04/03/2010 Author: Tony Griffiths

HFMWeek Daily Snapshot - 4 March

NEWSPAPERS & WIRES
Managers are launching more hedge funds this year than last year at a time when pension funds and other wealthy investors are poised to put fresh money into these portfolios, a top Wall Street executive said yesterday, Reuters  reports. "We are seeing very, very strong hedge fund formation right now," said Alex Ehrlich, who heads the prime brokerage business for Morgan Stanley. "The number of launches we are seeing are five times stronger than what we saw last year."

Citadel Investment Group, the hedge fund company founded by Kenneth Griffin, cut the size of its Asia team in charge of special situations investments by 40%, reports Bloomberg, citing three people with knowledge of the matter. The hedge fund firm laid off four members of its Asian merchant banking division led by David Noh earlier this year, said the people who declined to be identified because the information is private. Katie Spring, a spokeswoman in the Chicago head office of Citadel, and Hong Kong-based Noh declined to comment.

James Chanos concedes it could take a quite a while for him and his investors to cash-in on related bearish bets that his New York-based Kynikos Associates is making on companies that supply the raw materials fuelling China's high-rise building boom. "It could take three or four years to play out," said Chanos at a Reuters summit in New York. Chanos would not comment on specific company stocks that Kynikos is shorting, but he did drop some hints. He said if China's property bubble eventually bursts it could be bad news for some companies in Brazil, Australia and Canada. Chanos said companies based in those countries are some of the biggest suppliers of raw materials to China.

Hedge fund firm GLG Partners is bullish on the euro and believes bets on Greek bonds are unattractive, in views contrary to the high-profile trades some hedge funds are making on Greek's debt crisis, Reuters reports. While a number of hedge funds are betting that the huge budget deficits of Greece and other Mediterranean countries will put pressure on the single currency, Karim Abdel-Motaal and Bart Turtelboom, who run around $2.7bn at GLG, expect the euro to rise.

Little-known brokerage firm Monness, Crespi, Hardt & Co has long toiled in the shadows of Wall Street, but the boutique suddenly has been thrust into the limelight because of an 'ideas dinner' it sponsored last month for a group of about 18 hedge fund traders, says Reuters. Monness Crespi sponsors unscripted dinners from time to time, said people familiar with the get-togethers. An 8 February dinner is sparking controversy because one of the nearly two dozen topics discussed during the program was how hedge funds could profit from a decline in the euro, one of the world's most heavily traded currencies.

A former Atheros Communications executive pleaded guilty yesterday to conspiracy and fraud charges in the Galleon hedge fund insider trading case, Reuters reports. Ali Hariri, a former vice president of the Santa Clara, California, chip-maker, is the 10th person to plead guilty out of 21 traders, lawyers and executives accused last October and November in a probe that ensnared prominent Galleon founder Raj Rajaratnam.

CLOSURE
Nevsky Capital, the $7bn (£4.6bn) London hedge fund manager and one of the city's most respected emerging market specialists, is poised to wind down its flagship fund. Sources close to the fund have told the Financial Times that the $3.3bn Nevsky fund, which made a name for itself through hugely successful investments in Russia, would "highly likely" be liquidated after the departure of its two star managers, Martin Taylor and Nick Barnes, was announced yesterday. The fund's board is meeting to discuss options, but it is unlikely that a new asset management team will be appointed, according to significant investors in the fund. A spokesperson for the fund declined to comment.

PEOPLE MOVES
BlueMountain Capital Management announced today the expansion of its investor relations and marketing team with the hire of Jennifer Strickland as managing director. In addition, Josh Drazen has been promoted to managing director of investor relations and strategy. BlueMountain is a global asset manager specialising in strategies in the global credit markets and equity derivatives market. Strickland will help shape BlueMountain’s marketing strategy to promote its unique integrated investment style and tailored product offerings.  

Hedge fund consulting and third-party marketing firm Agecroft Partners has hired Tim Savage as its sixth managing director. Savage brings over 20 years of relevant professional experience to his new role at Agecroft. His responsibilities at Agecroft Partners will include assisting with due diligence on potential hedge funds the firm may represent and introducing the firm’s hedge fund clients to large institutional investors located within the US, Asia and the Middle East. Prior to Agecroft, Savage founded Oculus Capital, a third-party marketing firm.