Matéria do Herald Tribune
Germany fights lonely battle to rein in hedge funds
By G. Thomas Sims
Published: May 17, 2007
FRANKFURT: Germany will make a last-ditch effort Friday to persuade the world's top economic powers to tighten their grip on hedge funds and private equity firms.
But even before these countries' finance ministers convened at a Group of 8 meeting, the push was being written off as futile - illustrating Germany's isolation in its desire to rein in the booming industry.
In the run-up to a two-day meeting near Berlin that will begin Friday, the United States, Japan, Britain, and Canada - where the bulk of hedge funds and private equity firms are based - have signaled their desire for a hands-off approach toward regulation.
"Central banks and other regulators should resist the temptation to devise ad hoc rules for each new type of financial instrument or institution," Ben Bernanke, chairman of the U.S. Federal Reserve, said in a speech this week.
Henry Paulson Jr., the U.S. Treasury Secretary, has said he would skip the meeting this weekend altogether because of a heavy workload.
Other members of the club - France, Italy and Russia - have given little or no public support to Germany's effort.
Their stance is an embarrassment to Germany, which has made increased transparency of the industry a top priority in its role as the current president of the G-8.
Germany is particularly sensitized to the issue because an intricate system of corporate cross-shareholdings since World War II has long helped shield companies from outside predators. That cozy system is widely credited with helping Germany rise from the rubble to become the world's third largest economy after the United States and Japan.
Now, companies are gradually unwinding their intertwined shareholdings as they restructure amid the pressures of globalization. Although the country has recently recovered from an extended bout as the "sick man of Europe," unemployment still hovers close to 10 percent, and Germans are feeling especially vulnerable to an industry with its roots firmly in U.S.-British business culture.
The German government also has historically played a larger role in intervening in the economy than countries like the United States and Britain.
The rift within the G-8 illustrates the fierce emotions surrounding an industry that is increasingly in the news for buying publicly traded companies, and then sometimes sharply reducing the work force in an effort to increase profit.
In one prominent example, TCI, a hedge fund that invests in ABN AMRO, has called for a breakup of the Dutch bank, which within months rushed to merge with Barclays, a British bank. If successful, the merged bank would be one of the world's largest by assets, but the move has also caused angst among thousands of workers as they fear for their jobs.
On Thursday, funds that invest in Prudential PLC called for the breakup of the company, a British insurer, but the company's management said that it would pursue its current strategy. (Page 12)
Proponents of the role that hedge funds and private equity firms play say that they foster employment and innovation. Many such firms are focused on long-term growth and bring new capital and expertise into a company. At the same time they limit the power of self-serving managers and shareholders to the benefit of efficiency and the most sensible allocation of resources.
Opponents argue that these investors are only concerned with maximizing short-term profit and overburden takeover targets with debt. They also say they put jobs at risk, resulting in a lower tax intake by governments.
Germany, with its tradition of consensus politics and co-determination between labor and management, has come to symbolize this critical side. During the most recent federal election, politicians began to refer to such investors as "locusts" - for swarming in from great distances, like the United States or Britain, and stripping German companies of assets, costing jobs.
Last year, Blackstone, one of the largest private equity companies, bought a stake of nearly 5 percent in Deutsche Telekom and has been pressing for change ever since. During the past week, employees have been on strike because management of the former telephone monopoly wants to increase working hours and cut pay for 50,000 workers.
On Wednesday, Michael Frenzel, the chief executive of TUI, the German travel company, tried to soothe employee fears that the company was in "danger" of being taken over by a hedge fund after it posted steep losses.
Speculation is mounting that Siemens, the vast engineering and electronics company, is also ripe for a breakup bid by an activist investor. The company is suffering from a power vacuum after its top two executives stepped aside last month over a widening corruption scandal. Siemens has warned that it could face steep fines stemming from investigations like the one under way at the U.S. Securities and Exchange Commission.
On the other hand, there was little complaint from Germany this week when DaimlerChrysler announced that it would sell its Chrysler unit to Cerberus Capital Management, a private equity firm.
Peer Steinbrück, who as German finance minister has led the drive to rein in such investors, has argued that hedge funds and private equity firms need monitoring because of the risk they pose to the financial system. He often refers to Long-Term Capital Management, the New York hedge fund that nearly went belly up in 1998 and prompted the intervention of the Federal Reserve to control fallout in financial markets.
Steinbrück had hoped that this weekend he would persuade G-8 finance ministers to get hedge funds to agree to a voluntary code of conduct. Such a code could call on funds to disclose qualifications of staff and their methods for managing risk.
The United States and other opponents favor indirectly monitoring hedge funds through their dealings with banks, insurance companies and other lenders that are already subject to regulation.
The United States tried to play down differences Wednesday. Clay Lowery, the assistant Treasury secretary for international affairs, said that "there probably is not as much disagreement as people have made it out to be." But he also said that Germany's desire for a code of conduct for hedge funds was not necessary.
Last week, Steinbrück failed to get his counterparts in the European Union - which includes Britain - to back him in his effort ahead of the G-8 meeting. At that time Steinbrück began lowering expectations for striking a deal this weekend, though he vowed to try, and said he would try again at a later summit meeting of G-8 leaders.
Meanwhile, Germany is going it alone.
Last week, the government announced that it would soon propose a law to require investors who build up a stake of 10 percent in a German company to make their intentions clear. Steinbrück fears that some German companies might be vulnerable to a takeover or breakup if they do not know who their shareholders are.
As of earlier this year, investors with more than a 3 percent stake in a company are bound to announce their holding. But the government still fears that many investors conceal their identities behind a bank buying the shares on their behalf, and that numerous investors can band together to build up a common stake and hide in the cloak of anonymity.
Switzerland is in the process of closing legal loopholes that have allowed the raiders to sneak up on one Swiss company after another. Yet even the Swiss are not rallying to Germany's side.
Last week, Thomas Jordan, a member of the board of Swiss central bank, gave a speech in Berlin at an event sponsored by the Swiss embassy and Switzerland's influential banking organization.
While there might be individual cases in which private equity involvement might not be in the best interest of a specific company, "it would be premature and risky on the basis of individual cases to introduce disproportional regulation," he said.
Jordan warned that regulations in the name of transparency must not stifle investment.
Friday, May 18, 2007
Hedge funds step up challenge to SEC
Hedge funds step up challenge to SEC
By Dane Hamilton
NEW YORK (Reuters) - Hedge funds and other investment firms have been busily filing quarterly public reports to regulators in recent weeks, offering rivals a window into top manager holdings that sometimes moves shares.
But don't look for any information from Bulldog Investors or Wynnefield Capital -- their so-called 13-F filings are largely blank.
The two funds are leading a charge to overturn the rules that require them to file quarterly holdings information, maintaining that such disclosures are trade secrets. Both have applied to keep their holdings confidential, but expect regulators to turn them down, forcing a court battle.
"We filed but it was blank," said Phillip Goldstein, a veteran investor who heads the $300 million-plus hedge fund group Bulldog Investors and affiliate Full Value Advisors. "We haven't heard back from the SEC."
Goldstein is no stranger to tangling with regulators. Last year he successfully challenged SEC rules requiring hedge funds to register as investment advisers. The U.S. Court of Appeals in June agreed, forcing the SEC to abandon the rule.
"Frankly I think we will win," said Goldstein of his latest effort. But he said "I suspect it will take a long time." Last year Full Value Advisors also asked for an exemption, but got no response from the SEC, he said.
If Goldstein succeeds and funds stop filing quarterly 13-F reports, investors could be denied an important investment tool: a quarterly window into what the world's best investors are holding, at least as of a particular quarter's end. And evidence shows that information is closely followed.
Hedge funds step up challenge to SEC News Regulatory News Reuters
By Dane Hamilton
NEW YORK (Reuters) - Hedge funds and other investment firms have been busily filing quarterly public reports to regulators in recent weeks, offering rivals a window into top manager holdings that sometimes moves shares.
But don't look for any information from Bulldog Investors or Wynnefield Capital -- their so-called 13-F filings are largely blank.
The two funds are leading a charge to overturn the rules that require them to file quarterly holdings information, maintaining that such disclosures are trade secrets. Both have applied to keep their holdings confidential, but expect regulators to turn them down, forcing a court battle.
"We filed but it was blank," said Phillip Goldstein, a veteran investor who heads the $300 million-plus hedge fund group Bulldog Investors and affiliate Full Value Advisors. "We haven't heard back from the SEC."
Goldstein is no stranger to tangling with regulators. Last year he successfully challenged SEC rules requiring hedge funds to register as investment advisers. The U.S. Court of Appeals in June agreed, forcing the SEC to abandon the rule.
"Frankly I think we will win," said Goldstein of his latest effort. But he said "I suspect it will take a long time." Last year Full Value Advisors also asked for an exemption, but got no response from the SEC, he said.
If Goldstein succeeds and funds stop filing quarterly 13-F reports, investors could be denied an important investment tool: a quarterly window into what the world's best investors are holding, at least as of a particular quarter's end. And evidence shows that information is closely followed.
Hedge funds step up challenge to SEC News Regulatory News Reuters
Saturday, May 12, 2007
Managers celebrate surging prices
Managers celebrate surging prices
Ian Kerr
07 May 2007
High-flying hedge funds make millions for founding partners thanks to favourable market conditions
Oh, to be a high-flying hedge fund manager with assets of at least $5bn. It isn’t simply the standard 2% management fee but the fact that in these market conditions the performance fees that usually start at 20% will generate earnings of tens of millions of dollars more for each of the founding shareholders.
How can the hedgies go wrong in these markets? Only with difficulty. The long-short strategies, which are mainly long on closer examination, have been helped by surging share prices. Convertible arbitrage, which was considered dead two years ago, has come storming back.
Commodities are flying high. Merger arbitrage has been helped by merger mania. Distressed debt is yielding rich pickings for the vulture hedgies, Credit trading and derivatives are providing the same high returns that the big investment banks have enjoyed.
Does it all sound too good to be true? Perhaps, but don’t spoil the party. Don’t mention Amaranth Advisors, Vega or the soggy performance of Gavyn Davies’ Semper Macro fund. These were minor hiccups. Amaranth might have been a knockout blow but the episode is barely mentioned today and Brian Hunter, the trader whose bets backfired, has started a new fund.
Because the hedge fund industry has been so successful and has created large personal wealth for a small number of individuals, it hasn’t been easy to attract favourable publicity. Even when the managers give away tens of millions or even hundreds of millions to worthy charitable causes, the reaction is: “So how much did they keep for themselves?”
There should, therefore, be a small word of praise for the activist funds, which have been attracting considerable attention this year.
The term “activist” might have been considered user-friendly five years ago but the chief financial officer of a FTSE 100 company said: “These funds do little more than place a gun to the heads of management in the hope of maximising the value of the shares they have bought.
"At best they are irritating. At worse they are a nuisance and a waste of valuable management time.”
We have been following the Conrad Black court case but only limited credit has been given to Tweedy, Browne, the New York-based activist hedge fund, which first blew the whistle on Black’s Hollinger International.
In the case of ABN Amro, it wasn’t Christopher Hohn’s The Children’s Investment Fund that first started buying ABN Amro shares and call options. However, TCI was sufficiently influential to cause the value of the shares to rise 6% in one day when it said it had taken a more than 1% stake in the Dutch bank.
What TCI accomplished was to underline the incompetence of ABN Amro’s management and the need for change. Did TCI have the desired effect or was this an idle threat?
Within days, Barclays made a bid for ABN Amro and Royal Bank of Scotland made a counter-offer. The outcome is in the balance but the one certainty is that TCI will keep snapping at the heels of ABN Amro’s management to ensure fair play – the highest price for ABN Amro shareholders and for itself.
Why should hedge funds have become the new supremos in distressed debt and the restructuring of ailing or collapsed companies? These are businesses to which they should be attracted. Many traders at the best- performing funds specialised in high-yield or junk bonds and their bankers saw failing companies as an opportunity to acquire assets.
Michael Milken of Drexel Burnham (very RIP) had pointed the way in junk bonds but the distressed debt opportunities were then exploited by groups including Goldman Sachs, Lone Star and other US vulture funds.
Better still, the hedge funds found they possessed superior restructuring skills to the commercial bankers, who had been the traditional lenders and only wanted to recoup a part of those loans as quickly as possible.
As a former Goldman Sachs partner said: “It used to be that if you had a restructuring meeting for a distressed company, the process was driven by the main relationship banks. Now, if you go to a distressed company meeting, often there are no banks at all – just hedge funds.”
While the hedge fund sector basks in sunny market conditions, have you noticed there are fewer criticisms of the industry’s fee structure? The standard 2% and 20% suddenly doesn’t seem so greedy or onerous when the hedge funds are reporting a steady rise in net values.
There is also evidence that high fees do not detract from performance or cause penny-pinching investors to withdraw their funds. What better example is there than Renaissance Technologies, run by former maths professor James Simons, who charges no less than a 5% standard and a 44% performance fee. Some market observers would suggest those numbers are outrageous.
“Not at all”, according to Simons’ loyalists, who correctly said that Renaissance Technologies is one of the best performing and most consistent hedge funds in the world and that Renaissance continually has to turn away new investors. Did the loyalists object when Simons earned $1.7bn last year? I suspect that there was not a murmur of dissent.
Renaissance Technologies is a pure quantatitive fund which even Simons admits “is really a black box”. Don’t black boxes make you nervous? They were first exploited by Salomon Brothers for its global macro trading strategies.
The results were often brilliant but when the black box gave the wrong signals, the losses ran into hundreds of millions of dollars. Then John Meriwether took some of Salomon’s black boxes, its best quant traders and a pair of Nobel Prize winners to start Long-Term Capital Management.
However, the combination of extraordinary intellect with extraordinary computer power didn’t prevent the collapse of LTCM in 1998.
Simons’ computers have not let him down and he is described as the most successful hedge fund manager in history. Are quant-driven trading models superior to stock-picking or directional trading strategies?
Simons would back the quants and so would Ken Griffin of Citadel and Steve Cohen of SAC Capital, whose huge daily trading volumes, mainly computer driven, make them among Wall Street’s best customers.
In Simons’ world there are no clouds on the horizon but more conventional funds have proved to be vulnerable, even in a modest equity downturn. In Simons’ case, he also proves good hedge fund managers can improve with age. Simons is 69.
The legendary George Soros is 76 and former oil man turned hedge fund manager T Boone Pickens will be 80 at his next birthday. What do they have in common? Each earned close to $1bn or more last year.
• Ian Kerr is a freelance writer and consultant to the investment banking industry
Ian Kerr
07 May 2007
High-flying hedge funds make millions for founding partners thanks to favourable market conditions
Oh, to be a high-flying hedge fund manager with assets of at least $5bn. It isn’t simply the standard 2% management fee but the fact that in these market conditions the performance fees that usually start at 20% will generate earnings of tens of millions of dollars more for each of the founding shareholders.
How can the hedgies go wrong in these markets? Only with difficulty. The long-short strategies, which are mainly long on closer examination, have been helped by surging share prices. Convertible arbitrage, which was considered dead two years ago, has come storming back.
Commodities are flying high. Merger arbitrage has been helped by merger mania. Distressed debt is yielding rich pickings for the vulture hedgies, Credit trading and derivatives are providing the same high returns that the big investment banks have enjoyed.
Does it all sound too good to be true? Perhaps, but don’t spoil the party. Don’t mention Amaranth Advisors, Vega or the soggy performance of Gavyn Davies’ Semper Macro fund. These were minor hiccups. Amaranth might have been a knockout blow but the episode is barely mentioned today and Brian Hunter, the trader whose bets backfired, has started a new fund.
Because the hedge fund industry has been so successful and has created large personal wealth for a small number of individuals, it hasn’t been easy to attract favourable publicity. Even when the managers give away tens of millions or even hundreds of millions to worthy charitable causes, the reaction is: “So how much did they keep for themselves?”
There should, therefore, be a small word of praise for the activist funds, which have been attracting considerable attention this year.
The term “activist” might have been considered user-friendly five years ago but the chief financial officer of a FTSE 100 company said: “These funds do little more than place a gun to the heads of management in the hope of maximising the value of the shares they have bought.
"At best they are irritating. At worse they are a nuisance and a waste of valuable management time.”
We have been following the Conrad Black court case but only limited credit has been given to Tweedy, Browne, the New York-based activist hedge fund, which first blew the whistle on Black’s Hollinger International.
In the case of ABN Amro, it wasn’t Christopher Hohn’s The Children’s Investment Fund that first started buying ABN Amro shares and call options. However, TCI was sufficiently influential to cause the value of the shares to rise 6% in one day when it said it had taken a more than 1% stake in the Dutch bank.
What TCI accomplished was to underline the incompetence of ABN Amro’s management and the need for change. Did TCI have the desired effect or was this an idle threat?
Within days, Barclays made a bid for ABN Amro and Royal Bank of Scotland made a counter-offer. The outcome is in the balance but the one certainty is that TCI will keep snapping at the heels of ABN Amro’s management to ensure fair play – the highest price for ABN Amro shareholders and for itself.
Why should hedge funds have become the new supremos in distressed debt and the restructuring of ailing or collapsed companies? These are businesses to which they should be attracted. Many traders at the best- performing funds specialised in high-yield or junk bonds and their bankers saw failing companies as an opportunity to acquire assets.
