Hedge Crunch FinancialHighWater Making Changes at the Top
Darren Stainrod and Mark Fagan join two other recent appointees to the directors’ lineup at the alternative financial management firm HighWater. Stainrod comes to HighWater from a stint as the managing director of UBS Cayman, where he was employed for 17 years.
Mark Fagan was promoted to director at HighWater. He is a Chartered Accountant and CFA Charter holder. Before Fagan joined HighWater he worked at RBC Dominion Securities as an investment advisor. He was also a portfolio manager and performance analyst at Butterfield Bank.
Stainrod and Fagan are taking their place with other newcomers Matt Auriemma and Todd Groome. Auriemma was the senior managing director and global head of operational risk management at UBP Asset Management. Groome was the global chairman of AIMA plus and advisor to the International Monetary Fund.
The managing director of HighWater, Gary Linford, commented on the latest appointments:
“We are thrilled that Darren will join us and are pleased that HighWater continues to attract such high quality professionals. Mark has worked tirelessly implementing our business model, extending his understanding of our clients’ needs. Mark and Darren have the correct skill-set alongside the client-service attitude that we live by.”
Hedge Funds Care Benefit in Style of Chicago Jazz Era
Untitled, a new restaurant in Chicago, will play host to the 11th annual “Hedge Funds Care” benefit on May 22 at 6pm. The benefit will raise money for the prevention and treatment of child abuse. This year’s fundraiser is striving to attract the younger crowd among hedge fund managers with a prohibition era themed nightclub venue. There will also be an additional party held afterwards. GEM Realty Capital will be the recipient of the Kelly Lively Award in recognition of their outstanding contribution to Hedge Funds Care.
The benefit will have cocktails, a raffle, live entertainment and tasting of great liquor in an environment inspired by the supper clubs during the days of prohibition. The after party will begin at about 9:30pm in the same venue.
“This special evening will bring together the Chicago financial community in support of a common charitable cause, which is to help prevent and treat child abuse,” said Committee co-chair Wesley Nissen.
“I am very thankful for the industry’s strong commitment to helping us support local programs that truly make a difference in the lives of abused and neglected children.”
Committee co-chair Benji Wolken added. “It is our responsibility not only to support this vital cause, but also to engage the next generation of financial professionals to get involved now and carry on this important work.”
Location Based Technologies Passes One Hundred Business Customers Mark
Location Based Technologies, Inc, an OmniView Capital Advisors portfolio company with AJ Discala, announced that it has accumulated 100 new business customers since they began their Business Solutions platform.
The Business Solutions platform is designed for business customers. In exchange for paying a higher monthly service fee businesses get access to enhanced user-interface features. In one recent month LBT experienced an increase in business customers by 36 percent as these special customers continue to see the benefits of this upgraded service plan.
LBT has over 112 companies signed up to receive their new, affordable GPS system. The price structure allows businesses of all sizes to receive the benefits of financial savings, more efficient operations and other creative and flexible business solutions.
Chief Executive Officer AJ Discala of OmniView Capital Advisors is pleased with the growth of this important portfolio company.
“Our commercial sales pipeline continues to grow and in just a few months we have surpassed an early milestone of serving more than 100 businesses,” said Dave Morse, CEO of Location Based Technologies. “Any business looking for cost savings, enhanced safety and expanded management capability for their mobile assets should ‘test drive’ our new Business Solutions system – whether you have 5 or 5,000 mobile assets. As large and small businesses have found, our asset tracking solution delivers the best value and is the ‘easiest to use’ interface on the market. It is simply not good enough to only know where your valued assets are located at the beginning and the end of each day,” Morse adds.
Paul Singer Still Betting on Gold
Gold Still Best Value
Yes it’s true that in recent days gold has been losing value, but for many analysts, including Paul Singer of Elliot Management Corp, gold is still a good investment with the best store of value.
Singer is the founder and president of Elliot, which has assets under management of more than $22 billion. And he still has faith in the value of gold.
