07/07/2010 Author: Shannon Hawthorne

HFMWeek Daily Snapshot - 7 July

NEWSPAPERS AND WIRES 
Copia Capital, a utility and energy hedge fund managing $520m, is breaking away from Morgan Stanley's FrontPoint Partners unit to operate independently, according to people familiar with the matter, reports the Wall Street Journal. Since Copia was launched in 2002, hedge-fund firm FrontPoint operated Copia's back-office, trading and marketing efforts, while sharing revenues with Copia. However, FrontPoint will now invest money with Copia but no longer provide services for the fund, the people said. Though the move has been in the works for a number of months, according to people close to the matter, it comes amid increased scrutiny of hedge-fund activities within big banks. Legislation wending its way through Congress could restrict hedge-fund and other trading done by banks. 

Hedge funds seemed to wilt a little in the June heat according to one industry index, says FINalternatives. The Credit Suisse Liquid Alternative Beta Index shed 0.4% last month. The decline, following a 2.64% loss in May, leaves the index down 0.12% on the year.Despite dipping into the red for the first half, Jordan Drachman, head of research for alternative beta strategies, said there was room for optimism.“Despite overall negative performance, three out of four LAB sector indices posted gains as managers utilized a number of diverse strategies which generated positive returns across currency and credit markets,” Drachman explained.

A senior executive at Hermitage Capital Management has received death threats for pursuing allegedly corrupt Russian police officers in events that echo the killing last year of the hedge fund's former investigative lawyer, Sergei Magnitsky, reports the Telegraph. The director, who asked to remain anonymous, has been leading Hermitage's inquiry into an alleged $230m (£150m) fraud against the Russian taxpayer that implicates police. The threats, left as a phone voicemail, follow an explosive YouTube documentary about the millionaire lifestyle of one official linked to Magnitsky's death who is alleged to have committed the fraud. The video has been viewed almost 200,000 times in a fortnight. Magnitsky died in prison while awaiting trial on charges of tax evasion brought by police officers whom he had testified were involved in the fraud. 

Former IBM Corp executive Robert Moffat, who admitted to charges of insider trading in the Galleon hedge fund probe, told Fortune magazine that his affair with co-defendant Danielle Chiesi was more about business than sex, says Reuters. Moffat, once a candidate to succeed IBM chief executive officer Samuel Palmisano, is scheduled to be sentenced on 13 September in Manhattan federal court for his role in what US prosecutors describe as the biggest probe of insider trading at hedge funds in the US."Everyone wants to make this about sex," Fortune quoted Moffat as saying. "Danielle had an extensive network of business people. And she added clarity about what was going on in the business world...I know in my heart what this relationship was about: clarity in the business environment."

PEOPLE MOVES
Swiss bank Union Bancaire Privée (UBP), has appointed Larry Morgenthal as CEO of its US arm, UBP Asset Management, says Citywire. Morgenthal who boasts 18 years' experience in alternative investment and business development, will also take over as CIO of alternatives. In this position he will focus in strengthening the company’s fund of hedge fund platform. The firm was hard hit by the Madoff scandal and its total assets shrunk by around a quarter in 2008 after it admitted that half of its 22 funds of funds were invested in funds related to the Ponzi scheme operator. It has since overhauled its due dilligence process, including putting a focus on the principle of 'triangulation', meaning insisting on full independence between the custodian, administrator and the managers of hedge funds.

Mizuho Securities, Japan’s third-largest brokerage by market value, hired Alastair Sclater to head its prime brokerage business in Singapore, two people with knowledge of the matter said, reports Bloomberg. Sclater, the former head of UBS AG’s Singapore prime brokerage business, starts at Mizuho in August, the people said, asking not to be identified because it hasn’t been announced. He resigned from the Swiss bank in May. Yasunori Fukuda, a spokesman at Mizuho Securities in Tokyo, declined to comment. Tokyo-based Mizuho joins Barclays and Citigroup in expanding their prime services teams in Asia as the region leads the global economic recovery. Firms are targeting the growing number of small hedge-fund managers in Singapore that could generate trading-fee income, said Robb Baiad, a senior partner at executive search firm Meridian Partners.

Quantitative investment management firm AHL, a division of Man Group, has appointed Kevin Chuah as a portfolio managers, reporting to Harry Skaliotis, who heads up AHL’s client portfolio management team. In this role, Chuah will be responsible for working with clients to enhance their knowledge of AHL’s trading strategies, in addition to working closely with the manager’s 75-strong research team. Prior to the move, Chuah worked at Aspect Capital where he was a product manager. He also previously gained experience as a portfolio manager within the fund of hedge funds team at Colonial First State Global Asset Management, where he was based in Sydney before moving to London.

Global fund administrator Omnium has hired Peter Sanchez as global head of business development and client service. Prior to the move, Sanchez was CEO of OpHedge Investment Services. He also previously held the positions of global head of operations and prime brokerage for Royal Bank of Canada Capital Markets and global head of operations at Greenwich NatWest. Peter has an outstanding reputation in our industry; he understands client challenges and opportunities and will bring the power of Omnium to bear for our partners,” said John Buckley, president of the firm.