Goldman Says CDO Insurer Knew Paulson Was Short (Finalternatives) The insurer suing Paulson & Co. and Goldman Sachs Group, Inc. (NYSE:GS) over a collateralized debt obligation knew perfectly well that the hedge fund was shorting it, the bank said. In a court filing on Friday, Goldman said that ACA was aware that Paulson was shorting residential mortgage-backed securities at the time of the 2007 CDO, Abacus-2007-AC1. The bank added that ACA Financial Guaranty, the insurer, “cherry-picked” the evidence it offered in its lawsuit. Among the evidence left out was a May 2007 phone call between a Morgan Stanley bond trader and an ACA executive.
Ackman Won’t Realize Bet on Hong Kong’s Peg, K.C. Chan Says (Bloomberg) Hedge-fund investor William Ackman won’t realize his bet that Hong Kong will amend its 29-year-old peg to the dollar, said K.C. Chan, the city’s secretary for financial services and the treasury. The Hong Kong Monetary Authority has injected almost $14 billion since Oct. 19 as the local currency’s move to HK$7.75 obliged it to buy U.S. dollars in the foreign-exchange market. Ackman, the founder of New York-based Pershing Square Capital Management LP said Oct. 20 he was keeping his call contracts on the city’s currency and suggested Hong Kong revalue its dollar 30 percent higher versus the greenback to curb inflation.
Linedata Signs Magenta in Asia (WatersTechnology) Buy-side technology vendor Linedata has announced that its Global Hedge product has been selected by Magenta Advisors PTE, a Singapore-based hedge fund. Magenta, which is taking a hosted package from Linedata, will be using the portfolio management and middle office modules in order to support the fund.
JURISDICTIONS SHOULD COMPETE, BUT IN A FAIR AND EQUITABLE MANNER (Opalesque) The success of the Cayman fund regulations are based on the innovation, creativity and forethought of the local legal and structuring talents more than a decade ago. Very quickly, the Cayman hedge fund has become the default model for an entire industry, and investment managers as well as investors have been attracted by the jurisdiction because of its efficiency. By a significant margin, Cayman remains the leading hedge fund jurisdiction selected by existing and new launch managers.
Many Chinese onshore hedge funds look to set up offshore presence in Hong Kong (Opalesque) Hedge fund managers from the Chinese mainland are looking to diversify their operations into Hong Kong, AsianInvestor.net reports, citing sources from South African firm Skybound Capital. The firm’s China Red fund of hedge funds (FoHF) invests in mainland-focused hedge funds strictly through offshore managers, who typically have an office in Hong Kong. The FoHF runs $20m in AuM and returned 6% in 2012, says AsianInvestor. About a year ago, China Red was merged with another of Skybound’s FoHF, the Dragonfly Asia Pacific Fund, which has a regional focus.
LindenGrove launches first hedge fund with NewAlpha seed capital (HedgeFundsReview) LindenGrove Capital, the hedge fund manager established by former Nomura proprietary traders, has launched a global macro hedge fund and received capital from Paris-based seeder NewAlpha Asset Management. The management company was founded in 2009 by Borut Miklavcic, former global head of liquid markets proprietary trading at Nomura. LindenGrove Capital Master Fund was launched in December 2012 and in January 2013 received seed money from NewAlpha to take its assets under management to more than $50 million.
Quest's Greyhound Asia Fund returns 6.9% in 2012 (Opalesque) Asia ex-Japan hedge fund Greyhound Asia Fund, which is managed by Doug Barnett's Quest Management's Sergej Belozerov, posted positive gains of 6.9% in 2012 compared with the MSCI Asia ex-Japan Index which gained 19.4% last year. In a letter, Barnett said Greyhound achieved positive performance last year while holding mostly cash during the critical European uncertainties during the late spring, protecting shareholder capital. He added that 2012 was a very challenging year for the markets because of uncertainties from the U.S., EU and China.