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 – Artradis Fund Management, Singapore’s largest hedge fund manager, said on Monday it has hired David Dredge from Royal Bank of Scotland as managing director for portfolio management.
Dredge was deputy global head of local markets at RBS as well as its head of local markets trading and risk management in Asia. He is also deputy chairman of the Singapore Foreign Exchange Market Committee.
Artradis said in a statement it saw opportunities in foreign exchange and interest rates, and has re-opened two of its funds to take in fresh money from investors.
HedgeCo.net – Artradis Fund Management, Singapore’s largest hedge fund manager, said on Monday it has hired David Dredge from Royal Bank of Scotland as managing director for portfolio management.
Dredge was deputy global head of local markets at RBS as well as its head of local markets trading and risk management in Asia. He is also deputy chairman of the Singapore Foreign Exchange Market Committee.
Artradis said in a statement it saw opportunities in foreign exchange and interest rates, and has re-opened two of its funds to take in fresh money from investors.
Wall Street Journal – Some numbers are so big you just have to stand back and admire them. An investment banker claiming $550 million of fees in a single year is just such a number.
The number is staggering for an industry in which a great year means an investment banker brought in $25 million in fees and $40 million of fees makes a Wall Streeter a star.
Then there is Merrill Lynch banker Andrea Orcel laying claim to bringing in more than 13 times that for his firm, or $550 million in fees, according to this Wall Street Journal article by our colleague Susanne Craig. That earned Orcel a 2008 bonus of $33.6 million–down just a smidge from the $38 million he received in the M&A boom year of 2007.
Investment bankers’ bonuses are based in large part on the credit the individual bankers claim for the deals they worked on. As today’s Page One Journal article notes, Orcel won a big one-time bonus of $12 million in 2007 just for advising the Royal Bank of Scotland Group-led $101 billion acquisition of Dutch bank ABN Amro.
The Herald – Toscafund, the hedge fund that was a catalyst for the sale of ABN Amro, made £158m profit in 2007 when Royal Bank of Scotland led the disastrous £49bn acquisition of the Dutch bank.
The investment firm, whose holding company is chaired by former Royal Bank chief Sir George Mathewson, enjoyed a spectacular increase in earnings which appears to have been helped by a surge in the value of ABN Amro.
The revelation of Toscafund’s success may stoke fresh controversy about hedge funds. These have been accused of causing massive problems for the UK’s banks with investment policies focused on making short-term gains.
Times Online – Hedge funds were accused by MPs yesterday of gambling against the taxpayer when they bet that the share prices of British banks would fall.
Appearing before the Treasury Select Committee, four leading hedge fund managers were told by John McFall, the committee’s chairman: “You’re snubbing the public; not only that, but you’re making shedloads of money.”
The hedge fund heavyweights — Paul Marshall, of Marshall Wace, Douglas Shaw, of BlackRock, Chris Hohn, of TCI, and Stephen Zimmerman, of NewSmith Capital Partners — came under particular attack over the practice of short-selling, only a day after it emerged that Paulson & Co, a renowned American hedge fund, had made an estimated £270 million in profits from betting against Royal Bank of Scotland (RBS) , which is majority-owned by the State.
Bloomberg – Paulson & Co., the hedge fund run by billionaire John Paulson, made at least 295 million pounds ($420 million) since September by short selling Royal Bank of Scotland Group Plc.
Paulson held a short position of 0.87 percent in Edinburgh- based RBS on Sept. 19, according to regulatory filings. The shares traded at 213.5 pence at the time, and Paulson’s disclosure indicates he borrowed and sold almost 144 million RBS shares with plans to buy them back at a lower price. He reduced his short position to less than 0.25 percent, or about 98.6 million shares, as of Jan. 23, according to a filing yesterday.
New York (HedgeCo.Net) – Billionaire and hedge fund manager extraordinaire John Paulson has reportedly pocketed $139 million by betting against the Royal Bank of Scotland, further fueling cynicism that shorting aids in driving down share prices.
Paulson is no stranger at predicting trends and shorting companies that he feels fit. Late last year, his New York-based Paulson & Co. disclosed short positions in the British mortgage lender HBOS, Barclays and Lloyds TSB.
Investors turn to Paulson because he seems to have a knack for placing bets that he feels will turn out in his favor. Paulson infamously bet against the U.S. housing market in 2007, which garnered himself a $3 billion paycheck while returns on his hedge funds continued to rise. In 2008, when most hedge funds lost an average of 15 percent on the year, Paulson’s funds kept steady, with his Advantage Plus fund up 20 percent.
While some argue that the practice of shorting is responsible for driving down share prices, many feel that is an unfair assumption. The ban on short selling that was enacted last September in the UK was finally lifted earlier this month, although short positions are still required to be disclosed. The Financial Services authority has said they would reinstate the ban if it proved to be needed.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
Guardian Unlimited – Billionaire hedge fund manager John Paulson has made a £100m profit by betting that the Royal Bank of Scotland’s share price would fall dramatically, according to calculations by the Guardian, adding fuel to the debate about the impact of short-selling on bank stocks.
New York-based Paulson, who made more than $3bn by betting against the US housing market, now appears to be profiting from positions placed on the assumption that bank shares would tumble in the aftermath of the market chaos caused by the demise of the sub-prime mortgage industry.
His hedge fund, Paulson & Co, was one of the few to trade through the ban imposed on short-selling by the Financial Services Authority in September to protect the rescue takeover of HBOS by Lloyds TSB.
LONDON (Reuters) – Hedge funds may have missed out on sharp falls in banks’ shares in recent days because few rushed in after the UK’s ban on short selling financial stocks expired on Friday, data shows.
According to figures from research firm Data Explorers, the amount of stock out on loan — a good indication of how much a stock has been sold short — did not increase on Friday in Royal Bank of Scotland and actually fell in HBOS.
Stock out on loan in HSBC, Lloyds TSB and Barclays rose only slightly.
nebusiness.co.uk – LLOYDS Banking Group became the latest casualty of the bank sector sell-off yesterday as its shares plunged as much as 47%.
Royal Bank of Scotland steadied a little after Monday’s mammoth 67% fall, but doubts over the Government’s second bank bail-out and renewed fears for the sector’s health dragged its rivals lower.
Lloyds, created this week from the merger of HBOS and Lloyds TSB, was the worst hit, followed by Barclays down nearly 20%.
The falls extend losses across the sector in light of news that RBS expects to report record annual losses, but also comes in the wake of the recent expiry of the short-selling ban.
Wall Street Journal – Experts say hedge funds are not responsible for the wholesale selloff in U.K. financial stocks which saw shares in the four remaining major banks dive to record lows earlier this week and prompted renewed calls to the U.K. financial regulator to reintroduce a ban on the short-selling of financial stocks.
While Lloyds Banking Group (LYG), HSBC Holdings PLC and Royal Bank of Scotland Group PLC (RBS) all closed in positive territory Wednesday with Barclays PLC (BCS) only down 0.07%, all four had had massive falls Monday and Tuesday.
Forbes – Patrick Degorce, a founder and partner at high-profile activist hedge fund firm The Children’s Investment Fund (TCI), has left the company, a spokeswoman told Reuters on Friday.
Degorce was in the public eye in early 2007 when he wrote a high-profile letter on behalf of shareholder TCI to Dutch bank ABN Amro criticising its ‘terrible shareholder return’ and calling on it to look at a break-up, spin-off, sale or merger of units or the business as a whole.
ABN was later sold to a consortium led by Royal Bank of Scotland for about 70 billion euros ($95.73 billion).
