Falcone’s Future Hinges On Lightsquared Gamble As SEC Threatens A Lawsuit (Bloomberg)
A day after being told that U.S. regulators may sue him, billionaire hedge fund manager Philip Falcone telephoned Sheldon Lowe, a close friend of 23 years, and told him that he would fight back. Falcone may be facing his toughest challenge yet as the government considers whether to sue him over alleged violations of securities laws. The threat of a lawsuit, disclosed last week, has prompted the hedge-fund manager to consider suspending withdrawals for a second time in three years, which may make attracting new investors difficult unless his bet on a wireless telecommunications venture called LightSquared Inc. pays off.
Paulson, Renaissance Visit Spain To Assess Banks, Expansion Says (Bloomberg)
Executives from hedge funds including Paulson & Co and Renaissance Technologies LLC visited Spain last week to weigh investments in banks at a meeting organized by the son of Emilio Botin, Expansion said. Negotiations between hedge funds and Spanish banking executives have so far stumbled over the valuation of bank assets, the newspaper said, citing people in the finance industry without naming them.
U.S. Hedge Fund Sues Vietnam’s Vinashin (WSJ)
U.S. hedge fund Elliott Advisers LP is suing Vietnamese state-run shipbuilder Vinashin in the U.K. High Court. Vinashin defaulted on a $600 million syndicated loan last December, when the first repayment of $60 million was due. Other investors in the loan, which was arranged by Credit Suisse AG in 2007, include Dublin-based Depfa Bank PLC and Malayan Banking Bhd., as well as Credit Suisse. Elliott is suing for par value of its investment, together with unpaid interest and default interest totaling $13.2 million.
Nippon Life Plans To Boost Private-Equity Holdings, Maintain Hedge Funds (Bloomberg)
Nippon Life Insurance Co., Japan’s biggest life insurer with about 50 trillion yen ($640 billion) of assets, plans to invest more in private-equity funds and maintain its hedge-fund allocations. The company currently invests in more than 100 private-equity funds and about 30 to 40 hedge funds globally through its asset- management arms, according to Sakuma. Lured by the prospect of buying banks’ portfolios at discounts, U.S. hedge funds and private-equity firms such as Apollo Global Management have raised about $7 billion targeting European distressed assets since 2009 and are seeking another $7 billion, according to Preqin.
Barclays Wealth Launches New Hedge Fund (HFN)
Barclays Wealth has launched a new global bond hedge fund. The new fund was open for sale to outside investors on Nov. 1, according to a Securities and Exchange Commission filing on Friday. The new fund has raised $10.1 million so far from 25 investors, with a minimum investment of $100,000. It also plans to be open to investors for more than a year.
The SEC’s New Approach To Fraud (Bloomberg Businessweek)
A new government system for spotting securities fraud is bearing fruit. Over the past month the Securities and Exchange Commission filed four fraud cases against three hedge funds and six people for misconduct, including improper use of assets, fraudulent valuations, and misrepresenting returns. “Hedge fund managers depend on valuation and performance for both their compensation and marketing,” says Bruce Karpati, co-chief of the SEC’s asset-management enforcement unit. “These managers have either manipulated performance or engaged in other falsehoods in order to line their own pockets at the expense of investors.”