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.
Explore the most informative hedge fund articles and take the news with you, using HedgeCo RSS.
Still want more? Browse the hedge fund blogs, authored by hedge fund industry experts.
New York Times Blogs - Duff Capital Advisors has recently laid off dozens of its employees and is holding off on its plans to raise as much as $1.5 billion just eight months after the hedge fund firm began business, according to people briefed on the actions.
The Greenwich, Conn.-based firm was started in March by Philip N. Duff, a former chief financial officer of Morgan Stanley, with $500 million of capital from the New York private equity firm Lindsay Goldberg. At the time, Duff Capital said then that it was in discussions with several financial institutions to provide seed money for its investment strategies, beginning in the past spring.
While the firm is still in discussions with clients and some potential investors, it has failed to find any new capital so far.
Bloomberg - Office rents in Mayfair and St. James’s, the London districts with Europe’s biggest concentration of hedge funds, are falling for the first time since 2005 as the alternative investment industry has its worst year in two decades.
The cost of renting new or refurbished offices in those neighborhoods, the most expensive in the world, fell 6.5 percent to 107.50 pounds ($168) a square foot in the six months ended Sept. 30, data compiled by Jones Lang LaSalle Inc. show. Incentives such as rent-free periods lowered the net figure to 95.96 pounds, the commercial property broker estimates.
Demand for space is falling as at least 350 funds in the $1.7 trillion hedge fund industry have closed this year amid the global financial crisis, including Peloton Partners’ ABS Fund and MKM Longboat Capital Advisors’ Multi-Strategy Fund. Client redemptions and forced asset sales have given investors losses for five straight months through October, the longest streak since 1990, and the slump may push rents down to as low as 90 pounds a foot, Jones Lang of Chicago estimates.
Bloomberg Europe - Lehman Brothers Holdings Inc.’s bankruptcy probably means the end of hedge-fund manager Oak Group Inc. after 22 years in business.
John James, who runs the Chicago-based firm with $25 million of assets, didn’t buy Lehman stock or debt. Instead, his potentially fatal mistake was to rely on the bank’s prime brokerage in London, a unit that provides loans, clears trades and handles administrative chores for hedge funds. He’s one of dozens of investment managers whose Lehman prime-brokerage accounts were frozen when the company filed for protection from creditors on Sept. 15.
“We’re probably going out of business and liquidate, game over,” James, 59, said. “We’ve lost 70 percent of our assets.”
The list of funds trapped in the Lehman morass keeps growing. London-based MKM Longboat Capital Advisors LLP said last week it will close its $1.5 billion Multi-Strategy fund in part because of assets stuck at Lehman, according to an investor letter.
Reuters - More hedge funds have called it quits worldwide in the first half of 2008 than a year ago, as tumbling markets and finicky investors take a heavy toll on the $1.9 trillion industry, new data show.
Liquidations rose by 15 percent during the first six months of 2008 when 350 funds closed their doors compared with 303 a year earlier, according to numbers released by Hedge Fund Research (HFR) on Thursday.
"This year, the industry will likely see more funds shut down than start up," said Phil Duff, who runs Duff Capital Advisors.
In the first eight months of the year, hedge funds lost an average 4.83 percent, making for the worst returns in a decade.
New York (HedgeCo.Net) - Victory Park Capital, a Chicago-based hedge fund, has received a vote of confidence from FRM Capital Advisors in the form of a major investment. Victory Park Capital plans on expanding their asset-based lending fund in hopes of taking advantage of the favorable market conditions associated with this kind of strategy.
“We are delighted to have the opportunity to partner with such an experienced team,” says FRM Chief Executive Clive Peggram. “We believe it is a very good time in the credit cycle to pursue an asset-based lending strategy.”
Victory Park Capital Advisors was founded last year and provides asset-backed loans to companies who are in need of financing and can’t always turn to the bank. Asset based lending is a popular strategy in today’s current market turmoil with the large amount of high rises and other developments being constructed. High interest rates are usually tacked on the loans, while the building is put up as collateral.
“We’re very pleased to form a relationship with Victory Park Capital,” says Blaine Tomlinson, FRM’s founder and group chairman. “As an established and experienced team, they are in an excellent position to capitalize on the attractive financing opportunities available to those who have capital to deploy.”
FRM Capital Advisors is active in the hedge fund seeding industry, seeking out potential opportunity among new funds. Hedge fund seeding is a great way for new funds to get the capital needed to get off the ground. Companies who provide the financing will work out some sort of the deal with the fund, perhaps sharing in the profits once the fund starts posting returns.
“We are incredibly excited about our relationship with FRM Capital Advisors and we are gratified that it has concluded that our team and strategy warrant such a significant investment,” said Victory Park Managing Principle Richard Levy.
FRM is a global fund of hedge funds group with over $15 billion of assets under management.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com
CNBC- For the first time, more hedge funds will fail this year than are originated, according to Philip Duff, of Duff Capital Advisors.
In a rare interview with CNBC, Duff said the difficulty in gauging the health of banks has made it a challenging year for the fund industry.
"The dream of starting a hedge fund has been an enormous pull for people coming in off the streets," he said. "At the same time, delivering a consistent risk-adjusted return … is not an easy thing to do."
Yet Duff said the future continues to be strong for hedge funds. He welcomed more government regulation and predicted that as investment banks continue to experience problems funds will continue to grow.
"I think the hedge funds will take over a lot of the roles of investment banking in the basic function of intermediating capital and intermediating risk in the marketplace," he said. "I do think there will be more regulation, and I view that as a good thing."
Reuters- Meeting long-term funding obligations can be the stuff of nightmares but that’s what hedge fund industry veteran Philip Duff says his new firm can do to help pension funds, endowments and insurers tackle.
For years, Duff has warned these organizations could soon run out of money and has urged them to find a fresh approach.
Now he is offering help through Duff Capital Advisors, his four-month-old company that offers not only hedge funds but products that could set actuaries’ hearts racing. For example, its risk analysis models can help insurers calculate ways to hedge mortality risk and help clients select appropriate types of investments.
Reuters- Investment firm Duff Capital Advisors said on Tuesday it acquired hedge fund group North Sound Capital.
The two firms, both located in Greenwich, Connecticut, did not disclose terms of the deal.
For Duff Capital, which launched in March with the goal of raising between $1 billion and $1.5 billion to seed investment strategies, this marks its second hedge fund investment.
For North Sound Capital, whose assets have shrunk from $2.9 billion in 2006 to $1 billion now, the deal is a chance to join forces with Philip Duff, a Wall Street veteran with a track record of growing investment firms.