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Snapman

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PostSubject: HF general news   Thu Jun 17, 2010 12:55 pm

Wow this is ridiculous! We definitely need to get a sovereign connection!

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London Hedge Fund to be Backed by Libya
Libya, a country that formerly supported terrorism, is investing in a London hedge fund to the tune of hundreds of millions of dollars, the Independent reported.

The new fund will be run by FM Capital Partners, a U.K.-based firm that is in the process of registering with the Financial Services Authority this summer. Frederic Marino, former trader from Merrill Lynch and Bear Stearns, will be in charge of the vehicle, the report stated.

Capital will come from the Libyan government through a number of sub-funds, including sovereign wealth funds. Libyan government officials are also said to be active in the fund, including the country's deputy foreign secretary and the manager of a government-run fund that focuses on Africa.

Before joining JPMorgan in 2008, Marino was in charge of the fund-linked products group at Merrill Lynch. Prior to that, he worked for Rabobank in the early 1990s.

The firm will continue to staff up through the fall, looking to have more than 40 employees in place by then, the report said.

In addition to investing capital on behalf of the Libyan government, the new fund will train investment managers from the country's finance industry and sovereign wealth funds. Marino has been recruiting mathematicians in Paris to join the firm.

The report said Libya's ties to businesses in the West have been "tentative" as the memories of the country's support for terrorism remain fresh. Sanctions against the country were lifted in 2003.
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PostSubject: Re: HF general news   Mon Jun 21, 2010 12:53 pm

More news on pension funds... Got to get that offshore:


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SDCERA to Put $150M to Work in Hedge Funds
The San Diego County Retirement Association (SDCERA) has decided to invest $150 million in two hedge funds run by BlackRock, according to reports.

Johanna Shick, a spokeswoman from SDCERA, did not return a message seeking additional information about the pension's plans.

The BlackRock funds will have a global macro focus. SDCERA will invest $115 million in one fund and the remaining $35 million in an emerging markets macro vehicle.

SDCERA has been changing its strategy, moving into a global macro/CTA focus away from credit and multi-strategy hedge funds. The new strategy will also take a bottom-up market neutral approach.

SDCERA currently invests in funds run by Brevan Howard, Graham Capital Management and Bridgewater.
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PostSubject: Re: HF general news   Tue Jun 22, 2010 4:22 pm

Seeing a continued trend of bankers wanting to be hedgies


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Ex-Citigroup Trader Hall Raises $1 Billion for Commodities Fund
By Miles Weiss - Jun 22, 2010
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A Citi logo appears on a flag flying outside the Citigroup Inc. headquarters in New York. Photographer: Daniel Acker/Bloomberg


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June 22 (Bloomberg) -- Andrew J. Hall, the former Citigroup Inc. energy trader whose proposed $100 million payout became a symbol of excessive Wall Street compensation, raised $1.08 billion for the offshore version of a commodities fund. Bloomberg's Deirdre Bolton reports. (Source: Bloomberg)

Andrew J. Hall, the former Citigroup Inc. energy trader whose proposed $100 million payout became a symbol of excessive Wall Street compensation, raised $1.08 billion for the offshore version of a commodities fund.

Hall’s firm, now owned by Occidental Petroleum Corp., lined up 37 investors for its Astenbeck Offshore Commodities Fund II Ltd., according to a filing yesterday with the U.S. Securities and Exchange Commission. The fund began raising money in 2008, the filing shows.

Citigroup last year sold the trading firm, then known as Phibro LLC, after the New York-based bank came under pressure from the Obama administration to reduce a potential $100 million payout to Hall, who made a similar amount in 2008. The $250 million purchase price was less than Phibro’s average annual pretax profit of $371 million in the prior five years.

Michael Young, an executive vice president at Astenbeck Capital Management LLC in Westport, Connecticut, declined to comment on the filing.

Phibro, formed as Philipp Brothers in 1901 to buy and sell everything from aluminum to grains, began to concentrate on energy trading during the 1970s. Citigroup, which took control of Phibro when it bought Travelers Cos. in 1998, opened the proprietary trading business to outside investors in 2007 through a pair of partnerships called Phibro Oil Funds A and B.

22% Return

The firm mostly trades oil and refined products along with electric power, coal, metals and equities, according to marketing documents for Astenbeck Commodities II. The offshore fund 22 percent after fees from the start of 2008 through August 2009, according to the documents. That compares with the 44 percent decline by the Standard & Poor’s GSCI Index.

Park Hill Group LLC, a unit of New York-based Blackstone Group LP, helped with the offering. Park Hill, which recruits investors for hedge funds and buyout firms, will receive an estimated $7.5 million in sales commissions, the filing shows.

