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.
Dow Jones – Man Group PLC said Thursday it is launching an onshore version of its AHL product, one of the largest single hedge funds with some $20 billion assets under management, in a further sign of the company’s confidence in boosting sales to private investors.
Man AHL Diversity is a managed-futures trading program, which means it follows and seeks to exploit persistent market trends. It will be managed by Man Investments, the asset management arm of Man Group, and marketed by hedge fund advisory company Dexion Capital Group.
West Palm Beach (HedgeCo.net) – Hedge fund firm, Financial Investments Inc. (FII), is to be recognized as one of the 500/5000 winners to be honored at a special event in Washington in September. The hedge fund will also be featured in the September issue of Inc. magazine.
The Inc. 500 celebrates the fastest-growing private companies in America. FII is a Herndon, Virginia-based Alternative financial investment management firm that has recently garnered national recognition for its growth and outstanding performance. Companies that qualify for the Inc. 500 must have a sales history of four or more years and annual revenues of at least $2 million in 2008.
FII has also been recognized by Virginia Business Magazine as a regional semi-finalist for its Small Business Success Story of the Year. In 2008 and 2009, the Virginia Chamber of Commerce also named FII to their “Fantastic 50″ list of the state’s 50 fastest growing companies.
“FII was founded in 1997, and has achieved annual revenue growth in excess of 40% each year for the last four years,” said Craig Kendall, President and CEO. “Our customer focus and disciplined approach to investments with commodities, equities and equity indexes has resulted in consistent commendable returns for our institutional and private investors. Time and again we have exceeded returns to investors in excess of the S & P 500 during this year’s volatile market,” he added.
This is the second year that FII has been recognized in the Inc 500/5000 awards program. “FII continued with its growth and improvement of services all during the recent meltdown that the financial markets have experienced. A feat that we are most proud of”, stated Kendall.
FII evolved from the original accounting firm of Kendall & Company, CPA’s. In 2005, FII created Financial Commodity Investments (FCI) to provide products and services relating to commodity markets. As of July, 2009, the FCI products have generated net positive YTD returns in excess of 20% to investors. In August, 2009 the FCI alternative investment products were also recognized and ranked as one of the top Top Commodity Trading Advisors, CTA’s for five year returns as tracked and reported by Barclays in their Barclay Managed Funds Report.
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Reuters – Internet auction and services company EBay Inc has reached a deal to sell its online telephony unit Skype to a group of private investors, the New York Times said, citing two people briefed on its plans.
Andreessen Horowitz, a new venture capital firm headed by the Netscape co-founder Marc Andreessen, is likely to be among the investors in the group, the paper cited the people as saying.
London-based Index Ventures and Silver Lake Partners may also be involved in the deal, one of the people told the paper.
Reuters UK – Man Group, the world’s biggest listed hedge fund firm, reported a rise in sales to private investors and said it expects to return to overall net client inflows in its second half, boosting its shares.
In a statement on Thursday, the firm said it attracted net private investor inflows in its first quarter of $1.9 billion (1.1 billion pounds) into its funds, which aim to deliver positive investment returns whether markets rise or fall. This partly offset net outflows of $3.3 billion from institutions such as pension funds.
West Palm Beach (HedgeCo.net) – Global hedge fund manager Cogo Wolf Asset Management has launched the Cogo Wolf Trimaran Liquidity Fund, a highly liquid fund of hedge funds designed to help institutional and private investors navigate the current global investing storms.
Managed by Co-CIOs and Managing Partners Christopher R. Wolf and Giles Conway-Gordon and offering complete transparency, the Trimaran Liquidity Fund targets 16-18% net return with expected volatility of 6-8% without the use of leverage.
“The global financial markets are forever changed. The industry has experienced a kind of ‘perfect storm’ in recent years—the credit contraction, the housing contraction and the overall economic contraction,” stated Christopher R. Wolf. “Trimaran is the first fund of its kind, designed as a remedy for sophisticated institutional and private investors who are ready to redeploy capital but need new assurances to do so.”
