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New York (HedgeCo.Net) – At least David Findel can never be called a band-wagon fan. The owner of mortgage-lender Financial Resources just agreed to pay a record $400,000 to the rights to two of the best seats at the new Meadowlands stadium. That’s just for the rights. The tickets themselves will cost him another $7000 annually.
The New Jersey native told the New York Post that he probably won’t even use the coveted seats.
“I purchased them for my son, Brandon, 11, and my daughter, Brooke, 7. I will probably continue to sit in my current seats.”
Both Jets and Giants fans were informed this season that they would have to pay money to obtain licenses in order to secure seats in the new stadium, which they will be sharing. Though some fans were outraged, the Jets were hoping to raise $170 million by selling licenses that ranged between $4000 and $25,000 per seat. The Giants, coming off a SuperBowl win and leading the solid NFC East Division, planned to charge between $1000 and $20,000 per seat license. The money from both teams will help to pay for the $1.3 billion in construction costs for the new stadium.
Jets owner Woody Johnson doesn’t see anything wrong with charging such outlandish fees in times of economic turmoil.
"People who buy PSLs and suites are looking over the long term," he said. "I know they realize, because I’ve been talking to a lot of them, that this is kind of a once-in-a-lifetime opportunity to buy something that hasn’t been available ever."
Meadowlands Stadium will hold 82,500 seats, making it the second largest stadium in the NFL next to FedEx Field, home of the Redskins.
Findel won the rights at an October 16 auction, outbidding other millionaires like Nobu owner Drew Nieporent. Instead of slightly raising the $140,000 bid for each of the two seats, he shocked the crowd and shot right up to $200,000 per seat. Not exactly the kind of frivolous purchase you see mortgage lenders making lately.
“Although part of the mortgage business is in turmoil, this is an opportunity to invest in my business and to further demonstrate our loyalty to the New York Jets,” Findel told the Post.
Ummm…a Favre jersey would’ve worked too.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
Independent – The FTSE 100 Index tumbled more than 200 points today after a weekend of financial turmoil in Europe.
Investors took scant comfort from Friday’s backing of a US financial rescue to leave the FTSE 100 Index down almost 5 per cent or 240.5 points at 4739.
Banks were under pressure after German mortgage lender Hypo Real Estate became the latest to receive state aid.
Analysts said the impact of the latest crisis crossed all sectors amid fears of slowing demand.
Halifax Bank of Scotland – soon to merge with Lloyds TSB – plunged 15 per cent in the sell-off, while Royal Bank of Scotland suffered a 10 per cent drop.
The market was also hit hard by hefty falls from heavily-weighted mining stocks after experts warned that the sector’s earnings could almost halve this year.
Bloomberg – RAB Capital Plc is trying to freeze client redemptions for three years to avoid liquidation of its flagship hedge fund, which lost almost half its value this year.
RAB fell as much as 14 percent in London trading after it said investors have until Sept. 29 to vote on the plan, which would cut fees and postpone redemptions until Oct. 3, 2011.
Special Situations, RAB’s largest fund, has lost more than $1 billion this year from investments in Northern Rock Plc, a mortgage lender nationalized by the U.K. government, and small natural-resources companies such as Oxus Gold Plc, a miner down 68 percent this year. RAB Chief Executive Officer Philip Richards stepped down this month to focus on the fund, once one of London’s best performers, returning 1,475 percent in 2003.
“If the investors reject the proposal, the group would then have to liquidate the portfolio,” said Irfan Younus, an analyst at NCB Stockbrokers in London who has a “reduce” rating on the stock. “In a worst-case scenario, unwinding of this could pose a significant threat to the franchise.”
RAB plans to liquidate the investments if it’s unable to get investor support for the new structure, the company said. It didn’t disclose how many investors had to approve the changes.
We “regret the impact that the performance will have on investors,” Richards said in a statement. “We believe that the underlying thesis of investment in early-stage natural resources is one that will repay patient investors over time.”
New York (HedgeCo.Net) – The SRM Global Master Fund, headed by former UBS AG star trader Jonathan Wood, is down about 85% over the course of its two-year tenure, according to a report by the Wall Street Journal.
Launched in September 2006, the fund grew fast, raising over $3 billion in assets in what was one of the largest European hedge fund kick-offs ever. The fund held long equity positions in companies that were involved in takeovers, mergers or restructurings.
Mr. Wood’s stellar UBS reputation earned him the trust of many affluent investors. However, venturing into a hedge fund is very different territory. Investors agreed to higher than normal lock up periods, some as long as five years, apparently not too concerned about potential risks. Now many are barred from cashing out or even cutting their losses.
The SRM fund has had a string investments gone sour. They held a major stake in Northern Rock, which was nationalized by the British Government last year, causing shares to plummet. Wood is currently seeking a judicial review.
Adding to the unlucky investments is the stake that SRM held in Countrywide. The mortgage lender was taken over by Bank of America for a deal that Wood thought undervalued them greatly. Bank of America ended up with a steal, purchasing Countrywide for $2.5 billion.
One notable investor in SRM is UBS, who in addition to providing their prime brokerage services, allocated about $500 million to the fund.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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Montreal Gazette- IndyMac Bank is under investigation by the FBI for possible fraud involving home loans made to risky borrowers, the Associated Press reported yesterday, citing an unnamed law enforcement official.
The report said it was not immediately clear how long the FBI’s probe of the bank has been ongoing but the probe is focused on the company and not individuals who ran the thrift institution.
U.S. banking regulators seized mortgage lender IndyMac Friday after withdrawals by panicked depositors led to the third-largest banking failure in U.S. history.
Financial Times- Even as politicians and regulators accuse hedge fund short-sellers of trying to bring down banks in Britain, the US and Australia, top hedge managers are providing rescue capital to prop up the ailing corporate world.
The latest bail-out backed by hedge funds is the £4.5bn cash raising by Britain’s Barclays, where five big managers are ready to provide just under 10 per cent of the new money – with sovereign wealth funds providing the majority of the rest.
Hedge funds are important backers of the current wave of rights issues, too, according to investment bankers close to the deals. In spite of publicly-declared short positions – where hedge funds hope to profit from falling prices – several big hedge funds are sub-underwriting the rescue rights issue by HBOS, the biggest mortgage lender, guaranteeing to buy the shares if the rights are not taken up.
"Although equity underwriting currently looks difficult, hedge fund participation in this market has increased as their asset base has grown," says Jim Renwick, vice-chairman at UBS. "This has been the case for more than five years now."
Business Spectator- Hedge funds sharply increased their bets against UK lender HBOS in the first days after the Financial Services Authority imposed new rules on June 13, targeting abusive short-selling and smooth the process for firms raising cash from rights issues, reports The Financial Times.
HBOS, Britain’s biggest mortgage lender, which earlier issued its prospectus for a £4 billion rights issue has seen its shares drop below the rights issue price, as hedge funds revealed their positions.
US hedge fund Harbinger Capital said it held a 3.3 percent short position, worth about 345 million pounds, in HBOS, under the new disclosure rules for companies during rights issues.
