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AIN012108
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SAC PM JOINS TRIVIUM
JANUARY 21, 2008
VOL. IX, NO. 3
Web Exclusive
Bear Stearns is creating a distressed
mortgage business that will develop
strategies to use both the bank’s capital
and manage capital for others.
Visit iialternatives.com
At Press Time
Allan Reine, former portfolio manager at SAC Capital Management, has joined New Yorkbased Trivium Capital Management to head up the $735 million firm’s healthcare portfolio.
Trivium Onshore Fund, a long/short equities strategy is seeking to increase its exposure to
healthcare Reine told AIN. The fund is expected to soft-close at $1.2 billion this year. An
SAC spokesman declined to comment.
Trvium’s fund also invests in consumer and technology. For now, Reine will focus on
U.S. companies, but he expects to eventually expand to a worldwide mandate. Reine spent
two-and-a-half years at Steven Cohen’s firm, managing one of its biotech strategies. He
(continued on page 22)
Burdick Moves To Apollo
Guggenheim Pounds Pavement
For PE Funds
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Americas
Banks, Insurers Next For Activist?
Lipschutz Has Banner ’07
Convexity Returns Rebound
Bond Play A Winner For Stillwater
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Europe
Madrid Shop Unveils Alts Foray
AltEdge Opens Swiss Office
Synergy Preps ABL Launch
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New York-based Stonebrook Capital Management is negotiating with a mutual fund
provider to convert its limited partnership alternative beta hedge strategy into a mutual fund
by the end of the second quarter. CIO Jerome Abernathy said the manager intended to
convert the strategy to a retail structure if it was successful. “We came through [last year]
with flying colors,” he said, citing annual returns of 10.45%. “That was the litmus test for
us, and now we’re ready to roll out to a larger audience.”
The $54 million Stonebrook Alternative Beta Fund, which launched in May with just
$1 million, identifies the alt beta portion of returns from Hedge Fund Research’s HRFI
Fund Of Crusaders
LA FAYETTE UNVEILS NOVEL FoF STRAT
Vendor/Regulatory News
EM Consultant Opens For Business 15
SEC Unveils Compliance Targets
15
Departments
In The News
Search Directory
Data Zone
Mandate Scoreboard
BETA STRATEGY TO BECOME MUTUAL FUND
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Fund of hedge funds firm La Fayette Investment Management, with $6
billion under management, has launched a strategy that allocates solely to
activist hedge fund managers. It is believed to be the first of its kind in
Europe. André Pierre Visser, founder, chairman and cio and Kevin Dolan,
ceo, head a four-strong team that manages the fund from London. The
portfolio allocates to seven managers in the U.S. and Europe, with a
target of up to a dozen managers.
CARDANO STARTS U.K. ALTS BUSINESS
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Rotterdam-based pension consultant Cardano is launching an alternatives business geared to
U.K. institutions that will round out its six month-old London office. The 11-person team
manages $10 billion from three U.K. pensions, with alternatives allocations totaling an
estimated 15-16%, but Kerrin Rosenberg, who heads the U.K. business, told AIN he expects
to ultimately have 20-30% of a targeted $80-100 billion dedicated to alts within five years.
The firm will be investing these funds itself as the “solvency management” contract it
signs with clients gives it full custody of assets. “Within that, alternatives is obviously an
Check www.iialternatives.com during the week for breaking news and updates.
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Alternative Investment News
www.iialternatives.com
January 21, 2008
At Press Time
Guggenheim Shopping
Asia PE Funds
New York-based Guggenheim Capital Markets is raising money
for two Asia-focused private equity funds expected to close in the coming
months. HSBC Private Equity Asia, with headquarters in Hong Kong, asked
Guggenheim to raise money for its sixth Asian Regional Private Equity Fund,
which provides middle-market expansion capital and buy-out funds throughout
Asia. That fund will likely raise $800 million-$1 billion within a few weeks and
hard close at $1.5 billion. Guggenheim targets corporate and public pension
funds, other large institutional investors and private investors.
Jacob Ballas Capital India, based in New Delhi, asked Guggenheim to grow
its third fund to $500 million from $220 million. New York Life Insurance owns
nearly 25% of Jacob Ballas and the firms have formed a private equity alliance,
with Jacob Ballas the investment advisor. The New York Life International India
Fund III will invest in growth companies working to meet India’s surging
infrastructure needs. That fund is expected to close by April, the investor said.
Guggenheim’s private fund group raises capital for private equity funds, hedge
funds, fixed-income offerings and third-party investment vehicles. The private
fund group has raised roughly $2 billion since inception in 2000. This is the first
time the group has raised money for Jacob Ballas. It has completed three separate
rounds of fund-raising for HSBC over the past 15 years.
Apollo Snags Rainmaker For Capital
Markets Push
Apollo Management has hired Robert Burdick, chief marketing officer at Pequot
Capital Management in New York, to spearhead an aggressive growth plan for its
capital markets division. Serving as co-head of marketing, Burdick will work
alongside Stephanie Drescher, a partner who focuses on Apollo’s private equity
business. They plan to build an “institutional quality” marketing and client service
group and have yet to decide how many people to hire.
Apollo manages $10 billion in five capital markets vehicles, including some
hedge funds, and intends to launch additional strategies. Its current offerings—
Apollo Strategic Value Fund, AP Investment Europe, Apollo Investment Corporation,
Apollo Asia Opportunity Fund and Apollo European Principal Finance Fund—
focus on debt and equity in the public and private markets. “The close
collaboration among the firm’s investment teams is truly impressive,” said
Burdick, adding that Apollo has a fantastic reputation. The firm has $40 billion
in total assets under management.
Burdick and his team raised more than $3 billion in institutional assets for
Pequot, which he joined in January 2005. He hired 12 client-facing marketers
and client service professionals, eight of who remain with the firm. Frances Selby,
head of client service, will replace him.
Throughout his career, Burdick and marketing teams he has led have raised
$30 billion. He has worked for MacKay Shields, Loomis Sayles & Co. and
Travelers Asset Management Pension Services.
2
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January 21, 2008
Americas
General Atlantic Expands To Brazil
New York and Greenwich, Conn.-based private equity
investment firm General Atlantic, with $17 billion under
management, has opened an office in Sao Paolo, part of the firm’s
growing interest in Latin America, said Patricia Hedley, senior
v.p.. So far, the office has two people but the 70-person firm will
be adding more, she said.
General Atlantic invests in two companies in South America
that have gone public recently, she said. They are MercadoLibre,
Latin America’s version of eBay, which is based in Argentina, and
the Brazilian Mercantile and Futures Exchange in Sao Paolo.
The firm’s focus is on growth companies, with investments in
China, India, Europe and Latin America. Last year, it invested
$2.1 billion, Hedley said. The firm typically makes 8-12
investments a year, with an average holding period of five-toseven years.
The Sao Paolo office is the firm’s eighth. The others are in
London, Hong Kong, Dusseldorf, Mumbai, and Palo Alto, Calif.
Activist Set Sights On U.S.
Insurers, Banks
Regulated financial service companies such as insurance
companies and banks could be the next target of U.S. activist
investors, said Clifford Press, a managing member at New Yorkbased activist investor Oliver Press Partners. Press said his shop
will pursue an insurance company or bank in the next couple
months and file a 13-D, announcing at least a 5% stake in the
company and stating its demands. He declined to name the
company or companies that interest him.
“Activism has come into its own in the last few years,” said
Press, about the timing of the move. He said activist investors feel
emboldened because shareholders are less deferential to boards
than before. And they see such regulated companies as good
opportunities because of historical relative immunity to takeovers
and restructurings, as well as being undervalued, he said. The
move on them by activist investors in Europe is fast becoming a
trend, he said.
