Hedge Fund News: Carl Icahn, Brevan Howard, Chase Coleman

ICAHN CAPITAL LPEx-hedge fund exec who admitted theft for gambling habit denied leniency (NJ)
The former chief financial officer of a Short Hills-based hedge fund will serve 4½ years in federal prison for stealing more than $10.4 million from the firm to fuel a longtime sports gambling habit. David Newmark, a 39-year-old married father of 6-year-old triplets, was sentenced yesterday in U.S. District Court in Newark to 54 months in prison after surrendering to federal authorities in January and pleading guilty to one count each of wire fraud and tax evasion.

MFA releases hedge fund investor app (Hedgeweek)
The Managed Funds Association (MFA) has released its first application on the iTunes App Store, the Hedge Fund Investor Map, giving policy makers, media, and the general public a powerful tool to track the impact and imprint of hedge funds across communities throughout the US. The app is a unique educational offering that provides a comprehensive survey of the institutional hedge fund investor landscape.

JP Morgan automates unlisted fund transactions (Investordaily)
JP Morgan has introduced a new fund routing and settlement service that allows its custody clients to automatically process the transactions of unlisted unit trusts and hedge funds. More than 80 per cent unlisted unit trusts and hedge fund transactions are still carried out manually by fax, or telephone, the company said. The Fund Order Routing and Settlement Service (FORSS) allows large multi-manager investors, including super funds, to deal with multiple counterparties via a single, automated online channel for all unlisted unit trust and hedge fund orders.

Brevan Howard Buying CMBS Sees 60% Gains for Teachers: Mortgages (Businessweek)
Brevan Howard Asset Management LLP is seeking returns of as much as 60 percent within two years by buying some of the riskiest commercial mortgage backed securities as Europe’s debt crisis pushes down prices. The $36 billion investment firm is purchasing bonds created during the real-estate boom leading up to 2007, according to people with knowledge of the strategy, who declined to be identified because it’s private. Brevan Howard created a CMBS fund that may be as large as $1 billion, probably lasting through 2014, and will return 20 percent to 60 percent, the Pennsylvania Public School Employees’ Retirement System said in an April memorandum on its website, recommending a $200 million investment with the hedge-fund manager.

Australia’s Fortescue comfortable with debt, China focus (Reuters)
The chairman of Fortescue Metals Group, the world’s fourth largest iron ore producer, defended on Friday the hefty $6 billion debt taken on to fund an expansion, saying it was affordable even as growth in top metals consumer China slows. Andrew Forrest, who is also the firm’s founder, was speaking after several hedge funds sold Fortescue shares short on bets that iron ore prices will continue falling as China’s economy continues to cool, crimping its demand for raw materials.

Auditor Criticizes La. Pensions’ Hedge Investment (Finalternatives)
Just over two months after three Louisiana public pension funds won the liquidation of a hedge fund they invested $100 million with, a state watchdog has rapped them for poor oversight. The state’s Legislative Auditor found that the Louisiana Firefighters’ Retirement System, Louisiana Municipal Employees’ Retirement System and New Orleans Firefighters’ Pension and Relief Fund failed to fully document the risks inherent in the Fletcher Asset Management fund.

May sees big drop for HFs but gains on equity markets YTD (HFMWeek)
Most hedge funds posted declines during a volatile May with the HFRI Fund Weighted Composite Index returning -1.6%, marking a third monthly consecutive decline, data from Hedge Fund Research (HFR) Thursday showed. The results reduced the composite index’s year-to-date gain to 2.5%, but saw it steal a march on equity markets globally, as continuing uncertainty surrounding Greece and growing concerns about the sustainability of Chinese growth led to a raft of steep declines.

Other Voices: Why the JOBS Act may mean nothing to hedge funds (Opalesque)
This article was authored by Phil Niles, Director of Product Development at Butterfield Fulcrum, a global independent fund administration company. Much has been made in recent weeks about the passage and adoption of the JOBS Act, which at its core has been crafted to assist small businesses in raising capital and help stimulate job growth and the economy. More specifically, there are changes to alternative investment managers and their funds, notably surrounding the ability of hedge funds to now market themselves to accredited investors. For decades, marketing was not permitted for hedge funds, so the JOBS Act marks a substantial change with respect to what hedge funds can and cannot do with respect to external communications.

Louisiana Teachers names hedge fund consultant finalists (HFMWeek)
The Louisiana Teachers Retirement System (TRSL) has named the finalists for its hedge fund consultant mandate, edging the $14.6bn fund closer to addressing an unmet hedge fund allocation of up to $280m, HFMWeek can confirm. Albourne America, NEPC and Hewitt EnnisKnupp are all in the running and, as the latter is the fund’s existing investment consultant, a decision will be made by the internal investment team following presentations from the trio in July.

SW8 surpasses important milestone (SacBee)
SW8 Asset Management Inc., a Toronto-based hedge fund manager, today announced it recently passed its two year mark of managing funds on behalf of investors. This two-year threshold is a key milestone for establishing a money manager’s track record. “We are quickly establishing a reputation for being able to deliver positive performance in highly volatile markets since our launch in April 2010,” said Matt Skipp, President and Portfolio Manager. “For example, May 2012 was a very bad month for equities but SW8 produced a positive return for investors. People are looking for money managers who place a high premium on capital preservation and have designed investment strategies to perform in volatile markets.”

