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.
Telegraph.co.uk – The hedge fund, which has $11bn (£6.7bn) of assets under management, will be the cornerstone investor in the new company called Lothian which will buy oil assets around the world and manage them. The plan is for Lothian to have a market value of as much as $500m.
GLG, which is listed on the New York Stock Exchange, is helping to put together a management team for Lothian that includes Tom Hickey, the former finance director of Tullow Oil, John Kennedy, chairman of Wellstream Holdings – the Newcastle-based manufacturer of pipes for the oil and gas industry – and Andrew Knott, a former analyst at Merrill Lynch who joined GLG last year. It is thought they are looking for one more high-profile director before the flotation.
Financial Standard – US investors can now access a liquid and transparent hedge fund replication strategy after IndexIQ launched the IQ Hedge Multi-Strategy Tracker ETF on the New York Stock Exchange.
The New York based firm’s exchange traded fund (ETF) seeks to replicate the returns of the IQ Hedge Multi-Strategy Index before fees and expenses.
The index holds a range of hedge fund strategies including equity long/short, global macro, market neutral, event driven and fixed income arbitrage.
Bloomberg – Blackstone Group LP, the world’s largest private-equity firm, fell to a record low in New York trading this week on concern that a rebound in leveraged buyouts will lag behind any economic recovery.
“Given the economic outlook and pressure on asset values, even on existing investments, it’s going to be a while before they have a chance to come back,” said Robert Lee, an analyst with Keefe, Bruyette & Woods Inc. in New York. “It’s hard for investors to see through that valley.”
After announcing about $169 billion of buyouts in 2006 and 2007, New York-based Blackstone has since completed $9.2 billion of deals. An absence of financing for new acquisitions and an inability to sell current holdings have idled the firm and competitors such as KKR & Co. and Carlyle Group LP. Investors say deal won’t resume until after the economy starts to grow and banks can rebuild capital depleted by losses on mortgage-backed securities and previous LBO loans.
Blackstone, run by Chairman Stephen Schwarzman, probably will report a loss tomorrow of 31 cents a share, its third in the past four quarters, according to the average estimate of seven analysts in a Bloomberg survey. The company had a profit, excluding some costs, of 8 cents a share in the same quarter a year earlier.
Of the nine analysts who rate Blackstone shares, six have ratings equivalent to hold, including Lee. One analyst, Barclays Capital’s Roger Freeman, suggests selling the stock. Two recommend clients buy the shares.
Blackstone dropped below $4 a share for the first time on Feb. 23, closing at $3.89, almost 90 percent less than its $31 initial public offering price in June 2007. The stock declined 17 cents to $4.12 yesterday in New York Stock Exchange composite trading.
Reuters – Suspected insider trading cases reached an all-time high last year, driven less by hedge funds and more by pillow talk between relatives and friends, the head of surveillance at the New York Stock Exchange said on Wednesday.
In a year when bombshell revelations rocked bank stocks, governments outlawed short-selling, and panicked investors brought on the worst market rout since the 1930s, there was much to tempt those with privileged information.
NYSE Regulation, the Big Board’s oversight body, referred 146 cases of suspected insider trading to the U.S. Securities and Exchange Commission in 2008, five more than in 2007, the previous record year, and more than twice as many as in 2004.
Seekingalpha.com – Since inception, its funds have returned on average 40% annually, which explains how they can charge a 50% performance fee to investors, compared to the normal 20% that most hedge funds charge. They are very active traders and at any given time can account for up to 3% of the volume on the New York Stock Exchange and up to 1% on the Nasdaq. And, if you’re curious, you can see a picture of Cohen’s house here.
Before beginning, we do want to stress that since SAC actively trades positions quite frequently, tracking it via its13F is not necessarily beneficial and we advise that those reading take this with a grain of salt. We are simply covering the fund since it’s a prominent fund and many of our readers were curious about what it was up to these days.
Wall Street Journal – With anxiety about hedge-fund woes gripping the market, funds have their own fear: their investors.
Some investors, particularly what are known as "funds of funds," are demanding their money back and may ramp up requests in the weeks ahead. That has prompted hedge-fund managers to sell securities to raise cash.