Michael Milken of Drexel Burnham (very RIP) had pointed the way in junk bonds but the distressed debt opportunities were then exploited by groups including Goldman Sachs, Lone Star and other US vulture funds.
Better still, the hedge funds found they possessed superior restructuring skills to the commercial bankers, who had been the traditional lenders and only wanted to recoup a part of those loans as quickly as possible.
As a former Goldman Sachs partner said: “It used to be that if you had a restructuring meeting for a distressed company, the process was driven by the main relationship banks. Now, if you go to a distressed company meeting, often there are no banks at all – just hedge funds.”
While the hedge fund sector basks in sunny market conditions, have you noticed there are fewer criticisms of the industry’s fee structure? The standard 2% and 20% suddenly doesn’t seem so greedy or onerous when the hedge funds are reporting a steady rise in net values.
There is also evidence that high fees do not detract from performance or cause penny-pinching investors to withdraw their funds. What better example is there than Renaissance Technologies, run by former maths professor James Simons, who charges no less than a 5% standard and a 44% performance fee. Some market observers would suggest those numbers are outrageous.
“Not at all”, according to Simons’ loyalists, who correctly said that Renaissance Technologies is one of the best performing and most consistent hedge funds in the world and that Renaissance continually has to turn away new investors. Did the loyalists object when Simons earned $1.7bn last year? I suspect that there was not a murmur of dissent.
Renaissance Technologies is a pure quantatitive fund which even Simons admits “is really a black box”. Don’t black boxes make you nervous? They were first exploited by Salomon Brothers for its global macro trading strategies.
The results were often brilliant but when the black box gave the wrong signals, the losses ran into hundreds of millions of dollars. Then John Meriwether took some of Salomon’s black boxes, its best quant traders and a pair of Nobel Prize winners to start Long-Term Capital Management.
However, the combination of extraordinary intellect with extraordinary computer power didn’t prevent the collapse of LTCM in 1998.
Simons’ computers have not let him down and he is described as the most successful hedge fund manager in history. Are quant-driven trading models superior to stock-picking or directional trading strategies?
Simons would back the quants and so would Ken Griffin of Citadel and Steve Cohen of SAC Capital, whose huge daily trading volumes, mainly computer driven, make them among Wall Street’s best customers.
In Simons’ world there are no clouds on the horizon but more conventional funds have proved to be vulnerable, even in a modest equity downturn. In Simons’ case, he also proves good hedge fund managers can improve with age. Simons is 69.
The legendary George Soros is 76 and former oil man turned hedge fund manager T Boone Pickens will be 80 at his next birthday. What do they have in common? Each earned close to $1bn or more last year.
• Ian Kerr is a freelance writer and consultant to the investment banking industry
Hedge funds may pose huge market risk: Fed
Hedge funds may pose huge market risk: Fed
Could be largest risk since Long-Term Capital Management crisis in 1998 says New York Federal Reserve
May 2 2007: 1:18 PM EDT
NEW YORK (Reuters) -- Hedge funds may now pose the biggest risk of a crisis since 1998, when the implosion of Long-Term Capital Management threatened the global financial system, the New York Federal Reserve said on Wednesday.
The statement represented the bank's sternest warning to date over the possible fate of the $1.4 trillion industry.
"Recent high correlations among hedge fund returns could suggest concentrations of risk comparable to those preceding the hedge fund crisis of 1998," according to a paper written by Tobias Adrian, capital markets economist at the central bank.
Back in 1998, the New York Fed helped bring together Wall Street tycoons who eventually cobbled together enough funds for an unprecedented $3.6 billion bailout.
The LTCM crisis was all the more shocking to investors because of the individuals involved, regarded highly for their market savvy and mathematical prowess.
But with the crisis averted, the hedge fund industry bounced back with a vengeance, increasingly rapidly over the last decade in both size and scope to an estimated $1.4 trillion.
Hedge funds, investment pools that are aimed primarily at wealthy investors and institutions, have been very lightly regulated, facing only vague registration requirements.
Their sheer immensity has raised some red flags from policy-makers, with New York Fed President Timothy Geithner among those sounding repeated warnings about the need for cautious lending.
The Fed's latest worry arose from what it described as a rising correlation between the actual returns of hedge funds, which could point to similar trading strategies that excessively concentrate risk on too few market positions.
"Similar trading strategies can heighten risk when funds have to close out comparable positions in response to a common shock," the economist Adrian wrote.
Still, many officials including Geithner have shied away from calling for explicit regulation, arguing instead that the large banks who lend to hedge funds should police themselves to make sure no one lender gets in too deep.
Hedge funds borrow large sums of money in order to take aggressive bets on financial markets. Many operate heavily in the derivatives market, estimated at around $17 trillion, raising fears about possible future shocks.
Could be largest risk since Long-Term Capital Management crisis in 1998 says New York Federal Reserve
May 2 2007: 1:18 PM EDT
NEW YORK (Reuters) -- Hedge funds may now pose the biggest risk of a crisis since 1998, when the implosion of Long-Term Capital Management threatened the global financial system, the New York Federal Reserve said on Wednesday.
The statement represented the bank's sternest warning to date over the possible fate of the $1.4 trillion industry.
"Recent high correlations among hedge fund returns could suggest concentrations of risk comparable to those preceding the hedge fund crisis of 1998," according to a paper written by Tobias Adrian, capital markets economist at the central bank.
Back in 1998, the New York Fed helped bring together Wall Street tycoons who eventually cobbled together enough funds for an unprecedented $3.6 billion bailout.
The LTCM crisis was all the more shocking to investors because of the individuals involved, regarded highly for their market savvy and mathematical prowess.
But with the crisis averted, the hedge fund industry bounced back with a vengeance, increasingly rapidly over the last decade in both size and scope to an estimated $1.4 trillion.
Hedge funds, investment pools that are aimed primarily at wealthy investors and institutions, have been very lightly regulated, facing only vague registration requirements.
Their sheer immensity has raised some red flags from policy-makers, with New York Fed President Timothy Geithner among those sounding repeated warnings about the need for cautious lending.
The Fed's latest worry arose from what it described as a rising correlation between the actual returns of hedge funds, which could point to similar trading strategies that excessively concentrate risk on too few market positions.
"Similar trading strategies can heighten risk when funds have to close out comparable positions in response to a common shock," the economist Adrian wrote.
Still, many officials including Geithner have shied away from calling for explicit regulation, arguing instead that the large banks who lend to hedge funds should police themselves to make sure no one lender gets in too deep.
Hedge funds borrow large sums of money in order to take aggressive bets on financial markets. Many operate heavily in the derivatives market, estimated at around $17 trillion, raising fears about possible future shocks.
Tuesday, May 08, 2007
Greed
Qantas Deal Scuttled by Hedge Fund Greed: Analysts
By Reuters Monday, May 07, 2007
MELBOURNE (Reuters)—Miscalculations by hungry hedge funds in a giant game of brinksmanship appear to be the key reason behind the crash of an A$11 billion (US$9.1 billion) takeover offer for Australia's Qantas Airways Ltd., analysts said.
Local newspapers named U.S. billionaire Samuel Heyman, who holds 11% of Qantas, as the investor who offered a 4.9% stake in the airline five hours after the deadline.
That would have pushed acceptances to 50.6%, and kept the deal alive for another two weeks, allowing hedge funds another two weeks to buy cheap stock. An array of hedge funds had bought more than 40% of the airline over recent months, analysts have said, expecting to make gains on the difference between the company's share price and the A$5.45 a share offer by bidding group Airline Partners Australia.
The stock has never traded up to the offer price as opposition to the bid has created uncertainty about its success, allowing hedge funds to buy from local investors who feared the share price would fall if the bid failed.
The bid group needed to reach 50% of shareholders acceptances by a Friday [May 4] deadline to trigger a two-week extension of the offer, before it reached the 70% level needed to close the bid.
Analysts said hedge funds hoped to engineer an outcome where the offer just edged over 50%, creating another two weeks of uncertainty and providing more opportunity to buy stock below the offer price from nervous retail and institutional investors.
Instead, they miscalculated. The bid group won just 46% of acceptances, scuttling the bid.
Hedge funds stand to lose hundreds of millions if the Qantas share price falls when trade resumes.
Qantas shares were placed on a trading halt on Monday [May 7] awaiting legal clarification about the bid, and analysts said some funds may hold on to their shares as they await APA's plans. APA said on Monday it was considering a fresh offer, again at A$5.45.
The stock closed on Friday at A$5.38.
"The rationale for gambling that APA got 50% and no more was to ensure that the stock continue[d] to trade at a discount, thereby allowing them to continue to pick up a few extra pennies," said an analyst, who asked not to be identified.
Theories abound for the error.
The Australian reported Mr. Heyman had agreed with two other hedge funds, Polygon Investment Partners and Highbridge Capital Management, to each deliver between 45% and 60% of their holdings by the deadline, which would have been enough to edge the deal over the 50% mark.
But Mr. Heyman was secretly determined to hold on to all of his Qantas shareholding, the newspaper reported in an unsourced front-page story.
The Sydney Morning Herald reported that Heyman Investment Associates Chief Investment Officer Jim Hoffman simply didn't believe increasingly hysterical calls from Sydney that the bid would fail without his acceptance.
Mr. Hoffman said only: "While we have consistently indicated to advisers that this has always been a close call for us, we are hopeful that our tender will facilitate the successful completion of the transaction," the paper reported.
Analysts said funds would have played the same game with the 70% level, betting that APA would buy out minority shareholders at a higher price and proceed with its original plan to delist the airline, analysts said.
If APA had won acceptances between 70% and 90%, it would still have been cheaper to pay a higher price of perhaps A$6.50 to minority shareholders than to raise its offer to all shareholders, JP Morgan analyst Matthew Crowe told clients last week.
The buyout group includes Macquarie Bank Ltd. and private equity firm Texas Pacific Group.
By Victoria Thieberger
By Reuters Monday, May 07, 2007
MELBOURNE (Reuters)—Miscalculations by hungry hedge funds in a giant game of brinksmanship appear to be the key reason behind the crash of an A$11 billion (US$9.1 billion) takeover offer for Australia's Qantas Airways Ltd., analysts said.
Local newspapers named U.S. billionaire Samuel Heyman, who holds 11% of Qantas, as the investor who offered a 4.9% stake in the airline five hours after the deadline.
That would have pushed acceptances to 50.6%, and kept the deal alive for another two weeks, allowing hedge funds another two weeks to buy cheap stock. An array of hedge funds had bought more than 40% of the airline over recent months, analysts have said, expecting to make gains on the difference between the company's share price and the A$5.45 a share offer by bidding group Airline Partners Australia.
The stock has never traded up to the offer price as opposition to the bid has created uncertainty about its success, allowing hedge funds to buy from local investors who feared the share price would fall if the bid failed.
The bid group needed to reach 50% of shareholders acceptances by a Friday [May 4] deadline to trigger a two-week extension of the offer, before it reached the 70% level needed to close the bid.
Analysts said hedge funds hoped to engineer an outcome where the offer just edged over 50%, creating another two weeks of uncertainty and providing more opportunity to buy stock below the offer price from nervous retail and institutional investors.
Instead, they miscalculated. The bid group won just 46% of acceptances, scuttling the bid.
Hedge funds stand to lose hundreds of millions if the Qantas share price falls when trade resumes.
Qantas shares were placed on a trading halt on Monday [May 7] awaiting legal clarification about the bid, and analysts said some funds may hold on to their shares as they await APA's plans. APA said on Monday it was considering a fresh offer, again at A$5.45.
The stock closed on Friday at A$5.38.
"The rationale for gambling that APA got 50% and no more was to ensure that the stock continue[d] to trade at a discount, thereby allowing them to continue to pick up a few extra pennies," said an analyst, who asked not to be identified.
Theories abound for the error.
The Australian reported Mr. Heyman had agreed with two other hedge funds, Polygon Investment Partners and Highbridge Capital Management, to each deliver between 45% and 60% of their holdings by the deadline, which would have been enough to edge the deal over the 50% mark.
But Mr. Heyman was secretly determined to hold on to all of his Qantas shareholding, the newspaper reported in an unsourced front-page story.
The Sydney Morning Herald reported that Heyman Investment Associates Chief Investment Officer Jim Hoffman simply didn't believe increasingly hysterical calls from Sydney that the bid would fail without his acceptance.
Mr. Hoffman said only: "While we have consistently indicated to advisers that this has always been a close call for us, we are hopeful that our tender will facilitate the successful completion of the transaction," the paper reported.
Analysts said funds would have played the same game with the 70% level, betting that APA would buy out minority shareholders at a higher price and proceed with its original plan to delist the airline, analysts said.
If APA had won acceptances between 70% and 90%, it would still have been cheaper to pay a higher price of perhaps A$6.50 to minority shareholders than to raise its offer to all shareholders, JP Morgan analyst Matthew Crowe told clients last week.
The buyout group includes Macquarie Bank Ltd. and private equity firm Texas Pacific Group.
By Victoria Thieberger
Sunday, May 06, 2007
Público X Privado
Discussão interessante sobre os hedge funds que abriram o capital no exterior.
It's personal up in the funds stratosphere - International Herald Tribune
It's personal up in the funds stratosphere - International Herald Tribune
Friday, May 04, 2007
Mapa dos Gestores - RJ
Neste link tem um mapa do Google feito por mim com a localização de alguns gestores no Rio.
Thursday, May 03, 2007
London is the Silicon Valley of finance — for now
London is the Silicon Valley of finance — for now
For London’s brokers and bankers, it now seems a given that they inhabit the financial capital of the world. New York is regarded almost with condescension. It is still big and powerful, but parochial. It is no longer where the action is.
But such talk makes Tony Jackson feel uneasy. Think back to the late 1980s, he says in his On Monday column in the FT, when the Japanese stock market was twice the size of America’s — and remember what happened next.
But the real issue now, for both London and New York, is whether, in the future, the world will actually have a financial capital at all.
London has two huge natural advantages - its time zone and the universal language of English. Hence the fact that for decades it has dominated the world’s foreign exchange trade. Now that global equities are almost as fungible as currencies, London is getting a corresponding grip of the new-issue market. Here as elsewhere, its role as intermediary can only be helped by the rise of China. And all the while, it is establishing itself as a magnet for global talent - the Silicon Valley of finance.
Things could go wrong, such as the global tide of liquidity drying up. But the long-run trend looks unstoppable.
One big reason is the continuing march of privatisation. The more enterprises are sold off in Russia, China and India, the more liquid capital is drawn to those countries and the more local expertise is created in managing it.
One powerful illustration of this is the share that the developed economies hold in the world’s stock of quoted equity. Thirty years ago, the big five markets - the US, Japan, the UK, Germany and France - between them accounted for 90 per cent of the world by value. The figure is now 64 per cent and falling steeply.
For London to imagine it has inherited New York’s former power is an illusion. That power is being distributed around the world. London’s best hope is to hang on to its share.
For London’s brokers and bankers, it now seems a given that they inhabit the financial capital of the world. New York is regarded almost with condescension. It is still big and powerful, but parochial. It is no longer where the action is.
But such talk makes Tony Jackson feel uneasy. Think back to the late 1980s, he says in his On Monday column in the FT, when the Japanese stock market was twice the size of America’s — and remember what happened next.
But the real issue now, for both London and New York, is whether, in the future, the world will actually have a financial capital at all.
London has two huge natural advantages - its time zone and the universal language of English. Hence the fact that for decades it has dominated the world’s foreign exchange trade. Now that global equities are almost as fungible as currencies, London is getting a corresponding grip of the new-issue market. Here as elsewhere, its role as intermediary can only be helped by the rise of China. And all the while, it is establishing itself as a magnet for global talent - the Silicon Valley of finance.
Things could go wrong, such as the global tide of liquidity drying up. But the long-run trend looks unstoppable.
One big reason is the continuing march of privatisation. The more enterprises are sold off in Russia, China and India, the more liquid capital is drawn to those countries and the more local expertise is created in managing it.
One powerful illustration of this is the share that the developed economies hold in the world’s stock of quoted equity. Thirty years ago, the big five markets - the US, Japan, the UK, Germany and France - between them accounted for 90 per cent of the world by value. The figure is now 64 per cent and falling steeply.
For London to imagine it has inherited New York’s former power is an illusion. That power is being distributed around the world. London’s best hope is to hang on to its share.
Finding a way into the hedge fund maze
Artigo muito bom sobre hedge funds em Londres que saiu domingo no The Observer.
Finding a way into the hedge fund maze
Members of the new hedgocracy are elite money-makers, but their methods are esoteric and sometimes risky. Richard Wachman exposes their secretive world
Sunday April 29, 2007
The Observer
London's hedge fund elite have one thing in common - the most successful are astonishingly rich. According to a recent survey, about a quarter of the world's wealthiest hedge fund managers operate from the UK.
Step forward Christopher Hohn, the activist manager who acquires stakes in underperforming European companies then presses for radical corporate change. Hohn's pay last year was put at £150m, well above what is considered a good return by the most well-rewarded hedgies - the richest 100 can expect to pocket £25m a year. But according to American magazine Trader Monthly, Noam Gottesman and Pierre Lagrange, who run GLG Partners in London, collected between £200m and £250m each. Maurice Salem, 37, of Wharton, made between £75m and £100m.