Generali, Italy’s largest insurer, is the target of activism by
minority shareholder and investment bank Mediobanca,
which is demanding better performance. U.S. investor Carl
Icahn is backing Swedish activist investor Cevian which is
demanding changes at Munich Re, the second biggest
reinsurer in the world.
Phil Goldstein of activist investor shop Bulldog Investors said
he did not know of any insurance companies or banks that have
been pursued by activist investors in the U.S. Former AIG Chief
4
Executive Hank Greenberg considered a proxy contest against
AIG but decided against it.
Hudson Bay Reopens Fund
New York-based Hudson Bay Capital Management has
reopened its maiden hedge fund, Hudson Bay Fund, to new
investors Jan. 1. The multi-strategy, event-driven offering was
soft-closed last year, according to Stephanie Reckler, head of
investor relations.
The firm seeks to grow fund assets to $550 million from
$300 million, she said. The strategy, which invests in derivatives
and makes private investments in public securities (PIPEs),
returned 8.4% through Nov. 30. The firm is in talks with global
pensions, foundations, endowments and family offices.
Sander Gerber, John Doscas and Yoav Roth co-founded
Hudson Bay, a spin-off of proprietary trading firm Gerber Asset
Management, in 2005. Charlie Winkler, former coo of
Amaranth Advisors, joined the firm as its new coo last month
(iialternatives.com, 1/14/08.)
Gerken Preps MENA Strategy
San Francisco-based Gerken Capital is
preparing a Middle East/North Africa
(MENA) fund for launch later this year and is
in talks with potential seed investors,
including asset managers and institutional
investors in the region. Once a partner is
identified, the fund will begin trading, most
Lou Gerken
likely in the third quarter, according to Lou
Gerken, founder of the $1.4 billion firm.
The strategy will invest in the United Arab Emirates, Saudi
Arabia, Bahrain, Oman, Qatar, Kuwait, Egypt, Turkey and
Libya, focusing on energy, infrastructure, construction, financial
services and retail. “These are very vibrant parts of the Middle
East,” Gerken said.
The firm has not decided who will manage the strategy, but
the manager will be located in Dubai. The fund’s investment
minimum will be $1 million with fees of 2/20.
Gerken is also preparing to launch an India fund this quarter
and a Russia fund next quarter (iialternatives.com, 8/17/07). Its
other offerings are a Greater China strategy, a BRIC fund and a
Latin American strategy. “For every additional fund that we add
to our platform, it gives investors more and more of a global
emerging markets menu to choose from,” Gerken said.
Gerken founded the hedge fund and private equity firm
in 1989.
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Lipschutz’s Hathersage
Has Banner ‘07
Hathersage Capital Management, the South
Norwalk, Conn., foreign exchange trading
outfit founded by Bill Lipschutz, saw returns
of over 34% in its $300 million Long Term
Currency Platform last year. This makes the
strategy the top performer of 69 managers
tracked by Deutsche Bank’s FXSelect
Bill Lipschutz
platform. H3 Global Advisors (32.85%
returns) was second-best, followed by Fortress Investment
Group’s Drawbridge (29.11%).
Itau Group Hires Director
São Paulo-based Itaú Private Bank, the private banking arm of
the Itaú Group, hired Philippe Sremau as head of investor
relations Jan. 1. Sremau’s role is to increase the firm’s investor
base, primarily in its latest roll-out, the Best of Brazil Investment
Fund, a fund of hedge funds that launched Oct. 1 with $20
million. Sremau said he will target Brazil-based institutional
investors and family offices.
Prior to joining the firm, Sremau worked at $2 billion family
office Arsenal in São Paulo. Previously, he spent five years at Ad
Valorem, a $200 million family office also in São Paulo. Itau’s
goal is to grow assets in the fund of funds to $100 million by the
end of the year (iialternatives.com, 8/31/07). Its alternative assets
division has roughly $1 billion under management.
Renewable Energy Manager Taps
Into Rising Demand
Sustainable Energy Investors is raising assets for its New Energy
Fund. The $15 million hedge fund recently secured
commitments totaling $20 million from two funds of funds,
which should be finalized this month. Partner Abigael Laufer
hopes to raise $500 million to $1 billion in the next three to five
years. She said demand from institutional and retail investors in
the U.S. is increasing as demand for renewable energy rises.
Laufer declined to name the funds of funds.
An offshore fund was launched in September and Laufer is
seeing enormous interest from Europe in solar energy and other
sectors. Laufer and Founder Marx Cox will be traveling to
conferences and road shows in Europe and the U.S. to pitch their
fund. They want to hire staff to fill back office positions so they
can focus more on marketing.
Demand for renewable energy will remain strong as long as oil
prices stay high, Laufer said. Sources of renewable energy will
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January 21, 2008
then become lucrative in terms of price competition. Negative
issues related to fossil fuel will persist, she continued, such as
climate change.
The fund invests in publicly-traded companies globally, but
Laufer and Cox think there are considerable investment
opportunities in the private sector. They will consider launching
a private equity fund this year. “There is a lot of entrepreneurial
innovation in this sector and not every company is ready to be a
public company,” Laufer said.
The investible universe is growing exponentially. When the
New Energy Fund was launched in 2004, Sustainable had only
about 25 public companies to choose from, compared to around
650 now. The fund focuses on supply and demand within the
renewable energy sector and holds 30-50 stocks, selecting
companies with annual growth expectations of 30-50%. As of
Sept. 30, the fund’s largest positions were solar energy, wind,
storage, bio fuels and efficiency. Fees are 1.5% and 20%. The
fund was up for 20% for 2007 and has a 28% annualized rate of
return over three years.
Middle Market Buyout Investors Told
To Hold Fast
Christopher O’Brien, Investcorp International’s head of direct
investment, private equity and real estate, told middle market
buyout investors to be extra
conservative going forward
because of a probable recession
this year. Speaking at a
middle market private
equity symposium held at
Columbia Business School
Jan. 8, O’Brien implored
investors to stick with their
core competencies and avoid
tinkering with their formula. “Don’t
be creative; you’re not an artist,” he said, to laughs from the
audience. “Creative is synonymous for off-strategy. Don’t do it.”
O’Brien said a recession now could be tougher than past
versions because raw materials prices will not go down, making
the margin for error on deals even slimmer. He suggests focusing
on existing businesses and investing in already successful deals to
pad future profits.
Middle market investors typically seek to buy companies in
the $100-150 million capitalization range. Attendees at the
conference said making a deal is already hard these days.
Howard Morgan, senior managing director, Castle Harlan,
said some sellers were now simply bypassing traditional buyout
shops. Three or four months ago, he said his firm was beat on a
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AIN012108
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Page 8
bid for a $100 million capitalization company by a public
entity offering to buy the company with 90% stock, instead of
cash, which the seller was willing to do. “I had never seen that
before,” he said.
Benjamin Hochberg, partner, Lee Equity Partners, said he’s
been frustrated that sellers are unfazed by the downturn. Their
demands and asking prices weren’t going down, accordingly, he
said. But David Lobel, founder, Sentinel Capital Partners, said
private equity firms were fighting back because things were
tough. “Today if you want to come to market with a mediocre
business, you’ll get a mediocre price,” he said.
If things look bleak, don’t fret, O’Brien concluded. There were
worse things than being a middle market investor these days.
“Can you imagine being at the ‘large cap conference’?” he asked.
“I wouldn’t know what I would do with $18 billion, I honestly
don’t know.”
