11/03/2010 Author: TonyT^b

HFMWeek Daily Snapshot - 11 March

Hedge fund Horseman Capital has lost more than half its assets as clients pulled out $2.5bn after star manager John Horseman decided to stand down, a sign of the key-man risk that haunts the industry, Reuters reports. Clients withdrew the assets at the start of January, a spokesman said, the first opportunity they had to exit after the firm announced 51 year-old Horseman would cease day-to-day fund management but remain as CEO.

Tim Geithner, US Treasury secretary, has delivered a blunt warning to the European Commission that its plans to regulate the hedge fund and private equity industries (the AIFM Directive) could cause a transatlantic rift by discriminating against US groups, the FT reports. A letter sent by Geithner this month to Michael Barnier, Europe’s internal market commissioner, makes it clear that the EU is heading for a clash with Washington if it pushes with what the US – and Britain – fear could be a protectionist law.  

Hedge funds that trade currencies are taking hits from politicians casting them as speculators out to sink the euro and push Greece into insolvency. They are also losing money, says Bloomberg. Macro funds, so named because they try to profit from macroeconomic trends, fell 1% in the first two months of the year, according to data compiled by Chicago-based Hedge Fund Research, Brevan Howard Asset Management, Europe’s largest hedge fund firm, Moore Capital Management and Tudor Investment Corp were among those reporting fund losses.

Germany and France on Wednesday urged the EU to consider banning speculative trading in credit default swaps, launching a probe into trading in CDSs on sovereign bonds of EU member states, and setting up a compulsory register of derivatives trading, reports the FT. The move came as Angela Merkel, German chancellor, called for more power for EU institutions to control speculation and police the deficit spending of member states. François Fillon, French prime minister, said after talks in Berlin that both governments agreed on “tackling extreme speculation”.

More shariah hedge funds are likely to be launched, specialising in healthcare, telecoms and technology stocks as the industry debates how far Islam sanctions such investments, Reuters reports.

A Citigroup broker-dealer unit need not face arbitration in a dispute with Channel Islands hedge fund VCG over a credit default swap, a federal appeals court ruled yesterday, Reuters reports. VCG Special Opportunities Master Fund sued Citigroup Global Markets in 2008 alleging a violation of their agreement. It charged that this violation triggered VCG's obligation to pay $10m to another Citigroup unit, Citibank.

Advent Software, a provider of software and services for the global investment management industry, today announced Advent’s acquisition of Goya, a privately held Norwegian software provider. Under the terms of the agreement, Advent acquired all of the outstanding shares of Goya. Through this acquisition, Advent will be able to offer Goya’s product, Tradex, a software solution for fund managers and fund distributors in Europe, Middle East and Africa (EMEA).

Steel Partners Holdings has settled a lawsuit brought by a Carl Icahn affiliate that had sought to block a complicated restructuring plan aimed at dealing with heavy redemption requests from investors, reports the WSJ. The plan converted the former Steel Partners II into a public company. Investors holding more than half of the fund’s assets wanted to redeem their money and were given both cash and shares of companies that the fund invested in. 

The former chief investment officer for New York State's comptroller yesterday pleaded guilty to helping favored firms gain access to the state's $129bn pension fund, Reuters reports. David Loglisci, who had reported directly to onetime Democratic Comptroller Alan Hevesi, admitted to violating the state's Martin Act and will cooperate in the "pay-to-play" investigation into the New York State Common Retirement Fund.

Malcolm Calvert, a former partner at UK stockbroker Cazenove known by his peers as 'Streaky', was found guilty of five counts of insider trading in a case at London's Southwark Crown Court on yesterday, the WSJ reports. The veteran of the City of London financial district made a £103,883 ($155,769) profit from the trades, which took place between 2003 and 2005, according to the UK Financial Services Authority. Cazenove is now part of US bank JP Morgan Chase & Co.