The rewards put 'fat cat' payments for company executives in the shade. But how are these fees calculated? Given the complexity of hedgies' financial models, it is a relatively simple formula: a 2 per cent management fee, representing a cut from the assets under management, then 20 per cent of the profits. So if a £3bn fund goes up 30 per cent, or £900m, that's £180m for the managers.
Hedge funds are used by wealthy individuals, financial institutions and pension funds. The great and the good are getting involved: former chairman of Royal Bank of Scotland Sir George Mathewson recently became a non-executive of Tosca, a fund that has campaigned for a break-up of ABN Amro. Hedge funds gamble on the future direction of equities, bonds, currencies, commodities or interest rates. They have attracted interest from regulators because they sometimes 'gear up' their bets with borrowed money, so creating the possible danger of systemic financial risk.
Firms' strategies are diverse. Many specialise in 'shorting' shares where they believe a company's stock price is overvalued, or in a generally declining market. Shorting involves borrowing a share and then selling it, in the hope that it will fall in value and can be bought back at a cheaper price when the time comes to return it to its owner. Probably the most famous example was when George Soros shorted the pound in 1992, forcing Britain out of the European exchange rate mechanism.
Other strategies include 'going long' (conventional investing in shares in the belief they will rise in value), and 'big-picture' investment or 'global macro' - exploiting international trends, such as rising interest rates or burgeoning demand for raw materials from emerging economies such as China.
Hedge funds have grown in popularity as their more aggressive stance can offer higher returns for investors than if they placed their money with conventional money managers. But there are risks as well.
So, who are the hedgie millionaires? Our list is by no means exhaustive because the industry is a secretive world that tends to loathe publicity. Nevertheless, we offer a snapshot of the big players who have become members of a new financial aristocracy.
Stanley Fink and Peter Clarke
Firm: Man Investments.
Under management: £22.5bn.*
Strategy: Diverse, with funds across the board. Interests range from special situations to financial futures, oil, precious metals and shares.
Personal: As boss of parent company Man Group, Fink built the organisation into one of the world's biggest publicly listed managers of hedge funds. The son of a lampshade manufacturer, he recently stepped down to become non-executive deputy chairman, handing over the job of chief executive to Peter Clarke. Fink is a founder of children's charity Ark and is closely involved with the Evelina Children's Hospital Appeal; in the past he has lent money to the Conservative party. In 2004, he had a benign brain tumour removed, and was back at work within six months.
Did you know? The firm is better known in the world of literature as the sponsor of the Man Booker Prize.
Noam Gottesman and Pierre Lagrange
Firm: GLG Partners.
Under management: £9.25bn.
Strategy: Multi-asset long/short, mergers and acquisitions arbitrage, convertible bonds, special situations.
Personal: A former Goldman Sachs banker, Gottesman set up GLG seven years ago. He was joined by other City executives, including Pierre Lagrange and 'Manny' Roman. He has built GLG into one of London's biggest and most successful hedge fund managers, but has had to deal with a number of regulatory issues that have brought the firm headlines that it could have done without. Last year, one of the firm's star managers, Philippe Jabre, was fined £750,000 by the Financial Services Authority for 'violating market conduct' and 'non-deliberate market abuse'. GLG was also fined by the French regulator last December for actions linked to a bond issue by French telecoms group Alcatel.
Did you know? Although GLG is a symbol of red-in-tooth-and-claw capitalism, it has started a fund that specialises in investing in the world's 'greenest companies'.
Michael Alen-Buckley and Philip Richards
Firm: RAB Capital.
Under management: £9bn.
Strategy: Opportunistic, long or short on equities, mergers and acquisition arbitrage.
Personal: Founded by Alen-Buckley after he left his job as head of international equity sales at ABN Amro eight years ago. He is married to Giancarla, sister of Sir Rocco Forte, the hotels magnate. Richards is a committed Christian and believes in paying a tithe to charity - that is, at least 10 per cent of his remuneration package. Last year, he donated around £5m of his £20m salary.
Did you know? RAB made its reputation by investing in commodities with some shrewd calls on the stock price movements of small mining companies.
Christopher Hohn
Firm: The Children's Investment Fund.
Under management: £7.5bn.
Strategy: Activism to force management of target companies to sell assets or agree to radical corporate revamps.
Personal: A maverick and secretive investor who has hit the headlines in Europe, especially Germany, where he was criticised for his role in derailing a proposed merger between Deutsche Borse and the London Stock Exchange in 2005. More recently, he has lobbied for the break-up of Dutch bank ABN Amro.
Did you know? He accused the German press of anti-Semitism when he was depicted with a large nose at the head of a swarm of locusts devouring German loot. He donates around half of his profits to a charitable foundation run by his wife for impoverished children in Africa.
Paul Ruddock and Steve Heinz
Firm: Lansdowne Partners.
Under management: £7bn.
Strategy: Equity long/short, macro.
Personal: Ruddock and Heinz set up the firm in 2000 and are now among the best-paid hedge fund managers in London. According to Trader magazine, they earn between £75m and £100m each. Last year, Morgan Stanley agreed to buy a 19 per cent stake in the business. Ruddock has worked at Schroders and Goldman Sachs.
Did you know? The firm has a 2 per cent stake in Arsenal.
Ian Wace and Paul Marshall
Firm: Marshall Wace.
Under management: £5.5bn.
Strategy: Best known for their Tops Fund, which picks and analyses the best ideas of brokers and analysts then takes long or short positions in equities.
Personal: Marshall is a lifelong supporter of the Liberal party and friend of Sir Menzies Campbell. Wace is thought to be closer to the Conservatives and is a confidant of Michael Heseltine. Marshall's first job was as a scaffolder, but he later moved to Mercury Asset Management. Wace began his working life at SG Warburg. Their estimated net worth is said to be north of £200m.
Did you know? Wace smashed records for a listed hedge fund at the end of last year after raising £1bn from investors. Sir Andrew Large, formerly of the Financial Services Authority, is chairman of one the firm's funds.
Hugh Sloane and George Robinson
Firm: Sloane Robinson.
Under management: £5.5bn.
Strategy: Equity long/short.
Personal: The pair co-founded the firm 14 years ago. Robinson is the more high-profile, donating £6m to build an arts centre at his old college, Keble, Oxford. Near neighbours in London's Holland Park include playwright Harold Pinter. Sloane is rarely in the limelight but is said to be 'frighteningly bright': he obtained an MPhil in economics from Oxford. Boasts an impressive property in the Cotswolds.
Did you know? The firm's four top partners are thought to have shared a £175m pot over the past 10 years as the business has more than doubled in size.
Roger Guy
Firm: Gartmore.
Under management: £5bn.
Strategy: Equity long/short.
Personal: Guy studied economics at Sussex University, graduating in 1988. His AlphaGen Capella fund is one of the best-performing in the industry. He has won the European Fund Manager of the Year award and manages £250m. He has a seat on the board after helping to mastermind the buyout of Gartmore Investment Management last year with Jeff Meyer, who is chief executive. The buyout was backed by Hellman & Friedman, the US private equity group.
Did you know? Gartmore recently recruited Andrew Skirton as non-executive chairman from Barclays Global Investments, whose portfolio includes a £10bn hedge fund business.
Elena Ambrosiadou
Firm: Ikos.
Under management: £2bn.
Strategy: Global macro.
Personal: She founded Ikos with Martin Coward, her husband and a former Goldman Sachs quantitative analyst, 15 years ago, initially specialising in foreign exchange trading. Now she has five international funds with broad remits. She was thought to be Britain's best-paid woman in 2004 when she scooped £16m. Unlike Coward, who shuns publicity, she is happy to be in the limelight. She studied at Imperial College and obtained an MBA from Cranfield, and has been a trustee of the Oxford Philomusica orchestra.
Did you know? Ambrosiadou is being sued by two former employees who allege she owes them £26m in bonuses and shares. She claims they stole secrets from her when they left.
Crispin Odey and Nichola Pease
Firm: Odey Asset Management.
Under management: £1bn.
Strategy: Equity long/short, currencies, bonds, short term interest rates.
Personal: Began his career at the Queen's bank, Barings, establishing his own hedge fund 10 years ago. Phenomenally bright, he entered Christ Church, Oxford when he was 16. He has a knack for investing in companies, such as Marconi, that are on the verge of collapse but have potential.
Did you know? He was married to Rupert Murdoch's eldest daughter, Prudence. Now married to Nichola Pease, chief executive of JO Hambro Capital Management, whose products include hedge funds.
William Browder
Firm: The Hermitage Fund.
Under management: £2bn.
Strategy: Equity long/short; activist.
Personal: Browder was a management consultant and investment banker before setting up his own business. Hit the headlines last year when he was barred from entering Russia, despite carrying a British passport. It is thought that the Kremlin had become displeased with his campaign for improved corporate governance and transparency.
Did you know? Browder is grandson of Earl Browder, a former general secretary of the US Communist Party.
Other big players
Charlie Porter, co-founder of Thames River Capital; Alan Howard of Brevan Howard Asset Management; Jonathan Lourie of Cheyne Capital.
· Assets under management are estimates from archive sources.
Small investors: your time will come
The Financial Services Authority has paved the way for the public to have direct access to hedge funds for the first time. Access would be via unit trusts that would invest in what the FSA has dubbed a 'Faif' - a 'fund of alternative investment funds'.
Three years ago, the regulator decided against making it easier for retail investors to invest in hedge funds themselves, which are huge money-making machines if their managers make the right decisions, but incredibly risky if things go the wrong way.
Now the FSA has indicated that retail investors will be allowed to put money into funds of hedge funds, which spread the risk by investing in a number of vehicles. Faifs will be rigorously regulated, with the FSA expected to rule that the fund manager operate with 'due diligence' and that investors be able to make timely redemptions.
However, experts are not expecting a wall of money from private individuals to find their way into hedge funds until the Revenue makes their tax treatment more favourable. The FSA is not expected to bring in the new regime until 2008 at the earliest.
Risk factors
The risks posed by the aggressive investment strategy of many hedge funds has been highlighted by disasters that have rocked the global financial system. Two years ago, Amaranth took a massive bet on the future price of natural gas, but jumped the wrong way, leaving investors with egg all over their faces as the value of the fund fell by more than 50 per cent. The worst setback came in 1998 when LTCM, a heavily-borrowed US hedge fund, had to be rescued by a bail-out from Wall Street firms, organised by Chairman of the Federal Reserve Alan Greenspan.
Worries about the secrecy, complexity and the frequency of hedge funds failure (about 50 per cent of all start-ups) are unlikely to go away.
Finding a way into the hedge fund maze
Members of the new hedgocracy are elite money-makers, but their methods are esoteric and sometimes risky. Richard Wachman exposes their secretive world
Sunday April 29, 2007
The Observer
London's hedge fund elite have one thing in common - the most successful are astonishingly rich. According to a recent survey, about a quarter of the world's wealthiest hedge fund managers operate from the UK.
Step forward Christopher Hohn, the activist manager who acquires stakes in underperforming European companies then presses for radical corporate change. Hohn's pay last year was put at £150m, well above what is considered a good return by the most well-rewarded hedgies - the richest 100 can expect to pocket £25m a year. But according to American magazine Trader Monthly, Noam Gottesman and Pierre Lagrange, who run GLG Partners in London, collected between £200m and £250m each. Maurice Salem, 37, of Wharton, made between £75m and £100m.
The rewards put 'fat cat' payments for company executives in the shade. But how are these fees calculated? Given the complexity of hedgies' financial models, it is a relatively simple formula: a 2 per cent management fee, representing a cut from the assets under management, then 20 per cent of the profits. So if a £3bn fund goes up 30 per cent, or £900m, that's £180m for the managers.
Hedge funds are used by wealthy individuals, financial institutions and pension funds. The great and the good are getting involved: former chairman of Royal Bank of Scotland Sir George Mathewson recently became a non-executive of Tosca, a fund that has campaigned for a break-up of ABN Amro. Hedge funds gamble on the future direction of equities, bonds, currencies, commodities or interest rates. They have attracted interest from regulators because they sometimes 'gear up' their bets with borrowed money, so creating the possible danger of systemic financial risk.
Firms' strategies are diverse. Many specialise in 'shorting' shares where they believe a company's stock price is overvalued, or in a generally declining market. Shorting involves borrowing a share and then selling it, in the hope that it will fall in value and can be bought back at a cheaper price when the time comes to return it to its owner. Probably the most famous example was when George Soros shorted the pound in 1992, forcing Britain out of the European exchange rate mechanism.
Other strategies include 'going long' (conventional investing in shares in the belief they will rise in value), and 'big-picture' investment or 'global macro' - exploiting international trends, such as rising interest rates or burgeoning demand for raw materials from emerging economies such as China.
Hedge funds have grown in popularity as their more aggressive stance can offer higher returns for investors than if they placed their money with conventional money managers. But there are risks as well.
So, who are the hedgie millionaires? Our list is by no means exhaustive because the industry is a secretive world that tends to loathe publicity. Nevertheless, we offer a snapshot of the big players who have become members of a new financial aristocracy.
Stanley Fink and Peter Clarke
Firm: Man Investments.
Under management: £22.5bn.*
Strategy: Diverse, with funds across the board. Interests range from special situations to financial futures, oil, precious metals and shares.
Personal: As boss of parent company Man Group, Fink built the organisation into one of the world's biggest publicly listed managers of hedge funds. The son of a lampshade manufacturer, he recently stepped down to become non-executive deputy chairman, handing over the job of chief executive to Peter Clarke. Fink is a founder of children's charity Ark and is closely involved with the Evelina Children's Hospital Appeal; in the past he has lent money to the Conservative party. In 2004, he had a benign brain tumour removed, and was back at work within six months.
Did you know? The firm is better known in the world of literature as the sponsor of the Man Booker Prize.
Noam Gottesman and Pierre Lagrange
Firm: GLG Partners.
Under management: £9.25bn.
Strategy: Multi-asset long/short, mergers and acquisitions arbitrage, convertible bonds, special situations.
Personal: A former Goldman Sachs banker, Gottesman set up GLG seven years ago. He was joined by other City executives, including Pierre Lagrange and 'Manny' Roman. He has built GLG into one of London's biggest and most successful hedge fund managers, but has had to deal with a number of regulatory issues that have brought the firm headlines that it could have done without. Last year, one of the firm's star managers, Philippe Jabre, was fined £750,000 by the Financial Services Authority for 'violating market conduct' and 'non-deliberate market abuse'. GLG was also fined by the French regulator last December for actions linked to a bond issue by French telecoms group Alcatel.
Did you know? Although GLG is a symbol of red-in-tooth-and-claw capitalism, it has started a fund that specialises in investing in the world's 'greenest companies'.
Michael Alen-Buckley and Philip Richards
Firm: RAB Capital.
Under management: £9bn.
Strategy: Opportunistic, long or short on equities, mergers and acquisition arbitrage.
Personal: Founded by Alen-Buckley after he left his job as head of international equity sales at ABN Amro eight years ago. He is married to Giancarla, sister of Sir Rocco Forte, the hotels magnate. Richards is a committed Christian and believes in paying a tithe to charity - that is, at least 10 per cent of his remuneration package. Last year, he donated around £5m of his £20m salary.
Did you know? RAB made its reputation by investing in commodities with some shrewd calls on the stock price movements of small mining companies.
Christopher Hohn
Firm: The Children's Investment Fund.
Under management: £7.5bn.
Strategy: Activism to force management of target companies to sell assets or agree to radical corporate revamps.
Personal: A maverick and secretive investor who has hit the headlines in Europe, especially Germany, where he was criticised for his role in derailing a proposed merger between Deutsche Borse and the London Stock Exchange in 2005. More recently, he has lobbied for the break-up of Dutch bank ABN Amro.
Did you know? He accused the German press of anti-Semitism when he was depicted with a large nose at the head of a swarm of locusts devouring German loot. He donates around half of his profits to a charitable foundation run by his wife for impoverished children in Africa.
Paul Ruddock and Steve Heinz
Firm: Lansdowne Partners.
Under management: £7bn.
Strategy: Equity long/short, macro.
Personal: Ruddock and Heinz set up the firm in 2000 and are now among the best-paid hedge fund managers in London. According to Trader magazine, they earn between £75m and £100m each. Last year, Morgan Stanley agreed to buy a 19 per cent stake in the business. Ruddock has worked at Schroders and Goldman Sachs.
Did you know? The firm has a 2 per cent stake in Arsenal.
Ian Wace and Paul Marshall
Firm: Marshall Wace.
Under management: £5.5bn.
Strategy: Best known for their Tops Fund, which picks and analyses the best ideas of brokers and analysts then takes long or short positions in equities.
Personal: Marshall is a lifelong supporter of the Liberal party and friend of Sir Menzies Campbell. Wace is thought to be closer to the Conservatives and is a confidant of Michael Heseltine. Marshall's first job was as a scaffolder, but he later moved to Mercury Asset Management. Wace began his working life at SG Warburg. Their estimated net worth is said to be north of £200m.
Did you know? Wace smashed records for a listed hedge fund at the end of last year after raising £1bn from investors. Sir Andrew Large, formerly of the Financial Services Authority, is chairman of one the firm's funds.
Hugh Sloane and George Robinson
Firm: Sloane Robinson.
