- Cov-Lite Loans Make a Return
- Pasture land for Plainfield Read the rest of this entry »
Tags: Cov-lite loans, Fees, Hedge funds, History repeating itself, liquidations, Max Holmes, Plainfield
Have they learned nothing? Cov-lite loans said to be making a comeback; Max Holmes’ Plainfield said to be liquidating so that he can start over (get that fee machine back up and running!)
On March - 26 - 2010
- Citigroup’s Pandit Said to Plan to Thank Taxpayers for Bailout
- Pandit Returns to Capitol’s Hot Seat
- Obama Sends ‘Volcker Rule’ Proposal on Bank Trading to Congress
- JPMorgan Tops Goldman in Investment Banking as Fees Swell 13%
- Scandal-stained Rangel quits post
- Geithner Adviser Sachs Plans to Resign as Banking Crisis Wanes
- Nissan to Recall Over 500,000 Cars Read the rest of this entry »
Tags: Autos, bailout, Barack Obama, Charlie Rangel, Citigroup, Ethlly challenged politicians, Fees, Goldman Sachs, JP Morgan, Nissan, Politics, recalls, TARP, Tim Geithner, U.S.. Treasury, Vikram Pandit
Marc Faber expects stocks to fall; Geithner still plagued by bailout anger; AIG stabilizing?; Alvarez & Marsal bank $233M in fees from bankrupt Lehman Brothers
On February - 22 - 2010
- U.S. Stocks to Fall, Faber Says; Wood Doubts Recovery
- Bailout Anger Undermines Geithner
- AIG Death Spiral Ends as Bailout Support Brings Stable Revenue
- Alvarez & Marsal Gets $233 Million for Advising Bankrupt Lehman Read the rest of this entry »
Tags: AIG, Alvarez & Marsal, Bankruptcy, Bears, Fees, Lehman Brothers, Marc Faber, Tim Geithner, U.S. Treasury; Bailout
- Banks Brace for Bailout Fee
- JPMorgan’s Dimon defends bank’s pay policy
- SEC broadens charges on Bank of America
- Bank Is in Talks to Settle State Claims Over Merrill
- N.Y.’s Cuomo Seeks Bonus Data From Bailed-Out Banks
- SEC Should Probe NY Fed Staff Over AIG, Senator Says
- Pandit Shakes Up Citi’s Upper Ranks
- Federal Reserve earned $45 billion in 2009 Read the rest of this entry »
Tags: AIG, Andrew Cuomo, Bank of America, Banks, Barack Obama, Citigroup, Deck shair reshuffling; Ponzi schemes, Fed, Fees, Jamie Dimon, JP Morgan, Lehman Brothers, Politics, Pound of flesh; SEC, TARP, Vikram Pandit
- Meriwether setting up new hedge fund
- TPG Plans to Return $20 Million in Fund Fees
- Hamptons Home Sales Surge Most in Five Years Amid 19% Discounts Read the rest of this entry »
Tags: Fees, Hamptons, John Meriwether, liquidations, Liquidations / implosions, Real Estate, TPG
- Cerberus to Raise New Funds After Investors Pull $4.77 Billion
- Lehman’s Europe Administrator May Claim $100 Billion
- Frank Said to Back Broader Fed Audits
- Kennedy Death Cuts Broad Health Bill Odds, Hatch Says
- Raft of Deals for Failed Banks Puts U.S. on Hook for Billions
- Fed makes $14bn profit on loans provided during financial turmoil
- The Flash-Trading Thorn in NYSE’s Side Read the rest of this entry »
Tags: Apple, Barney Frank, Cerberus, Fed, Fees, Health Care, Hedge fund redemptions, Lehman Brothers, NYSE, Politics
Jim Rogers: Short U.S. treasuries — “someday”; Currency funds crushed; The decline of LBO / hedge fund fees; Netscape co-founder Andreeson raised $300 million venture fund
On July - 6 - 2009
- Jim Rogers Sells Dollars, Plans to Short Treasuries
- Currency Funds Crushed on Dearth of Market Trends
- Reduced LBO Fees Mean 2% Disappears as Pensions Lament Losses
- Financial News: Managers Bow To Client Pressure Over Fees
- Andreessen raises $300m VC fund Read the rest of this entry »
Tags: Currencies, Fees, Hedge funds, Jim Rogers, LBO / MBO, Treasury Bonds, Venture Capital
