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.
New York Times Blogs – John Paulson, the hedge fund manager who reaped a windfall betting against the U.S. housing market before the credit crunch, is now hoping to ride to riches on the property industry’s recovery, The Telegraph reported.
Mr. Paulson’s firm, Paulson & Company, is in the early stages of raising money for a new private equity fund, Paulson Real Estate Recovery Fund, the newspaper said.
Seekingalpha.com – First, the veteran can lose money just as easily as the rookie.
Second, and more perniciously, just because a young money manager has been humbled does not mean he now shares your thinking about risk. And in a few years’ time, when young hedge fund managers are back raising money for new funds, and they boldly advertise "I’ve learned my lesson," don’t be so quick to believe them.
The game of institutional investment management (especially for family offices) is largely about the Old and the Rich entrusting their capital to the Young and the Poor. But as every older person, no matter how wealthy, knows, the young will always be richer in the one thing that matters most–time. It’s perfectly rational for a younger person to take more financial risks because if things don’t work out he can always start over.
Hedge Week.com – Pacific Alternative Asset Management Company, an Irvine, California-based fund of hedge funds manager with USD9bn in assets has announced the recruitment of the investment team of KBC Alpha Asset Management, a USD700 million Asia-focused fund of hedge funds manager.
KBC Alpha was established in 2001 by chief investment officer Neale Safaty as the fund of hedge funds division of KBC Alternative Investment Management. The fund investment team will be integrated into Paamco’s global portfolio management team and will initially operate as a separate division within the firm known as Pan Asia Alpha Strategies.
Tehran Times – Permal Investment Management, the hedge fund investment division of U.S. asset manager Legg Mason Inc, is aiming to raise up to $500 million to take advantage of a boom in distressed sales of hedge fund holdings, the Financial Times said.
Hedge funds investors have been selling their holdings at a discount to escape restrictions on withdrawals amid a global rush for cash, according to the paper.
The new fund has been ""designed to take advantage of investors’ need for liquidity,"" Omar Kodmani head of Permal’s London office, told the paper.
""There is an unusual number of sellers out there and those who are holding funds with a one-year lock-up or even a three-month wait to the next redemption window need to get out at a discount,"" Kodmani was quoted as saying.
Norwalk Advocate – Some hedge funds are reducing their management and incentive fees to keep investors for longer periods during turbulent times on Wall Street.
Typically, hedge fund managers require investors to lock their money into a hedge fund for a year while charging a 2 percent management fee and keeping 20 percent of hedge-fund profits as an incentive fee – if it reaches a pre-determined point.
Camels Capital LLC, a Greenwich-based hedge fund, and Ore Hill, a New York-based fund, among others, have restructured these terms to keep investors.
"Ourselves, Ore Hill and a few other funds have taken a step to do that in this period of liquidity to lock in investors," said Richard Brendan, chief executive officer for Camels Capital. "We’ve been able to lock in our investors for a period of time to participate in opportunities with them."
Brennan would not comment on the specifics of the agreement between the hedge fund and his investors.
Scott Baker, a principal with Greenwich-based hedge fund investment firm Cookpine Capital, said many hedge funds are coming up with innovative ways to secure investor capital for longer periods.
Bloomberg – Tokio Marine Holdings Inc. will shift more of its 11 trillion yen ($100 billion) in assets to hedge funds and scour the globe for bargains as the credit squeeze forces down prices.
Tokio Marine & Nichido Fire Insurance Co., a unit of Japan’s biggest casualty insurer, may boost its investments in hedge funds by as much as 30 billion yen annually, said Fumihiro Nakajima, who runs the firm’s hedge fund investment group. The insurer has almost 200 billion yen in this asset class, he said.
“Our goal is to gradually increase hedge funds investments,” said Nakajima, 44, in an interview in Tokyo yesterday. “In the wake of subprime loan problems, there will be an opportunity to invest in hedge funds that invest in the credit market,” including high-yield bonds and credit-default swaps.
Reuters- Investment firm Duff Capital Advisors said on Tuesday it acquired hedge fund group North Sound Capital.
The two firms, both located in Greenwich, Connecticut, did not disclose terms of the deal.
For Duff Capital, which launched in March with the goal of raising between $1 billion and $1.5 billion to seed investment strategies, this marks its second hedge fund investment.
For North Sound Capital, whose assets have shrunk from $2.9 billion in 2006 to $1 billion now, the deal is a chance to join forces with Philip Duff, a Wall Street veteran with a track record of growing investment firms.
West Palm Beach (HedgeCo.net)- According to a new report by DataMonitor, ‘Hedge Funds in Europe 2008′, the European hedge fund market is going through a period of growth but the extent of the mortgage-backed security crisis is still uncertain.
The report forecasts strong growth in funds of hedge funds over the next year, with less demand for single hedge funds according to 65% of asset managers in Europe.
Asset managers in Spain and Italy believe most strongly that the demand for funds of hedge funds will outstrip that for single hedge funds, followed by France, Germany and finally the UK.
Across the five core economies in Western Europe – France, Germany, Italy, Spain and the UK – institutional investors now dominate the market for hedge funds. On average, slightly more than two-thirds of asset managers confirmed that this group represents their biggest customer segment for hedge funds today.
40% of asset managers in Italy say mass market investors may also be put off by the price of hedge fund investment. In Spain, on the other hand, demand from mass market clients is being limited by competition from capital-protected and structured products and inadequate promotion of hedge fund products by banks and advisers.
DataMonitor, a provider of online database and analysis services for key industry sectors, has put out the report presenting views on the market for hedge fund investment based on a survey of 100 leading asset managers across Europe.
Covering mass market, high net worth and institutional customer groups, ‘Hedge Funds in Europe 2008′ is part of a series of reports looking at the market for alternative investments in Europe.
CityWire.co.uk- RWC Partners has recruited Carmel Peters and Kirsty McLaren for the launch of an Asian-focused fund.
Investment boutique RWC, which changed its name from MPC Investors earlier this month, has hired Peters and McLaren from Sofaer Capital.
The duo has been brought in to co-manage the RWC Asia Ascent Fund, which will be launched later in the year.
The new fund will invest across the Asia region and be benchmarked against the Asian (ex-Japan) indices. It will adopt Ucits III status to allow the flexibility to short indices and stocks.
Bloomberg- A sharp decline in a Fifth Third Bancorp hedge fund investment led to more than $300 million in charge-offs the bank took in the last two quarters, according to a Bloomberg report.
Cincinnati-based Fifth Third had already said that it took a pretax charge of $144 million in the first quarter and a $177 million charge in last year’s fourth quarter as a result of the declining value in its portfolio of bank-owned life insurance, which it takes out to cover its employees.
Fifth Third (NASDAQ: FITB) said in its first-quarter earnings release that the charge was caused by "further deterioration in the values of the underlying investments of the policy, reflecting widening credit and municipal spreads during the quarter."
