- Assured Guaranty Ltd. Announces Commitment by Wilbur Ross to Purchase Up to $1 Billion of Common Equity
- Financial Firms Face $600 Billion of Losses, UBS Says
- MF Global takes $141m hit trading wheat
- Thornburg Hit With Margin Calls
- Credit Default Swap Losses Hurt Swiss Re’s Net Income
- Dell’s Profit Drop Dogs Turnaround Push
- WPP paints upbeat picture for 2008
- EBay Agrees to Settle `Buy It Now’ Patent Lawsuit
Archive for February, 2008
Renaissance Technologies’ Jim Simons makes $60 Million gift to SUNY
On February - 28 - 2008
Billionaire hedge fund guru James Simons and his wife Marilyn are donating $60 million to SUNY Stony Brook for a new Physics center at the school. Simons was the former chairman of SUNY Stony Brook’s math department and has made significant gifts to the school in the past…
James and Marilyn Simons announced the
gift, the largest ever to a school within the SUNY system, at a press conference
yesterday with Governor Spitzer in Manhattan. The donation will go toward the
creation of the Simons Center for Geometry and Physics, where scholars will
study subjects at the cutting edge of physics, including string theory, which
scientists believe could yield valuable insights into the properties of the
universe."We believe there is a chance that
work accomplished at the center will significantly change and deepen our
understanding of the physical universe and of its basic mathematical
structure," Mr. Simons said.
Tags: Hedge funds, Jim Simons, Philanthropy, Renaissance Technologies
Private equity seeking to fill the financing gap with sovereign wealth fund cash
On February - 28 - 2008
Not only is Blackstone lookiing for other than traditional bank financing, but so too are Carlyle’s David Rubenstein and Terra Firma’s Guy Hands. And unsurprisingly, sovereign wealth funds are among the deep pocketed firms being approached.
Private equity firms are now approaching
sovereign wealth funds for loans for big leveraged acquisitions, filling the gap
left by investment banks struggling with the credit squeeze, leading buy-out
bosses said on Wednesday.Guy Hands, head of Terra Firma, and David
Rubenstein, head of the Carlyle Group, told the Super Return conference in
Munich that private-equity firms were already talking to wealthy state-backed
funds in the Middle East and Asia about raising debt
Tags: Carlyle, Private equity
Major barfage at UK hedge fund Richmond Capital — it was down over 50% in January
On February - 28 - 2008
January was not kind to many hedge funds. It was especially unkind to UK based Richmond Capital LLC which ended December with around $524 million in assets — The fund cratered over 50% in January. That’s a pretty devastating result:
That makes Richmond, launched by Luca
Bechis, an experienced trader with a track record of posting strong gains, among
the biggest losers in a year that is already proving challenging for a number of
funds.Richmond fell more than 50% in January,
according to data compiled by Banque Syz & Co., a Swiss private bank, and
other investors with access to details of the fund’s performance. The fund had
€350 million ($524 million) in assets as of December 2007, according to Syz.
It was flat last year, but returned gains of about 24% and 18% in 2006 and 2005,
respectively.
Tags: Credit Crunch, Hedge funds
- Bernanke Hints at More Rate Cuts Amid Multiple Economic Risks
- Cerberus in talks to invest in Ambac-source
- UBS shareholders agree huge cash injection during stormy meeting
- JPMorgan Earnings Estimate Cut by Goldman, Merrill
- Euro Ends Above $1.50 for First Time
- Citigroup appoints new chief risk officer
- RBS Second-Half Net Rises 16%, Helped by Asset Sale
- IPOs worth $21bn pulled from market
- Apple on track to sell 10 million iPhones in 2008-COO
- Sears Fourth-Quarter Profit Declines on Lower Sales
Carlyle’s David Rubenstein: “Private equity has not seen the high water mark…” “The industry will come back stronger” (but banks won’t be big lenders again for awhile)
On February - 27 - 2008
Carlyle Group’s David Rubenstein made optimistic comments on the leveraged buyout market at the Super Return Conference in Germany. The "golden age" will return and come back even stronger. But he noted that owing to the $200 million debt overhang on their balance sheets that banks won’t be lending again in a major way for maybe three years. But while they’re waiting for business to pick up, they’ll still be busy — with all of the bankruptcies and restructurings that are on the way. So it’s all good…..