Kennedy Family Office
Loses CEO
Stacy Dutton, former ceo and head of Park Agency which ran
the Joseph P. Kennedy family’s estate, has left the firm. Dutton
has reportedly taken a post at a wealth management firm in the
Brandywine Valley area of Pennsylvania.
Dutton was brought on in July 2006, after a long search by
the family office, which was formerly coined Joseph P.
Kennedy Enterprises. Dutton, who also served as cio, was
instrumental in the makeover and name change to the more
private moniker Park Agency (AIN, 7/30/06). An executive
at the firm confirmed Dutton had left and referred calls to
Bob Corcoran, the family’s general counsel, who was on
vacation and did not immediately return calls. Dutton, who
resides in the Philadelphia area, did not return a call to her
cell phone.
Tech Fund On Hiring Binge
Beverly Hills, Calif.-based Strata Capital Management, a
$265 million firm specializing in emerging technologies, has
hired its fourth and fifth employees with plans to add more staff
in the coming months. Jordan Richards started last week as a
senior v.p., and is one of the firm’s “quarterbacks” in charge of
identifying themes among emerging technologies, looking for the
next big thing, said Steve Bardack, the firm’s founder and
portfolio manager.
Bardack said Richards is well qualified because of his
experience, most recently as an analyst specializing in technology
for Pequot Capital, a $7.4 billion multi-strategy firm, in its West
Coast office. Before that, Richards was an analyst at Citadel
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January 21, 2008
Investment Group.
Bardack said the controller, whom he declined to identify
because he is still employed elsewhere, will start in April. The
controller will assist the firm’s coo, work with the firm’s prime
broker Goldman Sachs on handling daily reporting and
conduct the yearly audit, he said. Bardack is interviewing
candidates to add a senior investment team member.
Candidates should have worldwide expertise in Internet and
casino gambling technologies and knowledge of long/short
strategies, he said.
Bardack said the eventual third hire will make nine in the
office for the firm since its founding in 2006. The goal is to grow
the Strata Fund to a hard-close of $800 million, with a soft-close
of $600 million.
The firm focuses on identifying technologies and tech trends
and then making the appropriate bets. Some of the technology
themes Strata is bullish on are industrial lasers, wireless data,
Asian gaming technology and automotive entertainment
technology.
Last year, Strata was up 29%, Bardack said. The fund has
1.5/20 fees, which will move to 2/20 fees in April. Those who
invest before April will be grandfathered in at the old fund rate
until June 30, 2009, he said.
Jack’s Back!
Convexity Rebounds In ‘07
Convexity Capital Management, the highflying hedge fund firm run by former
Harvard University endowment chief Jack
Meyer, bounced back with solid returns in
2007 after a lackluster rookie season. Meyer
raised around $6 billion in 2006 with
several foundations and endowments
Jack Meyer
coming onboard, but it was widely reported
that he suffered losses of around 4.5%. Last year the hedge
fund’s various strategies were up 19.81% through 31.95%,
according to recent unaudited results sent to investors. Meyer
was out of the office and did not return a call
seeking comment.
Meyer’s bread and butter is fixed-income arbitrage, but
when he debuted in ‘06 that strategy suffered due to a lack of
volatility, said a fund of funds official. Last year there was
more volatility and the firm was able to perform more in line
with expectations, he added. “His upside is much better than
his downside negative alpha,” the official, who does not invest
in Convexity, noted.
Convexity offers 10 strategies within its fund and investors
select a benchmark for Meyer and his team to add alpha above.
For example, investors who selected the Dow Jones—AIG
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Commodity Total Return Index as a benchmark earned 15.91%
from the index plus an additional 16.03% in alpha for a total net
return of 31.95%. On average, Convexity provided around 15%
of alpha on top of each of the indices.
Full Cycle Energy Director Departs
Robert Duncan has left Toronto-based Full Cycle Energy
Investment Management, where he was director of business
development and not yet been replaced. A spokeswoman
declined to comment. Duncan did not return a call to
his mobile.
Duncan was responsible for marketing the firm’s three energy
hedge funds, the most recent one of which launched in October
(iialternatives.com, 11/21/07).
He joined the firm late 2006. Previously, he worked as a
freelance third-party marketer to hedge funds (iialternatives.com,
9/7/07). Henry Cohn and Viren Wong co-founded Full Cycle,
now with $70 million assets, in 2003. They were energy
researchers at Credit Suisse in Toronto.
Stillwater Rides Dayton Superior
Bonds To Gains
New York-based Stillwater Capital Partners’ asset-backed
lending hedge fund benefited from going long the bonds of
manufacturing and heavy materials company Dayton Superior
last year, when it returned 11%.
The Stillwater Loan Opportunities Fund, managed by Neil
Rothenberg, was long the senior bonds and was able to
capitalize when the company announced it had obtained a bank
loan from GE Commercial Finance in November. Its bond
prices jumped to $102.80 and were trading $102.25 on Jan. 9.
The fund is still in the position. “I can invest in smaller
companies and special situation securities that the multi-billion
dollar hedge funds wouldn’t consider because of their size,”
Rothenberg said.
This year, the fund is long Spark Networks equities, an online
service that runs dating Web site jdate.com, among others.
Rothenberg said the company’s business is in a “recession
resistant” sector. “Not only is the company generating positive
cash flow, but it’s the type of company that should be wooed by
potential buyers like Yahoo! and E-Harmony,” Rothenberg
pointed out.
The fund will continue to go long in stocks, bonds and
loans in the healthcare, education and defense sectors, all of
which have international exposure. “I’m searching for nuggets
of gold in the sand,” he said. Rothenberg is in talks with
global pensions, endowments, foundations, family offices and
funds of hedge funds, seeking to grow the fund’s assets to
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January 21, 2008
$100 million. The fund will soft-close when it reaches
$500 million. It began trading internally in May 2006,
opening to outside investors in September 2006
(iialternatives.com, 8/30/06).
Prior to joining the firm in June, Rothenberg worked at
Xerion Capital Partners and Ramius Capital Group, managing
corporate credit hedge funds.
First Quadrant Names
New Partner
First Quadrant, a $30 billion Pasadena, Calif.-based quant firm,
has named Jia Ye as a new partner. Ye will remain in her position
as chief investment strategist. Chief Operating Officer Curt
Ketterer said the 20-year-old firm has been adding on average
one new partner each year for the last four years, commensurate
with its growth.
Ye is the firm’s tenth partner and constructs the investment
models for the firm’s U.S., European and global equity models
and its emerging market models.
The firm specializes in equities and global macro and
launched a multi-strategy Custom Global Macro in 2006, an
expansion of its Global Macro fund (AIN, 7/3/2006).
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Page 1
Project1
1/11/08
11:39 AM
Page 2
SPONSORED ARTICLE
Valuation
Clarification
New FASB Rule on Fair Value Adds Consistency, Comparability
and Transparency
By Christine Egan and Jorge de Cardenas, CPA
I
T IS NO SURPRISE THAT valuation of
assets is the most challenging operational
issue concerning hedge fund investors. The
primary purpose of each net asset value
(NAV) calculation is to establish a price at
which investors subscribe and redeem. The largest component of the NAV is made up of the fund’s investments,
which include realized and unrealized gains or losses in
value since the prior NAV calculation. Investors need to
understand the fund’s valuation process and how they
arrive at ‘fair value,’ which is an accounting term defined
as the most relevant measure for a financial instrument.
THE GOALS OF FASB RULE 157
Financial Accounting Standards Board (FASB) Rule 157
defines fair value, establishes a framework for measuring
fair value in generally accepted accounting principles
(GAAP) and expands disclosures about fair value measurements. The intentions of this regulatory change are to provide transparency, comparability and consistency to
investors and the industry. The rule is
effective for financial statements issued
for fiscal years beginning after
November 15, 2007 and interim periods within those fiscal years.
