TPG Capital LLP agreeed to buy GlobeOp Financial Services SA, a hedge fund administrator, for about 508 million pounds ($800 million). The private equity firm will pay 435 pence a share in cash, 49 percent more than the closing price on Jan. 5, the day before GlobeOp said it was in talks to be acquired, TPG said in a statement today.
Warren Buffett: I’m Backing America (Money Week)
Forget all the trash talk about America’s glory days being over – Warren Buffett is talking up the USA. One of the world’s most successful investors, whose vehicle Berkshire Hathaway has delivered a 20.2% compound annual return since 1965, Buffett reckons that once the housing market revives, the US economy will follow suit.
Warren Buffett Matching Illinois Teen’s $300 Deficit Donation (CNBC)
Warren Buffett isn’t limiting himself to matching deficit-reducing donations by Washington lawmakers. Katie Murphy, a 16-year-old girl who lives in the northern suburbs of Chicago tells WLS-TV that Buffett will match her own $300 contribution toward trimming the U.S. national debt.
Soros Sits Out Obama Super-PAC Money Race (Bloomberg)
George Soros, the billionaire investor who bankrolled Democratic groups during George W. Bush’s presidency and then indicated in 2010 that his giving days were over, is back. He just isn’t giving to the political action committee working to re-elect President Barack Obama.
Tepper Protégé Forges New Fund (AR)
As hedge fund managers, David Tepper and Jeff Lignelli travel in the same elite financial and social circles, but it’s their humble Pittsburgh roots that brought them together. That relationship recently led Tepper to make an undisclosed lead (but not a seed) investment in a long/short equity and opportunistic credit strategy that Lignelli plans to launch on April 1 at his new firm, Incline Global Management. Lignelli cites Tepper prominently in Incline’s marketing documents as a mentor, and Lignelli’s success as an asset manager increased considerably once he began sharing ideas with, and learning from, the Appaloosa Management founder.
Big Names Added To Lyxor Platform (HFM Week)
Marathon Asset Management and AQR Capital were among several big names to have funds added to Lyxor Asset Management’s industry-leading Managed Account Platform (Map) in December. The news marks a strong end to the year for the Lyxor Map in terms of fund additions, with new products from Brevan Howard, Paulson & Co and Cheyne Capital also debuting in the final few months of 2011, filings on the Irish Stock Exchange (ISE) reveal.
U.S. Weighs Volcker Sovereign-Debt Exemption (Bloomberg)
The global backlash against the Volcker rule has been welcomed by U.S. banks, which have been lobbying Congress and regulatory agencies to delay and weaken numerous provisions in the 298-page proposal released in October. The rule would allow banks to continue short-term trades for market-making or hedging. It also would limit investments in private-equity and hedge funds. Dodd-Frank, enacted in response to the 2008 credit crisis, requires that the rule be in place by July 21.
EU Miscalculates Solvency II Hedge Fund Risk, Research Says (HFM Week)
EU policy makers have massively overestimated the inherent risk of hedge funds as an asset class in its Solvency II insurance legislation, new research suggests. An update of the EU’s capital solvency rules, the Solvency II Directive, due to come into force in 2014, requires European insurance companies with gross premiums exceeding €5bn to, among other stipulations, increase their capital holdings for certain asset classes.
No Thanks for Donor Ackman at Theater Opening (FINalternatives)
At yesterday’s grand opening of the Pershing Square Signature Theatre on 42nd Street, Rep. Jerry Nadler (D-N.Y.), whose district encompasses the Frank Gehry-designed theater complex, made sure to thank those who helped make it a reality. He offered gratitude to Mayor Michael Bloomberg and City Council Speaker Christine Quinn and actor Ed Norton. But he forgot to mention the man Norton convinced to make the Signature Theatre the Pershing Square Signature Theatre—Pershing Square Capital Management founder William Ackman.
