15/06/2010 Author: Shannon Hawthorne

HFMWeek Daily Snapshot - 15 June

NEWSPAPERS AND WIRES
The European Commission has launched a consultation on short-selling, the final step before the body makes legislative proposals in September, reports Financial News. This comes against a backdrop of fragmented approaches to short selling by member states. In a consultation paper sent out today, the Commission, led by Michel Barnier, is seeking to consult market participants, regulators and other stakeholders on possible provisions for legislation. It intends to focus the consultation on five key areas: scope, transparency, uncovered short sales, exemptions and emergency powers of competent authorities. 

Hedge fund managers may be off their double espressos after losing millions of pounds betting on coffee price, says the Telegraph. Yesterday, the price of New York-traded Arabica coffee hit a two-year high as an unidentified company called time on this profitable trade and demanded funds make good on the futures contracts they had been selling. Trading in Arabica – premium coffee beans bought and sold on the Intercontinental Exchange in New York – breached the 150 cents level, its highest in more than two years. The price spike echoed moves on London's Liffe exchange where Robusta - used in instant coffee production - has jumped 20% in the last three days. 

Fashion chain Peacocks could be put up for sale, after its owners commissioned a review of the retailer’s options, says City AM. It is understood the retailer could secure a price-tag of £600m if put on the market, handing its US hedge fund owners a multi-million pound windfall. Peacocks’ management is currently reviewing the company’s operations, including the possibility of a sale, sources close to the firm said last night. A spokesperson for the group said Peacocks was not on the market at the moment; however, it is thought that owners Och-Ziff and Perry Capital are each looking to cash in on their investment. Och-Ziff and Perry own around 25% of Peacocks a piece, while Goldman Sachs owns roughly 10%. 

A New York hedge fund manager who claimed royal ties has been arrested and charged with defrauding investors of at least $6m, reports FINalternatives. Guy Albert de Chimay was arrested Friday in North Carolina after he was charged with grand larceny and forgery by the Manhattan district attorney. On the same day, the Securities and Exchange Commission filed a fraud lawsuit against Chimay and his Chimay Capital Management. According to the SEC, Chimay sold investors on his “Bridge Loan Facility” by telling them he would pool their assets with millions from the princely family of Chimay in Belgium, claiming to be related to the Prince of Chimay. In fact, Chimay spent at least $6m to pay his divorce lawyers and the mortgage on his house in the Hamptons, according to the SEC. He allegedly falsified bank statements to hide his fraud, and also lied to investors  about how much his firm managed, claiming to run $200m. 

LAUNCHES
Gregg Weinstein, a former global head of risk management for Goldman Sachs’ investment management division, is establishing RocWood Capital Management, an event-driven hedge fund, reports Bloomberg. The firm, based in New York, will begin marketing in July with the aim of beginning to invest in the third quarter, according to a person familiar with the discussions. It will reportedly invest across the corporate capital structure, seeking mispriced investments following a particular catalyst. RocWood has seven employees and plans a staff of twelve by the fund’s launch, the person said. It is expected to expand as assets under management grow. 

Well-known stock analyst Roger Ibbotson has launched a hedge fund designed to profit from lesser-known stocks, FINalternatives reports. Ibbotson, founder of Ibbotson Associates who now serves as a finance professor at Yale University, said his research shows that stocks with high volumes of trading consistently underperform the broader markets. “Stocks with high trading volumes tend to be the glamour companies that get overpriced,” he said in an interview. “Stocks with low volumes are not in the news, and they tend to sell at discounts.” Further focusing on low-volume stocks with high earnings produced an annualised return over the past 34 years of 15.1%. 

PEOPLE MOVES 
Dilan Siritunga, former top executive at hedge fund powerhouse Atticus Capital, is reported to be moving quickly to staff up his new fund by attracting talent from other prominent funds, according to Reuters. Joseph Salegna left Barry Rosenstein's $2bn activist hedge fund Jana Partners after five years to become chief financial officer at Siritunga's Serendiv Capital. Matthew Oak, a six-year veteran at $12bn York Capital Management, joined the new firm as head of research. Siritunga, who helped grow Atticus into one of the world's biggest and best-known activist investors, is one of a number of prominent managers launching their own firms now that pension funds are eager to invest fresh cash in hedge funds. Serendiv is expected to start trading later this year. 

Man Group has added Tim Fitch to its UK institutional sales team, FINalternative reports. Fitch joins the world’s largest publicly-listed hedge fund manager from Axa Investment Managers, where he served as director of single-strategy hedge fund sales. Newly-appointed senior relationship manager Fitch is charged with building Man’s relationships with British family offices, funds of hedge funds, pensions and endowments, among other institutional investors. Prior to his time at Axa, Fitch also gained experience at hedge funds KBC Alternative Investment Management and GMP Asset Management. 

Pierre-Henri Flamand, the former head of Goldman Sachs' principal strategies business, has made another senior hire to his fledgling firm – one that will reunite two ex-UBS colleagues at this year’s most-anticipated hedge fund startup, reports Financial News. Matt Turner, who runs operations and the treasury function at London hedge fund firm Oceanwood Capital Management, is expected to join Edoma Capital, Flamand's new venture, in a similar role in the next couple of months. Turner, who has worked in the city for nearly 20 years, previously worked alongside Martina Slowey, Edoma's chief operating officer, during his days at UBS, when he ran prime brokerage operations in London and Slowey was head of European prime brokerage.

Specialist fund of hedge fund investment manager International Asset Management (IAM), has appointed the appointment of Nan Mead as vice president of client development. Prior to joining the firm, Mead gained experience in marketing, sales and investor relations at Ivy and Credit Suisse in similar marketing focused positions. Based in IAM's New York office, he will report to head of client development and marketing, Andrew Cade.  "We are delighted to appoint Nan as a vice president within our client development team, said Morten Spenner, CEO at IAM. “Nan's wealth of experience in marketing, sales and investor relations will further strengthen our client development team in New York and her appointment reinforces our commitment to expand and develop our business in the US.”