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.
guardian.co.uk – Investment companies and private equity firms suspect that they have been caught up in a directive whose real aim was hedge funds largely because it is so difficult to define hedge funds.
The Group of 20 leading world economies agreed in April that hedge funds above a certain size should be subject to authorisation and required to report data to supervisors as part of a broader extension of financial regulation in response to the global financial crisis.
But hedge fund managers believe the EU directive is so unclear and badly drafted that it would be dangerous to stick around to find out exactly what it means. The most worrying aspect of the directive is that it would allow regulators to limit the amount of leverage assumed by hedge funds.
New York Daily News – An enthusiastic math whiz plus hands-on exhibits multiplied by deep-pocketed investors equals a math museum.
This formula may one day lead to every school kid’s nightmare – a museum dedicated to nothing but mathematics – thanks to a Long Island man who quit his hedge fund job to dedicate himself to the project.
"Math is an ongoing, living and developing thing that is beautiful and can be a lot of fun," said Glen Whitney, 40, of Stony Brook.
CNBC – Hedge funds posted their best monthly performance in a decade in May, taking advantage of rallying stock markets and distressed opportunities across the board, according to the latest numbers from the Absolute Return Composite of hedge fund indices.The industry has been increasingly under the microscope by Washington and investors alike since the second half of last year. On top of registering their worst performance ever in 2008, with the average fund down 19 percent for the year, the $50 billion Madoff fraud delivered a severe blow to the already suffering industry and gave rise to a huge wave of redemptions.
But this year has been different. On average, hedge funds gained 3.1 percent over May, bumping up year-to-date gains across the $1.33 trillion industry to about 6.1 percent.
Forbes – Plummeting stock prices in Eastern European should have made the region full of rich pickings for Western investors, but hedge funds and private equity firms have been sitting on the side lines for the last few months, fearful that things would continue to deteriorate. Now the tide is finally changing, and the some of the first investors dipping their toes back in are from the private-equity sphere.
Italian insurer Assicurazioni Generali has just put 300 million euros ($419.8 million) into a joint private-equity fund to invest in Central and Eastern Europe. It is launching the 615.0 million euro ($874.7 million) fund with PPF Group of the Czech Republic, which has already invested some 400.0 million euros ($568.9 million) into the region, focusing on mid-cap companies, a PPF spokesman said.
Reuters Blogs – Finding the right partner can be difficult, which is why matchmaking can be helpful.
That’s precisely what recruitment firm Alpha Search Advisory Partners is attempting to do with its Hedge Fund Consolidation practice, launched today.
The unit, which aims to provide “confidentiality” and which boasts of its “extensive network of potential partners”, will work on behalf of hedge funds “seeking strategic partnerships with other top investment managers” with the aim of cutting costs, creating economies of scale and combining assets under management.
Reuters UK – NewSmith Capital Partners, one of the hedge fund firms to appear before a parliamentary committee investigating the UK banking crisis in January, has lost six staff as it cuts costs in a tough period for the industry.
According to a regulatory filing obtained by Reuters on Tuesday, Edward Johnson, an analyst on the firm’s resources and energy fund, and Ben Squire, an analyst on the credit fund, are no longer members of the firm.
The firm, which employs around 70 people, has also parted company with Sadiq Currimbhoy, a strategist on the firm’s Global Opportunities fund. A spokesman said investors had taken up an option to withdraw their assets from the liquid part of the fund and keep the remaining part of the portfolio as a private equity vehicle.
VC Circle – CX Partners, a new private equity firm promoted by former Citigroup Venture Capital International (CVCI) head Ajay Relan, has achieved the first close of $220 million for its maiden fund. The first close was made by the fund in March this year, Relan told VCCircle. The fund plans a final close of $500-600 million by September this year.
"The fundraising environment was tough six months ago, but now it is getting better," Relan told VCCircle. Indian stock markets have also been on a rally with Sensex rising from 8,160 points on March 9 to 14,284 points yesterday.
Courthouse News Service – A Beverly Hills man defrauded his family and friends of $44 million by persuading them to invest in his two nearly worthless hedge funds and spent the money on a Malibu Beach home, Porsches, and poker, federal prosecutors say.
Bradley L. Ruderman, 46, quoted as a financial expert by national media, surrendered on Friday after being named in a criminal complaint charging him with fraud.
West Palm Beach (HedgeCo.net) – The UK Serious Fraud Office, (SFO) Friday conducted searches on two residential properties (one in Kent, the other in Surrey) assisted by the City of London Police, in connection with its investigation into an alleged fraud involving the recently collapsed hedge fund, Weavering Capital.
Two men, aged 43 and 45, were arrested and have been taken to a police station for questioning.
Hedge fund Weavering Capital launched in March 2009, acting as investment advisor to a Cayman Islands incorporated hedge fund, Weavering Macro Fixed Income Fund Limited. The Macro Fund was understood to have funds under management of around $639 million in late 2008.
The investigation is currently focused, the SFO said, on certain interest rate swap transactions between the Macro Fund and a company registered in the British Virgin Islands, Weavering Capital Fund Limited, which appears to be a related third party, which inflated the apparent Net Asset Value of the Macro Fund. More details to be released as the case proceeds.
Alex Akesson
Editor for HedgeCo.Net Email: alex@hedgeco.net
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Seeking Alpha – The innovators were out with guns blasting as they introduced an ETF that acts like a hedge fund. How has it been doing since the March 25 launch?
This new ETF, established by Index IQ analyzes publicly available hedge fund performance data and then tries to replicate returns utilizing ETFs and other liquid trading vehicles. Additionally, it promises to perform as well as a hedge fund without the risk and with low correlation to traditional assets. Another benefit that this ETF could offer to investors is risk reduction because of its low correlation with the stocks and bonds that already dominate an investor’s portfolio.
West Palm Beach (HedgeCo.net) – The Treasury Department said that they have recieved 100 applications from potential fund managers interested in participating in the Legacy Securities portion of the Public Private Investment Program (PPIP).
A variety of institutions applied, including traditional fixed income, real estate, and alternative asset managers, such as hedge funds.
Successful applicants must demonstrate a capacity to raise private capital and manage funds in a manner consistent with Treasury’s goals, they must have experience investing in eligible assets and headquartered in the United States.
Applicants can expect to be informed of their preliminary qualification around May 15, 2009, when they can begin raising a minimum of $500 million in private capital that will serve as the investment that, pending further approval, will be matched with taxpayer funds.
Since announcing the program details on March 23, the Treasury has encouraged small, veteran, minority and women owned private asset managers to partner with other private asset managers. On April 6, Treasury extended the deadline for fund manager applications to provide more time to facilitate these types of partnerships.
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