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Bloomberg - Deephaven Capital Management LLC, the hedge-fund unit of stockbroker Knight Capital Group Inc., froze a $1.6 billion fund after investors asked to get back 30 percent of their money.
Withdrawals from the Deephaven Global Multistrategy Fund were suspended so managers wouldn’t be forced to sell assets in falling stock and debt markets, the Minnetonka, Minnesota-based firm said yesterday in a letter to investors. Lenders and trading partners also imposed stricter financing requirements, according to the letter.
Deephaven Global, which trades a variety of securities including bonds and commodities, follows RAB Capital Plc, Ore Hill Partners LLC and Highland Capital Management LP in limiting withdrawals amid the worst financial crisis since the Great Depression. The fund lost 15 percent this year through September, and Deephaven estimated it has fallen an additional 10 percent this month. The fund has returned an average of 16 percent annually since opening in 1994.
“This level of redemptions in the current market environment forces the question of whether such redemptions can be processed in the ordinary course without disadvantaging both continuing and later redeeming investors,” said the letter, signed by Colin Smith, Deephaven’s chief executive officer .
Bloomberg - Nippon Life Insurance Co., Japan’s biggest life insurer, said it will boost hedge fund investments and may target distressed assets to take advantage of volatility caused by the collapse of the U.S. subprime mortgage market.
Nippon Life, with about 100 billion yen ($920 million) in hedge funds, increased its allocation to this asset class by about 30 billion yen during the past two years in a trend it intends to continue, Hideya Sadanaga, deputy general manager of the firm’s Credit & Alternative Investment Department, said in an interview in Tokyo.
The global credit crisis that’s caused more than $500 billion of losses and writedowns at financial firms has increased volatility in debt markets and led to a 20 percent decline in the value of the 1,737 companies on the MSCI World Index this year.
“There will be investment opportunities in the credit and distressed asset class eventually, given this market environment,” said Hiroshi Aikawa, head of alternative investment at office at Nippon Life’s Nissay Asset Management Corp., in the same interview on Sept. 5. “Investments that profit from trading volatility also look attractive.”
Bloomberg.com: Asia - Nippon Life Insurance Co., Japan’s biggest life insurer, said it will boost hedge fund investments and may target distressed assets to take advantage of volatility caused by the collapse of the U.S. subprime mortgage market.
Nippon Life, with about 100 billion yen ($920 million) in hedge funds, increased its allocation to this asset class by about 30 billion yen during the past two years in a trend it intends to continue, Hideya Sadanaga, deputy general manager of the firm’s Credit & Alternative Investment Department, said in an interview in Tokyo.
The global credit crisis that’s caused more than $500 billion of losses and writedowns at financial firms has increased volatility in debt markets and led to a 20 percent decline in the value of the 1,737 companies on the MSCI World Index this year.
Gulf Daily News - Developing markets are fertile ground for hedge funds, if the funds have experienced managers, according to Paulson and Company founder and chief executive officer John Paulson."Underdeveloped markets are less efficient and create more opportunities," Mr Paulson said in an interview in the forthcoming issue of The Report Bahrain 2008.
"In markets such as London and New York, which are very efficient, the arbitrage opportunities are very thin. However, in developing markets, the arbitrage opportunities are greater. A developing market could benefit from an experienced manager who is able to navigate the market to create value for investors."
He outlined many of the hedge fund strategies, and pointed out that, for GCC hedge funds, underdeveloped debt markets should not pose an obstacle as hedge fund managers can focus in the areas where there is sufficient liquidity.
Mr Paulson said that, with the hedge fund sector among the fastest growing industries in the world, there was a demand from many investors from outside the Gulf region to diversify and invest in promising areas of the world.
New York (HedgeCo.Net) - RAB Special Situations hedge fund is contemplating a share buyback, after getting burned by the nationalization of Northern Rock and the plummeting of share values that followed. The fund said it may repurchase the shares and either hold or cancel them.
"Our strategy has now lost money for three straight quarters ever since the credit crunch spread from the debt markets and began to hurt equity valuations," said RAB head Philip Richards.
While he did write off the Northern Rock loss as “very regrettable,” Richards went on to explain how he believes in a twenty year super-cycle for commodities. This would be driven by urbanization and industrialization in China, India and the Gulf region; areas that he says are experiencing supply shortages stemming from decades of under-investments in the mining and energy industries.
The $1.5 billion fund lost about 37% of its NAV this year. While it was the biggest holder of Northern Rock, other sour investments would have still forced the decline in Net Asset Value. The fund posted a loss of 28.9 million pounds, or 53.8 million dollars in the first six months of this year.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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New York (HedgeCo.Net) - Greenwich-based hedge fund SageCrest Finance has filed for Chapter 11 bankruptcy protection. The credit opportunity fund, which grants short-term loan to companies left with few financing alternatives, said its recent losses were due to the condition of the debt markets coupled with mounting lawsuits.
The fund once managed around $900 million. Current assets are listed at $50-$100 million. In addition to providing short term capital to businesses, SageCrest also extended loans to plaintiffs in slip-and-fall lawsuits. They also dabbled in the art world and are caught in a nasty battle mired with scandal to retrieve $40 million which they claim is owed to them.
SageCrest is run by Alan and Philip Morton. The fund has had its recent share of bad press, with two investors suing the company for various reasons this year. Westerly Capital filed a suit in June claiming the managers ran the fund to their own benefit and to the detriment of its clients. This followed an earlier suit by Wood Creek Capital Management, who claimed that SageCrest did not adhere to its redemption policy.
In a petition filed on Sunday in U.S. Bankruptcy Court in Connecticut, SageCrest listed debts in the range of $1 million to $10 million.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@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! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com
Independent- The man who made a personal $3.7bn (£1.85bn) fortune by predicting the credit crisis is hoping to make another killing by helping to prop up financial companies brought to the brink of ruin by the chaos in the debt markets.
John Paulson, who went from being an obscure Manhattan hedge fund manager to one of the financial world’s hottest properties last year, is raising a new fund that will invest in banks, insurance companies and other financial institutions as they rebuild their battered balance sheets.
Financial companies have written off more than $460bn since the collapse in the debt markets began last summer, and Mr Paulson believes that is barely one-third of the final total that will be lost. At a conference in Monaco last month, he said writedowns could ultimately reach $1.3 trillion.
John Paulson, who went from being an obscure Manhattan hedge fund manager to one of the financial world’s hottest properties last year, is raising a new fund that will invest in banks, insurance companies and other financial institutions as they rebuild their battered balance sheets.
Financial companies have written off more than $460bn since the collapse in the debt markets began last summer, and Mr Paulson believes that is barely one-third of the final total that will be lost. At a conference in Monaco last month, he said writedowns could ultimately reach $1.3 trillion.