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.
Reuters - U.S. hedge fund Citadel Investment Group LLC plans to roll out several new funds, including one with lower fees that will aim to make money on currencies, interest rates and other trades based on broad economic trends, the Wall Street Journal reported.
Citadel could not be reached for comment.
The firm hopes to raise $2 billion in coming months and could raise $5 billion for its new Citadel Global Macro Fund Ltd, the paper said citing marketing documents.
Forbes – New Jersey’s Bureau of Securities permanently barred three former Merrill Lynch brokers accused of helping a hedge fund make tens of thousands of improper trades in mutual funds.
Christopher Chung, Kevin Brunnock and William Savino will collectively pay $1.15 million in civil penalties, under terms of an administrative consent order, according to a statement from New Jersey’s attorney-general.
International Herald Tribune – It used to be that if you wanted a job done properly, you did it yourself. That no longer holds for the administration of hedge funds.
The practice of doing middle- and back-office administrative work in-house, especially prevalent in long-established U.S. funds, was already on the wane.
But Bernard Madoff’s alleged fraud, abetted by his self-contained operation, has accelerated the march toward outsourcing.
Exhibit A this week is Millennium Management, the old-school hedge fund firm run by Izzy Englander. All its funds are now going to be administered by GlobeOp Financial Services. That means that tasks like reconciling cash positions and trades, some pricing and asset value calculations, sending clients statements and so on will now be handled outside the firm.
Reuters – Broker-dealers such as Morgan Stanley and Goldman Sachs are losing out in the battle for hedge funds’ dwindling pool of assets, as funds seek out banks with diverse sources of funding in a major shake-up of prime broking.
The collapse of investment bank Lehman Brothers in September shocked hedge funds, as those with accounts at Lehman when it sought bankruptcy protection had those assets frozen and risked being unable to close trades.
Bloomberg – Bond dealers and hedge funds that fail to complete trades in Treasury securities face a penalty of as much as 3 percent on the proceeds of transactions, according to a Federal Reserve-backed industry code to be implemented in the next six months.
The plan, which strengthens official oversight of trading, will be unveiled as soon as Jan. 5, said Thomas Wipf, chairman of the Treasury Market Practices Group and the head of institutional securities group financing at Morgan Stanley in New York.
“It seems quite obvious that the Fed and Treasury cannot and will not accept the status quo for much longer,” Wipf said in an interview.
