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AIN050106
4/28/06
11:23 AM
Page 1
MAY 1, 2006
VOL. VII, NO. 17
OSPRAIE READIES HYBRID FUND
RAB Starts Pension
Fund Push
London’s RAB Capital is making a
major push for pension fund assets and
hopes to benefit from increased interest
in hedge funds from institutional
investors of all types.
See story, page 2
Dwight Anderson
Ospraie Management is readying a hybrid fund that crosses a hedge
fund strategy with private equity invest in illiquid investments. It will
invest in the basic industry and commodities spaces; the bread and
butter of the $4 billion firm run by Dwight Anderson. An Ospraie
official declined to comment.
The firm is seeking to raise $750 million over a series of several
closings, with a hard close expected in a few months. It is launching the
(continued on page 14)
Doomsday Alert!
At Press Time
Morley Plots Major Expansion
2
U.S. News
Loeb Continues Offensive
Chicago Options Shop Makes Hires
FSU Foundation To Boost Alts
3
4
5
European News
Citadel Seeks London Analysts
FIM Taps Head Marketer
6
7
Under The Hood
Thames River Gains On Nikkei Bet
Blackberry A Winner For GLG
9
9
Private Equity News
NY Shop Closes Fund #1
Middle East Firm Sells
Romanian Stake
11
11
Departments
Search & Hire Directory
Data Zone
12
13
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DALIO: HEDGE FUND BUST WOULD
RIVAL S&L CRISIS
The next crisis in world financial markets will likely burn more than $100 billion of hedge
fund assets, which would rival the 1989 savings and loans crisis in terms of impact. This is
one of the points of a letter titled What a Hedge Fund Bust Would Look Like penned by
Bridgewater Associates Founder Ray Dalio. A call to Dalio was referred to a Bridgewater
spokesman, who did not return a phone call.
Dalio’s letter demonstrates the impact of past financial crises on hedge fund assets:
(continued on page 14)
BLACKSTONE AFFILIATE HIRES
CREDIT SUISSE TRIO
Three senior professionals at the hedge fund marketing unit of
Credit Suisse’s private fund group will join Park Hill Group,
an alternative asset placement firm affiliated with Blackstone
Asset Management. The three are Pat Daly, director,
Alexander Moomjy, managing director and Peter Mayer,
whose title could not be obtained. They will continue raising
(continued on page 14)
MORGAN STANLEY TRIMS ALTS GROUP
Morgan Stanley has laid off approximately one-fourth of its alternative investment group.
The layoffs are likely due to the firm’s effort to restructure various departments after
James Gannon, the new head of retail, came on board. Asked about his efforts to
restructure the firm, Gannon hung up the phone. Calls to Morgan Stanley spokespersons
were not returned.
At least four individuals, including a product manager and sales associate were among
those affected by the layoff. The group numbered between 16 and 20 people.
—E.M.
Check www.iialternatives.com during the week for breaking news and updates.
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Alternative Investment News
www.iialternatives.com
May 1, 2006
At Press Time
RAB Makes Global Push For
Pension Fund Assets
RAB Capital, the $3.2 billion London-based hedge fund firm, is
making a major push for pension fund assets. It hopes to benefit from increased
interest in hedge funds from all kinds of institutional investors. As part of the
move, the firm is targeting Japanese institutions for the first time. It is also seeking
to grow its U.S. client base.
RAB’s client base already includes a handful of pension funds. “It’s a growing
market opportunity and we want to benefit from it directly, rather than
indirectly,” said Marc Popiolek, spokesman.
To distribute its funds in Japan, RAB has joined with Prestige Asset
Management, a local consulting firm. With the country’s economy
strengthening, Japanese institutions “are becoming more outward-looking” in
terms of their investments, added Popiolek.
RAB is pursuing Japanese institutional assets for its RAB Europe and RAB
Multi-Strategy offerings. Japanese investors want exposure to Europe by investing
with local managers, he explained. The vast majority of RAB’s client base is
currently European, with a small amount of U.S. money, said Popiolek. Rod
Barker, director of business development and distribution, will oversee a
marketing push to grow RAB’s U.S. client base.
Other Western firms have sought to benefit from the growing capital flows
into alternatives from Asian institutional investors, including Harcourt
Investment Consulting (iialternatives.com, 7/1), Gems Advisors
(iialternatives.com, 7/15) and CDK Group (iialternatives.com, 11/4/05).
STEVE MURRAY
Deputy Editor
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Managers
ORN Just The Beginning?
Morley Plans Major Hedge Fund Expansion
Morley Fund Management, the London-based asset management giant, is
planning to grow its hedge fund business and will consider acquiring hedge fund
boutiques and launching more funds from scratch. The firm made a major move
in this direction last week when it acquired a 56% stake in $600 million London
hedge fund firm ORN Capital—Morley’s first hedge fund acquisition. An
industry official familiar with the situation said Morley is also in the process of
hiring other managers to run funds in-house.
Morley has total assets under management of GBP156.2 billion, but hedge
funds only account for GBP500 million—less than a third of one percent, said
Fiona Baker, spokeswoman. James Tanner, managing director, distribution and
alternatives, reviewed Morley’s alternatives business in December with a view to
accelerating growth, said Baker. The firm will consider making other acquisitions,
possibly of entire firms, if there is a good fit with Morley’s existing business, she
added. Baker declined to comment on any plans to hire teams away from other
firms, and said Morley does not have a specific target for hedge fund asset growth.
The firm runs a multi-strategy fund of funds, as well as four single-strategy
funds focused on G-7 fixed income, convertible bond arbitrage, Central Europe
long/short equity, and socially responsible long/short equity investment. ORN’s
funds, which include event-driven, global resources and distressed debt funds,
were seen to fill gaps in Morley’s platform, said Baker.
Harald Orneberg, founder and chairman at ORN, could not be reached.
2
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May 1, 2006
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Alternative Investment News
U.S. News
New York Firm To Launch
Long/Short Healthcare Fund
Sio Capital Management will unveil its
flagship long/short equity Sio Partners fund
with an anticipated mid-May launch date.
The fund will take 20-25 long positions and
10 short positions in the healthcare sector,
according to Michael Castor, portfolio
manager. There is no limit on the number of
Michael Castor
positions taken at one time, Castor said.
The fund will identify healthcare investments that U.S.-only
funds are not targeting. It will also eye various technological,
political and environmental issues surrounding healthcare, Castor
said. Castor, declining to elaborate on specific investments, noted
the majority of their holdings will be long-term, over a year.
Prior to starting Sio Capital, Castor was a consumer noncyclical/healthcare portfolio manager at AllianceBernstein
Institutional Investment Management.
The fund carries a $1 million investment minimum, 1.5/20
fees and has a one-year lockup with quarterly redemption.
Merlin Securities is the prime broker.
Loeb Continues Assault On
Coal Company
Third Point, the activist hedge fund firm run by outspoken
manager Daniel Loeb, is continuing its bombardment of Massey
Energy Company. Loeb is running a slate of two nominees,
including himself, for seats on the coal company’s board because
he feels it’s moving too slow with a share buyback program (AIN,
4/24). He is also now railing against its CEO’s compensation and
management perks, while offering to use some of the savings to
reward the coal company’s mine workers.
