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.
StarTribune – The money trail in a suspect currency investment program promoted by several Twin Cities companies runs through an industrial building in this gritty southern California community that calls itself Horsetown USA.
Trevor Cook, a 37-year-old Minneapolis money manager at the center of a sweeping federal investigation, wired millions of dollars over the past year to a lawyer here, Gary Saunders, to buy land for a Panama casino and condominiums, according to sources familiar with the transfers.
Reuters – Harvard University’s multibillion dollar endowment is adopting a strategy of selling off some holdings in hedge funds, private-equity firms and other money managers to bring more money under the control of internal investing staff over the next few years, the Wall Street Journal said.
Jane Mendillo, head of Harvard endowment, told the paper the university’s move would allow it to be more nimble, have better transparency into the portfolio and more liquidity.
HedgeCo.net (West Palm Beach) – Man Investments’ seeding fund, RMF Global Emerging Managers, has completed its second incubation deal of the last two months, providing a cornerstone investment of $50 million for Hong Kong’s Minerva Macro Fund.
In July RMF GEM invested $50 million in the flagship product of 5:15 Capital Management, an unrelated fixed income arbitrage manager based in Connecticut.
Minerva is managed by Stanley Ku, who founded the Hong Kong office of hedge fund Fortress Investment Group and most recently managed $750 million for Fortress’ Drawbridge Global Macro Fund. Dorothy Lau, Minerva’s risk and business manager, formerly worked for JP Morgan and Goldman Sachs.
“Stanley Ku’s work at Fortress and Goldman Sachs has made him a very well respected money manager in Asia,” said Hans Hurschler, head of Man Investments’ hedge fund Ventures. “We believe that Minerva has the potential to generate solid, stable returns and that it may attract substantial assets.”
Minerva is a discretionary global macro fund, focused on Asia. It trades only highly liquid instruments such as interest rate or bond futures, foreign exchange forwards and equity index futures or sector ETFs. The entire portfolio is designed to be liquidated in 48 hours.
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The Ledger – The financial crisis has ravaged many a Wall Street giant, but it has also produced a handful of winners. BlackRock, a money manager that is much admired but little known outside financial circles, is fast emerging as one of the nation’s financial powerhouses.
BlackRock, which started in a one-room office 21 years ago, now manages $1.3 trillion in assets for big private clients, including hedge funds and foreign governments.
But it is the company’s highly prized role as a government adviser and contractor that is now drawing attention.
Bloomberg – Moore Capital Management LLC is seeking to raise as much as $500 million for two new hedge funds run by Greg Coffey, the top-ranked money manager who joined the company last year after quitting GLG Partners Inc., according to an investor.
The funds, both focused on emerging markets, started trading April 1, said the investor, who asked not to be identified because the information is private. Fees are 2 percent of assets, standard for the industry, and 25 percent of investment gains, more than the typical 20 percent.
HeraldTribune.com – So much for Art Nadel’s high-profile legal team.
Nadel, the Sarasota money manager charged with running a $400 million investment scam, is now represented by a federal public defender after his private attorneys dropped him on Wednesday.
Prominent Tampa attorneys Barry Cohen and Todd Foster had defended Nadel against criminal charges since he turned himself in to the FBI on Jan. 27, two weeks after he left Sarasota as his hedge funds imploded.
Grand Forks Herald – The wife of disgraced money manager Bernard Madoff withdrew more than $15 million from a firm co-owned by her husband – including $10 million on the day their children turned her husband over to authorities for overseeing an alleged $50 billion Ponzi scheme, the top securities regulator in Massachusetts said Wednesday.
Seekingalpha.com – First, the veteran can lose money just as easily as the rookie.
Second, and more perniciously, just because a young money manager has been humbled does not mean he now shares your thinking about risk. And in a few years’ time, when young hedge fund managers are back raising money for new funds, and they boldly advertise "I’ve learned my lesson," don’t be so quick to believe them.
The game of institutional investment management (especially for family offices) is largely about the Old and the Rich entrusting their capital to the Young and the Poor. But as every older person, no matter how wealthy, knows, the young will always be richer in the one thing that matters most–time. It’s perfectly rational for a younger person to take more financial risks because if things don’t work out he can always start over.
West Palm Beach (HedgeCo.net) – Swiss bank UBS AG’s money manager, Luxalpha, was one of the main European hedge funds that gave money to US money manager Bernard Madoff, it is now being shut down by CSSF, Luxembourg’s financial supervisors.
The Luxalpha assets were frozen in January, in what appears to be the first court action in Europe. Another private investor in a second UBS-run feeder fund, Luxembourg Investment Fund-US Equity Plus, is also considering legal action against the Swiss bank.
People with knowledge of the situation claimed that the two Luxembourg funds were not actively marketed by the bank and were set up at the request of clients to send money to Madoff. One of the Luxalpha board members, Rene-Thierry Magon de la Villehuchet, committed suicide in December after loosing $1.4 billion in his Madoff investments.
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Gold Seek – This January was one of the worst on record for financial markets. US Treasuries crashed after enjoying a recession-beating run in 2008. Gold and silver were the only major asset class to end the month higher.
Hedge funds that previously ignored precious metals have become converts, with hedge fund star Greenlight Capital buying the yellow metal for the first time.
Another money manager Osmium Capital Management is offering a hedge fund priced in ounces of gold to protect it from exchange rate fluctuations. Subscriptions are in dollars, euros or pounds and then converted into gold.
New York (HedgeCo.Net) – Investors in South Florida are fearing the worst, with all eyes turned to Michael Riolo, a Boca Raton resident who may have bilked over $50 million out of investors.
Riolo regularly distributed performance reports to his investors showing admirable returns. Now, three investors are claiming that it was all a sham. Donald Gory, Anthony Leonardo and Nicholas Gory of Broward County have filed a suit against Riolo, claiming he stole more than $1 million from them.
According to the suit, Riolo allegedly conducted a “Madoff-like Ponzi scheme” through his two companies, LaSalle International Clearing Corp. and Sterling Wentworth Currency Group. The investors said they were recently informed that the firms had become insolvent. They are asking the judge to freeze his assets and ban him from transferring any funds.
It seems that wealthy Florida residents have been hit hard by financial scams in recent months. Bernard Madoff, the infamous Ponzi-schemer who lost $50 billion of investor’s money, was a part-time Palm Beach resident who garnered the trust and money of many elite Floridians.
Money manager Arthur Nadel of Sarasota is still missing, along with $350 million, after being exposed as a fraud in what authorities are now dubbing the “mini-Madoff.”
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
MSN MoneyCentral – Mace Security International Inc. said Tuesday it has only received $1 million of a little more than $3.2 million owed it by a hedge fund managed by missing Florida money manager Arthur Nadel.
The Horsham, Pa., maker of personal defense and electronic security products said the Victory Fund Ltd. didn’t pay Mace the roughly $2.2 million it was due Jan. 15.
“We have already filed a report with the authorities, and we intend to take all possible legal action against the Victory Fund,” Dennis Raefield, Mace’s CEO and president, said in a statement. “Mace continues to have a solid balance sheet, cash in the bank and strong business fundamentals.”
