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Newark Star-Ledger - Managers of New Jersey’s embattled pension fund, criticized by lawmakers for bailing out a struggling BlackRock hedge fund in October, secretly gave two other hedge funds the same deal, records from the state investment council show.
The Canyon Special Opportunities Fund and GoldenTree Credit Opportunities Fund were each awarded $49.5 million in state funds on the same day the controversial $49.5 million bailout of a BlackRock Inc. fund took place, according to a memo released by the investment council this week.
The cash infusions were a shade below the $50 million threshold that triggers public scrutiny. The BlackRock deal riled prominent Statehouse lawmakers. So does the new revelation that there was not just one such deal, but three.
Washington Post - New Jersey’s pension fund is under fire over a series of hedge-fund investments, the Wall Street Journal said.
New Jersey made the investments last month, to funds run by BlackRock Inc <BLK.N>, Canyon Capital Advisors LLC and GoldenTree Asset Management LP, as they were "facing the equivalent of margin calls," William Clark, director of the New Jersey Division of Investment, told the paper in an interview.
In effect, the funds, which had borrowed money for investments, either faced or anticipated facing demands from lenders for cash as the value of those investments fell, the paper said.
State legislators, upon learning of the investments, are questioning both the wisdom of the decisions as well as the process, according to the paper.
Globe and Mail - The Caisse de dépôt et placement du Québec, hammered by losses on international holdings, has been forced in recent weeks to sell billions of dollars of stocks into a falling market.
A fund that began the year with $155.4-billion of assets has sold $10-billion of stocks in the past two months, sources said.
Canada’s biggest pension fund needed cash to shore up or shut down money-losing positions in areas such as currency hedging and derivatives, along with international real estate and private equity. Part of the problem, sources said, is that the fund’s hedging strategy was sideswiped by the recent fall in the Canadian dollar.
Investors Chronicle- In Homer’s Iliad, Troy was razed to the ground by Greek warriors, but Troy Asset Management aims to put up a much better defence for its investors. The boutique fund manager takes its name not from the ancient city but from Lord Weinstock’s British thoroughbred racehorse, winner of the 1979 Epsom Derby.
As chief executive of Troy Asset Management, Sebastian Lyon’s main concern is not to lose investors’ money. He used to work for GEC as one of the team running its pension fund but in 2000 was asked by GEC managing director Lord Weinstock to set up an independent management company to look after £36m of the family fortune, with a brief to look after it conservatively.
Troy’s three funds are open to investors who have £10,000 (or £7,200 in an individual savings account) to invest, and between them they have assets of £258m.
"It’s not an easy time to be a fund manager," admits Mr Lyon, who manages the conservative Trojan Fund and co-manages the more aggressive Trojan Capital Fund. "We will probably continue to be in a bear market for the next year or so."
West Palm Beach (HedgeCo.net)- Winners of Alternative Investment News’ 6th Annual Hedge Fund Industry Awards were announced on Wednesday evening June 25th at a black-tie dinner and ceremony at Cipriani Wall Street in New York City. The awards recognized hedge funds, fund of funds, consultants, endowments, foundations and corporate and public funds that stood out for excellence in alternatives investing during the year.
Nearly 500 leaders and luminaries from every facet of the industry were in attendance to see winners announced and awarded ‘Oscar-Style’. Michael Steinhardt, a pioneer in the hedge fund world, and Phil Goldstein, Founder of Bulldog Investments were in attendance to accept their respective awards for Lifetime Achievement and Outstanding Contribution to the Industry.
Winners were awarded in nine other categories, and included Paulson & Co. for Hedge Fund Leader.
Also recognized and awarded were the 2008 Rising Stars of Hedge Funds, 20 up-and-coming, talented young professionals poised to be future leaders of the industry.
This year’s award winners were as follows:
Hedge Fund Leader of the Year: Paulson & Co.
