Tighten due diligence procedures for more successful hedge fund investment Practical Operational Due Diligence on Hedge Funds is an encyclopaedic, comprehensive reference, written from the perspective of an experienced practitioner. Accompanied by a useful archive of factual material on different hedge fund issues, including failures, fines, and closures, this book focuses on the areas due diligence professionals should address, and explains why they're important. Extensive discussion of publicised cases identifies the manager entities and actual fund vehicles involved, and provides commentary on what could have been done differently in each case, backed by actual regulatory materials, such as SEC complaints, that recreate the events that took place. Readers gain a deeper understanding of the many facets of due diligence and the many possible pitfalls, learning how standardise processes and avoid major errors and oversights. The amount of money managed by hedge funds has almost doubled from the $1 trillion under management at the time of the financial crisis. Hedge funds can be extremely risky, but can be extremely profitable as money increasingly flows back in, due diligence on these alternative investments becomes more and more critical. This book provides complete guidance toward the due diligence process, with plentiful real-world examples. * Identify the areas of due diligence and what can go wrong * Create procedures and checklists to minimise errors * Learn what publicised cases could have done differently * Gain a deeper understanding of massive failures and successes Proper due diligence can be a massive undertaking, but thoroughness is essential when the price of failure is so high. Practical Operational Due Diligence on Hedge Funds provides the details professionals need to be on point every time.
Preface xIiii Acknowledgments xIvii About the Author xIix Disclaimer Ii PART I Processes and Procedures CHAPTER 1 What is a Hedge Fund? 3 1.1 The Role of a Hedge Fund in an Investment Portfolio 5 CHAPTER 2 Defining Operational Issues 7 2.1 Classifying Problems and Failures 8 2.2 Fraud 8 2.3 Insolvency and Winding Up 10 2.4 Investment Losses Outside the Fund s Stated Volatility Range 10 2.5 Operational Problems, Fund Defaults and Material Breaches of Contract 11 2.6 Regulatory Intervention Resulting in a Settlement, Fine or Fund Closure 12 2.7 What Happens When It All Goes Wrong 12 CHAPTER 3 Structures for Investment in Alternatives 15 3.1 A Quick Primer on Fund Structures 15 3.1.1 Contracts under English Law 16 3.2 Limited Companies 17 3.2.1 Investor Rights in a Limited Company 18 3.2.2 Significance of Jurisdiction 18 3.3 Unit Trusts 19 3.4 Partnerships 19 3.5 Managed Accounts 20 3.6 Master Feeder and Mini Master Structures 21 3.7 Umbrella Structures 22 3.8 UCITS 23 3.9 The Changing Landscape and the Implications for Investors 23 3.10 Regulatory Arbitrage 23 CHAPTER 4 Is the Fund for Real? Establishing the Basics 25 4.1 Constitutional Documents 25 4.1.1 Constitutional Documents for a Limited Company 25 4.1.2 Constitutional Documents for a Trust Such as a Unit Trust 27 4.1.3 Constitutional Documents for a Partnership 28 4.2 Fund Contracts and the Basics of Contract Reviews 28 4.3 Service Providers to the Fund 32 4.3.1 Fund Directors and General Partners 32 4.3.2 The Prime Broker 35 4.3.3 The Fund Administrator 39 4.3.4 The Investment Manager 42 4.3.5 The Fund Lawyers 42 4.3.6 The Fund Auditors 43 4.4 Manager Visits 46 4.4.1 Business Structures 47 4.4.2 Investor Base 47 4.4.3 Trade Processes 47 4.4.4 Support Processes 47 4.4.5 Transfer Agency 48 4.4.6 Portfolio Management 48 4.4.7 Systems 48 4.4.8 Independent Reports on the Manager s Systems 49 4.5 Background Checks 49 4.6 Initial Questionnaires to Commence Due Diligence Work 50 4.6.1 Litigation and Regulatory History 51 4.6.2 Administration of the Target Fund 51 4.6.3 Segregation of Duties at the Investment