EU Could Renew Hard-Line AIFM Approach, Says Aima (HFM Week)
The upcoming technical draft of the EU’s Alternative Investment Fund Managers Directive (AIFMD) “could be worse” than the legislation’s original version, Aima’s head of asset management regulation warned late last week. EU financial regulator Esma published its Level 2 advice in November following months of consultations and workshops – input the hedge fund industry was generally pleased with.
Euro May Fall Toward Parity with Dollar (Bloomberg)
Craig Ferguson, a currency hedge fund manager at Antipodean Capital Management in Melbourne, talks about Europe’s sovereign debt crisis and its implications for the region’s common currency. Ferguson also discusses the Australian dollar. He speaks with Rishaad Salamat on Bloomberg Television’s “On the Move Asia.”
Sprott Silver Trust Fund Completes Second Close (HFM Week)
Sprott Asset Management, the $9.1bn Canada-based investment manager, has completed its second close of the Sprott Physical Silver Trust (PSLV) this month, raising $350m, HFMWeek has learned. The trust, one of the manager’s three NYSE-listed closed-end funds, invests and holds substantially all of its assets in physical and silver bullion.
Romney Sees Surge in Wall Street Campaign Contributions as Obama’s Decline (Bloomberg)
Mitt Romney’s investment background, criticized by some of his Republican presidential rivals, is helping him build a financial advantage over them. Romney’s support from Wall Street goes beyond donations to his campaign. Paul Singer, president and founder of the New York-based hedge fund Elliott Management Corp., donated $1 million to the pro-Romney Restore Our Future, one of the largest individual donations in the last six months to the super-PAC. Elliott employees also contributed $106,025 to Romney in the last three months.
Texas Billionaire Simmons Bankrolling Multiple Republican Causes (Bloomberg)
Harold Simmons, a Texas billionaire, gave $8.5 million in the last six months of 2011 to support two Republican presidential contenders and a political action committee founded with help from Karl Rove, U.S. Federal Election Commission filings released yesterday show. Such donors include Jon Huntsman Sr., a chemical company executive and father of candidate Jon Huntsman Jr.; Paul Singer, president and founder of hedge fund Elliott Management Corp.; and Steven Spielberg, co-principal of DreamWorks Animation SKG. (DWA)
Analysis: Financial Titans Rally to Romney’s Cause (Reuters)
Three hedge fund managers pitched in $1 million to the pro-Romney PAC: Tiger Management’s Julian Robertson, Elliot Management’s Paul Singer and Renaissance Technology‘s Robert Mercer.
Hedge Fund’s Frankenstein Algorithm Stalks Robert Harris Thriller: Books (Bloomberg)
Now Robert Harris — bestselling author of novels about Nazi Germany (“Fatherland”), ancient Rome (“Pompeii”) and modern Britain (“The Ghost”) — has updated Mary Shelley’s classic tale of hubris in “The Fear Index,” a brisk new thriller set at a Geneva hedge fund.
South Carolina Fund Paid High Fees for No Gain, Treasurer Says (Bloomberg)
South Carolina (STOSC1)’s $26 billion pension fund paid excessive fees while trailing peers after half the plan’s assets were invested with hedge funds and private-equity firms, State Treasurer Curtis Loftis said.
Energy Future Planning $400 Million Bond Sale to Repay Intercompany Debt (Bloomberg)
Energy Future Holdings Corp. (TXU), the Texas power company taken private in 2007 in the largest buyout in history, plans to sell $400 million of notes to partially repay intercompany debt that hedge fund Aurelius Capital Management LP has said violates the company’s credit agreement.
Barclays’ Todd Edgar Said to Plan Start of Atreaus Macro Hedge Fund in May (Bloomberg)
Todd Edgar, former global head of macro trading at Barclays Plc (BARC) in London, is starting hedge fund Atreaus Capital LLC in May, according to a person familiar with his plans. Edgar, 39, is opening New York-based Atreaus with former colleagues Peter Buschmann, Dmitri Shklovsky, Sinan Gumusdis and Michael Ridewood, according to the person, who asked not to be identified because the fund is private.
