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International Herald Tribune – Blackstone Group, manager of the world’s largest leveraged-buyout fund, said Wednesday that second-quarter profit beat analysts’ estimates as gains from hedge funds offset a decline in private-equity takeovers.
Net economic income, a measure that excludes some compensation costs, fell 75 percent to $165.6 million, or 15 cents a share, from $655 million, or 58 cents, a year earlier, the New York-based Blackstone said. That exceeded the average estimate of 8 cents a share by 10 analysts in a Bloomberg survey. Revenue declined 63 percent to $353.7 million.
Blackstone’s fees from buying and selling companies have plunged as buyouts of more than $2 billion dried up and initial public offerings fell to their lowest in four years. Investors backed away from the debt used to finance LBOs in the fallout from the collapse of subprime-mortgage securities in the second half of last year.
International Herald Tribune- A former manager of a Citigroup Inc hedge fund has filed a complaint with a British tribunal accusing the bank of causing his fund’s demise, the Wall Street Journal reported on Saturday, citing people familiar with the matter.
In a sealed complaint filed last month with a state-run employment tribunal, John Pickett, who ran a hedge fund known as CSO Partners that specialized in corporate debt, accuses the bank of pressuring CSO to buy billions of dollars in troubled loans, the newspaper reported.
Pickett said the loans undermined CSO and led to his resignation. Citigroup called the complaint "without merit," the Journal said.
International Herald Tribune- Hedge fund managers are looking to global macro funds to try to steer clear of the mess created by the credit crisis while cautiously dipping into a small pool of more risky assets, a Reuters poll found.
Stormy markets have torn through the hedge fund market this year, forcing many to shut up shop and others to tumble, but most have still managed to keep well ahead of the severe double-digit losses suffered by global stock markets in the first half of the year.
The quarterly survey of 13 managers who invest in a basket of hedge funds and manage a total of about $150 billion in assets showed global macro funds leading the way through 2008 as they tend to benefit from periods of high volatility.
Typically global macro funds bet on the direction of markets, currencies or debt, and commodities.
International Herald Tribune- Samuel Israel 3rd bilked his investors out of $250 million, but they are hoping to recoup some of their money from one of Wall Street’s deepest pockets: Goldman Sachs.
Bayou’s creditors were taking aim at Goldman even before Israel, the former manager of the Bayou Group hedge fund firm, surrendered to the authorities on July 2. His faked suicide on a Hudson River bridge 40 miles north of Manhattan and subsequent disappearance on the day he was to start a prison term had set off an international manhunt.
Bayou’s unsecured creditors committee sued Goldman in late May, claiming the investment bank had failed to detect Israel’s fraud, one of the biggest ever in the hedge fund industry, and to investigate signs that something was amiss at Bayou.
For six years, Goldman acted as the so-called prime broker for Bayou, clearing trades, taking custody of securities and providing reports on the fund firm’s investments. The claim seeks $20 million.
International Herald Tribune- One by one, John Devaney sold his treasures, hoping to forestall what was in the end inevitable. He sold his Renoir and his Gulfstream, his home and his helicopter. Even his cherished yacht — gone.
But on Wednesday Devaney, who made and then lost a fortune trading mortgage investments, finally called it quits. He shut his hedge fund, and told his investors that all their money was gone too.
"I’m devastated, I’m totally devastated," Devaney said by telephone from Aspen, Colorado "I feel horrible that I’ve lost my own money and that so many people who saw the skills I have and trusted in us have now been hurt."
International Herald Tribune- The girlfriend of a missing hedge fund swindler was arrested Thursday and charged with helping him elude his sentence on the day he was supposed to begin serving 20 years in prison.
Debra Ryan was charged with aiding and abetting the escape of Samuel Israel III.
Federal agents said Thursday that Israel took off in a white recreational vehicle carrying a motor scooter and his belongings. Officials said he might be at RV parks, campgrounds or highway rest areas, possibly using the names Sam Ryan or David S. Clapp.
International Herald Tribune- A Wall Street stock broker accused of throwing a fellow health club member into a wall during a cycling class has been acquitted.
A Manhattan Criminal Court jury found 44-year-old Christopher Carter not guilty of assault against hedge-fund manager Stuart Sugarman.
Carter had complained about the 48-year-old Sugarman’s loud hollering and grunting during the high-impact spin class and asked him to quiet down. Sugarman says he refused. He says Carter lifted his exercise bike and hurled him into a wall, damaging a disc in his neck.