A U.S. hedge fund is often comprised of two separate partnerships, including an onshore vehicle for investors subject to federal taxes, including wealthy individuals. The offshore version, usually incorporated in the Cayman or Virgin Islands, is marketed to those exempt from paying U.S. taxes, including foreign investors and domestic pension plans.

The onshore partnership for Astenbeck Commodities Fund II, formerly known as Phibro Commodities Fund II LP, reported in February that it had raised about $148 million.

Citigroup and Hall agreed to defer his compensation until 2010, when it was to be paid by Occidental, after it determined his contract couldn’t be altered, people familiar with the matter said in October.

To contact the reporter responsible for this story: Miles Weiss in Washington at mweiss@bloomberg.net
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PostSubject: Re: HF general news   Wed Jun 23, 2010 12:37 pm

VIA HF net daily


Pershing Square Gives Blessing to $1.4B Landrys Sale
Bill Ackman's Pershing Square Capital Management has given the go-ahead for a $1.4 billion management buy-out of Landry's Restaurants, according to a company statement.

Tilman Fertitta, Landry's chief executive officer, who owns 55% of the company, increased his offer from $24 per share to $24.50 per share in order to get Ackman and former Pershing director Richard McGuire on board.

Together, Ackman and McGuire own almost 10% of the company.

The deal heads off yet another fight between Fertitta and activist hedge fund manager Ackman. McGuire also has his own activist hedge fund firm, San Francisco-based Marcato Capital Management.

Fertitta has been trying to buy his own company for about two years. A prior offer of $14.75 per share had been rejected by Ackman.

Houston-based Landry's owns a string of casual dining restaurant chains including Landry's Seafood House, Willie G's Seafood & Steak House and The Crab House.
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PostSubject: Re: HF general news   Thu Jun 24, 2010 1:14 pm

Sounds like a HF to me ….


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RWC Plans for UCITS III Launch This Summer
RWC Partners announced the firm will launch a UCITS III pan-European long-short equity fund at the end of July.

As a UCITS III vehicle, the fund will provide daily liquidity and share classes that will have local registrations in various European countries. The vehicle is listed in Luxembourg, RWC spokeswoman Claire Burston told HedgeFund.net. The fund can be marketed to both institutional and retail clients, and there are no qualified purchaser limitations.

The fund will have a 2% annual maintenance fee as well as a 20% performance fee with a LIBOR hurdle, Burston said. The minimum investment in the fund is $25,000.

The new vehicle will be managed by Ajay Gambhir, who joined RWC in 2007 from JPMorgan Asset Management. He began managing hedge funds in 2003, and since then, his strategy has returned more than 13%, the announcement said.

At JPMorgan, Gambhir was responsible for $6 billion in assets under management. He managed European-focused hedge funds for the bank.

RWC also announced it will launch a similar fund focused on the United States. That fund will begin operations right before Gambhir's fund launches.

In related news, RWC announced on Wednesday that British asset manager Schroders had acquired a 49% stake in the firm. Plans call for RWC to remain a separate legal entity from Schroders while continuing to be run by its current management team. RWC has $2.2 billion in assets under management.
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PostSubject: Hedge Funds `Frozen in Headlights' Cut Trading as Markets Swing    Thu Jul 08, 2010 4:20 am

July 8 (Bloomberg)--Hedge-fund managers, Wall Street’s best compensated and supposedly smartest investors, are dazed and confused. Reeling from the worst second-quarter performance in a decade, hedge funds have scaled back trading as they struggle to figure out where markets are headed amid sometimes vicious crosscurrents in stock, commodities and other markets, according to brokers and managers. “There’s a degree of being frozen in the headlights, of not knowing what sectors to emphasize, of what securities to emphasize,” said Tim Ghriskey, chief investment officer of Solaris Asset Management LLC, a Bedford Hills, New York-based firm with $2 billion in hedge-funds and conventional stock- funds.

Hedge fund managers, who oversee $1.67 trillion in assets, are reluctant to put money to work as they are buffeted by a wide range of often conflicting political and economic forces, from fiscal policy in Europe and the U.S., to what regulations will be imposed on the financial-services and energy industries, to the growth prospects in China. In turn, smaller and fewer trades may make it harder for funds to rebound from losses incurred since May, when the industry suffered its worst decline in 18 months. “For many people, it’s a frustrating market given the high volatility and low volumes,” said Aaron Garvey, portfolio manager at MKP Capital Management LLC, a New York-based hedge fund overseeing $3.5 billion. “We are seeing strong opposing forces in the markets, which makes generating strong convictions difficult for the medium- and long-term.”