Another one bites the dust: Cantillon Capital is shutting down its two hedge funds
On June - 17 - 2009
Add William von Mueffling’s Cantillon capital to the list of larger hedge funds (like Pequot and Raptor) that’s shutting down. Instead of running his two hedge funds which have a combined $3.5 billion in assets, he’ll focus on a long only strategy. Read the rest of this entry »
Tags: Cantillon Capital, closing the doors, Fees, Hedge funds
And another fund manager is shutting down: George Noble’s Gyrfalcon funds
On June - 2 - 2009
Sounds like it’s all about the fees: Add another under water hedge fund manager, George Noble, to the list of those who’ve announced that they’re shutting their doors today. Like Jim Pallotta, he’ll be rethinking his strategy and hopes to raise more outside money in the near future, according to the WSJ. Translation: High water mark? No problem! Just open a new fund and restart that fee meter! Read the rest of this entry »
Tags: closing the doors, Fees, Gyrfalcon, Hedge funds
Pallotta’s Raptor Global Funds are shutting down
On June - 2 - 2009
It was just a few days ago that Art Samberg shocked the investment world saying he was shutting down Pequot Capital. Now another big name fund is closing its doors. James Pallotta will wind down his Raptor Global Funds which was spun out of Tudor Investment at the end of last year with $1.5 billion in assets after 2008 losses of 20% and big investor withdrawals. He’ll start returning money to investors next month. According to Bloomberg, after taking off a few months off, he’ll apparently develop a new investment strategy. Hmmmmm. Is it our imagination, or does it sound like a case of another fund manager escaping a high water mark to restart the fee meter? Read the rest of this entry »
Tags: closing the doors, Fees, Hedge funds, James Pallotta, Paul Tudor Jones, Raptor, Tudor Investment
A Wall Street silver lining from the stimulus package: fees from the sale of muni bonds
On February - 26 - 2009
One area on Wall Street will reap benefits from the stimulus plan: Sellers of muni bonds….
While U.S. President Barack Obama criticized Wall Street bonuses, his
stimulus plan offers bankers the opportunity to boost fees with
incentives that may lead to $65 billion in municipal bond sales….
stimulus plan offers bankers the opportunity to boost fees with
incentives that may lead to $65 billion in municipal bond sales….
Banks that advise state and local governments and market their debt may
collect $314 million in fees as a result of the sales, based on
Bloomberg data. Municipal bond offerings, which totaled $392 billion
last year, may expand as underwriters urge clients to take advantage of
the stimulus tax breaks.
“Bankers can make the argument to their issuers that it’s good now to
accelerate multiyear borrowing plans into issues this year and next
year,” said Matt Fabian, managing director at Municipal Market
Advisors…..
Obama Showers Wall Street Fees With Muni Stimulus – Bloomberg
Tags: Barack Obama, Fees, Municipal Bonds, Politics
After a disastrous 2008, hedge funds could lose $450 billion more in assets this year
On January - 23 - 2009
According to Morgan Stanley analyst Huw van Steenis, hedge funds are in for yet another rocky year in 2009 with expected asset declines of as much as $450 billion through market losses and redemptions……
Tags: Credit Crunch, Fees, Hedge funds
- Buffett Says the U.S. Is in Midst of an ‘Economic Pearl Harbor’
- Hedge Fund Fees Too High?
