The latest hedge fund news shows that Lumix Capital AG is planning to launch an agricultural hedge fund during this quarter. Since June of 2008 the Lumix AgroDirect Fund has been incubated. They invest in the production of soft commodities in four countries – Uruguay, Argentina, Brazil and Paraguay.
As Lumix’s managing partner, Gonzalo Fernandez Castro explained to FINalternatives, “Farming is very volatile when you talk about one plot of land. If you have 1,000 plots of land in different areas, the volatility is very much reduced.”
So far, the firm has raised $20 million US dollars of capital from both partners and seed investors. It targets to raise $100 million for its first offering.
This is one example of interesting new hedge fund news like the news that frequently comes from companies such as the NIR Group with Corey Ribotsky and many other locations.
Habitat for Humanity sees as its mission bringing the dream of home ownership into the reality of hard-working families who otherwise would not be able to afford it. The New York City branch of Habitat for Humanity purchases vacant lots for $1 from the city, and then develops them with monies which are raised in a large variety of ways, including through loans, foundation grants, state funds, sales revenues and fund-raising.
As the number of possible sites available for development decreases while the cost of their development skyrockets, Habitat for Humanity decided to enlist the help of the private sector in order to acquire a portion of the needed funding.
For the first time since its establishment in New York in 1984 Habitat is enlisting the help of a well-placed sector in the New York economic and financial world, and that is through hedge fund managers. A few years ago real estate agents helped in the effort, raising over $100,000 towards Habitat’s latest project, the Atlantic Avenue condominium development which includes 41 affordable condo units in the Ocean Hill-Brownsville section of Brooklyn.
The Brooklyn Borough president’s office has also contributed to this undertaking, along with Corey Ribotsky of the NIR Group, LaCrosse Global Fund Services, PNC Multifamily Capital and a long list of other private sector supporters that believe that “investing in human capital contributes to the success of the hedge fund industry, and New York City.”
There are two approaches to investing in the “Green Sector”, industries and products which focus on renewable resources and other sustainable innovations. According to Corey Ribotsky of the NIR Group, you either have to be “green focused,” meaning that you just pick and choose green technology, whether it is hardware or software, or you have to look at “green infrastructure” meaning that you are investing in the actual products and/or services themselves. This can include a huge variety of industries worth investing in, including energy to cars, to “almost anything under the sun.”
Ribotsky explains that he has seen many types of investing styles, from investors with a large number of different transactions as well as investors with quite a lot of different focuses. Many of these deals that he has seen are from other investment banks or other private equity investment firms. These deals are happening with a lot of partnerships. According to Ribotsky, one of the greatest benefits that has come from this market is the co-generation of ideas.
What we are anxiously awaiting is the moment when the inevitable new influx of innovative and revolutionary technologies and services emerge so that we can be a part of it.
Long Island is experiencing the same private equity boom which is influencing business takeovers as the rest of the country as other sources of capital dry up and companies continue to go, or consider going, private. As hedge funds look for investment opportunities in private industry, Long Island investment firms are ready to play their role.
The President of Northwood Ventures, based in Syosset, Long Island, Peter Schiff, said the private equity boom is being keenly felt on Long Island.
“Overall, the private equity market is very active,” Schiff said. “Our marketplace is very active. We’re working with smaller companies.”
Corey Ribotsky, head portfolio manager of the NIR Group, of Roslyn, New York is also involved in the excitement. Having over ten years of experience in these types of investments makes the NIR Group especially well positioned to benefit from the current economic reality.
As companies go private they are not only in need of investment forms to ease the way. Law firms and accounting firms are also benefiting from the trend, and many Long Island firms are participating.
On Oct 29, 2008 the charity organization, Hedge Funds for Habitat-NYC, was honored at the NYSE. Stuart Feffer, Co-CEO of LaCrosse Global Fund Services rang The Opening Bell together with hedge fund manager and leader Corey Ribotsky who is the Founder and Managing Member of The N.I.R. Group. These two men were honored in recognition of Ribotsky’s N.I.R. Group’s collaboration with the charity Hedge Funds for Habitat-NYC.
