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 – India Church Pension Fund has invested in Future Group backed Indivision India, Advantage Partners and IDG Accel China.
The $8 billion Church Pension Fund based in New York City has roped in Eric Mason(ex-Carlyle Group), to open a new Hong Kong office, its first in Asia, reports Dow Jones.
Mason is a former JP Morgan banker and most recently headed Carlyle Group’s Asian leveraged finance team(set-up in 2007 but disbanded in November 2008 after the credit crunch hampered its ability to raise funds). He will look after all asset classes including private equity, real estate and hedge fund investments in the continent, the report said.
Guardian.co.uk – Hedge funds and banks are expected to bear the brunt of derivative losses estimated at $15bn (£9.4bn) linked to the collapse of Iceland’s three major banks – Landsbanki, Glitnir and Kaupthing – which failed in rapid succession last month.
The complex unwinding of trades linked to debt issued by the banks began yesterday with a settlement auction to determine the payout price on credit default swap (CDS) contracts – insurance taken out against the risk of debts going bad – for Landsbanki.
Payouts on all three banks are expected to be some of the largest ever seen in the $54.6tn CDS market – greater than those relating to Lehman Brothers, whose collapse triggered the meltdown of the global financial system.
The high settlement prices for Icelandic bank CDSs will be a blow to hedge funds, banks and other derivative traders who insured the debt.
The Independent – The financial fall-out in the vast, opaque credit default swaps market caused by the collapse of Lehman Brothers could be smaller than originally feared, analysts say.
Optimism was rising yesterday that the unwinding of insurance contracts on Lehman debt might involve the transfer of barely $6bn, and that the settlement next week can be completed without a major player failing to pay.
The concern had been that banks and hedge funds who promised to compensate trading partners for losses on Lehman bonds would not have the money to do so, triggering a chain reaction of losses through the financial system.
Although Lehman bonds were valued in a closely-watched auction last Friday at just 8.625 cents on the dollar, and sellers of credit default swaps will have to pay out a higher-than-expected 91.375 cents on the dollar, the great majority of players are both buyers and sellers of credit default swaps – meaning they can net off their exposure.
