Citigroup is shuttering its USD2bn Tribeca Global Investments hedge fund business and will return money to investors in order to focus its efforts on Old Lane, an investment manager with USD4.25bn in assets it acquired for USD800m around five months ago.
Tribeca has lost roughly 1.2 per cent so far this year and underperformed average returns posted by hedge funds globally last year. An estimated 50 of Tribeca's 90 staff will lose their jobs as a result. Citigroup will now facilitate investments in Old Lane by creating a feeder fund for clients of the bank's global wealth management division, which includes its Smith Barney brokerage.
The hedge fund industry suffered its highest level of redemptions in seven years in July after investors withdrew around USD55bn from funds of hedge funds, according to a report from fund flow data specialist TrimTabs Investment Research. Redemptions for August and subsequent months are feared to be even higher. Inflows into single-manager hedge funds stood at USD23bn in July.
Bear Stearns investors seek change at bankrupt funds
A group of investors in two Bear Stearns hedge funds that went bankrupt last month as a result of bad bets in the mortgage market wants to replace Bear as the funds' general partner. In a notice filed this week, institutional and private investors in the two Bear funds have asked a New York federal bankruptcy court to appoint FTI Consulting as the funds' new general partner.
FTI Consulting is a publicly traded company specialising in restructuring and forensic analysis. The investors want FTI to help determine what went wrong at the funds and who may be responsible. The firm could if necessary report findings to the Securities and Exchange Commission or take legal action on investors' behalf.
Renaissance Technologies is raising capital for its third quantitative hedge fund. The Long Island firm, led by famed mathematician Jim Simons, is simultaneously raising money for Renaissance Institutional Equities Fund, its second fund that now manages roughly USD26bn and aims eventually to manage USD100bn of assets.
The latest fund-raising effort comes amidst reports last month of significant losses being posted by leading quantitative managers including DE Shaw, AQR and Renaissance itself. The latter is seeking eventually to raise USD50bn for its third fund, which will trade futures among other asset classes.
Deutsche gears up commodities business
Deutsche Bank Securities has hired John Redpath as a managing director for its commodities trading unit as it grows its energy division and launches an agriculture commodities business. Redpath, now global head of oil products and agriculture trading in the German bank's global markets division, previously headed Citi's global oil and metals trading group. He is based in New York and reports to Deutsche's global head of commodities David Silbert.
Bermuda-based administrator Fulcrum has hired Fred Jacobs as a managing director for business development in the US. Jacobs previously worked as senior vice-president for global fund business development at PFPC Global Fund Services. Jacobs now reports to Fulcrum's global sales head Glenn Henderson.
In an otherwise subdued private equity market, Lehman Brothers and the state of New Jersey have established a USD105m fund, dubbed New Jersey Directed Investment Fund, which is intended to drive economic growth in the state. Lehman will act as general partner and will steer investment into private equity funds and privately-owned companies that have substantial operations in New Jersey.
Long-established private equity firm TA Associates has taken a minority stake in ASB Holdings, the parent of mutual fund manager and alternative investment adviser Arnhold and S Bleichroeder, which is also putting shares into an employee incentive plan.