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| Big name Hedge Funds are in trouble too! |
| 2008-09-24 |
| One hedge fund expert pointed to The Hedge Fund Implode-O-Meter (HFI) as how he judges the state of the industry. The HFI was set up online in the wake of the credit crunch "to track as hedge funds learn the double-edged-sword nature of the often extreme leverage they use". The group's "imploded funds" list has hit 51 companies since the sub-prime mortgage crisis in the United States kicked off a widespread downturn. That compares with its historical list, stretching back more than a decade to the end of 2006, of just 14, including the collapse of Long-Term Capital Management and Amaranth. This year, big names including Peloton Capital Partners, Carlyle Capital Corporation and Dillon Read Capital Management are just some of the half century to collapse. "We think hedge funds have largely lost their way," HFI said. "Notably, most have abandoned capital-preservation for the goal of aggressive accumulation of capital gains, with the benefit of lax regulation and extreme leverage available to exploit." It has 34 stocks on its "ailing/watch list" of those that have suffered significant value declines or temporarily halted redemptions. According to EuroHedge, a hedge fund data provider, 272 individual funds strategies were launched during the first six months of 2008, the lowest for nine years. In the same time, 243 funds have been liquidated, the highest in a six-month period. To remind people. Wikipedia discusses The Carlye Group here Principals: Key people Louis V. Gerstner, Jr., Chairman William E. Conway, Jr., Founder Daniel A. D'Aniello, Founder David M. Rubenstein, Founder John F. Harris, CFO Controversy Connections between the Carlyle and the Bush family have created controversy, particularly in relation to the War on Terror and the Iraq War. George H. W. Bush and his Secretary of State James A. Baker III have at times been advisors to the group. One writer claimed that Saudi Arabian interests have given $1.4 billion to firms connected to the Bush family. Of this figure, $1.18 billion comes from contracts awarded to defense contractor Braddock, Dunn & McDonald, which Carlyle sold before George H. W. Bush became an advisor.[23] A Carlyle spokesman noted in 2003 that its 7% interest in defense industries was far less than several other Private equity firms.[24] The group has in the past had links with the Bin Laden family, although the group argues investment was relatively minor and made by relatives including half brother to Osama Bin Laden who had "disowned" him. [25] Notable current and former employees and affiliated persons Business * G. Allen Andreas - Chairman of the Archer Daniels Midland Company * Daniel Akerson - company director * Joaquin Avila - investment banker * Laurent Beaudoin - CEO of Bombardier (1979-) * Paul Desmarais - Chairman of the Power Corporation of Canada * Arthur Levitt - former Chairman of the U.S. Securities and Exchange Commission * David M. Moffett - CEO of Freddie Mac, unilateral appointment by Treasury Secretary, Henry M. Paulson Jr., September 7, 2008. * Karl Otto Pöhl - former President of the Bundesbank * Olivier Sarkozy (half-brother of Nicolas Sarkozy, President of France) - co-head and managing director of its recently launched global financial services division, since March 2008 [26]. * Jeffrey Chen- CEO of ASE-Taiwan * Jason Chen- Chairman of ASE Group Political figures North America * George H. W. Bush, former U.S. President, Senior Advisor to the Carlyle Asia Advisory Board from April 1998 to October 2003. * George W. Bush, current U.S. President. Was appointed in 1990 to the Board of Directors of one of Carlyle's first acquisitions, an airline food business called Caterair, which Carlyle eventually sold at a loss. Bush left the board in 1992 to run for Governor of Texas. * James Baker III, former United States Secretary of State under George H. W. Bush, Staff member under Ronald Reagan and George W. Bush, Carlyle Senior Counselor, served in this capacity from 1993 to 2005. * Frank C. Carlucci, former United States Secretary of Defense from 1987 to 1989; Also, former Princeton wrestling partner of former US Secretary of Defense, Donald Rumsfeld. Carlyle Chairman and Chairman Emeritus from 1989 to 2005. * Richard Darman, former Director of the U.S. Office of Management and Budget under George H. W. Bush, Senior Advisor and Managing Director of The Carlyle Group from 1993 to the present * Randal K. Quarles, former Under Secretary of the U.S. Treasury under President George W. Bush, now a Carlyle managing director * Allan Gotlieb, Canadian