In a letter to shareholders, Loeb decries what he calls “Massey’s
Air Force,”—his multi-million dollar Challenger 601 jet. His
letter questions the need for an aircraft with a 3,000 mile range
for a company whose business is only in Central Appalachia. “If
elected to the board of directors, we will urge the board to get rid
of the Challenger 601 luxury jet and review the use of the other
aircraft. We think a good place to put the cost savings from the
luxury jet would be a program to reward and retain the
company’s miners,” the letter says.
Loeb also makes several attacks against Massey CEO Donald
Blankenship. “For the year ended December 31, 2005, Massey’s
CEO was paid $33.7 million, more than four times the average
compensation of $8.1 million for the competitors’ CEOs,” Loeb
wrote. Loeb also came out against Blankenship living in a
company paid house, which would become his when he leaves.
“What kind of example does it set when a CEO who makes
$33.7 million in a single year is given free housing while the
company is having difficulty retaining its mine workers?”
The hedge fund also questioned Massey’s dealing with a
vendor owned by Blankenship’s nephew. “The company should
promptly disclose to stockholders not only a detailed explanation
of the reasons for any such approval, but also meaningful facts
that indicate the significance of the company’s relationship to the
executive’s relative or his business.,” Loeb wrote.
Loeb declined to comment and calls to Blankenship’s office
were referred to Massey’s investor relations department. An
official there did not comment.
Ohio Power Fund Sets Up
Houston Post
Columbus-based Alpha Energy Partners is opening an office in
Houston. The firm, which is run by former American Electric
Power honcho Lew Williams, is opening the office on May 1,
said Barry Hines, co-founder of Boomerang Capital, which
serves as third-party marketer.
Alpha, which manages $325 million, focuses on natural gas
trading (iialternatives.com, 9/24/04). The team is comprised
mostly of AEP veterans, and for this reason is based in
Columbus, said Hines. By opening an office in Houston, the
firm will have an easier time attracting talent in the future, he
added. John Massey, who manages the coal and emission
portions of the portfolio, will head up the office in the Lone Star
state.
Credit Suisse/Tremont Index
Up For March, Q1
The Credit Suisse/Tremont Hedge Fund Index, composed of 410
funds, was up for March and the first quarter at 1.82% and
5.46%, respectively. March’s return was an increase from
February’s nearly flat return of 0.34% (AIN, 3/27). Within the
index’s ten sub-strategies for March, managed futures generated
the highest return of 4.08% due to currency trends and a strong
commodities market, according to Oliver Schupp, president of
the index. The only negative performer for the month was
dedicated short bias, down 3.32%, according to Credit
Suisse/Tremont Hedge Fund research.
The two strongest performers for the quarter were emerging
markets and long/short managers up 8.89% and 6.88%,
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respectively, Schupp said. January’s return of 3.23% and March’s
return were the quarter’s two strongest months, he added. Each
month the index had only one negative performer. Managed
futures were down 2.62% in February and dedicated short bias
was down 2.98% in January, according to index research.
Bear Stearns To Launch Leveraged
Classes Of Structured Fund
Bear Stearns is in the process of creating 2:1 and 3:1 leveraged
share classes for its $1.4 billion High-Grade Structured Credit
Strategies fund to launch June 1, according to a third-party
marketing document. The new share classes will initially be open
to existing investors only, but new investors will have a chance to
invest in the leveraged share classes later this year. The fund,
which has not experienced a losing month in its 30-month
lifespan, reopened to new investors last fall (AIN, 11/26). Calls
to Bear Stearns were not returned by press time.
Ninety percent of the fund’s portfolio consists of structured
finance securities rated at least AAA and AA-. The remaining
10% of the portfolio is currently used to purchase securities that
will themselves be restructured into investment-grade assets or
have an investment-grade return profile, states the document.
The fund returned 39 basis points in March and is up 1.87%
year-to-date.
Chicago Firm Boosts Options;
Drops Lockups
Chicago-based Sellers Capital, which buys long-term equity
anticipation securities (LEAPS) call options, has hired two
officials to work on the operational side of its business. The $60
million firm is also in the process of registering with the
Securities and Exchange Commission. It tapped Mike Porter
from Morningstar and Melanie Dart from Kilkenny Capital
Management.
Dart will focus on trade reconciliation and work on registering
the firm with the SEC, said Porter. Porter, who was director of
operations for the equity group at Morningstar, will serve as her
backup, as well as handle IT and client relations. The firm hired
the pair because its staff, including its founder Mark Sellers,
wanted to spend more time on investments, said Porter.
The firm is registering with the SEC now, having previously
opted to impose two-year lockups in lieu of registration. It is
changing course because it now has enough staff to handle the
process, and removing the lockups will assist in raising new
capital, said Porter. The firm has been planning a second fund for
a while because its original offering was nearing the investor limit
(iialternatives.com, 9/2). The new feeder should be up and
4
May 1, 2006
running this summer, he added.
The firm is also planning its first annual investor meeting.
Rather than pack investors into a Chicago conference room, the
firm is holding its gathering in Omaha, Neb., to coincide with
Berkshire Hathaway’s famed meeting. The site was chosen
because Sellers bases his investment philosophy on Warren
Buffett, said Porter. The hedge fund was also able to secure some
passes to the Berkshire soiree for its investors.
Kurzman To Focus On
“Clean” Assets
New York-based Kurzman Partners is selling
its non-clean technology assets so its flagship
long/short Kurzman Clean Tech fund can hold
shares in exclusively clean technology
companies, the area of greatest growth,
according to David Kurzman, managing
partner. This transition will allow the fund to
David Kurzman
maintain its ability of finding well-run
companies generating strong-free cash flow that can be purchased
at a reasonable valuation, Kurzman said. By year’s end, the fund
is expected to take 100% of its positions in clean technology
stocks, up from 75%. At inception in September 2003, 60% of
the fund’s shares were in clean technology stocks. The fund has a
total of 18 long and three short positions.
Kansas City, Kan.-based Seaboard is one non-clean
technology position the fund is eliminating. Kurzman is selling
this pork producer at 15.90 a share, an increase from his
purchase price of 10.80 per share.
Headwaters and Hy-Drive Technologies are two clean
technology companies in which the fund’s shares have increased
since purchase. Kurzman’s position in Salt Lake City’s
Headwaters, an alternative energy and construction products
company, has increased to 37 a share, up from 14. In Ontariobased Hy-Drive Technologies, Kurzman’s shares have increased
approximately 10% since his C$4 per share purchase. Hy-Drive
manufactures machines that create hydrogen gas from distilled
water.
The majority of the fund’s investors are high-net-worth
individuals, said Kurzman. A Vermont-based hedge fund of
funds also invests in it, but Kurzman declined to identify it.
Prior to launching the fund, Kurzman was v.p. of equity
research for energy at New York-based investment banks
Needham and H.C. Wainwright.