Holding Cash

Prime brokers such as Credit Suisse Group AG and JPMorgan Chase & Co. that service hedge funds report that managers are borrowing less money and are sitting on more cash. Credit Suisse’s hedge-fund clients held 24 percent of their assets in cash in June, compared with 19 percent three months earlier, according to the Zurich-based bank’s prime brokerage unit. “People are in cash for the most part and nobody’s really taking out any big bets,” said Blaze Tankersley, chief market strategist at Bay Crest Partners LLC, a brokerage firm in New York. “Nobody wants to take risk in either direction. It’s a weird time in the market.” U.S. stock market trading last month had its steepest June decline in at least 13 years. Daily trading volume for the Standard & Poor’s 500 Index of the largest U.S. companies averaged 1.09 billion shares in June, 20 percent less than in May. The 15 percent decrease last year was the second-biggest slump between May and June in Bloomberg data going back to 1997.

No ‘Summer Lull’

Hedge funds account for 20 percent of the equities volume in the U.S., according to Tabb Group LLC, a New York-based adviser to financial-service companies. Trading of options on stocks, indexes and exchange-traded funds on the eight U.S. exchanges also fell in June, declining 2 percent from last year to 309 million contracts for the month, according to the Chicago-based Options Clearing Corp. Options are contracts that give the right to buy or sell assets at a set price by a specific date. “This is much more than a summer lull,” said Sam Hocking, global head of prime brokerage sales at BNP Paribas SA. “Given the uncertainty out there, many hedge funds have felt it wise to pull back and take risk off the table.” Credit Suisse says its hedge-fund clients have cut their borrowing, or gross leverage, to about 2.5 times assets in June compared with 2.8 times assets in March.

Stock Market Decline

“We’re trying to reduce risk by downsizing of our trades,” said Max Trautman, a former Goldman Sachs Group Inc. proprietary trader and co-founder of Stoneworks Asset Management LLP, a $460 million macro hedge fund based in London. “It’s not that we have stopped taking views but we’re just putting less risk in them.” Global stocks posted the biggest losses in the second quarter since the bull market began last year, as the sovereign- debt crisis in Greece threatened to spread to other European countries. Chinese government restrictions on lending and real estate, intended to prevent the world’s third-largest economy from overheating, added to concerns global growth may slow. In the U.S., slowing growth in manufacturing, an unexpected jump in jobless claims and a slump in home sales have fueled concern the economic recovery is faltering.

Biggs Sells

Barton Biggs, whose purchase of stocks in March 2009 gave Traxis Partners LLC a 38 percent gain last year, said last week he sold about half his stock investments because of concern governments around the world are curtailing stimulus measures too soon. “I’m not wildly bearish, but I don’t want to have a lot of risk at this point,” Biggs, who manages $1.4 billion, said in a telephone interview. “I’m not putting my money into anything. I’m raising cash.” Hedge-fund managers say they are also worried about the impact of financial reform being introduced as a result of the Wall Street meltdown, and energy regulation following the BP Plc oil spill in the Gulf of Mexico, the largest in U.S. history. Hedge funds declined 0.94 percent in June and 2.79 percent in the three months ended June, the worst second-quarter performance since 2000 when the industry lost 3.42 percent, according to Hedge Fund Research’s HFRX Global Hedge Fund Index. The index dropped 1.2 percent in the first half of this year.

‘High Correlation’

There’s “a high degree of correlation among stocks, so it’s not the best environment for stock picking, or sector allocation,” said Solaris’s Ghriskey. “Investors are not moving money around between sectors, nor are they aggressively moving between fixed income and equities.” Trading of U.S. corporate bonds fell 4 percent in June from the previous month, the first decline between May and June since 2006, according to data compiled by the Financial Industry Regulatory Authority.

Some hedge-fund investors prefer that managers don’t place large bets to offset losses this year. “It’s all about capital preservation at the moment,” said Amit Shabi, a Paris-based partner at Bernheim Dreyfus & Co., which farms out client money to hedge funds. “The losses of 2008 are still fresh in investor’s memories and so managers should be cautious.”

Hedge funds lost an average 19 percent in 2008, the worst returns since Chicago-based Hedge Fund Research started tracking data in 1990. While the industry rebounded 20 percent last year, almost half of the 2,000 funds that make up the HFRI Fund Weighted Composite Index ended the first quarter of 2010 below their high-water mark, or peak net asset value, meaning they can’t charge investors performance fees.

‘Cogs in the Wheel’

Some hedge-fund managers say the outlook for the U.S. economy will become clearer after companies report second- quarter earnings in the latter half of July, and executives talk about their outlook for the rest of the year. Investors are also looking to results from European banks’ stress tests, due out later this month, and data on U.S. economic growth scheduled to come out on July 30.

Companies in the S&P 500 Index increased profit by 34 percent during the second quarter, according to the average analyst estimates collected by Bloomberg. The U.S. economy will grow at a 3.2 percent annual rate this quarter, down from a prior estimate of 4 percent, JPMorgan said in a July 1 note to clients.