Ex-FrontPoint Manager Skowron Calls Morgan Stanley No Victim of His Crimes (Bloomberg)
Former FrontPoint Partners LLC fund manager Joseph F. “Chip” Skowron, sentenced to five years in prison for an insider-trading scheme, says that Morgan Stanley (MS) isn’t a victim of his crimes and doesn’t deserve restitution. Galleon Group LLC, the defunct hedge fund at the center of the biggest insider-trading scheme in U.S. history, was among Skowron’s five investor victims that won court approval for restitution in November.
Ex-Credit Suisse Traders Said to Plan Asian-Focused Hedge Fund (Bloomberg)
Two former senior traders at Credit Suisse Group AG (CSGN) plan to start a hedge fund this year that will invest in stocks and derivatives tied to Asian companies, according to two people with knowledge of the matter. Carlo Ramirez, Credit Suisse’s former head of Asian trading for equity and equity derivatives, and Olivier Garcia, the Swiss bank’s former head of Asia-Pacific exotic trading, intend to start trading in the second quarter, said the people, who declined to be identified because the plans are private. RG Investment Capital LLP will be based in London, the people said.
Cequel Communications Sets Rate on $2.7 Billion in Loans (Bloomberg)
Cequel Communications LLC, the cable-television and Internet-services provider that does business as Suddenlink Communications, set the interest rate on $2.7 billion in loans it’s seeking to refinance borrowings, according to a person with knowledge of the transaction. A term loan B is sold mainly to non-bank lenders such as collateralized loan obligations, bank loan mutual funds and hedge funds. In a revolving credit facility, money can be borrowed again once it’s repaid; in a term loan, it can’t.
Citi Awarded Mandate from Veritable LP to Provide Hedge Fund Middle Office and Administration Services for $2.2 Billion in Assets (Market Watch)
Citi today announced that Veritable, L.P. has awarded it a mandate to provide a comprehensive suite of hedge fund services including middle office, fund accounting, and investor services. Veritable, L.P. is among the largest independently owned Registered Investment Advisors in the United States providing unbiased, tax efficient, integrated investment solutions for families of substantial wealth.
Yale’s Swensen: Index Funds Best Plan for Most (Bloomberg)
David Swensen, who pioneered an investing style that helped endowments beat markets by using alternative assets such as private equity and real estate, said investors who don’t have access to top managers are best off using index products. “High quality hedge-fund exposure that produces returns that are fundamentally independent of what’s going on in the markets can be a great addition to an institutional portfolio,” said Swensen, 58, who has headed Yale’s investments office since 1985. Still, hedge funds’ traditional fees of 2 percent of assets and 20 percent of profits “are a huge issue,” Swensen said, and unmerited except for extraordinary performance.
Kaufman Shuts as Minority-Owned Investment Bank Succumbs to Trading Dearth (Bloomberg)
Kaufman Bros. LP, the minority-owned investment bank that helped unwind U.S. stakes in bailed-out financial companies, ceased operations as of yesterday, according to a notice posted on its website. The company, which also has offices in San Francisco, said it was sought out by institutional investors, hedge funds and government agencies to help meet diversity goals. Kaufman’s website, before it was disabled today, said the firm participated in public offerings of Citigroup Inc. and American International Group Inc. as the U.S. Treasury Department disposed of stakes accumulated when it bailed out the firms during the financial crisis.
Hedge Fund Managers to Outspend Bankers on London Homes (Reuters)
The property consultancy said on Wednesday that while banker bonuses were a key factor behind rocketing London house prices in 2006-7, their importance has been overtaken by overseas investors and buyers from the hedge fund and private office-populated West End.
Hedge Funds Brace for Euro Zone Break-Up (Reuters)
Nervous hedge funds managers are stress-testing their portfolios and searching for ways of protecting themselves against their worst nightmare — a potential break-up of the euro zone. With talks on restructuring Greece’s debt mountain still deadlocked, and the exit of one of more countries from the euro seen as a small but definite possibility, funds are modelling scenarios ranging from a 50 percent slump in European stocks or a 45 percent fall in the oil price to a 30 percent rise in gold.
