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.
West Palm Beach (HedgeCo.net) – French IT services group Atos Origin is holding a shareholder meeting on Feb. 10, making board changes and initiating a plan to speed up recovery spearheaded by its new chief executive Thierry Breton.
Atos Origin is replacing it’s current structure for a single managing board headed by a Chairman and CEO, according to a Reuters report.
Benoit d’Angelin, who represents hedge fund Centaurus on Atos’s current supervisory board, will not seek a seat on the new board, Centaurus recently cut its direct stake in Atos in September to 6.66% from around 12%, selling its shares to PAI Partners.
PAI Partners, which is Atos’s main shareholder with a 22.61% holding, would now have three representatives on Atos’s new board, the list showed. Centaurus, together with Pardus Capital, forced board changes at Atos Origin last year after a long-running battle between the company and the activist hedge funds. The two funds still own a combined 16.71% of Atos capital.
Pardus, which sources have said has no plans to sell its stake in Atos, will keep its representative on Atos’s new board, Behdad Alizadeh.
Meanwhile Jean-Paul Bechat, the former head of Safran’s managing board, and LVMH executive Nicolas Bazire, will sit on the new board as independent members.
Atos Origin gave the following composition of the 12-member board, which has yet to be approved by shareholders:
Rene Abate, former chairman of Boston consulting Group; Bedhad Alizadeh, Partner, Pardus Capital Management; Nicolas Bazire, LVMH Exec Committee member, Acquisitions; Jean-Paul Bechat, former head of Safran Managing Board; Thierry Breton, Atos Origin Chief Executive; Dominique Megret, Chairman of Pai Partners; Bertrand Meunier, Head of Investments at Pai Partners; Michel Paris, Senior Partner at Pai Partners; Vernon Sankey, former Chair and CEO of Reckitt & Colman, UK; Jean-Philippe Thierry, AGF Chairman; also on the list is one independent member, who has yet to be named and one representative of the workers holding Atos shares.
New York (HedgeCo.Net) – Hedge fund investor Thomas H. Lee may downsize or shut the door to two of his funds after posting losses of about 40 percent this year, according to the Wall Street Journal.
The funds, which together manage about $1.5 billion, suffered losses that were multiplied by Lee’s heavy use of leverage, according to the sources who estimated he sustained losses of as much as $3.2 billion.
The funds were actually set up as funds-of funds, meaning Lee distributed investor’s money to approximately 110 other funds. When investors moved to withdraw cash from the hedge fund, it sparked a wave of redemption requests from the original funds, creating a domino effect of losses.
Funds that Lee invested in include SAC Capital Advisors and D.E. Shaw Group, according to the report.
Lee’s private equity firm was launched in 1974 and has grown to be one of the largest in the country. Lee now heads up his hedge fund business, Thomas H. Lee Capital Management LLC and his new private equity firm, Lee Equity Partners. Lee currently manages about $2.7 billion in capital.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
Reuters – Blue Mountain Capital Management LLC has temporarily halted redemptions at its largest hedge fund after clients asked to withdraw money despite its "distinguished" performance, according to a letter to its investors.
New York and London-based Blue Mountain said in the letter it had come up with a "redemption and recapitalization plan" to protect all its investors in the $3.1 billion Blue Mountain Credit Alternatives Fund.
The fund is down 2.4 percent year-to-date, the letter said, far less than the average fund which has lost 20 percent this year. Blue Mountain has a total of $5.5 billion assets under management.
The pressure on the credit fund came from some large fund-of-fund investors, "themselves facing liquidity pressures from their own investors," submitting significant redemption notices, the letter said.
"If we were to unwind or sell positions to meet current redemptions, the severe liquidation costs would be borne inequitably by the remaining investors," wrote CEO Andrew Feldstein in the letter, seen by Reuters.
Bloomberg – Deephaven Capital Management LLC, the hedge-fund unit of stockbroker Knight Capital Group Inc., froze a $1.6 billion fund after investors asked to get back 30 percent of their money.
Withdrawals from the Deephaven Global Multistrategy Fund were suspended so managers wouldn’t be forced to sell assets in falling stock and debt markets, the Minnetonka, Minnesota-based firm said yesterday in a letter to investors. Lenders and trading partners also imposed stricter financing requirements, according to the letter.
Deephaven Global, which trades a variety of securities including bonds and commodities, follows RAB Capital Plc, Ore Hill Partners LLC and Highland Capital Management LP in limiting withdrawals amid the worst financial crisis since the Great Depression. The fund lost 15 percent this year through September, and Deephaven estimated it has fallen an additional 10 percent this month. The fund has returned an average of 16 percent annually since opening in 1994.