Of the banks and their debt overhang he said:
"It’s now on their books at 95 cents
on the dollar and if they had to sell it they would get even less. So they don’t
want to sell it and it stays on their balance sheets."But this will change – eventually the
banks will conclude they are better using their balance sheets for other things.
When it begins to happen you will see leverage coming back into the
industry."In the meantime, he predicted there would
be some bankruptcies of private equity run companies, but he countered the
pessimism of Alchemy boss Jon Moulton by claiming default ratios would be small."I don’t think defaults will be as
large as they were during previous periods of distress. Banks are much more
flexible and there is much more expertise in buyout firms than there as
before."
Tags: Carlyle, Private equity
Uncategorized
Blackstone: We don’t need no stinking bank debt financing
On February - 27 - 2008
Screw the banks. Blackstone thinks they don’t need them. According to Blackstone President Hamilton James, they’ll find their own sources of cash to fund their LBOs. That’s gonna mean lower fees to Wall Street banks..
The firm is contacting hedge funds and
mutual funds to provide loans for takeovers, James said after a panel discussion
today at the Super Return conference in Munich. Other firms may follow New
York-based Blackstone’s lead, he added.“We’re bypassing the banks,” James said.
“There’s still ultimately demand for this paper out there if you can go
directly to the buyers.”
Tags: Banks, Blackstone, LBO / MBO
- Markets on Tear: Wheat, Oil, Euro
- Oil Rises Above $102 as Weak Dollar Boosts Commodities Prices
- Issuers Ask SEC for Break Amid Auction-Rate Woes
- U.S. gives Blackstone OK to acquire GSO Capital
- Democrat urges $20bn subprime plan
- Microsoft Is Fined Record 899 Million Euros in Antitrust Case
- Ethanol Fuels Fire Concerns
- Toll Reports Second Straight Loss as Demand Slumps
Harbinger’s Phil Falcone’s new Penthouse pad
On February - 26 - 2008
Well it’s not exactly a penthouse. It’s a town house (with a pool — pictured below). But hedge fund honcho Phil Falcone of Harbinger Capital is the proud buyer of the Milbank Mansion, one time home of former Penthouse Magazine publisher Bob Guccione. The asking price was $59 million, but Falcone, the bargain hunter that he is, talked it down to somewhere below a meager $50 million….
The saga of the impressive 27-room,
22,000-square-foot, double-wide vintage home began when Guccione’s financial
problems first surfaced, prompting him to list the East 67th Street digs for $40
million in 2002.At the time, Guccione reportedly had a
full-time staff of 20, including four armed guards, a butler, numerous maids and
three dog walkers. As we noted last week, Guccione eventually vacated the
premises in 2006, after the present owners, now listed as P.H. Realty
Associates, called in his loan.The sale is expected to close by mid-March.
Coming Up Short – NY Post
‘Penthouse’ Pad – NY Post
View Harbinger’s 13F Filing in Chart form
Tags: Harbinger, Hedge funds, Real Estate
Credit Suisse: A big write-down, then a fire. With disasters seeming to happen in threes, what’s next?
On February - 26 - 2008
Simon Goodley of the Daily Telegraph asks: "Is Credit Suisse suddenly cursed?": First the firm revealed a huge loss due to a small group of traders inflating their trading results by mismarking bond positions. And yesterday, there was a fire in the CS Canary Wharf offices, forcing 5,000 to evacuate the building for about an hour. Fortunately, no one was reported hurt. We note that disasters tend to happen in threes. So what’s next?
Fire marshals told the crowd outside,
which included a few people in sportswear with towels around their shoulders
for warmth, it would take another hour before everyone could return to the
building.
The spokesman said the cause of the fire was not yet clear and added there was
no damage to the building.
Tags: Credit Suisse
Uncategorized
Some big investment banks picked the right Oscar horses….
On February - 26 - 2008
Some Wall Street Banks were winners on Sunday night when the Oscars were handed out….