“We remain unconvinced that genuine normalization of global economic and financial conditions has been achieved,” said Singer in a recent interview. “There is only one store of value and medium of exchange that has stood the test of time as ‘real money,’ and that is gold.”
Vinik Closing Hedge Fund After Poor Performance and Company Upheavals
Jeffrey Vinik
Jeffrey Vinik, veteran hedge fund manager who rose to fame along with the spectacularly successful Fidelity Investment’s Magellan fund in the 1990s, has decided to close down Vinik Asset Management, which was launched in 1996.
“After a great deal of consideration, we have made the difficult decision to return our investors’ funds,” Mr. Vinik wrote in a Friday letter to investors.
Vinik added that he and his founding partner Mike Gordon were “very proud of our excellent long-term record of 17% annualized returns since we started VAM, the last 10 months have been more difficult…following our restructuring.”
As a result of the restructuring Mr. Vinik became more involved in management, including making decisions about how much money each of his employees should manage. They also created a new investment team. The company also moved locales from Boston to Tampa, Florida, the base of Mr. Vinik’s professional hockey team the Tampa Bay Lightning.
The firm lost 4.8 percent since the beginning of July last year, and was down by 5.3 percent just in April. Mr. Vinik plans on returning several billion dollars to his outside investors by the end of June.
Highland Capital Donates One Million Dollars to Support Middle School Math
Dallas-headquartered investment management firm Highland Capital Management has donated $1 million to a Texas-based non-profit organization, Reasoning Mind, a developer of improved math curricula throughout the United States. Half of that money is earmarked for the development of Reasoning Mind’s new seventh-grade math curriculum while the remainder will be used to expand their program into North Texas.
The new Reasoning Mind curriculum focuses on preparing students to excel in algebra which education experts believe is the “gatekeeper” to college. The program utilizes online interaction of students, teacher training and on-site support.
Presently the Reasoning Mind program is being delivered to 70,000 students throughout eight states. In partnership with the Dallas Independent School District every second- and third-grader is immersed in the program.
“Analysis of the 2011-12 school year showed that second-grade DISD students using the program for 70 hours or more over the course of the year grew by 1.6 grade levels in math performance as measured by the Iowa Test of Basic Skills — growth equivalent to five additional months of instruction,” said Andrea Foggy-Paxton, Reasoning Mind’s senior vice president of national expansion based in Houston.
“The DISD plans to expand the Reasoning Mind program to a large number of fourth-grade classes in the 2013-14 school year,” she added.
Highland Capital has been supporting organizations around the world which focus on improving health care and education. Since 2005 Highland Capital has given over $8 million to such organizations.
“Reasoning Mind is a perfect fit for our team’s giving strategy,” said Jim Dondero, co-founder and president of Highland Capital Management. “Only revolutionary ideas that improve the delivery of education have any chance of making a real impact on graduation rates and employability.”
Hedge Fund Industry Descending on Las Vegas
May 7 is the opening day of the 3-day SkyBridge Alternatives Conference (SALT), the largest annual conference for the hedge fund industry, to be held this year in Las Vegas.
Over 1,800 delegates are expected to converge on the Hotel Bellagio, about half of them investors. According to the organizers of the conference, SkyBride Capital, about 25-30 percent are hedge fund managers and 10 percent service providers. The remainder of the participants are from non-profit organizations, public policy makers, academics and media.
Asian hedge funds will be represented in greater numbers than ever before, due to the launching of SALT Singapore last year. The Dubai International Financial Center Authority is also sending representative to Las Vegas.
Although the main focus of the conference is capital introductions, the reputation for featuring a large variety of programming and features makes attendance as much play as work. Among the speakers on hand will be John Paulson of Paulson & Co; Carson Block, the founder of Muddy Waters Research; and ex-French President Nicolas Sarkozy. Hollywood is also represented in the persons of Wall Street director Oliver Stone and actor Al Pacino.