Oil in Equilibrium At $100: Mercuria (Reuters)
Marco Dunand, chairman of Mercuria Energy Group, told Reuters the oil market had steadied despite turbulence in the Middle East and North Africa over the last year and tension between Iran and the West over Tehran’s nuclear program.”If a money manager, a hedge fund or an index fund increases its allocation from let’s say 0.5 percent to 1.5 percent, given the present size of the market, it would not be able to cope. The market will simply run out of sellers.”
U.S. Expands Case against Ex-Goldman Director Gupta (Reuters)
Federal prosecutors have expanded their insider trading case against former Goldman Sachs Group Inc. (GS) director Rajat Gupta, saying the illegal activity lasted longer and involved more trades than alleged. An amended indictment made public on Tuesday expands the period in which Gupta supposedly provided illegal tips to former Galleon Group hedge fund founder Raj Rajaratnam, now serving an 11-year prison term following his insider trading conviction.
Marathon Weighs Pipeline Option (WSJ)
Marathon Petroleum Corp. said Wednesday it will explore a corporate structure for its pipeline operations that reduces tax liabilities, in addition to implementing a $2 billion share buyback. The company made the move after activist hedge fund Jana Partners LLC said in a January securities filing that it had taken a 5.5% stake in Marathon, which it viewed as undervalued, according to the January securities filing.
Video: South Carolina’s Efforts to Wean Public Pension Funds Off Private Equity and Hedge Funds (WSJ)
WSJ’s Michael Corkery stops by Mean Street to discuss South Carolina’s efforts to wean its public pension funds off of ‘alternative…
Marc Andreessen Talks About New $1.5B Fund, Venture Valuations (WSJ)
Andreessen Horowitz has closed its third fund at $1.5 billion, raising a total of $2.7 billion in less than three years and marking the firm as one of the biggest venture capital fund raisers in Silicon Valley history.
New Hedge Funds Update: January 2012 (AR)
Peter Muller’s PDT Partners is projected to raise $2 billion or more when it launches later this year.
As Billions Flow In, Pine River Launches Two New Funds (AR)
Pine River Capital Management, the $5.5 billion firm that was launched from a remote lake cabin in Minnesota, has rolled out two new strategies as money continues to flow in to its existing funds. The Pine River Financial Services Fund and Pine River Liquid Rates Fund began trading this month, each with more than $100 million in startup capital. The first, a long/short equity fund, will deal primarily in U.S. financial stocks, according to a person familiar with its strategy. It has been trading internally for the…
Harvard Management Veterans Prepare Emeth Partners (AR)
Steve Alperin, who until last year was head of emerging markets stock investing at the $32 billion Harvard Management Company, is joining with his former lead analyst Sara Fleiss to launch an emerging markets hedge fund in the third quarter, according to Goldman Sachs capital introduction marketing materials obtained by the new Boston based firm, Emeth Partners, will use event-driven and arbitrage strategies, focusing on emerging markets, according to the materials. Emeth is the Hebrew word for firmness, faithfulness and truth and was…
BREAKING NEWS: Akin Gump Swoops For Simmons & Simmons Pair (HFM Week)
Two of London’s leading hedge fund lawyers, Tim Pearce and Ian Meade, have left Simmons & Simmons for rival Akin Gump Strauss Hauer & Feld. The pair will join as partners and “significantly expand the firm’s London practice”, according to a statement.
Northern Trust Admin Growing Despite Cuts (HFM Week)
Northern Trust’s hedge fund administration unit is “continuing to hire” despite the job cuts planned for the wider company. It emerged this week that the company is planning to cut 700 jobs in the US and Europe as it targets cost reductions of $230m by the end of 2013. But a spokesperson told HFMWeek the admin unit would not be hit. “While we can’t comment on any specifics, we can say that we are continuing to hire in our Northern Trust Hedge Fund Services (NTHFS) group, both in the US and in Emea.”