DEFINITION OF FAIR VALUE
FASB Rule 157 introduces a revised definition of fair value that replaces all existing
definitions in GAAP: “Fair value is the price
that would be received to sell an asset or
paid to transfer a liability in an orderly
transaction between market participants at
the measurement date.” While the definition in the rule maintains the exchange
price notion that existed in previous definitions of fair value in accounting literature,
JANUARY 2008
Christine Egan, Business Development Manager, and Jorge de Cardenas,
co-founder and director, both of Kaufman Rossin Fund Services
this revised definition focuses on the price that would be
received to sell the asset or paid to transfer the liability (an exit
price), not the price that would be paid to acquire the asset or
received to assume the liability (an entry price).
Applying FASB
Rule 157 will
provide ongoing
benefits, including greater clarity regarding the
inputs used in
arriving at
fair value
measurements.
FRAMEWORK FOR
MEASURING FAIR VALUE
There are three key valuation techniques employed to measure fair value:
market approach (transactions involving
identical or comparable assets or liabilities), income approach (converts future
amounts to a single discounted present
value) and cost approach (current
replacement cost adjusted for obsolescence). While one or more of these valuation techniques may be used, the fair
value hierarchy focuses on market
inputs, not valuation techniques.
FASB Rule 157 has created a fair value
hierarchy that prioritizes the inputs
(observable versus unobservable) into
three broad levels. Market inputs can be
Project1
1/11/08
11:39 AM
Page 3
SPONSORED ARTICLE
observable (market data obtained from independent
sources) or unobservable (based on the reporting entity’s assumptions of market inputs).
In the fair value hierarchy:
• Level 1, ‘mark-to-market,’ uses observable inputs
that reflect quoted prices for identical assets or liabilities in active markets.
• Level 2, ‘mark-to-model,’ uses observable inputs,
other than quoted prices included in Level 1, for the
asset or liability, including market-corroborated
inputs. The price is an estimate based on observable
inputs, such as quoted prices for similar assets in
active markets or quoted prices for identical or similar assets in markets that are not active.
• Level 3 is the lowest level of significant inputs, consisting of unobservable inputs. Unobservable inputs
are those that reflect the reporting entity’s own
assumptions about what market participants would
use to price the asset or liability (considering inherent
risks), developed using the best information available
without undue cost and effort. There is no verification
requirement if the assumptions are in line with those
of market participants.
EXPANDED DISCLOSURES ABOUT THE USE
OF FAIR VALUE
The expanded disclosures about the use of fair value to measure
assets and liabilities should provide users of financial statements
with better information about the extent to which fair value is used
to measure recognized assets and liabilities, the inputs used to
develop the measurements and the effect of certain of the measurements on earnings (or changes in net assets) for the period.
FASB Rule 157 requires reporting entities to disclose the level within
the fair value hierarchy in which a fair value measurement falls, presented by major category of asset or liability (see example below).
FASB Rule 157 also requires a reconciliation of the beginning
and ending balances for any fair value measurements that utilize significant unobservable inputs (Level 3 inputs).
Therefore, any asset or liability that was determined to be a
Level 3 measurement at either the beginning or the end of a
reporting period would need to be considered in the reconciliation. To enhance the information provided in the reconciliation with respect to total gains and losses recognized in earnings, the rule requires the reporting entity to also disclose the
change in unrealized gains and losses recognized in earnings
(for the period) for assets and liabilities measured in Level 3
that are still held at the reporting date. Effectively, this will
require an entity to distinguish its unrealized gains and losses
from its realized gains and losses for Level 3 measurements.
GOING BEYOND THE REGULATION
This regulation provides guidance; however, investment
managers and their administrators need to use judgment
when working through the practical realities of compliance.
FASB Rule 157 will have a direct result on pricing policies,
systems (to track, monitor and report types of inputs and
transfers in and out of hierarchy levels) and financial statement preparation and presentation.
Indirect consequences will result as well. Valuation techniques for esoteric and illiquid instruments also will need to
be examined for consistent application. In certain cases, it
may be appropriate to change a valuation technique or its
application if the change results in a measurement that is
equally or more representative of fair value. Revisions
resulting from a change in valuation technique or its application will be accounted for as a change in accounting estimate in the financial statement footnote disclosures.
Applying FASB Rule 157 will provide ongoing benefits,
including greater clarity regarding the inputs used in arriving at fair value measurements. Regular testing of pricing
models for accuracy against market prices and a collaborative approach between managers, administrators and
accountants on level assignment for certain instruments can
be counted as positive consequences as well.
Christine Egan is Business
Development Manager for
Kaufman Rossin Fund Services
and can be reached at
[email protected]. Jorge de
Cardenas is co-founder and
director of Kaufman Rossin
Fund Services and can be
reached at
[email protected].
JANUARY 2008
AIN012108
1/17/08
5:53 PM
Page 14
January 21, 2008
Europe
AltEdge Expands To Switzerland
AltEdge Capital Management has opened a new subsidiary in
Switzerland and hired a former Deutsche Bank professional as its
managing director. Christophe Martin, who has been on
gardening leave, joins AltEdge Capital in Geneva. He will report
to President Eric de Candia. The new subsidiary will focus on
business development and client services across several
Continental European countries.
“Establishing a presence in Switzerland reflects the strong
growth in our business over recent years,” said de Candia, adding
that the local presence will help the firm to better service its
clients. Martin could not be reached by press time.
Max Williams, executive director in business development
based in London, said the firm’s product range will not change in
the near future. AltEdge Capital Management has around $700
million under management via several long/short and leveraged
hedge funds. Its client base includes institutional investors, asset
managers and investment banks.
Madrid’s Belgravia Unveils
Alts Foray
Madrid-based Belgravia Capital has launched its maiden hedge
fund, a long/short version of its long-only flagship European
equities fund Belgravia Beta SICAV. The BC Lambda Fund is
domiciled in Dublin and is managed by CIO Carlos Cerezo and
his two-strong team, David Jack, marketing and business
development, told AIN.
The firm has established a strong capital base with their long
only strategies, he continued. Almost 80% of its assets under
management come from Spanish-domiciled investors and so to
broaden their target it was necessary to provide something
structurally and fiscally more attractive, he said. Although new
regulation in Spain has made the domestic hedge fund a new
investment category in itself, allowing the use of leverage and the
shorting of stocks, it is really only suitable for domestic investors
because it is liable to withholding tax treatment on share profits.
As a result, this structure is clearly of little interest to non-Spanish
investors, even where double taxation treaties exist. Therefore
Belgravia’s new hedge fund is domiciled in Dublin in order to
compete with other Cayman- or Ireland-domiciled funds. Jack
highlighted that the move reflects the local regulators’ increasing
recognition of alternatives as a field.
There is no seed capital but existing long-only investors have
committed around €15 million to the strategy, said Jack. The
firm is aiming to expand to €500-750 million from €160 million
14
over the next three- to four-years, he continued.
The new hedge fund strategy aims to generate double digit
returns with volatility less than 15% and Sharpe Ratio higher
than the Dow Jones STOXX 600 Index. It will typically invest in
a portfolio of 35 long positions and 15 shorts, with up to
200% leverage. There is no specific bias towards sector,
geography, growth or value stocks or market capitalisation. The
focus is on areas in which the team has expertise. This includes
U.K., France, Germany, Southern Europe and Greece. There is
a correspondingly lesser allocation where the team has no
specific expertise, such as in Scandinavia and biotechnology.
Large-cap stocks are favoured said Jack, as he believes that midcaps are a value trap.
