Private equity managers have begun investing in the debt of troubled companies at discounted prices, with Apollo, CVC, Blackstone, Permira and TPG among buyout groups that are finally movi
Private equity managers have begun investing in the debt of troubled companies at discounted prices, with Apollo, CVC, Blackstone, Permira and TPG among buyout groups that are finally moving off the sidelines to strike such deals. Some experts believe that this move by private equity firms signals the bottom of the market. Cash-strapped banks are happy to offload such assets from their balance sheets to buyout groups at significant discounts.
London hedge fund manager Lansdowne Partners is still internally debating whether it should go public like some of its rivals. According to chief executive Paul Ruddock, the firm is currently leaning toward staying private, but this could change in the future. Speaking at an Institutional Investor hedge fund conference in San Francisco, Ruddock also said Lansdowne has not seen a rise in margin terms or funding costs.
Blackstone Group’s senior managing director John Studzinski expects financial markets to remain in turmoil until 2010. He believes next year should be a very strong year in terms of US financial services consolidation while the UK, Germany and Italy could see further mergers and acquisitions, he told an industry event in London. The healthcare sector could also see M&A activity. Studzinski, who joined Blackstone in 2006, heads its global mergers and acquisitions advisory group.
Henry Waxman, chairman of the US House of Representatives committee on oversight and government reform, has asked the Federal Reserve to show all documents related to its arrangement with BlackRock to manage USD30bn of assets on its behalf as part of JP Morgan’s acquisition of Bear Stearns.
Waxman wants to know whether the Fed could solicit competing bids and to explain how the arrangement with BlackRock is in the interest of taxpayers. He is also seeking details of BlackRock employees who will oversee the portfolio and the Fed’s oversight plans. The Fed, which brokered the JPMorgan-Bear deal last month, has until April 18 to respond.
The liquidator of two Bear Stearns hedge funds that collapsed last summer has sued the investment bank and the funds’ auditor Deloitte & Touche for USD1bn. Geoffrey Varga and William Cleghorn of Kinetic Partners in the Cayman Islands, who were appointed as liquidators in February, filed the suit in Manhattan.
Fund of hedge funds manager Pacific Alternative Asset Management’s chief executive Jane Buchan says the abrupt withdrawal of credit could send more hedge funds into sudden liquidation. At the slightest hint of trouble, banks pull the line of credit, a trend that has led to the liquidation of several funds in recent months.
Buchan says her firm has not faced any similar problem with its own underlying hedge fund investments but stands ready to put money into one fixed-income fund if banks threaten to withdraw credit lines. If the banks pull the credit from that undisclosed hedge fund, Paamco will encourage the other hedge funds in its portfolio to withhold their business from those banks, she says.
RBC Capital Markets has created RBC Global Prime Services Group to serve its growing roster of fund management clients. The umbrella unit offers services including capital introduction, execution and clearing for futures and options, proprietary trading, securities lending, financing and prime brokerage.
William Bonde has joined ING Investment Management as co-head of its fund of funds business, working alongside Harold Yoon. Bonde previously worked at Commerzbank Capital Markets as joint head of alternative investment strategies in its international multi-manager unit in New York.
London-based Duet Group has hired Osman Semerci as partner and chief executive. Until last year Semerci was Merrill Lynch’s global head of fixed income, currencies and commodities. Duet manages USD1.7bn in private equity, hedge funds and long-only products.