- Ackermann Warns Banks Face 'Fragile Situation' as Economy Slows
- ‘Time to Sell’ Treasuries, Biggest Korean Fund Says
Tags: Deutsche Bank, Fees, Hedge funds
Tontine Partners is liquidating two funds with gargantuan losses, and will start anew (and so will the fees)
On December - 23 - 2008
We're always amazed when fund managers simply close big money losing funds (where they don't stand a chance of collecting fees until they make up losses) only to start a new one with a brand spanking shiny new fee faucet that they can tap. With two funds sustaining 2008 losses of over 60%, Tontine Partners leader Jeffrey Gendell doing just that — closing them and starting over with a new fee generating machine. Tontine's new Total Return Fund will invest in stocks it thinks are undervalued, and won't use borrowed funds. According to Bloomberg
Tags: Fees, Hedge funds
“I am appalled and disgusted”: Hedge fund pioneer fires off letter to peers about the state of hedge fund industry and its declining ethics
On November - 21 - 2008
Sandra Manzke, a hedge fund pioneer who founded Tremont Capital Management
and who now runs Maxam Capital Management, is fed up with the state of the hedge
fund business, its apparent decline in ethics and its out of whack fee
structure. "I am appalled and disgusted by the activities of a number of hedge-fund
managers" she said in a letter sent to hundreds of hedge fund
managers. She'd like to see the hedge funds come together as a group as
the " Hedge Fund Investors United Forum", where they set industry
standards. According to the NY Post:
Tags: Fees, Hedge funds
Hedge fund fees: Is the classic “2 and 20″ model finally on its way out?
On November - 5 - 2008
We've heard that for years, although most funds have been able to ignore the noise, with the fee machine happily chugging along. With the mostly dismal returns produced so far in 2008, is that bubble finally about to burst? Alexander Ineichen, a senior offer at UBS Global Asset Management who's on the investor steering committee of the Alternative Investment Management Association thinks that changes are imminent. According to the Financial Times:
Tags: Credit Crunch, Fees, Hedge funds
Going to the mattresses: Cash is king as big name hedge funds seek refuge on the sidelines
On October - 14 - 2008
With all of the turmoil and new game changers appearing when you least expect
it causing tremendous market volatility, some of the best known hedge funds have been heading for cash for the year’s final stretch. Some of
those stuffing the mattresses are SAC Capital’s Steve Cohen, Millenniumm
Partners’ Izzy Englander, and Paulson Capital’s John Paulson.
While that might be prudent, at least for the short run, that’s not why most
funds get paid the big bucks, especially with what’s paid on cash these
days. Those guys will probably be able to get away with it since even
through the turmoil, they’ve fared better than most. However, if smaller
funds try it, they might not be so successful. In the hedge fund world,
it’s a game of ‘use it or lose it’ if you’re not justifying those fees.
Tags: Fees, Hedge funds, Izzy Englander, Paulson & Co, SAC Capital
Some hedge funds, desperate to keep their investors in the fold, are reducing fees
On September - 9 - 2008
There are the rock stars, like Jim Simons, who can charge way more than the classic 2 and 20 hedge fund fee structure. But most hedge funds haven’t performed so well over the last year or two. Now the unthinkable is finally happening. The current market turmoil is separating the men from the boys — fees are facing downward pressure with some under siege funds voluntarily offering investors lower rates to stick with them. And that could lead to a bigger shakeout of the haves and have nots. This morning’s Wall Street Journal provides examples of some funds who are biting the bullet on their fees including Camulos Investors, down around 20% through early September and Ore Hill, down 7.1% through July…..
Tags: Fees, Hedge funds
Good thing Atticus Capital’s partners were paid so much in the past, because with this year’s under water performance they’re not getting their fees
On September - 2 - 2008
Oops: The principals at Atticus Capital, with over $20 billion
under management at its peak last year, won’t be making the
estimated $250-300 million that they’re said to have each pulled in last year. That’s because
the hedge funds run by Tim Barakett, David Slager and Jacob Rothschild haven’t done so
well this year — down by an estimated 5 billion (or 25%) — and they won’t be getting paid any fees. According to the Financial Times:
Tags: Atticus, Fees, Hedge funds
With fees to Wall Street banks drying up, will there be more consolidation?
