Unstructured Finance

At Hedge Fund Gala, Hedge Funds MIA

March 3, 2012

By Katya Wachtel

The classic Wall Street haunt Cipriani, where Hedge Fund Cares held its annual children charity gala on Thursday night, was noticeably devoid of any people who work for hedge funds.

Instead, the room was filled with those who help keep hedge funds running; there was a ton of guests from the Big Four accounting firms, in particular KPMG, as well as  law firms, tax groups, and service providers like Citco and BTIG LLC. There were some hedge fund firms represented of course, including Fortress Investment Group and Tudor Investment Corp.

It seemed odd though, in light of the charity’s name, there were not more traders and portfolio managers in tow.

“They all go to Robin Hood,” said one attendee, referring to the benefit put on by the Robin Hood Foundation, a charity that targets poverty in New York, and whose board includes a rather deep roster of hedge fund heavyweights, including Lee Ainslie, Steve Cohen, David Tepper and Paul Tudor Jones.

Still, the massive Cipriani space on 42nd Street was packed until 10pm, long after Hedge Funds Care honored former Yankees manager Joe Torre for his work with Safe at Home, a charity he founded in 2002 aimed at the reduction of domestic violence, with a focus on support for children who are victims of abuse.

“My dad abused my mom,” Torre told Reuters. “I took a lot of emotional scars into my adult life, and I thought, well, this is just the way I was born. This is the way things are.” Torre hopes his foundation will allow children to discover earlier than he did, that a childhood steeped in abuse should not be the norm.

Thursday night’s gala raised over $2 million, though a few weeks earlier, donors were dawdling.

“It didn’t look good six weeks ago, but there was a late surge in donations” said Glen Dailey,  Managing Director and Head of Prime Brokerage at Jefferies & Company.

“That always happens every year,” said Richard Schimel, founder of hedge fund Diamondback Capital Management and President of another children’s charity, A Little Hope. “It’s slow, slow, slow, and then a week before suddenly there’s a rush.”

Schimel’s Diamondback Capital, which he co-founded with fellow SAC Capital alumnus Larry Sapanski,  was recently ordered to pay more than $9 million to settle allegations of insider trading at the Connecticut-based hedge fund, related to an investigation of two former employees.

Incidentally, Hedge Funds Cares was formed in 1999 to combat the sullied reputation of hedge funds after the implosion of Long Term Capital Management. Rob Davis – then working for Montgomery Securities, now managing director at prime brokerage Concept Capital – decided that in the wake of LTC’s very noisy collapse, the  hedge fund world was in need of some good publicity.

“So we threw a party at The Pierre to raise money for charity, and it turned out to be a pretty good party,” Davis told Reuters. “And everyone said, when are we doing it next year?” Hedge Fund Cares has since awarded close to $30 million in grants globally, with Torre’s Safe at Home Foundation the recipient of a $40,000 grant last year.

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