Hedge Funds for Habitat-NYC is a wonderful initiative founded by the hedge fund community in order to provide hardworking N.Y. City families with home ownership opportunities through the activities of Habitat for Humanity – New York City.
Opalesque Exclusive: As illiquidity is cited as the greatest risk for further economic crisis, asset based lending funds step in to provide liquidity for firms caught in the credit pullback
This week The Bank of International Settlements (BIS) released its 78th Annual Report reviewing the financial markets. Providing an overview of the 2007-2008 year the BIS notes the hedge fund industry which at first felt much of the blame for market problems has shown itself to be a point of stability in the midst of the credit crisis. “Even though the first signs of strain to emerge were problems in hedge funds associated with large investment houses, the performance of the industry as a whole initially proved relatively robust. During 2007, returns on most hedge fund strategies compared favorably to those recorded in 2006. The main exception was the performance of fixed income funds, which slipped during 2007. Over the calendar year, net investor inflows to all fund sectors remained at levels comparable to those of the recent past.”
Providers of needed liquidity
In an industry that has grown to oversee the investments of approximately $1.8 trillion of the world’s wealth, hedge funds as well as other alternative assets have the potential to further serve as a driver towards the recovery of the global economy. Corey Ribotsky cites the largest risk for worsening financial conditions to be “linked to the response of aggregate demand to the weakened position of banks and tighter lending standards.” It remains to be seen if non-financial firms have the ability to withstand the combination of tightening credit conditions and the possible downturn in profits expected to occur with the consumer’s weakened ability to maintain previous levels of consumption. But the chances for survival for these firms are dependent on the nature of the external credit available, and asset based lending (ABL) funds are stepping into the void created by the credit crisis to provide this liquidity.
As we enter what the BIS has determined is the sixth stage or, “the crest” of the credit crisis it remains unclear “whether liquidity supply and risk appetite [have] recovered sufficiently to help maintain this improved credit market environment on a sustained basis.” ABL funds have come to provide some of the few options for companies looking to raise capital for growth, or to survive temporary profit downturns. Opalesque recently spoke to Josh Zegen at Madison Realty Capital and about the ABL space and the changes they have seen over the past few months as bank credit options have dried up and the opportunity set for ABL funds has grown immensely.
The `debtquity` fund from Corey Ribotsky, providing liquidity to the backbone of the economy
According to a NY Times article we recently carried in the AMB (Source) hedge funds in the asset based lending arena have quadrupled over the past three years, holding approximately $13bln in assets. “This is really the perfect storm for a firm like ours,” Pollack said. “Banks that traditionally lend to the micro caps typically have a knee jerk reaction and these small businesses are typically the first ones shut out. These types of companies have been and will continue to be the backbone of the US economy. A lot of them are really good companies that will flourish and grow and are having a difficult time getting the capital to do so.”
Many are focused on micro cap companies whereby they evaluate a fund for an abundance of tangible collateral as well as a growth orientation. This is due to the two pronged strategy in which, “Our transaction typically have both a debt and equity component. We will provide companies with debt intervention through 3 year amortizing loans with a coupon of somewhere around 11-12%. There is this debt piece and we are usually senior secured…But with our transactions, companies also provide us with an equity stake.” In this way, they are providing capital for growth opportunities in micro cap companies, is protected on the downside with hard assets and further rewarded through equity stakes when their financing fuels growth for the borrower.
Asset flow
Companies recently launched a Japan Yen Fund to address interest in the fund and reduce currency risk for Japanese investors, and the manager says ABL lending has come of age. “We are in a business where even though we are a hedge fund, we operate more like a specialty finance company. We are getting more and more interest not only from Japanese investors, but also from the Middle East and even traditional Europe, because it is a straightforward strategy with a model that we have perfected over the years” commented Corey Ribotsky.
Corey Ribotsky cites both Greenspan’s and Paulson’s bearish outlook on the “inordinate amounts of losses which still need to be taken. We see that it will remain difficult for these smaller companies to get financing and are positioning ourselves to find the right companies to invest in and believe we can continue with strong returns.”