Blackstone has purchased the shares from Stornoway for $250 million. The hedge fund giant also bought into a minority ownership interest in the Renard diamond stream, a $946 million project to mine diamonds in Québec.
“Blackstone’s global presence and their long-established status as one of the world’s leading investment firms make them ideally suited to Stornoway as we work to build a world class diamond mining company.” Matt Manson, President and CEO at Stornoway, said.
“The Renard Diamond Project is fully financed and permitted for development of an open pit and underground diamond mine that is expected to produce an average of 1.6 million carats per year over an initial 11-year mine life, representing approximately 2% of global diamond supply by value.“ Blackstone said in a press release.
Blackstone Group, a hedge fund with over $300 billion, broke all of their asset and earnings records in the first quarter in the First Quarter 2015 , their economic net income has doubled since 2014, while their distributable earnings rose nearly 160%.
Some of last year’s highlights:
- In 2014 Blackstone announced that it will spin off its Advisory, Restructuring, and Park Hill businesses in 2015.
- Blackstone completed equity capital markets activity of over $20 billion, including initial public offerings of La Quinta, PBF Logistics LP, Michaels Stores, Catalent, Travelport, and Vivint Solar.
- BAAM, Blackstone’s Hedge Fund Solutions business, launched a UCITS fund in Europe, as well as its second mutual fund.
- Blackstone’s Real Estate business launched its Core+ platform to focus on stabilized real estate in major markets.
- Blackstone portfolio company Black Rhino and Dangote Industries announced a commitment to jointly invest up to $5 billion over the next five years in energy infrastructure projects across Sub-Saharan Africa.
The firm also announced that it had hired 20,000 veterans in twenty months through its portfolio since its April 2013 commitment to hire 50,000 in five years.
New York (HedgeCo.Net) – The former chairman of the US Federal Reserve has joined another institution not regulated by the Fed.
From now on Ben Bernanke will be lead consultant at Deutsche Bank, Pacific Investment Management Company (PIMCO), which monitors assets of approximately $1.59 trillion.
“The Fed does not regulate Pimco or its parent or any other firm that is affiliated with it,” Bernanke said, according to Reuters. “So there is no contact.”
Bernanke himself removed the entities out from under his jurisdiction while in office.
Citadel Investment, the hedge fund founded by billionaire Ken Griffin and one of the largest on Wall Street, hired the former economic adviser to George W. Bush in mid-April. Citadel manages over $25 billion in assets under management.
Former Reagan adviser and Chairman of the Federal Reserve from 1987 to 2006, Alan Greenspan, previously accepted a position as a consultant at PIMCO as well as hedge fund Paulson & Company.
Just over a month ago Jeremy C. Stein, who left the Fed last May, agreed to join as an advisor to BlueMountain Capital Management.
Bernanke, who had been sympathetic to the criticism of public opinion towards these ‘revolving doors’, explained that both of his positions are outside the regulation of the Fed, so he will not be doing any ‘lobbying’.
“I wanted to avoid the appearance of a conflict of interest,” Bernanke said, according to the NYT. “I ruled out any firm that was regulated by the Federal Reserve.”
The former Fed Chairman will combine his work as a PIMCO and Citadel with his current job as a researcher at the Brookings Institute and his activity as a lecturer and waiting to publish next October his book ‘The courage to act’ in which looks back on his years as head of the Fed in which had to deal with the worst economic and financial crisis since the Great Depression.
New York (HedgeC0.Net) -Manny Roman, Chief Executive Officer of hedge fund giant Man Group, reported a a good start to the year from a performance perspective which, together with the latest acquisitions, contributed to an overall 7% increase in FUM over the quarter.
AHL’s traditional momentum strategies had a strong first quarter and continue to perform well on a relative basis, returns have improved across GLG’s range of strategies and Numeric’s strategies continue to outperform their respective benchmarks.
“We are pleased to have completed the Silvermine, NewSmith and BAML fund of funds acquisitions which help to broaden our product offering and US footprint.” Roman said.
