01/03/2010 Author: Tony Griffiths

HFMWeek Daily Snapshot - 1 March

NEWSPAPERS & WIRES
Hedge funds have made large profits from Greek debt and providing insurance to overexposed European banks, it emerged yesterday. France signaled that private banks were likely to help in any rescue plan for Athens. The hedge funds have been successful as traders anticipated that over-exposed European banks would drive a wave of selling against Greece, industry insiders told the FT. “There are a group of funds, perhaps three or four, that have played this as a huge sovereign basis trade, and made a lot,” said a strategist at one of London’s biggest hedge funds. Paulson & Co, the $32bn fund, was identified by several industry participants as one of those involved.

George Soros is helping drive up gold prices by doubling his bet in a market even he considers a 'bubble' as Goldman Sachs Group, Barclays Capital and HSBC Holdings predict more gains before it bursts, Bloomberg reports. Soros Fund Management, which manages about $25bn, increased its investment in SPDR Gold Trust, the world’s largest exchange-traded fund for the metal, by 152% in the fourth quarter, a 16 February SEC filing shows. While prices have fallen 8.9% since reaching a record on 3 December, 15 of 22 analysts in a Bloomberg survey say gold will reach a new high, with the median forecast predicting a 16% advance to as much as $1,300 an ounce this year.

London’s RWC Partners says it will launch Ucits variants of each new hedge fund it establishes as long as the strategy meets key criteria, Investment News reports. Daniel Mannix, RWC’s head of business development, says: “As long as the hedge fund can be run with the liquidity of Ucits, and can be clearly articulated to a retail audience, then that is what we would do.” It is a landmark move for a hedge fund and affords access to managers’ long/short skills to retail investors, placing them on a par with institutions. It is supported by RWC’s experience in launching its Biltmore US hedge fund and US Absolute Alpha funds. Each took in about $320m since inception.

Sovereign wealth funds (SWFs) gradually regained their appetite for foreign investments in 2009 having cut-back on cross-border spending for much of 2008 according to International Financial Services London (IFSL), the independent organisation promoting UK financial services worldwide. IFSL’s report Sovereign Wealth Funds 2010 shows that the $10bn invested by SWFs in the first half of 2009 was the slowest start to a year since 2005. Activity picked up in the second half, and much of the $50bn invested during this period was in foreign markets, primarily Europe and North America.

Europe’s hedge fund industry finally pulled out of its tailspin in the second half of 2009, with assets rising for the first time since the onset of the financial crisis, the FT says. Continent-wide assets rose 9.1% to $382bn in the six months to December, according to HedgeFund Intelligence, although this is still below both the $398bn held at the end of 2008 and the all-time peak of $575bn, in December 2007. Factoring in assets held in the new generation of onshore, Ucits-compliant hedge fund-lite strategies, or Newcits, the European total rises to $405bn. Several offshore hedge funds included in previous surveys have since converted to Ucits status, HFI said.

A Panamanian hedge fund will have to turn over documents – sought by the US SEC to British regulators, a court has ruled, FINalternatives reports. The London appeals court overturned an August ruling that Amro International did not have to hand over the documents. The SEC had asked the UK Financial Services Authority to seek documents, dating back more than a decade, as part of a probe into illegal short-selling by Rhino Advisors, which manages the Amro fund.

Hedge fund fraudster Alberto Vilar used to make $455 every three hours or so. But the recently-jailed scammer says he can’t now muster that sum to appeal his conviction, FINalternatives reports. Vilar, who was sentenced last month to nine years in prison for ripping investors in his Amerindo Investment Advisors off to the tune of $40m, told the US Second Circuit Court of Appeals that he can’t afford the $455 filing fee. He’s asking that it be waved so he can fight his fraud conviction, which came last year.

PEOPLE MOVES
Financial services and hedge fund firm Halter Financial Group has added a senior partner to its Shanghai, China, office FINalternatives reports. William Haus joins as part of HFG’s corporate finance group. Haus most recently served as CEO of a special-purpose acquisition corporation in China, but earlier in his career lead due diligence and deal execution for a China-focused hedge fund.“We have seen tremendous growth in our China business as an ever-increasing number of investors in the US are seeking ways to invest in China,” Tim Halter, chairman of Dallas-based HFG, said. “Mr Haus has significant experience in deal execution, financial analysis and management that we plan to leverage as our operations in China continue to grow.”