Accurate Global Macro Fund Launches Outside Spain (HFM Week)
Accurate Advisors, a Madrid-based manager, launched its systematic global macro fund strategy to non-Spanish investors this month. The offering, Accurate Global Assets Fund, will target all types of allocators in Europe, ranging from high-net-worth individuals, family offices, funds of hedge funds and institutions, to reach a $2bn capacity.
Harvest Capital Opens New Long/Short Fund (HFM Week)
Harvest Capital Strategies, a San Francisco-based $1.3bn alternative investment manager, has this month launched a new long/short equity hedge fund.
Fund Admin Firm Viteos Opens Singapore Office (HFM Week)
Fund administration firm Viteos has opened a Singapore office, becoming the latest service provider to establish a presence in the region. Jay Moghe, who has worked in Asia-Pacific for 16 years, has joined from Credit Suisse to head up the office. Viteos, which services single manager hedge fund assets worth nearly $10bn, has already picked up one client in the region, while another two deals are currently being worked on.
JonesTrading Taps New Head of Advisor Services (FINalternatives)
Brokerage firm JonesTrading Institutional Services has named industry veteran Seth Michaels as managing director and head of its advisor services business. Michaels previously managed Neuberger Berman Clearing Services (a Lehman Brothers company) which provided execution, reporting, custody and clearing services to correspondent broker dealers, registered investment advisors and hedge funds.
Permal Assets Fall 9% (FINalternatives)
Fund of hedge funds Permal Group suffered a 9% drop in assets last year, parent Legg Mason said.
N.Y.-Based Southpoint Nets $233M (FINalternatives)
A $1 billion New York hedge fund has raked in more than $200 million for its new offering in just a month.
Hedge Fund Headache Slashes Danish Bank’s Profit (FINalternatives)
Denmark’s second-biggest bank has taken a big hit in its bottom line, thanks to the country’s second-ever class-action lawsuit. Jyske Bank said it put aside 229 million Danish kroner (US$40 million) to cover any possible liability from the lawsuit, filed by angry investors in one of the bank’s hedge funds. That, combined with a 299 million kroner write-down of its exposure to Greek sovereign debt, cut Jyske’s profit by 40% to 601 million krnoer.
Sports Betting Hedge Fund Busts, Investors Out £1.6M (FINalternatives)
Investors in the world’s first sports-betting hedge fund find themselves holding shares as worthless as losing wager tickets. Centaur Corporate’s Galileo Fund debuted in the middle of 2010. But earlier this month, the fund called in the liquidators and told investors that there’s no money left—meaning losses of £1.6 million.
Majedie Closes Hedge Fund At £350M (FINalternatives)
After three years of strong returns, Majedie Asset Management has closed its “old-fashioned long/short equity fund” to new investment.
Citi To Shut Prop. Desk As Chief Readies Hedge Fund (FINalternatives)
Citigroup will close its proprietary trading operations next month as it seeks to come into compliance with the upcoming Volcker rule banning the activity.
Man Group Signs On To UN Initiative (HFN)
One of the world’s largest hedge funds, Man Group, has signed on to an United Nations initiative.
RAB Capital’s Chief Executive Quits (HFN)
The CEO of London-based hedge fund firm RAB Capital – Charles Kirwan-Taylor – has quit his post.
