Archive for October, 2009

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Duff Capital failed, former employees say, because its founder kept spending money as if the credit crunch weren’t happening. Duff agreed to pay $5.5 million a year in rent, according to a person familiar with the matter, and outfitted his top-floor offices with a food court, showers, a boardroom table for 20 and a skylight with panes that filtered bright light to keep traders from squinting at their computer screens.”
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“Citadel Investment Group is allowing its investors to withdraw their money from the $14 billion Chicago hedge-fund firm, 10 months after it put up “gates” that prevented investor withdrawals, according a letter sent to investors Thursday.”
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““If they can’t understand it, they’ll pass,” said Joe Curtin, head of portfolio analytics and consulting at U.S. Trust Bank of America Private Wealth Management. “That’s a significant departure. If the strategy can’t be explained in conversational terms, they’re not going to do it.””
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K1 Hedge Fund Founder Arrested

Founder of Germany’s K1 Arrested in Fraud Probe

Helmut Kiener, the founder of K1, has been arrested by German authorities in a large fraud probe concerning a Caribbean-based fund that he managed.  Investigators are looking into Kiener over charges of fraud and breach of trust. 

According to the arrest warrant, “Barclays and BNP Paribas may have lost millions of dollars in the case, which prosecutors say spanned the Atlantic and featured lavish personal spending on planes, a helicopter and luxury properties.”

“There is a suspicion that the 50-year-old suspect did not comply with investment guidelines agreed with an English and a French bank among others and has used several millions in funds contrary to agreements,” prosecutors said in a statement.

The case centres on the K1 Global Sub Trust hedge fund run by Kiener, a psychologist by training who once sold ads for the Yellow Pages in Germany before moving into the financial sector.

Barclays may have lost most of the nearly $220 million (133 million pounds) it invested with the fund, authorities said.

“If Barclays had known of the suspect’s plans, it would not have provided the K1 Global Sub Trust any funds for investment between 2006 and 2009,” the arrest warrant seen by Reuters says, adding the funds “are mostly lost as far as we now know”.  Source

Related to: KI Hedge Fund Manager Arrested

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Tags: K1, K1 group, K1 foundation, K1 fund, fraud, crime, hedge funds, helmut k1, German hedge funds, Helmut Kiener, Helmut Kiener k1 arrested, arrest

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Trading Commodities in a Fund

Can I Trade Commodities in a Hedge Fund?

Brent Gillett, a partner at the Investment Law Group, has contributed a question and answer series covering the establishment of a hedge fund and laws related to hedge funds.

Question: Can I trade commodities in the fund?

Answer: If  a  hedge  fund  trades  in  futures  contracts  or  options  thereon,  the  fund  would likely be considered a commodity pool under the Commodity Exchange Act and the  manager  of  the  fund  would  have  to  register with  the  Commodity Futures  Trading  Commission  as  a  commodity  pool  operator.  Such  manager  would  have to pass the Series 3 exam administered by the National Futures Association.

Guest author: Brent S. Gillett, partner at the Investment Law Group. To find more information about the Investment Law Group follow this link.

Related to: Trading Commodities

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Tags: fund commodities, hedge fund commodities, trading commodities, hedge fund strategy, hedge fund trading, hedge fund, questions, law

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“Billionaire investor Wilbur L. Ross Jr., said today the U.S. is in the beginning of a “huge crash in commercial real estate.”

“All of the components of real estate value are going in the wrong direction simultaneously,” said Ross.”
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” The Galleon insider trading case reveals a world where corporate secrets are thrown around with cavalier disregard for regulations on how public company information should be disclosed.”
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” Could the controversial appraisal system imposed nationwide by mortgage giants Fannie Mae and Freddie Mac in May — and now tied to lowball property valuations, busted home sale transactions and higher fees to consumers — be on its way out?”
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HedgeCo News Archives – ALTIN AG, the Swiss alternative investment company listed on the London and Swiss stock exchanges, is today pursuing its policy of greater transparency to investors initiated in March by disclosing its entire portfolio holdings.

The portfolio, featuring over 30 underlying funds representing 10 different strategies, is particularly well diversified and boasts a positive performance of +11.16 %1 to date in 2009.

Only approximately 16% of funds held by ALTIN have restricted redemptions of one form or another, down 4% from 20% in the last quarter. This relatively low proportion does not affect ALTIN as, being a fixed-capital investment company, it is not faced with redemption requests.

The portfolio’s great liquidity allows the investment manager to conduct a dynamic management strategy and benefit from the current investment opportunities. During the third quarter of this year, the manager has therefore continued the investment programme initiated earlier this year. Since June, weightings in “Long/Short Equity”, “Multi-Strategy” and “Credit” strategies have been increased, through a reduction of cash, “Event Driven” and “Other Equity and Derivatives” strategies.

ALTIN AG was launched in December 1996 and has been listed on the Swiss Stock Exchange since its inception, as well as on the London Stock Exchange since 2001. ALTIN is a multi-strategy fund of hedge funds investing in more than 30 hedge funds representing various investment styles. The Company holds one of the world’s longest track records as an exchange-listed fund of hedge funds. Its objective is to generate an absolute annual return in US dollars terms with lower volatility than equity markets.

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HedgeCo News Archives – Mohican VCA Fund, LP has received the 2009 Lipper Hedge Fund award for Best Hedge Fund in Convertible Arbitrage. The award is based on portfolio performance of convertible arbitrage funds over a period of three years ending June 30, 2009.

“We appreciate that Lipper and Hedgeworld have recognized our fund for this award. Lipper’s methodology makes this award especially credible because they consider risk and return over a statistically significant period of time, in this case 3 years.”
Eric Hage, Chief Investment Officer of Mohican Financial Management, said.

The Lipper Award honors a hedge fund and management firm that has delivered the best performance among peers. Each candidate for the award is a fund that has provided superior consistency and risk-adjusted returns when compared to similar funds.

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