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.
St. Louis Post-Dispatch – For his 20th feature film, “The Girlfriend Experience,” director Steven Soderbergh has returned to a theme he explored in his breakthrough “sex, lies and videotape”: infidelity. Yet the Oscar-winning director of “Traffic” and blockbusters such as “Ocean’s Eleven” refuses to play it safe. Like his recent projects “Bubble” and “Che,” “The Girlfriend Experience” is available for PC download and pay-per-view simultaneous with the theatrical release. And Soderbergh crossed an invisible line when he cast adult-film star Sasha Grey in the lead role.
I spoke by phone with Steven Soderbergh last week.
Q: Did the original idea for this movie come from you or from the screenwriters (Brian Koppelman and David Levien, who wrote “Ocean’s Thirteen”)?
A: It landed on us at the same time. We were together at a bar in midtown Manhattan when I saw a woman who seemed disconnected from everything else that was going on there. I asked them if they could figure out how she fit in, and they both said “Oh, that’s a G.F.E.”
Globe and Mail – The Caisse de dépôt et placement du Québec, hammered by losses on international holdings, has been forced in recent weeks to sell billions of dollars of stocks into a falling market.
A fund that began the year with $155.4-billion of assets has sold $10-billion of stocks in the past two months, sources said.
Canada’s biggest pension fund needed cash to shore up or shut down money-losing positions in areas such as currency hedging and derivatives, along with international real estate and private equity. Part of the problem, sources said, is that the fund’s hedging strategy was sideswiped by the recent fall in the Canadian dollar.
Hamilton Spectator – North American stock markets chalked up huge rallies late in the afternoon yesterday, resulting in one of the biggest one-day gains ever for the Dow Jones industrial average and a big bounce in Toronto.
Toronto’s S&P/TSX composite index rose 614.29 points or 7.2 per cent to close at 9,151.63. That mended a good chunk of the 757-point hole dug on Monday, when growing worries about the length and depth of a global recession pushed down Canada’s main index by eight per cent.
In New York, the Dow gained 889.35 points yesterday to rise almost 11 per cent to 9,065.12 — the second-biggest percentage gain on record for the world’s most-watched stock-market indicator
Globe and Mail – Desjardins Group is winding down hedge fund-linked products, as Canada’s largest financial co-operative joins life insurers in dealing with problems in guaranteed investments that have been pounded by the downturn.
Montreal-based Desjardins is shutting down lines of what are known as "principal-protected notes," or PPNs, an extremely popular product with individual investors. The move comes as Manulife Financial and Sun Life Financial take reserves against possible losses on annuities and other funds that promise customers’ capital will always be returned.
The products that Desjardins killed bought hedge funds to offer the co-op’s 5.8 million customers the upside of markets, along with a guarantee they would get back 100 cents on the dollar. Desjardins is closing PPNs called the Perspectives Plus Guaranteed Investment and Alternative Guaranteed Investment, both of which come due over the next five years.
FT – Reuters – Fortress Investment Group LLC, one of the few publicly traded managers of private equity and hedge funds, is taking action to keep two of its companies afloat, the Financial Times said, quoting people familiar with the situation.
Fortress is struggling to preserve the value of its investments in Intrawest, a ski resort company based in Canada that has $1.68 billion in debt due on October 23, and Gagfah, a German residential real estate group that is seeking to raise additional equity to comply with the terms of its debt, the paper reported on its Website.
People familiar with Fortress say there is a low probability Intrawest will file for Chapter 11 bankruptcy protection, the Financial Times said.
Financial Post – The Canadian hedge fund industry has ballooned in the past few years, with some estimating annual growth at 30%. But there is still plenty of room for more, given that plenty of the strategies, such as risk arbitrage, that have proliferated in London and New York have not yet arrived here.
A near full house at yesterday’s Canadian Hedge Fund Managers Speak With Investors forum demonstrated that the industry, now pegged at about 200 separate funds in Canada, is alive and well regardless of the recent turmoil. Much of this is being driven by institutional investment.
Despite so much volatility in the markets in the past two months, and the fact that some feel fundamentals have "gone out the window," Canadian hedge fund managers at the forum, owing perhaps to having less leverage than their U. S. counterparts, remain upbeat. "The response from investors was outstanding. They are looking for some understanding and this is a perfect venue for that," said Karen Azlen, CEO of Introduction Capital, who organized the event.
Reuters – U.S. asset manager Putnam Investments said on Thursday that it had closed its $15 billion (8 billion pound) Prime Money Market Fund due to redemption pressures.
Putnam, a unit of Canada’s Great-West Lifeco, said in a statement that the board of trustees of its funds had voted to close the institutional money market fund as it faced "significant redemption pressure" on September 17.
"The trustees’ action was not related to the portfolio’s credit quality, but was instead a reaction to marketwide liquidity issues," the fund company said.
Hedge Funds Review Magazine – Greenwich Associates conducted a study of 146 institutions in North America and Europe to determine how fears of counterparty risk were affecting institutional investment and trading strategies.
The study revealed that 37% of participating institutions have over $50 billion in assets under management. A further 18% have more than $100 billion.
Survey respondents were divided between 32 hedge funds, 114 banks and traditional long-only investors, with the majority domiciled in the US (70%) and 30% in Canada and Europe.
Among US institutions, 85% sees credit default swap (CDS) counterparty risk as a serious threat to global markets. Institutions in Europe are slightly more sanguine; with just over 55% describing CDS counterparty risk as a significant danger.
Over 905 of hedge funds, however, said they see counterparty risk relative to credit default swaps as posing a significant threat to global markets.
Toronto Star- In one of Canada’s biggest investment scandals, regulators pulled the plug on Portus Alternative Asset Management Inc. in early 2005.
The now-bankrupt Toronto company was selling risky hedge funds to ordinary investors, using a complex structure that avoided mandatory disclosure in a prospectus.
Luckily, the 26,000 people who invested more than $700 million in Portus products didn’t lose everything.
Clients of Manulife Financial Corp. were reimbursed in full – with a payout of $246 million by the insurer. Other Portus investors recouped most of their money through receivers last year.
