Star manager Dwight Sipprelle is winding down his USD1.2bn global credit fund and retiring from active money management.
Star manager Dwight Sipprelle is winding down his USD1.2bn global credit fund and retiring from active money management. The founder of New York-based Arx Investment Management, who previously spent 16 years at Morgan Stanley, plans to shut down the Arx Global High Yield Master Securities Fund, which has gained 150 per cent since its launch in February 2002, by June 30. His brother and fellow Morgan Stanley alumnus, Scott Sipprelle, shut down his own firm Copper Arch late last year.
Merrill Lynch’s Boris Ehsani is establishing his own hedge fund after his employer scuttled the planned spin-off of his Principal Credit Group. Merrill is now combining the business with a group that trades distressed debt while eliminating some positions as part of efforts by Merrill chief executive John Thain to scaling the firm’s allocations to principal investments in order to trim risk.
Merrill and Ehsani had worked on the spin-off for more than two years and Merrill was expected to seed it with USD500m. Ehsani joined Merrill in 1985 and ran USD2.8bn in assets last year. He will continue to run the Principal Credit Group’s portfolio as an adviser until the investments mature and are wound down.
Angelo, Gordon is raising USD300m for a special purpose acquisition company, or Spac, to fund the acquisition of an unspecified firm. The New York-based private equity firm, which manages USD15bn in assets, plans to target a business whose operations can be fundamentally improved and profits boosted, suggesting it might be in the distressed investments arena.
Angelo, Gordon has a long history in Spacs, which essentially hold investors’ cash in a trust until a deal is put together. The company plans to make the investment within two years. JP Morgan is underwriting the deal, which will sell 30 million units at USD10 apiece.
GLG Partners recorded a loss of more than USD200m in the first quarter, largely as a result of a USD300m compensation expense in relation to its stock market listing last November. The London manager expects to incur ‘similar but diminishing’ quarterly charges until the end of 2012.
Meanwhile, it took in USD770m in fresh investor capital and made a USD820m currency gain, which offset investment losses of USD1.55bn. At the end of March, GLG had USD24.64bn assets under management, compared with USD24.61bn at the end of last year. However, the firm expects investors to redeem at least USD2.5bn from the funds run by star manager Greg Coffey, who last month announced he would leave in October.
London’s RAB Capital expects its profits to drop significantly during the first half of 2008 amid declining assets. The AIM-listed firm said at its annual general meeting on May 6 that its assets had fallen 12 per cent so far this year to USD8.34bn as a result of a combination of investor redemptions and investment losses.
RAB Capital says it is currently focused on protecting investor capital and expects its strong balance sheet to help it gain momentum once market conditions normalise, especially as it normally books the majority of its profits in the second half of the year, when performance fees become payable. However, the company could lose up to GBP70m it invested in stricken bank Northern Rock before it was taken over by the UK government.
The US Commodity Futures Trading Commission has accused the now-defunct Sentinel Management Group and two executives of defrauding investors. In a complaint filed in the US District Court for the Northern District of Illinois, the CFTC sought permanent injunctions against chief executive Eric Bloom and vice-president Charles Mosley.
The commodities market regulator also wants Sentinel to repay customers it defrauded by misusing client money that should have been in segregated accounts, for instance by using it as collateral for loans to Sentinel. The firm, which still owes USD130m of the USD562m it held of behalf of commodity pool clients, filed for bankruptcy protection on August 17 last year.
