Archive for April, 2010

Crossovers: JP Morgan Fund, SEI Guide

April 29, 2010

Chidem Kurdas

In just the past few days there have been a number of announcements about the intersection of hedge funds with mutual funds. Among these is JP Morgan’s launch of Highbridge Dynamic Commodities Strategy mutual fund, which draws on an investment team that is part of Highbridge Capital, the bank’s giant hedge fund. (more…)

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Comac Attracts FoFs

April 27, 2010

Chidem Kurdas

In recent months a couple of large funds of funds allocated to London-based Comac Capital, a global macro manager that has established a solid track  record in the past five years. One fund of funds invested $100 million with Comac, which has grown to around $5 billion in assets. (more…)

Did Investors Make a Mistake?

April 22, 2010

Chidem Kurdas

As of the end of March, hedge funds had recovered all but 1.6% of their 2008 loss, whereas the MSCI World Index was still down 24.4% from its peak, according to data from the Credit Suisse/Tremont Index.

Of course investors who took their money out of the funds did not benefit from the resurgence. They would’ve recovered the losses had they stayed with the investment, says Oliver Schupp, President of Credit Suisse Tremont Index LLC.  (more…)

Strange Twists in Goldman Sachs Fraud Case

April 20, 2010

Chidem Kurdas

From the Securities and Exchange Commission’s claim, “Goldman Sachs failed to disclose to investors vital information …. in particular the role that a major hedge fund played in the portfolio selection process,” you might think that John Paulson, the manager of  the hedge fund in question, was Goldman’s secret partner in the subprime mortgage-based collateralized debt obligation called ABACUS 2007-ACl.

In fact, Goldman introduced Paulson & Co. to the main party in the deal, ACA.  Mortgage-backed securities specialist ACA Management picked the underlying securities for the portfolio; its parent, bond insurer ACA Capital, took on the credit risk by insuring the notes. (more…)

Daniel Och’s Compensation

April 19, 2010

Chidem Kurdas

The chief executive of Och-Ziff Capital, Daniel Och, received $9.4 million in company stock and did not get any non-equity incentive compensation in 2009. All other pay he received was minor, as best I can tell. He took Och-Ziff public in 2007.

The number for 2009 sounds very modest compared to past estimates of how much Mr. Och made.  (more…)

Fund Targets Both Top and Emerging Managers

April 16, 2010

Chidem Kurdas

One of the largest independent advisor firms, SCS Capital Management,  is preparing to launch a vehicle that will invest in top-tier hedge funds but will round out the portfolio with  promising early-stage managers. (more…)

Galleon Clients Escape Unscathed

April 15, 2010

Chidem Kurdas

Sounds like Galleon chief Raj Rajaratnam did alright by his clients, whatever he did by securities laws.  While he and a significant number of associates face lengthy civil and criminal lawsuits for insider trading, the hedge fund’s investors may get out of the debacle whole.   (more…)

Hedgies See Greener Grass on Other Side

April 14, 2010

Chidem Kurdas

The trend for hedge fund managers to start traditional investment vehicles appears to be gaining force, with hedge fund firms across the spectrum considering whether to launch a mutual fund. A growing number are going ahead.

Clarity Asset, an advisor to high-net-worth individuals and families since 1998, is among those entering the fray. An offshoot of the advisory firm manages a hedge fund, Clarity Fund LLC, in addition to separate accounts. (more…)

Side Pockets Persist

April 8, 2010

Chidem Kurdas

Even as markets and hedge fund returns recovered from the crisis of 2008, some managers continued to keep hard-to-sell assets in separate portfolios that have restricted redemption. The practice was initially a response to extraordinary circumstances but persisted largely because managers believe they can salvage losing investments if given more time.

Side pockets limit withdrawals by investors while the agreed-upon redemption conditions still apply to the assets in the fund proper. Thus some of Perry Capital’s investments were moved to side pockets after losses in 2008. The losses came in part from Perry’s trades in Porsche’s attempted takeover of Volkswagen.  (more…)

SEC Investigation Stalks Ellington

April 6, 2010

Chidem Kurdas

Michael Vranos’ plan to take a mortgage-backed securities investment vehicle public was bold in view of the fact that his firm’s hedge funds have been slowly winding down with redemptions frozen for years. The approaching initial public offering  looks even more daring as details emerge of an investigation by the Securities and Exchange Commission into mortgage-related collateralized debt obligations. (more…)