Take Morgan Stanley, which gets credit for
the two big Oscar winners, "There Will Be Blood" and "No Country
for Old Men," as well as another highly regarded picture, "Into the
Wild." "Blood" and "No Country" were co-produced by
Walt Disney Co.’s Miramax Films and Viacom Inc.’s Paramount Vantage. Morgan
Stanley was an early backer of Paramount Vantage — the art-house subsidiary of
Paramount — investing $150 million in the studio through a vehicle called
Marathon Funding. Paramount Vantage also produced Sean Penn’s "Into the
Wild" and "The Kite Runner." All told, its movies garnered 19
nominations and six Oscars.Allianz AG’s Dresdner Kleinwort was a
winner, too. It invested $200 million in Focus Features, which had two pictures
earn nominations — "Atonement" and "Eastern Promises" –
and one statue. Then there is Goldman Sachs Group Inc., which helped get the
Weinstein brothers’ post-Miramax venture, Weinstein Co., off the ground;
Weinstein was behind the Bob Dylan bio-pic "I’m Not There" and
co-produced "Sicko." Each got one nomination.
Banks Picked Oscars, Too – Wall Street Journal
Tags: Dresdner, Film, Goldman Sachs, investment banking, Morgan Stanley
Aging BSDs may benefit from a dose of testosterone
On February - 26 - 2008
Wall Street is often described as a "high testosterone" environment. You need big balls to work there. But what if you’re older (like 40 and up) and your man berries aren’t functioning quite the way they did when your were an eager young pup, and instead you may be feeling tired and depressed? Maybe you need testosterone replacement! That’s what they’re saying at the 6th Annual World Congress on the Aging Male….
"If we had a drug that could restore
sexual function in men, make them stronger, build their bones, reduce fat and
get rid of the blues, you’d say, ‘Oh my God, why doesn’t everybody know about
it?’ " says Abraham Morgentaler, a urologist at Harvard Medical School and
director of the Men’s Health Boston clinic. "There is a drug like that –
but the public associates testosterone with cheating and illicit behavior and
the fact that 40 years ago, it was thought to give people prostate cancer."Whether it does or not is still an open
question. But many studies have shown that low testosterone is associated with
reduced muscle mass, bone density, sexual function and vitality, and increased
fatigue, depression, Type II diabetes and obesity — particularly belly fat.
Evidence is accumulating that restoring testosterone to normal can alleviate
many of those problems.
Tags: Health
Uncategorized
Citigroup had 15 $100 million money losing days last year….
On February - 26 - 2008
That was disclosed in it’s annual report that was filed on Friday according to the Wall Street
Journal. Ok, it’s not sooooo bad in view of the fact that company also had $100 million winning days — "more than 55" of them according to a Citigroup spokeswoman. But the gains couldn’t make a dent in the humongous writedowns they’ve already reported. Among other first time disclosures: its investment bank is holding about $20 billion of hard-to-value trading positions "that are directly or indirectly tied to the global commercial real estate market." These little tidbitss and no doubt many others are sure to entertain an exclusive group of 15-20 Wall Street analysts that Vikram Pandit is entertaining later today in a "meet and greet" cocktail party at Citigroup HQ.
Those 15 financially disastrous days, which
Citigroup disclosed in its annual report filed late Friday but declined
yesterday to describe in detail, added to worries the New York bank’s problems
are deeper than those that led to about $20 billion in mortgage-related
write-downs last year, the ouster of its chief executive and a sinking stock
price."Ouch!" said David Hendler, an
analyst at CreditSights Inc., about the trading losses.
Tags: Citigroup, Credit Crunch
- Relief over bond insurers spurs Dow
- Citigroup may face $12 billion in additional write-downs, Goldman says
- MBIA Retains Rating, But Concerns Persist
- Goldman Estimates Slashed by Merrill’s Moszkowski
- Visa’s $19 Billion IPO Swipe
- Cisco develops new network processor
- Nordstrom profit off, designer sales holding up
- Wattles Nominates Slate of 5 To Circuit City Board
- Home Depot Profit Drops on U.S. Housing Slowdown
- Oscars Turn in Lowest Ratings
Fox Business: Rebecca Gomez (and her cleavage) does the runway walk, modeling Oscar fashions
On February - 25 - 2008
Filmed just before the Oscar ceremony: FBN’s Rebecca Gomez looks hot modeling sexy cleavage baring frocks and then interviews fashion designer Nicole Miller. On the runway Rebecca vogues, does a little bootie shake, and oh my….that black chiffon blind fold….
One notable exchange:
Nicole: "One thing about actresses: they really like to show their bodies…They work hard on their bodies and they’re in great shape"
Cody (pointing to Rebecca): "Not just actresses"
Rebecca: Hey! Hey! Easy!…."
