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Money managers under the microscope

Reuters Hedge Fund and Private Equity Summit 2010

Next Monday sees the start of our 3-day Reuters Hedge Fund & Private Equity Summit, in London, New York and Hong Kong.

We have a great range of high-profile speakers this year, who will address issues such as the industry’s recovery, the investment outlook in 2010 after a year of rising markets, and impending regulation.

It’s not just the leverage

If private equity is anything to go by, there is plenty of hope for hedge funds operating in the new, post-Lehman world of lower leverage.

RTXQA97A study by the Center for Entrepreneurial and Financial Studies and Capital Dynamics, out today, finds that two-thirds of private equity’s value creation is down to improving companies it owns or rising market multiples.

Phew, the Gartmore “will it, won’t it” game is over!

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SO: Gartmore is going ahead with a listing on the LSE after all, ending a “will it- won’t it” game that has gone on for quite a bit in the past few weeks. Phew!

 

gartmore-picThe company CEO, Jeffrey Meyer, says the firm does not strictly need to raise cash now to pay off any urgent debt. In fact the debt taken on to finance the management buy-out in 2006 is not due for years and years to come. Gartmore is going to market simply because it feels like it is the right moment to do it.

Tilting at windmills

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Hedge fund rules on thin ice?The growing discomfort among pension funds over EU plans to regulate the hedge fund industry has prompted another public pronouncement, this time from Dutch schemes with assets of about 450 billion euros, including APG and PGGM.

We’ve noted the potential pivotal role the pension industry could play before, but as yet there hasn’t been an appreciable softening in the tone adopted by the hardliners. Their standard bearer Poul Nyrup Rasmussen called London Mayor Boris Johnson “out of touch with reality” after the much-lobbied blonde tried to strike a blow for the alternatives industry on a vist to Brussels this week.

from Commentaries:

Moulton’s parting shot at Alchemy

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Jon Moulton Reuters file photoReal Business is running a copy of what it says is Jon Moulton's resignation letter from Alchemy.

It is full of wonderful nuggets about the private equity boutique he set up in 1997 and gives insight into a wider malaise in financial services.  Moulton is not saying if the letter -- which is addressed to investors -- is authentic.

The letter's parting words capture the tone: "I would do it again - but better".

Oaktree’s Marks takes aim at industry fee-for-all

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Fund management fees are not necessarily too high — just too uniform, veteran investment manager Howard Marks told Reuters. 

The infamous “2 and 20″ scheme once reserved for a few stars is now the standard. Master and mediocre managers alike charge the same top-tier prices. Yet 2 percent fees for assets under management plus 20 percent of a fund’s profits should be exceptional pay for the best managers, he said, not the rule. 

“Pricing in the investment management business was very uniform, and it shouldn’t be,” said Howard Marks, chairman of Oaktree Capital Management, a Los Angeles firm that manages $60 billion alternative investments. “If markets are working right, different things have different prices.” 

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