The hedge fund arena has a variety of leaders that often share their opinions publicly about where they see their respective markets heading. One such individual is John Taylor, the founder of FX Concepts, the largest currency hedge fund in the world. He created the firm in 1981 in order to assist clients in hedging their foreign exchange exposures, and after thirty years, the fund now has over $8 billion under management.
While most pundits can talk openly about their market prognostications, Mr. Taylor must put words into practice and be held accountable for the returns that his funds produce. FX Concepts has a variety of funds and core competencies. Known primarily as the world’s largest currency hedge fund, the company is also “one of the world’s oldest and most established global investment management and research firms specializing in foreign exchange and interest rate risk management”, a direct quote from an industry website.
While returns were negative in 2009 following the recession, the firm’s flagship currency investment fund of $3.2 billion, the “Global Currency Program”, produced returns of 12.5% for 2010, its largest year-over-year gain since 2006 when a gain of 18.6% was recorded. The company successfully bet against the Euro in the early part of the year, assuming that the turmoil in Greece would spread to other weaker member states in the Eurozone. In the latter part of the year, the Dollar was shorted in anticipation of the global dilution that the Fed’s quantitative easing program would produce.
FX Concepts does not focus entirely on the major forex pairs. Emerging market currencies and options add to the mix, but the overriding strategy last year was to short those currencies where their respective governments and central banks were deliberately expanding the money supply by pumping cash into the financial system. Simple strategies generally work best in the long run.
What is John Taylor’s outlook going forward? Many view Mr. Taylor as a complete contrarian, choosing to oppose the prevailing sentiments of so-called market experts. He believes the Euro is overvalued versus the Greenback and continues to be bullish on the “AUD USD” pair and other commodity currencies when many feel they have peaked. His critics, however, turn a deaf ear when he begins to declare that another major recession is in the offing.
“We’re going into a recession, a really big one, bigger than 2008 — I’ll hang my hat on it,” Taylor recently said. “It’s descending upon us already. Next year’s going to look worse. The recession will be deeper because there’s no other “gimmick” U.S. policy makers are able to use to stave off the slowdown. Europe is likewise headed for a downturn,” he said.
He predicts that the run up of the Euro will soon end, as interest rate differential benefits gradually erode as yield curves advance. While most experts see some decline in the Euro, Taylor is emphatic that the downdraft will be significant, retracing lows in the $1.18 region and then threatening parity some time in 2012. In the long run, the current debate in Washington over the debt ceiling and the deficit will actually help the Dollar in his vision of how all of the variables will play out.
Forex analysts, however, are unconvinced. Many have learned the hard way to take Taylor’s public comments with a grain of salt. He had predicted Euro parity with the Dollar for 2011, but his latest update has pushed that event out a year.
Whether you agree or not, John Taylor, now 67, has made his mark on the forex world.
Risk Disclaimer: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite.
Tags: fx concepts, hedge fund, interest rate, john taylorAugust 15, 2011 at 7:48 am | General | 
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LAS VEGAS — Many hedge fund managers are not happy with the regulatory tone in Washington.
Among their biggest concerns: the Dodd-Frank law, which was passed in the wake of the financial crisis.
The debate smoldered on Friday morning on a panel at the SkyBridge Alternative Conference in Las Vegas between former Senator Christopher J. Dodd (of Dodd-Frank fame), David Axelrod, a top presidential adviser, and Kenneth C. Griffin, the founder of the Citadel hedge fund. Only Mr. Dodd asked that his comments be off the record.
Mr. Griffin, whose Chicago hedge fund manages about $10 billion, lauded aspects of the Dodd-Frank Act, including limits on leverage and the creation of a derivatives clearinghouse.
But he took aim at a central part of the law — the designation of institutions as systemically important, or “too big to fail.” He argued that once a firm was labeled as such, the assumption was the government would provide a backstop if something went wrong.
“There’s a grave concern that systemically important will create the largest moral hazard that we’ve seen in the financial world,” Mr. Griffin told the audience.
That one landed with a thud, and was not subject to much debate. As one might expect at a hedge fund conference, Mr. Griffin enjoyed significant support from the crowd of managers and investors assembled in the Bellagio ballroom, who frequently burst into applause after his succinct commentary.