Manager 52 4.6.4 Prime Brokerage and Custody 52 4.6.5 Treasury 52 4.6.6 Fund Documentation 52 4.6.7 Auditors and Financial Statements 53 4.6.8 General Matters 53 4.7 Generic Risks in Documents and Contracts 53 4.7.1 Liability and Indemnity Provisions 53 4.7.2 Joint and Several Liability and Cross-Class Liability 55 4.7.3 Borrowing and Leverage 56 4.7.4 Investment by Service Providers and Other Related Parties 57 4.7.5 Change of Service Providers 57 4.7.6 Material Adverse Change Clauses 57 4.7.7 Audit and Financial Statements 57 4.7.8 Fund Dealing (Subscriptions and Redemptions) and Fees 58 4.7.9 Rights on Shares Held by Investors 60 4.7.10 The Investment Manager 60 CHAPTER 5 Understanding Fund Operations and Controls 61 5.1 Investment Strategies and What They Involve 62 5.1.1 Long/Short Strategies 62 5.1.2 Event-Driven Strategies 62 5.1.3 Tactical Trading Strategies 63 5.1.4 Relative Value Strategies 63 5.2 Operational Structures Required to Support an Investment Strategy 63 5.3 Establishing the Existence of Controls 64 CHAPTER 6 Governance Managing Risk Through a Non-Executive Board 65 6.1 Investor-Nominated Directors 66 6.2 Managing Risk as a Non-Executive Board 67 6.2.1 Risks at the Fund Level 68 6.2.2 Risks at the Individual Investment Level 72 6.2.3 Risks that Impact the Market 73 CHAPTER 7 Reporting to Members and Statutory Reporting 75 7.1 Statutory Reporting 75 7.2 Financial Statements 76 7.3 Designing a Template for Reviewing Financial Statements 81 7.4 Shareholder Voting: the Automatic Proxy 83 7.5 Investor Reporting and Transparency 84 7.6 Conflicts of Interest and Transparency 85 CHAPTER 8 The Curse of Leverage (Fund Liabilities) 87 8.1 Who Provides Finance 88 8.2 How Financing is Secured 90 8.3 How Collateral Creates Fund Risk 92 8.4 Understanding Default Clauses and Covenants 93 8.5 Collateral Management and the Concept of Margining 95 8.6 Rehypothecation 97 8.6.1 Understanding Custody 98 8.7 Blow-Ups Due to Leverage 99 8.7.1 Segregating Assets to Protect Them From Leverage 99 CHAPTER 9 Fund Assets 103 9.1 Valuation Concepts 103 9.2 Designing Principles for Valuations 105 9.2.1 Documenting Policies 106 9.2.2 Valuation Methodologies 106 9.2.3 Financial Instruments 106 9.2.4 Regular Review of Policies 107 9.2.5 Independence Over Policy Formulation and Valuation 107 9.2.6 Override of Procedures 107 9.2.7 Third-Party Service Providers 108 9.2.8 Transparency 108 9.3 Valuations From an Accounting Perspective 108 9.4 AIMA Recommendations 110 9.5 Valuing Level 3 Investments and Illiquid Investments 112 9.6 Valuation Tricks and Discrepancies Including Accounting and Dealing NAVs 113 9.7 Liquidity 115 9.7.1 A Note on Funds of Funds 115 9.8 Style Drift 116 9.9 The Side Pocket 117 9.10 Reviewing Derivative Transactions 118 9.11 Betting the House and Its Contents 119 9.12 Naked Shorts and Options 120 9.12.1 Naked Shorts 120 9.12.2 Naked Options 122 9.13 Monthly Reporting and What It Means 122 9.14 Hedging Currency Risk and Implications for Liquidity 123 9.15 Realising Fees on a Fund and Deferrals 124 9.16 The Basics on Taxation of Hedge Funds 126 9.16.1 Transfer Pricing 126 9.16.2 Domicile 126 9.16.3 Fund Wrapper/Structure 126 9.16.4 Dividend Income 127 9.16.5 Leverage 127 CHAPTER 10 Fraud 129 10.1 Phantom Funds and Theft 129 10.2 Ponzi Schemes 130 10.3 Intentional Misvaluation 131 10.4 Preferential Treatment 131 10.5 Misrepresentation/Misreporting 132 10.5.1 Misreporting Returns 133 10.5.2 Misreporting Regulatory and Legal Problems 134 10.6 The Nick Leeson Syndrome: Rogue Traders 134 10.7 Covering up Mistakes 136 CHAPTER 11 Fees: the Essence of Hedge Funds 137 11.1 High Water Marks, Hurdles and Claw Back Provisions 138 11.1.1 High Water Marks 138 11.1.2 Hurdles 139 11.1.3 Performance Fee Calculation Methods 140 11.1.4 Clawbacks 142 11.2 What Does It Cost to Run a Fund? 142 11.3 Can Investors Pose a Risk to the Survival of a Fund? 144 11.4 The Gate 145 