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 – Alex Salmond is under renewed pressure over his links with Sir George Mathewson, the former HBOS chairman, after it emerged that Sir George’s investment group’s hedge fund is running businesses from the Cayman Islands.
John McFall, the Labour chairman of the Treasury Select Committee, questioned Mr Salmond’s continuing use of Sir George as his chief economic adviser yesterday following the revelation.
Mr McFall said: “I am highly surprised that someone who appears to be avoiding paying tax in this country is an adviser to Alex Salmond. It is not in Scotland’s interests and sends very mixed messages to both bankers and the Scottish public.”
Telegraph.co.uk – When Andy Hornby, the former chief executive of HBOS, was asked by the Treasury Select Committee to detail his banking qualifications he couldn’t. Like his fellow bankers, Sir Fred Goodwin, Sir Tom McKillop and Lord Stevenson, being questioned by the panel, Mr Hornby, had to admit publicly that he held no formal banking qualifications. However unlike his fellow bankers, Mr Hornby’s admission held one important qualification.
"I have an MBA from Harvard," he told the MPs, "where I specialised in all the finance courses including financial services."
With the question about qualifications almost certain to come up, Mr Hornby’s answer was almost certainly prepared. By referring not just to his MBA, but also to where he got it from, Mr Hornby knew he was putting himself firmly at the front of the pedagogical pecking order. Harvard prides itself on consistently being the highest-ranked university; Mr Hornby no doubt prides himself on being the highest-achieving student out of his year, coming top out of 800 peers.
Reuters – NewSmith Capital Partners, one of the hedge fund firms to appear before last month’s Treasury Select Committee into the banking crisis, told Reuters on Thursday partner Jeremy Silewicz had left the firm.
Silewicz, who joined NewSmith in March 2007 as a portfolio manager on its European fund before moving to a role in marketing, left at the end of last year, a spokesman said.
He added that Andrew Irving, a member of NewSmith’s operations team, had also left the firm, but declined to comment on the reasons for their departures.
Times Online – Hedge funds were accused by MPs yesterday of gambling against the taxpayer when they bet that the share prices of British banks would fall.
Appearing before the Treasury Select Committee, four leading hedge fund managers were told by John McFall, the committee’s chairman: “You’re snubbing the public; not only that, but you’re making shedloads of money.”
The hedge fund heavyweights — Paul Marshall, of Marshall Wace, Douglas Shaw, of BlackRock, Chris Hohn, of TCI, and Stephen Zimmerman, of NewSmith Capital Partners — came under particular attack over the practice of short-selling, only a day after it emerged that Paulson & Co, a renowned American hedge fund, had made an estimated £270 million in profits from betting against Royal Bank of Scotland (RBS) , which is majority-owned by the State.
Times Online – They are the financial world’s most secretive and unaccountable men — but also among its wealthiest and most influential. Today, four of the sharpest speculators in the hedge fund industry will be thrust into the spotlight when they appear before a Commons committee to defend themselves.
Christopher Hohn, the multi-millionaire founder of The Children’s Investment (TCI) fund, and Paul Marshall, the City financier who chairs Marshall Wace, will be appearing before the Treasury Select Committee hearing into the banking crisis.
They will be joined by Douglas Shaw, the head of alternatives at BlackRock, the biggest listed asset manager in America, and Stephen Zimmerman, the former Merrill Lynch executive who co-founded NewSmith Capital Partners. John McFall, the MP who chairs the committee, will be in charge of the hearing. Mr McFall, an ally of Gordon Brown, is likely to push his witnesses hard on short-selling.
While media-shy TCI founder Chris Hohn and others will face tough questions from the Treasury Select Committee on financial stability, short-selling and other issues, it nevertheless seems that the pro-legislation lobby’s position may be weaker than it has been in recent years.
For one thing, many hedge funds simply do not have the financial clout — and therefore carry the associated risks seen by some politicians — that they once did.
guardian.co.uk – Secretive hedge fund barons, blamed by many for undermining Britain’s financial stability, will be unmasked on Tuesday when they are forced into the public spotlight by the powerful Treasury select committee.
As suggestions grow that hedge funds have made huge sums shorting UK bank stocks and sterling, the billionaire Chris Hohn and Liberal Democrat-supporting tycoon Paul Marshall will be quizzed on whether the predicted decimation of hedge funds as a result of the financial crisis could destabilise the global economic system further.
Hedge fund bosses will argue that they manage "only" £1.3 trillion of cash, which is less than a large fund manager, and that not one hedge fund has received a public bail-out. In addition, of the 150 bans or censures levelled by the Financial Services Authority since 2005, only two have involved hedge funds. They will also say that there have been numerous examples of hedge funds shorting sub-prime assets ahead of the credit crunch.
