Bearish hedge fund managers have reaped some of their biggest gains since the collapse of Lehman Brothers amid the market turmoil triggered by the eurozone debt crisis, the FT reports. Funds reaping big gains include Brevan Howard’s $24bn flagship fund, which has risen 7 per cent over the past two months, and Caxton Associates which has seen its $5bn main fund rise 6 per cent over the same period, according to investors. GLG’s $2bn Atlas Macro Fund, run by former Goldman Sachs star trader Driss Ben-Brahim and Jamil Baz, a former Pimco money manager, has meanwhile risen 16.6 per cent. Over the same period, the MSCI world equities index has dropped 7.5 per cent and the average hedge fund has lost 6 per cent, according to Hedge Fund Research.
Breaking pre-market news on Monday,
- Glencore to acquire 70 per cent stake in Mina Justa Project for $475m – statement. Read more
GLG Partners is preparing to close one of its largest funds to new investors, amid growing concerns about the ability of supersize hedge fund portfolios to deliver strong returns. The London hedge fund’s market neutral fund will shut when it grows beyond $1bn – expected to be in the next few weeks – Steve Roth, the fund’s manager, has told the Financial Times.
Man Group suffered net client outflows for the eighth successive quarter, despite the strong performance of its flagship fund, reports the FT. The UK-based hedge fund manager said pre-tax profits in the six months to Sept 30 are expected to fall more than 55% to $135m, compared with $302m a year earlier. The update is broadly in line with analyst expectations. More than $75m has been written off from charges related to the divestiture of brokerage MF Global last year as well as costs from Man’s bid for rival hedge fund GLG Partners, expected to close in October. Lex notes that much, for Man, rests on a successful merger with GLG.
Volatile markets led institutional and private investors to withdraw almost $1bn from Man Group’s funds in the second quarter to June, the FT reports. But Peter Clarke, chief executive, pointed to the improved performance of the group’s flagship AHL fund, and to lower levels of redemptions by institutional investors, in the quarter. He also said that plans for the acquisition of rival GLG Partners were proceeding.
Remember the heady days of GLG Partners’ US listing back in 2007 when the UK-based fund achieved a stock market valuation of $3.4bn?
Here’s a Lex note from the time; Read more
Shares in Man Group were the biggest faller in the FTSE 100 on Monday morning, as investors digested its transformational deal to grab GLG, FT Alphaville adds. No doubt. Man Group is paying a good 6.75 per cent of GLG’s AUM. If Man doesn’t make this work, prepare for a big goodwill write off. Read more
Man Group has made a bold move to diversify its business — it’s buying GLG Partners for $1.6bn, FT Alphaville writes. There are plenty of highlights to the deal – but one can’t help feeling Man was desperate to broaden its business beyond its key managed futures fund AHL, which has had a patchy record since markets bottomed last year. Read more
First there was the London loophole. Now, it appears, the development of another entirely new loophole is underway. Let’s call it the physical loophole.
From Intercontinental Exchange CEO Jeffrey Sprecher’s Tuesday testimony to the CFTC on the matter of position limits and the influence of speculators on the price of commodities: Read more
Swathes of red and negative inflows do not make for pretty postcards from GLG Partners’ third-quarter presentation:
More worrying, perhaps, is this slide – showing net inflows, or now, outflows, for the period:
The hedge fund industry will shrink by almost a third as tens of thousands of groups are forced out of business, Manny Roman, co-CEO of GLG Partners, said yesterday. Economist Nouriel Roubini said regulators may have to shut down markets for as long as two weeks to stem the flow of hedge funds liquidating assets and positions, Bloomberg reports.
Hedge funds haven’t had much luck getting their message across to the public or the government over the past few weeks, being labelled “bank robbers” by an archbishop, no less.
Their lobbying power at the heart of government has taken a turn for the better thanks to the latest reshuffle, though. Peter Mandelson, Paul Myners and Sir John Bond, all called on in one role or another, all have close links to hedge funds. Read more
Or: How to time material announcements, GLG edition.
Before shorting GLG stock was banned (16 Sep): Read more
One of Goldman Sachs’ top traders is leaving to join GLG Partners, London’s second biggest hedge fund which manages $24bn (£12bn), amid a wave of defections from the City to Mayfair-based fund managers. The arrival of Driss Ben-Brahim, a partner and head of the emerging markets trading business at Goldman, is one of the highest-profile hires by a hedge fund and will give New York-listed GLG a boost as its current star trader, Greg Coffey, is due to leave in October.
Virgin Money, the Branson offshoot which wants to buy Northern Rock, on Friday launched a green investment fund. The fund’s manager, GLG Partners, will only invest in companies with lighter than average environmental footprints as well as companies that provide, manufacture or own solutions to environmental problems.
That’s the same GLG that is currently short of Northern Rock to the tune of 13m shares – which presumably helps Virgin, since it has served to to depress Rock’s market price. (Have you noticed this, Philip Richards of RAB Capital?) Read more
UK hedge funds are following the US pattern as older, more established London hedge funds spawn second-generation funds, highlighting the limited supply of investment bankers willing or able to raise large sums, reports the FT on Monday.
Mr Turner’s move follows the setting up of two large funds by former senior hedge fund managers. Jabre Capital, created in Geneva by former GLG Partners star trader Philippe Jabre, now runs $4bn, while Talaris Capital, founded by Nicolas Andine from Gandhara Capital, has grown to $925m since starting trading in January, notes the report. Read more