11.5 Redemption Terms and Lock-Ups 146 11.6 Fees on Side Pockets and Illiquids 146 11.7 The Capital Base of the Fund 147 11.8 Aligning Interests 147 11.9 Arrivals and Departures: Fund Dilution, Rebalancing and Box Management 147 CHAPTER 12 Regulatory Actions, Politics and Market Confidence 149 12.1 Characteristics of Successful Complaints and Defences 151 12.1.1 Parties to an Action 152 12.1.2 Duty of Care 153 12.1.3 Breach of Contract 153 12.1.4 Avenues of Recourse and Defences 153 12.2 The Basics of an SEC Complaint 154 12.2.1 Matter Under Enquiry or Informal Investigations 154 12.2.2 Investigation 155 12.2.3 Formal Order of Investigation 156 12.2.4 The Wells Notice 156 12.2.5 The Enforcement Process 157 12.2.6 The State Actor Doctrine 157 12.2.7 Use of Documents by the SEC 158 12.2.8 Overseas Witnesses 158 12.2.9 Rewarding Cooperation 158 12.2.10 Methods of Protection 159 12.2.11 Parallel Investigations 160 12.3 Investigations by the UK Financial Conduct Authority 160 12.3.1 Case Selection 161 12.3.2 Overseas Assistance 162 12.3.3 Sources of Cases 162 12.3.4 Enforcement Approach 162 12.3.5 Notices of Regulatory Action 163 12.3.6 Investigative Powers and Conduct of Investigations 163 12.3.7 Settlement of Cases 163 12.3.8 Remedies Available to the FCA 164 12.4 Large Financial Services Firms vs Small Financial Services Firms 165 12.4.1 The Problem with SEC and FSA Settlements Goldmans as a Case Study 165 12.5 Managing Electronic Discovery 169 12.6 AIFMD 170 12.7 Developments in the Asia Pacific Region 171 12.8 Investor Protection Through Regulation 171 12.9 Identifying Future Risks 173 CHAPTER 13 Key Man Risk, Disaster Recovery and Business Continuity 175 13.1 The House of Cards Disaster Recovery or Business Continuity 176 13.2 Whose Information Is It Anyway? 177 13.3 Insurance 178 CHAPTER 14 Negotiating Terms and Exercising Rights 181 14.1 The Subscription Document 181 14.2 The Necessity for Side Agreements 182 14.3 The Implications of Side Agreements 185 14.4 Things to Consider 187 14.5 Exercising Shareholder Rights 191 14.6 Taking Over the Management of the Fund 192 14.7 Exiting or Redeeming From a Fund 193 CHAPTER 15 Risk Ratings and Scoring 195 15.1 Scoring: Temptations and Dangers 196 15.2 Risk Mapping and SOX Controls 197 15.2.1 A Basic Template for Risk Mapping a Business or Department 198 15.3 A Template for Scoring a Hedge Fund 200 15.3.1 NAV Calculation Procedures 201 15.3.2 Prime Brokerage and Custodial Arrangements 202 15.3.3 Liquidity Profile of the Fund 202 15.3.4 Auditors and Audit History 204 15.3.5 Regulatory Issues and Litigation 205 15.3.6 Transparency and Investor Reporting 208 15.3.7 Fund and Management Company Structures (including Tax and Jurisdiction) 208 15.3.8 Contractual Arrangements 208 15.3.9 Operational Controls, Risk Escalation and Segregation 212 15.3.10 Cash and Trading Controls 212 15.3.11 Quality of Operational Staff and Manager Background 212 15.3.12 Quality of Service Providers (Lawyers, Administrators, Distribution Agents and Directors) 212 15.3.13 Insurance Arrangements 216 15.3.14 Business Continuity and Disaster Recovery Arrangements 216 15.3.15 Investor Profile and Concentration 217 15.3.16 Overall View 219 15.4 External Rating Agencies 221 15.5 Outsourcing Due Diligence by Funds of Funds and Institutions 222 CHAPTER 16 Marketing to Investors 229 16.1 What the Prospectus Does Not Say 229 16.2 Does Operational Risk Really Matter? 