23/02/2010 Author: Tony Griffiths

HFMWeek Daily Snapshot - 23 February

NEWSPAPERS & WIRES
Hedge funds will increase their investments in distressed debt and equity this year and expect to make more money doing it, the Reuters HedgeWorld & Dykema 2010 Insolvency Outlook Survey found. The most attractive areas for distressed investing in the next 12 months will be banking, energy and healthcare, according to the survey by the daily news service HedgeWorld and the law firm Dykema. Of the 120 hedge fund managers who answered the questionnaire by email in December and January, 65% said at least some of their portfolios were invested in financially troubled companies, up from 53% in a year-earlier poll. 

Louis Bacon’s $14.6bn Moore Capital Management told investors it isn’t betting on a Greek default because European authorities will probably bail out the country, Bloomberg reports. “We are expecting the European authorities to move beyond uninformed blame-casting and begin bailing out Greece,” Bacon wrote in a 19 February letter to clients in his Moore Macro Managers Fund. Moore has a net long duration position in Greek bonds, meaning it will benefit from a uniform decline in interest rates across the yield curve.
 
Managed Funds Association (MFA) president and CEO Richard H Baker, yesterday announced that MFA has formed an alliance with the New York Hedge Fund Roundtable (NYHFR), a membership community of over 1,000 hedge fund professionals, investors, and professional service firms. “Our affiliation with the NYHFR allows us to exchange information and ideas with professionals located at one of the most important hubs within our industry,” Baker said. The affiliation furthers MFA’s efforts to align members of the alternative investment community and unify the industry’s voice.
 
The US plans to investigate how hedge funds and other speculators create volatility in oil markets, US Energy Secretary Steven Chu said on Monday in Saudi Arabia, AFP reports. He said speculation, blamed for oil prices that climbed to nearly $150 a barrel in July 2008 before plunging to $40 just six months later, damaged economies and complicated planning by both consumers and suppliers.
 
Former Atheros Communications vice president Ali Hariri agreed to waive his right to a grand jury indictment, prosecutors said, an indication he may plead guilty and bolster the government’s evidence in the Galleon Group insider-trading case, Bloomberg says. Should Hariri plead guilty, he will become the 10th person to admit wrongdoing in the case. There is no indication in yesterday’s court filing of whether Hariri will cooperate with prosecutors, as others are doing. Hariri, who was arrested in November, was a manager at Atheros’s broadband networking unit.
 
LAUNCHES
Aisling Analytics, manager of the $1.6bn Merchant Commodity Fund, plans to start a $300m equity hedge fund, Bloomberg reports. The Merchant Equity Fund will be an equity long/short fund investing in commodities and natural resource companies worldwide, with a focus on Asia, said Michael Coleman, the Singapore-based managing director of Aisling Analytics. Long/short funds bet on rising and falling stocks.
 
Odey Asset Management, the London boutique owned by the highly rated hedge fund manager Crispin Odey, has shut its Asia fund after failing to raise enough money, despite substantial outperformance through the financial crisis. Its closure came after a 14% loss in 2008, when the MSCI Asia, excluding Japan, index fell 45%, according to Odey figures. Over the three years to the end of January, it returned 8% to investors, while the index rose 4%.
 
Grey Spark Partners, a London-based business, management and technology consultancy specialising in capital markets, today announced its official launch. The announcement comes in response to increased demand, following the financial crisis of the past two years, from financial institutions for expert and pragmatic consultancy. Grey Spark Partners officially launches with a 20-person strong team, including its four founding partners, Frederic Ponzo, George Kao, Andrew McLauchlan, and Bradley Wood.

PEOPLE MOVES
The Matrix PVE Global Credit Fund, which was launched on 19 October 2009, has grown to six investment professionals with the appointments of Elena Ciampichetti as head of credit research and Judith Newman as research analyst. Prior to joining PVE, Ciampichetti spent nine years at Citi (formerly Citigroup) as a managing director in fixed income. Newman previously worked at Legal & General Investment Management, Julius Baer Asset Management and most recently at Credaris.