The California Public Employees’ Retirement System, the world’s fourth largest pension scheme, has sold a private equity portfolio valued at USD3bn to a group of five investors in what has
The California Public Employees’ Retirement System, the world’s fourth largest pension scheme, has sold a private equity portfolio valued at USD3bn to a group of five investors in what has been billed as the largest-ever secondary fund divestment.
Oak Hill Investment Management, Conversus Capital, Lexington Partners, HarbourVest and Pantheon Ventures have agreed to buy a portfolio comprising commitments to some 50 private equity funds. Calpers hired UBS to sell the portfolio more than a year ago as part of a restructuring of its private equity programme that began in 2005. Calpers runs USD21bn of assets in private equity.
Ken Griffin’s Citadel Investment Group has separated its options market-making unit from its hedge fund business in what has been interpreted as a possible prelude to an initial public offering. The USD20bn asset manager has hinted in the past that it might consider an IPO, but it isn’t clear whether it would sell shares in itself or any of its businesses. Griffin launched Citadel in 1990 and last year the firm posted returns of 30 per cent.
BlackRock Investment Management’s Larry Fink and Lazard’s Bruce Wasserstein think the asset management industry is ripe for consolidation. BlackRock chief executive Fink says that while his firm has no plans to talk with anyone, there are a lot of interesting acquisition opportunities. Wasserstein, meanwhile, says his company is thinking about companies that complement its existing business geographically or with different product expertise, although no deal is imminent though.
Insurer XL Capital has taken a minority equity stake in fund administrator Equinoxe Alternative Investment Services of Hamilton, Bermuda. Led by Stephen Castree, Equinoxe was established last year and has announced plans to expand to Dublin, Singapore and the US.
While XL has invested in various alternative asset managers during the past eight years, this is its first deal involving a specialist service provider in the sector. Meanwhile, Deutsche Bank has bought Christopher Nero’s HedgeWorks, a Carlsbad, California-based hedge fund administrator of with USD10bn in assets.
Merrill Lynch alumnus Dow Kim expects to get his solo venture Diamond Lake Investment Group off the ground by April. Kim was most recently co-president of global markets and investment banking at the New York bank, overseeing the business that accounted for a big chunk of its USD24.4bn write-down in its latest quarter.
Kim has told prospective investors his fund could be anywhere from USD650m to USD1bn in size. He has so far signed up 14 staffers and will also open a Singapore office before the fund goes live. Warren Silver of Ziff Brothers Investments, Syed Adlan of Tribeca Global, UBS’s Namuk Cho and Michael Pasternack, who co-founded Pinewood Capital, are among his lieutenants.
Ritchie Capital Management of Lisle, Illinois, has settled investigations into late trading between 2001 and 2003 by handing over USD40m. The manager will pay a USD2.5m penalty while the remainder will come from the Ritchie Multi-Strategy Global Trading fund. The New York attorney-general and the Securities and Exchange Commission, which handled the investigation, also asked Ritchie to adopt certain reforms.
The biggest hedge funds launched last year raised USD31.5bn, slightly ahead of the total of USD31bn in 2006 but below the USD34bn brought in during 2005 and USD40bn in 2004. Eight new funds began trading with more than USD1bn, compared with six in 2006, according to a survey by Absolute Return magazine, while multi-strategy funds were the biggest sector, with 18 new offerings raising USD3.82bn. The first half of 2007 saw more number of launches than the second half.
Unsecured creditors of collapsed fund manager Bayou Group have obtained the right from a bankruptcy judge to investigate whether Goldman Sachs Execution and Clearing received funds fraudulently transferred to it. Creditors are trying to ascertain whether they can sue the investment bank’s securities brokerage unit.
Meanwhile, Goldman Sachs’ high-flying new USD7bn hedge fund, called Goldman Sachs Opportunity Partners, fell 6 per cent in January, its debut month.
Martello Investment Management of Great Barrington, Massachusetts, has launched a resources fund of funds, which invests in managers running long/short equity and systematic trading strategies. The USD850m firm’s founder and investment chief David McCarthy manages the fund with Philip Smith.