231 16.3 Marketing as a Differentiating Factor 232 16.4 Career Risk Management 233 16.5 Investment Selection Processes the Deceptiveness of the Power of Veto and Overriding Controls 235 PART II Case Studies CHAPTER 17 Case Studies Pre-2000 239 17.1 Fleschner Becker Associates 242 17.1.1 Reference Article 242 17.1.2 Background 242 17.1.3 Observations 244 17.2 D.E. Shaw & Co LP 244 17.2.1 Reference Article 244 17.2.2 Background 244 17.2.3 Observations 246 17.3 Askin Capital Management L.P. 247 17.3.1 Reference Article 247 17.3.2 Background 248 17.3.3 Observations 249 17.4 Guarente-Harrington Associates 250 17.4.1 Reference Article 250 17.4.2 Background 250 17.4.3 Observations 252 17.5 Hubshman Management Corp 253 17.5.1 Reference Article 253 17.5.2 Background 253 17.5.3 Observations 253 17.6 Investor Overseas Services Limited 253 17.6.1 Reference Article 253 17.6.2 Background 253 17.6.3 Observations 256 17.7 Long-Term Capital Management L.P. 256 17.7.1 Reference Article 256 17.7.2 Background 256 17.7.3 Observations 258 17.8 Niederhoffer Investments Inc/NCZ Commodities Inc 259 17.8.1 Reference Article 259 17.8.2 Background 259 17.8.3 Observations 260 17.9 Odey Asset Management Ltd 260 17.9.1 Reference Article 260 17.9.2 Background 260 17.9.3 Observations 261 17.10 Omega Advisors Inc 261 17.10.1 Reference Article 261 17.10.2 Background 261 17.10.3 Observations 263 17.11 Pharos Capital Management LP 265 17.11.1 Reference Article 265 17.11.2 Background 265 17.11.3 Observations 266 17.12 Piper Capital Management Inc 266 17.12.1 Reference Article 266 17.12.2 Background 266 17.12.3 Observations 268 17.13 Steadman Security Corporation 268 17.13.1 Reference Article 268 17.13.2 Background 268 17.13.3 Observations 270 17.14 Steinhardt Management Company Inc 270 17.14.1 Reference Article 270 17.14.2 Background 270 17.14.3 Observations 272 17.15 Takara Asset Management Corporation 273 17.15.1 Reference Article 273 17.15.2 Background 273 17.15.3 Observations 274 CHAPTER 18 Case Studies 2000 275 18.1 Ashbury Capital Management LLC 275 18.1.1 Reference Article 275 18.1.2 Background 275 18.1.3 Observations 276 18.2 Laser Advisers Inc 276 18.2.1 Reference Article 276 18.2.2 Background 276 18.2.3 Observations 277 18.3 Manhattan Capital Management, Inc 277 18.3.1 Reference Article 277 18.3.2 Background 277 18.3.3 Observations 279 18.4 Maricopa International Investment Corporation 279 18.4.1 Reference Article 279 18.4.2 Background 279 18.4.3 Observations 280 18.5 Penta Investment Advisers Ltd 280 18.5.1 Reference Article 280 18.5.2 Background 280 18.5.3 Observations 281 18.6 Soros Fund Management LLC 282 18.6.1 Reference Article 282 18.6.2 Background 282 18.6.3 Observations 282 18.7 Tiger Management Corp 283 18.7.1 Reference Article 283 18.7.2 Background 283 18.7.3 Observations 284 CHAPTER 19 Case Studies 2001 285 19.1 E Thomas Jung and E Thomas Jung Partners Ltd 285 19.1.1 Reference Article 285 19.1.2 Background 285 19.1.3 Observations 286 19.2 Marque Millennium Group, Inc. 286 19.2.1 Reference Article 286 19.2.2 Background 286 19.2.3 Observations 287 19.3 Heartland Advisors Inc 287 19.3.1 Reference Article 287 19.3.2 Background 287 19.3.3 Observations 288 CHAPTER 20 Case Studies 2002 289 20.1 Beacon Hill Asset Management LLC 289 20.1.1 Reference Article 289 20.1.2 Background 289 20.1.3 Observations 290 20.2 Integral Investment Management LP 290 20.2.1 Reference Article 290 20.2.2 Background 290 20.2.3 Observations 291 20.3 Klesch & Co Limited 292 20.3.1 Reference Article 292 20.3.2 Background 292 20.3.3 Observations 292 20.4 Orca Funds Inc 293 20.4.1 Reference Article 293 20.4.2 Background 293 20.4.3 Observations 294 20.5 Trout Trading Management Company Ltd 294 20.5.1 Reference Article 294 20.5.2 Background 294 20.5.3 Observations 295 CHAPTER 21 Case Studies 2003 297 21.1 CPTR LLC 297 21.1.1 Reference Article 297 21.1.2 Background 297 21.1.3 Observations 299 21.2 Canary Investment Management LLC 299 21.2.1 Reference Article 299 21.2.2 Background 299 21.2.3 Observations 301 21.3 Eifuku Investment Management Limited 303 21.3.1 Reference Article 303 21.3.2 Background 303 21.3.3 Observations 304 21.4 J.T. Investment Group Inc and New Resource Investment Group INC 304 21.4.1 Reference Article 304 21.4.2 Background 304 21.4.3 Observations 305 21.5 Lancer Management Group LLC and Lancer Management Group II LLC 305 21.5.1 Reference Article 305 21.5.2 Background 305 21.5.3 