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.
Times Online – GLG Partners, the London-based hedge fund, is on the point of losing a star fund manager this weekend in a situation that mirrors the high-profile departure of another top manager, Greg Coffey, last year.
Robert Donald, who manages part of the $1.5 billion (£1.3 billion) European fund with Pierre Lagrange, is planning to leave GLG after six years to work with the legendary financier George Soros.
However, sources close to New York-listed GLG said the situation was still live. ”He has not formally resigned, though he has indicated his desire to leave,” one said.
Boston Globe – The trustee in the bankruptcy case of swindler Bernard L. Madoff has told a hedge fund business owned by Massachusetts Mutual Life Insurance Co. to return money that it received from Madoff over the past six years.
Responding to a Boston Globe inquiry, bankruptcy trustee Irving Picard confirmed that he had sent a so-called clawback letter to Tremont Group Holdings Inc.
Tremont is among more than 225 former Madoff investors who have received such letters from Picard, on the grounds that the money belonged to other investors, because Madoff never generated any real investment profits. Picard wants to recoup the disbursed funds to have more money to repay investors for their losses. He has threatened to sue anyone who doesn’t return the funds.
Financial Times – The trustee charged with tracking down money for victims of Bernard Madoff’s alleged $50bn Ponzi scheme will target big investors – such as hedge funds – that pulled "substantial amounts" of "false profits" out of the broker’s operation.
Under federal and New York law, investors who withdrew either principal or profits in the 90 days before Mr Madoff’s December 11 arrest are particularly vulnerable to so-called "clawbacks", but the trustee will be able to reach back up to six years in some cases.
With billions in claims and only about $940m in recovered assets, Irving Picard, the trustee, must rely on money from investors who cashed out early as a source of restitution.
He and David Sheehan, a lawyer working with him, told a creditor meeting last week that they intended to focus on large investors, particularly if they had suspicions about Mr Madoff’s operation.
Mr Sheehan cited the example of "someone who may have been well informed and may have had red flags".
Globe and Mail – GMP Securities enjoyed a solid debut with its new and much-scrutinized hedge fund.
GMP Diversified Alpha Fund, a multi-strategy fund launched last year by the investment dealer, published its first set of performance numbers Thursday as part of the parent income trust’s financial results.
The fund, which is run in part by GMP’s star stock trader and vice chairman Michael Wekerle, posted a 6.2 per cent return over its first three months of operation, a quarterthat ended June 30. The fund has $196-million of assets.
Over the same period, the benchmark Scotia Capital Canadian hedge fund index returned 5.93 per cent over the same period on an equal weighted basis, and 9.93 per cent on an asset weighted basis that puts more emphasis on performance at the larger domestic hedge funds.
GMP’s venture into the hedge fund world has drawn attention on the Street because of Mr. Wekerle’s dual role as both a part of the hedge fund team and head of the dealer’s equity desk.
Daily Herald- The computer screen on Scott Topping’s desk at Southwest Airlines flickered with row after row of dates and numbers, but they had nothing to do with arrivals and departures. They tracked the price of oil futures for the next several months, and they told a grim tale: No letup in sight from record prices for jet fuel.
"We’re on a one-way street right now," Topping said as he hunched over the screen, shaking his head. It’s Topping’s job to oversee Southwest’s battle to control surging fuel costs. It is the most successful program of its kind in the airline industry.
In the first quarter of this year, Southwest paid $1.98 per gallon for fuel. American Airlines paid $2.73, and United paid $2.83 per gallon in the same period.
FINalternatives- Another pair of Citigroup fixed-income executives is to set up its own hedge fund shop.
Jeff Jacob and John Humphrey, who run the global special situations group they established at Citi four years ago, will leave the firm in about two months. Citi is splitting up their proprietary-trading desk, which focuses on distressed corporate bonds and loans, and restructuring the group to focus on customer trading. The move is just one of a variety of risk-cutting moves by Citi, which has taken some $43 billion in writedowns and losses resulting from the credit crisis.
Jacob and Humphrey, who came to Citi in 2004 from Merrill Lynch, will launch their distressed-debt hedge fund early next year. The fund will be seeded by Citi, although the terms of that investment are still being negotiated, though all of its current assets will remain with Citi.