Sylvan Chackman, global co-head of prime brokerage at Bank of America Corp. in New York, said he expects hedge funds to increase trading this quarter. “They need to put their capital to work to generate returns,” he said. John Trammell, chief executive officer of New York-based Cadogan Management LLC, said it might take until the end of the year or the start of 2011 for managers to get clarity about the direction of markets. “There are so many cogs in the wheel,” said Trammel, whose firm invests about $2.7 billion of client money in hedge funds. “We need more details on the fiscal positions in Europe and then have to wait to see whether the policies will work or not.”
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PostSubject: Re: HF general news   Tue Jul 20, 2010 1:00 pm

Seems to me that banks are gonna play a greater role in third party admin services to HF's instead of being investors



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LaCrosse Buys BofA Fund Administration Business
LaCrosse Global Fund Services is acquiring Bank of America's fund servicing business which will bring LaCrosse's assets under administration to $21 billion when the deal is done.

LaCrosse did not announce the terms of the deal in the statement it issued Monday.

Bank of America views its fund administration business as being a small part of its overall service to the hedge fund industry, according to someone familiar with the bank's business plans.

Bank of America's incentive to sell its hedge fund administration business could also be cash, pure and simple. Although the bank beat analyst expectations with its second-quarter earnings statement showing net income up 15% to $2.78 billion, its stock is still trending downward.

For LaCrosse, the deal follows a trend in the fund administration business toward growth through acquisition.

In February, Bank of New York Mellon acquired PNC Global Investment Servicing for $2.3 billion, moving Bank of New York into the top three ranked fund administrations along with Citco Fund Services and State Street Alternative Investment Solutions.

Later that spring, Citco entered into a strategic alliance with OpHedge Investment Services while Credit Suisse bought Fortis' prime brokerage business.
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PostSubject: Re: HF general news   Thu Jul 22, 2010 9:23 pm

SMH


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SEC Chief Not Sure if Hedge Funds Pose 'Systemic' Risk
Although the SEC has been charged with overseeing hedge fund registration and reporting, its chief still isn't sure if they pose a "systemic" risk.

Testifying at a Congressional hearing Tuesday, SEC Chairman Mary Schapiro told lawmakers that it wasn't clear whether hedge fund firms posed the kind of risk to the financial system as some of the big financial institutions like Wall Street banks and insurers, according to Bloomberg.

Nevertheless, the agency is beefing up its staffing to meet the mandates set out by the financial reform bill that has just passed Congress. Schapiro said, in a prepared statement, that the SEC expects to hire about 800 people over time to carry out its new or expanded responsibilities.

The SEC is also still trying to get back its credibility as a regulator after its failure to detect Bernard Madoff's $65 billion Ponzi scheme. Besides reorganizing the agency division that handles inspections and examinations, the SEC will now require its staff to routinely verify that client assets are where fund managers claim they are.

Madoff, who is serving a 150-year prison term, said his client funds were with an affiliated entity, rather than a third-party custodian, which made it easier for him to steal the money.

Schapiro also said the SEC had already set up a searchable central database for tips sent in about possible securities law violations.

One of the reasons Madoff got away with his scam for so long was that whistleblower Harry Markopolos' complaints to the SEC's Boston office were ignored by the New York office.
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PostSubject: Re: HF general news   Mon Jul 26, 2010 7:36 am

Snapman wrote:
SMH


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SEC Chief Not Sure if Hedge Funds Pose 'Systemic' Risk
Although the SEC has been charged with overseeing hedge fund registration and reporting, its chief still isn't sure if they pose a "systemic" risk.

Testifying at a Congressional hearing Tuesday, SEC Chairman Mary Schapiro told lawmakers that it wasn't clear whether hedge fund firms posed the kind of risk to the financial system as some of the big financial institutions like Wall Street banks and insurers, according to Bloomberg.

Nevertheless, the agency is beefing up its staffing to meet the mandates set out by the financial reform bill that has just passed Congress. Schapiro said, in a prepared statement, that the SEC expects to hire about 800 people over time to carry out its new or expanded responsibilities.

The SEC is also still trying to get back its credibility as a regulator after its failure to detect Bernard Madoff's $65 billion Ponzi scheme. Besides reorganizing the agency division that handles inspections and examinations, the SEC will now require its staff to routinely verify that client assets are where fund managers claim they are.

Madoff, who is serving a 150-year prison term, said his client funds were with an affiliated entity, rather than a third-party custodian, which made it easier for him to steal the money.

Schapiro also said the SEC had already set up a searchable central database for tips sent in about possible securities law violations.

One of the reasons Madoff got away with his scam for so long was that whistleblower Harry Markopolos' complaints to the SEC's Boston office were ignored by the New York office.