Observations 307 21.6 Lipper Holdings, LLC 308 21.6.1 Reference Article 308 21.6.2 Background 308 21.6.3 Observations 309 21.7 Millennium Capital Group LLC 310 21.7.1 Reference Article 310 21.7.2 Background 310 21.7.3 Observations 311 CHAPTER 22 Case Studies 2004 313 22.1 Dobbins Offshore Capital LLC 313 22.1.1 Reference Article 313 22.1.2 Background 313 22.1.3 Observations 314 22.2 Fountainhead Asset Management LLC 314 22.2.1 Reference Article 314 22.2.2 Background 314 22.2.3 Observations 315 22.3 LF Global Investments LLC 316 22.3.1 Reference Article 316 22.3.2 Background 316 22.3.3 Observations 317 22.4 Nextra Investment Management SGR 317 22.4.1 Reference Article 317 22.4.2 Background 317 22.4.3 Observations 318 CHAPTER 23 Case Studies 2005 319 23.1 Creedon Keller & Partners 319 23.1.1 Reference Article 319 23.1.2 Background 319 23.1.3 Observations 320 23.2 Aman Capital Management Pte LTD 320 23.2.1 Reference Article 320 23.2.2 Background 320 23.2.3 Observations 321 23.3 Applegate Investments 322 23.3.1 Reference Article 322 23.3.2 Background 322 23.3.3 Observations 322 23.4 Amerindo Investment Advisors Inc 322 23.4.1 Reference Article 322 23.4.2 Background 322 23.4.3 Observations 323 23.5 Lake Dow Capital, LLC 324 23.5.1 Reference Article 324 23.5.2 Background 324 23.5.3 Observations 324 23.6 Bailey Coates Asset Management LLP 325 23.6.1 Reference Article 325 23.6.2 Background 325 23.6.3 Observations 325 23.7 Bayou Management LLC 325 23.7.1 Reference Article 325 23.7.2 Background 325 23.7.3 Observations 327 23.8 AJR Capital Inc and Century Maxim Fund Inc. 327 23.8.1 Reference Article 327 23.8.2 Background 327 23.8.3 Observations 328 23.9 Durus Capital Management LLC 328 23.9.1 Reference Article 328 23.9.2 Background 328 23.9.3 Observations 330 23.10 Entrust Capital Management Inc 331 23.10.1 Reference Article 331 23.10.2 Background 331 23.10.3 Observations 331 23.11 EPG Capital Management Inc 331 23.11.1 Reference Article 331 23.11.2 Background 331 23.11.3 Observations 333 23.12 HMC International, LLC 333 23.12.1 Reference Article 333 23.12.2 Background 333 23.12.3 Observations 334 23.13 K.L. Group LLC, KL Florida LLC & KL Triangulum Management LLC 334 23.13.1 Reference Article 334 23.13.2 Background 334 23.13.3 Observations 335 23.14 Hunter Capital Management LP 335 23.14.1 Reference Article 335 23.14.2 Background 335 23.14.3 Observations 336 23.15 Linuxor Asset Management LLC 336 23.15.1 Reference Article 336 23.15.2 Background 336 23.15.3 Observations 337 23.16 Lyceum Capital LP 338 23.16.1 Reference Article 338 23.16.2 Background 338 23.16.3 Observations 338 23.17 Marin Capital Partners LLC 339 23.17.1 Reference Article 339 23.17.2 Background 339 23.17.3 Observations 339 23.18 Millennium Management LLC 339 23.18.1 Reference Article 339 23.18.2 Background 339 23.18.3 Observations 341 23.19 Norshield Asset Management (Canada) Ltd 341 23.19.1 Reference Article 341 23.19.2 Background 341 23.19.3 Observations 343 23.20 Philadelphia Alternative Asset Management Company LLC 344 23.20.1 Reference Article 344 23.20.2 Background 344 23.20.3 Observations 345 23.21 Phoenix Kapitaldienst GMBH 345 23.21.1 Reference Article 345 23.21.2 Background 345 23.21.3 Observations 346 23.22 Pippin Investments 347 23.22.1 Reference Article 347 23.22.2 Background 347 23.22.3 Observations 347 23.23 Portus Alternative Asset Management Inc 348 23.23.1 Reference Article 348 23.23.2 Background 348 23.23.3 Observations 349 23.24 Refco Inc. 350 23.24.1 Reference Article 350 23.24.2 Background 350 23.24.3 Observations 351 23.25 Springer Investment Management Inc 351 23.25.1 Reference Article 351 23.25.2 Background 351 23.25.3 Observations 352 23.26 Tenet Asset Management LLC 353 23.26.1 Reference Article 353 23.26.2 Background 353 23.26.3 Observations 353 23.27 Melhado, Flynn & Associates Inc 354 23.27.1 Reference Article 354 23.27.2 Background 354 23.27.3 Observations 355 23.28 