“Current FUM estimated at $82.0 billion including $2.4 billion related to the acquisitions of NewSmith and BAML fund of funds.”
- Positive investment performance across all our managers added $4.3 billion to FUM in the quarter
- Good performance across AHL’s range of strategies led to $1.3 billion of positive investment movement in quant alternative strategies in the period
- Asset weighted outperformance of 137 basis points (before fees) across Numeric’s strategies and performance overall added $0.6 billion to FUM in the quarter
- Positive performance across GLG’s range of alternative strategies added $0.5 billion to FUM in the period
- The majority of GLG’s long only strategies had positive investment performance in the quarter, with the main contributor to the positive investment movement of $1.6 billion being the Japan CoreAlpha strategy
- FRM investment performance added $0.2 billion to FUM
- Net outflows in the quarter of $1.3 billion, comprising sales of $4.2 billion and
- redemptions of $5.5 billion
- Net inflows into quant alternatives ($0.7 billion) and quant long only ($0.3 billion), offset by;
- Net outflows from discretionary long only ($0.9 billion), discretionary alternatives ($0.6 billion), fund of fund alternatives ($0.6 billion) and guaranteed products ($0.2 billion)
- FX movements of negative $2.0 billion in the quarter, driven by the strengthening of the US dollar against the Euro (around 11%) and GBP (around 5%)
- Acquisition of Silvermine completed on 24 January 2015 adding $3.8 billion to FUM
Other positive movements of $0.4 billion driven by guaranteed product re-gears of $0.2 billion, $0.2 billion of positive rebalancing at AHL and an additional $0.2 billion from seeding activity; partially offset by product maturities and other movements of negative $0.2 billion
Our flows in Q1 reflect a natural lag between better investment performance and higher sales. As we have commented previously, our business is now more institutional in nature, with larger individual mandates causing greater variation in flows on a quarterly basis.” Roman, said: ”We retain a degree of caution on the outlook for first half flows. As ever, the outlook for the rest of the year will likely depend on performance. Whilst we have a reasonable pipeline of sales, in particular in our quant businesses, recent market volatility reminds us of the uncertain macro environment in which we operate and its potential impact on demand for our products.”
New York, HedgeCo.Net – The Securities and Exchange Commission today announced an award of more than a million dollars to a compliance professional who provided information that assisted the SEC in an enforcement action against the whistleblower’s company.
The award involves a compliance officer who had a reasonable basis to believe that disclosure to the SEC was necessary to prevent imminent misconduct from causing substantial financial harm to the company or investors.
“When investors or the market could suffer substantial financial harm, our rules permit compliance officers to receive an award for reporting misconduct to the SEC,” said Andrew Ceresney, Director of the SEC’s Division of Enforcement. “This compliance officer reported misconduct after responsible management at the entity became aware of potentially impending harm to investors and failed to take steps to prevent it.”
The whistleblower in this matter will receive between $1.4 million and $1.6 million. Whistleblower awards can range from 10 percent to 30 percent of the money collected in a successful enforcement action with sanctions exceeding $1 million. By law, the SEC must protect the confidentiality of whistleblowers and cannot disclose information that might directly or indirectly reveal their identities.
Since its inception in 2011, the SEC’s whistleblower program has paid more than $50 million to 16 whistleblowers who provided the SEC with unique and useful information that contributed to a successful enforcement action. All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators. No money is taken or withheld from harmed investors to pay whistleblower awards.
This is the second award the SEC has made to an employee with internal audit or compliance responsibilities.
New York, HedgeCo.Net – Google chairman Eric Schmidt, has bought a 20% equity share in the D. E. Shaw group, a global hedge fund investment and technology development firm with more than $36 billion in aggregate investment capital.
“I’ve always regarded Eric as a kindred spirit—someone who shares our belief in the power of groundbreaking innovation, analytical rigor, and extraordinarily gifted employees,” said David Shaw, founder of the D. E. Shaw group. “I’ve known and respected David for many years, and as a longstanding investor in the D. E. Shaw group’s funds, I have the highest regard for their team and the firm that they’ve built,” said Eric Schmidt. “I’m excited to invest in an enterprise that has so successfully used technology to deliver superior risk-adjusted returns across asset classes globally.”