ambassador to the United States (1981-89) and member of Carlyle's Canadian advisory board. * Arthur Levitt, Chairman of the U.S. Securities and Exchange Commission (SEC) under President Bill Clinton, Carlyle Senior Advisor from 2001 to the present * Dan Senor - political consultant * Peter Lougheed - Premier of Alberta (1971-85) * Luis Téllez Kuenzler, Mexican economist, current Secretary of Communications and Transportation under the Felipe Calderón administration and former Secretary of Energy under the Zedillo administration. * Frank McKenna, Canadian ambassador to the United States and former member of Carlyle's Canadian advisory board Europe * John Major, former British Prime Minister, Chairman, Carlyle Europe from 2002 until 2005 [edit] Asia * Liu Hong-Ru, former chairman of China's Securities Regulatory Commission * Anand Panyarachun, former Prime Minister of Thailand (twice), former member of the Carlyle Asia Advisory Board until the board was disbanded in 2004 * Fidel V. Ramos, former president of the Philippines, Carlyle Asia Advisor Board Member until the board was disbanded in 2004 * Thaksin Shinawatra, deposed Prime Minister of Thailand, former member of board, who resigned on taking office in 2001 Middle East * Shafig bin Laden, older brother of Osama bin Laden Media * Norman Pearlstine - editor-in-chief of Time magazine from (1995-2005) |
| Posted by:3dc |
| #6 Finally, some good news about the economy! |
| Posted by: Cornsilk Blondie 2008-09-24 12:26 |
| #5 Since the buy-in is a sum beyond my wildest dreams, I must conclude that the investors in hedge fund have "got it on them" to lose. No tears here. |
| Posted by: bigjim-ky 2008-09-24 11:47 |
| #4 The top five hedge funds were on to a nice little earner. : As the world's biggest banks reeled in the face of the credit crunch last year, the top five hedge fund earners took home at least $1.5bn apiece after their funds gambled the right way in exceptionally volatile markets. A survey by US hedge fund magazine Alpha, published yesterday, said the five - Mr Paulson, George Soros, James Simons of Renaissance Technologies, Philip Falcone of Harbinger Capital and Kenneth Griffin of Citadel - all individually earned more than the $1.2bn that JPMorgan will spend to buy Bear Stearns, the most high profile victim of the crunch. |
| Posted by: tipper 2008-09-24 11:42 |
| #3 Who'd have thought than in a time of massive de-leveraging firms based around leveraged buying of assets would be in trouble. In other news... Water is wet. |
| Posted by: Bright Pebbles 2008-09-24 11:10 |
| #2 Well sinse is in trouble too. i wonder if they will bail me out |
| Posted by: sinse 2008-09-24 10:24 |
| #1 Dillion Read & Co Dillon, Read & Co. was a prominent American investment bank from the 1920s into the 1960s. Dillon Read originated in 1832 as the Wall Street brokerage firm Carpenter & Vermilye. However, it is best known for its actions during the 1920s. During that time Clarence Dillon managed the rescue of faltering Goodyear Tire & Rubber Company, engineered the buyout (in 1925) and subsequent sale of Dodge Motors (in 1928) to Chrysler, launched the first post-war closed-end investment trust (in 1924), and led the largest-ever stock offering (in 1926). By the end of the decade, Dillon Read was considered to be an investment-banking powerhouse, alongside J.P. Morgan & Co. and Kuhn, Loeb & Co.. Dillon Read was purchased by Swiss Bank Corporation (SBC) in 1997 and merged with London-based investment bank S. G. Warburg & Co. (purchased by SBC in 1995) to become Warburg Dillon Read. The merged entity, in turn, became part of UBS AG when the latter firm bought SBC. The Dillon Read name was dropped by 2000 but recently re-emerged in the name of UBS's internal hedge-fund division, Dillon Read Capital Management (DRCM). During its brief 18-month existence, DRCM launched a successful fund of $1.2 billion (which was over-subscribed by 50%) for outside investors which returned 16.6% after fees, making it one of the top multi-strategy funds for 2007. On May 3, 2007, UBS announced the closure of Dillon Read Capital Management due to "operational complexities." DRCM had run up a loss of $124M in the first quarter.[1] DRCM's strategies, which involved leveraged purchases of subprime and Alt-A mortgage bonds, eventually lost $3B - more than 60% of the fund's previous $4.7B value. The April 2008 report to the Swiss Federal Banking Commission (SFBC, in German: Eidgenössische Bankenkommission, EBK, in French: Commission fédérale des banques, CFB) stated that the "assets could not be sold given the illiquidity in the market."[2][3]. |
| Posted by: 3dc 2008-09-24 09:00 |