Event Driven: Olea Capital Also to Shut Down posted on Tuesday 6 Sep 2005 08:57 BST From Times Online - see full story The Times reports another failure in the hedge fund world - the closure of a global macro fund worth $450 million. Later this month, due to a number of large redemptions, Olea Capital - based in Mayfair, Central London - will shutdown. Tim Yetman was shocked at how quickly investors withdrew their money but was realistic to admit that the fund underperformed and suffered from a malaise in global macro and lack of investor confidence he said. Olea was lauched with six traders in 2000 after Mr Yetman left his head of proprietary trading role at Tokei Bank. He also managed the OâConnor hedge fund at UBS for a time
Portus Still Under the Microscope posted on Tuesday 6 Sep 2005 08:49 BST From GlobeandMail.com, Canada - see full story The Globe and Mail reports another twist in the tale for embattled hedge fund company Portus Alternative Asset Management Inc. - new allegations that the company co-founder Boaz Manor took nearly $12-million (U.S.) of investor money to buy precious stones or metals. Mr Manor was also allegedly behind the transfer of $8.6-million of client money put into several Hong Kong bank accounts just a few weeks ago. These developments are contained in a report filed in court yesterday by the court-appointed receiver for the insolvent company, KPMG LLP. The RCMP also launched a criminal investigation into Portus who was pushed into receivership last March by the Ontario Securities Commission, and KPMG is continuing to try and recover about $800-million (Canadian) in assets.
The Globe and Mail reports that an Ontario hedge fund manager who faces fraud allegations in the United States has been sent a $208-million (U.S.) claim on behalf of a group of investors. Paul Eustace, who lives with his family in Oakville, Ont., ran Philadelphia Alternative Asset Management Co., or PAAM. The $230-million hedge fund was based in Philadelphia and specialized in complicated commodity trading. In June, the U.S. Commodity Futures Trading Commission, or CFTC, alleged that Mr. Eustace defrauded investors by telling them his commodity trading pool was increasing in value when, in fact, it had lost more than $140-million from February to May.
The NY Times is about the last source I would trust to get this story right. However, even a stopped clock is right twice a day There are way too many brand new funds out there all fighting in the same zero sum game. Some will do terrific, some will blow out, and most will probably muddle through with below market returns. Sit back and watch natural selection do its thing.
I remember similar posts around the time GM was trading at 25 or so. Credit arbitrage blowing up. Market ripped huge from there and GM went from 25-37.5 before it was over. Too many prognostications of end of the world to have this happen.