California based Hillspire, LLC, the family office that serves as the investment vehicle for Google Executive Chairman Eric Schmidt and his family, purchased the 20 percent equity interest previously owned by Lehman Brothers Holdings Inc. The equity stake represents a passive economic interest in the D. E. Shaw group, which will continue to function independently, with no changes in management or operations.
“We’ve worked with Hillspire for quite some time now, and have developed great respect and admiration for them,” said Anne Dinning, a Managing Director at the D. E. Shaw group and a member of the firm’s Executive Committee. “We’re truly delighted to be expanding our relationship with them.”
New York, HedgeCo.Net – For the fifth consecutive year, Centaur Fund Services has been recognised in the HFM European Hedge Fund Services Awards. Centaur was named as Best Administrator under $30bn – Overall in recognition of its exceptional client service and innovative product development over the past 12 months.
“We are thrilled that Centaur has once again been recognised as the best administrator amongst our peers.“ Ronan Daly, Founding Partner of Centaur Fund Services said “Being firmly established as the leader in this category allows us to stand out in this competitive market. It is a testament to the hard work of our entire team over the last five years.”
On awarding the ‘Best Administrator under €30bn – Overall’ award, the judges commented “We are delighted to award Centaur for the fifth year running. Centaur has consistently proven itself to be the leader in its field by demonstrating impressive customer service, product development and growth. The judges were particularly impressed by Centaur’s focus on accountability, which runs through every aspect of its firm.”
Centaur would also like to take this opportunity to congratulate clients that received awards at the HFM Week European Performance Awards 2015 also hosted by HFMWeek.
- Trafalgar Trading Fund – Long/Short Equity long term performance over 5 years
- RWC Europe Absolute Alpha Fund – Long/Short Equity (Europe) over $500m
Headquartered in Dublin, Ireland and with offices in London and New York, Centaur delivers independent fund administration and regulatory services worldwide.
New York (HedgeCo.Net) – An Oklahoma husband and wife were handed prison sentences yesterday for stealing over $6.5 million from six victims who thought they were investing in a hedge fund.
Linda Livolsi was sentenced to 45 months (3.75 years) in prison, three years of supervised release, and ordered to pay approximately $6.1 million in restitution. Her husband, William Livolsi, was sentenced to two years in prison, three years of supervised release, and ordered to pay approximately $5 million in restitution.
“The defendants used convincing tactics and tempting monetary returns to persuade their victims to part with their money,” said U.S. Attorney Bogden. “If someone offers unusually high returns on an investment, it is likely too good to be true.”
Since about 2003, under the artifice of RGM Enterprises, LLC, Linda Livolsi had been soliciting and inducing persons to give her money for the purpose of investing it in a purported hedge fund that offered large monetary returns. In reality, the hedge fund never existed and the Livolsi’s spent most the money for their personal benefit.
The Livolsi’s fraudulently obtained about $6.5 million in funds from six investors from 2003 to 2007, including approximately $5 million that came from one victim. Linda Livolsi also filed false federal tax returns for the years 2003 to 2006, and failed to file tax returns for 2007 and 2008. Her total tax liability for those years, not including interest and penalties, is approximately $1.1 million.
New York (HedgeCo.Net) – BlackRock Advisors LLC has agreed to settle SEC charges of failing to disclose a conflict of interest among its ranks and will pay a $12 million penalty. The hedge fund advisor will also hire an independent compliance consultant to conduct an internal review.
BlackRock reported $70.4 billion of long-term net inflows for the first quarter of 2015, representing 6.5% annualized growth.