The fund carries a $250,000 investment minimum with
1.75/20 fees. As assets grow, the management fee will most likely
be reduced, said Kurzman. The fund has a one-year lockup with
quarterly redemption. Jefferies Group is the prime broker.
Copying prohibited without the permission of the publisher.
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FSU Foundation To Boost Alts
The $375 million Florida State University Foundation intends
to boost its 20% allocation to alternatives—possibly via a maiden
direct investment in hedge funds—and has hired Cambridge
Associates for advice. CFO Tom Hawkins said the fund will
have its initial meeting with Cambridge in two weeks and will
begin discussing which asset classes to invest in and how much to
allocate. Cambridge will educate the Tallahassee-based
foundation on the full range of hedge fund strategies.
FSU has $38 million in funds of hedge funds, split almost
evenly between Blackstone Alternative Asset Management and
Gerber/Taylor Associates. The foundation had used Mercer
Investment Consulting as its advisor for roughly a decade, but
the investment committee decided it wanted to seek out new
ideas. “The committee just decided that after 10 years it wanted
a fresh perspective.” Hawkins, who said it was difficult to sever
long-term ties with Mercer, noted that the committee went
with Cambridge because of its extensive work with
endowments. “They are the gold standard when it comes to
endowments,” he said. Charles Salmans, spokesman for
Mercer, declined to comment.
Florida State allocates 48% to domestic equity, 12% to
international equity, 20% to fixed income and 20% to
alternatives. Manager inquiries should be directed to Cambridge.
Ohio State Eyes Hedge Funds,
Private Equity
The Ohio State University is considering allocating more of its
$2 billion endowment to direct hedge fund and private equity
investments. So far the bulk of the school’s alternatives exposure
is overseen by funds of funds. It has selected a consultant to help
find opportunities, said Alvin Rodack, associate treasurer. The
consultant’s contract will be finalized in the next 30 days and he
declined to name the firm until then.
The endowment plans to increase its 14% alternatives
exposure, which includes real estate, to 20% in the next two to
three years. This $120 million will be invested across private
equity, hedge funds and real estate. Rodack said the endowment
is more interested in diversification than in specific strategies.
“We’ll definitely be adding money,” he continued, but he’s not
sure exactly how much will be invested this year. That will
depend on opportunities in the market. “We’re going to be
patient,” he added.
Most of the school’s private equity assets are handled by
Commonfund, Fort Washington Capital Partners Group and
Mesirow Financial Private Equity.
The endowment decided early last year to increase its target
alternatives allocation to 13% from 7%, and then raised the
target to 20% toward year-end.
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May 1, 2006
European News
Swiss Firm Launches Long-Only
Energy Fund
London Firm Launches Special
Situations Play
Zurich-based Azemos Partners has launched its long-only
Hornet Renewable Energy Fund with a €100 million target,
according to Gerard Reid, portfolio manager. The fund will take
between 30 and 35 positions at one time and invest in
geothermal, biofuel, wind, water and energy storage, Reid said.
Prior to launching the fund, Reid was head of research at First
Berlin, a small-cap research company in Germany, where he
focused on wind and solar companies.
The fund carries a €190,000 investment minimum, 1.5/10
fees and has no lockup. Zurich-based Liechtensteinische
Landesbank is the prime broker.
London-based Ecofin is launching its long/short and special
situations Ecofin Special Situations Utilities Fund this week and will
close to investors in July, according to Vincent Barnouin, chief
operating officer. These two strategies will be split evenly among
the portfolio and the fund will have on average 50 long and 50
short positions, he said. The fund will invest in gas, electricity and
water assets in the United States, Europe and various emerging
markets in Eastern Europe, Russia, India and China.
Bernard Lambilliotte, cio, is the fund’s portfolioj1 manager.
Prior to co-founding the firm in 1992 he was an investment
manager at Swiss private banking giant Pictet & Cie in its
Geneva and London offices where he developed sector funds.
Lambilliotte was not available to comment.
This vehicle is the firm’s third, said Barnouin. Its maiden
Ecofin Water & Power Opportunities fund launched in February
2002 and has $740 million in assets. Its long/short Ecofin Global
Utilities Hedge Fund which launched in October 2004 and has
$750 million in assets. It has generated a 22% annualized return
since inception, Barnouin said.
The latest fund has a $500,000 investment minimum with
2/20 fees for the one-year lockup option and 1.5/20 fees for the
two-year lockup option. Goldman Sachs and Morgan Stanley
are the prime brokers.
Citadel To Make Analyst Hires
For London
Citadel Investment Group, the $12 billion hedge fund
mammoth led by Ken Griffin, is seeking analysts to join its
equity and credit investment teams in London. The Chicagobased firm is on the lookout for analysts with one-to-three years’
experience and a background in an area such as mergers and
acquisitions, private equity, leveraged finance, or credit or equity
research. Scott Rafferty, investor relations, declined to comment,
citing firm policy.
Shooter Rolls Out Short Equity Fund
Square Eyes More Fund
Launches
Square Investment Management, the global macro firm set up
late last year by Pierre Schroeder, ex-head of proprietary trading
and debt finance at Société Générale, is considering launching
additional hedge funds. This is the firm’s medium-term plan and
is unlikely to happen until the firm’s existing $200 million macro
offering, the Square One Fund, hits capacity at $1 billion, said
Séverine Arnaud, head of investor relations and marketing. In
November, Arnaud told AIN the firm’s goal was to grow the fund
relatively quickly, to $500 million within around six months
(iialternatives.com, 11/18).
Any new funds are likely to run a similar or identical strategy
to the existing fund and would be marketed to new investors
following the close of Square One. “It’s always going to be
global macro with Pierre, and always fundamental,” said
Arnaud. She added that the first fund has been named with the
intention that a second fund would follow suit and be called
Square Two. The firm is a nominee for AIN’s Emerging Manager
of the Year award, with the winner to be announced at an event
in New York on June 28.
6
Shooter Fund Management, the London-based hedge fund firm,
has launched its second offering, a short equity fund with an
options overlay called the Shooter Bear Fund. The fund launched
Feb. 22 with $20 million, said David Beddington, chief
operating officer. With
many long/short funds
increasingly veering
toward a long-bias,
Shooter has seen a lot of
interest for the strategy
from investors hungry for
more exposure on the
short side, “especially with
Shooter Team
markets looking a bit
frothy at the moment,” said Beddington.
The new fund carries a 1.5% management fee, coupled with
a 15% performance fee against a benchmark, which is a 50/50
split between the inverse of the Standard & Poor’s 500 index,
and a basket of European indices. The fund has a 60-day
redemption notice period and a $1 million investment
minimum. The firm will not seek to grow the fund above $500
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million, said Beddington.
The firm might eventually launch other funds, probably single
strategies carved out of the main fund, said Beddington. He
added that this would be a medium-term development and will
depend on whether the move adds sufficient value to the firm.
“We like being streamlined…and focused on trading,” explained
Beddington. The firm’s flagship Shooter Multi-Strategy Fund,
which invests in a variety of volatility arbitrage strategies, is set to
soft-close this month (AIN, 4/24). At press time it held $530
million. Shooter is a nominee for AIN’s Emerging Manager of the
Year category. The winners will be announced at a June 28 event
in New York.
