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.
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)