glg thumped in first quarter tuckerbrook`s yoder launches fund amid

Transcription

AIN051208
8/5/08
20:11
Page 1
MAY 12, 2008
VOL. IX, NO. 19
TUCKERBROOK’S YODER LAUNCHES
FUND AMID DISCORD
Integre Unveils Offshore
Fund
Integre Advisors has rolled out an
offshore version of its long-biased equity
hedge fund, with no performance fee.
See story, page 2
Paulson Touts Event Arb
John Paulson is personally promoting
his $14.4 billion Paulson Advantage
fund to investors as his firm seeks to
grow assets under management beyond
the current $33.1 billion.
See story, page 6
At Press Time
SocGen Loses Sales Director
Third Avenue Gets Goldman Pro
2
2
The Americas
Babson Hires MD For L.A. Office
Bertram Seeks Power Buyouts
Martello Shuts Down Shop
Highland Touts Mortgage Funds
4
8
9
10
Jay Yoder is preparing to launch a new private equity fund
for Tuckerbrook Alternative Investments not long after he
expressed an interest in leaving the firm over difficulties with
Co-Founder and Managing Principal John J. Hassett.
According to court filings, he went so far as to engage in talks
with Calder Capital to launch his real assets fund.
Tuckerbrook went to court May 1 in a battle with Sumanta Banerjee, ex-portfolio manager,
(continued on page 19)
Back In The Saddle
AGARWAL TO LAUNCH UNIQUE ASIAN
STAT ARB FUND
Monty Agarwal, the ex-head of Asia Pacific interest rate trading at BNP Paribas who left to
form the now-defunct Predator Capital, is taking another stab at launching his own hedge
fund firm with what he believes is the first statistical arbitrage fund to focus on Asia ex-Japan.
He has founded Palm Beach-based MA Capital Management and will launch the MACM
Asia Pacific RV/Macro Fund on June 1. The fund will invest in interest rate and foreign
exchange plays in the region. “I cannot find any other hedge fund that does that,” Agarwal
Registration Relief
CALIFORNIA CANS HEDGE FUND PLAN
Europe
Tiburon Halves Taiwan Exposure
Euronova Finds Seed Partner
FIM To Up Distressed Exposure
10
11
13
Departments
Data Zone
Mandate Scoreboard
Search Directory
13
14
17
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The California Department of Corporations won’t be going ahead with a controversial
proposal that, had it been adopted, would have forced some hedge fund advisers to
register with the department unless they elected to sign up with the Securities and
Exchange Commission, according to AIN sister publication Compliance Reporter.
The failed proposal aimed to deal with what Preston DuFauchard, commissioner of the
department, called “a gap in regulation between the SEC and the state of California” by
$882 Million Hurdle
GLG THUMPED IN FIRST QUARTER
London giant GLG Partners, already buffeted by the abrupt departure of star portfolio
manager Greg Coffey, lost 7.6% across its hedge funds in the first quarter, with 15 of 21
funds in the red. Many of the $24.6 billion firm’s funds are now well below their highwater marks, including its largest hedge fund, the $5 billion GLG Emerging Markets Fund,
which is down 19% this year to April 30 and needs to recover about $882 million before
it starts to generate performance fees, said Noam Gottesman, chairman and ceo, during a
Check www.iialternatives.com during the week for breaking news and updates.
AIN051208
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Alternative Investment News
www.iialternatives.com
At Press Time
Third Avenue Hires Goldman
Associate
Steven Chua, formerly of Goldman Sachs, has joined the $25
billion Third Avenue Management as a research analyst May 1. He will focus on
undervalued securities, distressed and special situations. Calls to Chua were
referred to Bridget Smith, spokeswoman for the firm, who did not have an
immediate comment by press time.
At Goldman, Chua was an associate in the leveraged finance group within the
investment banking division, focusing on leveraged loans and high-yield bonds.
Previously he worked at Boston Consulting Group on corporate restructuring.
Spokesmen from both firms did not return calls.
Well-known investor Martin Whitman runs Third Avenue, which manages
hedge funds, mutual funds and managed accounts.
Integre Rolls Out Offshore Fund
Integre Advisors launched an offshore version of its long-biased U.S.
equities strategy, D.G. Value Partners Fund, on May 1. The Integre Offshore
Fund was due to open with $100 million. Will Kelly, junior analyst, could
not confirm launch assets. Michael Marrone, chief operating officer and
chief compliance officer, previously told AIN the fund was launched based
on interest from foreign investors. It is domiciled in Luxembourg and
charges a 2% management fee, with no performance fee. Marrone said
investors had expressed a preference for long-biased strategies to charge
management fees only.
SocGen Sales Director Quits
Nader Salman, director of institutional sales in Société Générale Asset
Management’s alternatives division in London, has resigned and left the firm
at the beginning of May. He had focused on sales to Middle Eastern investors
and has not yet been replaced. An official at the firm confirmed his departure
but declined to comment further. Salman could not be reached on his mobile
phone.
Salman’s resignation follows that of Alastair Smith, head of hedge fund
sales for Europe and the Middle East, who left SocGen late last year (AIN,
Oct. 15). Smith joined hedge fund firm Polar Capital in February, to head
up U.S. and Swiss sales. Smith was unable to provide details of Salman’s
next move.
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May 12, 2008
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AIN051208
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May 12, 2008
The Americas
Sogoloff Launches Quant Strat
Horton Point has launched its first offering, a quantitative
strategy, May 1. The Gallery Master Fund comes in both
domestic and international versions. The fund was due April 1
but Dimitri Sogoloff’s firm had to delay the launch due to
market conditions and some last-minute investor issues
(iialternatives.com, April 11). Sogoloff declined to specify launch
assets but said that the fund was in the $100-200 million range.
He expects that it could grow to billions. The investment
minimum is $5 million with a 2% management fee and a 20%
performance fee. Credit Suisse and Deutsche Bank are the prime
brokers. Sogoloff co-founded Alexandra Investment
Management in 1996 and left 10 years later before establishing
Horton Point.
Babson Adds MD To New
West Coast Office
Private equity and mezzanine firm Babson
Capital Management has hired Benjamin
Silver as a managing director to co-head the
firm’s Los Angeles office, its first on the
West Coast. Silver will focus on the smallto mid-cap market space spanning Salt Lake
City to California, and from Vancouver
Benjamin Silver
down to San Diego, Michael Hermsen,
managing director, said.
Silver will work alongside Michael Ross,
managing director, also in L.A. Previously,
Silver spent two years at GE Commercial
Finance as senior v.p. of the corporate lending
group in Beverly Hills. Silver started the end
of last month.
Michael Hermsen
Babson made plans to expand to
California last July (iialternatives.com, July 27) and opened the
office April 19 due to the mid-market growth in the West Coast,
particularly Los Angeles and San Francisco. “We wanted to make
sure we had a good, strong presence in the region. Now there’s
more commercial activity,” Hermsen said. A few years ago, largecap markets were “going gangbusters but now it’s almost
completely dormant.” A lot of the main banks are retrenching
now to address their problems and aren’t making credit available
to large cap companies, he said, adding that Babson still sees
plenty of opportunities in the small- to mid-cap space. Babson
will staff the L.A. office with up to two analysts by year’s end.
