Archive for July, 2011

Highland Crisis Takeaway

July 29, 2011

Chidem Kurdas

Credit specialist Highland Capital is bringing its crisis woes to a surprisingly successful end after three years. Remaining clients, among them large and experienced funds of funds, sound content with the way the managers handled the situation. But the firm has significantly less assets now compared to before the crisis.  (more…)

Large Investors Favor Small-Cap Pickers

July 27, 2011

Chidem Kurdas

Big chunks of institutional and fund of funds money is still in long/short equity. Despite talk of wanting to increase diversification to strategies less correlated to stocks, some 35% to 45% of large investors’ allocations are said to be to stock funds.

But there may be greater attention to diversity within long/short equity. One name that keeps coming up suggests this. (more…)

UBS Raises Money for Funds

July 26, 2011

Investors are coming back to funds of funds—at least, to those run by some large banks and asset managers. Thus UBS appears to be successful in getting subscriptions for its multi-strategy vehicles. (more…)

Blackstone Energy Bets Going Strong

July 21, 2011

Chidem Kurdas

Saratoga Resources, an oil and gas development company that went through bankruptcy, was not an obvious energy play for private equity and hedge fund behemoth Blackstone Group. Indeed, Blackstone’s growing stable of energy and commodity funds (more…)

Goldman Sachs as Trading Thermostat

July 19, 2011

Chidem Kurdas

Goldman Sachs reports that its net revenue from fixed income, currency and commodities trading dropped 53% from the same quarter in 2010. The firm attributed this mainly to having taken less risk due to global uncertainty. But in part the fall comes from lower volumes of trading by clients—among them, hedge funds.  (more…)

Madoff Black Box vs. Gut Feel

July 14, 2011

Chidem Kurdas

Bernard Madoff told Securities and Exchange Commission examiners an evolving tale as to how he made money. He started with a black box, which may sound like another reason to suspect computerized models. One examiner wrote: “no discretion on the part of Madoff—everything is determined by the black box.”

Then Madoff changed his tune. Yes the computer model signaled when to enter and exit the market, but he “was adamant he also uses his ‘gut feel’ to make these decisions.”

The lesson from this little story: it is better to be presented with a black box than to be told the guy’s gut is making the money.  (more…)

Ares as Debt Investment

July 13, 2011

Chidem Kurdas

Ares Management is a Los Angeles-based debt specialist and private equity firm with $40 billion in assets that runs a Nasdaq-listed business development company in addition to private funds and accounts. (more…)

Index-Huggers on Notice

July 12, 2011

Investors are increasingly insistent that active managers, hedge funds among them, generate gains that do not track the market. To get capital, managers have to demonstrate their ability to make non-correlated returns. “Performance is disguised beta unless the manager can show me otherwise,” says an executive from a corporate pension (more…)

BlueCrest Affiliate IPO on Track

July 6, 2011

A public offering on NASDAQ from the American arm of Guernsey-based BlueCrest appears to be going forward, with underwriting done by (more…)

Daniel Och’s Ownership Stake Grows

July 5, 2011

Chidem Kurdas

Och-Ziff Capital went public in 2007 but founder and chief executive Daniel Och owns most of the voting interest.  Now he’s received another block of shares. (more…)