At least she is better than Chris Cox. No
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PostSubject: Knight Capital Acquires ETF Firm    Mon Aug 02, 2010 10:59 pm

HFN:

Electronic trading company Knight Capital has acquired an ETF portfolio construction firm for $20 million. The deal for Chicgao-based Astor Asset Management was in cash and stock, according to an announcement. Astor has about $560 million in assets under management and 13 employees, the announcement said. Astor's founder, Robert Stein, has been offered a four-year employment contract as part of the deal. The acquisition is expected to close in the fourth quarter.

ETFs (exchange-traded funds) have become a popular investment vehicle, offering the diversification of a mutual fund, with the ability to trade the product like a stock. New Jersey-based Knight Capital divested itself of its hedge fund business last year when it sold Deephaven Capital Management to Stark Investments.
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PostSubject: Fortress Sees Bigger Loss in Second Quarter    Fri Aug 06, 2010 5:47 pm

Alternative investment firm Fortress Investment Group reported greater losses in the second quarter on Thursday. The firm, which manages a handful of hedge funds and private equity funds, among other types of vehicles, reported a net loss of $251 million for the quarter, compared with $171 million in losses for the same time a year ago. Losses attributed to Class A shareholders was $92 million, compared with a loss of $45 million from the previous year. As of the second quarter, Fortress had $41.7 billion in capital under management. Of that, $17.3 billion was in private equity and $12.9 billion was in hedge funds.

Fortress' private equity capital under management was up $700 million in the second quarter from the same time a year prior, while its hedge fund assets under management declined $1.4 billion. In its liquid hedge fund portfolio, a macro offshore fund was down 0.7% and a global macro fund was down 1.5%, while a commodities fund was up 2.2%. Funds in Fortress' credit hedging business saw two special opportunities funds up 4% and 3.4%, an offshore fund up 0.5% and another fund down 0.3%.

Private equity accounted for 26% of total segment revenues and hedge funds accounted for about 11%. To be sure, it wasn't all bad news for the firm. Fortress closed its deal to acquire Logan Circle Partners, adding $11.5 billion in traditional assets under management. Fortress also raised an additional $1.9 billion in capital from investors during the second quarter. Fortress held a final close for a credit opportunities fund on $2.6 billion in July as well as a final close on a domestic Japan real estate fund on $800 million last quarter.

Fortress, one of the few alternative asset managers to go public, saw its shares rise 17 cents during early afternoon trading on Thursday. Still, the performance of the firm's shares has disappointed investors since going public in February 2007 when it opened at $35 per share. On Thursday, shares were trading at $4.11 per share
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PostSubject: Re: HF general news   Mon Aug 16, 2010 4:08 pm

Out with the old… making room for the new….




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Grubman Leaving Highfields
Richard Grubman is retiring from Highfields Capital Management, the hedge fund firm he helped to found.

He is leaving for personal and family reasons and intends to devote his time to charitable causes, according to a spokeswoman for the firm.

Grubman founded Highfields in 1998 with Jon Jacobson. Jacobson will remain at the firm's helm.

Boston-based Highfields has about $10 billion in assets under management.

Perhaps Grubman's biggest claim to fame was when he provoked Enron chief executive Jeffrey Skilling to call him an obscenity on a 2001 conference call when Grubman was challenging Enron's information.

Eight months after that call, Enron collapsed and filed for bankruptcy. Skilling is now serving time in prison for his role in the company's fraud.

Earlier this year, Grubman was arrested and charged with assault when he allegedly threw car keys at an attendant at Boston's Ritz-Carlton after he was told to move his BMW. That case is pending.

Grubman, however, was considering retirement long before the incident at the hotel, according to people familiar with his situation. His wife was diagnosed with breast cancer last year and he wanted more time to spend with his family.

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Rubin Exits Hedge Funds for Private Equity
Ex-Treasury Secretary Robert Rubin reportedly is giving up advising hedge fund firms to take a position with boutique investment bank and private equity company Centerview Partners.

Rubin will give up his advisory work with hedge fund firms Taconic Capital Advisors and Farallon Capital Management to take the position as a counselor with Centerview, Bloomberg reported.

The position at Centerview is part-time, Bloomberg said.

Rubin was appointed as Treasury Secretary under President Bill Clinton.

After he left Treasury in 1999, Rubin served as director and later chairman of Citi. In January 2009, he left Citi in the wake of that firm's financial troubles and a $45 billion government bailout.

By the time he left Citi, Rubin was criticized for fostering policies at the bank that allowed it to take on too much risk.

His reward for serving the bank for a decade was about $126 million in cash and stock, according to newspaper reports.

Centerview was founded in 2006 by two dealmakers: UBS investment banker Blair Effron and Robert Pruzan, president of Weinstein Perella & Co.