It was when Mr. Griffin later challenged the way President Obama had increased spending since taking office — and expressed worry about the financial stability of the United States — that the sparks flew on the panel.
“We’re on a path that’s unsustainable,” Mr. Griffin said. “I believe that’s what’s driving the public support by a number of hedge fund managers and asset managers for change in Washington.”
Suffice it to say that there was disagreement. Mr. Axelrod, who grew impatient with Mr. Griffin’s comments, noted that there were other concerns pressing on the president besides the national debt, including education, health care, unemployment, as well as cleaning up of the financial crisis he inherited.
Specifically, given the challenges inherited by the president, the picture was not nearly as bleak as it might have been, Mr. Axelrod said, adding that fixing the deficit and fiscal situation of the United States remained a priority for the administration.
One former public official who was speaking on the record, William H. Donaldson, the former chairman of the Securities and Exchange Commission from 2003 to 2005, did not really address that issue. When asked whether the S.E.C. had failed in its oversight given the devastation wreaked by the financial crisis, he offered modest support for his successors.
“There’s lots of blame out there for many people, including but not limited to the S.E.C.,” he said, citing the black eye the commission had suffered from Bernard L. Madoff’s huge Ponzi scheme, which it had been warned about. “There is no excuse for that other than the tremendous burden the S.E.C. has.”
Tags: asset managers, derivatives, financial crisis, hedge fund managers, leverage, mr dodd, obamaMay 17, 2011 at 8:23 am | Hedge Fund Information, Hedge Fund News | No comments
Zady-Jones Management Group, LLC has announced it was in closing negotiations to establish a $15M finance agreement for a film production. The company’s project and affiliation division has grown to over 80 producers covering 70+ projects ranging in size from $5M to $250M. They are the new financing vehicle to meet the needs of a film industry no longer reliant on studio financing to produce films with A-list talent and blockbuster results.
Zady-Jones Management has brought together an executive board whose experience in film, finance, marketing and commercial modeling allowing them to have a unique competitive edge in the film finance and production world. General Partner Sareh Yeghiazarian explained:
“Our strategy is designed specifically to bridge the gap between Hollywood and Wall Street in order to create films that are both profitable and artistic. With the amount of films summited annually for financial review it is difficult for an investing party to distinguish one that will be successful not only artistically but monetarily. That’s where we come in. We scrutinize the projects and offer only the financially lucrative ones to our partners.”
Sareh Yeghiazarian established Zady-Jones Management in New York City in 2010. Yeghiazarian grew up in the film business, working on both independent and studio productions in Los Angeles. He saw the growing need for independent financing options for producers. Lead project developer and partner Jose Jimenez explains how the company has the ability to build a large investor base:
“Our investing partners have become keenly aware of the inaccurate public perception that films are a poor investment. They were specifically waiting for a company to approach them from a fiscally sound perspective when assessing the value of films. Through a strict criteria and a thorough review system our company does exactly what investors have been waiting for; we remove the fluff from projects and give every factor a monetary value. At the end of the day we are still in the business of producing and financing art, however, our goal is to make sure that art is always generating profits.”
For inquiries, contact:
Zady Thomas
(646) 205-2280
Email: info@zadyjones.com
Tags: film business, film finance, finance agreement, jose jimenez, Sareh Yeghiazarian, Zady Thomas, Zady-Jones Management GroupMay 11, 2011 at 7:02 pm | General | No comments
It’s bad enough to have Hong Kong regulators on your case for insider-trading. It gets a lot worse when the U.S. Securities and Exchange Commission hits you with a subpoena. Such is the miserable fate New York-based Tiger Asia Management.
In a letter to investors dated Oct. 12, Tiger Asia assumed that the SEC’s involvement arose out of the Hong Kong investigation. It seems that the Hong Kong Securities and Futures Commission (SFC) has twice gone to court to accuse Tiger Asia of using inside information to trade Chinese bank shares. The first court visit last April was to freeze Tiger’s assets; the subsequent appearance in August was a request to the court to stop Tiger from trading in Hong Kong – an unprecedented request from the SFC.
According to the SFC, Tiger Asia made illegal trades in both Bank of China and China Construction Bank Corp. shares. In the former case, the hedge fund allegedly made the trades after being invited to participate in two placements of the bank’s shares in late 2008 and early 2009. Tiger Asia is accused of earning HK$8.6 million on its first insider-trade and losing HK$10 million on the second.
