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Hedge Fund Profit on Defaults, UBS Denies Report, Hedge Fund M&A

Hedge Funds Profit on Defaults (TheAustralian)

WHILE I was at work on a book about the 2008 financial disaster I became interested in a tiny handful of investors who had made their fortunes from the collapse of the sub-prime mortgage market. A lot of people had thought that the debt-fuelled US housing boom was unsustainable – but only 15 or so had gone all in and placed enormous bets that vast tracts of American finance would go up in flames. Most of these people ran hedge funds in London or New York. Most, usually, avoided journalists. But on this topic, at that moment, they were surprisingly open. All had experienced the strange and isolating sensation of being the sane man in an insane world. Among them was Kyle Bass, the manager of a hedge fund called Hayman Capital in Dallas.

Kyle Bass

UBS Denies Hedge Fund, Private Equity Report (FINAlternatives)

UBS has denied a report that it could cut two of its largest alternative investment businesses. According to Reuters, the Swiss bank is mulling a plan that would do away with its its private equity placement business and UBS-O’Connor, its asset management business’ hedge fund arm, as it seeks to scale back its operations in the wake of a US$2.3 billion rogue trading scandal. The bank may also reduce its presence outside Europe, including in the United States. But UBS spokesman Torie van Alt called dismissed the report as “rumors” that are “categorically untrue.” “We are not closing either our Private Funds Group or O’Connor business.”

Madison Street Says Surge in Hedge Fund M&A Likely (Opalesque)

According to Madison Street Capital’s “Fall 2011 M&A Outlook – Hedge Fund Industry” report, M&A activity in the hedge fund industry in 2011, as indicated by both the number and size of completed transactions, can best be described as sluggish. However, if last year‘s past results has any predictive value, we can expect a surge in activity in the fourth quarter that will likely spill over into the first quarter of 2012. For instance, the current M&A Market conditions are very favourable for transactions. The sector has rebounded from an investor confidence point of view as both net investment flows as well as total Hedge Fund industry assets are at almost all-time highs. The fear that Hedge Funds would no longer be a viable asset class allocation are all but gone, and the recent market volatility suggest that that assets allocated will be even higher as investors turn to more sophisticated money managers to help navigate through this global economic uncertainty.

Several Korean Hedge Funds Attempt to Debut Amid Uncertainties (KoreaTimes)

For the national government, now may not seem like the most opportune or politically savvy moment to give more freedom to the finance industry, which has become the symbol of inequality and the punching bag for public anger. Like it or not, though, local asset management firms are pushing through to launch their own hedge funds before the end of the year, following the National Assembly’s approval of relevant regulations last month. Industry insiders and experts play down the early controversy and instead urge patience from regulators and the general public ― to wait before they try to fight a threat, they say, that does not exist.
Henderson Closes Currency Arm (Opalesque)
Henderson is closing its £47m global currency offering. The firm is closing its £36.7m Henderson horizon global currency fund, a Luxembourg-domiciled Ucits III as well as its £10m Henderson global currency fund, a Cayman Island-domiciled Ucits III hedge fund. The five strong team, which includes head of currency Bob Arends are all leaving the firm as a result of the decision to close the offering. The team, which is based in Amsterdam, were hired from Fortis Bank in January 2009. The offering will close on October 31
Abacus Group Signs 100th Client (MarketWatch)
Abacus Group, the leading private cloud provider for hedge funds, is pleased to announce that it has recently signed its 100th client. After starting operations in San Francisco just over two years ago, Abacus Group LLC has grown quickly, adding clients at a rapid rate in multiple locations, expanding into New York, and hiring both IT and sales staff. In addition, Abacus Group is actively growing business with strategic partners, such as hedge fund specific software application providers. In June, Abacus became the first private cloud for hedge funds to successfully complete the SAS 70 Audit, enabling it to provide the highest level of security to its customers.