Prior to founding and heading the 11-strong team at
Belgravia in September 2002, Cerezo was head of research and
portfolio manager at London-based hedge fund Park Place
Capital. The investment minimum is €250,000 while the fees
charged are 1.5/20.
London Firm To Reopen Fund; Seeks
Investors For Launch
Sydney-and London-based Bennelong Asset Management is
planning to reopen its inaugural hedge fund to new investors by
the end of this quarter or early in the fourth quarter. The fund,
Bennelong Asia Pacific Multi Strategy Equity Master Fund, has
assets of $1.3 billion, and the firm believes that it has the capacity
to reach $2 billion by year’s end, according to Megan Jenner,
chief financial advisor in investor relations. The firm soft-closed
the Asia Pacific fund in July 2006 (iialternatives.com, 8/11/06).
Its year-to-date return is 13.95% through July 31.
The firm is pitching its latest rollout to investors, focusing in
pensions, endowments, foundations, family offices and other
institutions. The Bennelong Global Special Opportunities Master
Fund launched this February with $103 million. The firm hopes
to increase its assets to $400-500 million by February 2008,
Jenner said. The fund’s three underlying strategies are risk
arbitrage, special situations and value driven, and it has returned
21.49% from inception through July 31.
Richard Pegum and Paul Henry co-manage both strategies.
Alex Dittmair joined the firm in April from York Capital
Management to help co-manage the global opportunities fund.
Pegun and Henry co-founded Bennelong in Oct. 2004,
previously working at Macquarie Bank for 14 years as
proprietary traders.
The firm has also hired a volatility trader who will start in a
few weeks. Jenner declined to offer further information on the
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February 26, 2008 • Union League Club • New York City
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This inaugural one-day forum, produced by Institutional Investor
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• Analyzing the Macro Imbalances and Risks in
Emerging Markets
• The Impact of the U.S. Economy on Emerging Markets,
including the Sub-Prime Crisis:
- Contagion, or the Beginning of a New Bubble?
• Tools and Strategies from Private Equity Firms, Hedge
Funds and Other Emerging Market Investors
• Special Focus Sessions - Assessing Drivers for Growth,
Liquidity and Risk in: CHINA & ASIA • LATIN
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• Russell Deakin, CRP
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AIN012108
1/17/08
5:53 PM
Page 16
January 21, 2008
Europe (cont’d)
recent hire, but mentioned there are no immediate plans for any
additional fund launches.
Iraq Fund Gains From Oil
Companies, Banks
Luxembourg-based Godvig Capital Management’s hedge fund
devoted to Iraq returned 25.05% last year, primarily due to
investments banks and oil companies. The Babylon Fund invested
in Petrel Resources, a Dublin-based drilling company that
researches oil fields in Iraq. Shares were trading at £1.30 through
Thursday. The strategy also invested in the Iraq Middle East
Investment Bank and the Bank of Bagdad, which were trading
at IQD1 and IQD3, respectively, through Thursday.
Co-Founder Björn Englund told AIN he will continue to
make investments in financials. “There is a strong upside
potential in banking stocks on the Iraqi Stock Exchange,” he
said. The Babylon Fund recovered from November when it was
down 5.4% and saw its biggest redemption, primarily due to a
lack of liquidity (iialternatives.com, 1/09).
But earlier this month, Varma Mutual Pension Insurance
Co., a Finnish pension fund, invested in the Babylon Fund.
Englund declined to identify the size of the allocation. The firm
has halted its original plans of launching its second fund due to a
main seed investor pulling out. The fund was expected to be
100% dedicated to Iraq (iialternatives.com, 8/31/07). Godvig has
offices in Baghdad, Arbil—the capital of the Kurdistan Regional
Government—London and Stockholm, as well as Luxembourg.
Prior to co-founding Godvig, Englund spent two years at
Scandinavian bank Nordea.
Synergy To Launch ABL Fund
London-based Synergy Global Capital is preparing to launch an
asset-based lending hedge fund, Synergy Global Finance Fund,
with $150 million later this quarter. Synergy Co-Founder Syd
Hanna is marketing the fund in New York and Chicago this
week, according to an investor presentation. An official at the
firm declined to comment.
The strategy will make most of its investments outside the U.S.,
focusing on deconsolidation and balance sheet optimization, real
estate, project and infrastructure finance, public sector finance,
utilities, energy and resources and corporate restructuring.
Hanna and Stefano Ghersi co-founded the firm in 2006.
Hanna previously co-founded hedge fund firm Cheyne Capital
Management and ran its asset-based lending business from
2003-2006. Ghersi was head of capital markets at Nomura
Group from 2001-2006.
Vendor/Regulatory News
SEC Outlines
Compliance Priorities
delegates that CCOs need to stay on top of all filings and
managing custody issues.
Compliance staff at registered firms need to focus on nine areas
to show the Securities and Exchange Commission their firm is
taking compliance seriously, according to Thomas Biolsi,
associate regional director for examinations at the SEC’s New
York Regional Office.
To start, chief compliance officers (CCOs) should be able to
tell SEC examiners how their firms obtain clients and investors,
Biolsi told delegates at a Financial Research Associates
conference in New York Monday.
Several of Biolsi’s targets focused on CCOs being able to
understand the appropriate use of performance numbers and
being able to review distribution channels. “They should
know when cherry-picking is going on.” Biolsi added that
compliance staff should be able to demonstrate how funds
make returns to investors and ensure the way they do so is
consistent with offering documents.
Compliance staff also should be well-versed in performance
attribution, Biolsi said. He rounded out the list by telling
Alts-Focused Emerging Markets
Specialist Launches
16
Dunia Frontiers Consultants, a five-person Washington, D.C.,
firm specializing in hedge fund and private equity investments in
emerging and frontier markets, has opened for business. For
private equity firms, the firm performs due diligence on private
companies in these markets, Managing Director Kyle Stelma
told AIN. Hedge fund clients generally demand sector-wide
research or macro-economic and geopolitical analysis of a specific
region, he added. The firm’s specializes in Turkey, the United
Arab Emirates, Lebanon and sub-Saharan Africa.
Stelma, the firm’s emerging markets specialist, was previously
at Citigroup in Mumbai. Patrick Doyle, a Booz Allen Hamilton
veteran, focuses on carbon markets. Kipp Tearney, Peter Abe
and Kyle Tearney round out the team. The firm’s clientele
includes one $10 billion hedge fund firm and a Middle Eastbased private equity firm.
AIN012108
1/17/08
5:53 PM
Page 17
January 21, 2008
In The News
SAC To Lose President, CFO
Greenspan To Join Paulson
SAC Capital Advisors President Brian Cohn plans to leave
the firm, The Wall Street Journal reports. Cohn plans to take
time off and hasn’t accepted another position yet. SAC is also
losing Finance Chief James Rowen, who is departing for
Renaissance Technologies.
Paulson & Co. has appointed former Federal Reserve
Chairman Alan Greenspan to its advisory board. Greenspan
agreed not to work with any other hedge as part of his
employment.
Lansdowne Snags 9.69% Stake In Och-Ziff
Sorenson Capital Raises $400M For PE Fund
Lansdowne Partners disclosed that it holds a 9.69% passive stake
in Class A shares of Och-Ziff Capital Management Group,
Reuters reports.
Sorenson Capital has closed its second private equity fund,
Sorenson Capital Partners II, after raising about $400 million,
Private Equity Wire reports. The firm’s first fund closed with
$250 million in May 2004. This fund will invest mainly in
companies with revenues between $30 - $300 million.