"As the hedge fund investor base broadens, hedge fund portfolio management…slips out of the hands of the portfolio managers and into the hands of the investors," wrote Andrew Redleaf, who runs Whitebox Advisors, a Minneapolis hedge fund with about $5 billion under management, in an August client letter. "It is no insult to the investors to say that this worsens performance."
Funds-of-funds select hedge funds on behalf of pension funds, wealthy individuals or other investors, and charge a layer of fees on top of the hefty fees levied by hedge funds themselves. They often ask hedge funds for the option to redeem money as often as monthly and get good terms because they can bring in big chunks of cash at once.
West Palm Beach (HedgeCo.Net)- Southridge LLC, a New York financial holding company, is launching a "not as you know" market neutral fund to add to their portfolio of funds.
The new fund, Southridge Market Neutral US LP has the capacity to grow to $1 billion, the fund will have a $500,000 investment minimum, 2/20 fees and monthly liquidity.
Ten years in the making, Southridge Market Neutral is designed and managed by Andrew G. White, CFA. "We’re quite encouraged that our new fund strongly outperformed during first half of 08, despite being a start-up in truly hostile markets. We’re even more optimistic for the future." White commented.
“We launched the fund as quantitative market neutral, but not as you know quant or market neutral," White said, "High return with low downside risk is possible if you first focus on return using objective trend-following in US large/mid cap stocks and then employ risk control including NO leverage.”
Focusing on what works and why, the strategy is objective trend-following instead of subjective mean reversion. Investing in US large/mid caps (100% long / 100% short), the fund strategy unusually uses no leverage or factor hedging. Nonetheless, risk/return profile is similar to 6:1 leveraged market neutral funds, but with a vastly smaller market footprint and black swan exposure.
Stephen Hicks, Southridge’s CEO, said, “As we leverage our twelve year track record at Southridge, we look forward to further broadening our product line for our investor base and view the Southridge Market Neutral US strategy as an integral part of that mosaic.”
West Palm Beach (HedgeCo.net)- Global fund of hedge funds (FOHF) group Financial Risk Management (‘FRM’), has hired Au King-lun, MH, PhD, as Chief Executive Officer of FRM Hong Kong.
"The firm has long been known for its strength in serving institutions and for its deep expertise in hedge funds." Dr Au said, "Asian investors are increasing allocations to hedge funds because of the absolute, uncorrelated returns and flexible investment strategies they can offer. FRM is in a strong position to deliver performance and products for this important and growing investor base."
With offices in Europe, Asia, North America and Australia, the new Hong Kong office is an effort to expand business efforts in Japan and Korea.
Dr. Au will join in September from HSBC, where he has been working for the past 11 years, most recently as Head of Institutional Business in Asia Pacific.
FRM opened its Hong Kong office in May 2008, building on its significant presence in Asia, including offices in Tokyo and Sydney, opened in 2000 and 2001 respectively. As one of the largest independent fund of hedge fund groups, FRM manages over $15 billion in assets for institutions and other sophisticated investors, including approximately 300 pension funds worldwide.
Dr. Au currently serves as Chairman of the Hong Kong Securities Institute and is a previous Chairman of the HK Investment Funds Association. In July Dr. Au was awarded the Medal of Honour (MH) by the Hong Kong SAR Government for his valuable contributions to the securities and asset management industry.
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!
Altassets – Cleantech-focused venture capital firm RockPort Capital Partners has closed its third fund, RockPort Capital Partners III, on over $450m, the hard cap of the fund. It had an initial target of $400m and held a first closing just three weeks ago, on $400m.
The new fund will continue the focus of RockPort’s previous funds, investing in the development of technology and products in emerging cleantech companies.
The investor base consists of US university endowments, family offices, foundations and institutional investors from both the US and Europe.
Wilber James, managing general partner, RockPort, said, ‘The cleantech sector provides enormous opportunities to identify and foster initiatives that offer solutions to global energy and natural resource needs, while providing superior investment returns. We have already seen how the teams we invest in can create enormous value. Our collaborative approach together with a business-building mentality and keen domain expertise has proven invaluable to growing companies.’