Under management: £5.5bn.
Strategy: Equity long/short.
Personal: The pair co-founded the firm 14 years ago. Robinson is the more high-profile, donating £6m to build an arts centre at his old college, Keble, Oxford. Near neighbours in London's Holland Park include playwright Harold Pinter. Sloane is rarely in the limelight but is said to be 'frighteningly bright': he obtained an MPhil in economics from Oxford. Boasts an impressive property in the Cotswolds.
Did you know? The firm's four top partners are thought to have shared a £175m pot over the past 10 years as the business has more than doubled in size.
Roger Guy
Firm: Gartmore.
Under management: £5bn.
Strategy: Equity long/short.
Personal: Guy studied economics at Sussex University, graduating in 1988. His AlphaGen Capella fund is one of the best-performing in the industry. He has won the European Fund Manager of the Year award and manages £250m. He has a seat on the board after helping to mastermind the buyout of Gartmore Investment Management last year with Jeff Meyer, who is chief executive. The buyout was backed by Hellman & Friedman, the US private equity group.
Did you know? Gartmore recently recruited Andrew Skirton as non-executive chairman from Barclays Global Investments, whose portfolio includes a £10bn hedge fund business.
Elena Ambrosiadou
Firm: Ikos.
Under management: £2bn.
Strategy: Global macro.
Personal: She founded Ikos with Martin Coward, her husband and a former Goldman Sachs quantitative analyst, 15 years ago, initially specialising in foreign exchange trading. Now she has five international funds with broad remits. She was thought to be Britain's best-paid woman in 2004 when she scooped £16m. Unlike Coward, who shuns publicity, she is happy to be in the limelight. She studied at Imperial College and obtained an MBA from Cranfield, and has been a trustee of the Oxford Philomusica orchestra.
Did you know? Ambrosiadou is being sued by two former employees who allege she owes them £26m in bonuses and shares. She claims they stole secrets from her when they left.
Crispin Odey and Nichola Pease
Firm: Odey Asset Management.
Under management: £1bn.
Strategy: Equity long/short, currencies, bonds, short term interest rates.
Personal: Began his career at the Queen's bank, Barings, establishing his own hedge fund 10 years ago. Phenomenally bright, he entered Christ Church, Oxford when he was 16. He has a knack for investing in companies, such as Marconi, that are on the verge of collapse but have potential.
Did you know? He was married to Rupert Murdoch's eldest daughter, Prudence. Now married to Nichola Pease, chief executive of JO Hambro Capital Management, whose products include hedge funds.
William Browder
Firm: The Hermitage Fund.
Under management: £2bn.
Strategy: Equity long/short; activist.
Personal: Browder was a management consultant and investment banker before setting up his own business. Hit the headlines last year when he was barred from entering Russia, despite carrying a British passport. It is thought that the Kremlin had become displeased with his campaign for improved corporate governance and transparency.
Did you know? Browder is grandson of Earl Browder, a former general secretary of the US Communist Party.
Other big players
Charlie Porter, co-founder of Thames River Capital; Alan Howard of Brevan Howard Asset Management; Jonathan Lourie of Cheyne Capital.
· Assets under management are estimates from archive sources.
Small investors: your time will come
The Financial Services Authority has paved the way for the public to have direct access to hedge funds for the first time. Access would be via unit trusts that would invest in what the FSA has dubbed a 'Faif' - a 'fund of alternative investment funds'.
Three years ago, the regulator decided against making it easier for retail investors to invest in hedge funds themselves, which are huge money-making machines if their managers make the right decisions, but incredibly risky if things go the wrong way.
Now the FSA has indicated that retail investors will be allowed to put money into funds of hedge funds, which spread the risk by investing in a number of vehicles. Faifs will be rigorously regulated, with the FSA expected to rule that the fund manager operate with 'due diligence' and that investors be able to make timely redemptions.
However, experts are not expecting a wall of money from private individuals to find their way into hedge funds until the Revenue makes their tax treatment more favourable. The FSA is not expected to bring in the new regime until 2008 at the earliest.
Risk factors
The risks posed by the aggressive investment strategy of many hedge funds has been highlighted by disasters that have rocked the global financial system. Two years ago, Amaranth took a massive bet on the future price of natural gas, but jumped the wrong way, leaving investors with egg all over their faces as the value of the fund fell by more than 50 per cent. The worst setback came in 1998 when LTCM, a heavily-borrowed US hedge fund, had to be rescued by a bail-out from Wall Street firms, organised by Chairman of the Federal Reserve Alan Greenspan.
Worries about the secrecy, complexity and the frequency of hedge funds failure (about 50 per cent of all start-ups) are unlikely to go away.
Wednesday, April 18, 2007
Hedge Funds X Mutual Funds
Both sides now
More mutual funds are using strategies such as short selling once allowed only in hedge funds
(From The Denver Post, provided by LexisNexis) April 17, 2007 Tuesday
The line between hedge funds and mutual funds is becoming increasingly blurred as a growing number of money managers introduce mutual funds that use strategies once limited to hedge funds.
What's more, some hedge-fund managers, who historically catered only to the most wealthy, are now offering their services through mutual funds, which are accessible to a wider group of investors.
The trend is providing average investors with a low-cost way of diversifying their portfolios through the use of hedging strategies - a category of investing techniques often too complex or risky for most small-
time investors.
Since 2003, the number of hedge-fund-like mutual funds, also called "long-short" funds, has more than doubled, increasing from 25 to 53 funds, according to investment researcher Morningstar. Long-short funds allow asset managers to buy stocks as well as sell stocks short, a technique used to profit from the falling price of a stock.
Denver-based Janus Capital Group, for instance, rolled out a long-short fund last August. The fund has attracted $50 million in investment since then.
Jerry Paul, head of Greenwood Village-based Quixote Capital Management, ran a hedge fund for years before introducing a mutual fund in 2005.
"It moved me into a whole new market," Paul said, who uses a hedging strategy in which he simultaneously buys into both sides of a merger-and-acquisition deal.
Paul's hedge fund has a $1 million minimum. Investors can get into his mutual fund for as little as $2,500.
The number of portfolio managers simultaneously operating mutual funds and hedge funds has increased from 80 three years ago to 124 today, according to Morningstar. In 2000, just 31 portfolio managers used such a side-by-side approach.
Hedge funds, or private investment partnerships lightly regulated by the U.S. Securities and Exchange Commission, are typically used by the wealthy. The funds are open only to accredited investors - those with at least $1 million in net worth or $200,000 in annual income.
Running mutual funds alongside hedge funds is attractive to money managers for several reasons, Paul and others said.
Hedge funds offer stock pickers greater compensation than mutual funds. Most hedge funds charge a base fee of 1 percent and then take 20 percent of profits. By comparison, mutual funds have an average expense ratio of 1.41 percent, according to researcher Lipper Inc.
The lucrative pay structure has allowed hedge funds to lure talented money managers away from mutual funds. In response, some mutual-fund companies are launching hedge funds as a means to retain top talent, said Ryan Tagal, a director with Morningstar. However, Tagal said small-time investors are potentially shortchanged if fund managers spend more time managing their hedge fund compared to their mutual funds.
"There are potential conflicts of interest," Tagal said. "Perhaps they will buy stocks for the hedge fund before they buy it for the mutual fund."
The interest in hedge funds and hedge-fund-like mutual funds boomed after the bear market of 2002-03, said Todd Trubey, a senior analyst with Morningstar.
Trubey said hedge funds outperformed mutual funds during that time, largely because the hedge funds were able to sell stocks short - a tactic that most mutual funds can't use.
"The reason the funds have appeal is that they do well in a rising market and in a falling market," Trubey said. But, he noted, long-short funds tend to lag most stock funds during bull markets.
Long-short funds have posted an average annual return of 6.5 percent since 2003. By comparison, the Standard & Poor's 500 has gained 14 percent per year during that span.
"Unfortunately, asset managers oftentimes show up at the party just as it's ending," Trubey said.
Staff writer Will Shanley can be reached at 303-954-1260 or .
More mutual funds are using strategies such as short selling once allowed only in hedge funds
(From The Denver Post, provided by LexisNexis) April 17, 2007 Tuesday
The line between hedge funds and mutual funds is becoming increasingly blurred as a growing number of money managers introduce mutual funds that use strategies once limited to hedge funds.
What's more, some hedge-fund managers, who historically catered only to the most wealthy, are now offering their services through mutual funds, which are accessible to a wider group of investors.
The trend is providing average investors with a low-cost way of diversifying their portfolios through the use of hedging strategies - a category of investing techniques often too complex or risky for most small-
time investors.
Since 2003, the number of hedge-fund-like mutual funds, also called "long-short" funds, has more than doubled, increasing from 25 to 53 funds, according to investment researcher Morningstar. Long-short funds allow asset managers to buy stocks as well as sell stocks short, a technique used to profit from the falling price of a stock.
Denver-based Janus Capital Group, for instance, rolled out a long-short fund last August. The fund has attracted $50 million in investment since then.
Jerry Paul, head of Greenwood Village-based Quixote Capital Management, ran a hedge fund for years before introducing a mutual fund in 2005.
"It moved me into a whole new market," Paul said, who uses a hedging strategy in which he simultaneously buys into both sides of a merger-and-acquisition deal.
Paul's hedge fund has a $1 million minimum. Investors can get into his mutual fund for as little as $2,500.
The number of portfolio managers simultaneously operating mutual funds and hedge funds has increased from 80 three years ago to 124 today, according to Morningstar. In 2000, just 31 portfolio managers used such a side-by-side approach.
Hedge funds, or private investment partnerships lightly regulated by the U.S. Securities and Exchange Commission, are typically used by the wealthy. The funds are open only to accredited investors - those with at least $1 million in net worth or $200,000 in annual income.
Running mutual funds alongside hedge funds is attractive to money managers for several reasons, Paul and others said.
Hedge funds offer stock pickers greater compensation than mutual funds. Most hedge funds charge a base fee of 1 percent and then take 20 percent of profits. By comparison, mutual funds have an average expense ratio of 1.41 percent, according to researcher Lipper Inc.
The lucrative pay structure has allowed hedge funds to lure talented money managers away from mutual funds. In response, some mutual-fund companies are launching hedge funds as a means to retain top talent, said Ryan Tagal, a director with Morningstar. However, Tagal said small-time investors are potentially shortchanged if fund managers spend more time managing their hedge fund compared to their mutual funds.
"There are potential conflicts of interest," Tagal said. "Perhaps they will buy stocks for the hedge fund before they buy it for the mutual fund."
The interest in hedge funds and hedge-fund-like mutual funds boomed after the bear market of 2002-03, said Todd Trubey, a senior analyst with Morningstar.
Trubey said hedge funds outperformed mutual funds during that time, largely because the hedge funds were able to sell stocks short - a tactic that most mutual funds can't use.
"The reason the funds have appeal is that they do well in a rising market and in a falling market," Trubey said. But, he noted, long-short funds tend to lag most stock funds during bull markets.
Long-short funds have posted an average annual return of 6.5 percent since 2003. By comparison, the Standard & Poor's 500 has gained 14 percent per year during that span.
"Unfortunately, asset managers oftentimes show up at the party just as it's ending," Trubey said.
Staff writer Will Shanley can be reached at 303-954-1260 or .
Tuesday, April 17, 2007
Market Wizard
Artigo do Telegraph (UK) de 06 de Abril
Hedge fund guru prepares for London float Business Money Telegraph
Hedge fund guru prepares for London floatBy James Quinn, Business Correspondent
Last Updated: 10:19pm BST 06/04/2007
One of the founding fathers of the hedge fund industry is to float his fund of hedge funds in London with a market value of up to £275m.
Jack Schwager, who wrote the best selling Market Wizards series of investment tomes, is to list his Market Wizards Fund on the main market of the London Stock Exchange later this month.
Mr Schwager, who works for Fortune Asset Management, is to raise £200m as part of the float, with existing assets in the region of £75m.
Fundraising for the listing is due to begin next week, led by financial adviser Fox-Pitt Kelton. The fund has been running for seven years, and is incorporated in Guernsey as a closed-ended investment company.
Mr Schwager is an industry veteran of more than 30 years' experience, and is known for being the first to spot some of the big hedge fund managers of today, such as Michael Steinhardt and Paul Tudor Jones, founder of the Tudor Group.
He is Fortune's investment director, and plays a key part in all investment decisions. The Fortune team is led by London-based chief executive Simon Hopkins, who co-founded Fortune with investment director Rick Tarvin, while Nancy Curtin, the former head of global mutual funds at Schroders, is chief investment officer.
Fortune was bought last year by Close Brothers as part of its wish to move into the hedge fund sector.
The Market Wizards Fund has produced an annualised return of 12.44pc over the last seven years.
It has a great mixture of diversification across strategies, with the largest, options trading, accounting for only 18.2pc of the fund's total assets.
Its raison d'etre is that it invests in managed accounts of hedge funds, meaning that rather than just ploughing its money into a hedge fund's general money pot, its money is placed into specific managed accounts.
This allows Fortune to track the success - or failure - on a daily basis, allowing greater liquidity, more transparency, and the ability to mitigate the major drawbacks of investing in hedge funds. Typically, funds of hedge funds have to wait for monthly updates to know how their investments were going.
Hedge fund guru prepares for London float Business Money Telegraph
Hedge fund guru prepares for London floatBy James Quinn, Business Correspondent
Last Updated: 10:19pm BST 06/04/2007
One of the founding fathers of the hedge fund industry is to float his fund of hedge funds in London with a market value of up to £275m.
Jack Schwager, who wrote the best selling Market Wizards series of investment tomes, is to list his Market Wizards Fund on the main market of the London Stock Exchange later this month.
Mr Schwager, who works for Fortune Asset Management, is to raise £200m as part of the float, with existing assets in the region of £75m.
Fundraising for the listing is due to begin next week, led by financial adviser Fox-Pitt Kelton. The fund has been running for seven years, and is incorporated in Guernsey as a closed-ended investment company.
Mr Schwager is an industry veteran of more than 30 years' experience, and is known for being the first to spot some of the big hedge fund managers of today, such as Michael Steinhardt and Paul Tudor Jones, founder of the Tudor Group.
He is Fortune's investment director, and plays a key part in all investment decisions. The Fortune team is led by London-based chief executive Simon Hopkins, who co-founded Fortune with investment director Rick Tarvin, while Nancy Curtin, the former head of global mutual funds at Schroders, is chief investment officer.
Fortune was bought last year by Close Brothers as part of its wish to move into the hedge fund sector.
The Market Wizards Fund has produced an annualised return of 12.44pc over the last seven years.
It has a great mixture of diversification across strategies, with the largest, options trading, accounting for only 18.2pc of the fund's total assets.
Its raison d'etre is that it invests in managed accounts of hedge funds, meaning that rather than just ploughing its money into a hedge fund's general money pot, its money is placed into specific managed accounts.
This allows Fortune to track the success - or failure - on a daily basis, allowing greater liquidity, more transparency, and the ability to mitigate the major drawbacks of investing in hedge funds. Typically, funds of hedge funds have to wait for monthly updates to know how their investments were going.
Wednesday, April 11, 2007
Bankruptcy
Artigo da Financial News.
Funds take equity stakes in bankruptcies
Heidi Moore
11 Apr 2007
Shareholders could have more say over assets
Hedge funds like having control almost as much as they like making money. They are trying to achieve both in the US by using their power to influence the outcome of corporate collapses.
Firms such as Cerberus Capital Management, Fortress Investment Group and DE Shaw are becoming more active in steering the fate of bankrupt companies, including power plant operator Calpine, Northwest Airlines and car parts group Delphi Automotive.
The funds are building their roles as shareholders in collapsed companies into a powerbase from which they force acquisitions, pressure unions, create capital structures and control restructurings.
If the hedge funds succeed, they will have created a revolution in bankruptcy law under which equity holders would have nearly as much negotiating power as the debt holders. In most cases there is usually nothing left for shareholders.
Robert Stark, a partner in the bankruptcy practice of law firm Brown Rudnick Berlack Israels, said: “Distressed fund managers are extremely intelligent problem solvers and will often propose alternative restructuring ideas that can yield value to equity, if that is where they are invested.”
Hedge funds are organising themselves into equity committees and pooling resources. “In bankruptcy proceedings, there’s an inclination against value going to stockholders. You need power, advocacy and stamina to get the ball rolling,” said Stark.
Martin Bienenstock, head of bankruptcy at law firm Weil, Gotshal & Manges, said of the hedge fund committees: “It helps them maximise their investment. They’re present at all the hearings, they see what’s going on in the case, they get a seat at the negotiating table and they get their opportunities to try their solutions.”
But it is not easy. Hedge funds are fighting an image problem in such cases. In at least one instance – that of Northwest Airlines – a bankruptcy judge raised questions about whether a group of 10 funds were trying to help fellow equity holders or seeking ways to use the bankruptcy code to ensure their profit at the expense of others.
Corinne Ball, a partner with law firm Jones Day, said: “Northwest is a case where equity holders are trying to stick a crowbar in the door and make sure they’re not eliminated until they ensure there’s no hidden value that’s deferred.”
The failure of Northwest Airlines is one that specialists are watching closely to see how far hedge funds will be allowed to wield power. Two groups of equity holding hedge funds are pushing Northwest to be taken over while in bankruptcy proceedings.