Fund of Hedge Funds Leader of the Year: Harcourt Investment Consulting
Emerging Manager of the Year: Algebris Investments
Hedge Fund Launch of the Year: AdultVest
Institutional Manager of the Year: The Blackstone Group
Public Fund Investor of the Year: Teacher Retirement System of Texas
Corporate Pension Fund of the Year: Railway Pension Trustee Company
Nonprofit Investor of the Year: Texas Christian University
Hedge Fund Consultant of the Year: Jaeson Dubrovay, NEPC
FINalternatives- An Illinois pension fund official caught up in the trial of a prominent supporter of Sen. Barack Obama (D-Ill.) may be joining a new hedge fund.
Jon Bauman, executive director of the $38.7 billion Teachers’ Retirement System of Illinois, is mulling a departure to join Abraham Lincoln Alternative Investments, which is set to launch its first fund of hedge funds in August. But Bauman sounds far from certain he’ll be leaving TRS, and the pension fund says he’ll be staying put for at least another year.
“The long and short of it is, I’m not ready to pull the trigger yet,” Bauman told Crain’s Chicago Business. “There are considerations on both the TRS and Abraham Lincoln sides of the situation that need to be worked out before I would resign this position and make the move over.”
Bloomberg - Whenever pension funds, mutual funds and insurance companies decide they should own dollar assets that are out of favor with hedge funds, the hedge funds lose.
Institutional investors bought more dollars than they’ve sold this year, according to State Street Corp. and Bank of New York Mellon Corp., the largest money managers for institutions. That’s significant because speculators such as hedge funds raised bets against the greenback by 36 percent, data from the Commodity Futures Trading Commission in Washington show.
History indicates institutional investors may be on to something. The dollar gained in 71 percent of the quarters over the past decade when they were net buyers, according to Boston- based State Street. They bought more than they sold in all of the quarters when, like now, benchmark interest rates were below inflation and the current account deficit, the broadest measure of trade, exceeded 3 percent of the economy.
"The dollar can do quite well in this slow-growth environment,” said Richard Batty, global investment strategist at Standard Life Investments in Edinburgh, a mutual and pension fund that manages the equivalent of $283 billion. "We’ve had for some time a positive position on the U.S. dollar.”
After falling to a 13-year low of 78.993 in March, the dollar has gained 2.5 percent to 80.993, according to a trade- weighted index maintained by the Federal Reserve that includes the euro and yen. It has rallied by the same amount versus the euro to $1.5554 since hitting a record low of $1.6019 on April 22.
Bloomberg - The annual shareholders meeting of UBS AG used to be a time for Chairman Marcel Ospel to gloat over his accomplishments. Shareholders would praise Ospel for turning a slow-growing, insular Swiss bank into a global financial powerhouse, with a stock price that rose 115 percent from January 1999 to January 2007. Just last year, Ospel bragged to shareholders about how the bank’s record profit was the result of its “smart expansion strategy.”
At UBS’s most recent annual meeting in April, shareholders cheered Ospel again. This time, though, it was when he announced his resignation. Ospel, 58, wearing a navy blue suit and bright yellow tie, didn’t flinch. Glasses resting on the end of his nose, he made a lengthy speech comparing himself to the captain of a ship emerging from a storm.
Shareholders responded that it was the chairman himself who had steered the bank into choppy waters. “Ospel is responsible for this malaise,” Gerhard Meier, a shareholder for 30 years, told investors at the meeting. In the nine months ended on March 31, UBS lost 25.4 billion Swiss francs ($24.3 billion), more than any other bank caught in the worldwide credit crunch.
Shareholders say Ospel and his fellow managers took a profitable Swiss bank and wrecked it on the shoals of structured finance and subprime mortgages.
“He built up enormous risks, which were damaging the whole organization,” says Herbert Braendli, president of Profond, a Swiss pension fund that has been selling down its holding of about 2.3 million UBS shares because it’s unhappy with the bank’s management. “He intentionally pushed it with his expansion goals.”