Tiger Asia has denied any wrongdoing and is continuing to challenge the SFC’s legal maneuvers. It said it is cooperating with the SEC.
The US$3 billion hedge fund said that its trading in Hong Kong had not yet been affected by the SFC actions.
Tiger Asia also took the opportunity to tell investors that it was easing its liquidity terms, offering quarterly withdrawals beginning on Jan. 1.
Tags: bank of china, china construction bank, chinese bank, futures commission, hedge fund, illegal trades, insider trade, insider trading, miserable fate, regulators, securities and exchange commission, subpoena, Tiger Asset Management, unprecedented request, wrongdoingOctober 29, 2010 at 12:01 am | Hedge Fund Crime | No comments
Plantation FL, October 28, 2010 – TradeStation Securities, Inc., the award-winning broker-dealer and futures commission merchant, and a leading provider of custom analysis and electronic trading solutions, recently announced the launch of TradeStation 9.0. The company expects that TradeStation 9.0 will reset the bar for trading platforms by empowering customers and developers to automate and test strategies in the equities, options, futures and forex markets unlike anything else currently available. TradeStation 9.0 is now being rolled out to new customers and is expected to be slowly rolled out to all existing TradeStation clients beginning next week.
“Traders in today’s markets demand access to information and the ability to act on it instantly,” said Salomon Sredni, the CEO of TradeStation Group, TradeStation’s parent company. “TradeStation 9.0 really expands the power of our platform. As an example, traders will be able to automatically monitor market depth and be alerted, or even place a trade, the moment the trader’s rule or trigger is met. Traders now may also have TradeStation monitor their open positions and continuously perform risk assessments, so that, in a fast market downturn or upturn, the appropriate action will automatically be executed. Also, traders now have the ability to execute code on a fixed time interval, access to all of the details for their orders and positions, and, on RadarScreen® (TradeStation’s state-of-the-art market scanning engine) access to multiple data streams.”
“TradeStation 9.0 also includes dozens of other popular enhancement requests for EasyLanguage, TradeStation’s industry-standard proprietary programming language,” added John Bartleman, TradeStation’s Vice President of Product Management.
TradeStation 9.0 also has a new look and feel. The company has improved the icons, enhanced some of the graphics and colors, and added a “Quick Start” to help new TradeStation users create an optimal workspace. Plus, TradeStation’s Options Development Team has in TradeStation 9.0 added another set of enhancements to OptionStation, the company’s highly-regarded automated research product for options trading analysis and decision-making.
For additional information about TradeStation 9.0 or TradeStation’s Prime Services offering, please visit: http://www.tradestationprime.com/ or contact Lance Baraker at 212-847-5950.
About TradeStation Prime Services, a division of TradeStation Securities, Inc.
TradeStation Prime Services, a division of TradeStation Securities, Inc., was founded to serve the needs of start-up to mid-sized hedge funds, registered investment advisers, professional traders and asset managers who need quality prime brokerage services, including execution and clearance, securities lending, capital introduction, and “incubation” services. Clients are offered electronic trading and decision-support platforms, including TradeStation, to analyze their trading strategies and automate or manually place their orders, and may avail themselves of the firm’s NYSE floor membership, which allows it to execute trades on behalf of clients on the NYSE floor as well as in other market centers from its NYSE floor booth/outsourced trading desk. TradeStation Prime Services is located at 400 Madison Avenue, New York, New York.
TradeStation Securities, Inc. (Member NYSE, FINRA, SIPC & NFA) is a licensed, self-clearing securities broker-dealer and a registered omnibus-clearing futures commission merchant, and has memberships or similar approved status (as well as direct connectivity for both market data and order execution) with BATS Z-Exchange, Boston Options Exchange, Chicago Board Options Exchange, Chicago Stock Exchange, EDGA Exchange, EDGX Exchange, International Securities Exchange, NASDAQ OMX BX, NASDAQ OMX PHLX, The NASDAQ Stock Market, NYSE Arca and NYSE Amex. For futures accounts, TradeStation connects directly (for both market data and order execution) with the CME Group, Eurex Group and ICE Group (U.S. and Europe) exchanges. TradeStation is a clearance member with DTCC and OCC for equities and options, serves its futures accounts on an omnibus clearance basis. TradeStation Securities has offices in South Florida, New York, Chicago and Dallas, and an affiliated introducing broker (TradeStation Europe Limited) in London.