Based in Springfield, Mass., the firm also has a satellite office
in Boston. It manages nearly $108 billion.
4
J.H. Whitney Seeks Asian
Hedge Funds
J.H. Whitney Investment Management in
New York is seeking to add several Asiafocused hedge funds to its two funds of
funds. These invest in a combined total of
35-40 underlying managers invested in
emerging and developed regions in Asia,
namely India, China, South Korea, Taiwan,
David Puth
Thailand and Japan, said David Puth, senior
advisor. He declined to quantify the firm’s assets or provide
more information about managers the firm may invest in.
J.H. Whitney sees signs of reflation in Japan, primarily in
Tokyo real estate, and also sees an emergence of private companies
in the country. The firm also views South Korea as a positive story
as there are more attractive valuations now than prior years.
In addition to the two funds of funds, the firm manages
four single managers in Tokyo and one U.S. long/short equity
strategy. John Hay Whitney founded the firm in 1946, one of
the first private equity companies in the U.S. It also has offices
in Stamford, Conn., San Francisco and Singapore.
SEC’s Gohlke: Get Ready For FAS 157
Asset management firms that use U.S. generally accepted
accounting principles, including hedge funds, should update
compliance policies and procedures to reflect the Financial
Accounting Standards Board’s Statement No. 157 on fair value
no later than this fall, according to Gene Gohlke, associate
director in the Securities and Exchange Commission’s Office of
Compliance Inspections and Examinations.
FAS 157 became effective for public companies’ fiscal years
beginning after Nov. 15, 2007. It outlines a framework for
measuring fair value under U.S. GAAP and expands disclosures
about such measurements. Public companies and mutual fund
firms have always understood that FAS 157 would apply to them
because they are required to report under U.S. GAAP. Hedge
funds have been less sure because they don’t have to use GAAP,
although many do. Beyond that, asset management firms of all
types have been unsure as to what is expected of them by the
SEC in terms of compliance.
Gohlke said the 2004 general compliance rules require firms
to keep up with regulatory changes such as new accounting
standards. He suggested they consider providing guidance on
how marking to market may be done in areas such as bonds
and loans. FAS 157 requires financial statements to be broken
down into three categories: market quotations, broker quotes
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AIN051208
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May 12, 2008
The Americas (cont’d)
and other factors, such as models. “Firms will need to make
sure they have procedures in place to make sure these
categories work.”
The process of adapting to FAS 157 will demand a lot of
resources and time, compliance staff said. A chief compliance
officer at a hedge fund firm based in New York said that his firm’s
new valuation policy, currently under development, will test to
compare the selling price of securities to net asset values to “see if
a pattern of overvaluation is occurring.”
“CCOs need to be working closely with their finance people
because there are a lot of technical issues that need to be
addressed,” said a compliance chief at a New York-based mutual
fund. He said his goal is to have revised policies in place by fall in
time for the firm’s annual audit. A spokeswoman for the FASB
declined to comment.
Paulson Seeks Money
For Event Arb Fund
John Paulson’s $33.1 billion Paulson & Co.
is raising money for the $14.4 billion
Paulson Advantage fund, his event arbitrage
strategy. Paulson himself is touting the fund
and spoke at an investor event held by Bear
Stearns’ capital introduction team Tuesday
morning in New York, addressing family
John Paulson
offices and funds of hedge funds, among
other investors. He advised the audience to minimize equity
exposure, maintain a short credit bias, and prepare for long
distressed opportunities, according to an attendee.
Paulson Advantage includes onshore, offshore and levered
versions. Paulson did not provide a target for asset-raising. This
year through March, the onshore fund is up 6.46%, the
offshore fund 7.38% and the levered version up 11%. His
onshore merger arbitrage fund is up 4.5% and offshore 5.66%
through March, with a combined total of $8.3 billion. He did
not disclose this year’s returns for his credit funds, which have
$10.4 billion total. Paulson’s merger arbitrage and credit funds
are closed to new investors, although Paulson did say he will
reopen the credit funds when there are more opportunities. He
did not elaborate.
Several of Paulson’s funds dipped slightly in April by using
credit default swaps to bet that Bear Stearns would collapse and
default on their debt. After JPMorgan announced it would
acquire Bear Stearns, spreads on the bets widened as investors
gained confidence in the stocks. One Paulson fund that invests
in mergers and bankruptcies dropped 3.4% while another
6
dropped about 2%. It could not be learned which of Paulson’s
funds dropped. Calls to Paulson were referred to Armel Leslie,
spokesman for the firm, who declined to comment. A Bear
Stearns spokesman did not return calls by press time.
Newgate Bullish On Korean
Financials, Shorts Chinese Telecoms
Newgate Capital Management, the Greenwich, Conn., firm
that manages $4.5 billion primarily in long-only money, has
been making money with its maiden hedge fund via long
positions in Korean financials, and betting short on several
Chinese telecom and technology names. The Newgate Asia
Opportunity Fund launched on Jan. 1 and has returned 2.3%
this year through May 2, said Matthew Peterson, partner and
portfolio manager.
The fund is long Korean financials Kookmin Bank and Hana
Financial Group, as well as holding a position in Samsung. The
evaluations of Korean financials are extremely attractive, and
while most people invest in China and India, there are plenty of
good opportunities in Korea, Peterson said. The country is often
overlooked and Korea’s new government is “expected to be
much more business and development friendly,” he added.
“We think that some of the Chinese telecom names are
overvalued,” Peterson said of the fund’s short book, declining to
name specific companies. Newgate decided to enter the
alternatives space in order to profit from shorting companies.
“We want to take advantage of those companies that are not
well positioned,” Peterson said. “We’re very bullish [on
emerging markets] long term, but there is a lot of volatility in
these markets.”
The fund is open to new investors and is approaching highnet-worth individuals, family offices, funds of hedge funds,
pensions and endowments as it seeks to increase its assets to $50
million by the summer. The firm’s long-only clients have shown
an interest in its first hedge fund, including Canadian bank
Desjardins Bank and Dutch-pension fund MN Services.
The firm had plans to launch the hedge fund two years ago,
but wanted to ensure they had a talented staff in place to
manage the fund. “Everyone in this business thinks they’re
geniuses and the second-coming, but we wanted to add staff
[before rushing the launch],” Peterson said. David Lee joined
the firm last September from Rohatyn Group, a spin-off of
Julian Robertson’s Tiger Management, where he managed one
of the firm’s Asia long/short offerings. Newgate is in the early
stages of preparing to launch its second hedge fund, a global
commodity equity strategy (AIN, May 5).
Project5
9/21/06
9:24 AM
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AIN051208
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Page 8
May 12, 2008
Bertram Looks For More
Power Buyouts
California-based private equity firm Bertram Capital
Management is seeking to buy out three or four more
companies in the $10-15 million range in the next year to
integrate into Power Distribution, Inc. (PDI). Bertram bought
PDI last year and acquired electrical component manufacturer
Marelco Power Systems at the end of January. The firm seeks
new acquisitions that are similar to Marelco and create
intermediate goods needed for PDI’s final product. Vice
President Kevin Yamashita said while Bertram does primarily
U.S.-based buyouts, if it saw an add-on acquisition for PDI that
was located overseas it would consider it.
