Event-Driven Mutual Fund vs. Hedge Funds

Chidem Kurdas

Mutual funds are increasingly offering less widely-available hedge fund strategies. Thus Rydex/SGI, a pioneer in the field, introduced an event-driven and distressed investing fund this month, in addition to funds in other alternative strategies.

Big investors developed an interest in such mass-market vehicles in the aftermath of the 2008 crisis, when getting one’s money back from hedge funds became so difficult.

Advertisement

Ladenburg Thalmann Real Estate Hybrid

Chidem Kurdas

Investment bank Ladenburg Thalmann is to start a fund that will blend real estate and natural resource investments with hedge funds. The manager is Philip Blancato, who is the president of the firm’s asset management arm.

Citadel Keeps Gates

Chidem Kurdas

Last year Citadel Group ended its freeze and allowed investors to redeem. This month Fitch affirmed the ratings of two big Citadel funds, Kensington Global Strategies and Citadel Wellington, at BBB-.  Fitch revised its rating outlook for the funds to “stable” from “negative”.

The freeze had been instituted after heavy losses and redemption requests in 2008. In 2009, Citadel had very strong returns. So the rough patch appeared to be over.

But the funds did not fully recover and redemptions remained restricted, according to an investor.

Blackstone Asset Growth Hopeful

Chidem Kurdas

Blackstone Group’s hedge fund division attracted significant  new capital in the second quarter. This does not mean that other hedge fund firms will also be able to raise money.

On the contrary, investors appear to be persistently moving to the largest firms. Blackstone is now a $111 billion behemoth (counting all assets) & growing. It has  probably become the biggest free-standing alternative investment business.  Plus, Blackstone survived the credit crisis well. Nobody else in the industry is really in the same position.

Nevertheless, this is great news for many hedge fund managers.

SAC Tries for Bull’s Eye

Chidem Kurdas

Steve Cohen’s Alcon trade has been fascinating. Alcon Inc. specializes in eye care products, primarily drugs and devices. It was the largest position held by Mr. Cohen’s SAC, with stock and options worth about $460 million as of April.

Life, Death, Taxes and Insurance

Chidem Kurdas

In this world nothing is certain but death and taxes, to quote Benjamin Franklin.  As politicians scrounge for more money, it is near-certain that taxes will rise for those with high incomes.

Cooperman Boosts KKR Position

Chidem Kurdas

Amid the excitement about the coming initial public offering of private equity giant Kohlberg Kravis Roberts & Co., the already publicly-traded credit fund managed by the firm, KKR Financial Holdings, appears to have slipped some pundits’ minds.

But Leon Cooperman of Omega Advisors has KKR Financial very much on the mind, judging from his recent buying.

Debt Managers Go Public, Goldman Underwrites

Chidem Kurdas

Secured business loans is a hot investment area. That probably helped MCC Advisors, a hedge fund that makes direct loans, to go ahead with its plan to float a fund on the New York Stock Exchange. The initial public offering is expected to raise $185 million to $212 million, to make loans of $10 to $50 million to small and medium businesses.

Man Group Preps US Fund

Chidem Kurdas

As part of a long-term effort to expand its share of  the American high-net-worth and institutional investor market, London-listed Man Group is preparing to launch a long/short equity fund of funds. The other products the company offers in the US are mostly multi-strategy and not dedicated to stock investing.