GENEVA, SWITZERLAND – London has not seen a show like this for a while, excluding the recent royal wedding: more than £17.2m million raised in one night Thursday 9 June at a party for Absolute Return for Kids (ARK), a UK-based charity, whose founding chairman is Swiss-British-French financier and social celebrity Arpad Busson, who heads EIM in Nyon.
The money will go to a series of children’s health programmes, including retro-virus vaccinations in southern Africa, to reduce the high incidence of dangerous early childhood diarrhea.
The charity had been honoured the previous day with the UK’s top award for charity, the UK Charity Awards 2011, for its work in Bulgaria.
Children might be the reason for the glamorous party, but all eyes were on the 1,000 people who paid £10,000 each to attend the fundraiser. The highlight of the evening, at least for the crowd outside, was the arrival of a stunning couple, the Duke and Duchess of Cambridge, the royal newlyweds, who were attending their first official function, dressed to outshine anyone. And there were plenty of people to outshine, as the Daily Mail was at pains to point out Friday morning with a fine collection of photos to accompany its front page story.
EIM is a Swiss hedge funds company that manages some $13 billion in funds, up from $10b in October 2010, when the firm ended its distinction between alternative and other funds management, according to Swiss Bilan magazine. The recent rapid growth in the funds managed by the companies was cited by the San Francisco Chronicle as a sign that the recovery of the hedges fund industry is now well underway.
Busson is no stranger to the celebrity life, first as a student at Le Rosey in Rolle, canton Vaud, then in an early and well-publicized relationship with actress Farrah Fawcett and later during his long relationship with super-model Elle McPherson (mother to his two children) and four years with actress Uma Thurman.
Bern, Switzerland (GenevaLunch) – Swiss financial supervisory body Finma quietly but firmly announced during the week that “a legislative basis must be created that brings previously unregulated activities under supervision,” a reference to institutional asset managers’ work, including hedge funds.
Foreign hedge funds go largely unregulated
The news did not rock the financial world, but it raised a red flag. Hedge funds moving to Switzerland have made global financial headlines largely because of UK fears that the industry is moving to Switzerland for tax purposes and as a result the British financial industry will be weakened.
There could well be another, globally more worrisome reason to be concerned about them shifting business to Switzerland, Finma suggests: lack of supervision under current Swiss law.
Hedge funds are part of the institutional investor industry, and it is not widely known that their business in Switzerland is largely unregulated, a situation that Finma says is unacceptable.
Geneva, Switzerland (GenevaLunch) - The latest UK company to move hedge fund managers to Geneva is Blue Crest, Europe’s third largest hedge fund group, in a move that the Financial Times suggests heralds “a trend for part-relocations.” The company is moving 50 of its managers to Geneva, out of a head office staff of some 300. Blue Crest was created in 2000 and is worth $15.5 billion today.
The company plans to move staff at a time when the European Union is considering a pay cap for alternative investment managers; Switzerland has many bilateral agreements with the European Union but is not a member.
Geneva, Switzerland (GenevaLunch) – Manuel Echeverría, the head of Optimal in Geneva, faces criminal charges for his role in the Madoff ponzi scheme. Optimal is Spanish bank Santander’s hedge fund arm, based in Geneva. Echeverria, who left the company some months ago after 19 years, according to the Wall Street Journal, becomes “one of the first and most senior wealth managers known to be facing criminal charges in connection with the Madoff scandal”, according to the Financial Times (FT). The newspaper, which has seen court documents, says the charges were filed in August but have just become known now, with Echeverría losing a legal bid to disqualify asset manager Franck Berlamont in the case. Five Aurelia asset managers are implicated in the case, says the FT. The company lost $800 million of its clients’ money to Madoff, Reuters reported in April 2009.
Armed hedges, in France
Geneva, Switzerland (GenevaLunch) - Unigestion, a Geneva-based asset manager specializing in alternative investments like hedge funds, has opened an office in Paris, France in order to be able to offer its clients a fund that is not Swiss. Chief executive officer Patrick Fenal says in an interview with Bloomberg 21 October that Unigestion lost a mandate from a potential client because the company is Swiss. The new fund is managed by a French team in Paris and is registered in France.
Most Swiss private banks are already present in the major European Union financial centres, and can market their own funds to EU citizens directly. A source at Lombard Odier Darier Hentsch, a Geneva private bank, told GenevaLunch that he did not see how Unigestion’s move could improve its marketing success with clients, except for the one potential client, already lost.
New York, NY (GenevaLunch) – Six people involved with hedge funds have been arrested in the US by the FBI and charged with insider trading. The group includes Raj Rajaratnam, who founded the Galleon Group, and who is on a Forbes magazine list of the world’s wealthiest people, worth an estimated $1.3 billion. Rajaratnam held a plane ticket for Geneva for the coming week, prosecutors say. Galleon is estimated to have $7 billion in assets under management. It appears that the group was arrested now because Rajaratnam had been tipped off that one of them was being listened to by the FBI.
Harvard and Yale universities posted heavy losses in their endowment funds in the fiscal year to 30 June. Harvard lost $11 billion, or 27.5 percent, and Yale lost 30 percent to $16b. The university endowment funds invested heavily in hedge funds and private equity, which have suffered during the financial crisis. Both universities have responded by cutting costs and curtailing planned investment. Harvard has laid off staff and is stopping an ambitious construction project. Yale has projected a $150 million operating budget deficit for the next three years. The universities’ investment managers were among the world’s top investment performers over the past 10 years. Harvard Crimson, Reuters