Soros Taps BlackRock Vet For CIO
Soros Fund Management has hired BlackRock Co-Founder
Keith Anderson to fill the chief investment officer post vacated
by Robert Soros in July, Bloomberg reports.
Hedge Fund Inflows Up 54% In 2007
Hedge fund inflows were 54% higher in 2007 than in 2006,
according to data from Hedge Fund Research. Hedge funds
attracted $194.5 billion in new money, bringing total assets to
$1.87 trillion across more than 10,000 funds. Growth slowed in the
fourth quarter, when the industry pulled in just $30.4 billion. On
average, data shows that hedge funds returned 10.24% for the year.
Managed Funds Association Names President
The Managed Funds Association has appointed Rep. Richard
Baker (R-La.) president and chief executive officer. Baker replaces
John Gaine, who will become a special advisor and orchestrate
the association’s global outreach initiative.
Dark Pools Symposium
February 1, 2008
The AXA Equitable Conference Center | 787 Seventh Avenue | New York, NY
(Between 51st and 52nd Streets)
R
ecent market structure and regulatory changes have prompted a dramatic increase in the number of “Dark Pools” –
so-called “hidden” sources of liquidity. How is this impacting the way we trade? Are there regulatory concerns? Is
transparency or trade execution negatively impacted? The Securities Industry and Financial Markets Association is
bringing together leading industry professionals to address these questions and other key issues to help you navigate the
changing marketplace. Panels will offer regulatory and business views on hidden liquidity from both a domestic and global
viewpoint. Discussions also will focus on how firms are handling the fierce competition, innovative trading platforms, and
dynamic business strategies (both buy-side and sell-side).
Confirmed Speakers:
Agenda Topics:
•
•
•
•
•
•
•
•
Accessing Hidden Liquidity
Linkages and Connectivity
Fragmentation/ Lack of Transparency
Anonymity
Best Execution
Market Impact
New Trading Platforms and
Systems
Dark Algorithms
Erik R. Sirri
Director, Division of Trading and Markets,
U.S. Securities and Exchange Commission
Eli Lederman
Chief Executive Officer, Turquoise
REGISTER TODAY! www.sifma.org/darkpools2008
AIN012108
1/17/08
5:53 PM
Page 18
January 21, 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 last 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.
Fund & City
Fund
Asset Size
Mandate
Size
Mandate
Region
Major
Style
176
Global
Private Equity
Minor
Style
General
Consultant
1,580
Vital Forsikring,
Bergen, Norway
40,268
Global
Hedge Funds
In early stages of analysing hedge funds with
a view to increase its allocation this year.
Undecided on manager searches.
Vital Forsikring,
Bergen, Norway
40,268
Global
Private Equity
Plans to invest in approximately five to seven
private equity funds and/or funds of funds.
Undecided whether to hire new managers.
Workcover Authority
of NSW, Gosford, Australia
10,536
Global
Hedge Funds
Samsung Life Insurance
Company, Seoul
110,000
Global
Alternative
(All)
Metropolitan Water
Reclamation District
Retirement Fund, Chicago
1,100
US
Hedge Funds
Standard Valuations
Labour Union Co-operative
Retirement Fund,
North Melbourne, Australia
2,107
Global
Alternative
(All)
Watson Wyatt
Reviewing its private equity, real estate and
infrastructure portfolio and managers in charge
of AUD400 million.
California Endowment,
Los Angeles
3,400
US
Alternative
(All)
Cambridge Associates
The foundation is seeking to make its maiden
foray into alternatives. The effort is part of plans
to de-risk and diversify its portfolio and
boost returns.
Norfolk Employees’ .
Retirement System,
Norfolk, Va
900
US
Hedge Funds,
Private Equity
UBS PaineWebber
The system may consider initial hedge fund and
private equity investments this year. The previous
board, which consistently decided against
alternatives, had a 100% turnover last year and a
new board is in place.
Mistra, Stockholm
559
Global
Private Equity
None
Continuing to analyse the asset class. Final results
expected by the third quarter this year, which
may further result in approximately two manager
hires in charge of SEK200 million. The decision
is pending the hiring of an investment consultant,
which is expected to complete within the
next two months.
Hercules Incorporated,
Wilmington, Del.
2,035
US
Alternative
(All)
N/A
Seeks to further branch out into alternatives and
round out its non-traditional asset exposure to
10%. It actively uses three managers for the
asset class and has no plans to sign on
new managers.
New Mexico State
Investment Council,
Santa Fe, N.M.
16,500
US
Hedge Funds
Arca Previdenza Fondo
Pensione Aperto, Milan
952
Global
Alternative
(All)
None
The GSL Pension Scheme,
Worcestshire, U.K.
169
Global
Alternative
(All)
Hewitt Associates
18
31
N/A
Comments
Stevedoring Employees
Retirement Fund,
Sydney, Australia
Absolute Return
Watson Wyatt
In the early stages of analysing Australian and
global private equity investments .Seeking to
invest AUD200 million in private equity over
the next three years.
May invest in global absolute return hedge funds,
pending asset review expected to be completed
by March.
Eyeing a review for its alternative asset class in
the first half of 2008 that may bring about
changes in its alternatives allocaton strategy and
manager roster.
New England
Pension Consultants
Gaining education on hedge funds and may make
allocations to the asset class this year.
May seek additional hedge fund managers as
part of its strategy to agressively round out
its alternatives allocation. There is no
time frame for a decision.
May make a maiden foray into hedge funds and
long-short strategies, pending domestic
legislative changes and governmental approval
over the next year. It will eventually bring on
board third-party managers.
The scheme is mulling alts as part of its
on-going investment strategy review and
trustee meetings. It has not set any specifics.
AIN012108
1/17/08
5:53 PM
Page 19
January 21, 2008
Search Directory (cont’d)
Fund
Asset Size
Fund & City
Ohio Police & Fire
Pension Fund, Columbus
12,900
International Paper Co.,
Stamford, Conn.
8,500
Mandate
Size
Mandate
Region
Major
Style
Minor
Style
General
Consultant
400
US
Hedge Funds
Market-Neutral
Hedge Funds
Wilshire Associates
The fund is requesting proposals from qualified
firms interested in providing active market neutral
alpha overlay investment management services.
Proposals are due by Feb. 8, 2008.
US
Alternatives
(All)
Rocaton Investment
Advisors
Seeking managers to implement new allocations
to derivative-based and commodities strategies.
It plans to make selections this quarter. Interested
firms should contact consultant.
Comments
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].
Data Zone
PERFORMANCE SNAPSHOT
The table below displays some of last year’s top performing multi-strategy managers, according to data
provided by Eurekahedge.