London Options Shop
Plans U.S. Fund
NEA Capital is in the early stages of launching a U.S.
version of its flagship NEA Diversified Strategies fund, an
options strategy that has been trading since February 2004,
according to Principal Michael Hanes. Hines declined to
offer details on timing.
The fund invests in the major equity indices through a
portfolio of both listed and over-the-counter equity options—
mostly customized contracts such as binary options, according to
a third-party marketing document. NEA uses statistical analysis
to construct a net-long options book corresponding to about
Alternative Investment News
40% of the portfolio, with the remainder being invested in shortdated U.S. Treasury Bills. Out-of-the-money put options add an
extra layer of hedging. The fund uses no leverage and has
monthly liquidity with no lock up. Last month it returned
1.62%. It is up 3.09% year-to-date.
London Fund of Funds Shop Hires
Marketing Head
FIM, a $2 billion fund of hedge funds firm,
has hired Lorenzo Rodriguez as managing
director of new business development—a
new position. Rodriguez will be in charge of
growing FIM’s asset base in Europe, South
America and the Middle East, according to
Federico Ceretti, ceo. Rodriguez will focus
Lorenzo Rodriguez on institutional markets in those areas,
Ceretti said. Rodriguez was not available to comment.
Prior to joining FIM, Rodriguez marketed funds across
Europe and the Middle East for DKR Capital. Prior to that he
worked at AIG and Bank of America in similar roles.
“We are confident that Lorenzo’s presence at FIM will mark the
beginning of a new phase of expansion for our business. We intend
to be a leading player with global reach, and his experience and
successful track record will undoubtedly benefit our expansion
plans,” said Carlo Grosso, founder and executive chairman.
Tired of fighting
over the lastest
newsletter copy?
Here’s a simple, painless solution.
The Corporate Access Program.
■
■
■
■
Instant, online access to breaking news, feature stories, league tables, rankings,search listings and online archives.
Information- and user-specific plans tailored to meet your company’s needs and bottom line.
An opportunity to limit your worries about copyright infringement.
Business leads and insights into regulatory outlooks.
Interested? Call Daniel Lalor at 212-224-3045 or [email protected], or
Julian Davies (U.K.) at 44-20-7779-8929 or [email protected]
INSTITUTIONAL INVESTOR NEWS / 225 PARK AVENUE SOUTH / NEW YORK, NY 10003 / WWW.IINEWS.COM
22
4/17/06
12:11 PM
Page 1
The 4th Annual
Alternative Investment News
Hedge Fund Industry Awards
Black tie optional
June 28th, 2006 • Gotham Hall • New York City
This gala event - held in conjunction with Institutional Investor's Spring Hedge Fund
Investment Roundtable, June 28-29, 2006 - will bring together the hedge fund
industry to recognize and applaud the achievements of its peers. The awards dinner
will include key industry players - hedge fund managers, funds of funds, endowments,
foundations, and corporate and public pension funds.
2005 Hedge
Fund Dinner
LIFETIME ACHIEVEMENT AWARD:
John Meriwether, JWM Partners
AWARD NOMINEES
EMERGING MANAGER:
KGR Capital
Pershing Square Capital Management
Sandelman Partners
Shooter Fund Management
Square Capital Management
INSTITUTIONAL MANAGER:
ABN Amro Asset Management
Goldman Sachs Asset Management
HSBC
ING Alternative Asset Management
State Street Global Advisors
HEDGE FUND LAUNCH:
Convexity Capital
Magnetar Capital
Peloton Partners
Renaissance Technologies
SAC Capital Advisors
FUND OF FUNDS LEADER:
Financial Risk Management
Gottex Fund Management
Investcorp Asset Management
Muirfield Capital Management
Optima Fund Management
INSTITUTIONAL INVESTOR:
California Public Employees' Retirement System
ITT Industries
San Diego County Employees
Retirement Association
Teachers Retirement System of Texas
West Yorkshire Pension Fund
HEDGE FUND LEADER:
AQR Capital Management
Brevan Howard Asset Management
Ospraie Management
Pirate Capital
Third Point Management
To secure your sponsorship or table reservation, please contact:
Tracey Redmond, 212-224-3239, [email protected].
2006 HEDGE FUND
ADVISORY BOARD
Joel Katzman,
Formerly JP Morgan
Alternative Asset Management
Nick von Speyr,
Optima Fund Management
Kent Clark,
Goldman Sachs
Hedge Fund Strategies
Victor Park,
Alternative Asset
Investment Management
Mehmet Dalman,
WMG Limited
Stuart Beretz,
Senior Managing Director,
Global Prime Brokerage
Services, Bear Stearns
AIN050106
4/27/06
6:42 PM
Page 9
May 1, 2006
www.iialternatives.com
Alternative Investment News
Under The Hood: AIN’s look inside hedge fund strategies
Thames River Japan Fund Gains
In March
London-based Thames River Capital’s long/short Japanese
equity fund returned 4.68% for the yen share class during March
because of gains in the long book and in futures. But the short
equity book was down slightly, losing 21 basis points. The
month’s performance contributed the majority of the fund’s gains
this year, leading to a 5.22% return for the first quarter. Long
positions in the $138.9 million Thames River Edo Fund made
3.81% last month, and futures returned 1.08%, according to an
investor letter. Rod Birkett, fund manager, declined to comment,
citing firm policy.
The fund had been overweight in the electrical sector
(iialternatives.com, 1/27) but has now reduced its net exposure
following five months of out-performance, the letter explains. It
observes that smaller-cap Japanese stocks “again lagged their
larger counterparts” in March. “Given our continued concern
about smaller company valuations, the weighted average market
cap in the long book is marginally greater than the average for
the Topix index,” says the letter.
London CTA Shines With
Metals Exposure
Mulvaney Capital Management’s $135 million Mulvaney Global
Markets Fund was up 13.05% in March, giving it a 22.20%
return for the first quarter. The fund benefited from a price surge
in precious and industrial metals, which returned 8.61% last
month. Paul Mulvaney, founder and cio, could not be reached
by press time.
Silver “is being helped to record highs by news that the
first exchange-traded fund tracking silver’s price is in the
pipeline,” according to an investor document. Copper also
rose, supported by strong demand from countries including
China, as well as a strike at a large Mexican producer, the
document says. “Gold is also surging as investors buy bullion
in the wake of speculation that the dollar may weaken,” it
continues.
After metals, the second-best performing sector was
livestock, which returned 2.91%. “Short positions benefited
from the U.S. Department of Agriculture forecasting ample
summer supplies of slaughter-ready cattle and from news
surfacing that hog supplies are expected to increase,” the
document says. The CTA fund also gained from exposure to
sugar, which rose on concerns of a reduction in production
from Brazil, as well as increased demand from fast-growing
economies.