One, calling itself the “ad hoc committee of certain claims holders”, holds $949.3m (€712m) in claims and includes 120 hedge funds. A second group has an additional nine firms.
Judge Allan Gropper threw down the gauntlet to one group by forcing it to disclose the extent of its holdings, which it argued could create a “chilling effect” on hedge funds since they want to avoid revealing their holdings to the competition and because hedge funds argue that creditors do not have to reveal their stakes.
The ad hoc committee of equity security holders caved in and disclosed their holdings.
The strategy appears to have worked. By agreeing to lose the battle over disclosure, the hedge funds could be winning the war for the merger: Gropper last week helped the funds by appointing an examiner to evaluate whether Northwest had held secret discussions about a post-bankruptcy sale.
Such a transaction would rob equity holders of the value of their shares, the hedge funds argued.
Their push for Northwest to be taken over while in bankruptcy means an acquirer would provide a capital infusion that could pay off creditors and leave enough for shareholders.
Delphi Automotive and building materials company US Gypsum are other examples where hedge funds have pushed for the outcome they wanted. At Delphi, Cerberus Capital Management and Appaloosa Management organised equity committees and made a successful bet that Delphi’s connection to General Motors – its primary customer – would guarantee a rich payout.
Appaloosa also holds subordinated debt in the company and plans to invest in return for a substantial ownership stake when then group emerges from bankruptcy.
In the US Gypsum case, which concluded last year, an equity committee forged by hedge funds worked with the company and its lawyers to fend off lawsuits alleging that it was responsible for asbestos injuries among former workers, who were forced to submit X-rays. This led the judge to rule there was no recognisable disease and the lawsuits were thrown out as a factor in the case.
Cerberus has been the most active hedge fund, often buying automotive companies out of bankruptcy. Last week it bought Tower Automotive out of Chapter 11 bankruptcy protection in a $1bn deal.
The plan was for Cerberus to pay Tower’s debt, including a $725m debtor-in-possession loan, its second-lien debts and its pensions. It is using its power to force rival bidders to offer $5m above its price.
Funds take equity stakes in bankruptcies
Heidi Moore
11 Apr 2007
Shareholders could have more say over assets
Hedge funds like having control almost as much as they like making money. They are trying to achieve both in the US by using their power to influence the outcome of corporate collapses.
Firms such as Cerberus Capital Management, Fortress Investment Group and DE Shaw are becoming more active in steering the fate of bankrupt companies, including power plant operator Calpine, Northwest Airlines and car parts group Delphi Automotive.
The funds are building their roles as shareholders in collapsed companies into a powerbase from which they force acquisitions, pressure unions, create capital structures and control restructurings.
If the hedge funds succeed, they will have created a revolution in bankruptcy law under which equity holders would have nearly as much negotiating power as the debt holders. In most cases there is usually nothing left for shareholders.
Robert Stark, a partner in the bankruptcy practice of law firm Brown Rudnick Berlack Israels, said: “Distressed fund managers are extremely intelligent problem solvers and will often propose alternative restructuring ideas that can yield value to equity, if that is where they are invested.”
Hedge funds are organising themselves into equity committees and pooling resources. “In bankruptcy proceedings, there’s an inclination against value going to stockholders. You need power, advocacy and stamina to get the ball rolling,” said Stark.
Martin Bienenstock, head of bankruptcy at law firm Weil, Gotshal & Manges, said of the hedge fund committees: “It helps them maximise their investment. They’re present at all the hearings, they see what’s going on in the case, they get a seat at the negotiating table and they get their opportunities to try their solutions.”
But it is not easy. Hedge funds are fighting an image problem in such cases. In at least one instance – that of Northwest Airlines – a bankruptcy judge raised questions about whether a group of 10 funds were trying to help fellow equity holders or seeking ways to use the bankruptcy code to ensure their profit at the expense of others.
Corinne Ball, a partner with law firm Jones Day, said: “Northwest is a case where equity holders are trying to stick a crowbar in the door and make sure they’re not eliminated until they ensure there’s no hidden value that’s deferred.”
The failure of Northwest Airlines is one that specialists are watching closely to see how far hedge funds will be allowed to wield power. Two groups of equity holding hedge funds are pushing Northwest to be taken over while in bankruptcy proceedings.
One, calling itself the “ad hoc committee of certain claims holders”, holds $949.3m (€712m) in claims and includes 120 hedge funds. A second group has an additional nine firms.
Judge Allan Gropper threw down the gauntlet to one group by forcing it to disclose the extent of its holdings, which it argued could create a “chilling effect” on hedge funds since they want to avoid revealing their holdings to the competition and because hedge funds argue that creditors do not have to reveal their stakes.
The ad hoc committee of equity security holders caved in and disclosed their holdings.
The strategy appears to have worked. By agreeing to lose the battle over disclosure, the hedge funds could be winning the war for the merger: Gropper last week helped the funds by appointing an examiner to evaluate whether Northwest had held secret discussions about a post-bankruptcy sale.
Such a transaction would rob equity holders of the value of their shares, the hedge funds argued.
Their push for Northwest to be taken over while in bankruptcy means an acquirer would provide a capital infusion that could pay off creditors and leave enough for shareholders.
Delphi Automotive and building materials company US Gypsum are other examples where hedge funds have pushed for the outcome they wanted. At Delphi, Cerberus Capital Management and Appaloosa Management organised equity committees and made a successful bet that Delphi’s connection to General Motors – its primary customer – would guarantee a rich payout.
Appaloosa also holds subordinated debt in the company and plans to invest in return for a substantial ownership stake when then group emerges from bankruptcy.
In the US Gypsum case, which concluded last year, an equity committee forged by hedge funds worked with the company and its lawyers to fend off lawsuits alleging that it was responsible for asbestos injuries among former workers, who were forced to submit X-rays. This led the judge to rule there was no recognisable disease and the lawsuits were thrown out as a factor in the case.
Cerberus has been the most active hedge fund, often buying automotive companies out of bankruptcy. Last week it bought Tower Automotive out of Chapter 11 bankruptcy protection in a $1bn deal.
The plan was for Cerberus to pay Tower’s debt, including a $725m debtor-in-possession loan, its second-lien debts and its pensions. It is using its power to force rival bidders to offer $5m above its price.
NY X London
Matéria do The Independent
New York is the leader but London is catching up fast
By James Moore
Published: 11 April 2007
New York still dominates the hedge fund industry but London is beginning to snap at the heels of its rival.
Hedge funds were, of course, an American invention but - despite what was widely seen as a crackdown last year - the less prescriptive style of "risk based" UK regulation is increasingly helping Britain's capital to bridge the gap.
One only needs to take a drink in one of more exclusive bars in Mayfair after a look around the district's luxuriously appointed office space to see that these are boom times for the industry.
According to the Alternative Investment Management Association (AIMA), Europe accounts for around 20 per cent of the $1.5 trillion hedge fund industry, and the UK has four- fifths of that. London is also now growing faster than its transatlantic rival. "London has been growing faster than New York for some time now," said Florence Lombard, executive director at AIMA. "We believe this is because it is a professional and efficiently regulated environment that both managers and investors are comfortable with."
Perhaps the most prominent hedge fund manager in the City in recent months has been Christopher Hohn, the founder of TCI. That is thanks to the Southampton University graduate's ability to force sweeping changes at some of Europe's most high profile companies.
Hohn last year had to deal with a rare setback after the stock exchange operator Euronext resisted his attempt to force a merger with Deutsche Börse in favour of an alternative deal with the New York Stock Exchange.
But shareholders (including TCI) hardly suffered as a result of this and Mr Hohn moved on to bigger fish - he was responsible for putting the Dutch bank ABN Amro into play.
His intervention has already had the desired effect on the lumbering Dutch bank's share price and his name is beginning to strike fear into company boards all over the Continent. Mr Hohn is ranked at 22 in the Trader Monthly 100 list of top earning traders with an income estimated at $275m.
However, the top earners in London are Pierre Lagrange and Noam Gottesman, whom the list says earned $450m each.
Their GLG Partners appears to have been little scathed by the loss of the star trader Philippe Jabre and a hefty fine from the Financial Services Authority in the midst of last year's crackdown.
That is perhaps because it has been phenomenally successful; ask anyone in the business to name the top five hedge funds in Britain and GLG will be in there. With $9 billion under management it is second only to the granddaddy of them all - the London-listed Man Group, which is the biggest independently quoted hedge fund group.
No discussion of London's most prominent hedge fund managers should leave its former boss, Stanley Fink, off the list. Mr Fink may have stepped down as chief executive, but his legacy lives on. Starting out as an obscure commodity trading company, under Fink, Man Group shot into the FTSE 100, and then the FTSE 50 list of Britain's biggest companies and still just keeps on growing. Between 2003 and the beginning of this year its market value had nearly quadrupled.
The flagship AHL fund may have suffered some difficulties in recent weeks, but such is Man's diversity that it hardly mattered. The institutional businesses picked up the slack.
The majority of hedge fund groups, however, remain in private hands.
Another star is William Browder from Hermitage Capital Management. The $275m man has made his name with bets on the Russian energy market. Given the volatility shown by those markets, it takes nerves of steel to be involved, something Mr Browder, who splits his time between London and Moscow, obviously possesses.
The former Credit Suisse banker Alan Howard can hardly be said to have had it all his way last year, although his flagship fund still returned a healthy 11.5 per cent and the list has his earnings at $225m (although it notes the firm calls this "grossly over-estimated").
Like many successful hedge fund managers, he founded Brevan Howard Asset Management after leaving an investment bank's proprietary trading desk. Despite the seven-figure bonuses paid by banks, it is a route that many continue to follow.
With these sorts of earnings available, that is no wonder.
New York is the leader but London is catching up fast
By James Moore
Published: 11 April 2007
New York still dominates the hedge fund industry but London is beginning to snap at the heels of its rival.
Hedge funds were, of course, an American invention but - despite what was widely seen as a crackdown last year - the less prescriptive style of "risk based" UK regulation is increasingly helping Britain's capital to bridge the gap.
One only needs to take a drink in one of more exclusive bars in Mayfair after a look around the district's luxuriously appointed office space to see that these are boom times for the industry.
According to the Alternative Investment Management Association (AIMA), Europe accounts for around 20 per cent of the $1.5 trillion hedge fund industry, and the UK has four- fifths of that. London is also now growing faster than its transatlantic rival. "London has been growing faster than New York for some time now," said Florence Lombard, executive director at AIMA. "We believe this is because it is a professional and efficiently regulated environment that both managers and investors are comfortable with."
Perhaps the most prominent hedge fund manager in the City in recent months has been Christopher Hohn, the founder of TCI. That is thanks to the Southampton University graduate's ability to force sweeping changes at some of Europe's most high profile companies.
Hohn last year had to deal with a rare setback after the stock exchange operator Euronext resisted his attempt to force a merger with Deutsche Börse in favour of an alternative deal with the New York Stock Exchange.
But shareholders (including TCI) hardly suffered as a result of this and Mr Hohn moved on to bigger fish - he was responsible for putting the Dutch bank ABN Amro into play.
His intervention has already had the desired effect on the lumbering Dutch bank's share price and his name is beginning to strike fear into company boards all over the Continent. Mr Hohn is ranked at 22 in the Trader Monthly 100 list of top earning traders with an income estimated at $275m.
However, the top earners in London are Pierre Lagrange and Noam Gottesman, whom the list says earned $450m each.
Their GLG Partners appears to have been little scathed by the loss of the star trader Philippe Jabre and a hefty fine from the Financial Services Authority in the midst of last year's crackdown.
That is perhaps because it has been phenomenally successful; ask anyone in the business to name the top five hedge funds in Britain and GLG will be in there. With $9 billion under management it is second only to the granddaddy of them all - the London-listed Man Group, which is the biggest independently quoted hedge fund group.
No discussion of London's most prominent hedge fund managers should leave its former boss, Stanley Fink, off the list. Mr Fink may have stepped down as chief executive, but his legacy lives on. Starting out as an obscure commodity trading company, under Fink, Man Group shot into the FTSE 100, and then the FTSE 50 list of Britain's biggest companies and still just keeps on growing. Between 2003 and the beginning of this year its market value had nearly quadrupled.
The flagship AHL fund may have suffered some difficulties in recent weeks, but such is Man's diversity that it hardly mattered. The institutional businesses picked up the slack.
The majority of hedge fund groups, however, remain in private hands.
Another star is William Browder from Hermitage Capital Management. The $275m man has made his name with bets on the Russian energy market. Given the volatility shown by those markets, it takes nerves of steel to be involved, something Mr Browder, who splits his time between London and Moscow, obviously possesses.
The former Credit Suisse banker Alan Howard can hardly be said to have had it all his way last year, although his flagship fund still returned a healthy 11.5 per cent and the list has his earnings at $225m (although it notes the firm calls this "grossly over-estimated").
Like many successful hedge fund managers, he founded Brevan Howard Asset Management after leaving an investment bank's proprietary trading desk. Despite the seven-figure bonuses paid by banks, it is a route that many continue to follow.
With these sorts of earnings available, that is no wonder.
Thursday, February 01, 2007
The 25 Most Intriguing Hedge Funds
Este artigo é ótimo e foi publicado no Hedge Fund Reader.
George Bush would have had a better chance of actually finding some “weapons of mass destruction”, albeit financial ones, if he had only known where to look – not in Iraq, but inside the hedge fund industry. No, this is not my flight of fancy; I’m only repeating Warren Buffet’s succinct summation of the $1.34 trillion business that’s got the financial world in a tizzy. Where else would you find pay packets so obscenely high that a secretary can steal more than £4.5 million from under the noses of her three bosses (Partner Managing Directors in a hedge fund) before they even notice that the money is missing? Or hear one manager refer to the secretive nature of another as “the biggest elephant trying to hide unsuccessfully in a jungle”?
There’s no doubt that hedge funds are part of an exciting and beguiling realm that thrives on secrecy and mystery, even as it draws and lures investors with the compulsive force of quicksand. The head honchos of these investment vehicles may be famous for playing their cards close to their chests, but we’re laying down what we know about them, face up on the table. So fasten your seatbelts folks, and let us take you on a whirlwind tour around 25 of the most intriguing hedge fund players in the game today.
1. SAC Capital Partners: Secrecy may be Steve Cohen’s middle name but that didn’t stop his hedge fund from being embroiled in controversy over the Fairfax Financial Holdings affair. The sex, lies and financial fraud scandal saw SAC Capital being accused of driving down the Canadian insurer’s share value, and slapped with a $6 billion lawsuit in the process. Started in 1992 with just $25 million, the group worth $12 billion now is minting money, if its alleged gross returns are to be believed – 40 percent before fees every year between 1996 and 2001. And if you’re thinking of joining the SAC bandwagon tempted by the 50 percent the fund retains, you’re out of luck – it’s closed to new investors. The “new prince of Wall Street” and the “hedge fund king” are sobriquets that lie lightly on Cohen’s shoulders – all he’s interested in is ruling his kingdom with an iron (secretive) fist.
2. Goldman Sachs Asset Management Group: It projects a conflicting image - Alpha Magazine ranks Goldman Sachs as the world’s largest hedge fund with assets totaling $720 billion, but the firm’s Manhattan headquarters does not even sport a sign to advertise its presence. The company is loaded with talent and money, but the secrecy is so high that one employee often does not know what his colleague is making. “The Apprentice” and Donald Trump fans will remember Kwame Jackson as the “ambitious chap” who threw up his cushy job at Goldman (he was denied a leave of absence citing “reputational risk”) for a chance to be Trump’s apprentice. Pity he got “fired” at the final hurdle! But that’s Goldman Sachs for you – secretive to the point of “shunning those who seek the spotlight.”
3. Quantum Fund: “If you had invested $1,000 with George Soros in his Quantum Fund when he started in 1969, you would have found yourself worth $4 million by the new millennium” – that sums up this particular hedge fund in a nutshell. It returned a whopping 3,365 percent in the ten years since its inception in 1970, and in 1992, made $10 billion worth of pounds at the expense of the Bank of England. Soros’s shrewd currency speculation and strategy of selling short earned him the dubious distinction of “the man who broke the Bank of England.” Now a philanthropist, this Hungarian emigrant to England donates his money and time to the creation of “open societies.”
4. Man Investments: A unit of the Man Group PLC, the biggest futures contract broker in the world, this is the largest publicly-traded hedge fund company in the industry. With $12.7 billion in assets, Man Investments uses the AHL black-box systems to decide on its trading strategies. The technique claims to have an annualized return of 17.9 percent since December 1990. An unlike achievement for a hedge fund, it’s also got its foot in the literary world – it sponsors the Man Booker Prize for Fiction, more popularly known as the Booker prize, awarded to the best original full-length English novel every year.
5. Caxton Associates: The world’s tenth largest with assets worth $12.5 billion, this hedge fund is known more for its enigmatic founder, Bruce Kovner. From driving a cab to pay rent during his days at Harvard to naming his fund after an obscure 15th century book printer – the range of Kovner’s eccentricities is wide. Caxton is a global macro hedge fund on the lines of Soros’ Quantum Fund. Kovner is said to have staff monitor the markets on a 24-hour basis, while he himself checks their status before and after trading hours.
