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.
Forbes – Hedge fund managers Lloyd Khaner, Stephen Roseman and Ken Shubin Stein discuss changes in the industry post-Bernie Madoff.
The next video will include a discussion between three hedge fund managers and Intelligent Investing assistant editor David Serchuk. In the wake of the Bernie Madoff scandal, hedge funds remain a charged topic among investors. Often considered secretive investments for the super wealthy, there is no doubt hedge funds wield enormous influence on our financial markets. Currently there are some $1.8 trillion in assets under management at hedge funds, as more and more investors scramble back in. But why should anyone invest in them? What value do they offer?
Reuters – Fundraising by new European hedge funds may be picking up, according to an industry survey, after hitting a record low in a first half of the year overshadowed by the Madoff scandal.
The survey, released on Monday by data group EuroHedge, shows $2.09 billion (1.26 billion pounds) was raised in new funds in the first six months of 2009, the lowest in the poll’s 10-year history, while 47 new funds were launched.
A year ago 106 funds were launched, raising $10.8 billion, including $2.5 billion raised by the Brevan Howard Multi-Strategy fund.
New York Times – The Ponzi scheme’s victims denounce him as cold-hearted, dishonest and just plain wrong
No, they are not describing Bernard L. Madoff, the author of the fraud that has ruined their lives. They are criticizing Irving H. Picard, the New York lawyer and trustee who has been appointed to represent their interests in the tangled scandal.
As claims flow in from thousands of victims, Mr. Picard and his legal team are quietly making life-shaping decisions every day. They decide who will be paid quickly, who will be paid eventually, who will not be paid at all and who will be asked to pay back money they got years ago.
New York Daily News – State Controller Thomas DiNapoli is booting 10 hedge fund managers from doing business with New York’s scandal-scarred $122 billion pension fund, the Daily News has learned.
Four of the 10 firms were listed, but not charged, in an indictment the state attorney general’s office brought against two top associates to former Controller Alan Hevesi.
The four are Consulting Services Group, HFV Management, Olympia Capital Management and Pequot Capital Management.
Forbes – Following a brutal 2008 of losses, plunging assets and the Madoff scandal, the activities of the Obama administration were a primary worry among the nearly 500 hedge fund managers and other industry executives gathering at a Las Vegas conference this week.
‘When you have government intervention at the scale we have, you do something the markets abhor: you create uncertainty,’ said Sean Mathis founding partner of New Centurion Capital Partners. ‘We have uncertainty where markets are going and what the rules of the road will be.’
The Obama administration, even as it courts private investors to help buy up toxic bank assets, has targeted Wall Street bonuses and called for tougher market regulation.
American Chronicle – A Los Angeles businessman has pleaded guilty to corruption charges in a pension fund scandal that began in New York and is heading west.
Julio Ramirez Jr.’s guilty plea to securities fraud, revealed Tuesday in New York, tightened the connection between that state’s scandal and the pension fund industry in California. The charges arise from Ramirez’s work as an unlicensed "placement agent" for Wetherly Capital Group of Los Angeles, a politically connected firm that has secured investment business from CalPERS and CalSTRS.
BNET – A hedge fund Ponzi scheme scandal is breaking in the blogosphere – and it goes right to the top of political power. A little while ago, blogger John Hempton, who writes Bronte Capital, a finance blog, started sniffing around Connecticut-based hedge fund Ponta Negra.
Hempton didn’t like what he found. After legal threats from the fund’s lawyers, Hempton retreated until a court ordered a freeze on the assets of Ponta Negra fund manager Francesco Rusciano amid allegations he lied to investors to raise more than $30 million. After that, the blogger published his findings.
Seeking Alpha – Zero Hedge is always happy to discover something rotten in the state of capital markets. We are even happier when others dig independently and come up with their own startling conclusions.
Last night, we were very happy. John Hempton, who writes the insightful blog Bronte Capital, has done some amazing dot connecting in what, if true, and not swept promptly under the carpet by the powers that be, could expose a hedge fund scandal that could rival the Madoff fiasco, for the simple reason that it implicates none other than Barak Obama’s right hand man: Joe Biden.
The fund in question is Paradigm Capital, a fund of funds, that is controlled by Hunter and James Biden, the VP’s son and brother, respectively.
Reuters – A switch by some big investors chastened by the Madoff scandal and the credit crisis into managed accounts at hedge fund firms could end up penalising smaller clients in mainstream funds.
Managed accounts offer greater visibility and flexibility for larger investors such as funds of funds and big institutions by giving them direct ownership of underlying assets and the option to sell the portfolio if they want to get out quickly.
Boston Globe – Investors of disgraced financier Bernard Madoff have filed 18 lawsuits against Massachusetts Mutual Life Insurance Co. in an effort to recoup $3.3 billion that its hedge fund group lost in the scandal. But the Springfield insurer is trying to distance itself from the ordeal and says it has no liability in the matter.
MassMutual maintains that the losses racked up by investors in its hedge fund group, Tremont Group Holdings Inc., are their own – and not the responsibility of the insurance company. Tremont had the second-largest loss among Madoff clients after Fairfield Greenwich Advisors, a New York hedge fund that lost $7.5 billion.
Reuters - Bernard Madoff is behind bars, but the effects of his fraud are still reverberating in the hedge fund industry, with more redemptions expected and investor confidence decimated.
Traumatized investors are now more likely to closely monitor where their money is and who is managing it, hedge fund professionals said at the Reuters Private Equity and Hedge Funds Summit this week.
"You know, it is just absolutely devastating," said Anthony Scaramucci, managing partner at SkyBridge Capital, referring to the Madoff scandal.
Guardian Unlimited – Andres Piedrahita, a London-based fundraiser for Bernie Madoff’s fraudulent empire, is among high society figures facing increasing pressure to explain how they missed warning signs around the disgraced hedge fund manager.
Piedrahita, who has homes in Belgravia, New York and Majorca, channelled billions of dollars from Europe into Madoff funds through so-called feeder fund Fairfield Greenwich, where he is a partner. Fairfield has emerged as the largest loser from the Madoff scandal, with potential losses of $7.5bn – more than half its assets under management. The company, founded and controlled by Piedrahita’s father-in-law Walter Noel, is based in New York but investors from Europe are believed to have provided 68% of managed assets.