The Trimaran Fund has been designed to provide Alpha with non-correlation and liability protection including: Ultra Liquidity (monthly liquidity, 10-day notice with no lock-up, no gate, no redemption penalties and complete transparency); Flexibility (all underlying investments are ultra liquid, permitting rapid, opportunistic responses to global volatility and market uncertainty); and Stability (diversification).
The “three distinct hulls” the Trimaran Fund invests in include:
* Managed Futures, Global Macro, CTAs and other ultra liquid strategies which have low/negative correlation to equity markets; * ETFs enabling narrow and controlled directionality as a proxy for direct hedge fund investing; * Debt-Related Instruments, notably mispriced credit opportunities offering attractive returns and gains.
“A forward-looking, global tactical asset allocation model will be necessary for investors to deliver profit in the new fund of hedge funds paradigm,” commented Giles Conway-Gordon. “Our top-down investment methodology, namely skating to where the puck is going to be, is paramount to nimbleness and adaptability. We are asset allocators first, talent scouts second.”
“It’s not enough to know what instruments one finds compelling; what’s mandatory is to know why you’re there in the first place. What macroeconomic trend does that investment capture? And if so, how effectively and what risks are associated with that decision? Risk management is more than optimization modeling, VAR and stress testing. It’s a holistic understanding of the environment in which these instruments are being used, the opportunity they’re designed to capture and the finesse necessary to know depth and duration – how long and how much does one hold? That’s the art and a talent we’ve honed over 25+ years,” Wolf concluded.
Cogo Wolf has been nominated by Alternative Investment News and Institutional Investor as “Emerging Manager of the Year” given its strong growth trajectory lead by the firm’s President and Partner, Rachel S.L. Minard, its 14-year history delivering 12% net CAR and having never lost an investor since its doors opened, according to the fund manager.
Alex Akesson
Editor for HedgeCo.Net Email: alex@hedgeco.net
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West Palm Beach (HedgeCo.net) – LoanInsights, a San Francisco-based financial services and technology company, has hired James Sias as Director of Business Development. Sias will be responsible for working with banks, hedge funds and US government entities to help them leverage the newly launched LoanInsights SMART (Secured Mortgage Asset Resolution Tool).
The new SMART platform enables financial institutions, investors and the government to value and manage optimally the $1 trillion-plus in so-called “toxic assets” that are a primary cause of the nation’s severe economic downturn and continue to be a major drag on the hoped for recovery.
"James’ real-world experience will be critical to our efforts in reaching out to hedge funds, banks and other investors to demonstrate how our new tools can help them effectively and profitably manage their distressed mortgage assets,” said Jonathan Strike, President and Co-Founder of LoanInsights. “In addition, with his deep knowledge of the mortgage industry and underlying process, James clearly understands what the various players need to do now to solve the toxic assets problem and help get credit flowing again."
The LoanInsights team has been working for the past eight months with investor groups, including hedge funds and private investors, to test the SMART process and technology platform in beta mode. During this time, the investors realized an unleveraged annual return on equity in excess of 30% on those portfolios analyzed and liquidated through the platform. In addition, the homeowners who were part of the program refinanced into lower, fixed-rate mortgages, and in some cases actually reduced their overall mortgage balances.
Alex Akesson
Editor for HedgeCo.Net Email: alex@hedgeco.net
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!
Forbes – Following a brutal 2008 of losses, plunging assets and the Madoff scandal, the activities of the Obama administration were a primary worry among the nearly 500 hedge fund managers and other industry executives gathering at a Las Vegas conference this week.
‘When you have government intervention at the scale we have, you do something the markets abhor: you create uncertainty,’ said Sean Mathis founding partner of New Centurion Capital Partners. ‘We have uncertainty where markets are going and what the rules of the road will be.’
The Obama administration, even as it courts private investors to help buy up toxic bank assets, has targeted Wall Street bonuses and called for tougher market regulation.