Veras Investment Partners LLC 356 23.28.1 Reference Article 356 23.28.2 Background 356 23.28.3 Observations 357 23.29 Wood River Capital Management LLC 357 23.29.1 Reference Article 357 23.29.2 Background 357 23.29.3 Observations 358 CHAPTER 24 Case Studies 2006 359 24.1 Amaranth Advisors LLC 359 24.1.1 Reference Article 359 24.1.2 Background 359 24.1.3 Observations 368 24.2 Archeus Capital Management LLC 370 24.2.1 Reference Article 370 24.2.2 Background 370 24.2.3 Observations 372 24.3 Benchmark Asset Management UK 372 24.3.1 Reference Article 372 24.3.2 Background 372 24.3.3 Observations 373 24.4 Capitalworks Investment Partners, LLC 373 24.4.1 Reference Article 373 24.4.2 Background 373 24.4.3 Observations 374 24.5 CMG-Capital Management Group Holding Company, LLC 374 24.5.1 Reference Article 374 24.5.2 Background 374 24.5.3 Observations 375 24.6 Directors Financial Group Ltd 376 24.6.1 Reference Article 376 24.6.2 Background 376 24.6.3 Observations 378 24.7 Endeavour Funds Management Limited 378 24.7.1 Reference Article 378 24.7.2 Background 378 24.7.3 Observations 379 24.8 Global Crown Capital LLC and J&C Global Securities Investments LLC 379 24.8.1 Reference Article 379 24.8.2 Background 379 24.8.3 Observations 381 24.9 GLG Partners Inc 381 24.9.1 Reference Article 381 24.9.2 Background 381 24.9.3 Observations 385 24.10 International Management Associates LLC 385 24.10.1 Reference Article 385 24.10.2 Background 385 24.10.3 Observations 386 24.11 Brummer & Partners 386 24.11.1 Reference Article 386 24.11.2 Background 386 24.11.3 Observations 387 24.12 Manchester Trading LLC 387 24.12.1 Reference Article 387 24.12.2 Background 387 24.12.3 Observations 388 24.13 Motherrock LP 388 24.13.1 Reference Article 388 24.13.2 Background 388 24.13.3 Observations 388 24.14 Langley Capital LLC 389 24.14.1 Reference Article 389 24.14.2 Background 389 24.14.3 Observations 390 24.15 RCG Capital Advisors LLC 391 24.15.1 Reference Article 391 24.15.2 Background 391 24.15.3 Observations 391 24.16 Samaritan Asset Management Services Inc 392 24.16.1 Reference Article 392 24.16.2 Background 392 24.16.3 Observations 393 24.17 Seaforth Meridian Advisors LLC 394 24.17.1 Reference Article 394 24.17.2 Background 394 24.17.3 Observations 396 24.18 Plusfunds Group Inc 396 24.18.1 Reference Article 396 24.18.2 Background 396 24.18.3 Observations 397 24.19 Spinner Asset Management LLC 398 24.19.1 Reference Article 398 24.19.2 Background 398 24.19.3 Observations 399 24.20 Viper Capital Management LLC and Compass Fund Management LLC 399 24.20.1 Reference Article 399 24.20.2 Background 399 24.20.3 Observations 400 CHAPTER 25 Cases Studies 2007 401 25.1 Absolute Capital Group Ltd 401 25.1.1 Reference Article 401 25.1.2 Background 401 25.1.3 Observations 404 25.2 Absolute Capital Management Ltd 404 25.2.1 Reference Article 404 25.2.2 Background 404 25.2.3 Observations 408 25.3 Aragon Capital Management LLC 409 25.3.1 Reference Article 409 25.3.2 Background 409 25.3.3 Observations 410 25.4 AXA Investment Managers Inc 410 25.4.1 Reference Article 410 25.4.2 Background 410 25.4.3 Observations 411 25.5 Basis Capital Funds Management Ltd 412 25.5.1 Reference Article 412 25.5.2 Background 412 25.5.3 Observations 414 25.6 Beacon Rock Capital, LLC 415 25.6.1 Reference Article 415 25.6.2 Background 415 25.6.3 Observations 416 25.7 Bear Stearns Asset Management Inc 416 25.7.1 Reference Article 416 25.7.2 Background 416 25.7.3 Observations 418 25.8 Cambridge Place Investment Management LLP 419 25.8.1 Reference Article 419 25.8.2 Background 419 25.8.3 Observations 420 25.9 Cheyne Capital Management (UK) LLP 420 25.9.1 Reference Article 420 25.9.2 Background 420 25.9.3 Observations 422 25.10 Clarion Management LLC 422 25.10.1 Reference Article 422 25.10.2 Background 422 25.10.3 Observations 423 25.11 Cooper Hill Partners LLC 424 25.11.1 Reference Article 424 25.11.2 Background 424 25.11.3 Observations 