Fri, 21/09/2007 - 06:58
The managers of the Goldman Sachs group's battered Global Alpha hedge fund has assured investors in a letter that it will not shut down and will constrain borrowing and adapt to market volatility better. The USD6bn fund has been in the news following its 22.7 per cent decline in August.
Meanwhile, Goldman's head of investor relations John Andrews is taking a job at USD16bn hedge fund manager Citadel Investment Group, which is soon expected to announce plans to go public.
Andrews' move comes weeks after the bank's public relations head in the US, Peter Rose, said he was joining Blackstone Group; both had been managing directors at Goldman.
Goldman has also launched Goldman Sachs Unregistered Equity, an open private placement market platform, for trading those offerings it helps underwrite and that don't require registration with the Securities and Exchange Commission.
Regulator tightens grip on Lake Shore
The Commodities Futures Trading Commission has succeeded in freezing the assets of Lake Shore Asset Management and barred the firm from trading futures and options. Following a three-day hearing, the US Court of Appeals in Chicago has also banned the Bermuda firm from destroying documents.
The court found that the firm's marketing documents touted a profitable trading record of USD1bn of assets under management while hiding losses of USD9m. Arguing that the US futures regulator didn't have the right to inspect its books, Lake Shore has appealed the order and requested the court to stay the order freezing assets pending the appeal, but the request was denied.
The Securities and Exchange Commission, meanwhile, will step up its examination of insider trading at hedge funds. In a 27-page letter to hedge funds, SEC officials have asked for a complete list of clients, staffers and their relatives that serve as officers or directors at publicly traded companies. SEC conducted 2,400 reviews of investment advisers and brokers in the financial year to September 2006.
Managers home in on distressed assets
According to placement agent Probitas Partners, investment managers are seeking more than USD30bn for distressed debt, turnaround and restructuring funds. Managers seeking to capitalise on the mayhem in the markets include Oaktree Capital, Avenue Capital, WL Ross and Matlin Patterson Global Advisers.
Calyon reported that it would take a USD347m hit to its third-quarter earnings due to a big, unauthorised credit trade undertaken by its New York proprietary trading desk. The bet was linked to diversified credit market indices and had no relation to sub-prime mortgage.
Although Lehman Brothers reported overall better than expected third-quarter results, it reported a USD700m downfall in its fixed-income revenue due to the recent credit meltdown. Lehman blamed the decline on very substantial valuation reductions, most significantly on leveraged loan commitments and residential mortgage-related positions.
JP Morgan hires growth manager
JP Morgan Asset Management has hired Gregory Luttrell from pension fund TIAA-CREF, where he managed USD13bn of growth fund assets. He used to work as an equity analyst with JP Morgan Investment Management.
Chicago research firm Morningstar has launched a group of five commodity futures indices designed for investors in search of benchmarks, the Morningstar Long/Short, Long/Flat, Short/Flat, Long-Only and Short-Only commodity indices. The new family of indices employs different strategic combinations of long futures, short futures, and cash (flat positions), and tracks 20 commodities.
Blackstone will probably raise USD15bn for Blackstone Capital Partners VI and is not likely to match the record USD21.7bn it attracted for its fifth fund earlier this summer, according to Bank of America analysts. Fundraising will commence in the fourth quarter or early next year.
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