Norristown Times Herald – The Treasury Department is making it easier for hedge funds and other private investors to participate in its plan for buying up banks’ bad assets, an acknowledgment that the interest level so far has been lackluster.
Analysts said the move shows the program hasn’t yet attracted enough large fund managers who may be wary of ending up on the wrong side of a congressional probe or public backlash. The program’s requirements also excluded too many smaller managers, they said.
Fort Worth Business Press – The rescue of the American financial system proposed by Treasury Secretary Timothy Geithner is, in all but name, a gigantic hedge fund. The government would lend vast sums to private investors to enable them to buy loss-ridden assets at discounts from banks with the prospect of making sizable profits. If that’s not a hedge fund, what would be? The hope is that the $14 trillion U.S. banking system would expand lending if it could get rid of many of the lousy securities and loans already on its books.
Almost everyone thinks a healthier banking system is necessary for a sustained economic recovery. Can the Geithner plan work?
CNBC – Man Group , the world’s largest listed hedge fund firm, said funds under management are $47.7 billion, down 11 percent from end-December, as clients pulled out assets in the face of falling markets.
The firm said net client outflows for the three months to March are estimated at $3.2 billion, with both private investors and institutions pulling out assets.
New York (HedgeCo.Net) – The Obama administration has unveiled its much anticipated program aimed at clearing toxic assets from the books of U.S. banks and finding a middle ground between inaction and nationalization. By financing the purchase of up to $1 trillion in illiquid real estate assets, the government is hoping that its Public-Private Investment Program will revive the lending process while helping to jumpstart the economy.
“This will allow banks to clean up their balance sheets,” Treasury Secretary Timothy Geithner said. “There is no doubt the government is taking risk. You cannot solve a financial crisis without the government assuming risk.”
The plan entails using up to $100 billion in the Troubled Asset Relief Program funds along with additional capital from private investors to “generate $500 billion in purchasing power to buy legacy assets with the potential to expand to $1 trillion over time,” according to a statement released by the Treasury.
Under the plan, the “Legacy Securities Program” would be instilled to protect private investors’ or hedge funds’ purchase of the assets by using money from half of the original funds. The Treasury would match any private capital that is raised for the purchases dollar for dollar.
The Federal Deposit Insurance Corporation would oversee a facet of the plan called the “Legacy Loans Program,” which is expected to garner interest among many private investors. With this program, the treasury would pony up half of the capital to purchase a bundle of loans while the rest of the cash would come from private investors or hedge funds. The FDIC would then guarantee financing of up to six times the original price, then auction off the loans.
In addition, private-sector purchasers would determine the value of these assets so as to quell any fears that the government might be overpaying for the loans.
Some critics are weary that the program’s success relies exclusively on the action of private investors to step up to the plate. The Fed’s new program to revive consumer credit, called the Term Asset-Backed Securities Loan Facility, or TALF, was a disappointment as far as popularity was concerned, with just 19 large hedge funds and other firms showing interest. Out of the $200 billion offered, only $4.7 billion in requests for loans came in.
Another reason cited for the lack of big-money interest in the programs is the mess that unfolded after AIG handed out $165 billion in employee bonuses. A near unanimous vote in the House to tax those bonuses 90 percent may have stifled public outcry, but it did little to put to rest investor’s uncertainty regarding the government’s conflicting actions.
Former President Bush declined to buy the toxic securities in November. No banks have agreed as of yet to sell their illiquid assets.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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Time.com – To stop the economy’s deflationary spiral, President Obama and Treasury Secretary Tim Geithner need to get toxic assets off banks’ balance sheets so the banks can start lending again. With much fanfare and after much delay, Geithner on Monday unveiled the details of the government’s "public-private" collaborative plan to make that happen.
There was a lot at stake. When Geithner rolled out an initial version of the plan Feb. 10, the details were missing, the stock market tanked and his image went with it. To give his plan a chance this time, Geithner had to show private investors they could make money partnering with the government to buy troubled loans, and the complex securities based on them, from the banks.
