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.
Citywire.co.uk – The Serious Fraud Office (SFO) is to probe UK banks for evidence that complex financial products were mis-sold to consumers before the recession hit.
SFO director Richard Alderman plans to investigate the sale of complicated financial instruments like credit default swaps and collateralised debt obligations. The SFO has changed its tactics and will take a more active tack with investigations and will intervene to prevent future frauds, according to a report in The Times.
SFO staff are already investigating Madoff’s UK operations, hedge funds accused of over valuing securities, AIG UK and the collapse of Weavering Capital, according to The Times. The government has also asked its fraud taskforce to examine the collapse of MG Rover in 2005. And the workload is set to grow with the decision to look into the Keydata saga, as reported by Citywire this week.
Caymen Net News – Hedge funds and financial institutions based in the Cayman Islands have been pulling their money out of Britain as they are hit by the credit crunch, according to figures from the Bank of England. The low-tax regime and limited regulation of the Cayman Islands – with a population of 52,000 – has attracted 80% of the world’s $1.3tn (£790bn) hedge fund industry.
The drop in Cayman Islands’ deposits comes as hedge funds are being forced to return money to investors who have made big losses from the financial crisis. Loans from UK banks to Cayman institutions also fell, but at a lower pace. Outstanding loans from UK banks to Cayman institutions outweighed Cayman deposits in UK banks by $124bn in the first quarter, a sharp increase from $12bn in the last quarter of last year, the data shows.
Hedge funds and financial institutions based in the Cayman Islands have been pulling their money out of Britain as they are hit by the credit crunch, according to figures from the Bank of England.
The low-tax regime and limited regulation of the Cayman Islands – with a population of 52,000 – has attracted 80% of the world’s $1.3tn (£790bn) hedge fund industry.
Those institutions have almost halved their deposits in UK banks over the past 12 months, from $356bn at the end of the first quarter in 2008, to $173bn at the end of March, Bank of England data shows. The drop in Cayman Islands’ deposits comes as hedge funds are being forced to return money to investors who have made big losses from the financial crisis. It also reflects fund losses from falling markets.
The outflow of funds from Britain puts the spotlight on hedge fund threats to abandon the UK because of higher taxes, tighter regulation and potential caps on executive pay and bonuses.
CNBC – High-profile hedge fund manager Crispin Odey, who made money last year betting on falling bank share prices, has been buying into UK banks recently because he thinks they are now so cheap.
Odey, who is founding partner of Odey Asset Management and manager of the 896 million euro ($1.1 billion) Odey European fund, said in notes to clients this month that the risk/return on UK clearing banks’ shares is now wrong and that over time these shares would do well.
