The future of two credit funds run by Bear Stearns remains murky following the reported seizure of USD800m of assets to auction off by lender Merrill Lynch.
The future of two credit funds run by Bear Stearns remains murky following the reported seizure of USD800m of assets to auction off by lender Merrill Lynch. JP Morgan Chase, another lender, has closed its positions in a private deal with Bear instead of its planned auction on Wednesday.
Under veteran Ralph Cioffi, the High Grade Structured Credit Strategies Enhanced Leverage Fund and High Grade Structured Credit Strategies Fund reportedly invested USD20bn in structured bonds backed by risky sub-prime mortgages. Stung by steep losses at the funds, investors and lenders are desperately trying to recover their capital.
The Bermuda Monetary Authority has given a green light to Citadel Investment Group’s offshore fund administration business. Led by ex-Dundee Leeds president Robin Bedford, Citadel Solutions Bermuda will serve as the headquarters for the Chicago firm’s offshore administration platform.
Inflows into Goldman Sachs Asset Management’s alternative investment funds came to a halt in the latest quarter from USD2bnbn in the previous three months, with lacklustre performance blamed. For instance, its Global Alpha fund is down 6 per cent so far this year, following a 9 per cent decline in 2006. Goldman plans to attract fresh capital with new products.
James Simmons’ Renaissance Technologies this week announced it had settled a trade secrets dispute with Millennium Partners. Under disclosed terms, Israel Englander’s Millennium agreed to pay USD20m to settle while denying wrongdoing. Renaissance’s December 2003 suit targeted former employees Alexander Belopolsky and Pavel Volfbeyn, who it believed its took trade secrets to their new employer. Millennium terminated their employment as part of the settlement.
BlackRock in New York expects to start buying small stakes in start-up hedge funds. San Francisco-based Progress Investment Management plans to launch an emerging manager fund-of-funds, comprising 130/30 entities, later in the year, and Lipper reported that event-driven funds drew in a record USD9.83bn of inflows during the first quarter.
Lehman unveils private equity fund of funds
Lehman Brothers has unveiled plans to float a fund of funds, Lehman Brothers Private Equity Partners, on the Euronext Amsterdam stock exchange. Lehman will invest USD100m itself and raise USD400m from outside investors. The vehicle will invest in both other private equity funds and direct investments.
Separately, the investment banking group has raised USD1.5bn for Lehman Crossroads Fund XVIII. Lehman and its employees contributed USD130m to the fund, which invests in private equity funds in America, Europe and Asia.
New York private equity firm Alinda Capital Partners, founded by former Citi executive Chris Beale, held a final closing of its inaugural USD3bn Alinda Infrastructure Fund I, which invests in public sector and energy infrastructure assets. C.P. Eaton Partners helped in raising capital.
In people moves, Cerberus Capital Management hired Alvaro de Molina, previously the finance chief at Bank of America, to run its financial services division. Kohlberg Kravis Roberts brought on board as a senior advisor Richard Clemmar, the former chief executive of semiconductor firm Agere Systems.
Plan for first nuclear ETF
Van Eck Global plans to add the first nuclear energy product to its roster. The Market Vector Nuclear Energy ETF would make diverse uranium to nuclear energy generation investments. Separately, Canadian firm Claymore Investments is going to launch ETF’s of global ETF’s investing in commodities, equities, fixed income and real estate.
San Francisco firm launches European fund
AMB Property in San Francisco has raised 263m euros from 20 institutions for AMB Europe Fund I, which invests in distribution facilities near airports, highways and seaports across Europe.
Canada’s Dundee Real Estate Investment Trust is to sell some assets to GE Real Estate and distribute USD1.7bn to investors.
Finally, Blackstone Group has hired Michael Nash from Merrill Lynch’s real estate principal group as a senior managing director of its real estate group. Blackstone is expected to go public this month.