Besides seeking new companies to acquire, Bertram is also still
working on a new fund, which it hopes to launch in the next 1218 months. The new fund will be larger than Bertram’s current
Bertram Capital Growth I, which has about $350 million assets
under management.
Due to the preparation for a new fund and new acquisitions,
Bertram has grown to 15 professionals. Bertram moved from
Palo Alto to a larger office in San Mateo last month.
Illinois Firm Plans Offshore Launch
Central Square Management, located in
Warrenville, Ill., plans on launching an
offshore version of its maiden hedge fund, an
industrial, technology and healthcare strategy,
in August. Kelly Cardwell, founder and
portfolio manager, said he wanted to launch
the offshore version after it built a year’s track
Kelly Cardwell
record. “There’s more to talk about now,” he
said on the Central Square Partners fund’s performance, which is
up 15.4% through April and up 28% since its inception last
August. “Some people wondered if the skill set from a long-only
background translates in a hedge fund environment. At least for
my personal style, it does.”
Cardwell’s fund, solely invested in the U.S., managed to avoid
the turmoil created by last summer’s credit crunch. “There
tended to be some crowded trades,” he said. “A lot of people were
long technology and short financials. But when the Fed cut rates,
people got whipsawed.” Cardwell avoided investing in financials.
“Avoiding that trap helped me quite a bit.” He likes technology
companies—“I find it easier to find longs on the tech side”—and
sees lots of good company balance sheets with good cash flow.
He declined to name specific long and short positions. Three of
the biggest contributors to his success last year include long
8
positions on Microsoft and technology company BEA Systems.
He is no longer in these positions. Cardwell has begun to market
the fund for the first time and is speaking with high-net-worth
individuals, family offices and funds of hedge funds as he seeks to
increase his assets to $50 million from $10 million.
Prior to founding the firm, Cardwell spent 10 years at Fidelity
Investments, managing several long-only funds. He is the sole
member of Central Square, and does not have plans to add
anyone. “Too many cooks spoil the broth,” he said.
Goldstein Revises Counterclaim
Against Galvin
Phil Goldstein, the founder of Bulldog Investors who battled
the U.S. Securities and Exchange Commission and won, has
added another offense to his counterclaim against Massachusetts’
Secretary of the Commonwealth, William Galvin. In addition to
the claim that Galvin’s suit violates first amendment rights,
Bulldog is maintaining that Galvin and the Commonwealth do
not have personal jurisdiction over the matter.
Galvin took action against Bulldog in February last year for
reportedly offering information about his hedge funds to
prospective investors that failed to meet SEC qualifications.
Goldstein countersued late March but has recently added another
argument to his counterclaim. “Galvin doesn’t have personal
jurisdiction over us; we don’t have sufficient contacts in
Massachusetts. Who made him sheriff of the internet?” said
Goldstein. Oral arguments are expected to begin in June.
“Apparently there isn’t enough fraud in Massachusetts. At the
time, Galvin saw how Eliot Spitzer launched an aggressive law
enforcement campaign,” said Goldstein. He feels that Galvin was
trying to launch his own aggressive campaign against hedge funds.
“Spitzer was his hero. I don’t think he is anymore,” he quipped.
On Feb. 5 of this year, Goldstein wrote a letter to Douglas
Scheidt, associate director and lead counsel for the Division
of Investment Management at the SEC, requesting a “no
action” ruling on Bulldog’s website. “If we cannot receive ‘no
action’ assurance by February 29, 2008, we intend to seek
declaratory and injunctive relief in federal court to permit us
to maintain an open website without fear of an enforcement
action,” the letter states. Goldstein said that Bulldog has
been maintaining a dialogue with individuals at the SEC and
as long as it appears that they are acting in good faith he will
continue to be patient and see where things head. That said,
he does not anticipate waiting the year out.
Calls to Galvin were referred to Brian McNiff, spokesman,
who declined to comment. Scheidt did not return calls.
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May 12, 2008
Martello Closes Doors
Martello Investment Management is closing up shop
because it failed to gather sufficient assets. Although the
fund of hedge funds oversaw $1 billion, it had just $250
million in assets under management, upon which it
collected a typical hedge fund fee. The remaining $750
million represented assets under advisory, for which
Martello earned a lower fee, said David McCarthy,
managing partner and cio.
Since inception in 2002 until the end of 2007, all
Martello’s funds generated positive returns, both
cumulatively and in each calendar year. Most of the firm’s
track record consisted of single digit returns, McCarthy
said, adding that hedge fund investors probably wanted
higher profits. For the past 18 months Martello achieved
double digit returns, but that came during a turbulent
market when investors were putting out fires, not making
new allocations. Hedge fund investing dried up in a similar
way in 1998, he added. Returns this year through April 14
ranged from -3.2% to 5.6%. “It’s a tough environment to
raise money and we didn’t want to push the rock up the hill
any further,” he explained.
The Great Barrington, Mass., firm’s investments will be
liquidated over the next couple of months. Martello invests
in hedge funds that employ tactical trading strategies,
including discretionary and quantitative global macro,
trend, systematic non-trend, relative value, regional and
resource. The firm provides exposure to global currency,
fixed income, commodities and equity markets. Martello
launched a fund of resources and commodity hedge funds
in January.
McCarthy is working with his staff to help them find jobs
elsewhere. “We have a good group of people and want to see
them placed well,” he said. As for his own plans, McCarthy
doesn’t intend to start discussing job opportunities until
mid-summer. He is focusing his efforts until then on closing
Martello.
McCarthy managed GAM’s trading funds of funds from
1994 until 2000. He has also worked for The Atlantic
Philanthropies, Rayner & Stonington, Brown Brothers
Harriman and McKinsey & Co.
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AIN051208
8/5/08
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May 12, 2008
AlphaOne Survives S&P Losses
With IPO Shares
Highland Makes Push For New
Mortgage Funds
AlphaOne Asset Management’s AlphaOne Partners Fund’s strong
returns from longs such as one in Colossus Minerals in January
and February are helping maintain year-to-date performance
despite losses from two Standard & Poor’s composite indices.
The fund, launched by the Toronto-based firm in December,
was up for its first three months, including a 21% return in
February. One big reason for this, Manager Steve Palmer said,
was the fund’s IPO share purchase of Colossus, which gained
114% during the month.
Despite the fund seeing profits in 21 of 25 shorts since launch,
declines in the S&P/TSK Venture Composite and S&P/TSX
Composite Total Return indices contributed to a loss of about
10.5% in March. On the negative side, the fund’s investment in
technology company 01Communique Laboratory Inc. took a
downturn that surprised Palmer. The stock dropped by 80% in
March after a judge initiated a re-examination of the company’s
patent, causing an indefinite delay in the company’s patent
infringement case that was supposed to go to trial that month.
Even with these losses, Palmer said he’s confident in the fund,
and is excited by many of his investments, in particular
IntelGenx (IGXT), a biotechnology company that is moving to
the venture exchange this month. The fund bought the stock at
70 cents about a month ago; it is now trading at about 95 cents.
