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Managers prepare billion dollar launches

Date: Monday, January 8, 2007
Author: Financial News Online US

At least four hedge fund managers are set to raise funds of more than $1bn (758m) in the first three months of the year almost as many as in the whole of last year despite the $6.5bn (5bn) collapse of Amaranth Advisors in the US.

Carlyle Group, a US private equity firm, and Jabre Capital Partners, founded by former GLG partner Philippe Jabre, are competing for top spot with expectations of raising between $2bn and $3bn for their multi-strategy funds.

Bankers said Carlyle Blue Wave, run by former Deutsche Bank executives Rick Goldsmith and Ralph Reynolds, had received promises of $1bn from investors. Carlyle declined to comment.

Jabre, who plans to start trading in Switzerland on February 6, has told bankers he has received a promise of $500m. He is confident of his fund growing to $5bn and establishing a Hong Kong office by the end of the year, but will have to convince investors his regulatory troubles are behind him. The UK Financial Services Authority fined him 750,000 last year for inadvertent market abuse. Jabre Capital Partners declined to comment.

Bankers said they expect US firms Brigade Capital and Menta Capital to raise $1bn for their new funds. Brigade will invest in companies with high debt and Menta will follow a market neutral strategy, taking long and short equity positions that cancel out each other. The firms declined to comment.

Only two firms raised a large hedge fund in the first quarter of last year. Convexity Capital, raised $5bn, a record for a first-time hedge fund and GSA Capital raised $1bn for its third fund.

Amaranth Advisors has closed its operations in London by going into voluntary liquidation.

Patrick Brazill and Elizabeth Bingham of accountant Ernst & Young are joint liquidators, according to a legal notice. They urged creditors to alert them of any debts by February 12.

The firm has laid off 250 of its 420 staff since losing $6.5bn in September, 70% of its assets.