24/01/2012

HFMWeek Daily Snapshot - 24 January

NEWSPAPERS AND WIRES
Hedge fund Diamondback Capital Management agreed to pay the government more than $9m to resolve insider-trading allegations, while entering into a non-prosecution agreement with the Justice Department in connection with a criminal investigation, federal authorities said on Monday, reports the Wall Street Journal. Last week, the Securities and Exchange Commission accused Diamondback, two of its former employees, another hedge fund and five other individuals of civil insider-trading violations.

The head of Man Group, the world's biggest listed hedge fund manager, is backing the reintroduction of the so-called 'uptick rule' to reduce the risk of a market crash prompted by lightning-fast computer traders, according to Reuters. Peter Clarke told a conference on Monday that the US rule, which only allowed short-selling -- bets on a share price falling -- if the last sale price of a stock was higher than the previous price, could help stop some rapid-fire computer hedge funds fuelling market falls.

LightSquared Inc’s effort to win support in Washington faces new scrutiny after a US senator questioned hedge fund billionaire Philip Falcone about contacts with the lawmaker’s staff, reports Bloomberg. Grassley said yesterday that Falcone, whose Harbinger Capital Partners hedge fund is LightSquared’s main backer, and a telecommunications executive implied that they wanted the lawmaker to “pull punches” in an investigation.

The hedge fund manager backed by industry star Chris Hohn expects a recovery in financial stocks after being hit last year by Eurozone leaders’ failure to tackle the debt crisis, writes City AM. Alex Lasagna, head of business development and investor relations at Algebris, said: “We think after five years of significant under-performance by financials there could be a return… This could be the year for financials, credit and possibly equity at the end of the year.”

Distressed debt investor Avenue Capital has raised $2bn for its second Europe-focused fund, joining a long list of rivals aiming to take advantage of the difficulties faced by the region’s governments and banks, writes the FT. Apollo Management, Centerbridge Partners and Oaktree have set up funds for investment in Europe, while Anchorage, a New York credit hedge fund with $10bn under management, is raising up to $1bn for a fund to be targeted largely at Europe.

PEOPLE MOVES
Avoca Capital Holdings, the Dublin-based investment firm, hired Rachel Black from Concerto Asset Management as head of capital raising for its credit hedge fund business, reports Bloomberg. Black is based in London and reports to Simon Thorp, chief investment officer of fixed income, according to a statement from Avoca, which oversees  €6bn euros ($7.8 billion). Black was head of Deutsche Bank AG’s credit hedge fund sales before joining Concerto, according to the statement.