About TradeStation Group, Inc.
TradeStation Group, Inc. (NASDAQ GS: TRAD), through its principal operating subsidiary, TradeStation Securities, Inc., offers the TradeStation platform to the active trader and certain institutional trader markets. TradeStation is an electronic trading platform that offers state-of-the-art electronic order execution and enables clients to design, test, optimize, monitor and automate their own custom Equities, Options, Futures and Forex trading strategies. TradeStation Group’s other operating subsidiaries are TradeStation Technologies, Inc. and TradeStation Europe Limited.
Nature of this Announcement
This announcement is made on a limited basis through hedge fund and other institutional trader websites and similar media for promotional/marketing purposes, to educate potential customers of TradeStation Prime Services about its product and service offerings, and is not intended to be an investor relations or public disclosure document for TradeStation’s publicly-traded holding company (TradeStation Group, Inc.).
Tags: electronic trading solutions, forex markets, tradestation securities, trading platformsOctober 28, 2010 at 12:01 am | Hedge Fund News | 1 comment
If the Securities and Exchange Commission thought that Stephen M. Hicks, CEO of Southridge Capital Management of Ridgefield, CT, was going down quietly, they better think again. Hicks, despite accusations of state and federal fraud violations, loudly denied the “baseless” allegations and swore to fight them to the bitter end.
This may be cold comfort to his investors, some of whom have been trying to redeem their investments since 2001. Mr. Hicks is accused of stymieing cash-out requests, overvaluing fund assets, and misusing investor funds.
Southridge and Hicks also were sued Monday by the Connecticut Attorney General and Department of Banking on related charges.
“The SEC and Connecticut Attorney General’s Office have focused on a handful of positions in the structured finance segment of Southridge’s business, ignoring over 250 Southridge fund investments, totaling in excess of $1 billion invested in the companies that it has financed,” Southridge attorney Robert Wolf said today, in a statement.
Wolf added: “Both complaints ignore the fact that Stephen Hicks and his family were large investors in the funds and, if allegations in the complaints were to be believed, they would have been among the so-called scheme’s most significant victims.”
The U.S. Securities and Exchange Commission said Monday it is seeking repayment of profits, interest and financial penalties.
“Investors have a right to complete and accurate disclosure about the valuation, liquidity and use of their assets,” said David Bergers, director of the SEC’s regional office in Boston. “We will continue to hold accountable hedge fund managers and other industry participants when they fail to meet their fiduciary obligations.”
Wolf said both the SEC and the banking department failed to account for the impact of “the global credit crisis on the performance and liquidity profile of the funds.”
“Like many peer hedge funds, Southridge experienced losses and significantly reduced liquidity,” Wolf said. “Rather than acknowledging the realities of the credit crisis, the SEC and the State of Connecticut appear to engaging in an effort to find blame where none exists.”
The Connecticut Attorney General’s office and the state Department of Banking filed a lawsuit accusing the firm of collecting more than $26 million in illegal fees on five funds Southridge helped manage. The lawsuit seeks civil penalties and an order banning Hicks from participating in any investment-related activities for 10 years and other penalties.
Both the SEC, which credited the state Banking Department, and the state agency, which began its investigation in 2007, focused on misuse of investor funds, including using them to pay administrative and legal fees on unrelated funds.
Southridge acted as a general partner to five funds, providing investment advice and strategy to the funds. The lawsuit said Southridge overvalued the assets of the funds — through false financial statements — so it could illegally charge greater fees to investors, the Connecticut lawsuit alleges.
“The investment firm told lucarative lies,” Connecticut Attorney General Richard Blumenthal said. “This kind of financial fraud harms investors but also the entire economy.”
Tags: bitter end, connecticut attorney general, federal fraud, fiduciary obligations, hedge fund managers, ridgefield ct, robert wolf, securities and exchange commission, southridge capital management, stephen hicks, structured financeOctober 27, 2010 at 5:27 am | Hedge Fund Crime | 1 comment
Are you interested in starting a hedge fund? Since you are reading this article, let’s assume the answer is YES! Well listen up – there are hedge fund seeder firms out there that will have $4 billion burning holes in their pockets over the next year. Want some?
