14/09/2009 Author: Tony Griffiths

HFMWeek Daily Snapshot - 14 September

NEWSPAPERS & WIRES
Lehman Brothers’ European clients and creditors may have to wait another two years before they get back billions of dollars of assets tied up in the bank when it collapsed a year ago, reports the FT. Tony Lomas, partner at PwC and administrator for the bank’s European operations, said he had hoped to have “broken the back” of the case by this time next year, substantially reconciling claims and returning assets to clients and putting in place a process for paying dividends to unsecured creditors. He said that it could now take two more years after an English judge decided last month that he could not approve a scheme of arrangement that would have helped expedite the winding up.

A draft European Union law to regulate the managers of hedge funds and other alternative investment funds may be strengthened despite fierce opposition from Britain and the hedge fund industry, a senior EU lawmaker said on Friday, Reuters reports. The bloc's governments and the European Parliament have joint say on the measure, which is part of wider EU and global efforts to learn from the crisis by shining a light and directly supervising all parts of the financial system. Britain wants the rules diluted, saying they go too far and would damage the industry and Europe but Poul Nyrup Rasmussen, president of the EU assembly's socialist bloc, the second largest grouping after the centre right, was confident that some changes will make aspects tougher.

Broker stock picks can help investors outperform most mutual funds, research by one of the largest hedge funds has suggested, reports the FT. While most asset managers have long dismissed analysts' recommendations as anything but reliable, traders and academics at GLG, the London hedge fund manager, have found otherwise. Based on a database of the daily recommendations it received from European brokers for the past four years, the hedge fund found that a portfolio following analysts' tips, and holding the positions for three months, would outperform 75% of mutual funds.

Poul Nyrup Rasmussen, the Socialist Party president who led a two-year campaign to introduce the first European Union regulation of the hedge fund industry, said he will next press firms to reduce their fees, reports Bloomberg. Funds should cut the 2% of assets and 20% of profits many of them charge investors, Rasmussen told a meeting of 300 hedge fund and private equity executives at London’s Guildhall last week. Firms could charge half a percent of assets and 15% of profit, he said. During the two-hour meeting, he repeatedly described himself as the industry’s “bogeyman.” “We’re in a new phase, guys, I wouldn’t say ‘friends,’” Rasmussen said. “Two plus 20 is not a state of nature. We need to go and review it,” he added. “You will not die of hunger.”

DE Shaw & Co, the $29bn investment firm run by David Shaw, said the Dubai Financial Services Authority granted its Middle East unit a licence to operate from the centre, reports Blomberg. The firm aims to build on its public and private investment through regional unit DE Shaw & Co MENA Ltd, the New York-based hedge fund manager said in an emailed statement from Dubai today. This will be DE Shaw’s first office in the Middle East and North Africa region and adds to its 13 across North America, Europe and Asia, it added.

LAUNCHES
Three former Macquarie Group quantitative strategists have started a hedge fund with the backing of Ascalon Capital Managers to invest in global equities using computer-trading models, reports Bloomberg. Helix Partners will invest using strategies developed by Brandt Leahy, Justin Webb and Matthew Perone, who worked as an investment team that used trading models at Macquarie Funds Group, Sydney-based Ascalon said in an emailed statement today. Helix is targeting $50m in funds managed by the end of 2010, $200m by end-2011 and over $500m by 2015, Webb said in a telephone interview from New York.