Fortis’s ABN Amro chickens come home to roost 12 Mar 2008 The BelgoDutch bank is raising an extra E2bn, reportedly from China, to shore up its capital base. It seems now to be selling some of its asset management business. Subprime is part of the problem. But Fortis s expensive ABN Amro purchase is the main cuprit.
Carlyle fund’s woes highlight uncharacteristic strategy 11 Mar 2008 The firm s Carlyle Capital affiliate is on the brink after making a relatively simple, if highly leveraged, bet on agency securities. That seems almost naive compared to the diverse and sophisticated investing Carlyle is known for. And it may not be what investors expected.
Close Bros. needs to prove itself 11 Mar 2008 Four months ago, the UK merchant bank said a 950pashare proposal was too low. With the shares now at 590p, it has a lot of ground to make up. Close needs a substantial reshaping. But it s not apparent that CEO Colin Keogh has a clear plan for change.
Fed’s liquidity tsunami raises troubling expectations 11 Mar 2008 Its plan to swap $200bn of Treasuries for mortgage securities will help stabilise that market though not in time to salvage most brokers firstquarter earnings. But it now needs to manage expectations so it isn t seen as Wall Street s lender of first, rather than last, resort.
Europe needs to unclog its derivatives plumbing 11 Mar 2008 EU regulators want to increase competition in the clearing and settlement of derivative trades. But moves by two exchanges to take their clearing inhouse would have the opposite effect. It won t be easy to stop them, but regulators should try.
Blackstone unveils the new reality 10 Mar 2008 The private equity firm s fourth quarter earnings underline the miserable time private equity firms are having. Its stock is down more than 50% since it went public last June. But the outlook has deteriorated dramatically. Shareholders need to reset their expectations.
Should SWFs get a US tax break? 10 Mar 2008 A US academic says it s unfair that foreign stateowned entities don t pay taxes on portfolio investments. He s right, in theory. Yet the US is not in a great position to close this loophole right now, not when SWFs could soon be asked for more money to prop up Wall Street.
Asset classes multiply, returns don’t 7 Mar 2008 Everything from stocks in failing countries to carbon offsets to rare violins is being peddled as a new asset class . Theoretically, adding uncorrelated assets to a portfolio can increase returns while lowering volatility. It s easier to sell investment nirvana than reach it.
Should Carlyle bail out its listed debt fund? 7 Mar 2008 The buyout firm backed an Amsterdamlisted fund that could go bellyup. Injecting capital might keep the fund afloat and minimise reputational damage. And there s a chance Carlyle would make money. But there would be risks. Carlyle could look even worse if a bailout failed.
Banks have no excuses for their losses 7 Mar 2008 That s the conclusion to be drawn from a new report by regulators on risk management practices at 11 major banks. They might like to blame unanticipated factors that botched up their models. But it was sophomoric blunders that separated the winners from the losers.
Hedge fund consolidation steps up a gear 7 Mar 2008 Londonbased Castlegrove is being acquired by Millennium Group, while GLG is opportunistically eyeing 20 hedge funds, including Tisbury. Further consolidation is inevitable fuelled not so much by distress as smaller firms throwing in the towel.
Carlyle debt fund too slow to cut borrowing 6 Mar 2008 The Amsterdamlisted mortgage fund with ominous ticker symbol CCC leveraged itself 32to1 to buy AAArated US mortgage bonds. Now it is struggling to meet margin calls. Prime brokers are increasingly riskaverse; Carlyle s fund didn t deleverage quickly enough.
Grabbing masters of the universe coattails doesn’t work 6 Mar 2008 Investors who bought into Blackstone, Carlyle, OchZiff or KKR shares hoping for some altasset pixie dust have been sorely disappointed. They shouldn t be shocked. The fund managers are masters of market timing. Why wouldn t they have sold out at the top?
Buffett shows that finance can still pay 6 Mar 2008 Microsoft s Bill Gates has been displaced as the world s richest man by the sage of Omaha. He s done brilliantly in a disastrous year for the finance industry. But Buffett is the exception. The best way to make great big money these days is to build a fortune in a poor country.
Ambac’s bailout springs a leak 5 Mar 2008 It isn t being rescued by its bank clients, as shareholders hoped. News of its plan to raise $1.5bn in equity and converts sent its stock plummeting. Ambac admits the new capital won t eliminate the risk of a rating downgrade. Banks were wise not to increase their exposure.
ECB should look for US help with the dollar 5 Mar 2008 The strong euro now has Europe worried. The ECB s Trichet is likely to try to talk the single currency down on Thursday. What he would like is US help. A Fed purchase of dollars would take pressure off the euro. It would also counter some inflationary problems in the US.
Exclusive: Brevan Howard to list new $500m fund 4 Mar 2008 The UK hedge fund is hoping to capitalise on the performance of BH Macro, its existing permanent capital vehicle, and growing investor appetite for listed funds. The timing looks smart providing investors aren t spooked by recent hedge fund blowups.
MBIA’s hothead CEOs don’t do it any favours 4 Mar 2008 Gary Dunton railed against allegedly unscrupulous short sellers and unfair ratings agencies. His successor, Jay Brown, has now taken up the cudgel. MBIA s shareholders might be better off if the bond insurer's bosses stopped slinging blame for its problems, and solved them.
Spacs shouldn’t be considered a bear market hedge 4 Mar 2008 Issuers say investors are snapping up shares of blank cheque IPOs even as they shun regular IPOs because there is little downside. But that s only true if the manager doesn t buy anything. If he does and he has every incentive to do so investors can easily lose out.
Bulldog baits SEC on hedge fund advertising 3 Mar 2008 Fund manager Phil Goldstein thinks regulators are unfairly preventing US hedge funds from marketing their businesses, putting the funds in the same category as purveyors of pornography. Goldstein has embarrassed the SEC before, and has a case this time, too.