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.
Forbes – The investment office of the Guinness family, which made its fortune in brewing, has taken a stake in 47 Degrees North and will back future fund launches, the fund of hedge funds firm said on Monday.
Under the deal, Iveagh will be a minority shareholder in 47 Degrees North and provide seed capital for new launches, which are set to include emerging managers and innovative hedge fund strategies, the hedge fund firm said in a statement. It did not give the size of the stake.
Reuters – Investment firm SW1 Capital said on Friday it has bought into hedge fund platform PCE Investors and plans to build a controlling stake, cutting private equity firm Ubequity Capital Partners’ own holding.
PCE runs $1.6 billion (1.1 billion pounds) in assets and by next month will have 21 funds, run by 15 teams, in its stable. SW1 is hoping to exploit greater demand for robust and transparent hedge fund operations, thrown into the spotlight by the financial crisis and Madoff scandal.
The deal initially sees two-thirds owner Ubequity temporarily increase its holding as it and SW1 buy out minority shareholder Schneider Trading Associates.
Newark Star-Ledger – Managers of New Jersey’s embattled pension fund, criticized by lawmakers for bailing out a struggling BlackRock hedge fund in October, secretly gave two other hedge funds the same deal, records from the state investment council show.
The Canyon Special Opportunities Fund and GoldenTree Credit Opportunities Fund were each awarded $49.5 million in state funds on the same day the controversial $49.5 million bailout of a BlackRock Inc. fund took place, according to a memo released by the investment council this week.
The cash infusions were a shade below the $50 million threshold that triggers public scrutiny. The BlackRock deal riled prominent Statehouse lawmakers. So does the new revelation that there was not just one such deal, but three.
New York (HedgeCo.Net) – Citigroup Inc. will be liquidating its Corporate Special Opportunities fund after losing over half its value last month, according to a report by the Financial Times.
The hedge fund had frozen redemptions for almost a year before deciding to shut it down. Many funds freeze redemptions in hopes that market conditions will improve and to prevent a liquidity crunch that may just be fueled by fear.
According to the report, Citigroup infused the hedge fund with $450 million in credit and about $320 million in equity. In its heyday, the fund managed about $4.2 billion.
October was a rough month for hedge funds as a whole, with the average fund down almost 5.5 percent according to data from Hedge Fund Research. With only two months to go, 2008 looks to be the worst year ever recorded by hedge funds, with the average fund down almost 15.5 percent.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
West Palm Beach (HedgeCo.net) – Argo Group, an emerging markets investment manager, announced the launch of The Era Shopping Park Iasi. Projected to generate EUR 18 million ($25.7 million) in annual rental income the launch is funded by Argo’s private equity fund, the Argo Capital Partners Fund 1, together with a local joint venture partner, Omilos Group.
"From Argo’s perspective this has been an excellent investment," says Argo Capital Management chief investment officer Andreas Rialas. "Through our partnership with Omilos we acquired two excellent sites at a time when property and land prices were relatively low. Since then both projects are well advanced and demonstrating their potential to generate substantial returns."
The Park is the first of two planned retail parks to operate under the Era Shopping Park brand. The Iasi retail park will be the largest outside of Bucharest and the second largest in Romania.
Based in Romania’s second largest city, situated in the north-east of the country close to the Moldovan border. The Era Shopping Park Iasi will offer on completion more than 115,000 square metres of gross lettable area.
The second facility planned, the Era Shopping Park Oradea, is located in Oradea in the north-west of Romania, close to the Hungarian border. This smaller project with a gross lettable area of 65,000 square metres is expected to open in March next year. The Oradea site is projected to generate annual rental income of EUR 10.5 million.
"Economically, Romania continues to perform strongly. Following its EU accession, there has been a significant uplift in consumer spending and as demonstrated by tenant demand for Era, western European retailers are increasing their presence in the country," Rialas concluded.
The Argo Group has significant experience in property notably through the Argo Real Estate Opportunities Fund, a Guernsey-domiciled closed-ended investment company that invests in the commercial property markets of Central and Eastern Europe. The AIM-listed company is managed by Argo Capital Management Property, which has offices in London, Bucharest and Kiev.
The Argo Capital Partners Fund I was launched in August 2006 to focus on delivering private equity returns from different types of investments and situations in emerging markets. The fund, which was launched targeting a minimum internal rate of return of 40 per cent, has not yet exited any investments.
Its current portfolio includes Infarmasa, a generics pharmaceutical company in Peru, Nigerian commercial and retail bank Intercontinental Bank, Greek triple-play telecommunications Telecoms and Russian regional bank Probusinessbank as well as the Era Shopping Parks.
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LONDON (Reuters) – Political uncertainty, occasional bomb blasts and border militant insurgency do not stop Pakistan being a good investment destination, one of the first funds to target the country says, comparing the economy to a smaller India.
The Melchior Selected Trust Pakistan Opportunities Fund, launching this month and aimed at ultimately reaching some $200 million in Pakistani equities, says the country has been poorly portrayed and its economic fundamentals remain appealing.
"We believe Pakistan has been treated unfairly by the international media," David Graham, partner of fund manager Dalton Strategic Partnership.
New York (HedgeCo.Net) – Drake Management will shut down its two remaining hedge funds one month after winding down the $2.5 billion Global Opportunities Fund. The $1.4 billion Absolute Return Fund and the $160 million Low Volatility Fund will follow suit, after experiencing similar losses originally fueled by the subprime fallout and credit crunch.
Drake had informed investors in March that they were considering shutting down the funds, citing “challenging market conditions.”
The Absolute Return Fund was down 14.36 percent in 2007, while the Low Volatility Fund was down 4 percent. Drake will be launching new funds, and investors that choose to stay with the firm will only pay performance fees once the original losses are recouped.
"We are committed to launching successor vehicles for the funds later this year, for those investors who have expressed a desire to remain invested in strategies substantially similar to those of the funds and to new investors who would like to invest," said the company.
Drake was formed in 2001 by former BlackRock manager Anthony Faillace and his partner Steve Luttrell.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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