- American Home Can’t Fund Loans, Says It May Have to Liquidate
- C-Bass Subprime Venture in Talks With Investors to Ensure Funds
- Heard on the Street: Betting on Mergers Can Pay Despite Widening Spreads
- Corporate Buyers Hit Gas on Deals
- Subprime Troubles Spread To Commerzbank, IKB
- A Stumble for ‘Bank Loan’ Mutual Funds
Tags: Mutual Funds, Private equity, Risk arbitrage
What do billionaire Wall Street BSDs blow their ill-gotten gains on? VH-1 aims to tell you, if you don’t already know. Over the weekend we saw a promo for an upcoming VH-1 show: "The Fabulous Life: Billion Dollar Wall Street Ballers". It’ll air on Thursday at 11am EDT and again that night at 9PM EDT with additional reruns on the VH-1 schedule. According to VH-1’s teaser/promo, the show features ESL / Sears’ Eddie Lampert, and naturally SAC Capital’s Steve Cohen. It also mentions the millions raised by the Robin Hood Foundation, so we’d guess that Paul Tudor Jones is probably in there too. Surprisingly also featured are accused perv / billionaire Jeffrey Epstein as well as besieged-by-subprime-debt John Devaney (Maybe parting with his "Positive Carry" yacht might not be such a big deal after all — VH-1 says he has 10!).
Think stars are having all of the fun?
Think again. These days nobody’s making more and spending more than the
buttoned-down badasses of Wall Street. From their sprawling estates and
tricked-out private yachts to exotic vacation homes and multi-million dollar art
collections– these guys are living larger than anyone else on the planet.
Welcome to The Fabulous Life of Billion Dollar Wall Street Ballers.
Tags: Art, Culture, Eddie Lampert, Jeffrey Epstein, John Devaney, SAC Capital
That was fast. Sowood Capital told its investors on Monday that after losing over 50% of its value on bad bond bets that it’s closing its two funds down and will unwind in an orderly fashion. It’s Alpha Fund Ltd plummeted 57% during July, while its Alpha Fund LP tumbled 53%. The Boston based funds, run by former Harvard Management’s Jeff Larson, were down 56% and 51% on the year, respectively. Usual suspect Citadel, came to the rescue and vultured up most of the assets of the felled firm.
Sowood Capital Management LP lost 50 percent in July, or about $1.5 billion, the biggest hedge-fund manager to collapse in the meltdown of the corporate bond and loan markets.
Sowood sold most of its assets to Citadel Investment Group LLC and will unwind its two funds, Jeff Larson, founder of the Boston-based firm, told investors in a letter yesterday. Sowood sought a buyer when it couldn’t meet lenders’ demands for more collateral. Terms of the sale to the Chicago-based hedge-fund manager weren’t disclosed.
“The transaction enabled us to avoid anticipated forced sales at extreme prices,” Larson, a former Harvard University endowment manager, said in the letter. “The weakness in corporate credit, particularly focused on loans and loan credit- default swaps, accelerated sharply during the week of July 23.”
Tags: Hedge funds
Our hearts go out to SAC Capital’s Brian Cohn and his wife who lost their 6 year old son in a tragic pool accident over the weekend:
The 6-year-old son of a Connecticut millionaire hedge-fund honcho drowned in the family pool in a freak accident over the weekend after his arm was sucked into a drainpipe that may have been missing a safety grate, police said yesterday.
The tragic boy’s inconsolable parents – dad Brian Cohn and mom Karen – and his three siblings, along with their nannies, were at the Greenwich mansion when little Zachary died.
His dad is president of SAC Capital Advisors, a $14 billion global financial enterprise.
Mogul’s Son, 6, Drowns In The Family Pool - New York Post
Tags: Hedge funds, Obits, SAC Capital
- General Motors Has $891 Million Quarterly Profit as Costs Fall
- Dow(n) To Wire
- ABN indicates it still supports Barclays bid
- HSBC weathers US bad debt storm
- more headlines below
Under water United Capital Markets founder John Devaney is looking to unload his 142 foot yacht and also his recently purchased Aspen property to raise cash to pay off debts. And if those don’t bring in enough cash, there’s always his Gulfstream jet, his helicopter and his waterfront home.