The small-cap long-biased hedge fund manages about $17.5
million. The investment minimum is $150,000 with a fee
structure of 2/20.
Mortgage-focused investment firm Highland Financial
Holdings Group is seeking assets for two new strategies
that have been launched as an attempt to profit from the
credit crisis. These are a multi-strategy hedge fund that
rolled out in January, and a distressed offering that
debuted in December.
As with all of Highland’s offerings, which now number
four hedge funds and three managed accounts, the two new
strategies are dedicated to mortgages. The multi-strategy
fund will use only small amounts of leverage and will invest
in any kind of mortgage securitization, from AAA-rated
securities to those unrated and below investment grade.
David Kaplan, managing director and head of North
American marketing and client services, declined to
comment on the name of the funds, current fund sizes, or
fees. He did say investors are primarily institutional, with
many pensions, endowments, funds of hedge funds and
family offices. The typical range of investments is $2-5
million, and the funds will close when they grow to $300500 million apiece.
Kaplan acknowledged that there is no shortage of
distressed funds right now, but noted that many funds that
launched in the fall jumped the gun, as the market
continued to deteriorate. Highland brought onboard
Morgan Stanley alum Gary Mendelsohn at the end of
March to manage the multi-strategy fund.
Europe
Tiburon Cuts Taiwan Exposure
Tiburon Partners is cutting long exposure to
Taiwan in its long/short Greater China
Tiburon Tao Fund, following elections in the
country that led to profits for the fund. “We
believe the easy money has, in the short
term, been made in Taiwan,” said Mark
Martyrossian, one of the founding partners
Mark Martyrossian
at the $220 million firm. Meanwhile, the
firm is also increasing exposure to China in both the long and
short books. The changes mean net exposure is being roughly
halved, from over 80% to around 40%.
The fund built up exposure to Taiwan ahead of the
Kuomintang of China (KMT)’s landslide victory in the
10
legislative elections in January, said Martyrossian. The “bolt-on”
Taiwanese portfolio accounted for 40-50% of the fund’s total
long exposure and held positions in brokers and engineering
companies, which would immediately benefit from
reinvestment in the country of money previously invested
offshore by KMT supporters, he explained. On the back of this
political development, which also saw the KMT win the
presidency in March, Taiwan has been Asia’s best-performing
market. Tiburon is now reducing the Tao fund’s exposure to
Taiwan to lock in profits.
Tiburon has also been increasing exposure to China, where
value is appearing. On the long book it is adding some Chinese
names which are listed both in and outside China, because
prices have been hammered and stocks are experiencing positive
AIN051208
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May 12, 2008
Europe (cont’d)
changes. The firm is particularly bullish on consumer stocks
and other Renminbi earners. Also in the portfolio are some
technology-related stocks in Taiwan as well as one or two
resource names, said Martyrossian. The firm has been adding to
the short book where there are some banks, and petrochemical
companies in Taiwan, he added. Western demand for exports is
slowing, but China’s domestic consumption and investment
growth is still very strong, said Martyrossian.
Tao is up 21% year-to-date and 47% since its launch on
May 1 last year. It has outperformed the Hang Seng China
Enterprises Index and the Eurekahedge Greater China Hedge
Fund Index, which were down 13.3% and 5.04% in March.
Tao is managed by Partner Jeff Coggshall, who is also is the
lead manager for the Formosa Growth Fund, the firm’s
Taiwanese fund.
Cazenove Seeks Marketer
Cazenove Capital Management is seeking to
hire a marketer to focus on the Benelux and
Nordic regions. The move follows the departure of James Cahill, who left last month to
join Axa Investment Management’s business
development team in Qatar
(iialternatives.com, April 3).
Robin Minter-Kemp
The new hire will be responsible for the
distribution of hedge funds and long-only offerings, Robin
Minter-Kemp, managing director, told AIN. The individual
will be based in London and will report to Minter-Kemp.
Cazenove has £11.5 billion in assets and six hedge funds.
Euronova Identifies Seed Partner
London firm Euronova Asset Management UK has identified a
seed partner that will provide an undisclosed amount of capital
for its latest roll-out, the Euronova Large Cap Fund, which
launched in March. An official declined to name the partner or
offer more information about the deal until the paperwork has
been finalized, most likely by early June. “March was a diabolical
month to launch,” the official said. Europe-based funds have had
extreme difficulties raising money, he added. Euronova’s goal is to
raise $500 million for the fund by year’s end.
Simon Connell manages the long/short European equities
strategy, which focuses on the top 300 stocks with a volatility
target of 8-10%. Launched in early March, it uses derivatives,
futures, options and ETFs to hedge. Henry Reid manages its
other fund, the Euronova Smaller Companies Fund, which
launched in 2000.
Laven Adds Consultant
To Geneva Office
London-based hedge fund consulting firm Laven Partners has
lined up a mid- to senior-level consultant who will join its
Geneva office by the end of the month. The new hire is needed
to support the increasing amount of operational work and due
diligence the firm is undertaking for its clients, which include
hedge fund managers and investors. Jerome Lussan, founder,
declined to name the new hire.
The office opened in August with two people. The firm
decided to set up a Swiss outpost because more and more
hedge funds were looking to be based there (iialternatives.com,
May 4, 2007). Lussan said Switzerland is a popular centre for
asset-raising because it is well-regarded and less regulated than
London. He added that Laven plans to grow the Geneva office
to five, but that recruitment is quite difficult as the firm is
looking for candidates who are qualified to work at a hedge
fund and are willing to relocate to Geneva if they do not
already live there.
KGR To Issue ‘C’ Shares For Asia FoF
KGR Capital is seeking to roughly double assets in its
London-listed fund of Asian hedge funds to £100 million from
£55 million, by raising at least £45 million from a placing of
‘C’ shares early in the summer. There has been increased
demand for shares in KGR Asia Dynamic 1, especially from
investors that see direct investment in Asia as too volatile, said
Mark White, ceo at the London and Hong Kong firm. There
is also interest from investors who want access to hedge funds
that exploit market inefficiencies in the less mature Asian
capital markets, he added.
The recent reduction in U.K. capital gains tax to 18% from
40% increases the appeal of this kind of offering for U.K.domiciled investors, because returns are taxed as capital gains
rather than as income tax, which remains at 40%, said White.
Although U.K. institutional investors such as pension funds
don’t pay capital gains tax, they will be attracted to the daily
price quote and daily liquidity that the fund’s listed status
brings, he said.
‘C’ shares are a temporary structure, converted into normal
shares once the capital raised has been fully invested. This gives
existing shareholders the reassurance that their position won’t
be diluted. The Guernsey-domiciled company has returned
7.17% annualised since it launched in November 2005. It is
down 4.7% this year to March 31. Fees are 1/10 with a highwater mark.
To receive email alerts or online access, call 800-715-9195.
11
II Events-HF Awards-new
4/24/08
11:10 AM
Page 1
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May 12, 2008
Europe (cont’d)
FIM Seeks Distressed Managers
FIM, the London firm with $4.6 billion in funds of hedge
funds, is seeking to add distressed hedge funds to its range of
portfolios over the course of 2008. There are many good
companies trading at distressed levels, Brendan Robertson,
head of investments, told AIN. FIM is looking for hedge fund
managers who can take advantage of these mispricing
opportunities, as well as capitalising on the increase in default
rates over the medium-to-long term, he said.
