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.
Bloomberg – Michael McCarty, former chief equity and options strategist at Meridian Equity Partners Inc. in New York, plans to start a hedge fund next month that will make bets on price discrepancies between similar exchange-traded funds.
McCarty, 49, said he is starting Differential Investment Partners LLC with Bret Rekas, 40, who helped oversee about $350 million at Somerset Asset Management LLC in Minneapolis.
Bloomberg – Hedge fund managers gathering in Monaco this week said they have work to do to regain investors’ confidence after the industry’s record losses last year.
“We have to prove as an industry that we can provide absolute returns again,” Pierre Lagrange, co-founder of hedge fund GLG Partners Inc., told some of the 750 delegates at the GAIM International hedge fund conference in Monte Carlo. “We have to show that in the next year or two we can strike back.”
Hedge funds tumbled 19 percent in 2008, the worst year since Chicago-based Hedge Fund Research Inc. began keeping records almost two decades ago, prompting investors to pull money, and funds to shut or impose limits on withdrawals. Funds have started to rebound this year, rising 9.4 percent through May, according to the HFRI Fund Weighted Composite Index.
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.
Boston Globe – A Boston law firm has filed a class-action lawsuit against a hedge fund controlled by Massachusetts Mutual Life Insurance Co. for placing all of the fund’s assets with Bernard Madoff, who is facing life in prison for conducting a massive fraud.
The lead plaintiff is Lawrence J. Rothschild, a Needham businessman who invested about $1.1 million with the Rye Select Broad Market XL Fund, according to the lawsuit, filed yesterday in Massachusetts Superior Court.
The suit alleges that Rye did not explicitly say that it placed all of its assets with Madoff, and that the firm’s parent, Tremont Partners Inc. (also part of MassMutual), ignored red flags about Madoff’s activities.
Bloomberg - GLG Partners Inc., the hedge-fund firm founded as a unit of Lehman Brothers Holdings Inc., and Och- Ziff Capital Management Group LLC reported lower fourth-quarter profits as their funds posted losses.
GLG’s profit excluding acquisition costs dropped 78 percent to $28.2 million, or 9 cents a share, from $127 million, or 38 cents, a year earlier, the London-based company said in a statement today. That compares with an average estimate of 6 cents a share, according to four analysts surveyed by Bloomberg. Assets fell to $15 billion from $17.3 billion in September and $24.6 billion a year earlier, dragged down by losses.
Reuters - Two years ago, investors scrambled to snap up shares in elite hedge fund firms, eager for a piece of the lucrative action. What they got instead were big losses.
Starting in early 2007, when hedge fund and private equity firms were minting cash, four private investment firms cracked open the door to let in small investors. Fortress Investment Group LLC, Och-Ziff Capital Management Group, Blackstone Group LP and GLG Partners Inc led a new class of firms that let ordinary investors ride the wave of hedge fund riches.