Devaney has had a fixation with boats since he was a young kid. He bought his first one when he was only seven years old — a dinghy for $100 raised from lawn-mowing earnings. His next purchase, when he was 29, was a 100-foot power yacht. And as recently as last year he was contemplating an even bigger putt-putt because, as he put it: "I don’t like golf." So it must sting that he has to give up his ‘Positive Carry’. At least Devaney won’t be totally boatless. We discovered that he also bought a 126 foot yacht called the "Big Easy" in April for his mom, Dorothy Ann. And the boat was rechristened in her name…
At the Fisher Island Boys and Girls Club
Rendezvous, club supporter and yacht owner John Devaney, CEO of United Capital
Asset Management (among other companies), sponsored a luncheon with writer and
TV personality Ben Stein. Devaney gave a short introductory speech,
relating a tale of how when he, as a young man, made his first millions, his
mother told him he needed to donate half of it to charity. Just before Christmas
last year, Devaney, who owns the 141-foot Trinity motor yacht Positive Carry,
made a surprise purchase for his mother, Dorothy Devaney-Goldman. He bought her
a yacht of her very own. It all happened rather quickly and spontaneously. On
Monday, December 11, Devaney expressed interest in the 126-foot motor yacht Big
Easy to Trinity Yachts CEO Felix Sabates Jr. On Wednesday, Devaney agreed to
purchase it. The deal closed on Friday, and the newly renamed Dorothy Ann was
christened on Saturday. Needless to say, his mom had the surprise of her life.
Tags: Hedge funds, John Devaney
Revised bonus expectation time? Was last year the high water mark?:
With the turmoil in the markets and the expectation of slowing of LBO’s and other fee generating transactions, Wall Streeters might be making less than they did last year come bonus time ending the record annual escalation we’ve all grown to expect.
A new report out of Standard and Poors today talks about how banking fees might be affected and which firms could be affected most:
Group revenue at Switzerland’s
second-largest bank could fall by 3.8 percent were leveraged buyout fees to fall
by half, S&P said. Earnings at Credit Suisse and UBS AG could plunge up to
19 percent as buyouts slow, Deutsche Bank AG analyst Matt Spick said on July 26.The risk of owning corporate bonds soared
to the highest level on record in the U.S. and Europe last week as banks
struggled to find investors for loans to pay for buyouts of Alliance Boots Plc
and Chrysler. Buyout firms will need to pay more to borrow and put more of their
own money into deals, the rating company said.“It seems certain that the LBO market’s glory days are over and the future
environment will be more challenging for sponsors and banks alike,” S&P
said.
Tags: Bonuses, Compensation, Hedge funds, IPO, LBO / MBO
In spite of the market turmoil, Cliff Asness’ AQR Capital Management is considering an IPO. They’re contemplating selling a 10% stake, raising as much as $500 million. They’ll have lots of investment banking muscle behind them with Goldman Sachs, Credit Suisse and Lehman Brothers underwriting the deal with Merrill Lynch and Morgan Stanley also included in the syndicate.
AQR’s decision to press ahead with an IPO
has highlighted how hedge fund listings are considered less vulnerable to recent
deterioration in market conditions than the largest private equity groups.This is because hedge funds often find ways to perform strongly in a variety of
environments, while buy-out groups are more reliant on healthy bond markets for
acquisitions and strong equity markets for exits.Based in Greenwich, Connecticut, AQR was founded in 1998 by Clifford Asness and
other members of the Goldman quantitative research group and now has about $35bn
under management.
AQR poised to sell 10% stake in $500m IPO – Financial Times
Tags: AQR, Hedge funds, IPO
- ‘Murdoch bid for Dow is no brainer’
- Bancroft split casts doubt over Dow Jones
- ABN Amro opts to stay neutral on rival offers
- ABN boards to decide on rival offers
- HSBC First-Half Net Rises 25%; Loan Provisions Jump
- more headlines below
When you’ve got a behemoth $29 billion hedge fund and your tripping over competitors like SAC Capital all looking for similar opportunities, maybe it means your fund is a little too big. With his fund earning lower returns so far this year than the S&P 500 and falling behind competitors like Pequot and Zweig-DiMenna, that seems to be what Jim Simons is acknowledging. He’s at least temporarily said to be turning off "the spigot a bit". In addition, Simons plans to slow down, stepping back from day to day operations in the next few years. In the meantime though, his new futures fund opens on October 1.
Renaissance Institutional gained 5.8
percent this year as of July 6, compared with the S&P 500’s 8.9 percent
advance. The fund will limit monthly inflows to less than $1.5 billion, the
current average, said a person who attended a meeting Simons held with clients
last week at New York’s Pierre Hotel.
The markets rocked and rolled again on Friday and we were loving the volatility, especially the wild wave going into the close!
Tags: Charts
Given the dismal performance of Blackstone’s IPO and the state of turmoil in the debt and equity markets, it’s sounding more likely that KKR may have a problem with its own planned IPO….
Jeff Arricale, who runs a financial-stock
mutual fund for T. Rowe Price Group Inc., said he doubts KKR will be able to
find enough investors to pull off an IPO if current market conditions continue.
