The markets may have already priced in much of the fallout from the ongoing credit crisis, BlackRock’s chief Larry Fink told investors at a Goldman Sachs Financial Co
The markets may have already priced in much of the fallout from the ongoing credit crisis, BlackRock’s chief Larry Fink told investors at a Goldman Sachs Financial Conference. Fink said he was advising clients to begin adding risk to their portfolios and, meanwhile, has begun positioning BlackRock to benefit from current markets.
Driven by fear, many investors have parked their capital in cash, he said, adding that if there is a recession in the US, it won’t be a long one. While the market is just a third of the way through the problem of sub-prime resets and there’s more trouble ahead, a combination of rising exports, continued investments in US assets by foreigners and increased federal government awareness should mitigate the severity of a contraction. Fink expects more easing by the Federal Reserve.
Affiliated Managers Group has acquired an equity stake in USD 4.8 bn outfit BlueMountain Capital Management. The latest acquisition follows the one it did last month with ValueAct Capital, a value investor and activist hedge fund manager. Co-founders of Prides Crossing, Massachusetts-based BlueMountain, Andrew Feldstein and Stephen Siderow will continue to manage the firm independently. Terms weren’t disclosed.
So far this year, BlueMountain’s funds – Credit Alternatives, Equity Alternatives, and BlueCorr – have gained 8 per cent, 25 per cent and 34 per cent respectively. Affiliated, which managed USD 286 bn of assets at September-end, makes equity investments in investment managers. It bought a piece of quantitative specialist AQR Capital Management back in 2004.
Activist hedge fund shop Jana Capital of San Francisco, California, has teamed up with Swiss manager Partners Group to launch a fund of funds which charges lower fees than a typical multi-manager entity. The Jana Triplepoint Fund address the issues of ‘high fees, poor transparency and poor liquidity,’ says managing director Ken Marshman. The fund, which has USD300m of seed money and is aimed solely at institutional investors, aims to generate returns of 5 per cent above cash during a five-year period.
In a victory for private equity managers, the US House Ways and Means Committee has backed away from raising taxes on carried interest gains to 35 per cent from the current 15 per cent as part of a new bill aimed at overhauling the country’s alternative minimum tax.
Rating agency Fitch says asset managers have outdated internal risk management processes and that they need to improve their risk assessment of factors such as crowded trades, leverage and the speed at which they can return investors’ money.
In a report on the impact of the credit meltdown on asset managers, Fitch said the hardest hit were those with supposedly low-risk products such as money-market funds, enhanced cash funds and absolute return funds. Investment managers of property, commodities, infrastructure and currency need to come to grips with factors such as poor liquidity, extreme market behavior and mispricing.
Parker Global Strategies has hired Jon Stein for the newly-created post of managing director for strategic alternatives. Stein, who was previously investment chief and an equity owner at Chicago-based AlphaMetrix Investment Advisors, will establish a Chicago outpost for Parker Global. He will also be responsible for product development and marketing its foreign exchange, portable alpha solutions for commodities and global natural resources, and investable indices that the firm is developing, and serve as a member of its investment and management committees.
Cos Cob, Connecticut-based private equity firm Pegasus Capital Advisors has finished marketing its fourth fund after winning commitments of USD 750m from investors including public and corporate pension funds, endowments, funds of funds and family offices. Park Hill Group assisted in fund raising for Pegasus, which manages USD 1.8 bn of assets.