The Mulvaney fund had a short euro/yen position which
benefited from concerns about the Bank of Japan upping interest
rates. But the fund lost out in two long financials positions. Its
exposure to the peso was hurt by a sell-off following “a retreat
from emerging markets and evidence of recent rises in Mexican
unemployment.” And worries about the widening gap between
Canadian and U.S. interest rates adversely affected the fund’s
long Canadian dollar position.
GLG Fund Wins With
BlackBerry Bet
London-based hedge fund colossus GLG Partners’ GLG
Technology Fund scored on its long position in Research In
Motion, makers of the BlackBerry device. RIM had been
suffering under a dark cloud due to a patent dispute with NTP
Inc., which threatened to derail the company and its popular
hand-held devices. Last month RIM opted to settle, forking over
roughly $612 million. GLG initiated its long position not long
before the settlement, after which RIM’s stock price shot up.
“This trade was unusually attractive due to the ability to buy
low cost option protection around the court date,” according to
an investor document.
The fund also scored with its positions in JDS Uniphase,
Avanex, Ciena, Alcatel and Adva. “We still see between 50 and
300% upside to each [of ] these names due to the huge
operating leverage inherent in their business models,” the
document says. GLG planned to actively trade around these
core positions and lighten up during periods of excessive
buying, heading into this month.
The hedge fund sent two of its analysts to Asia last month to
research the state of the semiconductor industry’s supply chain.
GLG found that the industry was healthy, but the Street
consensus is that there is a peak in prices, which could set off a
short squeeze. To counter this, GLG has moved into long
positions in semiconductor stocks.
The fund was up 11.91% last month, bringing its year-to-date
performance up to 17.18%. This differs drastically from the
firm’s global macro fund, which was down 10.18% last month
after its views on the U.S. fixed income and currency picture did
not play out as expected (AIN, 4/24). A GLG spokeswoman
declined to comment.
Copying prohibited without the permission of the publisher.
9
The Message Is Simple.AIN
2/9/06
6:37 PM
Page 1
The Message Is Simple…
JANUARY 23, 2006
A New Face On K-Street
ENRON SHORT-SELLER CHANOS
READIES NEW HEDGE FUND LOBBY
Renowned short-seller James Chanos, who in 2002
famously drew attention to “overvalued” Enron stock, is
preparing a new hedge fund trade association that would
006
RY 16, 2
represent the industry’s interests inside the Beltway. Chanos
JANUA
has been working on the group, tentatively named Coalition
!
Cheerio
TS HFR ead of HFR Asset the of Private Investment Companies (CPIC), for several
I
U
Q
N
GODDE en, the well-knowsinnhess and a regularpoonrted onmonths, according to an individual familiar with his plans.
dd
bu
first re
DECEMBER 5, 2005
John Go nt’s European
firm. As t Godden’s
me
e
g
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Lower The Gate!
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k
it
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y, it is
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conferen site last Monda be filled by Ma
CITADEL HIT WITH REDEMPTIONS
y
eb
.
AIN’s W ill at least initiall ot return a call
n. 6. Investors are fleeing Citadel Investment Group’s flagship
Ja
n
n
w
o
id
ti
n
d
si
o
positi
enogent resigned his po e said,
e v.p. D
Kensington Global Strategies fund as performance woes
executiv n told AIN he een brewing,” h
b
d
a
have exacerbated sticker shock over the fund’s fees. The
h
Godde
en; it
g’s sudd
exodus has triggered the firm’s gate provision—a rare
“Nothin
occurrence for most healthy funds—that limits quarterly
redemptions to a set percentage of assets, according to
former investors. With the gate provision in place,
5
3, 200
investors now have to pay a penalty on redemptions, but
OCTOBER
EEN
Y FUND S
IT
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renowned
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s returned 4.9%
ha
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SEPTEMBER 26, 2005
Three-Year Lockup
SAC PREPS MULTI-STRAT FUND
DECEMBER 26, 20
05
Back In Black
GLG DEBUTS TW
O
FU
NDS
London-based GL
G Partners has lau
nched two new
funds and is makin
g some headway
to reverse the poor
performance of som
e of its others. Th
e firm launched th
$200 million GLG
e
Emerging Markets
Fund and GLG
Consumer Fund No
v. 1.
The emerging ma
rkets fund invest
s in equities,
corporate bonds,
sovereign debt an
d local market
NOVEMBER 28, 2005
Sales In Demand
HEDGE FUND REFUGEES
RETURN TO LONG-ONLY
WORLD
Refugees from
a tough hedge fund market
are
returning to their long-only
roots. Traditionally,
talent has moved one way—f
rom long-only shops to
hedge funds. And while mo
st movement is still in
this direction, there is for the
first time an opposing
trend, according to a recent
study by Russell
SEPTEMBER 12, 2005
About Face?
Steve Cohen’s SAC Capital Management is rolling out a
new multi-strategy fund that will lock up investors’
PIMCO READIES GLOB
AL
capital for three years. Details remain elusive, as the
Stamford, Conn.-based firm is having potential investors CREDIT FUND
Pacific Investment Ma
sign confidentiality agreements. “What they are doing is
nagement Co. is plann
ing to
making people who meet with them sign confidentiality roll out a global credit
fund, less than a year
after its
letters first—no exceptions,” said one potential investor. CIO Bill Gross vilified
the hedge fund indust
ry in one
of his famous monthly
outlooks. “Hedge fun
ds in
reality are just unregula
ted banks, operating on
a
poorly disclosed amoun
AUGUST 15, 2005
t of equity capital and
taking
AUGUST
SSGA LAUNCHES FIRST FIXEDINCOME HEDGE FUND
State Street Global Advisors has launched its first fixedincome hedge fund, the Absolute Return Mortgage Fund.
The long/short mortgage fund has $60 million of firm and
client money and capacity should be $1-2 billion, said
Chris Pope, director of sales and client service. SSgA wants
to provide its clients with a broader suite of absolute return
strategies and complement its range of equity hedge funds,
8, 2005
PRIVATE EQUIT
Y FI
INTO HEDGE FU RM BRANCHES
NDS
Callidus Capita
l Management,
a $1 billion New
private equity, str
York-based
uctured bond an
d loan fund spec
launched its first
ialist, has
hedge fund. Th
e capital structu
fund was launche
re arbitrage
d with $100 milli
on, said an indu
official familiar
stry
with the launch.
The Saepes Capit
fund takes 30-5
al Investors
0 positions, prim
ari
ly
grade and senio
in non-investm
r secured floating
entrate bank debt,
hedged with shor
which are
t positions in fix
ed-rate junior in
struments
…You Read It Here!
To Subscribe: Call: 212 224 3570
WEB: www.iialternatives.com
AIN050106
4/27/06
6:42 PM
Page 11
May 1, 2006
www.iialternatives.com
Private Equity News
Middle East Shop Sells One
Romanian Investment
Dubai-based private equity firm Scimitar
Global Ventures sold its nearly $5 million
investment in Romania-based Monopoly
Media last week to another Romanian media
company, giving their Middle Eastern
investors a net return of 60%. Monopoly
installs flat screen televisions in grocery stores
Scott Ogur
and banks to sell advertising space. Scimitar
sold Monopoly because after its products spread through the
country much faster than anticipated, traditional media
companies in the region became interested in acquiring it,
according to Scott Ogur, partner. Since Scimitar did not have
the funding to compete against larger media companies, the most
profitable alternative for their investors was to sell it, Ogur said.