James Kilts, the former chief executive of Gillette and Nabisco, and David Hooper, from private equity firm Vestar Capital Partners, joined Centerview to head up its private equity arm.

Go to Bloomberg article

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PostSubject: Bigger, safer but duller    Tue Aug 31, 2010 1:29 pm

A secretive industry opens up to meet the demands of investors and regulators

Economist.com:

FOR much of the past two years hedge-fund managers have tried to convince queasy investors not to give up on them. Now it seems that some of the industry’s biggest names have given up on themselves. Stanley Druckenmiller, a celebrated hedge-fund manager and protégé of George Soros, announced on August 18th that he would close his fund, Duquesne Capital Management, because he was “dissatisfied” with its performance. Two days later it emerged that another well-known manager, Paolo Pellegrini, plans to hand back investors their remaining money by the end of September, after making losses.


Messrs Druckenmiller and Pellegrini are not the only hedge-fund managers to have been humbled. Hedge funds used to boast of their ability to deliver “absolute returns”—to make money regardless of the ups and downs in financial markets. That illusion was shattered in 2008 when the funds’ average returns were -19%, according to data from Hedge Fund Research, which tracks the industry. Funds clawed back some of the losses last year but have struggled to build on that recovery. Returns were -0.2% in the first half of 2010 (although stockmarkets fell by much more). Capital losses and withdrawals by investors have left hedge-fund assets at around $1.6 trillion, down from a 2007 peak of almost $1.9 trillion (see chart).

An industry that had run almost unchecked because of the returns it once produced and the mystique of its billionaire managers may never again get the same latitude from investors. “It’s almost as if you’re a car dealer and there was a devastating crash”, says one executive at a fund of hedge funds. “Now people for the first time want to know what’s under the hood.” It is not only poor performance that has given investors whiplash. Bernie Madoff’s Ponzi scheme, which came to light in 2008, made clear the risks of handing over capital without close oversight.

To retain investors, hedge funds have had to shed their cloak of secrecy. Some managers have started to meet their investors regularly and provide them with more frequent reports about performance. Other firms give investors greater access, via their websites, to up-to-date information about returns, leverage and liquidity. “We are so much more transparent than we used to be, and more transparent to our investors than a lot of public institutions”, says Simon Lorne of Millennium Partners.

There has been a similar rethink about day-to-day business operations. For instance, funds can reduce the risk that a big chunk of investors’ assets become trapped in a bankrupt bank (as happened when Lehman Brothers went bust in 2008), by using several prime brokers to carry out their trades and to provide them with secured lending. Many are also beefing up back-office operations, such as risk management and compliance. These sorts of changes appeal to institutional investors, such as pensions and endowment funds, which can write big cheques but require high standards of their investment firms.

To further broaden their appeal, hedge funds are offering a wider range of investment products. Managed account platforms, which allow an investor’s assets to be held separately from the main fund, are popular because clients can keep track of their positions. Other products are tailored to fit the rules for retail investments. The market for hedge-fund vehicles that comply with UCITS III, the European Union regulations governing pooled investments, has almost doubled to around $110 billion in the past year, according to Eurekahedge, a research group. That rapid growth has attracted the attention of some American big names. For instance, John Paulson, a hedge-fund boss known for his lucrative bet against the housing market, will soon offer a UCITS III product.

The creep of regulation is one reason why hedge funds increasingly resemble more traditional investment managers. America’s financial-reform bill, passed in July, will require hedge funds with assets over $150m—a low threshold—to register with the Securities and Exchange Commission, to hire or designate a compliance officer and to maintain records on trading positions and leverage. Proposals for new EU regulations would, if adopted, lead to increased oversight of hedge funds by regulators and put limits on funds’ leverage.

The increased cost of meeting the demands of institutional investors and regulators is tilting the industry towards ever-bigger firms. Investors already favour the larger, older funds, which they perceive to be safer bets. Most of the new money allocated to hedge funds in the second quarter went to those with assets over $5 billion.

The smallest hedge funds will struggle under these conditions. Some may seek to share back-office costs with larger funds in return for a cut of their profits. Others will liquidate or put themselves up for sale. The industry is already consolidating. On August 3rd, TPG-Axon, a New York fund, announced a merger with Montrica, a London outfit.

Whether this bulking-up will be good for the industry as a whole is unclear. The most glittering returns have often come from smaller, younger outfits, which are now being sidelined. Giant funds often struggle to find ways to produce outsize returns, because they are too big to move nimbly in and out of markets. Mr Druckenmiller said one reason he decided to close Duquesne was its burdensome size.