6. Tudor Investment Corporation: “Never had a down year since its inception in 1980” would best describe Paul Tudor Jones’ hedge fund. The shrewd trader made most of his money on Black Monday in 1987 when the Dow Jones Industrial Average dropped sharply and sent stock markets around the world crashing. Tudor Investment featured twice in Alpha magazine’s list of top 25 earners in the hedge fund industry in 2005 – Paul Jones in fifth place with $500 million and James Pallotta at number 14. The fund is known for more than just its global macro trading strategies – it runs the Robin Hood Foundation, an organization that helps New York City in the fight against poverty, besides collaborating with Save the Children to aid children affected by natural disasters and calamities like tsunamis and earthquakes all over the globe.
7. Renaissance Technologies Corporation: The year 2005 was obviously a good one for Renaissance - its flagship medallion fund made its founder James Simons richer by a cool $1.5 billion. Reliance on predictive computer models, science and associated spheres like mathematics and physics has paid off handsomely for Simons – in a world famous for its rollercoaster ups and downs, the Medallion Fund is known for its consistent success. Its average annual returns of 35 percent are 10 percent higher than the returns of Caxton Associates, Quantum Fund and Tudor Investment. And if you’re interested in learning how Simons earns so much, the 5 percent management and 44 percent incentive fees should tell you the entire story.
8. Hermitage Capital Management: It’s tempting to use the term “Russian Roulette” to describe the strategies of Hermitage’s CEO William Browder, but only because of the Russian connection. The fund, which focuses in Russian securities, has had a very successful decade since it was floated in 1996, with returns at an amazing 935 percent. Nelsons ranked it the “World’s Best Performing Emerging Markets Fund (1996-2001)”, Micropal called it the “Best Performing Fund in the World (1997)”, and Lipper termed it the “Best Russian Fund (1997-1998)”. A remarkable aspect of this activist fund is that it helps root out corruption in organizations, on the basis that this vice has an adverse effect on share prices. Browder is also renowned for his significant criticism of and subsequent effect on Russian corporate law, so much so that Russian President Vladmir Putin has banned him from setting foot in the country. The $1.25 billion fund has gone on record in 2000 to say that investors were valuing Hermitage at just 10 percent of its actual value. What is it really worth? Your guess is as good as mine!
9. ESL Investments: Its founder Edward Lampert is an eccentric chap; formerly of Goldman Sachs, he was the first hedge fund manager to earn more than $1 billion in a year, but then, this is also the same guy who drove around in an old car and lived in a rented apartment till he bought a $20 million mansion in 1999. The reclusive billionaire was thrust rudely into the spotlight when he was kidnapped and held for ransom; unfortunately for his kidnappers, he was rescued in 24 hours when one of them used his credit card to order pizza. Though Lampert has been compared to Warren Buffet for his low-key business style, his tactics in the merger of retail firms Kmart and Sears was anything but quiet. The deal earned his ESL Investments a 69 percent return on investments the same year the tycoon crossed the billion dollar earning mark.
10. BP Capital Management: According to the company website, the fund’s sole objective is “investing with energy.” BP Capital is managed by T. Boone Pickens, the octogenarian founder of Mesa Petroleum who earned $1.4 billion in 2005 through massive returns from his BP Capital Commodity Fund (650 percent) and BP Capital Energy Equity Fund (89 percent). Pickens shot to fame through his series of acquisitions, takeovers and mergers that led Time Magazine to feature him on its cover under the headline, “The Takeover Game.” BP Capital contributed $7 million to Katrina rehabilitation measures, while Pickens himself has donated nearly half a billion dollars to various charitable causes during the span of his career. A born survivor and fighter, as proved by his birth – after doctors had given up on him, Pickens was the first C-Section baby to be born in Holdenville hospital in Oklahoma.
11. Fortress Investment Group: This global alternative asset manager made news in November last year when it became the first hedge fund listed manager in the United States. It filed for an IPO that puts its value at $7.5 billion, and is looking to raise $750 million with Lehman Brothers, Goldman Sachs, Bank of America, Citigroup and Deutsche Bank as underwriters. The hedge funds arm of the group manages assets worth $9.4 billion and deals in hybrid and liquid hedge funds.
12. D.E.Shaw & Co.: Fortune Magazine called it “the most intriguing and mysterious force on Wall Street” in 1996. D.E. Shaw, founded by an erstwhile computer science professor at the Columbia University, is chock full of Rhodes, Marshall and Fulbright scholars and Putnam winners who are extremely skilled in problem solving and quantitative trading. Amazon.com’s founder, Jeff Bezos, was an employee at the fund before he left to make his own millions. And if you think you have a reasonable chance of getting your foot in the door, well, rumor has it that not even one in 500 applicants pass the eligibility criteria. The $24 billion fund recently made headlines when it hired Lawrence Summers, former Treasury Secretary with the Clinton administration and ex-president of Harvard University as its managing director. With its penchant for the erudite, it’s no surprise that this fund supports various educational programs like math and problem-solving Olympiads.
13. Pirate Capital: This hedge fund worms its way into the list for the sheer audacity of its name; its website features a pirate ship sailing across the seas, and its flagship funds are all tagged with the name Jolly Roger, an allusion to the flags of pirates of yore that sported the skull and crossbones. Pirate lends itself to the best headlines being crafted – an exodus of its staff saw this beauty hit the newsstands – “Staff Walks the Plank at Listing Pirate Capital.” The fund, which focuses on shareholder activism, was the subject of an SEC investigation for failing to provide accurate information on its stock sale. Tiger Management is another hedge fund manager that belongs in the category of captivating names – its founder Julian Robertson named his funds Puma, Jaguar and Panther after his wife, Tiger Robertson. The second-largest hedge fund in 1997, Tiger Management closed shop in 2000.
14. Barclays Global Investors: The largest money manager in the world, this London-based hedge fund had $1.77 trillion in assets under management as of March 2006. It is also the biggest privately-held beneficial owner of companies in the world. A part of Barclays PLC, this group manages $14.3 billion in single manager hedge funds, the sixth largest in the world according to Alpha Magazine. The fund management unit accounted for more than 50 percent of the firm’s revenue in 2005. Barclays Global is credited with the creation of the first index strategy in 1971 and the first quantitative active strategy in 1978.
15. Vega Asset Management: What’s going on at Vega Asset Management? The fund, which was ranked by Alpha Magazine as Europe’s biggest hedge fund manager in 2005, is now facing a crisis. With assets down to $6 billion from $12 billion just a couple of years ago, and investors seeking quick redemptions, questions are being raised if the fund will go the way of Amaranth. Vega is an example of the wide fluctuations in fortune that characterize the hedge fund industry.
16. Eton Park Capital Management: He retired from Goldman Sachs at the “ripe” old age of 36, with 15 years of experience, to float his own hedge fund, Eton Park. Meet Eric Mindich, the “Doogie Howser” in the world of hedge funds, Harvard economic graduate and youngest partner at Goldman Sachs at 27. Eton Park, launched in early 2004, was one of the largest start-ups with $3 billion in assets. Investors made a beeline for the fund even though there was a minimum investment limit of $5 million, a lock-up period of 4.5 years and a 6 percent redemption fee within the said period, an annual management fee of 2 percent, and 20 percent of the profits to the manager. Mindich’s financial savvy is demonstrated clearly by the 12.8 percent returned by Eton Park in 2005.
17. Geronimo Financial: A relatively small and new start-up that makes the cut because of its unusual attitude to hedge fund investing. Geronimo Multi-Strategy, which diversified into mutual funds, “sets a new standard for advancing the concept of democratizing hedge fund investments.” It has the ridiculously low investment limit of $1,000, with no need for net accreditation and a performance-based fee structure. Geronimo could well go ahead and create a new benchmark for publicly-traded alternative investments.
18. Bridgewater Associates: The world’s second largest hedge fund manager with $21 billion managed by its fund Pure Alpha, the biggest in the United States, and the founder in the top 25 earners in the business – Bridgewater sure has impressive credentials. Ray Dalio, CIO and president of the outfit, believes in the equality of all his employees. There is no hierarchy, with even the least important subordinate being encouraged to voice his/her opinions.
19. UBS AG: This fund of hedge funds is the world’s largest money manager with $45 billion assets under management. But that’s not what makes it interesting; rather, it’s the contrasting facades that UBS projects. The financial services organization has been named among the 100 best companies for working mothers in the United States for the fourth straight row; the same company was sued successfully by a female employee who alleged sexual discrimination in the workplace. UBS claims to have active gay and lesbian and ethnic minority groups, but it was taken to court by three African-American employees in a class action lawsuit that alleged racial discrimination in hiring and employment policies. And that’s not all – a watchman was dismissed after he found a historian destroying archives that tied a UBS subsidiary to the Nazi holocaust.
20. Brevan Howard: One of the largest and fastest growing hedge fund managers in Europe, Brevan Howard is all set to float a new permanent capital vehicle in London. The move has been eased by the Financial Services Authority relaxing rules to allow single-strategy hedge funds to float in London. With BH planning to raise between €500 million and €1 billion, the London Stock Exchange is finally keeping its share of listed funds instead of losing them to Amsterdam and other European destinations.
21. Lone Pine Capital: Named the hedge fund of the year in 2004 by the Alternative Investment News' Second Annual Hedge Fund Industry Awards, Lone Pine created a flutter of sorts when it broke away from industry norms and created its own performance fee structure. Instead of no fees for performances below the high-water mark, Lone Pine’s founder Steve Mandel gave his staff 10 percent for figures under the mark and 20 for those over, with investors also compensated accordingly. From Tiger Management to Goldman Sachs to Lone Pine Capital, Mandel’s long journey through the hedge fund industry has only served to put him among the top ten earners in the business – Trader Monthly pegged his 2005 income between $300 and $350 million.
22. Moore Capital Management: He calls Paul Tudor Jones II a close friend and Julian Robertson’s sister step-mother, but he’s quite the recluse that there are not too many photographs of him around – that’s Louis Bacon of Moore Capital Management for you. A shrewd macro money manager, his Moore Global Investments flagship fund has returned 31 percent every year, after fees, since it launched in 1990. Bacon is another of those hedge fund bigwigs who guard their trading secrets with their lives – he’s against the publishing of even historical returns for his funds.
23. GLG Partners: One of Europe’s largest hedge funds in 2005, GLG Partners has of late found itself in the news for all the wrong reasons. The first sign of trouble came in August 2006 in the form of a severe rap on the knuckles from the Financial Services Authority which fined the fund and its former managing director, Philippe Jabre, £750,000 each for market abuse and violation of FSA principles. To show that it pours when it rains, the French financial authorities pulled up GLG in December for alleged trading abuses relating to a convertible bond sale in 2002. Jabre’s brush with the wrong side of the law seems not to have had any adverse effect on him; two months down the line and the former MD is setting up his own financial company in Switzerland, with open plans for the development of a hedge fund!
24. Avenue Capital Group: Of course you’re going to make news when the daughter of one of the most (in)famous presidents in American history joins the ranks of your staff, especially when she’s also the child of a prospective future president. Chelsea Clinton dragged Avenue Capital into the front pages of newspapers when she signed up to work with the $12 billion fund. Of course, it also helps that Avenue’s Marc Lasry is among the top 25 earners in the hedge fund industry.
25. Atticus Capital: This investment management firm with $5.6 billion in assets under management is the largest shareholder in the pan-European currency exchange house Euronext. Atticus had a significant role to play in the merger between the New York Stock Exchange and Euronext, paving the way for the creation of a single platform where traders can deal in stocks, futures, commodities, options and corporate bonds across two continents for at least 12 hours every day.
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George Bush would have had a better chance of actually finding some “weapons of mass destruction”, albeit financial ones, if he had only known where to look – not in Iraq, but inside the hedge fund industry. No, this is not my flight of fancy; I’m only repeating Warren Buffet’s succinct summation of the $1.34 trillion business that’s got the financial world in a tizzy. Where else would you find pay packets so obscenely high that a secretary can steal more than £4.5 million from under the noses of her three bosses (Partner Managing Directors in a hedge fund) before they even notice that the money is missing? Or hear one manager refer to the secretive nature of another as “the biggest elephant trying to hide unsuccessfully in a jungle”?
There’s no doubt that hedge funds are part of an exciting and beguiling realm that thrives on secrecy and mystery, even as it draws and lures investors with the compulsive force of quicksand. The head honchos of these investment vehicles may be famous for playing their cards close to their chests, but we’re laying down what we know about them, face up on the table. So fasten your seatbelts folks, and let us take you on a whirlwind tour around 25 of the most intriguing hedge fund players in the game today.
1. SAC Capital Partners: Secrecy may be Steve Cohen’s middle name but that didn’t stop his hedge fund from being embroiled in controversy over the Fairfax Financial Holdings affair. The sex, lies and financial fraud scandal saw SAC Capital being accused of driving down the Canadian insurer’s share value, and slapped with a $6 billion lawsuit in the process. Started in 1992 with just $25 million, the group worth $12 billion now is minting money, if its alleged gross returns are to be believed – 40 percent before fees every year between 1996 and 2001. And if you’re thinking of joining the SAC bandwagon tempted by the 50 percent the fund retains, you’re out of luck – it’s closed to new investors. The “new prince of Wall Street” and the “hedge fund king” are sobriquets that lie lightly on Cohen’s shoulders – all he’s interested in is ruling his kingdom with an iron (secretive) fist.
2. Goldman Sachs Asset Management Group: It projects a conflicting image - Alpha Magazine ranks Goldman Sachs as the world’s largest hedge fund with assets totaling $720 billion, but the firm’s Manhattan headquarters does not even sport a sign to advertise its presence. The company is loaded with talent and money, but the secrecy is so high that one employee often does not know what his colleague is making. “The Apprentice” and Donald Trump fans will remember Kwame Jackson as the “ambitious chap” who threw up his cushy job at Goldman (he was denied a leave of absence citing “reputational risk”) for a chance to be Trump’s apprentice. Pity he got “fired” at the final hurdle! But that’s Goldman Sachs for you – secretive to the point of “shunning those who seek the spotlight.”
3. Quantum Fund: “If you had invested $1,000 with George Soros in his Quantum Fund when he started in 1969, you would have found yourself worth $4 million by the new millennium” – that sums up this particular hedge fund in a nutshell. It returned a whopping 3,365 percent in the ten years since its inception in 1970, and in 1992, made $10 billion worth of pounds at the expense of the Bank of England. Soros’s shrewd currency speculation and strategy of selling short earned him the dubious distinction of “the man who broke the Bank of England.” Now a philanthropist, this Hungarian emigrant to England donates his money and time to the creation of “open societies.”
4. Man Investments: A unit of the Man Group PLC, the biggest futures contract broker in the world, this is the largest publicly-traded hedge fund company in the industry. With $12.7 billion in assets, Man Investments uses the AHL black-box systems to decide on its trading strategies. The technique claims to have an annualized return of 17.9 percent since December 1990. An unlike achievement for a hedge fund, it’s also got its foot in the literary world – it sponsors the Man Booker Prize for Fiction, more popularly known as the Booker prize, awarded to the best original full-length English novel every year.
5. Caxton Associates: The world’s tenth largest with assets worth $12.5 billion, this hedge fund is known more for its enigmatic founder, Bruce Kovner. From driving a cab to pay rent during his days at Harvard to naming his fund after an obscure 15th century book printer – the range of Kovner’s eccentricities is wide. Caxton is a global macro hedge fund on the lines of Soros’ Quantum Fund. Kovner is said to have staff monitor the markets on a 24-hour basis, while he himself checks their status before and after trading hours.
6. Tudor Investment Corporation: “Never had a down year since its inception in 1980” would best describe Paul Tudor Jones’ hedge fund. The shrewd trader made most of his money on Black Monday in 1987 when the Dow Jones Industrial Average dropped sharply and sent stock markets around the world crashing. Tudor Investment featured twice in Alpha magazine’s list of top 25 earners in the hedge fund industry in 2005 – Paul Jones in fifth place with $500 million and James Pallotta at number 14. The fund is known for more than just its global macro trading strategies – it runs the Robin Hood Foundation, an organization that helps New York City in the fight against poverty, besides collaborating with Save the Children to aid children affected by natural disasters and calamities like tsunamis and earthquakes all over the globe.
7. Renaissance Technologies Corporation: The year 2005 was obviously a good one for Renaissance - its flagship medallion fund made its founder James Simons richer by a cool $1.5 billion. Reliance on predictive computer models, science and associated spheres like mathematics and physics has paid off handsomely for Simons – in a world famous for its rollercoaster ups and downs, the Medallion Fund is known for its consistent success. Its average annual returns of 35 percent are 10 percent higher than the returns of Caxton Associates, Quantum Fund and Tudor Investment. And if you’re interested in learning how Simons earns so much, the 5 percent management and 44 percent incentive fees should tell you the entire story.
8. Hermitage Capital Management: It’s tempting to use the term “Russian Roulette” to describe the strategies of Hermitage’s CEO William Browder, but only because of the Russian connection. The fund, which focuses in Russian securities, has had a very successful decade since it was floated in 1996, with returns at an amazing 935 percent. Nelsons ranked it the “World’s Best Performing Emerging Markets Fund (1996-2001)”, Micropal called it the “Best Performing Fund in the World (1997)”, and Lipper termed it the “Best Russian Fund (1997-1998)”. A remarkable aspect of this activist fund is that it helps root out corruption in organizations, on the basis that this vice has an adverse effect on share prices. Browder is also renowned for his significant criticism of and subsequent effect on Russian corporate law, so much so that Russian President Vladmir Putin has banned him from setting foot in the country. The $1.25 billion fund has gone on record in 2000 to say that investors were valuing Hermitage at just 10 percent of its actual value. What is it really worth? Your guess is as good as mine!