He declined to name the Romanian media company that
acquired Monopoly.
Monopoly was one of two investments Scimitar made in
Romania. Its other was a nearly $5 million investment in Direct
Credit, a software firm whose program initiates loans between
banks and consumers (AIN, 4/17). Scimitar is also looking at
possible leveraged buyouts in security and energy sectors in the
country, but Ogur declined to name specific companies.
Closes First Fund
N.Y. Firm Plans Industrial Program
KTR Capital Partners, a New York-based private equity firm
that was launched by former Keystone Properties Trust
executives, has closed its first fund. Keystone Industrial Fund, L.P.,
a $505 million value-add fund, will invest in industrial
properties in major transportation and population hubs and is
the first in a planned series. The company plans to acquire and
develop $1.4 billion of industrial properties over the next few
years, said Robert Savage, senior principal.
The fund will use leverage of 65%. So far, it has made 13
investments totaling $244.3 million in Chicago, Central and
Northern New Jersey, South Florida, Houston, Charlotte and
Phoenix. Its portfolio comprises 2.7 million square feet and
another 3.3 million square feet of developable land. Savage said
the fund will not target any specific acquisition size, but will look
at entity-level transactions and individual one-off transactions.
KTR was formed after ProLogis acquired Keystone in 2004.
Keystone had been a major player in the industrial real estate
market when Savage was its chief operating officer. Keystone’s
former chief executive officer, Jeffrey Kelter, is a senior principal
Alternative Investment News
with KTR and the firm also includes former Keystone executives
John Dicola and Don Chase.
Savage said the fund will pursue a value-added strategy. This
will include repositionings, development or property
management. The fund will seek to add value by tailoring
property characteristics—like ceiling heights, adding cross
dockings—to meet user needs.
KTR has seen tremendous growth in emerging logistics
markets throughout the southeast and the Gulf of Mexico as
shipping traffic has become less focused on the ports of Los
Angeles-Long Beach and Newark. Moreover, the industrial sector
is less crowded with institutional players—four public REITs and
two or three large private players—than other major asset classes.
The fund has a subscription facility that is being led by Bank
of America.
Albuquerque Academy To Boost
Private Equity
The $215 million Albuquerque Academy will double its target
allocation to private equity to 8% to boost returns. The move
will be funded by trimming allocations to other assets, but the
academy has not decided which exposures to cut, said Richard
Elkins, treasurer. “We just see the potential returns from
traditional equities as being modest going forward and see better
opportunities in some of these other asset classes,” he said. The
fund could begin making new private equity investments this
year or next year. Managers should contact Meketa Investment
Group in Braintree, Mass.
Real Estate Delay
Slovenian Fund Eyes First Closing
KD Group, a Ljubljana, Slovenia-based asset management firm,
will perform a first-closing for its planned private equity fund in
the next month or so. The firm is aiming to raise EUR70 million
for the fund, which will invest in deals in the financial
telecommunications and healthcare sectors in Southeast Europe
(AIN, 2/20). But the firm has yet to grow assets from the EUR30
million it had raised by February, according to an official at the
firm. KD is in “the last stage of negotiations” with several large
institutional investors, however, and expects the remainder to be
allocated in the next few weeks, he added.
The fund will be managed by a team including Gavin Ryan,
who is former head of Soros Investment Capital Management, a
private equity shop focused on Southeast Europe that was
majority-owned by George Soros. It has since been renamed
Bedminster Capital Management.
Copying prohibited without the permission of the publisher.
11
AIN050106
4/27/06
6:42 PM
Page 12
Alternative Investment News
www.iialternatives.com
May 1, 2006
Search & Hire Directory
Powered by:
i i s e a r c h e s . c o m
The following directory includes search and hire activity for the week. The accuracy of the information, which is derived from many sources, is
deemed reliable but cannot be guaranteed. All amounts are in US$ millions unless otherwise stated. To report manager hires and new searches,
please call Nathaniel Baker at (212) 224-3648 or Robert Murray at 44 (0)207 303 1705 or fax (212) 224-3939.
Potential Searches
Fund & City
Mandate
Size
(Mlns)
Total
Amt (Mlns)
Fund
Type
Consultant
Comments
USD75
Foundation
Global / Alternative /
Hedge Fund
USD8
N/A
Fund has pulled USD7.5 million out of long/short equity hedge
funds and is looking to invest it by May with long-only
international equity managers and true hedge funds, such as
trading strategies.
CAD1,500
Endowment
Canada / Alternative /
Portable Alpha
N/A
N/A
Fund is looking to expand its portable alpha program across
more equity classes, but is not taking calls from managers at
this time.
USD40
Public D.B.
US / Alternative /
Timberland/Vineyards
USD2
Dahab Associates
RFPs are available at http://dahab.com/searches.html. Proposals
are due March 31 with final presentation on May 10.
USD2,467
Public D.B.
US / Alternative /
Absolute Return
N/A
N/A
Sifting through a short list of managers. The fund classifies pure
alpha strategies, global tactical asset allocation and hedge
funds as absolute return strategies. It would prefer a separate
account rather than invest in a hedge fund to obtain more
transparency and customization.
USD33,000
Permanent
US / Alternative /
USD200
Callan Associates
Mariner Investment Group, Inc.
USD100
Callan Associates
Lazard Asset Management
USD200
Callan Associates
Martingale Asset Management
USD200
Callan Associates
UBS Global Asset Management
USD125
N/A
Abbott Capital Management, LLC
USD125
N/A
Pathway Capital Management
USD100
N/A
GI Partners
USD100
N/A
Guggenheim Partners
Pension Consulting
RREEF Funds
Albert & Ethel Herzstein Charitable
Foundation, Houston, TX
University of Toronto, Toronto,
Ontario
Assignment
New Searches
City of Overland Park Police Department
Retirement Plan, Overland Park , KS
Houston Firefighters’ Relief and
Retirement, Houston, TX
Completed Searches
Alaska Permanent Fund Corporation,
Juneau, AK
Alaska Permanent Fund Corporation,
Fund
USD33,000
Juneau, AK
Alaska Permanent Fund Corporation,
Permanent
Fund
USD33,000
Juneau, AK
Alaska Permanent Fund Corporation,
Hedge Fund-of-Funds
Permanent
Fund
USD33,000
Juneau, AK
Permanent
Public D.B.
Public D.B.
Juneau, AK
USD49,000
Public D.B.
USD49,000
Public D.B.
USD1,600
Public D.B.
US / Alternative /
USD40
Real Assets
EUR187,000
Public D.B.