The firm is in the early stages of conducting due diligence.
Robertson declined to quantify the number of distressed
managers that FIM will add, but said the move forms part of the
firm’s plan to add about 30 hedge fund managers across its range
of strategies this year. FIM’s five funds of funds are multistrategy, relative value, event-driven and distressed, and equityfocused offerings.
Data Zone
PERFORMANCE SNAPSHOT: MULTI-STRATEGY HEDGE FUNDS
The table below displays some of last year’s top performing multi-strategy hedge funds, according to data
provided by Eurekahedge.
Fund
Multi-Strategy
Rising China Fund
Artradis AB2 Fund
Lionhart Global Appreciation Fund SPCEurope Segregated Portfolio
Brigadier Capital
DQS Absolute Return Fund
Pure Alpha Strategy
Artradis Barracuda Fund
Claritas Hedge FI
HG Allocation Claritas Hedge
Phalanx Japan-AustralAsia Multi-Strategy Fund
GLC Diversified Fund
Singleton Fund
Graham Global Investment Fund II Proprietary Matrix Portfolio
Finisterre Global Opportunity Fund
Magic Capital Fund
CMT Global Fund
Graham Global Investment Fund II
EIP Overlay Fund
Solent Credit Opportunities Master Fund
Millburn International (Cayman)
Region
March 08
Return
2008 YTD
return
2007
return
Annualised
Std Deviation
Sharpe
Ratio
AuM
(US$ Mln)
Pinpoint Investment Advisor
Artradis Fund Management (Pte)
Global
Asia inc Japan
-7.21
3.75
19.08
18.39
26.09
56.96
29.47
16.55
2.31
2.15
198
2589
Lionhart Investments
Cohen & Company
DQS Investment Management BV
Bridgewater Associates
Artradis Fund Management (Pte)
Claritas Servicos Financeiros
Hedging Griffo Asset Management
Phalanx Capital Management
GLC
Washington Asset Advisors
Europe
Global
Global
Global
Asia inc Japan
Brazil
Brazil
Asia inc Japan
Global
North America
-8.03
4.11
-4.07
2.37
2.95
1.43
1.43
5.46
2.21
4.00
13.64
13.42
12.70
12.29
11.97
10.39
10.37
10.16
8.55
7.54
43.78
27.85
17.08
9.63
35.26
8.10
8.05
59.61
18.90
64.42
8.88
6.31
15.98
9.42
7.79
7.74
8.39
43.25
11.40
18.33
1.21
4.65
1.01
0.74
1.07
2.79
2.57
1.69
0.77
2.80
15
210
5
5925
1938
37
13
20
234
30
Global
Emerging Markets
North America
Global
Global
Asia ex Japan
Global
Global
1.05
-1.68
5.00
1.47
0.73
2.64
-0.83
-2.41
6.74
6.42
6.38
5.87
5.85
5.81
5.67
5.65
9.03
18.70
45.40
29.52
10.40
22.90
3.35
15.52
13.27
6.58
19.94
6.43
13.23
6.28
8.57
15.65
0.39
1.88
1.95
4.03
0.46
1.00
1.12
0.41
348
304
20
106
1214
15
238
58
-2.56
-2.00
-1.53
-0.86
-5.56
-4.79
0.55
-1.00
25.20
9.15
13.98
14.44
7.93
5.20
3.95
5.36
0.88
1.40
4.13
1.39
Manager
Graham Capital Management
Finisterre Capital
Washington Asset Advisors
CMT Asset Management
Graham Capital Management
Enhanced Investment Products
Solent Capital Partners
Millburn Ridgefield Corporation
Regional Multi-Strategy Indices
Eurekahedge Asia Multi-Strategy Hedge Fund Index
Eurekahedge Europe Multi-Strategy Hedge Fund Index
Eurekahedge Latin America Multi-Strategy Hedge Fund Index
Eurekahedge North America Multi-Strategy Hedge Fund Index
Notes:
* Ranked by 2008 YTD Returns
Eurekahedge Commentary
Hedge funds faced another difficult month this March, against the backdrop of persistent concerns on the slowing of global growth and the likelihood of a recession in the US. The composite
Eurekahedge Hedge Fund Index shed 2.2%. Volatility across the underlying markets, particularly prior to the Fed’s 75 bps rate cut on 18 March, coupled with a weak state of the credit markets,
were among the factors responsible for the month’s losses.
Multi-strategy funds finished the month registering losses averaging 2.4%. In terms of regional mandates, North America was the least negative (-0.9%), as gains from short positions in
equities and currencies helped managers offset some of the losses suffered from commodity-exposure and other allocations. Latin American players lost 1.5%, owing to losses suffered from
equity trades, among other things; the MSCI Latin American Index was down 3.6%.
European and Asian managers were down 2% and 2.6% respectively; poor performance of the financial sector and a visible economic slowdown in the region affected the former, while
notable declines across some equity markets (such as India and China), among other things, impacted the latter.
13
AIN051208
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May 12, 2008
Mandate Scoreboard
Powered by:
i i s e a r c h e s . c o m
The table below shows new allocation commitments gained by alternative managers year-to-date through May 7. The 2007 column denotes
last year’s ranking. Wins represent the number of new mandates the firm has won this year.
2008 Tally
Rank
1
2
3
4
5
6
7
8
9
10
11
12
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
2007
131
99
15
63
3
23
332
111
6
34
57
57
13
110
22
80
49
89
36
125
31
97
34
50
39
40
41
42
43
44
27
43
49
50
51
52
53
54
55
56
57
162
349
349
19
5
224
106
149
61
48
78
14
Week of May 5, Wins
Firms Hired
J.C. Flowers & Co.
BridgePoint Capital
Credit Suisse
TPG Capital
Bridgewater Associates
Advent International
CVC Capital Partners
Wins
1
6
6
3
2
8
6
FountainVest
Texas Pacific Group
Lone Star Funds
Riverstone/Carlyle
Deutsche Asset Management
Mellon Capital Management
Carlyle Group
PIMCO
Grove Street Advisors
Baring Asset Management
Avenue Capital Management
Barclays Global Investors
Oak Hill Capital Partners
Schroder Investment Management
Wayzata Investment Partners
Summit Partners
Macquarie Infrastructure Group
Gresham Investment Management
Actis
Partners Group
Apollo Investment Corporation
JPMorgan Asset Management
Nordic Capital
The Banc Funds Company
The Jordan Company
State Street Global Advisors
Barlow Partners
HSBC Private Equity
Invesco Private Capital
Mariner Partners
Noble Environmental Power
ABN AMRO Asset Management
RCG Longview
AnaCap Financial Partners
New Mountain Capital
Madison Dearborn Partners
Emerald Infrastructure Development Fund
Huntsman Gay Capital Partners
Landmark Partners
Lexington Partners
Versa Capital Management
“Angelo, Gordon & Company”
Henderson Global Investors
ABRY Partners
Siguler Guff & Co.