There are seven seeder firms you will want to contact. The biggest is the Strategic Alliance unit of Blackstone Group, which is sitting on $500 million in starter capital looking for a home. Together with the other 6 firms, they expect to raise a total of $4 billion in the next 12 months.
Besides Blackstone, another seeder you may want to tell your story to is Larch Lane – they’ve got $105 million in loose change. And don’t be shy about contacting FRM Capital Advisors ($150 million), IMQubator (€100 million), SkyBridge Capital Management ($50 million), Sweden’s SEB ($50 million) and Erste Bank ($45 million).
Of course, the best way to reach out to these seeder firms is to employ the services of a hedge fund startup company like Start A Hedge Fund .Com, which has a network of professionals to guide entrepreneurs through the twists and turns of launching a hedge fund.
The seven seeder firms have big fundraising plans to go with their seeding plans. Blackstone and Larch Lane each hope to raise an additional $600 million, while SkyBridge, fresh from its acquisition of three Citigroup hedge fund businesses, hopes to raise $500 million for its next seeding fund.
FCA—”very much in the capital-raising mode,” chief operating officer Patric de Gentile-Williams tells HFM—hopes to net a further $160 million. IMQubator is mulling the biggest fundraise of them all, possibly seeking an additional €750 million.
Nor are those firms alone. The Carlyle Group, CYAN Management, Reservoir Capital, Revere Capital and Stride Capital are all also rumored to be considering a fundraising push for seed vehicles.
If you are interested in getting a piece of the action, put Start A Hedge Fund .Com to work for you. Kindly fill out our short Contact Form, and we will be happy to explore with you the many ways our One-Stop-Shop Program can make it all happen.
Tags: blackstone group, capital management, carlyle group, citigroup, fundraising plans, larch, starting a hedge fund, startup company, strategic allianceOctober 26, 2010 at 1:04 am | Hedge Fund News | 1 comment
Arthur Nadel, 77, is an “old, frail human being who does not have very much longer to live,” according to his lawyer, Mark Gombiner. U.S. District Judge John Koeltl’s response: 14 years in the Big House!
It seems that Ponzi schemes are not just for the young. Nadel scammed $168 million through 6 phony hedge funds. In February he plead guilty to 15 counts of wire, securities and mail fraud. If he survives his sentence, he will be 91 years old upon release. The sentence amounts to a month in prison for each million stolen. In addition to the prison term, Koeltl also ordered Nadel to forfeit $162 million.
Gombiner said the judge “basically imposed a life sentence on Mr. Nadel.” He had asked for a sentence of only 5 years. As it is, Nadel received less than the 19 ½ year term sought by prosecutors. They pointed out the Nadel used his physical frailties to convince his victims to trust him.
Nadel squeaked at his sentencing hearing, “I blame no one but myself for my actions. I have been my own worst enemy. I have thrown away everything worth living for.”
Those words did not assuage one of his victims, Michael Sullivan, who called Nadel an “evil person” at the hearing.
Prosecutors this week also answered Nadel’s allegation that his business partners, Christopher and Neil Moody, on whose behalf he ran three of the six hedge funds that made up the Ponzi scheme, were getting away with their role in the fraud.
In response to a court filing earlier this week seeking leniency for Nadel because of the unpunished role of the Moodys, prosecutors said that Nadel “did not have any evidence that either Neil Moody or Chris Moody knew about Nadel’s fraudulent schemes.” The Moodys have been sued by the SEC, but not criminal charged.
“The government does not believe that Nadel’s statements relating to the extent, duration and involvement of other participants in the fraudulent scheme should be credited in any way—particularly given his long history of fraud and lies,” assistant U.S. Attorney Reed Brodsky wrote.
In any event, even if Nadel were telling the truth, that would actually merit a longer sentence, because it would amount to an admission of a criminal conspiracy.
“To the extent this court considers Nadel’s argument that others were involved with him, the court should find that a severe term of imprisonment is required for the additional reason that Nadel was a leader of criminal activity,” Brodsky wrote.