424 25.12 DSJ International Resources Ltd (Chelsey Capital) 424 25.12.1 Reference Article 424 25.12.2 Background 424 25.12.3 Observations 425 25.13 Evercrest Capital (PTY) Ltd 425 25.13.1 Reference Article 425 25.13.2 Background 425 25.13.3 Observations 426 25.14 Forsyth Partners Ltd 426 25.14.1 Reference Article 426 25.14.2 Background 426 25.14.3 Observations 427 25.15 Braddock Financial Corporation 428 25.15.1 Reference Article 428 25.15.2 Background 478 25.15.3 Observations 428 25.16 Geronimo Financial Asset Management LLC 429 25.16.1 Reference Article 429 25.16.2 Background 429 25.16.3 Observations 429 25.17 Goldlink Capital Asset Management Limited 429 25.17.1 Reference Article 429 25.17.2 Background 429 25.17.3 Observations 431 25.18 Caribbean Commodities Ltd 431 25.18.1 Reference Article 431 25.18.2 Background 431 25.18.3 Observations 433 25.19 Haidar Capital Management LLC 433 25.19.1 Reference Article 433 25.19.2 Background 433 25.19.3 Observations 434 25.20 Lake Shore Asset Management Ltd 434 25.20.1 Reference Article 434 25.20.2 Background 434 25.20.3 Observations 436 25.21 Lydia Capital LLC 436 25.21.1 Reference Article 436 25.21.2 Background 436 25.21.3 Observations 438 25.22 Bear Stearns & Co Inc 438 25.22.1 Reference Article 438 25.22.2 Background 438 25.22.3 Observations 439 25.23 MDL Capital Management Inc 440 25.23.1 Reference Article 440 25.23.2 Background 440 25.23.3 Observations 441 25.24 Mercurius Capital Management Limited 442 25.24.1 Reference Article 442 25.24.2 Background 442 25.24.3 Observations 444 25.25 Goldman Sachs Group Inc 445 25.25.1 Reference Article 445 25.25.2 Background 445 25.25.3 Observations 445 25.26 ODDO and CIE/ODDO Asset Management 446 25.26.1 Reference Article 446 25.26.2 Background 446 25.26.3 Observations 447 25.27 Eiger Capital Limited 447 25.27.1 Reference Article 447 25.27.2 Background 447 25.27.3 Observations 448 25.28 Sachsen LB 449 25.28.1 Reference Article 449 25.28.2 Background 449 25.28.3 Observations 449 25.29 BNP Paribas SA 450 25.29.1 Reference Article 450 25.29.2 Background 450 25.29.3 Observations 450 25.30 Pirate Capital LLC 451 25.30.1 Reference Article 451 25.30.2 Background 451 25.30.3 Observations 452 25.31 Quattro Global Capital LLC 452 25.31.1 Reference Article 452 25.31.2 Background 452 25.31.3 Observations 453 25.32 IKB Credit Asset Management GmbH 453 25.32.1 Reference Article 453 25.32.2 Background 453 25.32.3 Observations 454 25.33 Ritchie Capital Management LLC 455 25.33.1 Reference Article 455 25.33.2 Background 455 25.33.3 Observations 457 25.34 Rubicon Fund Management LLP 458 25.34.1 Reference Article 458 25.34.2 Background 458 25.34.3 Observations 459 25.35 Sentinel Management Group Inc 459 25.35.1 Reference Article 459 25.35.2 Background 459 25.35.3 Observations 461 25.36 Sowood Capital Management LP 462 25.36.1 Reference Article 462 25.36.2 Background 462 25.36.3 Observations 463 25.37 Stratix Asset Management LLC 464 25.37.1 Reference Article 464 25.37.2 Background 464 25.37.3 Observations 465 25.38 Synapse Investment Management LLP 465 25.38.1 Reference Article 465 25.38.2 Background 465 25.38.3 Observations 465 25.39 TPG-Axon Capital Management LP 466 25.39.1 Reference Article 466 25.39.2 Background 466 25.39.3 Observations 467 25.40 Tribeca Global Management LLC 467 25.40.1 Reference Article 467 25.40.2 Background 467 25.40.3 Observations 467 25.41 Dillon Read Capital Management LLC 468 25.41.1 Reference Article 468 25.41.2 Background 468 25.41.3 Observations 468 25.42 UBS Securities LLC 469 25.42.1 Reference Article 469 25.42.2 Background 469 25.42.3 Observations 470 25.43 Union Investment Asset Management Holding AG 471 25.43.1 Reference Article 471 25.43.2 Background 471 25.43.3 Observations 471 25.44 United Capital Markets Holdings Inc 472 25.44.1 Reference Article 472 25.44.2 Background 472 25.44.3 Observations 472 25.45 Wharton Asset Management GB Ltd 473 25.45.1 Reference