Successful Richland Closing Operations
In a surprise move, Richland Capital Management Ltd announced that it is closing shop, despite recent excellent performance which was better than its closest competitors in the Asian hedge fund market. The move is considered highly unusual for a successful firm in an industry which is having a difficult time raising assets.
Chief Investment Officer Alex Au said that the stocks in the Richland Asia Absolute Return Fund and the Richland Emerging Opportunities Fund have been sold, but he did not say why this decision, which was made a month ago, was taken.
Hong-Kong-based Richland is one of the most famous of the Asian hedge funds. It has about $100 million in assets under management in two funds. Richland also acts as an advisor for wealthy individuals for about $150 million in other assets.
Founded in 2006 by a former trader for HSBC Holdings Plc. Alex Au, and former Credit Suisse Group AG worker Eva Lo, Richland has posted gains every year since its founding, even in the traumatic 2008 crisis year, when it had a 5.3 percent gain.
Generally funds remain open as long as they are prospering, and only close down when either there is poor performance or client withdrawal of large sums of money. Neither of these has occurred to Richland, and its reason for winding down remains unclear.
Ark Dinner Taking a “Modesty” Break?
What has been a yearly tradition since 2002, the Ark charity fund-raising gala has been cancelled this year, with no concrete plans on whether the event will be permanently shelved. (ARK stands for ‘absolute return for kids.’)
Attracting London’s most beautiful people, this dinner has always been known for its over-the-top ostentatious display of wealth and power by the financial community, raising millions of pounds for Ark.
Over the course of the ten years that the £10,000-per-ticket dinner has taken place, this event has always been a good measure to the vagaries of the hedge fund sector’s health and well-being. At its height of decadent show of abundance in 2007 the dinner raised £26.6 million in just one evening. Madonna and Prince were the entertainment for the guests. The former US President Bill Clinton was the key-note speaker, and one of the prizes in the auction was a private dinner with Mikhail Gorbachev.
Over the years the yearly function has succeeded to raise $160 million for the Ark charity. Ark works towards improving children’s health and education throughout the world and they are well-known in England for their 18 academy schools which they sponsor.
Last year’s gala was attended by the Duke and Duchess of Cambridge, was held in the marquee in Kensington Palace Gardens, and managed to raise £14.5 million.
“We are taking a pause for breath and we don’t know how long that pause lasts?.?.?.?We have been focusing on other ways of raising money,” officials for Ark said when questioned about this year’s cancellation of the dinner.
The unashamed display of wealth traditionally on display at the Ark dinner has certainly come under criticism.
“It was all getting to feel a little bit 1788 and all that,” said one person associated with Ark, comparing the Ark dinner to the gala which took place in the court of Louis XVI on the eve of the French Revolution.
Dodd-Frank, Hedge Fund Registration and the SEC
Ever since the enactment of the Dodd-Frank legislation there are new requirements for hedge fund registration, effecting the entire hedge fund industry. There are several important issues of concern under the Advisers Act, including fees, conflicts of interest, and hedge fund risk management, which need to be addressed by hedge funds today. Dodd-Frank also has an impact on advisers and hedge fund management.
Requirements of Dodd-Frank
Private advisers are no longer exempt under Dodd-Frank, therefore hedge fund registration is a requirement for private equity funds as well. All private advisers are now subject to the same registration, regulatory oversight, examination and other requirements just like all other SEC regulated investment advisers. The deadline for the new hedge fund registration to be registered with the SEC was March 30, 2012.
Based on information presently available to officials at the National Examination Program, it seems that 48 of the 50 largest hedge fund advisors around the world were registered with the Commission.
Obligations Under Advisers Act
Hedge fund registration places important requirements on newly registered advisers. The rules require that hedge funds adopt and implement written policies and procedures; establish a position for a chief compliance officer and fill it; maintain certain types of record keeping; annually filing a Form ADV; creating and putting into usage a code of ethics; making sure that advertising and performance reporting adheres to all the rules of the Act. It is important to remember that a registered hedge fund is subject to examinations by the SEC.