Tags: big house, chris moody, district judge, evil person, fraudulent schemes, hedge funds, judge john koeltl, life sentence, mail fraud, michael sullivan, nadel, ponzi scheme, ponzi schemes, prison term, sentencing hearingOctober 25, 2010 at 12:01 am | Hedge Fund Crime | 1 comment
A recent popular phenomenon in the hedge fund world has been the increased interest in managed segregated accounts — personalized portfolios in which investors exert some control over assets. This is in response to the wave of hedge funds that erected barriers to withdrawals following the market meltdown in 2008.
Exhibit A is Swiss hedge fund company Gottex, whose Gottex Solutions Services managed account platforms is proving increasing popular. In the third quarter, its assets rose for the first time in more than two years as clients seeking more control over their investments poured cash into segregated accounts. Last year Gottex won its first investment and advisory mandate from food giant Nestle, which more than doubled the hedge fund’s size to $1 billion in the quarter and helping push fee-earning assets up 7 percent to $7.8 billion.
“We are seeing a pick-up in activity in certain areas such as customised solutions and managed accounts as witnessed by GSS doubling its asset base,” Gottex Chairman and CEO Joachim Gottschalk said in a statement.
Gottex said the bulk of the inflows to GSS came from pension funds, banks and asset managers. Assets in Gottex’s fund management arm slipped 1 percent to $6.75 billion as net investor withdrawals outweighed fund gains.
Gottschalk said, however, that industry growth could accelerate as investors start looking for higher risk-adjusted returns over the relative safe havens of cash and bonds.
The fund company said a new fee structure for some funds — which would partially defer incentive fees payable when the funds achieve determined returns — was attracting interest and could help flows to the unit turn positive again.
“We put this new fee structure in place to better align the long-term interests of Gottex with those of our clients. The response has been very positive from investment consultants and investors,” said Max Gottschalk, head of its European business.
“I don’t know of any major fund of funds that have implemented something like this yet,” he added.
Founded in 1992, Gottex has seen its managed assets shrink by almost half since mid-2008. Nearly 90 percent of assets are from institutional investors.
Tags: asset managers, customised solutions, fee structure, gottex, gottschalk, hedge fund, hedge funds, incentive fees, investment consultants, pension funds, withdrawalsOctober 22, 2010 at 12:01 am | Hedge Fund News | No comments
In hedge fund lingo, a side-pocket is type of account that separates illiquid assets from other more liquid investments. Investments stashed in a side pocket account benefit only current hedge fund participants.
Now it seems that a pair of hedge fund managers, Paul Mannion and Andrew Reckles of PEF Advisors, have been caught using a side-pocket to hide losses and rip off investors. The case may be the first over the use of side-pockets, which became prevalent during the financial crisis.
The Securities and Exchange Commission accused PEF Advisors of overvaluing its investment in World Health Alternatives by 10 times its value. The Atlanta firm’s Palisade Master Fund had about 20% of client assets invested in the company five years ago, when WHA announced that it was under investigation for accounting fraud.
PEF moved the WHA investment into a side-pocket as the stock’s value plummeted by more than 90%. But according to the SEC, PEF continued to value the stake at $4.12 million, when it was worth $362,000, “at most.”
“Side pockets are not supposed to be a dumping ground for hedge fund managers to conceal overvalued assets,” the SEC’s Robert Kaplan said. “Mannion and Reckles deceived investors about the fund’s performance and extracted excessive management fees based on the inflated values.”
According to the SEC, the duo stole some $1.6 million from investors using the side-pocket.
Mannion and Reckles deny the charges, arguing that “no valuation” of WHA “was reliable” following the announcement of the investigation and the company’s subsequent bankruptcy filing.
The two men’s attorney, Stavroula Lambrakopoulos, said that no money was lost by clients due to the use of the side pocket.
Although the first side-pockets fraud, it will not be the last. Kaplan said that “additional side pocket cases” are likely in the future.
Tags: accounting fraud, client assets, dumping ground, financial crisis, hedge fund managers, illiquid assets, liquid investments, management fees, mannion, robert kaplan, securities and exchange commission, side pockets, stavroula, world health alternativesOctober 21, 2010 at 12:01 am | Hedge Fund Crime | No comments