Bruising Year For Commodities Hedge Funds (Financial Times)
The commodities hedge fund industry has suffered its worst year…volatile markets. The average commodity hedge fund fell 1.7 per cent in 2011, according…9 per cent loss. BlueGold, the hedge fund founded by former Vitol traders Pierre…
Humbling Of Fred, Capital For Cameron (Financial Times)
…And their teachers will say: ‘That could be you, one day. If you become a banker and really screw up. Ever considered hedge fund management? That’s much lower-profile.’” He was free The appointment of John Browett, chief executive of Dixons…
Opportunities for Asia in Europe bank crisis (Financial Times)
…Japanese and Chinese banks, Singaporean insurers and local hedge funds, among others. About a quarter of the portfolio consists…Such loans have attracted attention from credit and distressed hedge funds, who say the assets are attractive in a low-yield world…
Data Explorers Launch iPad App for Hedge Funds And Brokers (Hedge Co. Net)
Data Explorers, provider of securities lending data, tracking short selling and institutional fund activity across all global market sectors, today announced the launch of its new hedge fund iPhone app, the first of its kind for the global securities lending market. “The long reign of BlackBerry as the securities lending professional’s favorite gadget is under threat from the new generation of iPhones that have already been adopted by leading financial institutions,” said Jonathan Morris, Chief Operating Officer at Data Explorers.
Reporting Values and Risks In Private Equity Funds And Funds Of Funds (Forbes)
Pension funds making substantial alternative investments want to keep careful track of their money. That has led to development of new tools for tracking private equity, venture capital and funds of funds. Funds of funds — hedge funds or private equity funds which invest in other funds to spread risks — face similar complexity in their accounts, said Mark Coriaty, who heads of Eze Castle Integration’s sister company, Ledgex. He said that Boston-based Eze was providing consulting services to hedge funds and found the needs of funds of funds were largely ignored.
As Facebook Prepares To Go Public, Investors Wonder Whether Zuckerberg Has A Twist In Store (Washington Post)
In “really hot IPOs,” 90 percent of the shares go to institutional investors and 10 percent to everyday investors, says Scott Sweet, senior managing partner at IPO Boutique. It’s a perk for the banks’ biggest clients, like Fidelity Investments or T. Rowe Price or hedge funds.
Ruby Capital Launches Pure UK Litigation Fund (Opalesque)
London-based Ruby Capital Partners has announced the launch of a pure litigation fund in the UK. Ruby Capital, the private investment office set up by its CEO Steve Rubens in 2005 is said the fund will have two senior legal heavyweights as partners.
Serone Brings European High Yield Hedge Fund Zenith On Board (Opalesque)
Following the start of the credit crisis, Serone Capital Management was set up by Neil Servis and other colleagues from Morgan Stanley. Servis’s structured credit department at the bank was reduced in 2008 and Servis set up Serone in 2009, gaining an asset management licence in 2010. Serone’s focus will be entirely on credit: corporate, structured, liquid and illiquid. “We have a full infrastructure and systems set up” says Servis. “We are a fully operational credit asset manager with the capacity to manage various structures.”
Hedge Funds Warned On FATCA Complacency Amid US-EU Negotiations (COO Connect)
Hedge funds and investment banks should not view proposed changes by the US Treasury towards FATCA (Foreign Account Tax Compliance Act) reporting requirements as a concession, the head of the fund management business at Ernst & Young (E&Y) has warned. It was revealed that US officials were exploring the possibility of allowing European Union financial institutions to transfer data on US citizens to national governments, who would then pass this information onto the US Internal Revenue Service (IRS). It had been feared that FATCA’s reporting requirements were in breach of European privacy laws.
Are Hedge Funds Worthwhile Investments? (Minyanville)
I just finished reading The Hedge Fund Mirage, by Simon Lack. I’m not planning to review it here, but it did get me thinking about a subject that’s trickier than it seems: how to measure investment performance.
10 Mid-Week AM Reads (The Big Picture)
Recent Tweets (Aleph Blog)
Morning News: February 1, 2012 (Crossing Wall Street)
Hot Links: What The Dickens? (The Reformed Broker)
Frontrunning: February 1 (Zero Hedge)
Private Equity Deals (CNN Money)
HFMWeek Daily Snapshot – 1 February (HFM Week)
What to Do If You’re Making Money (Reuters Hedge World)
More On MF Global Client Money ‘Vaporization’, Seeking Safety In L-S Equity, Promising HF Strategies For 2012 And More (Reuters Hedge World)
The Morning Leverage: Seacrest In! ‘American Idol’ Host Partners With Bain, THL (WSJ)
