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.
The Washingtom Post – Reston-based satellite firm SkyTerra said Wednesday that it has agreed to be acquired by its biggest shareholder in a roughly $280 million transaction that will return the company to private ownership.
Under the deal, New York-based investment firm Harbinger Capital Partners will pay $5 per common share of SkyTerra — a 56 percent premium over the stock’s average price in the month before the announcement. SkyTerra shares gained more than 38 percent on Wednesday, closing at $4.71.
Bloomberg – Bank of England Deputy Governor John Gieve said investors are still facing “acute” stress as market declines force hedge funds to sell assets.
“The financial system remains under acute strain,” Gieve said in a speech in London today. “The falls in equity markets, corporate bond prices and the prices for leveraged loans is hitting both long-term institutional investors and leveraged investors, including hedge funds.”
The Bank of England said in a semi-annual report that $2.8 trillion in banking losses and the threat of a global recession are increasing risks to financial stability. Meanwhile, Prime Minister Gordon Brown yesterday suggested he may scrap decade- old fiscal rules to prop up the banking system as the nation faces its first recession since 1991.
Investment losses at hedge funds and insurers pose further risks to the system, the central bank’s report said, as insurers may fall short of capital requirements and face credit rating downgrades, while hedge funds may be forced to sell assets.
Reuters – Nations from Europe to Australia rushed out plans on Sunday to shore up their banks, trying to halt a markets crash with pledges to back lending, buy stakes in financial institutions and take other emergency steps.if(window.yzq_d==null)window.yzq_d=new Object(); window.yzq_d['Yl9NCdG_Rvc-']=’&U=13fiorehq%2fN%3dYl9NCdG_Rvc-%2fC%3d632663.12996380.13209191.6227634%2fD%3dLREC%2fB%3d4577807%2fV%3d1′;
European leaders meeting in Paris said their line of attack would help halt the chaos that has frozen credit markets, the lifeblood of the financial system, redrawn the world’s financial industry and threatened a global recession.
"I believe that we will see over the coming few days worldwide action that will make people see that confidence in the banking system can be restored," British Prime Minister Gordon Brown told reporters.
The City’s regulator has threatened to impose unlimited fines on investors that breach its new rules on betting against UK bank shares amid a flurry of late disclosures by hedge funds.
The warning came yesterday as Gordon Brown promised new permanent rules to curb short-selling once the Financial Services Authority (FSA) ban expires in January. The Prime Minister said: “We’ll be reviewing over the next four months and I think you will find new rules for the future.”
Such a move could further threaten the hedge funds industry, which has grown explosively in London. The FSA last week introduced measures to tackle short selling of UK bank shares, fearing falling prices would undermine the financial system.
It ruled that any short position greater than 0.25 per cent of a market value of any 34 named financial stocks must be disclosed by 3.30pm on Tuesday this week. A number of other companies have since approached the regulator asking to be included on the list.
Independant – Gordon Brown will hail a new £1.5 billion drive to eradicate deaths from malaria in the developing world by 2015 at an emergency United Nations summit on world poverty and disease.
The initiative, to develop a vaccine and distribute bed nets and sprays over the coming years, is expected to save the lives of one million people who die from malaria every year.
It will be announced by the Prime Minister and Microsoft boss Bill Gates in New York, where 90 world leaders are gathering at the UN to discuss getting progress on the Millennium Development Goals back on track.
Mr Brown is also meeting Wall Street hedge fund chiefs to discuss the global financial turmoil which has sent shockwaves through the markets over the last week.
Independent – An unprecedented crackdown on speculators preying on falling share prices began on both sides of the Atlantic yesterday, as Gordon Brown promised to "clean up the financial system" after days of turmoil.
The Financial Services Authority (FSA) banned "short selling" of bank shares from midnight last night, after warnings that the practice helped fuel market turmoil that forced the dramatic £12.2bn takeover of HBOS by Lloyds TSB. This came as the New York Attorney announced his office had launched an investigation into illegal manipulation to profit from short selling. The move is to uncover whether speculators have spread misleading information or acted in concert to purposely drive down share prices.
Wealthy hedge fund traders, heavy users of the shorting strategy, have sparked fury after making millions from the collapse in value of UK banking stocks.