"Sure, at some price it is possible to do it, but I’d be shocked if they
end up doing this IPO."Five blocks south of KKR’s New York headquarters overlooking Central Park, rival
firm Blackstone Group LP is learning just how tough this market has become.
Shares of its own initial public offering — priced just over a month ago — are
now 17% below their $31 debut, and closed yesterday in 4 p.m. New York Stock
Exchange composite trading at $25.70, up 19 cents, or 0.7%.
Tags: Blackstone, IPO, KKR, LBO / MBO
That’s what Page Six is suggesting, because Erin’s been getting more TV time as well as publicity recently and that doesn’t sit well with the spotlight loving Bartiromo:
Insiders say Bartiromo is in an uproar over
her ravishing rival Burnett, who’s begun to upstage her at the business news
channel.An inside source tells Page Six the Money Honey has been fuming that curvy
Burnett, in addition to her duties as anchor of "Street Signs" and
co-anchor of "Squawk on the Street," is getting substantial airtime on
the "Today" show, which gives her a much bigger audience. "Maria
is like, hey, why isn’t it me on the ‘Today’ show? She’s very jealous of all the
attention Erin is getting," our source said.
Tags: CNBC, Erin Burnett, Maria Bartiromo
- Paulson Says Subprime Rout Doesn’t Threaten Economy
- Paulson to Visit China as Congress Goodwill Dwindles
- ABN Amro seen likely to recommend Barclays bid
- A Big Backer of Refco Sues
- more headlines below
What a great day to trade! It was a busy, busy, busy day for us at Wall Street Folly so we didn’t spend much time focusing on our blog. Our favorite trading comes on days when the market is super volatile and today our eyes were mostly glued to our screens.
That’s the Dow Jones Industrial intraday chart above, and S&P 500 futures below.
Tags: Charts
Tags: Blackstone, Nomura, Private equity
- Morgan Stanley shifts focus to Europe
- Morgan Stanley hires ex-Lazard man
- Havens Adds Two Execs
- Cowen hires Lazard banker to lead stock offerings
- HSBC’s head of Asian ECM resigns
Tags: Hedge funds, HSBC, Lazard, Morgan Stanley
The Bad Boss Contest sponsored by Working America last year is back! Share your stories and nominate your candidate(s) for the worst boss here.
Tags: Banking Culture, Humor
The subprime flu has spread to another Australian hedge fund. First it was Basis Capital that disclosed major problems with subprime exposure. Now Absolute Capital Group Ltd, a Sydney based investor in collateral debt obligations, has disclosed that it won’t process any withdrawals until October 25 after forecasting losses in two of its fund. The two funds, Yield Strategies Fund and Yield Strategies Fund NZD, manage about $177 million and are run by Bill Entwistle. ABN Amro’s Australian unit owns 50% of Absolute Capital.
Absolute Capital, which says it doesn’t
invest in the riskiest portion of CDOs, is suffering from the widening impact of
delinquencies on U.S. home loans to people with poor credit. Basis Capital Fund
Management Ltd., another Australian hedge fund battered in the North American
market, has hired Blackstone Group LP to negotiate with bankers to help it limit
losses.“Because of the contagion from subprime, all of the credit sectors are
re-pricing,” Sydney-based Entwistle said. “There are lots of sellers and no
buyers, the market has to settle down before we can get some clarity.”
Tags: CDO, Hedge funds
- CBOE seat sale fetches record $2.65 million
- SEC offers conflicting shareholder proposals
- For AmEx, Growth Is Still in the Cards
- Italian banker to stand trial over Parmalat
- Wall Street Analysts Failed to Foresee Amazon.com Stock Rally
- more headlines below
Apple shrugged off a post earnings announcement sell off to soar on better than expected earnings. The stock halted in advance of earnings, and when it reopened it traded off some 7 points, down to around $130, from its regular hours close. But when the dust settled and clearer minds prevailed, the stock skyrocketed, ending the after hours session at just over $150.
Apple Inc. said third-quarter profit soared 73 percent, more than analysts predicted. The shares rose 8.8 percent after orders for Macintosh computers set a record and shipments of the new iPhone met most estimates.
Net income increased to $818 million, or 92 cents a share, from $472 million, or 54 cents, a year earlier, Cupertino, California-based Apple said today in a statement. Sales rose 24 percent to $5.41 billion in the quarter ended June 30, topping analysts’ estimates of $5.32 billion.
Why is Amazon CEO Jeff Bezos smiling? Because after unexpectedly stellar earnings last night that pretty much blew everyone away, AMZN soared today, closing at $86.18, up $16.93.
Tags: Blackstone, KKR, LBO / MBO
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