Yet investors who have been scarred by the volatility of the past two years may now care more about stable performance than big returns. “If you can convince investors that you can consistently generate 10% returns, that is a huge market”, says one hedge-fund manager. But if “10 is the new 15” when it comes to returns, as some in the industry claim, then 15 may be the new 20 when it comes to fees. Investors may be less willing to pay the typical boom-era fees of 2% of assets and 20% of returns, if those returns are subdued. Should fees come down, many other hedge fund bosses may soon join Mr Druckenmiller in retirement.
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PostSubject: Hedge fund closures    Tue Sep 07, 2010 2:46 pm

Hedge fund closures

Published: September 3 2010 09:55 | Last updated: September 3 2010 15:34

Ever get that fin de siècle feeling? Some hedge fund managers seem to be a bit world-weary. They are handing back external capital with a polite “thanks, but no thanks”.

The motivations are partly personal: enormous wealth and a nagging suspicion that their best days are behind them. But the job is also looking harder. In major markets, 2010 has so far been mostly flat and directionless. If it stays that way for long enough, people struggle to care. The boutique money management industry in Japan, for example, has shrunk from almost 400 to fewer than 100 firms prepared to invest for international clients, according to GFIA, a Singapore-based consultancy.

Then there is the rise of algorithmic and other sorts of nearly mechanical trading, which seem to have caused assets to move increasingly in lockstep. For the first seven years of the past decade, the correlation between the S&P 500 and 10-year Treasury yields was 0.22; since then it has doubled. The correlation between equities and commodities has more than tripled. When markets move in tandem, the old-fashioned skills of stock-picking and sector allocation are hardly rewarded. This is a binary world of risk-on or risk-off.

For managers used to posting knockout numbers, operating in this kind of environment can be bruising. Stanley Druckenmiller cited the “high emotional toll” of this year’s diminishing returns as he drew down the shutters after almost 30 years at Duquesne Capital Management. Paolo Pellegrini, shooing outside investors away from his PSQR Capital, is reportedly convinced that the “party has come to an end”. Those who stick it out should remember two things. First, investors paying big fees for performance have a right to expect it. Second, reminiscing over la belle époque won’t bring it back.

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PostSubject: Hedge Funds Senrigan, Turiya Are Said to Boost Asia Assets as Returns Lag    Tue Sep 28, 2010 5:27 pm

(Bloomberg)--Senrigan Capital Group Ltd., backed by Blackstone Group LP, and Turiya Advisors Asia, founded by a former Goldman Sachs Group Inc. trader, at least doubled their assets, according to four people familiar with the matter, in a year when Asian hedge funds are the world’s worst performers. Senrigan, an event-driven fund based in Hong Kong, tripled assets to about $615 million by early September from its November inception, according to two of the people, who declined to be identified because the information is not public. Turiya, started by Davide Erro, a former Asia head of Goldman Sachs’s arbitrage desk, doubled assets to $320 million after it began trading in April out of Hong Kong, the other two people said.

Janchor Partners Ltd., the Hong Kong-based manager started in January by the former Asia head of the Children’s Investment Fund Management UK LLP, increased assets fivefold. They are among at least four of Asia’s biggest startups this year luring investors concerned that the pace of global economic growth will stall by assembling large teams and investing founders’ capital. The 75 new Asia-focused hedge funds set up since 2009 oversee an average $29 million, with only 5 percent of last year’s startups increasing assets to $100 million, according Eurekahedge Pte.

“The asset-raising environment for Asian hedge funds has been incredibly challenging for close to three years,” said Marlin Naidoo, head of the hedge fund capital group for Asia- Pacific at Deutsche Bank AG in Hong Kong. “Smaller funds need to significantly outperform or ran very differentiated strategies in order to get noticed.” The Eurekahedge Asian Hedge Fund Index dropped 0.4 percent through August, the worst performer of six regional indexes tracked by the Singapore-based data provider.

Janchor, Prudence

The Janchor Partners Pan Asian Fund increased assets to $200 million from $40 million at inception, with most investments locked up for three years, Chief Investment Officer John Ho said. The long-short fund, which bets on rising and falling stocks, gained 18 percent as of Sept. 24 since inception, he said. “With the benefit of long-term capital, we are able to execute our strategy of carefully managing the risk of the portfolio while delivering solid returns on both our longs and shorts,” said Ho.

Prudence Investment Management (Hong Kong) Ltd., a debt manager based in Hong Kong, tripled assets to more than HK$1.3 billion ($154 million) since starting its first fund in early 2009, according to data compiled by Bloomberg. Senrigan Chief Investment Officer Nick Taylor, Erro and Prudence Chief Investment Officer Chao Liu declined to comment.

Average Investments

The average institutional investment in a hedge fund is $10 million, said Paul Smith, a Hong Kong-based managing director of asset manager and hedge fund distributor Triple A Partners Ltd. “Many smaller Asian managers -- both startups and existing managers -- are simply non-investable for most institutions,” said Smith. “Smaller managers are as a result dying on the vine.”

