03/09/2010 Author: Shannon Hawthorne

HFMWeek Daily Snapshot - 3 September

NEWSPAPERS AND WIRES
David Einhorn, the US hedge fund manager who publicly questioned the health of Lehman Brothers before its collapse, has offloaded the majority of his stake in F&C, reports Investment Week. Einhorn's Greenlight Capital, which manages $6.5bn of assets, had a 3.4% stake in the UK asset manager, but has cut this back to just 0.4% over the past week. News of Einhorn's disposal comes as activist investor Sherborne Investors increased its stake in the group 14.6% from 11.3%. Einhorn, who set up his hedge fund with under $1m of capital in 1996, was heavily criticised in the media for his anti-Lehman stance in early 2008, after making a number of speeches questioning the validity of Lehman's reporting. 

Basis Capital, an Australian hedge fund suing Goldman Sachs for $1bn for losses related to credit default swaps, made the deal in Australia and can’t sue in the US, Goldman Sachs has said, reports Bloomberg. Basis never contends it “did anything within the United States in relation to the transaction,” Goldman Sachs said in a 1 September filing in Manhattan federal court, urging the judge to throw out the lawsuit. “The purchase and sale occurred only when both parties agreed to the terms of the transaction” and Basis executed those documents in Australia, Goldman Sachs said. 

The OGI Global Macro Fund, run by former Lehman Brothers Holdings Inc. proprietary trader Allan Bedwick, is set to double assets to about $100m this month after outperforming hedge-fund peers globally, according to Bloomberg. With money from overseas institutional investors, the fund’s assets swelled to $45m from $15m when it started last November, according to Naoya Takahashi, head of fund management at Tokyo-based OGI Capital Partners. It is set to double the assets with new capital by the end of this month, he said. 

Och-Ziff Capital Management Group, the New York-based hedge-fund firm run by Daniel Och, said assets under management rose by $200m last month as investors deposited money in its funds, Bloomberg reports. Holdings increased to $26.1bn as of 1 September from $25.9bn the prior month, the firm said in a filing today with the US Securities and Exchange Commission. The OZ Master Fund, Och-Ziff’s main fund, was little changed, maintaining a gain of 3% this year. The firm’s funds held their value as the Standard & Poor’s 500 Index fell 4.7% for the biggest August slump in nine years. 

Hedge funds were burned by plummeting equities markets in August, according to one industry benchmark, reports FINalternatives. Credit Suisse’s Liquid Alternative Beta Index dropped 1.14% last month, leaving it up 1.81% on the year. But that wasn’t nearly as bad as the losses posted by the broader markets, with the Standard & Poor’s 500 Index dropping 4.7%. “While the Credit Suisse Liquid Alternative Beta Index was down 1.14% in August, it outperformed the MSCI World, which fell 4.03%,” Jordan Drachman, head of alternative beta strategies research, said. “Despite the month's negative returns, LAB remains largely positive year-to-date with three of the four LAB sector indices posting gains.” 

LAUNCHES
Fund-of-hedge-funds management and advisory group Signet is launching its first Ucits-compliant fund of funds for its institutional and private-bank clients, says Citywire. The London and Switzerland-based group which runs some $1.4bn of assets, said the Signet Multi-Strategy Fund would offer  weekly liquidity amd would be able to allocate to around 15 hedge funds globally, in line with the limits set under Ucits III guidelines. The Dublin-domiciled fund is intended for investors in the UK, continental Europe and Asia. As with Signet’s other funds of funds, the new fund will aim to produce consistent, low-volatility returns largely uncorrelated with traditional markets. 

PEOPLE MOVES
Hedge fund manager RAB Capital surprised investors yesterday with the shock of resignation of its chief executive as the company fights to halt a decline in its assets, reports the Telegraph. Stephen Couttie stepped down as chief executive with immediate effect just two years after taking up the post, to be replaced by his chief operating officer Charles Kirwan-Taylor. Mr Couttie's failure to prevent the continued outflow of funds from RAB Capital since taking over as chief executive in September 2008, is believed to have been a factor behind his resignation.