Heerlen, Netherlands
Global / Alternative /
Alliance
EUR3,000
N/A
AlpInvest Partners
EUR3,000
N/A
AlpInvest Partners
N/A
AQR Capital Management LLC
Private Equity
EUR59,900
Zeist, Netherlands
Wisconsin Alumni Research
US / Alternative /
Private Equity
Retirement System, Santa Barbara, CA
Stichting Pensioenfonds PGGM,
US / Alternative /
Private Equity
Retirement Fund, Salem, OR
Stichting Pensioenfonds ABP,
US / Alternative /
Private Equity
Retirement Fund, Salem, OR
Santa Barbara County Employees
US / Alternative /
Private Equity
Alaska State Pension Investment Board, USD12,300
Oregon Public Employees
US / Alternative /
Hedge Fund
Juneau, AK
Oregon Public Employees
US / Alternative /
Hedge Fund
Fund
Alaska State Pension Investment Board, USD12,300
US / Alternative /
Hedge Fund-of-Funds
USD1,400
Hybrid DB-DC/
Global / Alternative /
Cash Balance
Private Equity
Foundation
Global / Alternative / Hedge FundUSD30
Foundation, Madison, WI
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 [email protected].
12
Copying prohibited without the permission of the publisher.
AIN050106
4/27/06
6:42 PM
Page 13
May 1, 2006
www.iialternatives.com
Alternative Investment News
Data Zone
This week, we take a look at multi-strategy hedge funds. The table below displays some of the top performing funds in
this sector, according to data provided by Eurekahedge. The data is deemed to be reliable, however AIN cannot vouch
for its accuracy. For questions please contact Eurekahedge.
Multi-Strategy
March 06
Return %
(1.76)
2005
Return
68.07
Standard
Deviation
52.24
Sharpe
Ratio
0.40
AuM
(US$
Million)
87
Previous
DataZone
Appearance(s)
April 3
Fund
Russian Opportunities Fund
Manager
Eurostep (Cyprus)
Region
Europe
2006
Return %
36.68
Ginger Capital Fund
Ginger Capital
Management
Asia
35.07
16.31
(5.04)
22.42
0.89
140
-
India Capital Fund
India Capital
Management
Asia
34.94
18.28
39.42
33.07
0.30
206
April 3, March 6, Jan. 30
LIM Asia Alternative Real Estate Fund
LIM Advisors
Asia
24.16
12.81
12.68
14.56
1.67
80
-
BTR Global Arbitrage Fund (Class B)
Salida Capital
North America 22.95
10.26
9.28
14.08
1.60
110
-
RAB Energy Fund - Class A
RAB Capital
Europe
19.07
4.64
37.78
16.96
3.38
446
April 3, March 6, Jan. 30
Dynamo Cougar
Dynamo Administracao Latin America 14.45
de Recursos
0.71
24.48
49.54
1.51
322
April 3, March 6, Jan. 30
RAB Multi Strategy Fund - Class B
RAB Capital
Europe
11.66
3.88
11.14
9.33
1.49
217
March 6
GLS Offshore Global Opportunities Fund
GLS Capital
North America 11.35
1.34
5.94
20.51
0.39
155
April 3, March 6
Permal Fixed Income Special
Opportunities - Class A
NWI Management
North America 10.48
1.32
7.39
8.98
1.24
647
-
Longview Fund
Viking Asset
Management
North America 10.06
5.11
21.08
15.13
1.83
84
-
Permal Global Opportunities - Class A
NWI Management
North America 9.53
1.84
28.24
17.62
0.57
503
Jan. 30
Metage Global Strategies Fund I
Metage Capital
Europe
9.40
1.07
22.30
8.37
2.51
129
April 3, March 6, Jan. 30
HG Verde 14
Hedging Griffo Asset
Management
Latin America 9.15
0.16
20.27
8.82
2.00
77
-
Claritas Hedge
Claritas Servicos
Financeiros
Latin America 9.09
(0.82)
28.53
7.03
1.82
46
-
Deephaven Market Neutral Fund
Deephaven Capital
Management
North America 8.71
2.72
6.13
5.26
1.73
872
-
Access Turkey Fund
Access Turkey
Europe
8.69
(5.30)
61.23
55.90
0.56
57
-
Hadron Fund - Class B USD
Hadron Capital
Europe
8.43
5.01
17.75
6.91
2.06
78
-
Everest Capital Emerging Markets
Everest Capital
Latin America 8.40
(0.62)
26.94
26.99
0.41
400
April 3, March 6, Jan. 30
EurekaHedge Commentary: Multi-Strategy Funds
Rising commodity prices, coupled with continued high levels of corporate activity and strong equity markets, ensured that most conventional hedge fund strategies had a terrific month
in March (the benchmark Eurekahedge hedge fund index was up 2 % for the month). It comes as no surprise then that this has translated into robust gains for multi-strategy hedge
funds as well, with the Eurekahedge multi-strategy hedge fund index up 2% for the month. The month’s key return-generating regions for multi-strategy funds were Asia and North
America, with the corresponding Eurekahedge regional indices rising 3.7% and 2.3% respectively. This was in spite of the overall tightening credit spread environment, as the Federal
Reserve met on the 28th, announcing a hike in the short term interest rate (to 4.75%) and indicating further hikes as and when increases in energy prices and resource utilization raise
inflationary pressure.
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AIN050106
4/27/06
6:42 PM
Page 14
Alternative Investment News
www.iialternatives.com
OSPRAIE READIES
(continued from page 1)
fund because its flagship offering is not set up to accommodate
enough of the longer-duration, more concentrated investments
typical of private equity plays. The fund’s hybrid structure is
further amplified by its lockup provisions, which will average
around four years. There will also be some side pocket
investments with undefined liquidity periods.
The firm is a nominee for AIN’s Hedge Fund Leader of the
Year award. Winners will be announced at a June 28 dinner in
New York.
—Mark Faro
BLACKSTONE AFFILIATE
(continued from page 1)
money for hedge fund investments at Park Hill.
The Credit Suisse group has approximately 60 staffers
worldwide. Victoria Harmon, Credit Suisse spokeswoman, said
the firm is actively seeking to replace them. Blackstone helped
fund Park Hill at its 2004 inception. Calls to the departing trio
and to Park Hill officials were not returned.
The departures follow a recent shake-up at the bank’s hedge
fund of funds group, where its top two executives in New York
were replaced last month (AIN, 4/10). This shake-up followed
May 1, 2006
Credit Suisse’s OneBank initiative, a broad effort to streamline
business operations throughout the bank (AIN, 9/19).
—Elana Margulies
DALIO: HEDGE
(continued from page 1)
Fallout from the 1994 U.S. Treasury bailout of Mexico led to a
7% drawdown, the 1998-1999 Long Term Capital
Management meltdown resulted in an 11% flight of assets and
the 2000-2003 bear market in U.S. equities led to a 9%
drawdown.
The comparatively smaller size of the hedge fund industry
during those periods meant these losses could be absorbed more
seamlessly by global markets. Yet today, “since the amount of
money is larger, we are inclined to believe that the negative
impact of trying to get through the keyhole at the same time
would be larger,” says the letter.
Specifically, in today’s terms, a 10% drawdown would
translate into $80 billion, or roughly one-half to two-thirds of
the S&L crisis bailout, Dalio writes. “We believe that losses are
likely to be higher (probably over $100 billion) because when
problems occur and liquidity dries up, losses become greater.”