Hedge Funds Get Squeezed In Mayfair As Offices Become Homes (Bloomberg)
Landlords in Mayfair and St. James’s, two of London’s most expensive neighborhoods, are exploiting a shrinking supply of new or refurbished office space to charge hedge funds and financial firms the highest rents in three years. Offices are being converted into residences costing 2,000 pounds ($3,100) a square foot or more as demand surges from foreign buyers seeking luxury homes in central London. A shortage of financing for new development and restrictions on high-rise projects add to the squeeze on commercial space.

RDG Capital Weighing Bid For Digital Generation, Glass Says (Bloomberg)
RDG Capital LLC, the New York investment firm that owns a stake in Digital Generation Inc. (DGIT), is weighing an offer for the advertisement-management company, said RDG founder Russell Glass. “RDG has been in discussions with the company regarding its potential interest in exploring a takeover bid,” Glass said today in an interview. A decade ago, he worked as president of Icahn Associates Corp., the hedge fund of billionaire investor Carl Icahn.

How data management can lead to additional alpha and drive convergence of private equity and hedge funds (Opalesque)
Gurvinder Singh, CEO and Bijesh Amin, Managing Director of consultancy shop Indus Valley, talked to Opalesque about (1) how data management can lead to additional operational alpha and (2) how data management is a key driver behind the convergence of private equity and hedge funds. Indus Valley Partners (IVP) is a niche technology consultancy focused on the alternative asset management industry. It has served hedge funds, funds of funds, private equity groups and prime brokers since 2000, and has offices in New York, London, New Delhi, Noida and Mumbai.

UK remains European hedge fund hub – Preqin (Opalesque)
The UK remains the largest hub for European hedge fund investment according to new research from global research firm, Prequin. The UK is home to nearly 40% of European institutional investors in hedge funds. Switzerland follows the UK with 22% of hedge fund investors located there. Switzerland’s investor base of insurance, private banking and pension funds remains active in the hedge fund space, and there are new centers of activity emerging. Paris and the Netherlands are growing as a newer investor base for hedge funds although both areas still remain somewhat cautious about getting involved with alternatives. The hedge fund investor base in both countries remains in the single digits but that hasn’t stopped new funds from launching. According to a report from Risk.net, former Societe General executives have recently joined forces on a new multi-commodity discretionary hedge fund that will be managed from Paris.

Former SEC Official Joins Hedge Fund Law Firm (Hedgeco)
Former SEC Official J Matthew B. Comstock has joined hedge fund law firm Murphy & McGonigle, P.C. as a partner in its Washington, D.C. office. Comstock brings to the firm experience advising clients with respect to securities trading practices, broker-dealer financial responsibility, and provisions of the Dodd-Frank Act. “We are very pleased to have Matt join our team,” said James A. Murphy, chairman of Murphy & McGonigle. “Matt’s extraordinary breadth and depth of experience in broker-dealer and cutting-edge securities market regulation issues will significantly enhance our ability to serve our financial services clients.”

Former Satellite man’s Ellis Lake hires first marketer (HFMWeek)
Ellis Lake Capital, the $160m event-driven credit hedge fund manager co-founded by Gabriel Nechamkin, who helped establish now-defunct Satellite Asset Management, has hired its first marketer as it begins efforts to target outside investors, HFMWeek can exclusively reveal. In what will be the first time that New York-based Ellis Lake has marketed itself to outside investors, Megan Sterrett, most recently of Doshi Capital Partners, has been named as director of marketing and investor relations.

Hermes BPK and Northern Lights seeding platform set for Q3 launch (HFMWeek)
Hermes BPK, the $2.3bn fund of hedge funds (FoHF), and Northern Lights Capital Group, an $11bn private equity firm, are readying their seeding platform for a Q3 launch and aim to allocate $75m to up to four early-stage hedge fund managers per year, hitting $750m in AuM within three, HFMWeek can confirm. The partnership, which was initially announced in September last year, is looking to give global institutional investors access to “talented, early stage managers” who will be given “acceleration capital” to generate momentum and drive returns.

The Investment Titan Who Outmaneuvered The Facebook Free Fall and Market Turmoil In May (Forbes)
The legend of Charles “Chase” Coleman III continued in May. The investment titan who runs $10 billion Tiger Global Management sidestepped Facebook’s terrible stock performance and the market upheaval sparked by European elections in May unlike many other Wall Street players who got pummeled by both events. Coleman smartly had his venture capital vehicles scoop up pre-IPO Facebook shares a long time ago and then managed to sell about one-third of his holdings, more than 19 million shares, in the May IPO for $37.6 each, collecting some $715 million. Coleman made the decision to sell some of his Facebook stock well in advance of the company’s IPO roadshow and he must have hoped the stock would perform better given his remaining big stake in the company.

KeyPoint Makes Two Key Appointments (Finalternatives)
Dallas-based real estate specialist KeyPoint Capital Management has made two key appointments, adding Scott Crowell as director of operations and promoting Ali Robins to director of marketing & investor relations. Crowell comes to KeyPoint from Maverick Capital, in Dallas, where he served as fund accountant with responsibility for overall accounting, valuation, and reporting across several funds advised by Maverick. Prior to Maverick, Crowell was a portfolio operations analyst and treasury analyst at Highland Capital Management, where he managed collateral and margin requirements for multiple financing facilities.

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