All GLG News Analyses Filed Under: Asset Management & Private Banking

Patrick YoungFounder and ChairmanDerivatives Vision

It May Look Like Icarus But the Wings Have Not Fallen Off Yet!

February 2, 2009

Analysis of:Swedbank Sees Deeper Economic Contraction, Risk of Deflation in Baltics | www.bloomberg.com

The Baltic economies are facing incredible challenges. However, their size and flexibility cannot be under-estimated.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

The Madoff Scandal - The Unravelling Threads - JP Morgan - The Possible Effects

January 29, 2009

Analysis of:JP Morgan Exited Madoff Linked Funds Last Fall | www.nytimes.com

I have always maintained that you have to pull a single thread to tear a cloth or unravel a fraud. This has now started happening in the Madoff case. The timing of certain transactions of JP Morgan appears to be the thread and in my opinion will have far reaching effects. JP Morgan is a name with a chequered history and has always (to my knowledge) acted in the best interests of investors as well  as the capital markets. A century back it effectively played the role of the Fed in the crisis of  1907-8. In this analysis I look at how times have changed and where the thread is indicating it may lead in the Madoff fraud.

Regulatory Disclosure of Short Positions : Yes, But With Caveats

January 9, 2009

Analysis by: GLG Expert Contributor

Analysis of:Fund managers fight tougher disclosure rules | www.ft.com

Disclosing short positions to regulators is, in principle, a noble idea, but the devil will be in the details. Lack of transparency abets the selfish motivations of free-riders (either humans or computer algorithms) who have no genuine insight into a company that warrants their own short-sale. More importantly, this lack of transparency exacerbates market movements to the point where the validity of short-selling as a useful investment management tool is questioned and debated in the court of hearsay. On the other side of the ledger, disclosure can meaningfully impair the implementation of a manager's strategy -- through mimicry and the resulting market impact. This is a valid concern (irrespective of short or long positions).

Short Selling Rules - Why Do Mutual Fund Companies Care?

January 8, 2009

Analysis by: GLG Expert Contributor

Analysis of:Fund managers fight tougher disclosure rules | www.ft.com

Perhaps most important is that the IFSA, the ICI and and IMA have issued a joint statement. It is possible these organizations would support a concept similar to 13F reporting in the US. Emphasis by regulators and market participants on short selling - versus any other kind of transactional activity - speaks to a lack of thought about what moves markets. Many hedge funds would be sorely taxed from an infrastructure standpoint to provide transparency.  This, coupled with increased emphasis on operational risk, is likely to squeeze small hedge funds out of the market and provide significant barriers to entry for new participants.

clarification

January 7, 2009

Analysis by: GLG Expert Contributor

Analysis of:Austria Takes Control of Medici, Bank With $2.1 Billion Madoff Investments | www.bloomberg.com

- bank medici did not HAVE 2.1bn investments, but SOLD 2.1bn investments to mostly professional investors as defined by MIFID - what remains for Medici is the legal risk of being sued by not giving sufficient transparency what implied risks in the strategy are concerned.

My view on the Soc Gen sale of its asset management business to GLG - Randy Schafer

December 23, 2008

Analysis by: GLG Expert Contributor

Analysis of:Societe Generale Sells $8.2 Billion U.K. Asset-Management Division to GLG | www.bloomberg.com

To be brief, the article is important because under normal market conditions, asset managers are generally viewed as "crown jewels" of global banks such as Soc Gen.  But with funds management getting a bad rap - in part from the market meltdown and more recently from the Madoff scandal, and with capital at a premium, this is an interesting reflection of the times we are in.  Not unlike Merrill Lynch's contemplate sale of its stake in BlackRock a few months back, which was driven by a need for capital (and its consumated sale of its Bloomberg stake).

Extra strain

December 22, 2008

Analysis by: GLG Expert Contributor

Analysis of:BNP Paribas may not buy Fortis after losses | business.timesonline.co.uk

BNP has suffered losses and its value also fell considerably. Though it could claim to be the biggest bank with huge deposit reserve on hand, it may go volatile if invested on buying spree acquisitions. However good be the fund managers, balancing the act needs extra caution which is a strain at this point.

A well timed step to create Eastern European Venture Capital Fund

December 22, 2008

Analysis by: GLG Expert Contributor

Analysis of:SBI of Japan Creates Eastern European Venture Capital Fund, Expects Growth | www.bloomberg.com

Coming up in the regime of irresistibly low valuations & acute shortage of Bank credit, the setting up of its first Eastern European Venture Capital Fund by SBI couldn’t have come at a better time. The Fund can pick up majority stake in select Small & Medium Enterprises in the region at most bargaining prices to reap sizeable growth in the medium term.    In the face of large foreign exchange reserves in Japan, the investments made at rather cheap valuations, aided by an appreciating yen would make the investment risks much lower in select cautiously chosen SMEs.

Cover your assets! Diversify into Managed Futures.

December 19, 2008

Analysis by: GLG Expert Contributor

Analysis of:Managed Futures and Portfolio Diversification | www.pfgbest.com

The traditional portfolio of equities and bonds and REIT type assets no longer provides adequate portfolio diversification in today's economy.  The Managed Futures Sector is expanding dramatically. Global Diversification in stable exchange-traded,transparent, liquid markets.  Managed Futures are exchange traded (no OTC-type counterparty risk) Managed Futures are transparent.Daily statements and improved technology even allows for live overview of trading activity. CTAs traded clients account only by Power of Attorney. CTAs must file a detailed disclosure document every 9 months. Client account held at an FCM in the relative safety of segregated funds.CTAs have no access to the account other than trading authority.Client can revoke Power of Attorney at any time and cease trading without penalty. Non correlation to traditional asset classes. Potential for enhanced portfolio returns Opportunity for reduced portfolio volatility risk Opportunity in both Bull and Bear markets 

SBI of Japan Creates Eastern European VC Fund Makes Sense in Many Ways

December 17, 2008

Analysis by: GLG Expert Contributor

Analysis of:SBI of Japan Creates Eastern European Venture Capital Fund, Expects Growth | www.bloomberg.com

* SBI's move to create an Eastern European fund at this time is logical. It enables SBI to move into a new territory and diversify geographic risk at a discount rate. In addition, the more conservative Japanese style of investment and currency reserves will enable SBI to hold their investments until the economic recovery and then receive the requisite ROI.

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