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.
Stuff – As the collectivisation of middle class capital accelerated, a multiplicity of managed fund choices emerged to confuse the investor. There are active funds, passive funds, index funds, hedge funds, specialist funds trading in commodities, shares, junk debt, securitised rubbish, mortgages, small cap shares, large cap shares, contrarian funds.
You name it, there is a manager out there for every conceivable flavour of investment approach and every conceivable investment asset. In addition you can buy ethical funds and green funds to tap into the social issues, which by the way underperform but we feel better somehow. (Ethical funds seem to outperform but this is more to do with the weight of money argument (see below) than the underlying performance of the assets).
AP – The head of the government agency that packages federally backed mortgages into investments is stepping down for a new job, people familiar with his plans said.
Joseph Murin, president of the Government National Mortgage Association, known as Ginnie Mae, is leaving his job this week after 13 months. The people declined to be identified because his departure was not yet official, and would not say where Murin is going to work next.
Ginnie Mae sold more than $200 billion in mortgage securities in the first six months of 2009, double last year’s level.
Detroit News – President Barack Obama is ready to roll out an overhaul of the intricate rules and systems that govern America’s troubled financial institutions, proposing the most ambitious revision since the Great Depression.
The goal is to prevent a recurrence of the economic crisis that erupted in the United States and exploded last fall with devastating consequences still reverberating around the world.
Unlike the government’s temporary ownership stake in automakers and major financial companies, the regulatory changes set to be announced Wednesday are designed to be permanent. They could result in a major realignment of power and authority among government agencies that set the rules for banking, lending and investing and touch American lives through daily transactions, from credit cards to mortgages and mutual funds.
Bloomberg – Billionaire Nelson Peltz and former Countrywide Financial Corp. President Stanford Kurland are among at least six investors turning to the public markets to finance purchases of distressed home loans and corporate debt.
The investors, most of whom previously relied on private partnerships for funding, have proposed since May 1 to raise $2.6 billion through public stock sales. They plan to use the money, along with government financing in some cases, to acquire mortgages and below-investment grade loans to companies that fell in value amid the collapse of the real estate and credit markets starting in mid-2007.
Am Law Litigation Daily – Remember how Linklaters’ representation of Barclays in a suit against Bear Stearns cost the firm its client relationship with JPMorgan Chase? It now looks like Linklaters sacrificed its JPMorgan work for nothing. Bloomberg is reporting that Barclays has dropped its Bear Stearns suit with prejudice.
In an amended complaint filed in June, Barclays blamed Bear Stearns and two since-indicted Bear hedge funds managers for causing Barclays to lose hundreds of millions of dollars it had invested in a Bear hedge fund with assets linked to subprime mortgages. (The fund imploded in 2007.) Barclay’s dismissal notice did not offer any explanation for why it was ending the suit. Linklaters partner Lawrence Byrne, whose name appears on the dismissal notice, did not immediately return our phone call.