“Daniel J. Rice III was managing energy-focused funds and separately managed accounts at BlackRock when he founded Rice Energy, a family-owned and operated oil-and-natural gas company.” The SEC said. “Rice was the general partner of Rice Energy and personally invested approximately $50 million in the company. Rice Energy later formed a joint venture with a publicly-traded coal company that eventually became the largest holding (almost 10 percent) in the $1.7 billion BlackRock Energy & Resources Portfolio, the largest Rice-managed fund. The SEC’s order finds that BlackRock knew and approved of Rice’s investment and involvement with Rice Energy as well as the joint venture, but failed to disclose this conflict of interest to either the boards of the BlackRock registered funds or its advisory clients.”
The SEC’s order also finds that BlackRock and its then-chief compliance officer Bartholomew A. Battista caused the funds’ failure to report a “material compliance matter” – namely Rice’s violations of BlackRock’s private investment policy – to their boards of directors. BlackRock additionally failed to adopt and implement policies and procedures for outside activities of employees, and Battista caused this failure. Battista agreed to pay a $60,000 penalty to settle the charges against him.
“BlackRock violated its fiduciary obligation to eliminate the conflict of interest created by Rice’s outside business activity or otherwise disclose it to BlackRock’s fund boards and advisory clients,” said Andrew J. Ceresney, Director of the SEC’s Division of Enforcement. “By failing to make such a disclosure, BlackRock deprived its clients of their right to exercise their independent judgment to determine whether the conflict might impact portfolio management decisions.”
New York (HedgeCo.Net) – According to a recent study from Citi Private Bank, an increasing number of hedge funds are converting to family office structures for various regulatory and compliance reasons.
Image courtesy of Switzerland Family Office
“It is absolutely the case that start-up managers have a much higher barrier to entry these days due to a combination of factors including the increasing need to develop an institutionalized platform with robust operational procedures in order to attract capital from sophisticated investors.” Meir Grossman, Investment Management Partner at Seward & Kissel LLP, said. “It is certainly the case that the time it is taking a manager to launch a fund has practically doubled from approx. 2-3 months to 4-6 months, especially given the trend of managers requiring a significant seed investment to properly launch.”
“However, the conversion from hedge fund management to family offices is really only happening at the upper levels of this industry as very few start up managers have the wealth to forgo a business and instead manage their own family office,” Meir said in a letter obtained by HedgeCo.
A family office or single family office (SFO) is a private company that manages investments and trusts for a single family. The company’s financial capital is the family’s own wealth, often accumulated over many family generations.
Family offices often provide family management services, which includes family governance, financial and investment education, philanthropy coordination, and succession planning. A family office can cost over $1 million to operate, so the family’s net worth usually exceeds $100 million. Recently, some family offices have accepted non-family members. (Source: Wikipedia)
By Alex Akesson – In a recent Ted Talk, hedge fund manager Paul Tudor Jones II spoke about fairness in the investing arena and how a focus solely on profits is, as he puts it, “threatening the very underpinnings of society.” Jones is estimated to have a net worth of $4.3 billion by Forbes Magazine and ranked as the 108th richest America.
Jones founded a not-for-profit called Just Capital, its mission statement: to help companies and corporations learn how to operate in a more just fashion by using the public’s input to define exactly what the criteria are for just corporate behavior.
“Income inequality is not a good thing. Higher profit margins do not increase societal wealth.” The hedge fund manager and philanthropist said in the talk. “What they actually do is they exacerbate income inequality… intuitively, that makes sense, right? Because if the top 10 percent of American families own 90 percent of the stocks, as they take a greater share of corporate profits, then there’s less wealth left for the rest of society.”
“It’s estimated that 47 percent of American workers can be displaced in the next 20 years. I’m not against progress. I want the driverless car and the jet pack just like everyone else.” Jones said. ”But I’m pleading for recognition that with increased wealth and profits has to come greater corporate social responsibility.”
“Now, when I was young, and there was a problem, my mama used to always sigh and shake her head and say, “Have mercy, have mercy.” Now’s not the time for us, for the rest of us to show them mercy.” Jones said. “The time is now for us to show them fairness, and we can do that, you and I, by starting where we work, in the businesses that we operate in. And when we put justness on par with profits, we’ll get the most wonderful thing in all the world. We’ll take back our humanity.”