—Nathaniel Baker & E.M.
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B400101
NAME
TITLE
JANUARY 2004
VOL. V, NO. 1
FIRM
GATE SLAMS ON
MILLENNIUM INVESTORS
FrontPoint Shuts Down
Quant Fund
FrontPoint Partners has
for the first
time liquidated one of its
funds. The
Greenwich, Conn.-based
hedge fund
juggernaut has shut
down the
Quantitative Equity Strategies
(QES) fund.
See story, page 19
ADDRESS
Some investors looking to
get out of an offshore fund
last quarter run by multi-billion
dollar hedge fund firm
Millennium International
Management found they
were stuck. That’s because
following a guilty plea by
a
former senior trader at the
Millennium International
Fund, the fund’s redemption
limits were reached,
(continued on page 25)
At Press Time
Ex-Ranger Manager Readies
Fund
LONGHORNS TO PLOW
INTO ALTS
2
U.S. Searches
CITY/STATE
POSTAL CODE/ZIP
Ispat Inland Considers Mezz.
Search 10
Albuquerque School Weighs
Funds 12
COUNTRY
European Searches
French Insurer Seeks Hedge
Funds
Health Charity Makes Foray
16
16
Bob Boldt
U.S. Manager News
Former Caxton Bond Trader
Returns 19
Amaranth Unveils Changes
20
TEL
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22
News From Other Ports
Telstra To Tap Managers
25
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The University of Texas System’s
$11.5 billion endowment
funds are
seeking to add roughly $575
million in new hedge fund
investments this
year. The funds, which are
managed by the University
of Texas
Investment Management
Company (UTIMCO), currently
have a little
over 20% of their assets allocated
to hedge funds, and the goal
a 25% allocation, said Bob
is to have
Boldt, cio. The school is leaning
towards
investing in absolute return
funds over other hedge fund
styles, Boldt
(continued on page 4)
FARALLON FOLLOWS LONE
PINE’S LEAD
ON HIGH-WATER MARKS
Farallon Capital Managemen
t, the San Francisco-based
hedge fund behemoth run
Steyer, is the latest hedge
by Tom
fund manager to propose
changes to its high-water
provisions. As first reported
mark
on AIN’s Web site, www.iialtern
atives.com, the move would
the firm in line with a growing
put
number of funds adopting
changes first proposed last
by Tiger cub Lone Pine Capital
spring
that allow hedge fund managers
even when their funds are
to earn performance fees
under water. Farallon wants
the ability to earn a reduced
(continued on page 26)
KLM TO WEIGH FUNDS
(continued on page 26)
Check www.iialternatives.
com during the week for
CREDIT CARD NUMBER
EXPIRATION DATE
OF FUNDS
The €8 billion KLM Pensioenfon
ds, the Amstelveen-based
pension plan for pilots, crew
members and ground staff
of
KLM Royal Dutch Airlines,
may make its first foray into
hedge funds of funds this
year. Fons Lute, cio of Blue
Sky
Group, the money managemen
t subsidiary of KLM
Pensionenfonds, said he plans
to recommend a 2-5% allocation
hedge funds of funds at a
to
board meeting in April.
breaking news and updates.
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AIN050106
4/27/06
6:42 PM
Page 15
May 1, 2006
www.iialternatives.com
The Long & Short Of It
Alternative Investment News
Quote Of The Week
Going Market-Neutral: The Nobel
Foundation. The folks who award the
Nobel Prize decided to invest in hedge
funds and recently completed their
maiden allocations. AIN is going long on
the reputable organization for this move,
which potentially supplies the industry
with a very powerful endorsement. Then again,
the terms “Nobel Prize” and “hedge fund” have been used
together before—most infamously when several Nobel Prize
winners joined as founding partners of a certain Greenwich,
Conn., firm about a decade ago. And of course, the Nobel
committee has not exactly been immune from questionable
decision-making (two words: Yasser Arafat. Two more: Jimmy
Carter). Finally, this move has affixed targets not only to the
foundation’s own back, but to the backs of hedge fund firms it
has hired—Corbin Capital Partners, Rock Creek Group and
Carnegie Corp. The Swedish foundation—and everybody else
for that matter—is certainly free to invest in hedge funds at
their discretion (reporters might even do this if they could
afford to). In this instance, however, it is too early for AIN to
commit to a long or short, making market-neutral the
conscientious choice.
Calendar
• 100 Women in Hedge Fund’s Environmental Risk, Untapped
Opportunity and Shareholder Value, at Bear Stearns, 333
Madison Avenue, New York. May 3. 5:00 p.m.
www.100womeninhedgefunds.org
“What kind of example does it set when a CEO who makes $33.7
million in a single year is given free housing while the company is
having difficulty retaining its mine workers?”—Daniel Loeb,
Third Point, in his latest letter to Massey Energy Company
CEO Donald Blankenship (see story, page 3).
One Year Ago In Alternative Investment News
Daniel Loeb, ceo of Third Point, sold his equity position in
small appliance maker and distributor Salton Inc., makers of
the George Foreman Grill. [A few months later, hedge fund titan
Angelo, Gordon & Co. agreed to a private debt exchange with
Salton, where Salton issued new bonds to the firm. The firm
also received preferred and common shares as part of the deal
(AIN, 7/11).]
5 Years Ago
Pequot Capital Management’s founders parted ways with Arthur
Samberg staying put and Daniel Benton leaving to start Andor
Capital Management. Benton took about half of Pequot’s $15
billion in assets with him. [Since the split, Pequot’s assets have
remained at nearly $7 billion and Andor’s have dropped 46% to
$3 billion. This decline transpired after CEO Chris James’
departure in 2004, which prompted the firm to liquidate the four
funds he managed (AIN, 7/15/04). Andor’s flagship Andor
Technology Offshore fund was down 15.65% in 2003. In 2004 and
2005, it returned 5% and 15.11%, respectively, and was up 7.8%
through the end of January of this year. A Pequot spokesman
declined to comment and a call to Andor was not returned.]
• MarHedge’s 12th Annual Mid-Year Institutional Investment
Conference, at the Palace Hotel, San Francisco. May 7-9.
Contact: Mark Salameh, 646-274-6268. E-mail:
[email protected]
• Opal Financial Group’s Alpha Max 2006 at Hotel Fira Palace,
Barcelona. May 8-10. Contact: 212-532-9898, E-mail:
[email protected]
• 2006 Value Investing Congress West Conference, at the Los
Angeles Airport Marriot, Los Angeles. May 10-11.
www.valueinvestingcongress.com
• Forex Profit and Loss Network’s Thought Leadership in Action,
at Three Times Square Conference Center, New York. May 11.
Contact: Lisa Wilson, [email protected]. www.profitloss.com
• International Finance Corporation’s 8th Annual Global
Private Equity Conference, at the Ronald Reagan Building and
International Trade Center, Washington, D.C. May 11-12.
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15
Project4
1/3/06
3:29 PM
Page 1
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