Hedge-Fund Managers Help Raise $1.7 Million at Downsized Gala

Date: Tuesday, February 10, 2009
Author: Patrick Cole, Bloomberg.com

The annual Hedge Funds Care benefit - - backed by Kenneth Tropin and Michael Vranos -- will downsize from a black-tie dinner to a cocktail party tomorrow night in New York.

The nonprofit, which aids child-abuse prevention programs, is hoping a laidback atmosphere will encourage some donors to write bigger checks -- and allow jobless hedge-fund managers to network while eating mini-hot dogs and shrimp instead of filet mignon.

“A formal, sit-down dinner wouldn’t have been the most appropriate thing to do when times are so bad,” Kathryn Conroy, the organization’s executive director, said in a telephone interview.

Tropin, whose Graham Capital Management has more than $4 billion in assets, chipped in with a hefty donation, Conroy said. Tropin is being honored at the benefit.

Other donors include Vranos, chief executive officer of Ellington Management Group LLC, Goldman Sachs Group Inc. Managing Director Dean Backer and John Budzyna, the charity’s board chairman and chief executive of Middletown, New Jersey-based Cutting Edge Consulting, which advises hedge funds.

To counter the decline of support from corporations and foundations, Hedge Fund Cares founder Rob Davis and the board, led by Budzyna, turned to their network of colleagues and friends. Ernst & Young, UBS Investment Bank and BNP Paribas are among the corporate backers.

Bad Time

“I know dozens of people who have lost their jobs, dozens,” Budzyna, 56, a former managing director of Deutsche Bank AG’s hedge fund consulting group, said in a phone interview. “It couldn’t have been a worse time to raise money. Instead, they’ve said, ‘Can I buy a ticket?’ or ‘Can I contribute something to the silent auction?’”

Conroy said she expects Wednesday’s event at Manhattan’s Cipriani 42nd Street will raise about $1.7 million, down from $2.2 million last year. Hedge Funds Care branches in Atlanta, London, Toronto and other cities are scheduling separate fundraisers.

“I was cautious about what could be raised given the severity of the financial crisis,” Conroy said. “To see what we’ve still done in this environment shows the resiliency of the industry.”

In 2008, the $1.4 trillion hedge fund industry averaged losses of 19 percent and only posted an average return of 0.4 percent in January, according to the Chicago-based Hedge Fund Research Inc.

Since its founding in 1998, New York-based Hedge Fund Cares, with a budget of $6.1 million, has counted on the generosity of hedge funds so it can award grants of $12,500 to $50,000 to 44 nonprofits in New York, New Jersey and Connecticut. Recipients include New York’s Coalition on Child Abuse and Neglect and Girls Education & Mentoring Services.

“No matter how bad the economy is, it’s nothing worse than what these kids go through,” Budzyna said about child abuse victims.

Hedge Funds Care’s 11th annual “Open Your Heart to the Children” benefit is tomorrow at 5:30 p.m. at Cipriani 42nd Street, 110 East 42nd Street in Manhattan. Tickets are $1,500. Information: http://www.hedgefundscare.org.

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To contact the writer on this story: Patrick Cole in New York at pcole3@Bloomberg.net.