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.
The Tribune – The more than $8.8 million judgment awarded to clients of Jeffrey Forrest has been paid, six months after a financial regulatory agency determined that the former San Luis Obispo investment adviser had misrepresented a risky hedge fund as being safe.
Forrest, who owned WealthWise LLC, and Associated Securities, an El Segundo-based broker-dealer with which his firm had been registered to sell securities, abandoned their appeal of the judgment in federal court, according to Phil Aidikoff, a Beverly Hills attorney representing the group of WealthWise investors.
AP – The head of the government agency that packages federally backed mortgages into investments is stepping down for a new job, people familiar with his plans said.
Joseph Murin, president of the Government National Mortgage Association, known as Ginnie Mae, is leaving his job this week after 13 months. The people declined to be identified because his departure was not yet official, and would not say where Murin is going to work next.
Ginnie Mae sold more than $200 billion in mortgage securities in the first six months of 2009, double last year’s level.
Business24-7 – Six months after their worst drawdown on record, regional stock markets are outperforming the Middle East and North Africa (Mena)-focused hedge funds, suggesting markets are once again warming up to equity participation.
According to Emirates Business research, Mena markets have posted gains of 9.73 per cent on average, beating the 10 region-focused hedge funds, which have posted returns of 4.4 per cent since the beginning of this year.
Even the GCC markets, battered by their exposure to relatively lower oil prices and global economic environment, have turned in a marginally better performance, at 4.42 per cent, suggesting that risk appetite among investors in the regional markets is on the upswing.
Forbes – Hedge fund firm RAB Capital said on Wednesday that assets under management fell 32 percent in the six months to June but said clients had started putting money into its single strategy funds since April.
The firm said assets fell to $1.3 billion at end-June from $1.9 billion at end-December, in part due to the sale of its Northwest business. A year ago it ran $5.9 billion.
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.
NASDAQ – The pace of new European hedge fund launches has stalled this year after the industry’s dismal 2008 performance made investors unwilling to back new ventures.
Data provider EuroHedge Monday said just 47 funds started trading in the first six months of the year, the least in a decade and less than half the number in the same period of 2008. The new funds collectively raised $2.09 billion – a figure that in "normal" times might have been raised by one fund alone.
However, EuroHedge said there are signs the second half could be more fruitful, with several high-profile funds already started or in the pipeline. Those include Theleme, a global equities strategy being set up by Patrick Degorce, a co-founder of The Children’s Investment Fund who left to strike out on his own, and Gyldmark Liquid Macro Fund, a fund started by former BlueCrest Capital portfolio managers.
Reuters – Bayswater Asset Management, a computer-driven hedge fund shut down last year after big losses during the credit crisis, has relaunched after revamping its risk management controls, its new backers said on Wednesday.
San Francisco-based Bayswater had initially been backed at its launch in 2004 with $25 million (15 million pounds) from Man Global Strategies, part of hedge fund giant Man Group.
However, its strategy of trying to exploit inefficiencies in global markets lost 12 percent in the six months to September 2007 and it returned money to investors after being caught out by a vicious circle of deleveraging in July and August that hit many computer-driven funds.
Bloomberg – The cost of insuring hedge funds against negligence has risen as much as 20 percent in the past six months after Lehman Brothers Holdings Inc.’s bankruptcy and Bernard Madoff’s Ponzi scheme increased the threat of lawsuits.
A fund manager with $200 million of assets running a “straightforward” strategy is typically paying as much as $60,000 a year for $5 million of coverage, up from $50,000 at the end 2008, said Brian Horwell, director of professional risks at London-based Miller Insurance Services Ltd.
“We’ve had Lehman Brothers, Madoff and the financial downturn, all of which are hitting claims,” said Paul Towler, head of financial and professional insurance at Jardine Lloyd Thompson Group Plc in London. “There’s a lot of worry and concern about what other claims are still to come out.”
VC Circle – CX Partners, a new private equity firm promoted by former Citigroup Venture Capital International (CVCI) head Ajay Relan, has achieved the first close of $220 million for its maiden fund. The first close was made by the fund in March this year, Relan told VCCircle. The fund plans a final close of $500-600 million by September this year.
"The fundraising environment was tough six months ago, but now it is getting better," Relan told VCCircle. Indian stock markets have also been on a rally with Sensex rising from 8,160 points on March 9 to 14,284 points yesterday.
Reuters – Hedge fund firm Cheyne Capital Management is to buy fund of hedge funds manager Altedge Capital, the firms said on Tuesday, as the once-booming industry consolidates in the face of client outflows. Under the deal, Altedge Chief Executive and Chief Investment Officer Chris Goekjian will become partner and chief investment officer at Cheyne, which manages more than $6 billion in assets, and will report to Chief Executive Jonathan Lourie.
Altedge, whose business will be integrated into Cheyne’s over the next six months, hopes to benefit from Cheyne’s distribution.
Times Online – Accountants and lawyers who are trying to sort out the European collapse of Lehman Brothers, the American investment bank, have charged more than £100million in fees in six months.
The bonanza shows no sign of abating. PricewaterhouseCoopers (PwC), the administrator, says that costs will accrue at a similar rate over the coming months as a team of nearly 1,500 people unwinds the complex financial web behind the world’s biggest bankruptcy.
PwC paid a further £114.8 million to 800 employees of the bankrupt bank who stayed on to help to unwind millions of trades between Lehman and other banks and hedge funds.
Norwalk Advocate – It could be six months to a year before major investors start pumping money back into the market, according to a survey by Quinnipiac University and Greenwich Roundtable, which represents hedge fund investors who control or manage more than $1 trillion in assets.
The survey of 89 private and institutional investors was conducted from Jan. 26 to Feb. 6.
Osman Kilic, a Quinnipiac professor of finance, said it’s important for these investors to engage in the market because they provide funding for many Main Street businesses.