Tags: Eye Candy, Fashion, Fox Business Network, Rebecca Gomez
Last year’s feast turns into this year’s famine: LBO Funds commiserate together at big German conference
On February - 25 - 2008
It’s that time of year again. The biggest of the big LBO firms are gathering in Germany at the Super Return conference, where this year they’ll no doubt be swapping wistful war stories about the good old days (like last year) when there were multi-zillion dollar LBO deals announced almost daily…..
Carlyle Group founder David Rubenstein and
TPG Inc.’s David Bonderman will join a meeting of about 1,500 executives from
the leveraged buyout industry in Germany this week, as funding for takeovers
vanishes and returns deteriorate.At last year’s Super Return conference,
executives toasted an unprecedented $713 billion of acquisitions with a
reception at the Frankfurt Zoo, where they were entertained by a dance troupe
and challenged to find the glass of champagne containing a real diamond.
Tags: Conferences, LBO / MBO
Uncategorized
Is Goldman Sachs overvalued? That’s what the WSJ Heard on the Street column is suggesting…
On February - 25 - 2008
This morning’s Wall Street Journal is suggesting that Goldman’s days of reporting stellar earnings may, at least for now, be over….
The problem: Many areas giving Goldman fits
in the current quarter — from leveraged-loan exposure to sluggish
investment-banking activity — aren’t likely to recover anytime soon. As a
result, its stock, still pricey compared with other Wall Street securities
firms, could fall much further.In a sign many investors think the credit crunch has hit Goldman hard in its
fiscal first quarter ending Feb. 29, the New York company’s shares are down 14%
since Feb. 1. Goldman shares Friday rose $2.54, or 1.5%, to $177.71 in New York
Stock Exchange 4 p.m. composite trading. The stock peaked at $250 last October."The world knows this quarter stinks for Goldman, as well as the
others," says Glenn Schorr, a securities analyst at UBS.In recent weeks, Goldman has been tightening its belt, curbing perks like group retreats to off-site locations and overnight deliveries of documents to employees’ homes, according to people familiar with the situation. The firm’s annual ritual of weeding out underperforming employees is being carried out with added focus.
A Goldman spokesman says the firm is "always focused on expenses, and that focus is even more intense in difficult markets."
Others aren’t so sure that Goldman may have as bad a quarter as the WSJ may be suggesting. This has been a great quarter for traders, and since that’s one of their bread and butter businesses, that may help blunt the pain. We shall see…
Goldman’s Profit Magic May Be Fading - Wall Street Journal Heard on the Street
Hedge fund January returns were REALLY ugly
On February - 25 - 2008
We were struck this weekend when we read Barron’s which published their monthly hedge fund returns for January — pages of listings of zillions of funds with their individual returns. Not everyone is included in the list — many of the largest funds, the marquis names, don’t publish their returns. But when you looked at who did report, line by line, it was striking at just how badly so many of the funds did in January. Here’s the link. (Subscription required).
Tags: Hedge funds
- Ambac Moves Closer To Raising $3 Billion
- UBS to be sued for sub-prime ‘mis-selling’
- CME Seeks Nymex Deal Despite Justice’s Concerns
- Qataris’ eye on RBS shares
- Yahoo! jobs ‘are safe’ says Microsoft
- Wall St. cutbacks crimp tech sector
- Clear Channel, Providence Agree on TV-Station Deal
- Take-Two Rebuffs Electronic Arts’ $2B Bid
- Tiger Woods Wins His 63rd PGA Event to Pass Palmer
- Nader Announces He’ll Run Again For White House
- Hedge Funds Record Worst Month Since 2000 in January
- Goldman, U.S. Brokers May Earn 40% Less Profit, Bernstein Says
- GMAC’s ResCap Gets Credit Line, May Sell Resort Unit
- Natwest Three sentenced to 37 months each
Tags: Enron, Goldman Sachs, Hedge funds
AQR’s largest hedge fund tumbles a miserable 15% through mid February
On February - 22 - 2008
Major ouchie: AQR’s largest hedge fund is said to have cratered by 15% through the middle of February. No comment from AQR on the loss according to Bloomberg….
The assets of AQR’s Absolute Return fund
dropped to $2.9 billion last month from $4 billion in the fourth quarter, said
the people, who declined to be identified because the Greenwich,
Connecticut-based firm doesn’t publicly disclose the data. AQR’s smaller Asset
Allocation fund lost 16 percent of value.Quantitative managers who rely on computers
to make trades have struggled as global equity markets declined. Assets managed
by AQR, co-founded in 1998 by former Goldman Sachs Group Inc. managing director
Clifford Asness, slipped more than 20 percent to $8.6 billion in the past six
months because of investment losses and client redemptions.
