Global Investors Seek Out More Canadian Hedge Funds (WSJ)
As Canadian hedge fund managers grab the attention of global investors, including their neighbors in the U.S., many are setting up offshore investment vehicles to capture the new money. “In the past six months, there’re close to a dozen Canadian funds launching offshore products. There were only two to three in each of the previous two years,” said Sharon Grosman, president of SGGG Fund Services Inc., a Canadian fund administrator whose clients have $7 billion in alternative assets. The offshore products allow non-Canadians to invest in Canadian funds without being subject to a 25% tax on dividends. The heightened interest from foreign investors will likely give a much-needed boost to the budding $9 billion Canadian hedge fund industry.
As one of South Africa’s oldest hedge funds, Big Rock plays its cards right with low-risk relative value strategy (Opalesque)
Within the Peregrine Group, there is a South Africa-focused, market neutral hedge fund called Big Rock Capital Fund; it is now up 5.6% YTD net, after returning 1.9% in May 2011. That month, the fund remained market neutral (3% net long), it was leveraged 1.4 times and benefited from relative value trades in the financial and industrial sectors. Without a single down calendar year since its inception more than 12 years ago, the Big Rock Capital Fund has returned 626% in total and has annualised 17.3% with a standard deviation of 6.7%. Like quite a few of its peers in South Africa, it did well in 2008 with a return of almost 20%, and in 2009 with 17%.
What’s in a name? Permian Investment Partners (HFMWeek)
The fund is small ($100m according to HedgeTracker) and is a value-oriented long/short equity fund, with a focus on investments in under-valued European companies. Partner Cara Goldenberg, previously of Brahman Capital, Highbridge Capital and Morgan Stanley, founded Permian with Alex Duran and Scott Hendrickson. The fund made the news last year when Goldenberg and Duran were invited to dinner with Warren Buffett after sending him research notes on their stock picks. A picture of Goldenberg standing next to the legendary investor appeared on her Facebook page soon after. The fund has had a mixed record, losing 12.9% in 2008 as the financial crisis took hold. However, that did not prove an extinction-level event on the scale of Permian-Triassic, with the fund reportedly bouncing back 13.9% in 2009.
Abrams Capital Raises $2.4B for Hedge Fund (Citybizlist)
Abrams Capital Management has raised $2.37 billion in limited partnership interests for its hedge fund, Abrams Capital Partners II LP, disclosing 392 investors in an SEC filing. Last April, Abrams had taken in $2.21 billion from 359 investors. Abrams Capital was founded in 1998 by Abrams, a former executive at Seth Klarman’s Baupost Group, and who is also a director of Global Signal Inc., Crown Castle International Corp., and USA Mobility, Inc.
Wall Street legend aims to strike pay dirt in Ontario (The Globe and Mail)
Baupost was part of a group funding Highland’s purchase of about $50-million worth of potato lands in Dufferin County in Southwestern Ontario, under which, at a relatively shallow depth of about six metres, lie an estimated one billion tonnes of limestone suitable for construction aggregate. The rock could be worth up to $25-billion, depending on its quality. To be sure, there is a big element of dice-rolling. To hit pay dirt, the quarry needs to be licensed, which means overcoming the fear and loathing among many in the local area toward the proposed development. It’s a huge, hard-to-quantify risk.