the total had jumped 20 per cent in the past year and continued to climb over the past six months even as the credit squeeze intensified.
The scale of the growth – up by $230bn in the six months to April – suggests concerns about hedge fund losses and a slowdown in flows of new money into the industry may be overstated.
However, the rate of growth is slowing, with the 9 per cent rise in the most recent six months well below the 17 per cent growth in the magazine’s last survey.
Hedge fund administrators act as independent valuers of hedge fund assets, giving investors updates and providing regulatory, legal and accounting services.
They are used by almost all European hedge funds and an increasing number of US funds, who are under pressure from investors to provide independent valuations.
Valuation practices are being closely scrutinised by regulators, with hedge funds in the UK and US setting up codes of best practice this year, with a focus on how to deal with hard-to-value assets such as private equity or structured credit.
