Hedgemedia's AltInvestment Global News Round-Up: Gore signs up as Kleiner Perkins targets clean technology
Former US vice-president and Nobel Peace Prize winner Al Gore is to become a partner at venerable Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers and will lead investments in alternative energy sources and related areas such as recycling and fuel and water purification. Kleiner Perkins, which was established in 1972, plans to deploy about a third of its funds toward clean technology by 2009.
Goldman Sachs chief executive Lloyd Blankfein told an investment conference in New York that the bank will launch a long/short hedge fund to take advantage of distressed opportunities in the credit markets. In addition to USD1.8bn the New York investment bank has raised for the fund, Liquidity Partners III, it has attracted a further USD2.7bn for a credit hedge fund, Liberty Harbor.
The USD30.1bn hedge fund manager Och-Ziff Capital Management has defied market turbulence and uncertainty to become a publicly-listed company. It shares began trading on Wednesday after being priced at USD32, in the middle of the range set by its bankers Goldman Sachs and Lehman Brothers. Founder Daniel Och will receive USD1.1bn while executive managing director David Windreich will get USD245.2m. At the IPO price, Goldman Sachs alumnus Och's 48.5 percent stake is worth USD4.7bn.
Prosecutors charge Paam's Eustace with fraud
US prosecutors have charged Paul Eustace, founder and principal trader of now-defunct Philadelphia Alternative Asset Management of creating accounts that showed his hedge fund was in the black when in fact it was losing tens of millions of dollars. He was also accused of increasing his management fees on the back of the bogus accounts and taking loans out of investors' cash, including USD500,000 to pay off a legal settlement, according to a two-count fraud indictment.
Eustace, who is accused of defrauding clients of at least USD200bn and concealing losses totalling USD175m, opened several accounts at Man Group's brokerage arm, now MF Global, where profitable trades were placed, and another one where he parked loss-making transactions. UBS's Cayman Islands operation also administered an account for him. Receivers for Paam are suing MF Global and UBS, while MF Global is also suing UBS, Paam's chairman and another employee.
The founder of Canada's Portus Alternative Asset Management, Boaz Manor, was arrested this week upon his return to Toronto from Israel on charges of fraud, money laundering and obstruction of justice. Manor, who established the CAD800m firm in 2002 with Michael Mendelson, is accused of improperly using CAD110m to pay referral fees and cover withdrawals.
Manor also arranged transfers of investor funds to Caribbean bank accounts, according to accounting firm KPMG. Manor, who fled from Canada when the hedge fund collapsed in 2005, denied any wrongdoing and accused Canadian lawyer Anthony Malcolm for setting up companies and bank accounts in the Caribbean.
AQR says IPO not on the cards
The market turmoil in the industry does not favour an initial public offering of any hedge fund firm at the moment, according to quantitative firm AQR Capital Management. Responding to a media report regarding its performance and supposed plans to list its shares, the Greenwich, Connecticut-based firm said its assets had grown from USD29bn at the start of the year to USD38.5bn.
On the performance side, AQR says all its long-only funds are in the black, while some of its hedge funds are up in the double digits and a few are down in single digits. One fund, which represents less than 1 per cent of total assets under management, is in the red by double digits, the firm acknowledged.
JP Morgan has launched a new commodity index tracker, the JP Morgan Commodity Curve Index, under the management of John Normand, head of global currency strategy and cross-commodity research. Meanwhile BNP Paribas has started its own Commodity Market Representative Index under the direction of Lionel Semonin, global head of commodity investor derivatives - and a former JP Morgan managing director.
The Standard & Poor's GSCI (originally launched by Goldman Sachs) and Dow Jones-AIG are currently the most widely followed commodity price indices, but they do not capture long-term price movements like the new entrants, which offer exposure across the entire futures curve.
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