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MSN MoneyCentral- A former manager of a Citigroup Inc hedge fund has filed a complaint with a British tribunal accusing the bank of causing his fund’s demise, the Wall Street Journal reported on Saturday, citing people familiar with the matter.
In a sealed complaint filed last month with a state-run employment tribunal, John Pickett, who ran a hedge fund known as CSO Partners that specialized in corporate debt, accuses the bank of pressuring CSO to buy billions of dollars in troubled loans, the newspaper reported.
FINalternatives- It’s not the first time “hedge fund” has been used as an epithet, but a former U.S. Treasury chief is using the H.F. words to describe mortgage giants Fannie Mae and Freddie Mac.
The two firms, into which Treasury said yesterday it will inject billions of dollars in loans and investments, have been “arbitraging their lower borrowing costs that came about because of the implied status as government entities,” John Snow, who now serves as chairman of private equity firm Cerberus Capital Management, told Bloomberg News.
“The business model they were using was really the model of a hedge fund,” he added.
Bloomberg – Leopard Capital, which is setting up a $100 million private-equity fund to invest in Cambodia, said it’s competing to buy a stake in Acleda Bank Plc, the largest Cambodian bank.
“It’s the best-run bank, it’s clean and it has very good margins,” Thomas Hugger, executive director at Leopard Capital, said in an interview in Singapore today.
Leopard Capital is vying with other foreign investors that are seeking to invest in Cambodian companies after the economy grew at least 10 percent in the last four years. Acleda Bank, based in Phnom Penh, reported a 46 percent jump in net income to a record $9.7 million in 2007, according to its annual report.
“We have a lot of people sniffing around, ready to buy into us,” John Brinsden, vice chairman of Acleda Bank, said in an interview in Phnom Penh on June 18, declining to give details.
Acleda’s assets more than doubled to $473 million in 2007, from $223 million the previous year, according to its annual report. Loans almost doubled to $311 million, from $157 million over the same period. The bank had 204 offices across Cambodia at the end of last year.
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.
Reuters- The credit crisis is not over, and losses in the financial sector are set to be around $1.3 trillion, according to star hedge fund manager John Paulson, who says he remains short credit.
In its twice-yearly report in April, the International Monetary Fund had said total potential losses on both subprime and other loans as a result of the credit crisis could reach $945 billion. Paulson, who earned $3.7 billion in 2007 according to Alpha Magazine by going short the subprime sector during the U.S. mortgage meltdown, also said a deterioration in consumer spending was set to drive the U.S. economy into recession this year.