9. ESL Investments: Its founder Edward Lampert is an eccentric chap; formerly of Goldman Sachs, he was the first hedge fund manager to earn more than $1 billion in a year, but then, this is also the same guy who drove around in an old car and lived in a rented apartment till he bought a $20 million mansion in 1999. The reclusive billionaire was thrust rudely into the spotlight when he was kidnapped and held for ransom; unfortunately for his kidnappers, he was rescued in 24 hours when one of them used his credit card to order pizza. Though Lampert has been compared to Warren Buffet for his low-key business style, his tactics in the merger of retail firms Kmart and Sears was anything but quiet. The deal earned his ESL Investments a 69 percent return on investments the same year the tycoon crossed the billion dollar earning mark.
10. BP Capital Management: According to the company website, the fund’s sole objective is “investing with energy.” BP Capital is managed by T. Boone Pickens, the octogenarian founder of Mesa Petroleum who earned $1.4 billion in 2005 through massive returns from his BP Capital Commodity Fund (650 percent) and BP Capital Energy Equity Fund (89 percent). Pickens shot to fame through his series of acquisitions, takeovers and mergers that led Time Magazine to feature him on its cover under the headline, “The Takeover Game.” BP Capital contributed $7 million to Katrina rehabilitation measures, while Pickens himself has donated nearly half a billion dollars to various charitable causes during the span of his career. A born survivor and fighter, as proved by his birth – after doctors had given up on him, Pickens was the first C-Section baby to be born in Holdenville hospital in Oklahoma.
11. Fortress Investment Group: This global alternative asset manager made news in November last year when it became the first hedge fund listed manager in the United States. It filed for an IPO that puts its value at $7.5 billion, and is looking to raise $750 million with Lehman Brothers, Goldman Sachs, Bank of America, Citigroup and Deutsche Bank as underwriters. The hedge funds arm of the group manages assets worth $9.4 billion and deals in hybrid and liquid hedge funds.
12. D.E.Shaw & Co.: Fortune Magazine called it “the most intriguing and mysterious force on Wall Street” in 1996. D.E. Shaw, founded by an erstwhile computer science professor at the Columbia University, is chock full of Rhodes, Marshall and Fulbright scholars and Putnam winners who are extremely skilled in problem solving and quantitative trading. Amazon.com’s founder, Jeff Bezos, was an employee at the fund before he left to make his own millions. And if you think you have a reasonable chance of getting your foot in the door, well, rumor has it that not even one in 500 applicants pass the eligibility criteria. The $24 billion fund recently made headlines when it hired Lawrence Summers, former Treasury Secretary with the Clinton administration and ex-president of Harvard University as its managing director. With its penchant for the erudite, it’s no surprise that this fund supports various educational programs like math and problem-solving Olympiads.
13. Pirate Capital: This hedge fund worms its way into the list for the sheer audacity of its name; its website features a pirate ship sailing across the seas, and its flagship funds are all tagged with the name Jolly Roger, an allusion to the flags of pirates of yore that sported the skull and crossbones. Pirate lends itself to the best headlines being crafted – an exodus of its staff saw this beauty hit the newsstands – “Staff Walks the Plank at Listing Pirate Capital.” The fund, which focuses on shareholder activism, was the subject of an SEC investigation for failing to provide accurate information on its stock sale. Tiger Management is another hedge fund manager that belongs in the category of captivating names – its founder Julian Robertson named his funds Puma, Jaguar and Panther after his wife, Tiger Robertson. The second-largest hedge fund in 1997, Tiger Management closed shop in 2000.
14. Barclays Global Investors: The largest money manager in the world, this London-based hedge fund had $1.77 trillion in assets under management as of March 2006. It is also the biggest privately-held beneficial owner of companies in the world. A part of Barclays PLC, this group manages $14.3 billion in single manager hedge funds, the sixth largest in the world according to Alpha Magazine. The fund management unit accounted for more than 50 percent of the firm’s revenue in 2005. Barclays Global is credited with the creation of the first index strategy in 1971 and the first quantitative active strategy in 1978.
15. Vega Asset Management: What’s going on at Vega Asset Management? The fund, which was ranked by Alpha Magazine as Europe’s biggest hedge fund manager in 2005, is now facing a crisis. With assets down to $6 billion from $12 billion just a couple of years ago, and investors seeking quick redemptions, questions are being raised if the fund will go the way of Amaranth. Vega is an example of the wide fluctuations in fortune that characterize the hedge fund industry.
16. Eton Park Capital Management: He retired from Goldman Sachs at the “ripe” old age of 36, with 15 years of experience, to float his own hedge fund, Eton Park. Meet Eric Mindich, the “Doogie Howser” in the world of hedge funds, Harvard economic graduate and youngest partner at Goldman Sachs at 27. Eton Park, launched in early 2004, was one of the largest start-ups with $3 billion in assets. Investors made a beeline for the fund even though there was a minimum investment limit of $5 million, a lock-up period of 4.5 years and a 6 percent redemption fee within the said period, an annual management fee of 2 percent, and 20 percent of the profits to the manager. Mindich’s financial savvy is demonstrated clearly by the 12.8 percent returned by Eton Park in 2005.
17. Geronimo Financial: A relatively small and new start-up that makes the cut because of its unusual attitude to hedge fund investing. Geronimo Multi-Strategy, which diversified into mutual funds, “sets a new standard for advancing the concept of democratizing hedge fund investments.” It has the ridiculously low investment limit of $1,000, with no need for net accreditation and a performance-based fee structure. Geronimo could well go ahead and create a new benchmark for publicly-traded alternative investments.
18. Bridgewater Associates: The world’s second largest hedge fund manager with $21 billion managed by its fund Pure Alpha, the biggest in the United States, and the founder in the top 25 earners in the business – Bridgewater sure has impressive credentials. Ray Dalio, CIO and president of the outfit, believes in the equality of all his employees. There is no hierarchy, with even the least important subordinate being encouraged to voice his/her opinions.
19. UBS AG: This fund of hedge funds is the world’s largest money manager with $45 billion assets under management. But that’s not what makes it interesting; rather, it’s the contrasting facades that UBS projects. The financial services organization has been named among the 100 best companies for working mothers in the United States for the fourth straight row; the same company was sued successfully by a female employee who alleged sexual discrimination in the workplace. UBS claims to have active gay and lesbian and ethnic minority groups, but it was taken to court by three African-American employees in a class action lawsuit that alleged racial discrimination in hiring and employment policies. And that’s not all – a watchman was dismissed after he found a historian destroying archives that tied a UBS subsidiary to the Nazi holocaust.
20. Brevan Howard: One of the largest and fastest growing hedge fund managers in Europe, Brevan Howard is all set to float a new permanent capital vehicle in London. The move has been eased by the Financial Services Authority relaxing rules to allow single-strategy hedge funds to float in London. With BH planning to raise between €500 million and €1 billion, the London Stock Exchange is finally keeping its share of listed funds instead of losing them to Amsterdam and other European destinations.
21. Lone Pine Capital: Named the hedge fund of the year in 2004 by the Alternative Investment News' Second Annual Hedge Fund Industry Awards, Lone Pine created a flutter of sorts when it broke away from industry norms and created its own performance fee structure. Instead of no fees for performances below the high-water mark, Lone Pine’s founder Steve Mandel gave his staff 10 percent for figures under the mark and 20 for those over, with investors also compensated accordingly. From Tiger Management to Goldman Sachs to Lone Pine Capital, Mandel’s long journey through the hedge fund industry has only served to put him among the top ten earners in the business – Trader Monthly pegged his 2005 income between $300 and $350 million.
22. Moore Capital Management: He calls Paul Tudor Jones II a close friend and Julian Robertson’s sister step-mother, but he’s quite the recluse that there are not too many photographs of him around – that’s Louis Bacon of Moore Capital Management for you. A shrewd macro money manager, his Moore Global Investments flagship fund has returned 31 percent every year, after fees, since it launched in 1990. Bacon is another of those hedge fund bigwigs who guard their trading secrets with their lives – he’s against the publishing of even historical returns for his funds.
23. GLG Partners: One of Europe’s largest hedge funds in 2005, GLG Partners has of late found itself in the news for all the wrong reasons. The first sign of trouble came in August 2006 in the form of a severe rap on the knuckles from the Financial Services Authority which fined the fund and its former managing director, Philippe Jabre, £750,000 each for market abuse and violation of FSA principles. To show that it pours when it rains, the French financial authorities pulled up GLG in December for alleged trading abuses relating to a convertible bond sale in 2002. Jabre’s brush with the wrong side of the law seems not to have had any adverse effect on him; two months down the line and the former MD is setting up his own financial company in Switzerland, with open plans for the development of a hedge fund!
24. Avenue Capital Group: Of course you’re going to make news when the daughter of one of the most (in)famous presidents in American history joins the ranks of your staff, especially when she’s also the child of a prospective future president. Chelsea Clinton dragged Avenue Capital into the front pages of newspapers when she signed up to work with the $12 billion fund. Of course, it also helps that Avenue’s Marc Lasry is among the top 25 earners in the hedge fund industry.
25. Atticus Capital: This investment management firm with $5.6 billion in assets under management is the largest shareholder in the pan-European currency exchange house Euronext. Atticus had a significant role to play in the merger between the New York Stock Exchange and Euronext, paving the way for the creation of a single platform where traders can deal in stocks, futures, commodities, options and corporate bonds across two continents for at least 12 hours every day.
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Aquisições e RH
Acquisitions of people carry indigestion risk Renée Schultes
01 Feb 2007
The bottom line is: you can buy assets but you only rent staff
Mergers and acquisitions in the asset management sector reached record levels last year but the boom has been met with unprecedented scepticism by many chief executives, who believe an acquisition-led strategy remains fraught with danger.
The long-running belief is that acquisitions are generally bad for business. With the exception of the largest deals, such as BlackRock/Merrill Lynch and Legg Mason/Citigroup Asset Management, which were about global positioning and scale, mergers have been about plugging product gaps. In almost every case, hiring would have been a better option.
But the most sought-after deals this year are likely to be acquisitions that provide contracts to manage assets. Managers want sources of permanent capital so they may generate more stable earnings. Hedge funds have listed closed-ended funds but fund managers with larger balance sheets could achieve this through acquisitions of contracts.
A handful of savvy chief executives, who have stood back from the acquisition frenzy in the past two years, have been buying contracts to manage assets for years. Goldman Sachs led the market in 1996 when it bought the right to manage the majority of the British Coal Pension Schemes’ assets.
Merrill Lynch did a similar deal in 2005 when it bought Philips’ pension fund in the Netherlands, becoming a local participant overnight with one of the largest pension fund contracts in that market and T Rowe Price bought the right to manage the Caterpillar funds.
Todd Ruppert, president and chief executive of T Rowe Price outside the US, believes the indigestion caused by acquiring people is not worth it. “The best antidote is to avoid the acquisition in the first place. No amount of incremental assets is worth the risk. The problem with the industry is that many have eyes bigger than their stomachs can legitimately tolerate. Fortunately for us, we don’t,” he said.
Mergers in the closed life fund business are likely to dominate this type of acquisition but a few pension funds that run their assets internally could find themselves targets. Buying contracts to manage money is a deal that almost every asset management chief executive sees merit in.
BT, which owns Hermes, has appointed investment bank Hawkpoint Partners to advise it on potential acquisitions for its pension fund but others suggest Hermes itself may be a target. Buying Hermes would be about acquiring the management contract, rather than expertise. Considering BT’s pension liability, it is highly unlikely to want to cede control of the management of its pension fund, but selling exclusive rights to manage the contract for a defined period is a more palatable option.
Acquiring for the sake of securing better distribution capabilities will be another big theme this year. Companies such as Henderson Group, which was divested from AMP in 2003, could benefit from a deal like this.
But the rise of private equity buyers in the sector and the lure of high valuations in public markets suggest mergers are less attractive than they once were. Firms such as Hellman & Friedman and TA Associates have provided an alternative means for asset managers that want to remain independent to realise monetary value.
The bottom line is the same as it has always been: you can buy assets but you only rent people.
• Old Lady harder than Fed
Minutes from the Bank of England’s monetary policy committee led many last week to conclude the close vote signalled interest rates have reached their peak. The suggestion was that because the Governor voted against his chief economist and the deputy governor, and his was the deciding vote, he will be uncomfortable about voting against them again at the next meeting. Others called the bank “confused” because of the closeness of vote, which was 5-4 in favour of an increase.
But this is the way the committee ought to operate, with each member drawing his or her own conclusions from the data. The chief UK economist at Barclays Capital wrote last week: “This is a reminder that there is no ‘Bank-pack’, or bank block voting as has often been suggested in the past.”
The diversity among the members demonstrated by this month’s vote suggests there will be more surprises to come.
Unlike the US Federal Reserve, which some investors argue has been held hostage by the market, the Bank of England showed it has clout.
Pimco’s Bill Gross hit the nail on the head in January when he wrote: “Is the Fed impotent now – a 110-pound weakling getting sand kicked in its face by the global financial community as it creates massive liquidity?” Whereas the Bank of England has moved from a reactive to a pre-emptive stance, the Fed rests heavily on its back foot.
01 Feb 2007
The bottom line is: you can buy assets but you only rent staff
Mergers and acquisitions in the asset management sector reached record levels last year but the boom has been met with unprecedented scepticism by many chief executives, who believe an acquisition-led strategy remains fraught with danger.
The long-running belief is that acquisitions are generally bad for business. With the exception of the largest deals, such as BlackRock/Merrill Lynch and Legg Mason/Citigroup Asset Management, which were about global positioning and scale, mergers have been about plugging product gaps. In almost every case, hiring would have been a better option.
But the most sought-after deals this year are likely to be acquisitions that provide contracts to manage assets. Managers want sources of permanent capital so they may generate more stable earnings. Hedge funds have listed closed-ended funds but fund managers with larger balance sheets could achieve this through acquisitions of contracts.
A handful of savvy chief executives, who have stood back from the acquisition frenzy in the past two years, have been buying contracts to manage assets for years. Goldman Sachs led the market in 1996 when it bought the right to manage the majority of the British Coal Pension Schemes’ assets.
Merrill Lynch did a similar deal in 2005 when it bought Philips’ pension fund in the Netherlands, becoming a local participant overnight with one of the largest pension fund contracts in that market and T Rowe Price bought the right to manage the Caterpillar funds.
Todd Ruppert, president and chief executive of T Rowe Price outside the US, believes the indigestion caused by acquiring people is not worth it. “The best antidote is to avoid the acquisition in the first place. No amount of incremental assets is worth the risk. The problem with the industry is that many have eyes bigger than their stomachs can legitimately tolerate. Fortunately for us, we don’t,” he said.
Mergers in the closed life fund business are likely to dominate this type of acquisition but a few pension funds that run their assets internally could find themselves targets. Buying contracts to manage money is a deal that almost every asset management chief executive sees merit in.
BT, which owns Hermes, has appointed investment bank Hawkpoint Partners to advise it on potential acquisitions for its pension fund but others suggest Hermes itself may be a target. Buying Hermes would be about acquiring the management contract, rather than expertise. Considering BT’s pension liability, it is highly unlikely to want to cede control of the management of its pension fund, but selling exclusive rights to manage the contract for a defined period is a more palatable option.
Acquiring for the sake of securing better distribution capabilities will be another big theme this year. Companies such as Henderson Group, which was divested from AMP in 2003, could benefit from a deal like this.
But the rise of private equity buyers in the sector and the lure of high valuations in public markets suggest mergers are less attractive than they once were. Firms such as Hellman & Friedman and TA Associates have provided an alternative means for asset managers that want to remain independent to realise monetary value.
The bottom line is the same as it has always been: you can buy assets but you only rent people.
• Old Lady harder than Fed
Minutes from the Bank of England’s monetary policy committee led many last week to conclude the close vote signalled interest rates have reached their peak. The suggestion was that because the Governor voted against his chief economist and the deputy governor, and his was the deciding vote, he will be uncomfortable about voting against them again at the next meeting. Others called the bank “confused” because of the closeness of vote, which was 5-4 in favour of an increase.
But this is the way the committee ought to operate, with each member drawing his or her own conclusions from the data. The chief UK economist at Barclays Capital wrote last week: “This is a reminder that there is no ‘Bank-pack’, or bank block voting as has often been suggested in the past.”
The diversity among the members demonstrated by this month’s vote suggests there will be more surprises to come.
Unlike the US Federal Reserve, which some investors argue has been held hostage by the market, the Bank of England showed it has clout.
Pimco’s Bill Gross hit the nail on the head in January when he wrote: “Is the Fed impotent now – a 110-pound weakling getting sand kicked in its face by the global financial community as it creates massive liquidity?” Whereas the Bank of England has moved from a reactive to a pre-emptive stance, the Fed rests heavily on its back foot.