On August - 25 - 2008
Fees generated by the big Wall Street banks and boutiques have dried up in a
big way and the Wall Street Journal’s Heard on the Street column suggests that there
may be more pain on the way. And that could lead to consolidation.
Senior bankers warn that after a tough first half, the outlook has deteriorated further. Does the grim forecast mean that the long-rumored consolidation in investment banking will finally occur?
The damage caused by mortgage-backed securities remains the focus for investors. The investment banks might have taken most of the balance-sheet hits from their subprime problems, but other areas, in particular commercial real estate and higher-grade residential mortgages, have begun to show cracks. Continued credit-market weakness is likely to force further write-downs in the third quarter.
Bankers Face a Grim Fall
- Wall Street Journal
Tags: Fees, investment banking, M&A
M&A bankers brace themselves for more deal famine ahead
On April - 1 - 2008
The fee machine is breaking down: M&A bankers are bracing themselves for a scarcity of deals after the first quarter provided the biggest drop in dollar value of announced M&A deals in six years….
That is the message circulating through
Wall Street’s mergers-and-acquisitions departments following the biggest
quarterly decline in six years in the dollar value of deals announced.It was clear by the end of last year that the merger business was in the midst
of a significant slowdown. The first quarter met the predictions of the most
pessimistic forecasters. The value of all global deals fell 24% from the first
quarter of 2007 to $736 billion. Many deal makers say 2008 is unlikely to get
much better, with some predicting declines of as much as 45%.The number of deals globally continued to
rise in the first quarter, jumping 14% to 9,195.There are "some bright spots," such as robust deal making in emerging
markets, but the merger business is likely in "for a tough time," says
Mark G. Shafir, chairman and global co-head of mergers and acquisitions at
Lehman Brothers Holdings Inc. "It’s a challenging environment right
now."
Deal Makers Brace For Even More Misery – Wall Street Journal
Tags: Fees, investment banking, M&A
Ernst & Young survey shows that hedge fund managers expect fees to drop
On October - 17 - 2007
A new survey from Ernst & Young says that one in seven hedge funds will raise money in the next two years via a public offering or selling a stake to another party. It also says that funds expect their fees to drop:
The survey showed 80% of hedge-fund
managers expect management fees and performance fees to decrease in the next two
years. Fees are typically structured as two and 20, which means investors pay a
one-off charge of 2% of the assets run on their behalf by hedge fund managers as
well as 20% of future profits."The poorer performers will be
affected the most," said Julian Young, a partner in Ernst & Young’s
U.K. hedge-funds practice. "Although pressures on fees may be downward,
managers that consistently perform well will be able to continue to charge the
fee structure they want."
Falling Fees Pressure Hedge Funds – Wall Street Journal
Tags: Fees, Hedge funds
Screw the profits from the business…For private equity it’s mostly in the fees
On September - 13 - 2007
This comes as no shock to us, but a new study by two Wharton professors cements the notion that the lion’s share of private equity winnings comes from the fees thhat an LBO can generate as opposed to profits from the underlying business. And that could hurt their congressional crusade to prevent new taxes being heaped on them:
Private-equity firms say they are experts
at wringing profits out of flagging businesses. It turns out they are almost
twice as good at wringing fees out of their investors.This finding — part of a study by two professors at the University of
Pennsylvania’s Wharton School — upends one of the deepest-held notions about
the buyout business: The bulk of the average private-equity firm’s earnings come
from profitably refashioning and reselling the businesses it buys.The study shows that, on average, leveraged-buyout funds can expect to collect
$10.35 in management fees for every $100 they manage. In comparison, slightly
more than half as much — $5.41 for every $100 — comes from carried interest.
Tags: Fees, Private equity
