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Hedge Funds Review Magazine – Troubled Swiss-based alternative asset management group Gottex Fund Management Holdings said assets under management (AUM) were down over $2 billion to $13.5 billion at September 30, 2008, compared with $15.6 billion at June 30, 2008. The fall represented a 13.6% decrease.
The fall was mainly caused by “negative performance in extremely challenging markets”, according to a company statement on third quarter trading. The poor performance was despite Gottex’s market neutral and directional products performing better than or in-line with the broader market indices and relevant hedge fund benchmarks.
AUM change across Gottex strategies during the quarter 2008 included declines in market neutral and directional strategies (-13.1%), asset based strategies (-15.8%), advisory mandates (-15.2%) and enhanced index strategies (-3.2%).
New York (HedgeCo.Net) – Merrill Lynch is still hoping to strike a deal in which Korea Asset Management Corp. would purchase a significant amount of their bad debt. Talks have been stagnant because of recent disputes over prices, but some say those debts could sell for under $200 million.
"We have been seeking to buy a significant amount, but a deal may be difficult at this rate,” said Lee Chol Hwi, head of Korea Asset, in an interview with Bloomberg.
Merrill, like other large financial institutions that have been pummeled by subprime related losses, is trying to raise capital to overcome the $40 billion plus of losses they have had to write down. Merrill recently had to get rid of about $31 billion of collateralized debt obligations, another form of mortgage backed securities, for about 22 cents on the dollar.
Korea Asset, which was created in 1962 and aims to purchase delinquent loans, set up a $870 million fund that buys bad debts in the United States. Lee says the company can afford to be patient, since he feels the turmoil in the marketplace is only going to push prices lower.
"The U.S. market desperately needs capital,” Lee said. "It’s practically a buyer’s market there.”
Shares of Merrill are trading for almost 66% less of what they were a year ago. Financial institutions have written down over $500 billion in losses stemming from the credit crunch. Merrill leads the pack along with Citigroup of those that have been hit the hardest, with the banks writing down $51 billion and $55 billion respectively.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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West Palm Beach (HedgeCo.net) – Established leader in the management of fund of hedge funds, Tremont Capital Management, has appointed Scott R. Metchick as Chief Investment Officer. Metchick brings to Tremont over 20 years of experience in the fund of hedge fund industry and a proven performance record.
"The role of the fund of hedge funds is even more important for investors in today’s market which makes Tremont’s over 20 years of experience and dedication to excellence critical factors in delivering the products and performance that our clients need and deserve," said Metchick. "I’m excited to join the firm and look forward to all that’s ahead of us."
Tremont says his demonstrated ability to manage a defined process-oriented investment philosophy while managing a global investment team complements the existing investment approach at Tremont, allowing the firm to deepen its presence in key global institutional and distribution markets.
"Investment excellence is core to our strategy of establishing a scalable, institutional standard multimanager fund of funds business," said Rupert Allan, President and Chief Executive Officer. "Scott’s appointment represents the execution of the final phase of this strategy by capping a series of senior hires which, together with our existing expertise in the investment management group, completes the leadership team at Tremont."
Metchick’s hire as CIO, replacing Cynthia Nicoll who left Tremont for personal reasons, is the most recent in a succession of senior appointments in the investment team including Andrew Kaneb, former head of Global Equities at Lighthouse Partners, and Jim Purnell, who came from the structured product group at Dresdner Bank to lead the risk management group at Tremont.
Allan has moved quickly within a challenging external environment since becoming CEO last year, adding to his role as President. "Now more than ever," said Allan, "clients want to know that they are working with an investment manager that has the experience, the infrastructure and the ability to deliver on a mandate in various market conditions with the products and solutions they need. We now have the team in place to do just that."
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The Columbian- The hope at Lehman Brothers is that a management shakeup Thursday will contain the damage of a stunning quarterly loss – yet some on Wall Street fear this is one more step toward a more dramatic outcome for the embattled investment bank.
The ouster of Chief Financial Officer Erin Callan and Chief Operating Officer Joseph Gregory was an attempt to quell investor anger that Lehman’s leadership has failed them. But, with a four-day stock plunge that wiped $4.5 billion from the investment bank’s market value, it was unclear if the upheaval will be enough to satisfy critics.
"These people deserve to be fired," said Dick Bove, an analyst with Ladenburg, Thalmann & Co. "Their mistakes cost their shareholders billions of dollars in wealth." Lehman shares fell 4.4 percent Thursday to $22.70 and are down 30 percent this week. The decline is a blow to investors who bought into a stock offering at $28 earlier this week – including BlackRock Inc. and former AIG chief Hank Greenberg.
