05/10/2007

HFMWeek Snapshot - 5 October

NEWS: announces nominees for its 2007 US Hedge Fund Performance Awards. Click here for details and a list of nominees.

NEWSPAPERS AND WIRES: FTAlphaville reports more trouble and strife for Absolute Capital Management. Following on from the departure of its enigmatic ‘leader’ Florian Homm, in the middle of September, Absolute probably expected friends and more importantly investors to rally round to its cause. Nothing of it, “Three hedge funds run by Absolute Capital Management plummeted more than 20% as prime brokers tightened margin requirements and other investors shorted companies where they were known to have big stakes,” reported the FT’s alternatives site. Thomson Investment Management News piled more woe on ACM with the news of the “departure of two portfolio managers in the wake of some disappointing net asset value figures for September. ACM said Frank Siebrecht and Stefan Heieck - portfolio managers for its Absolute Germany Fund Limited - were both leaving 'immediately' and 'by mutual agreement.”

Merrill Lynch is the latest investment bank to disclose severe losses from the subprime fallout. The FT reports, “Merrill Lynch on Friday became the latest bank to disclose damage caused by the credit squeeze, saying it would take a $5bn write-down and record a loss in its third quarter because of the reduced value of collateralised debt obligations, subprime mortgages and leveraged finance commitments held on its balance sheet.” Its summer clearout had already started according to the Wall Street Journal, “Merrill ousted its global head of fixed income, Osman Semerci, as well as his deputy, Dale Lattanzio, co-head of fixed income for the Americas, and also showed the door to their former boss, Dow Kim, the former co-head of institutional securities.”

The FT reported what was widely predicted on Friday that “Barclays had formally conceded defeat in the six-month battle for ABN Amro, but its chief executive insisted the UK banking group had “plenty of fuel in our tanks”.” Mr Varley insisted that Barclays’ growth prospects did not depend on the takeover going ahead. “When I look back on the last months, I feel regret we did not capture ABN Amro. But I do not feel despondent or a sense of dependency,” he said in the FT.

A new power base has sprung up for hedge fund managers. They’ve tried Manhattan, Connecticut, Canary Wharf and Mayfair, but none of them compare to the new home of hedge fund superstars…..Hungerford. According to The Times “Hungerford is a market town with a population of about 5,000. It is attractive, without being twee, with a handsome tree-lined High Street and an abundance of interesting, independently owned shops,” and just the spot to return to after a hard day at the office; “Wealthy hedge fund managers recently bought two of the bigger properties in the villages,” according to one local agent.