Fund
Manager
Region
Dec ‘07
Return
‘07 YTD
return
2006
return
Annualised
Std Deviation
Sharpe
Ratio
AuM
(US$ Mln)
Aurora Fund SPC -
Lionhart Investments
Global
1.55
159.59
30.93
21.88
2.23
80
Venture Segregated
Qinhan China Fund
Qinhan Capital Management
Greater China
5.26
124.21
70.98
30.51
1.99
150
Pinpoint China Fund
Pinpoint Investment Advisor
Greater China
5.50
98.96
139.18
21.08
4.30
589
UG Hidden Dragon Balance Fund
UG Investment Advisers
Greater China
8.63
91.11
99.81
17.37
2.36
202
India Capital Fund Limited
India Capital Management
India
10.40
90.74
67.26
32.99
0.48
457
Ashmore Turkish Equity Fund
Egeli & Co Investment Management SA
Emerging Markets
3.06
88.60
-26.40
33.82
1.13
12
Goldbond Growth Fund
Piper Jaffray Asia Asset Management
Greater China
-2.53
80.63
43.60
24.40
1.83
Not disclosed
Eastern Europe & Russia
10.43
57.46
107.56
49.23
0.55
176
Asia inc Japan
-2.15
56.97
15.88
16.39
1.89
1285
Russian Opportunities Fund
Eurostep (Cyprus)
Artradis AB2 Fund
Artradis Fund Management (Pte)
Northglen Aggressive Fund SP
Slater Investments
Galaxy China Opportunities Fund
Galaxy Asset Management (HK)
Europe
-0.11
47.43
77.88
27.73
2.88
21
Greater China
-1.50
45.24
60.97
19.45
2.08
569
Global Appreciation Fund SPC. Europe Segregated Portfolio - Class A - USD
Lionhart Investments
Europe
3.62
43.56
13.80
6.71
1.40
4
Komodo Fund
JF South Asia Absolute Return Fund
PT HB Capital Indonesia
Asia ex Japan
4.25
42.91
10.15
12.89
3.38
Not disclosed
JF Funds
Asia ex Japan
0.61
42.81
13.87
12.91
1.27
JF Greater China Absolute Return Fund
4
JF Funds
Greater China
-0.03
38.10
20.82
11.20
1.49
39
Metage Emerging Market Opportunities Fund
Metage Capital
Artradis Barracuda Fund
Artradis Fund Management
Emerging Markets
2.53
36.72
5.39
11.30
2.03
64
Asia inc Japan
-1.20
35.07
8.64
7.58
0.87
1495
UG Greater China Multi-Strategy Fund
UG Investment Advisers
Greater China
4.21
34.71
60.16
12.03
1.69
101
Baron Absolute Return Fund
Baron Asset Management
Asia ex Japan
0.46
34.08
45.34
9.32
2.03
Not disclosed
Dynamo Cougar
Dynamo Administracao de Recursos
Brazil
-0.27
34.00
36.80
46.83
1.67
394
Eurekahedge Asia Multi-Strategy Hedge Fund Index
-
0.72
27.99
22.06
7.42
1.17
-
Eurekahedge Europe Multi-Strategy Hedge Fund Index
-
0.68
8.09
17.55
4.85
1.69
-
Eurekahedge Latin America Multi-Strategy Hedge Fund Index
-
0.88
13.67
21.31
3.81
4.44
-
Eurekahedge North America Multi-Strategy Hedge Fund Index
-
-0.21
8.03
14.60
5.30
1.31
-
Regional Multi-Strategy Indices
Eurekahedge Commentary
December, which was a decent month for hedge funds, witnessed some volatility across equities (particularly as the Fed announced a rate cut on Dec 11), relatively narrow (as compared to the
past few months) movements between currencies and notable increases in commodity prices. Amid these movements, hedge funds returned 0.8%, bringing their gains for 2007 to a decent
13.5%, with multi-strategy managers contributing 0.7% in December, and a healthy 16.6% throughout the year. While the increase in oil (8.6%), gold and silver (both up in excess of 7%) prices
benefited multi-strategy players across the globe, Latin American managers registered the best returns (0.9%), in terms of regional mandates (owing to profitable trades in Brazilian equities
and regional currencies). Asian and European managers – both returned 0.7%; European managers made gains from short positions in equities, among other things, while Asian players
benefited from equity as well as currency trades (particularly in the Asia ex Japan region). North American managers finished the month flat to negative (-0.2%), as the volatility in equities
coupled with the drying up of liquidity in the M&A and high yield markets adversely impacted their performance.
To receive email alerts or online access, call 800-715-9195.
19
AIN012108
1/17/08
5:53 PM
Page 20
January 21, 2008
Calendar Of Events
Organization/
Sponsor
Location
Date(s)
Contact/Web site
Notes
GAIM USA
Institute for International
Research
Boca Raton Resort,
Boca Raton, Fla.
Jan. 21-24
gaimusa.com
The largest gathering of hedge funds and their
investors in the U.S.
Alternative Analysts’ Forecast:
2008—What Lies Ahead?
The New York Society
of Security Analysts
1177 Avenue of the Americas,
2nd Floor, New York
Jan. 24
nyssa.org
Exploring changes in allocations, trends, return
expectations, emphasis on risk management and
potential regulatory/tax changes.
Alternative Investment Roundup
Strategic Research Institute
Fairmont Scottsdale Princess
Jan. 27-30
srinstitute.com
Entering its 10th year, bringing together leading
private equity, real estate and hedge fund
executives from the U.S. and worldwide.
Hedge Fund Replication Forum
Financial Research Associates
The Downtown Association,
New York
Jan. 28-29
frallc.com
Learn about hedge fund replication from
experienced industry leaders.
4th Annual Hedge Fund Incubation
& Seeding Conference
The Flatotel,
New York
Jan. 30-31
frallc.com
The only conference focused on
hedge fund seeding & incubation.
Launching a Hedge Fund
Hedge Fund Capital Partners
The Princeton Club,
New York
Feb. 7, 5pm
hedgecap.com
Panel discussion with top industry professionals
on successfully launching a hedge fund in 2008.
Institutional Investors’ Congress
Opal Financial Group
Vienna Hotel, Vienna.
Feb. 7-8
opalgroup.net
Projected composition: 45% institutional
investors, 35% asset managers, 10%
consultants, 10% service providers.
Marketing & Client Servicing
for Hedge Funds
The Princeton Club,
New York
frallc.com
Investors, family offices, funds of funds, endowments,
foundations and plan sponsors present expertise.
Event
Feb. 11-12
Open Your Heart to Children Benefit
Hedge Funds Care
Marriot Marquis, New York
The Hedge Fund Operational Risk
Management Summit
The Harmonie Club,
New York
Feb. 25-26
Feb. 13
hedgefundscare.org
10th anniversary New York event.
frallc.com
Best practices for stress-testing and hedging
operational risks.
Trusts Taxation in Switzerland
Financial Events International
Ramada Park Hotel,
Geneva
Feb. 26
+41 22 310 9250,
financial-events.ch
Consequences of the Hague Convention and the
new Swiss guidelines on trusts taxation.
Singapore Hedge Funds Club
Networking Evening
Singapore Hedge Funds Club
TBD
Feb. 26
hedgefundsclub.com, singapore
@hedgefundsclub.com
By invitation only event for hedge fund managers
and investors is sponsored by ABN AMRO, BNP
Paribas and Chicago Mercantile Exchange.
Investing in Emerging Markets
Institutional Investor Events
Union League Club,
New York
Feb. 28
iievents.com
Inaugural forum, in association with ISI
Emerging Markets.
The 7th Annual Public Pension
Fund Awards For Excellence
AIN sister publication Money
Management Letter
and Information
Management Network
Hyatt Regency Huntington.
Beach Resort & Spa,
Huntington Beach, Calif
March 2
iievents.com
Honoring the people and organizations that have
made significant strides in the public pension
investment community during the previous year.
Hedge Funds World
Middle East 2008
Terrapinn
Madinat Jumeirah
Hotel, Dubai
hedgefundsworld.com/
2008/hfwme
Speakers include Barton Biggs. 2nd annual Hedge
Fund World Awards Middle East to take place
during event.
SPS Alpha Investment Strategies
Pension Funds
SPS Conferences
TBD Stockholm
March 4
spsconferences.com
Helping pension funds understand the different
opportunities for adding alpha to their portfolios.
Africa Hedge Funds 2008
JetFin
President Wilson Hotel,
Geneva
March 13
Pierre Lavaud, +41 22 772 0440,
[email protected]
Hedge fund investors in Africa on diversification
opportunities in this booming continent.
