The Federal Reserve injected some USD38bn into the US banking system, following similar moves by the central banks of Europe, Australia, Canada and Japan, in a bid to stabilise the bond ma
The Federal Reserve injected some USD38bn into the US banking system, following similar moves by the central banks of Europe, Australia, Canada and Japan, in a bid to stabilise the bond market. The federal funds rate had to be brought back to the Fed’s target rate of 5.25 per cent after overnight lending rates spiked to 6 per cent amid fears that the sub-prime mortgage bond exposure would rock traditionally safe commercial paper that companies rely on for short-term financing. It was also aimed at reassuring investment banks and their customers.
Virginia-based private equity and venture capital firm Third Security Capital Partners has completed fundraising for its sixth fund, which invests in emerging and late-stage life sciences and information technology companies.
The SEC has reached agreement with two hedge fund advisers on regulatory proceedings it had brought. Schultze Asset Management, which runs some USD730m in assets, agreed to pay USD100,000 and its founder a further USD50,000 to settle charges that it misrepresented its client commission or soft-dollar practices to an advisory client. Separately, Quattro Global Capital, a USD900m firm, will pay a USD100,000 civil penalty for failure to file certain quarterly disclosure documents.
Goldman says fund injection is ‘opportunity’
Goldman Sachs chief financial officer David Viniar and president and co-chief operating officer Gary Cohen held a conference call this week to communicate with investors after it was reported that the bank and a group of outside investors had injected USD3bn into its Global Equities Opportunities Fund.
The executives billed the move as an investment opportunity, rather than a bailout, asserting this wasn’t the first time the bank had taken such an initiative in its asset management business. At the same time, the bank could have to soon put out as fire on another front, with its USD8bn Global Alpha fund down some 26 per cent so far this year after falling 40 per cent in the past 12 months. Goldman has denied it plans to wind up the fund, run by Mark Carhart and Raymond Iwankowski.
Still, Goldman Sachs is far from being the only manager nursing losses. Renaissance Institutional Equities Fund, which has USD26bn of assets, is down 7 per cent so far in 2007, with more than half the losses coming in the past month. Other quantitative funds by reputed managers such as AQR are also reported to be suffering, in large part due to the global credit meltdown.
Och-Ziff avoids sub-prime pitfalls
By contrast, Daniel Och’s Och-Ziff Capital Management appears to have sailed through the credit meltdown unscathed. The firm disclosed that it wasn’t materially impacted by the adverse conditions in the mortgage financial markets, particularly the sub-prime sector. The statement was made as part of its regulatory filings ahead of its upcoming USD2bn flotation.
Meanwhile, William Ackman of Pershing Square Capital Management has given a go-ahead to the USD5.3bn buyout of payroll processor Ceridian by Thomas H. Lee Partners and Fidelity National. Ackman, who had previously been opposed to the USD36 per share deal, reversed his stance in light of the deterioration in the credit markets. Pershing own 14.9 per cent of the firm.
New York-based XShares Advisers plans to offer AirShares EU Carbon Allowance Fund, an exchange-traded fund based on futures of carbon emission allowances under the EU trading scheme. Also, Van Eck Global has launched the Market Vectors-Nuclear Energy ETF based on the Dax Global Nuclear Energy Index, which comprises securities of 38 companies operating in the sector.