Wednesday, November 29, 2006
Merrill Lynch
Esta página da Merrill Lynch dá acesso ao sistema de índices de Renda Fixa globais (ML Index System).
Esta página da Merrill Lynch dá acesso ao sistema de índices de Renda Fixa globais (ML Index System).
Monday, September 25, 2006
Hedge Funds
Artigo publicado hoje na Gazeta Mercantil.
Hedge funds: setor ainda pouco regulado
Washington, 25 de Setembro de 2006 - Mais de 100 fundos de hedge passarão a fornecer menos informações para os reguladores depois que um tribunal decidiu que a Securities and Exchange Commission (SEC), a comissão de bolsas de valores americana, não pode impor regras que exigem mais transparência do setor. A D.
Washington, 25 de Setembro de 2006 - Mais de 100 fundos de hedge passarão a fornecer menos informações para os reguladores depois que um tribunal decidiu que a Securities and Exchange Commission (SEC), a comissão de bolsas de valores americana, não pode impor regras que exigem mais transparência do setor. A D.B. Zwirn e a Mason Capital Management, que juntas administram perto de US$ 7 bilhões em ativos, estão entre os fundos que retiraram seus registros desde que o tribunal federal de apelações de Washington tomou sua decisão em junho, divulgou a SEC. Algumas cancelaram seus registros na SEC este mês, enquanto a Amaranth Advisors, com sede em Greenwich, Connecticut, perdia perto de US$ 6 bilhões com apostas erradas no mercado de gás natural. A SEC queria que os fundos de hedge informassem seu tamanho, número de funcionários e tipos de clientes, e que se submetessem a inspeções aleatórias. "Tenho dito há um bom tempo que um desastre de trem pode ocorrer pela falta de supervisão regulamentar adequada", disse o ex-comissário da SEC, Harvey Goldschmid, que votou pela norma da agência. "O caso Amaranth só indica a continuidade dessa preocupação", disse Goldschmid. As perdas da Amaranth ampliaram-se em US$ 1,4 bilhão na semana passada porque a companhia teve de vender ativos com desconto para não fechar as portas. Os fundos administrados pelas companhias MotherRock, Saranac Capital Management e Ospraie Management fecharam este ano depois de contraírem perdas em commodities e bônus conversíveis. A Aeneas Capital Management, que administrava perto de US$ 400 milhões em ativos, está sendo investigada pelos reguladores nos Estados Unidos e na Malásia depois que as apostas em ações causaram perdas de 60% em um de seus fundos. Os fundos de hedge são grupos privados de capital que permitem aos gestores participar substancialmente dos ganhos sobre os investimentos feitos em nome dos clientes. Eles habitualmente cobram taxas anuais de administração de 2% sobre o patrimônio e embolsam 20% ou mais dos ganhos dos fundos. As comissões de administração e desempenho da Amaranth eram de 1,5% e 20%. Mais de US$ 42 bilhões foram aplicados nos fundos de hedge no trimestre encerrado em 30 de junho, o mais alto volume em um trimestre desde 2003, segundo dados fornecidos pela Hedge Fund Research, de Chicago. A regra para fundos de hedge da SEC foi inspirada em parte pelo colapso em setembro de 1998 da Long-Term Capital Management. O tamanho de suas posições e a ameaça que sua quebra representou para os mercados financeiros alarmaram os reguladores. (Gazeta Mercantil/Finanças & Mercados - Pág. 2)(Bloomberg News)
Artigo publicado hoje na Gazeta Mercantil.
Hedge funds: setor ainda pouco regulado
Washington, 25 de Setembro de 2006 - Mais de 100 fundos de hedge passarão a fornecer menos informações para os reguladores depois que um tribunal decidiu que a Securities and Exchange Commission (SEC), a comissão de bolsas de valores americana, não pode impor regras que exigem mais transparência do setor. A D.
Washington, 25 de Setembro de 2006 - Mais de 100 fundos de hedge passarão a fornecer menos informações para os reguladores depois que um tribunal decidiu que a Securities and Exchange Commission (SEC), a comissão de bolsas de valores americana, não pode impor regras que exigem mais transparência do setor. A D.B. Zwirn e a Mason Capital Management, que juntas administram perto de US$ 7 bilhões em ativos, estão entre os fundos que retiraram seus registros desde que o tribunal federal de apelações de Washington tomou sua decisão em junho, divulgou a SEC. Algumas cancelaram seus registros na SEC este mês, enquanto a Amaranth Advisors, com sede em Greenwich, Connecticut, perdia perto de US$ 6 bilhões com apostas erradas no mercado de gás natural. A SEC queria que os fundos de hedge informassem seu tamanho, número de funcionários e tipos de clientes, e que se submetessem a inspeções aleatórias. "Tenho dito há um bom tempo que um desastre de trem pode ocorrer pela falta de supervisão regulamentar adequada", disse o ex-comissário da SEC, Harvey Goldschmid, que votou pela norma da agência. "O caso Amaranth só indica a continuidade dessa preocupação", disse Goldschmid. As perdas da Amaranth ampliaram-se em US$ 1,4 bilhão na semana passada porque a companhia teve de vender ativos com desconto para não fechar as portas. Os fundos administrados pelas companhias MotherRock, Saranac Capital Management e Ospraie Management fecharam este ano depois de contraírem perdas em commodities e bônus conversíveis. A Aeneas Capital Management, que administrava perto de US$ 400 milhões em ativos, está sendo investigada pelos reguladores nos Estados Unidos e na Malásia depois que as apostas em ações causaram perdas de 60% em um de seus fundos. Os fundos de hedge são grupos privados de capital que permitem aos gestores participar substancialmente dos ganhos sobre os investimentos feitos em nome dos clientes. Eles habitualmente cobram taxas anuais de administração de 2% sobre o patrimônio e embolsam 20% ou mais dos ganhos dos fundos. As comissões de administração e desempenho da Amaranth eram de 1,5% e 20%. Mais de US$ 42 bilhões foram aplicados nos fundos de hedge no trimestre encerrado em 30 de junho, o mais alto volume em um trimestre desde 2003, segundo dados fornecidos pela Hedge Fund Research, de Chicago. A regra para fundos de hedge da SEC foi inspirada em parte pelo colapso em setembro de 1998 da Long-Term Capital Management. O tamanho de suas posições e a ameaça que sua quebra representou para os mercados financeiros alarmaram os reguladores. (Gazeta Mercantil/Finanças & Mercados - Pág. 2)(Bloomberg News)
Monday, September 11, 2006
Ratings
As agências de ratings Moody's, S&P e Fitch estão desenvolvendo novos critérios para avaliação de hedge funds.
As agências de ratings Moody's, S&P e Fitch estão desenvolvendo novos critérios para avaliação de hedge funds.
Tuesday, August 22, 2006
Thursday, August 17, 2006
Administração X Gestão
Link para matéria muito interessante do Valor Econômico sobre o conflito entre gestão e administração.
Link para matéria muito interessante do Valor Econômico sobre o conflito entre gestão e administração.
Monday, August 14, 2006
Multimercados
Matéria da Gazeta Mercantil de 14 de Agosto.
Multimercado reconquista o investidor e lidera captação
São Paulo, 14 de Agosto de 2006 - Queda de juros e aplicador mais maduro explicam a forte captação dessas carteiras. Os fundos de investimento multimercados - mais flexíveis para explorar as oportunidades dos diversos mercados - retomaram a confiança do investidor. De todo o volume captado pela indústria de fundos ao longo de 2006, essas carteiras lideraram as aplicações com cerca de 40%, ou R$ 18,3 bilhões, destaca levantamento da consultoria Quantum. Com esse fluxo de recursos e um retorno médio de 11%, o patrimônio dos multimercados superou os R$ 152 bilhões, o que corresponde a uma participação de 18,6% no setor (com volume de R$ 817,3 bilhões).
O movimento representa uma reversão do que ocorreu em 2005, quando os multimercados sofreram resgates de quase R$ 3 bilhões e tiveram sua participação na indústria de fundos reduzida de 29% em janeiro para 17,6% no final do ano. A alta dos juros durante boa parte do ano, a crise do mensalão e o fraco desempenho da Bolsa afastaram o investidor dos multimercados, uma que vez que a aplicação tem um nível de risco maior. Mas, a partir de setembro, quando foi dado início ao corte da Selic, esse mercado começou a apresentar recuperação, mas ainda não o suficiente para anular as perdas do ano.
"Queda de juros e boa performance explicam o desempenho positivo dos multimercados", avalia Fernando Ganme, sócio da Capital Serviços de Agente Autônomo, distribuidora de fundos com foco em produtos de risco. De fato, toda vez que a tendência do juro apontava para baixo, os multimercados aumentavam seu peso no setor. Dados da Associação Nacional dos Bancos de Investimento (Anbid) mostram que, entre dezembro de 2002 e dezembro de 2004, a fatia dos multimercados passou de 26,6% para 29,6%, enquanto a taxa Selic caiu de 25,50% para 17,25% ao ano.
O gestor da Mauá Investimentos, Lourenço Tigre, reconhece que a dinâmica da taxa de juros e o ambiente macroeconômico - com o País menos vulnerável a crises e inflação controlada - foram fundamentais para que o investidor começasse a pensar na sua poupança com uma visão de mais longo prazo e buscar ativos que gerassem uma rentabilidade melhor. Mas, na sua opinião, há um outro fator importante que explica o bom desempenho dos multimercados: o amadurecimento da indústria.
"Os investidores estão mais confortáveis com esse tipo de aplicação, uma vez que entendem melhor o nível de risco a que estão sujeitos e, conseqüentemente, suportam melhor a volatilidade desses fundos, em troca de melhores retornos", explica. Além disso, ele ressalta o amadurecimento do ponto de vista da gestão, uma vez que os multimercados começam a formar um histórico, ainda que recente, e com isso ganhar mais credibilidade.
Isso explicaria, inclusive, o fato de os multimercados terem resistido bem à volatilidade do mês de maio, provocada pela indefinição quanto ao juro americano. No geral, esses fundos não sofreram resgates, nem mesmo com o fato de algumas carteiras terem perdido rentabilidade. "Também para o analista da Hedging-Griffo, Luiz Parreiras, esse movimento reflete o amadurecimento do investidor. "Em anos anteriores, qualquer sinal de volatilidade e fraca performance gerava uma ondas de resgates", informa.
Parreiras afirma que os multimercados ganharam muito dinheiro no início do ano, por conta do cenário claro para os ativos (juro em queda, apreciação do real e performance positiva para a Bolsa), da forte liquidez, do fluxo intenso de estrangeiros e da ausência de crises. "Já maio foi um mês difícil, mas boa parte dos gestores conseguiu proteger seus ganhos no ano, ou seja, já estava colocando o dinheiro no bolso", destaca. E os investidores, acrescenta Tigre, perceberam que fez sentido ter mantido suas aplicações. A média de retorno dos multimercados em 2006 está em 11%, acima dos 9,37% do CDI. Fundos como o Hedging-Griffo Verde e o multimercado da Mauá, por exemplo, acumulam ganhos bem superiores, de 18,53% e 20,89%, respectivamente.
O sócio da Quantum, Maxim Wengert, acrescenta que a captação significativa dos multimercados neste ano é reflexo do desenvolvimento da indústria de fundos ao longo dos anos, por conta da evolução da legislação, de divulgação de informação, ferramentas de análise disponíveis aos investidores e estratégias sofisticas adotadas pelos gestores.
Para os especialistas, a tendência continua favorável para esses fundos. Segundo Parreiras, com fundamentos da economia positivos e o juro em queda, os multimercados tendem a ganhar cada vez mais espaço, como uma alternativa de retorno maior.
Para Ganme, da Capital, o multimercado é "sempre um bom produto", uma vez que pode ganhar tanto num cenário positivo ou pessimista. "O que se compra, no caso do fundo multimercado, é a visão do gestor em relação ao cenário e não o cenário." Segundo o especialista, esse é o tipo de aplicação que o investidor tem de colocar o dinheiro e esquecer.kicker: Com R$ 18,2 bilhões e retorno médio de 11% (contra 9,37% do CDI), categoria atinge volume de R$ 152,3 bilhões, ou 18,6% do setor
Matéria da Gazeta Mercantil de 14 de Agosto.
Multimercado reconquista o investidor e lidera captação
São Paulo, 14 de Agosto de 2006 - Queda de juros e aplicador mais maduro explicam a forte captação dessas carteiras. Os fundos de investimento multimercados - mais flexíveis para explorar as oportunidades dos diversos mercados - retomaram a confiança do investidor. De todo o volume captado pela indústria de fundos ao longo de 2006, essas carteiras lideraram as aplicações com cerca de 40%, ou R$ 18,3 bilhões, destaca levantamento da consultoria Quantum. Com esse fluxo de recursos e um retorno médio de 11%, o patrimônio dos multimercados superou os R$ 152 bilhões, o que corresponde a uma participação de 18,6% no setor (com volume de R$ 817,3 bilhões).
O movimento representa uma reversão do que ocorreu em 2005, quando os multimercados sofreram resgates de quase R$ 3 bilhões e tiveram sua participação na indústria de fundos reduzida de 29% em janeiro para 17,6% no final do ano. A alta dos juros durante boa parte do ano, a crise do mensalão e o fraco desempenho da Bolsa afastaram o investidor dos multimercados, uma que vez que a aplicação tem um nível de risco maior. Mas, a partir de setembro, quando foi dado início ao corte da Selic, esse mercado começou a apresentar recuperação, mas ainda não o suficiente para anular as perdas do ano.
"Queda de juros e boa performance explicam o desempenho positivo dos multimercados", avalia Fernando Ganme, sócio da Capital Serviços de Agente Autônomo, distribuidora de fundos com foco em produtos de risco. De fato, toda vez que a tendência do juro apontava para baixo, os multimercados aumentavam seu peso no setor. Dados da Associação Nacional dos Bancos de Investimento (Anbid) mostram que, entre dezembro de 2002 e dezembro de 2004, a fatia dos multimercados passou de 26,6% para 29,6%, enquanto a taxa Selic caiu de 25,50% para 17,25% ao ano.
O gestor da Mauá Investimentos, Lourenço Tigre, reconhece que a dinâmica da taxa de juros e o ambiente macroeconômico - com o País menos vulnerável a crises e inflação controlada - foram fundamentais para que o investidor começasse a pensar na sua poupança com uma visão de mais longo prazo e buscar ativos que gerassem uma rentabilidade melhor. Mas, na sua opinião, há um outro fator importante que explica o bom desempenho dos multimercados: o amadurecimento da indústria.
"Os investidores estão mais confortáveis com esse tipo de aplicação, uma vez que entendem melhor o nível de risco a que estão sujeitos e, conseqüentemente, suportam melhor a volatilidade desses fundos, em troca de melhores retornos", explica. Além disso, ele ressalta o amadurecimento do ponto de vista da gestão, uma vez que os multimercados começam a formar um histórico, ainda que recente, e com isso ganhar mais credibilidade.
Isso explicaria, inclusive, o fato de os multimercados terem resistido bem à volatilidade do mês de maio, provocada pela indefinição quanto ao juro americano. No geral, esses fundos não sofreram resgates, nem mesmo com o fato de algumas carteiras terem perdido rentabilidade. "Também para o analista da Hedging-Griffo, Luiz Parreiras, esse movimento reflete o amadurecimento do investidor. "Em anos anteriores, qualquer sinal de volatilidade e fraca performance gerava uma ondas de resgates", informa.
Parreiras afirma que os multimercados ganharam muito dinheiro no início do ano, por conta do cenário claro para os ativos (juro em queda, apreciação do real e performance positiva para a Bolsa), da forte liquidez, do fluxo intenso de estrangeiros e da ausência de crises. "Já maio foi um mês difícil, mas boa parte dos gestores conseguiu proteger seus ganhos no ano, ou seja, já estava colocando o dinheiro no bolso", destaca. E os investidores, acrescenta Tigre, perceberam que fez sentido ter mantido suas aplicações. A média de retorno dos multimercados em 2006 está em 11%, acima dos 9,37% do CDI. Fundos como o Hedging-Griffo Verde e o multimercado da Mauá, por exemplo, acumulam ganhos bem superiores, de 18,53% e 20,89%, respectivamente.
O sócio da Quantum, Maxim Wengert, acrescenta que a captação significativa dos multimercados neste ano é reflexo do desenvolvimento da indústria de fundos ao longo dos anos, por conta da evolução da legislação, de divulgação de informação, ferramentas de análise disponíveis aos investidores e estratégias sofisticas adotadas pelos gestores.
Para os especialistas, a tendência continua favorável para esses fundos. Segundo Parreiras, com fundamentos da economia positivos e o juro em queda, os multimercados tendem a ganhar cada vez mais espaço, como uma alternativa de retorno maior.
Para Ganme, da Capital, o multimercado é "sempre um bom produto", uma vez que pode ganhar tanto num cenário positivo ou pessimista. "O que se compra, no caso do fundo multimercado, é a visão do gestor em relação ao cenário e não o cenário." Segundo o especialista, esse é o tipo de aplicação que o investidor tem de colocar o dinheiro e esquecer.kicker: Com R$ 18,2 bilhões e retorno médio de 11% (contra 9,37% do CDI), categoria atinge volume de R$ 152,3 bilhões, ou 18,6% do setor
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