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.
Reuters – Investors, encouraged by a growing number of acquisitions and public floats in the past few months, are keeping a close eye on a coterie of promising startups in Silicon Valley.
An informal poll of venture capitalists and others pointed to six privately held companies as the ripest for acquisition or readiness to go public, out of 34 cited in industries ranging from alternative energy to social networking.
For now, the Silicon Valley Six say they intend to keep growing rather than agreeing to be acquired or go public during the recession.
Reuters – Investors, encouraged by a growing number of acquisitions and public floats in the past few months, are keeping a close eye on a coterie of promising startups in Silicon Valley.
An informal poll of venture capitalists and others pointed to six privately held companies as the ripest for acquisition or readiness to go public, out of 34 cited in industries ranging from alternative energy to social networking.
For now, the Silicon Valley Six say they intend to keep growing rather than agreeing to be acquired or go public during the recession.
BullionVault – The Gold Price fell sharply against a strong US Dollar on Monday morning, falling through what one Asian dealer called "technical and psychological support at $942" to record the lowest Gold Fix so far this month at $937.50 an ounce.
Crude oil sank below $66 per barrel, while base metals and silver lost more than 3%.
Adding to Friday’s 0.7% loss despite news that France and Germany crept out of recession between April and July, world stock markets sank 1.4% early Monday on average – the biggest one-day loss in more than six weeks – after Japan reported 0.9% growth in its second-quarter GDP.
Commodity Online – Gold prices had an excellent run last week, led by the extensive fall in the US dollar and strong rally in the equity markets. The rise in crude oil prices also resulted in lifting bullion.
The US currency showcased the biggest decline in a month against euro last week as US data showed that the world’s largest economy contracted lesser than forecasts, which hinted that the recession is fading and gave rise to investor demand in riskier counters such as commodities and equities.
The outlook is bright – the most active benchmark contract at the Comex has pulled off a strong recovery, ending at $953.70 near the resistance at $960, a break and close of which will take prices towards new highs of $966.70/oz and $970.40/oz, state traders.
Citywire.co.uk – The Serious Fraud Office (SFO) is to probe UK banks for evidence that complex financial products were mis-sold to consumers before the recession hit.
SFO director Richard Alderman plans to investigate the sale of complicated financial instruments like credit default swaps and collateralised debt obligations. The SFO has changed its tactics and will take a more active tack with investigations and will intervene to prevent future frauds, according to a report in The Times.
SFO staff are already investigating Madoff’s UK operations, hedge funds accused of over valuing securities, AIG UK and the collapse of Weavering Capital, according to The Times. The government has also asked its fraud taskforce to examine the collapse of MG Rover in 2005. And the workload is set to grow with the decision to look into the Keydata saga, as reported by Citywire this week.
Taping a "Bernanke on the Record" special that will air on PBS this week, the top U.S. monetary policy-maker defended the aggressive, even unorthodox actions taken by the Fed during the long recession and deep financial crisis.
"I was not going to be the Federal Reserve Chairman who presided over the second Great Depression," Bernanke said.
"When you’re in a situation like this, a perfect storm, sometimes you have to do things that are a little unorthodox, out of the box,"
Bloomberg – Gold climbed in Asian trading as equity gains and an improving economic outlook boosted demand for the metal as a hedge against accelerating prices.
The MSCI Asia Pacific Index of equities gained for a sixth day after an index of leading economic indicators in the U.S. topped projections, indicating the country may be emerging from recession. Federal Reserve Chairman Ben S. Bernanke wrote in the Wall Street Journal that the central bank “will need to tighten monetary policy” to prevent inflation.
Reuters India – Wall Street, where hundreds of commodity traders lost jobs last year as the recession set in, is on a new hiring phase where banks and hedge funds want to pay top dollar but only to a few, highly productive people.
The actual number of hires is unlikely to match the pace seen during the commodities super-cycle from 2003 to 2008, when investment banks ran a maze of desks that handled almost everything in the energy, metals and agricultural space.
Bloomberg – Hedge funds and other tenants in London’s Mayfair and St. James’s district, the world’s second- most expensive business location, face a doubling in property taxes in the next five years, real estate brokers said.
Tenants in central London may start demanding rent cuts to compensate for municipal business property taxes, known as “rates,” that may increase to 50 pounds ($81.50) a square foot by 2014 from 25 pounds now, according to adviser Jones Lang LaSalle Inc.
The tax, reset to property rental values in April 2008, will rise even as rents in London’s West End area are tumbling. Since that reference date, prime rents have fallen 46 percent to 58.50 pounds a square foot after inclusion of rent-free incentives, JLL said. The financial crisis and the recession have cut demand from financial services firms, which account for 60 percent of tenant seeking to locate in the district.
Reuters – Traditional works of fine art are fetching good prices despite the recession as buyers seek security and quality, industry insiders said this week at the Art Basel show.
Film star Brad Pitt grabbed the headlines by splashing out $1 million on a painting by German artist Neo Rauch at the show, the world’s largest, which is celebrating its 40th year.
"The sudden change of the market in October affects not so much the prices but the overall volume of what is being offered," said Simon de Pury, chairman of auction house Phillips de Pury & Company.
"The catalogues are getting thinner but the prices are not necessarily getting lower. Indeed, some have held up very, very well," said de Pury, a leading art world figure known for his ability to whip up excitement in the sales room.
Reuters – Wall Street was set to open flat on Thursday, with investors eyeing retail sales and weekly jobless data for fresh insight into the state of the recession-hit economy.
* Investors will watch a 30-year treasury note auction for direction on interest rates, one day after a weak 10-year auction sent yields on the benchmark note to a eight-month high. The latest results are due at 1 p.m. EDT.
* Stock investors have been concerned that rates may dampen an economic recovery by increasing borrowing costs for consumers and businesses and are drawing money away from the stock market.
Reuters UK – U.S. government efforts to revive a sluggish economy have cheered markets since March, but some of the most successful investors around worry these moves may only make the bad times linger.
Several hedge fund managers at an investment conference this week warned that a number of policy moves by the Obama administration, from its Chrysler intervention to Treasury’s myriad bank bailouts, will only extend the recession.
It would be better, they said, if the government let markets move unimpeded, causing pain now but clearing a path for sustainable recovery.