Yucaipa American Funds
Harris Alternatives Investment Mgt
BlackRock
The Blackstone Group
AP Alternative Assets
Marathon Asset Management
Pacific Alternative Asset Mgt Co.
Vista Equity Partners
Aisling Capital
Ares Management
AvalonBay Communities
Evergreen Pacific Partners
Evnine-Vaughan Associates
Fillmore Capital Partners
Green Equity Advisors
JLL Partners
Knight Vinke Asset Management
2
3
2
2
1
1
5
5
1
2
1
3
1
2
2
4
3
2
2
1
4
2
2
2
2
2
1
1
1
1
1
1
1
1
3
3
1
1
1
1
1
3
1
3
5
2
2
4
4
2
2
2
2
1
1
1
1
1
1
1
1
1
Total*
4000
1075
1025
1025
900
801
752
600
580
550
530
500
500
486
425
400
317
309
305
300
270
265
260
235
235
230
230
215
210
210
200
200
200
200
200
200
200
200
196
175
165
160
155
150
150
150
150
150
145
139
125
121
120
118
108
101
100
100
100
100
100
100
100
100
100
100
100
100
100
Client
Asset Type
New York State Teachers’ Retirement System
Los Angeles County Employees’ Retirement Association (LACERA)
Louisiana State Employees Retirement System
Private equity (U.S.)
Tactical asset allocation
175
100
850
Teachers’ Retirement System of Louisiana
Los Angeles City Employees Retirement System (LACERS)
Los Angeles County Employees’ Retirement Association (LACERA)
Private equity (Europe)
Private equity (buyout)
125
22
100
150
Energy
100
Pennsylvania Public School Employees Retirement System
Distressed
309
Etera Mutual Pension Insurance
Private equity
N/A
Distressed (U.S.)
175
100
California Public Employees Retirement System (CalPERS)
Private equity (buyout)
150
150
150
75
Not specified
Not specified
100
100
100
100
Amount*
AIN051208
5/8/08
4:59 PM
Page 15
May 12, 2008
Mandate Scoreboard (cont’d)
2008 Tally
Rank
2007
74
75
76
8
284
82
142
84
85
89
72
318
40
91
92
93
95
96
97
100
101
102
103
104
71
64
46
264
93
247
105
222
76
140
123
124
125
126
127
128
129
130
131
132
9
205
85
39
178
136
137
138
92
7
170
Firms Hired
Pershing Square Capital Management
Strategic Capital Management
Tenaska Capital Management
WLR Recovery Fund
Lehman Brothers
Sun Mountain Capital
ARCH Venture Partners
Celtic House
Kearny Venture Partners
VantagePoint Venture Partners
Ventures West
Walden International
Babcock & Brown
Hutton Collins & Company
Macquarie Funds Management
BLUM Capital Partners
Caspian Capital Partners
Catterton Partners
Crow Holdings
Horsley Bridge Partners
PAI Management
HgCapital
Southwest Funding
UBS Global Asset Management
EACM Advisors
Natural Gas Partners
Platinum Equity
Chicago Equity Partners
Milestone Partners
Split Rock Partners
Morgan Stanley Investment Management
ANZ Asset Management
LGT Capital Partners
Exponent Private Equity
Apax Europe
Aristeia International
Caltius Capital Management
Cardinal Partners
Essex Woodland Health Ventures
Five Arrows Leasing Group
Fore Convertible Fund
Gold Hill Venture Lending Partners
Gso Capital Partners
HarbourVest Partners
International Investment Group
KSL Capital Partners
Lydian Overseas Partners
Orleans Capital Management
Pinnacle Asset Management
Stark Investments
Summit Investment Partners
Towerbrook Capital Partners
Wellington Management Company
HFA Asset Management
Pantheon Ventures
Fletcher Asset Management
ERE Rosen Real Estate Securities
Graham Partners
TimberVest
Longitude Capital Management
Crestview Capital Partners
Aurora Capital Partners
Adams Street Partners
M.D. Sass
Swander Pace Capital
Tailwind Investment Partners
Handelsbanken Asset Management
Tactical Global Management
Carlyle Capital Corporation
CB Richard Ellis Investors
Grosvenor Capital Management
Huff Asset Management
Paladin Capital Group
Patriot Capital Partners
Week of May 5, Wins
Wins
1
1
1
1
2
1
1
1
1
1
1
1
1
1
3
1
1
1
1
1
1
2
1
1
1
2
2
1
1
1
2
2
2
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
3
1
1
1
2
2
1
2
1
1
1
1
1
1
1
1
1
1
1
1
Total*
100
100
100
100
90
90
86
86
86
86
86
86
78
78
76
75
75
75
75
75
75
70
69
68
68
65
60
60
60
60
57
56
51
51
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
47
46
45
42
40
38
35
35
30
30
30
30
30
29
28
25
25
25
25
25
25
Client
Asset Type
Amount*
Not specified
100
Nationwide Building Society Pension Fund
Infrastructure
78
78
Teachers’ Retirement System of Louisiana
75
Private equity
N/A
Private equity
N/A
50
Indiana Public Employees’ Retirement Fund
50
Indiana Public Employees’ Retirement Fund
35
For a complete listing of the Mandate Scoreboard, please visit www.alternatives.com
15
DVSbwad:Layout 1
4/14/08
10:50 AM
Page 1
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This one and a half day intensive workshop will provide delegates with a new skill set
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Learn Advanced Tools & Techniques On:
Seminar Faculty:
Edward I. Altman, Max L. Heine Professor of
Finance, STERN SCHOOL OF BUSINESS,
NEW YORK UNIVERSITY; Director of
Research in Credit and Debt Markets, NYU
SALOMON CENTER, Advisor to CITIGROUP,
CONCORDIA ADVISORS, MILLER-MATHIS,
INVESTCORP, SERASA, AND KPMG
• Keith Allman, Managing Director, NSM CAPITAL
MANAGEMENT principal Trainer and Founder,
ENSTRUCT
• Ben Branch, Professor of Finance, UNIVERSITY OF
MASSACHUSETTS, AMHERST and Chapter 7
Bankruptcy Trustee, BANK OF NEW ENGLAND
CORPORATION
• Walter Curchack, Partner and Chair of the Bankruptcy,
Restructuring and Creditors' Rights Practice Group,
LOEB & LOEB LLP
• Warren Hirschhorn, Managing Director and Leader of the
Portfolio Valuation Practice, DUFF & PHELPS, LLC
• Espen Robak, CFA, President, PLURIS VALUATION
ADVISORS LLC
• Aryeh Sheinbein, Vice President and Portfolio Analyst,
PLAINFIELD ASSET MANAGEMENT
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Supply and demand trends and factors in the distressed debt market
Correlation between distressed debt and other asset classes
Risk and return analytics in the high yield and distressed debt markets
Recent LBO trends and credit risk
Strategies for distressed investing: passive, active, active control, arbitrage,
international
Models for predicting defaulting companies
Valuation in bankruptcy court
FAS 157: application of new regulations
Best practices in valuation policy
The value of a cause of action and capital budgeting
Who Should Attend:
•
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•
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Investment Managers
Portfolio Managers
Analysts
Strategists
Risk Managers
Directors
Heads of Research
Consultants
Lawyers
Accountants
Traders
Compliance Officers
From:
• Money Management Firms
• Hedge Funds
• Private Equity Funds
• Funds of Funds
• Distressed Funds
• Investment Banks
• Solution Providers
• Law Firms
• Accounting Firms
• Valuation Firms
• Consulting Firms
visit www.iievents.com for faculty updates
To Register:
Call 1.800.437.9997 or 212.224.3570 • www.iievents.com • registration@iievents.com
AIN051208
8/5/08
20:10
Page 17
May 12, 2008
Search Directory
Powered by:
i i s e a r c h e s . c o m
The following directory includes search activity for the week. The accuracy of the information, which is derived from many sources, is deemed
reliable but cannot be guaranteed. All amounts are in US$ millions unless otherwise stated.