“This level of redemptions in the current market environment forces the question of whether such redemptions can be processed in the ordinary course without disadvantaging both continuing and later redeeming investors,” said the letter, signed by Colin Smith, Deephaven’s chief executive officer .
Bloomberg – Nicola Horlick’s money-management firm, Bramdean Alternatives Ltd., pulled money out of hedge funds run by Nobel prize-winner Myron Scholes and James Dinan to focus on more defensive funds as volatility increases.
“In response to the continuing market turbulence,” Bramdean “is increasing the focus on capital preservation,” the London-based company said in a statement today.
Horlick’s firm pulled money from five of the eight money managers who oversee its so-called transitional portfolio. Bramdean redeemed investments in Dinan’s York Capital Management LLC’s Asian and European funds, and Scholes’s Platinum Grove Contingent Capital Offshore Fund.
The monthly reshuffle is Bramdean’s biggest since the firm raised 131 million pounds ($243 million) in a share sale a year ago. The transitional pool, Bramdean’s largest, fell 1.4 percent in July as hedge funds struggle through their worst patch in almost 20 years, according to Chicago-based Hedge Fund Research Inc. HFR’s Global Hedge Fund Index fell 2.8 percent in July, its biggest monthly drop in five years.
Bloomberg – Stanley Shopkorn, a former head of equities trading at Louis Bacon’s Moore Capital Management LLC, plans to open a global stocks hedge fund, according to a person with direct knowledge of the matter.
Hilltop Park Fund LP, based in New York, is scheduled to start trading Oct. 1, said the person, who asked not to be named because the fund is private. Shopkorn declined to comment.
Shopkorn, 65, has managed money for wealthy clients since leaving New York-based Moore Capital in 2002. Bacon hired him in 1996 to build the firm’s equities business. Before that, Shopkorn ran hedge fund Ethos Capital LP and was a vice chairman at Salomon Brothers.
“It’s not the best of times to start a new fund,” said Graziano Lusenti, founder of Nyon, Switzerland-based Lusenti Partners LLC, an investment adviser. “Investors have become more adverse to allocating capital to hedge funds given how their performance hasn’t been overwhelming this year.”
West Palm Beach (HedgeCo.Net)- The Managed Funds Association MFA and CME Group (CME), a Strategic Partner member, recently arrived back from a jointly arranged trip to meet with Chinese government officials, policy makers and financial services representatives.
The MFA and CME co-sponsored a conference, "Global Markets and the Role of Alternative Investments" was held in June with the Tianjin Municipal People’s Government and China Foreign Exchange Administration Magazine.
"The conference agenda helped us to continue a dialogue about the important role of alternative investments in the capital markets and to strengthen relationships in China as its economy and financial markets grow." Richard H. Baker, MFA President and CEO, said.
Members who participated in the conference included; Citadel Investment Group, L.L.C.; Fairfield Greenwich Group (FGG); Harbinger Capital Partners Funds; Moore Capital Management, LLC; Tudor Investment Corporation; the D.E. Shaw Group; Paulson & Co., Inc.; and S.A.C. Capital Advisors, LLC.
"MFA’s visit to China is part of its ongoing international outreach with policy makers and its mission to provide information about the global alternative investment industry." MFA said.
MFA is the voice of the global alternative investment industry. Its members include professionals in hedge funds, funds of funds and managed futures funds. MFA Members represent the majority of the largest hedge fund groups in the world who manage a substantial portion of the approximately $2 trillion invested in absolute return strategies.
HedgeCo.Net – Cranwood Capital Management LLC has announced the launch of their new fund, the Cranwood Fixed Income Arbitrage Fund. The fund seeks to generate high, absolute returns by using Treasury futures to arbitrage temporary discrepancies occurring along the U.S. Treasury Yield Curve.
After building their reputation as a propriety trading firm and posting average monthly returns of 2.93% since July 2005, growing interest from outside investors prompted the team to restructure themselves as a hedge fund. So far, the fund has received interest from both high net worth individuals and institutional investors.
The management team, headed by CEO Peter Powers, has been working together for five years, covering the full 22 1/2 hour trading day. They are able to assemble and liquidate substantial positions in all of the spreads up and down the yield curve as the market presents opportunities over the course of the trading day.
“We make our money daily, in small increments, by taking advantage of minor price adjustments caused by technical supply and demand factors, thus capitalizing on our execution edge,” explains Powers.
Cranwood uses no leverage, seeking more consistent and stable returns. Risking no more than 2-3% of capital each day, their objective is to never take a loss they can’t recover from in two to three days.
The Cranwood Fixed Income Arbitrage Fund has a sister fund, The Cranwood International Fund, a British Virgin Island-domiciled hedge fund, that mirrors the domestic fund.
For more information, please contact John Page at 561-789-7472 or by emailing Jpage@Cranwoodcapital.com.