2008 Emerging Growth and
Venture Forum
Starlight Capital
Yale Club, New York
March 27
starlightcapital.com,
713 225 3028
Limited number of presenter slots available.
Fourth Annual Global Private
Equity Investing Conference
Thunderbird School of
Global Management
Thunderbird campus,
Glendale, Ariz.
April 3-4
thunderbird.edu/TPEC-conference, Speakers include Carlyle Group Managing Director
[email protected],
Robert Grady and Cerberus’ Dan Quayle.
602-978-7503
Alternative Investing
Summit East
Landsdowne Resort,
Landsdowne, Va.
April 15-17
China Hedge Funds 2008
JetFin
Grand Hotel Kempinski,
Geneva
Alpha Max 2008
India Hedge Funds 2008
March 3-6
opalgroup.net
Evolving and traditional alternative investment
styles and strategies.
April 22
jetfin.com
Institutional and private investors meet to learn
and debate all issues surrounding hedge fund
and investment strategies applied to China.
The Westin Palace, Madrid
May 7-9
opalgroup.net
Piecing together a road map for maximizing
alpha in an institutional portfolio.
JetFin
Grand Hotel Kempinski, Geneva
June 24
jetfin.com
India today: demographics, economy, market,
infrastructure, labour arbitrage.
The 6th Annual Hedge Fund
Industry Awards
AIN
Cipriani Wall Street
June 25
iievents.com
Recognizing the hedge funds, funds of funds,
endowments, foundations, and corporate and public
pension funds that have stood out for their notable
accomplishments during the past year.
Russia Hedge Funds 2008
JetFin
Sept. 18
jetfin.com
The proliferation of funds linked to the region, industry
improvements, deregulation and fast economic growth
rate, more.
Middle East Hedge Funds 2008
JetFin
Mandarin Oriental du Rhone,
Geneva
Oct. 14
Pierre Lavaud, +41 22 772 0440,
[email protected]
Who are the winning managers in the Middle East? What
will the region’s best-performing strategies be?
LatAm Hedge Funds 2008
JetFin
Nov. 25
jetfin.com
Growth in LatAm hedge funds - returns, diversification,
regulation, politics, demand, resources
20
AIN012108
1/17/08
5:53 PM
Page 21
January 21, 2008
MANDATE SCOREBOARD
The table below shows new allocation commitments gained by alternative managers year-to-date through Jan. 16. The “2007” column
denotes last year’s ranking. “Wins” represents the number of mandates the firm has won this year.
2008 Tally
Rank
2007
Firms Hired
1
106
34
71
93
3
64
235
155
70
206
-
Harris Alternatives Investment Mgt
Pacific Alternatrive Asset Mgt
PIMCO
WLR Recovery Fund
Sun Mountain Capital
UBS Global Asset Management
EACM Advisors
Exponent Private Equity
Angelo Gordon
CVC Capital Partners
Handelsbanken Asset Management
Natural Gas Partners
Huff Asset Management
Resolute Fund
Halyard Capital
Wolseley Private Equity
Technology Crossover Ventures
Longitude Capital Management
Quellos Europe
Cardabi
Genstar Capital
Sun Capital Ventures
Vector Capital
5
6
8
9
10
11
12
15
16
17
18
19
20
Week of Jan. 14
Wins
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
2
1
1
1
1
1
1
Total*
100
100
100
100
90
68
68
51
45
30
29
25
25
25
10
9
5
5
2
N/A
N/A
N/A
N/A
Client
Asset Type
Amount*
Nebraska Investment Council
New Jersey Division of Investment
Distressed Debt Hedge Funds
Buyout
100
100
New Mexico Public Employees Retirement Association
Buyout
30
Nebraska Investment Council
Private Equity
25
ING Private Equity Access
Private Equity (Australia)
9
Stichting Pensoenfonds
Futures
N/A
*in USD millions
For further information, including identities of the institutions and RFP contacts, please visit iisearches.com or contact Keith Arends at 212-224-3533 or [email protected].
iisearches posted $220 billion in
alternative search leads in 2006...
The world's number one sales and marketing tool for investment managers
...grow your business with
the latest daily search leads.
For further information on iisearches’ daily search leads and searchable database of search-and-hire activity since 1995, visit
www.iisearches.com or contact Gene Dolinsky in New York at 212-224-3426 or at [email protected], or
Ben Grandy (Europe and rest of the world) Tel: +44 (0)20-7779-8965 or at [email protected]
AIN012108
1/17/08
5:53 PM
Page 22
January 21, 2008
SAC PM
LA FAYETTE UNVEILS
(continued from page 1)
now reports to Trivium co-founders Ward Davis and Rob
Feinblatt, who launched the fund with $100 million in 2004
(iialternatives.com, 10/25/04). Feinblatt is a fellow SAC
veteran, who left the firm in 2002 to start Trivium with Davis,
who was previously at Chilton Investment. The co-founders
worked together at Zweig-Dimenna Associates for four years
in the 1990s.
—Suzy Kenly
The liquidity squeeze has hurt private equity but investors
seeking strong returns with less risk and volatility should be
interested in La Fayette’s strategy, a spokesman ventured.
The fund is targeting annual returns of 15%, with volatility
half of the MSCI World Index. The spokesman said the fund is
likely to soft close at $500 million.
La Fayette was founded in 1992 by Visser. It also has offices in
New York and Geneva.
—Harriet Agnew
CARDANO STARTS
important part,” Rosenberg said, adding that the increased flow
of U.K. pension money into alts makes this expertise particularly
important. To head the alts group, the firm hired Keith Guthrie
from GAM and tasked him with hiring a staff of six hedge fund,
private equity and real estate/property experts in the coming
months, Rosenberg added. At GAM, Guthrie co-managed a $5
billion fund of hedge funds portfolio.
Cardano was founded in 2000 by Cother Kocken, who was
previously head of risk management at Rabobank. It also has
offices in Zug and Amsterdam.
—Nathaniel Baker
s SRI Fund
Harcourt Readie
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You Read It Here First!
To Subscribe Call 212 224 3570 (USA), + 44 20 7779 8999 (UK),
EMAIL: [email protected]
22
BETA STRATEGY
Weighted Composite Index and aims to replicate that return stream by investing in liquid
financial instruments such as futures (AIN,
6/22/2007). The fund has greater transparency than hedge funds at a lower cost; it
charges management fees of about 100 basis
points on an institutional account with no
performance fee. Abernathy declined to name Jerome Abernathy
the fund provider.
Michael Didier, director of client relations at hedge fund firm
Act II Partners, is skeptical on the worth of these watered-down
hedge funds, whose returns are limited to the indices. With a
bear market in its early stages, now is exactly the time that paying
2/20 fees to a hedge fund manager is likely to pay off in outsized
alpha. “You get what you pay for,” he said, when it comes to
hedge funds. “When you pay peanuts, you get monkeys.”
Abernathy responded that it is the exceptional hedge fund
that produces large returns in a bear market. “It’s not
[indicative] of the hedge fund industry in aggregate,” he said.
He said alt beta holds up well compared to the average indexed
hedge fund.
—Andrew Johnson
Quote Of The Week
“Don’t be creative; you’re not an artist.” — Investcorp
International’s Christopher O’Brien advising managers to stick
to familiar strategies and steer clear of toying with new formulas (see
story, page 6).
One Year Ago In Alternative Investment News
Harcourt Investment Consulting, the Zurich-based fund of
funds firm with $5 billion under management, started its first
big push for assets from Middle Eastern investors. [By mid-year,
Harcourt was establishing an office in Bahrain to support the
efforts (AIN, 6/29/2007).]
KSM-layout
1/3/08
2:29 PM
Page 1
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Project1
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Page 1

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