Total
Assets
Mandate
Size
Mandate
Region
Asset
Type
Kimberly-Clark Australia Retirement
Fund, Milsons Point
141
-
International
Private equity
MLC Implemented
Consulting
The scheme has postponed plans to invest in private equity for the
next 18 months because it finds market conditions unfavourable for
such investments.
Laerernes Pension, Copenhagen
5356
-
Global
Not specified
None
The fund plans to almost double its exposure to alternatives to 20%
in the long term starting this year. In 2007, it increased its
investments to 10.3% from 8.9%. No further details are available.
PensionDanmark (Danish Labour
Market Pension Fund), Copenhagen
15365
-
Global
Infrastructure, timber,
private equity
None
The scheme plans to analyse its alternatives investments including
infrastructure, timber and private equity. The scheme does not see
any meaningful diversification in these asset classes.
Perpetual Investments, Sydney
36856
-
Global
Hedge funds, infrastructure,
private equity
None
The firm plans to invest A$600 million over the next two years in its
multi-manager alternatives portfolio. It is actively evaluating funds
of hedge funds against building an internal program of directly-accessed
funds with its advisor Sovereign Investment Research. It will also invest
in infrastructure and private equity.
Alma College, Alma, Mich.
115
-
US
Private equity, commodities,
hedge funds, venture capital
-
The fund plans to make inroads into alternatives and is eyeing its
first allocations to private equity and commodities. It is also
considering hedge funds and venture capital in the longer-term. It
will downsize its domestic equity portfolio by 5% to fund its
alternatives foray by year’s end.
FMC Technologies, Chicago
633
-
US
Funds of hedge funds
-
The fund plans to invest 3% of total assets in funds of hedge funds
by cutting its 84.4% equity portfolio.
AMU-Gruppens Pensions Stiftelse,
Stockholm
85
-
Global
Not specified
-
The scheme is actively analyzing alternatives with a view to make a
maiden foray into the asset class, possibly by the end of the year.
This investment decision is subject to prior approval of its trustees.
It has not yet set specifics on size, minor classes or funding for the
investment.
-
Global
Infrastructure, commodities
Mercer
The scheme is looking to grow its allocation to alternatives and is
analysing infrastructure and commodities, with a view to invest
within 2008. It will also grow its private equity exposure to 7% from
5% and will seek new managers.
Fund & Location
West Midlands Metropolitan
15032
Authorities Pension Fund, Wolverhampton
Consultant
Comments
Canadian Pacific Railway, Calgary
13373
19.96
Canada
Commodities
Towers Perrin
The fund is looking to add commodities to its portfolio for the first
time, with an eye on oil and gas investments. It will likely invest
over the next year.
Canadian Pacific Railway, Calgary
13373
-
Canada
Hedge funds,
currency hedging
Towers Perrin
The fund is planning to invest an undisclosed percentage of assets
in hedge funds for the first time in 2008-2009. The fund is also
planning to allocate to currency hedging strategies later this year.
Korean National Pension Service,
Seoul
221938
-
Global
Hedge funds
Mercer
VBV Pensionskasse, Vienna
6917
-
Global
Infrastructure, real estate
-
The fund is analysing infrastructure with a view to make a maiden
foray into the asset class this year. The fund is also planning to
double its real estate exposure to 8% for higher returns. The fund
relies on a tender process to hire asset managers.
Robert McBride Pension Fund,
Manchester
127
-
Global
Not specified
-
The scheme is considering alternatives as part of its strategy review
and may make its first move into this area.
Massachusetts Institute of
Technology, Cambridge, Mass.
9980
-
US
Commodities, private equity
-
The fund plans to add to its commodities investments in the next
two years. It also expects to boost its private equity allocation in the
coming year. It presently invests 12.6% in private equity.
Denver Employees’ Retirement Plan
2100
105
US
Private equity
Callan Associates
The fund is looking to further increase its private equity exposure at
the expense of high-yield bonds. It recently upped private equity to
5% of total assets from 4% by reducing high-yield by 1% to 5%.
IBM Switzerland Employee
Welfare Foundation, Zurich
2835
-
Global
Commodities, private equity
None
The scheme plans maiden forays into commodities and private
equity as part of diversification efforts. No specifics on the timeframe,
investment size or funding for the investments have been set.
Armstrong World Industries, 3200
Lancaster, Pa.
128
US
Hedge funds
-
-
The fund plans to invest 4% in hedge funds by slashing its equity
exposure in 2009. It is seeking to hire one asset manager for the
asset class.
London Borough of Merton Local
Government Pension Fund
683
-
Global
Not specified
-
The scheme has started analysing all types of alternatives and may
make a first move into the asset class.
Farmington Hills Retirement System,
Farmington Hills, Mich.
150
-
US
Hedge funds
Merrill Lynch Consulting
Services Group
The fund is actively seeking to hire a hedge fund manager for its first
foray into the asset class at 5%. It has interviewed several
undisclosed managers.
The fund is analysing hedge funds before making a first move into
the asset class. It expects to get the approval to invest in the asset
class by its board later this year. It may invest through multi-strategy
funds or funds of hedge funds.
For further information on iisearches’ daily search leads and searchable database of mandates awarded and lost since 1995, please visit iisearches.com or contact Keith Arends at 212 224 3533 or karends@iinews.com.
17
AIN051208
8/5/08
20:10
Page 18
AGARWAL TO LAUNCH
(continued from page 1)
said. “Most of the hedge funds that focus on non-Japan are
either equity- or credit-based, or pure directional macro plays.
But applying this sophisticated strategy, I haven’t seen it.”
The fund will trade interest rate and foreign exchange
derivatives, as well as equities. “April saw a reprieve from the recent
credit market led volatility,” read an investor presentation sent to
AIN. “We view the recent equity market rally as more of a short
covering rally rather than the establishment of long positions in
the equity markets. The market needs to see an extended period of
‘no more tape bombs’ before long term confidence returns.”
Agarwal also believes Asian countries that export to the U.S.,
namely Korea, the Philippines, Taiwan and Singapore, will be
affected by the weakening dollar. “I have been trading these
markets since 1997. I probably know these markets better than
anybody,” he said. The capacity of the fund is $500 million. He
is speaking with family offices, funds of hedge funds and highnet-worth individuals. Goldman Sachs and Barclays Capital are
the prime brokers for the MACM fund. Fees are 2/20 with a
high-water mark, and the investment minimum is $1 million.
