Archive for December, 2009

Hedge Funds Teamsters

Hedge Funds Avoid Protest by Labor Union

It would have been a remarkable sight: Teamsters protesting outside the offices of a large hedge fund, Brigade Capital Management.  The International Brotherhood of Teamsters planned a midday rally against the hedge fund accusing the firm of refusing to participate in trucking company YRC Worldwide’s debt-for-equity swap.  If YRC cannot complete the swap, Teamsters estimate that 30,000 Teamsters will lose their jobs.

However, Brigade Capital Management responded quickly to avoid the rally and the bad press that would surely follow.   Both Brigade and hedge fund JMB Capital Partners announced that they have tendered all of their bonds in YRC, causing the Teamsters to call off the protest.

The union did warn that it would “monitor the situation” and “will plan future protests at these institutions and others if contrary evidence surfaces.”

“There is too much at risk for bondholders to sacrifice the livelihood of 30,000 workers for the marginal profits they might realize by their continued inaction,” said Teamsters General President James Hoffa. “It’s a simple choice—help a good, U.S. company recover and protect 30,000 jobs or allow our struggling economy to take another devastating hit. I think the choice is clear—bondholders must now do their part.”  Source

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Tags: Hedge Funds Teamsters, Brigade Capital Management, Teamsters union, hedge funds and unions, hedge fund management, public relations

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CalPERS Hedge Fund Ethics

CalPERS Tightens Ethics Following Probe into Hedge Funds

2009 has been a year for reviewing ethics policies and reexamining internal controls.  America’s largest pension fund is tightening its ethics rules following a minor scandal involving two hedge fund advisers.  CalPERS has announced that the president of its board can now discipline board members and all will have to go through annual training sessions.

The decision follows a probe into the fund’s paying of $36 million to two hedge fund advisers to manager the fund’s money without the required contracts.  Kurt Silberstein, who heads the hedge fund portfolio management, has been fined and placed on temporary administrative leave. 

The California Public Employees’ Retirement System’s board gave its president the power to discipline board members whose actions violate the $200 billion pension’s policies. It will also require annual training sessions.

The moves follow the revelation last month that CalPERS had paid some $36 million to two hedge fund advisers that were managing its money without a contract, as is required. The advisers in question, Pacific Alternative Asset Management Co. and a UBS unit, had both run portfolios for CalPERS since 2003.

As a result of the ensuing investigation, Kurt Silberstein, the pension’s senior portfolio manager for global equity and pointman on its $5.8 billion hedge fund portfolio, was fined and put on temporary administrative leave.

“By toughening our governance policies, we’re making sure that board members are held to the strictest standards,” board president Rob Feckner said. “The guidelines help us keep the focus on what’s important—the quality of our investments.”  Source

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Tags: CalPERS Hedge Fund Ethics, CalPERS, California Public Employees Retirement System, California Hedge Funds, California ethics, ethics probe, hedge funds

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Cadwyn Capital ended its Irish Stock Exchange-listed macro hedge fund. Cadwyn Capital was headquartered in Cardiff, Wales, and its 2005 launch marked a country-first, with Wales-based Carlyle Trust and Julian Hodge Bank financing its rollout.

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“After two years of crashing banking systems and economic recession, the euro zone enters 2010 with a full-blown debt crisis.”
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“Spanish savings banks have begun selling off the large property portfolios they acquired as collateral from loan defaults, in an effort to improve solvency ratios, a move that risks further falls in property values that could impair the value of their asset books.”
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“Rep. Dennis Kucinich (D., Ohio) said his congressional subcommittee plans to investigate Treasury’s decision to lift the existing $400 billion cap on government cash available to the two firms. Separately, Reps. Scott Garrett (R., N.J.) and Spencer Bachus (R., Ala.) called for the House Financial Services Committee to hold a hearing on the matter.”
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“So, what does it mean if we get another significant downturn? Well, not only are the 2003 to 2007 vintage mortgages in trouble, but those 2008 and 2009 mortgages are at risk as well. What are the chances of this happening? Fairly significant. For all of those guys who swear we are on the brink of a booming economic recovery, recall that it was housing depreciation that set all of this off to begin with”
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“For pensions are protected by law and contract, even when the pension fund can’t pay. Where does the money come from in such times? Cities and counties, of course. Us.”
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” Takeover advisers who cheered a surprise fourth-quarter surge in mergers and acquisitions may still have years to wait for a return to 2007’s record dealmaking.”
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” A new paper from the International Monetary Fund (not official policy) looks at the impact of lobbying by financial institutions.”
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