06/08/2008

HFMWeek Snapshot – 6 August

NEWSPAPERS AND WIRES

The London market bounced for the first session in four as oil prices fell and take-over speculation was rekindled. But Man Group, the world's biggest publicly traded hedge fund, sank 7.9% to 565p on news its Athena Guaranteed Futures fund fell 7.5% last month, the sharpest decline since April 2004, the Financial Times reports.

British satellite communications company Inmarsat said it does not expect to receive an offer from US hedge fund Harbinger for 12 to 18 months, when a deal could get the go-ahead from regulators, Reuters reports.

The $13bn State of New Mexico Public Employees Retirement Association is redeeming its investment in  Pendragon, a London-based event-driven hedge fund focused on small- to mid-cap European companies. The fund committed $35m to Pendragon in November, FINalternatives reports.

Hedge fund Bay Harbour Management is poised to take over bankrupt clothing retailer Steve & Barry's. The company announced on Monday it has filed a 'stalking horse' purchase agreement with the hedge fund in which Bay Harbour will acquire the bulk of the chain's assets for the bargain price of $163m, MarketsMedia Online reports.

Lehman may be on the verge of another round of fundraising, as the bank tries to avoid Bear Stearns’ fate. Lehman has so far raised $12bn, including $6bn of newly issued preferred and common shares in June, Forbes reports.

Smith, Gambrell & Russell and one of its former attorneys are caught up in the expensive brouhaha surrounding International Management Associates, a now-defunct investment firm which defrauded pro football players, a former Scientific-Atlanta CEO and other well-heeled investors of some $150m.

Daimler is working on a strategy to fend off possible takeover attempts, for instance finding an anchor investor who can block a full takeover, Financial Times Deutschland reported, without saying where it got the information.

Self-confessed hedge fund swindler Samuel Israel will appear in court on Wednesday to answer charges that he fled for almost a month instead of reporting to prison, his lawyer and the US Attorney's office said, Reuters reports.

PEOPLE MOVES

D.E. Shaw is splitting its executive roles in hiring a new chief financial officer as the hedge fund firm strives to keep up with its own growth. Christopher Zaback, formerly co-chief at hedge fund firm from Sandelman Partners.

As former Bear Stearns CEO Alan Schwartz prepares to head out the door at JPMorgan, it looks as if he won't be leaving alone. The exec is expected to depart with a former Bear exec, his right-hand man – Richard Metrick, who formerly was a Bear senior managing director, the New York Post reports.

Citigroup added eight prime-brokerage jobs in Asia to bolster its business of servicing hedge funds, the Wall Street Journal reported, citing Hannah Goodwin, head of the bank's prime-finance division in Asia. The jobs include new hires and staff transferred from within the company, the Journal said. The additions bring the unit's staff to 45, according to the newspaper.

Citadel, the hedge fund manager founded by Kenneth Griffin that oversees more than $20bn, hired nine more people to expand its principal investments business in Asia and Europe. The recruits include five portfolio managers: Tim Johnston in London, Julia Tsai and Kevin Kwong in Hong Kong, and Yasu Kuga and Ken Moriyama in Tokyo, Bloomberg reports.

LAUNCH

Occam is launching of a pair of UCITS III funds in September. The Occam Europe Focus and Occam Asia Focus Funds will be listed on the Irish Stock Exchange and will be introduced under the new Occam Umbrella Fund. Europe Focus will be managed by Phil Cliff and aim to outperform the MSCI Pan Euro Index running a high-conviction and concentrated fund with 20 to 35 positions.

Fund of hedge funds manager Ashton Advisers is in negotiations with BT Financial Group and Macquarie to launch its two flagship funds into the retail market. The fund hopes to launch its flagship Ashton Select Fund and Ashton Performance Fund by 1 September, Financial Standard reports.

Morgan Creek, a $16bn fund of hedge funds, has launched a $200m opportunistic fund focused on dislocation in the credit market, and targeting the municipal bond market for the first time. The Morgan Creek Dislocation Fund is designed in part to capitalise on assets discounted by institutions to improve liquidity, and is different from distressed vehicles set up by other fund managers, eFinancial News reports.

Hong Kong-based Geomatrix has reportedly launched a large-cap, long/short fund that hedges its market risk via listed index futures. The Akamai Pan Asia Fund will focus on the major markets of Japan, Hong Kong, China, Korea, India and Australia. Geomatrix HK is looking for early-stage investors or hedge fund seeders who want an equity long/short manager in Asia that does not have a long bias, Asian Investor reports.

VIRTUAL HEDGE CUTTINGS

You can’t put a price on patriotism. But if you did, you would want to aim at around $95,000. That is the modest amount Morgan Stanley is charging the US Treasury to advise the overwhelmed agency on what to do about misbehaving governmental stepchild Freddie Mac. The pittance will only cover Morgan Stanley’s expenses. $95,000 for five months of work, after all, is less money than a single banker right out of business school makes, the Wall Street Journal reports.