Investors added more than $360 million of new capital to Asian hedge funds in the second quarter, bringing industry assets to $74.4 billion and offsetting part of the $700 million of net redemptions in the first quarter, according to Chicago- based data provider Hedge Fund Research Inc. Worldwide investors are gravitating toward the largest managers. Almost all of the $23 billion of new inflows into the global industry in the first half went to firms managing more than $5 billion of assets, HFR said in a statement Sept. 15.

Returns

A lot of investors are reluctant to represent more than 10 percent of a manager’s portfolio so they can control risks, said Patric de Gentile-Williams, chief operating officer of FRM Capital Advisors Ltd., a unit of the $8.5 billion, London-based fund of hedge funds group Financial Risk Management Ltd. Senrigan’s fund, which invests in companies going through events such as mergers and spinoffs, returned 4 percent this year through August and 5 percent since it started investments in November, two of the people said. Turiya declined to reveal its returns.

The Prudence Enhanced Income Fund returned 98 percent in 2009, more than triple the 27 percent gain of the Eurekahedge Asian Hedge Fund Index. The fund returned 22 percent in the first eight months this year, according to Bloomberg data.

Starting Capital

Senrigan’s partners contributed $45 million of their own money toward the fund at the start and Blackstone, the world’s biggest buyout firm, initially invested $150 million. Turiya’s partners chipped in at least $100 million of the assets at the beginning. Taylor oversaw more than $1 billion for Modal Capital Partners, a hedge fund of Credit Suisse Group AG that he helped set up in 1999, and for Citadel Investment Group LLC.

Erro previously looked after $1.7 billion to $3.8 billion at predecessor Gandhara Capital and ran more than a billion dollars of investments while heading the Asia global arbitrage desk of Goldman Sachs, and at Deutsche Bank. Taylor assembled a team of 11 people at the outset that has grown to 19. Chief Operating Officer Jeff Levy was one of the 20 people Turiya had in place at the start, while Ho’s team of nine included dedicated operational staff and investment professionals who had worked with him previously.

Hedge funds are mostly private pools of capital whose managers participate substantially in the profits from their speculation on whether the price of assets will rise or fall.

To contact the reporter on this story: Bei Hu in Hong Kong at bhu5@bloomberg.net
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PostSubject: Re: HF general news   Mon Oct 11, 2010 8:27 am

For a region that is supposed to be lush with capital this is an interesting story. I guess this guy beasted it out for 15 years before needing a break, thats pretty impressive. Considering he started his HF during the peak of Sub Prime i guess 5.1 percent in a long/short strategy is relatively impressive. I guess after loosing 82% of your AUM can be a stickler… on the understatments …lol


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Singapore hedge fund Amoeba Capital to close down


Morgan Stanley
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$25.32
+0.25+1.00%
12:00am EDT
SINGAPORE | Fri Oct 8, 2010 12:24am EDT
Oct 8 (Reuters) - Amoeba Capital Partners, a Singapore-based hedge fund manager, is shutting down and will return money to investors by the end of the year from its sole $135 million long/short equity fund, its founder said on Friday.

Ashutosh Sinha, chief investment officer of Amoeba Capital Partners and a former Morgan Stanley portfolio manager, told Reuters he needed a break.

"I wanna take some time off after working non-stop as a fund manager for more than 15 years," he said.

"It is a very simple story. By 31st December we will return all the capital to our investors."

The long/short fund, which started operation in 2006, was up 5.1 percent year-to-date by the end of August, but Sinha said there were redemptions which scaled down the size of the fund from a peak of $750 million.

Prior to founding Amoeba Capital in 2006, Sinha was managing director, head of Asian investments, and co-portfolio manager for global emerging markets at Morgan Stanley (MS.N).

The closure of Amoeba Capital was earlier reported by financial website AsianInvestor.

(Reporting by Charmian Kok and Saeed Azhar, editing by Raju Gopalakrishnan)

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PostSubject: Re: HF general news   Thu Nov 11, 2010 1:15 pm

Tudor Pickering Hires Ex-Citadel Manager
Tudor, Pickering, Holt & Co., a Houston-based boutique investment bank which focuses on the energy sector, hired a former Citadel Group portfolio manager to launch a new energy hedge fund.

Paul Chambers joined Tudor, Pickering, from Citadel where he ran an energy portfolio in the global equities division of the hedge fund firm, the investment bank said in a statement.

His hiring expands Tudor, Pickering's new asset management division which will be headed up by Walker Moody.

Moody was hired to lead the new division earlier this year. He had been with Goldman Sachs before signing on with Tudor, Pickering.

The asset management division will initially focus on an energy sector long-short product, with a credit product contemplated later.

The HFN Energy Sector Index was up 3.80% in October and +10.90% year-to-date.


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