Agarwal left BNP at the end of 2002 to form Predator
(iialternatives.com, May 8, 2003). He launched the Predator Global
Fund in January 2004, only to close it two years later to join III
May 12, 2008
Funds, the $5 billion Boca Raton, Fla., firm. “III provided an
attractive opportunity at the time to execute [the same] strategy
with a much larger capital base,” he said on closing Predator. In
two years, Predator’s returns were LIBOR +4.5%. However, after
spending a few years at III, he decided it was time to start his own
fund again. “Once you’ve worked for yourself, it’s extremely hard
to go work for anybody else,” he said.
—Suzy Kenly
GLG THUMPED
conference call to investors.
The worst performing fund in the first quarter was the GLG
Credit Fund, down 21.1%. The losses put more pressure on GLG,
which has suffered $1.7 billion in redemptions since Coffey, its
high-performing emerging markets fund manager, quit last month.
A report published by Lehman Brothers on April 16
calculates that GLG’s funds, including long-only strategies, are
on average 8% below their high-water mark. The document
also estimates GLG will generate performance fees of $244
million in 2008 and $488 million in 2009, against its previous
estimates of $672 million and $727 million, respectively.
The firm’s three other emerging markets funds enjoyed
positive returns. The only other funds to do so were the GLG
Alpha Select Fund (9%), GLG Esprit Fund (1%) and the GLG
Corporate Access Program
Get instant, online access to Alternative Investment News
for everyone in your firm.
This Corporate Access Program (CAP) is being offered now for
ONE PRICE — Call now to get your discount and start your firm’s
subscription to www.iialternatives.com.
Your CAP Subscription Includes:
Alternative Investment News –
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> A cost-effective way to disseminate information
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Need for Hedge Fund, Private Equity
and Other Alternatives
FOR MORE INFORMATION PLEASE CONTACT:
Dan Lalor | 212.224.3045 | dlalor@iinews.com
AIN051208
8/5/08
20:10
Page 19
May 12, 2008
European Opportunity Fund (3.7%). Gottesman told investors he
expects assets in the emerging markets funds to decline threefold to about $2 billion from the $6.3 billion that Coffey is
currently managing. Gottesman also expects most of the ninestrong emerging markets team to leave with Coffey. The main
emerging markets fund has returned 71.09% annualised since
launch in November 2005. It was up 43% in 2007.
Gottesman pointed out that excluding the performance of
the four emerging markets strategies, GLG’s hedge funds are
down only 3.4% in the first quarter. Lehman’s report
concludes by giving the GLG stock a ‘buy’ rating, as “the stock
is expected to outperform the unweighted expected total
return of the sector coverage universe over a 12-month
investment horizon.” Talia Druker, a spokeswoman for GLG,
had no comment.
—Harriet Agnew
CALIFORNIA CANS
revising a state exemption that has allowed investment advisers
with 15 or fewer clients and $25 million or more in assets to
avoid registration requirements. The plan, which was similar to
the SEC rule rejected after it was challenged by Bulldog
Investors’ Phil Goldstein, had drawn fire from critics claiming it
would drive hedge fund advisers to states with lighter regulation.
“We are withdrawing the regulations due to an ongoing
parallel process at the federal level which may preempt or
obviate the need for state action at this time,” DuFauchard
said in a statement May 1. Mark Leyes, director of
communication, said the department decided to drop the
proposal following the release of the U.S. Department of the
Treasury’s blueprint on regulatory reform. He said the
commissioner was not responding to a specific part of the
Treasury’s plan, just “that the effort is going on.”
Under the Treasury’s plan, the Federal Reserve would be
given wider powers as a “market stability regulator.” Announcing
the blueprint in March, Treasury Secretary Henry Paulson said
the Fed would collect information from a range of financial
institutions, including hedge funds, to evaluate capital, liquidity
and margin practices across the financial system.
Leyes hinted, however, that the door may not be closed to
future plans. “We decided not to proceed with the proposed rules
and ended it for now,” he said, adding, “We could always come
back [with another proposal], but it would have to come back
from scratch.”
According to Donald Davidson, a partner at Bingham
McCutchen’s San Francisco office, most states require advisers to
hedge funds to register with their local authorities unless they
choose to register with the SEC. Some—such as California, New
York and Connecticut—do not. “It’s no accident that the hedge
fund industry is concentrated in those states,” he said. “This
proposal would have stripped California of that benefit and now it
can maintain status quo. Advisers won’t be voting with their feet
now.”
—Josh Stoffregen
TUCKERBROOK’S
for control of two of its funds (iialternatives.com, April 30). Court
documents obtained by AIN include an email dated Jan. 25 from
Yoder to Banerjee, in which he states that he has asked “JJH,”
presumed to be Hassett, to negotiate his separation from
Tuckerbrook. “I have had it with his lies and threats,” Yoder wrote.
The email indicates that Yoder told Turner Smith, cofounder and managing principal, that he would stay on if the
firm set up a separate subsidiary for private equity and that
Yoder never had to deal with Hassett again. Yoder also asked
Banerjee to introduce him to contacts at Calder.
Hassett told AIN, “There is always a point in time around
the launch of a new fund that the economics of the parties can
become contentious. Investment firms live with this reality as
part of their day-to-day business. The email that you read from
Jay Yoder simply reflects that tension at about the time that
the economics were being negotiated for fund two.” Yoder
declined to comment. Smith did not return calls.
The firm will launch a second version of its Tuckerbrook Real
Assets Fund I this quarter, for which Yoder is the portfolio manager.
The Tuckerbrook Real Assets Fund II will hold $100 million, nearly
double the first fund’s $55 million and Yoder will be the manager
of this fund as well. According to Hassett, the fund is a response to
investor interest and the firm expects a number of clients from the
first fund to participate in the newest version.
“Jay remains an employee of the company, happily employed I
believe, and we think it’s going to be well received by fund one
investors and new investors,” Hassett said. The investment
minimum is $1 million. Tuckerbrook has $300 million under
management and is based in Marblehead, Mass. —Sarah Klein
Quote Of The Week
“I have had it with his lies and threats.”—Jay Yoder at Tuckerbrook
Alternative Investments, who considered leaving the firm over
difficulties with Managing Principal John J. Hassett, according to court
documents (see story, page 1).
One Year Ago In Alternative Investment News
Alexandra Investment Management Co-Founder Dimitri Sogoloff
set up Horton Point, which planned to launch up to 20 algorithmic
strategies. [The firm aimed to launch the Gallery Master Fund April
1 (AIN, March 12). Horton Point delayed the launch slightly due to
current market conditions, but it debuted on May 1 with launch
assets in the $100-200 million range (see story, page 4).]
19
ICAP-Sailing-layout
4/22/08
10:04 AM
Page 1
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©ICAP plc 2008. ICAP¨, ICAP Market Data and other service marks and logos are service marks of ICAP plc and/or one of its group companies. All rights reserved.
Entities within the ICAP group are regulated as applicable.

glg thumped in first quarter tuckerbrook`s yoder launches fund amid

Transcription

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