AQR’s Biggest Hedge Fund Fell Almost 15% Through Mid-February – Bloomberg
Tags: AQR, Hedge funds
D.B. Zwirn shuttering two hedge funds suffering from internal control problems and large redemptions
On February - 22 - 2008
Hedge fund DB Zwirn is throwing in the towel on two funds, its on shore and off shore Special
Opportunities Funds, with $4.2 billion in assets after investors said they wanted to withdraw over two billion. The funds had disclosed accounting irregularities and internal control problems last year, including improper transfers between funds as well as improper handing of operational expenses. It’ll be an orderly wind down that could take years, not a fire sale according to a letter to investors. The company will still run around $1 billion of other assets not included in the two liquidating funds. According to the Financial Times:
On Thursday night, Zwirn sent a letter to
investors outlining its plans to liquidate assets, about 60 per cent of which
are not easily tradable and mostly involve illiquid loans made both in the US
and abroad.A spokesman for Zwirn confirmed that its
founder, Daniel Zwirn, had used a private jet but said he was not aware the
expense had been booked improperly to the funds. He added that all matters had
been remediated.Zwirn received a clean bill of health from
its auditors at PwC for 2006. But on January 29, PwC sent it a letter that
appeared to undermine that opinion, saying Zwirn’s failure to maintain proper
internal controls had led to “material weakness”. It cited areas of concern
including “improper cash and investment transfers, overcharging of expenses by
investment management to the fund” and “premature payment of management fees
to the investment manager”.
Tags: Hedge funds, Toe Tags
- Dresdner Rescues $19 Billion SIV, Follows Citigroup
- Philadelphia Fed Survey Suggests Continued Weakness
- Exchanges Vie to List ‘Blank Check’ Firms
- NYMEX Merger Deal All But Completed
- Dinallo defends monolines handling
- Microsoft to Reveal Software Secrets on Internet
- Motorola Hung Up by Handsets
- Nearly $50M in fees for Delphi lawyers OK’d
- Starbucks Cuts 600 Jobs, Restructures Operations
- Fears of Stagflation Return As Price Increases Gain Pace
- Obama Raised $36 Million
- UBS to Shorten Ospel Term to One Year at Re-election
- Société Générale Details Lapses
- SocGen Controls Weren’t Followed Up, Board Says
- Liechtenstein’s Prince Promises Changes Amid German Tax Probe
- Gross Says U.S. Budget Deficit May Reach $800 Billion
- Bovespa and BM&F in merger talks
- GMAC to slash American workforce
- Eurotunnel begins €1.7bn refinancing
- Stringer’s Blu-Ray Win May Fail to Spur Growth in Sony Earnings
- Sharper Image, Lillian Vernon File for Bankruptcy
The glitter is gone and is anyone really surprised?: Hollywood hedge fund money is drying up
On February - 20 - 2008
The first thing we learned when we started looking at investing in the movie industry many years ago is that by the time they make it to Wall Street, a given movie project has been already shopped around and rejected by pretty much everyone who counts in Hollywood. And even then, with their ever increasing budgets, most projects don’t make money. But then producers smelled easy cash, and they started shopping their mostly crap projects directly to hedge funds. Yes, the odd film made money. But the number of projects where you could toss in a few million bucks and then make a hundred million at the box office (or much more) are few and far between. So it’s no wonder and no surprise to learn that hedge funds’ relatively recent fascination with investing in Hollywood may be coming to a mostly unprofitable end…..
Hedge funds have been a major source of
capital for Hollywood studios over the past three years. Drawn by projections of
double-digit returns with minimal risk, they pumped $13 billion into 150 major
pictures. Typically, they helped finance "slates" consisting of as
many as several dozen movies. Now, the glitter is gone. Many of those deals
probably will lose money for equity investors, according to investment bankers.
The toll could reach hundreds of millions of dollars.In some cases, studios have restructured
deals to appease angry investors. Sony Pictures, whose investors backed flops
including "All the King’s Men" and "Stranger Than Fiction,"
agreed last year to absorb some marketing costs originally charged to them,
according to three people knowledgeable about the matter.
Tags: Film, Hedge funds