Article 473 25.45.2 Background 473 25.45.3 Observations 474 CHAPTER 26 Case Studies 2008 475 26.1 Citigroup Global Markets Inc MAT/ASTA Funds 475 26.1.1 Reference Article 475 26.1.2 Background 475 26.1.3 Observations 476 26.2 Gabriel Capital Corporation 477 26.2.1 Reference Article 477 26.2.2 Background 477 26.2.3 Observations 480 26.3 Blue River Asset Management LLC 481 26.3.1 Reference Article 481 26.3.2 Background 481 26.3.3 Observations 483 26.4 Bluebay Asset Management PLC 484 26.4.1 Reference Article 484 26.4.2 Background 484 26.4.3 Observations 485 26.5 Carlyle Investment Management LLC 486 26.5.1 Reference Article 486 26.5.2 Background 486 26.5.3 Observations 488 26.6 Centaurus Capital Ltd 488 26.6.1 Reference Article 488 26.6.2 Background 488 26.6.3 Observations 489 26.7 1861 Capital Management LLC 489 26.7.1 Reference Article 489 26.7.2 Background 489 26.7.3 Observations 490 26.8 Andor Capital Management LLC 490 26.8.1 Reference Article 490 26.8.2 Background 490 26.8.3 Observations 491 26.9 Ceres Capital Partners LLC 491 26.9.1 Reference Article 491 26.9.2 Background 491 26.9.3 Observations 493 26.10 Citadel LLC 493 26.10.1 Reference Article 493 26.10.2 Background 493 26.10.3 Observations 494 26.11 Coadum Advisers Inc & Mansell Capital Partners III LLC 495 26.11.1 Reference Article 495 26.11.2 Background 495 26.11.3 Observations 496 26.12 Cornerstone Quantitative Investment Group Inc 496 26.12.1 Reference Article 496 26.12.2 Background 496 26.12.3 Observations 497 26.13 Citigroup Capital Markets Inc CSO Partners Fund 497 26.13.1 Reference Article 497 26.13.2 Background 497 26.13.3 Observations 497 26.14 Dalton Strategic Partnership LLP 498 26.14.1 Reference Article 498 26.14.2 Background 498 26.14.3 Observations 499 26.15 D.B. Zwirn & Co. L.P. 499 26.15.1 Reference Article 499 26.15.2 Background 499 26.15.3 Observations 501 26.16 Deephaven Capital Management LLC and Knight Capital Group 502 26.16.1 Reference Article 502 26.16.2 Background 502 26.16.3 Observations 503 26.17 Drake Capital Management LLC 503 26.17.1 Reference Article 503 26.17.2 Background 503 26.17.3 Observations 504 26.18 Dreier LLP 505 26.18.1 Reference Article 505 26.18.2 Background 505 26.18.3 Observations 505 26.19 Endeavour Capital LLP 506 26.19.1 Reference Article 506 26.19.2 Background 506 26.19.3 Observations 507 26.20 Epic Capital Management Inc 507 26.20.1 Reference Article 507 26.20.2 Background 507 26.20.3 Observations 508 26.21 Deltaone Capital Partners Corp 508 26.21.1 Reference Article 508 26.21.2 Background 508 26.21.3 Observations 509 26.22 Citigroup Alternative Investments LLC 510 26.22.1 Reference Article 510 26.22.2 Background 510 26.22.3 Observations 510 26.23 Fairfield Greenwich Advisors LLC 511 26.23.1 Reference Article 511 26.23.2 Background 511 26.23.3 Observations 512 26.24 Focus Capital Investors LLC 512 26.24.1 Reference Article 512 26.24.2 Background 512 26.24.3 Observations 513 26.25 Fortress Investment Group LLC 513 26.25.1 Reference Article 513 26.25.2 Background 513 26.25.3 Observations 514 26.26 Front Street Capital Corporation 515 26.26.1 Reference Article 515 26.26.2 Background 515 26.26.3 Observations 516 26.27 Global Opportunities (GO) Capital Asset Management B.V. 517 26.27.1 Reference Article 517 26.27.2 Background 517 26.27.3 Observations 518 26.28 Barclays Bank PLC 518 26.28.1 Reference Article 518 26.28.2 Background 518 26.28.3 Observations 519 26.29 Gordian Knot Ltd 520 26.29.1 Reference Article 520 26.29.2 Background 520 26.29.3 Observations 522 26.30 Gradient Capital Partners LLP 523 26.30.1 Reference Article 523 26.30.2 Background 523 26.30.3 Observations 524 26.31 Headstart Advisers Limited 525 26.31.1 Reference Article 525 26.31.2 Background 525 26.31.3 Observations 526 26.32 Heritage Wealth Management Inc 526 26.32.1 Reference Article 526 26.32.2 Background 526 26.32.3 Observations 528 26.33 Highland Capital Management LP 528 26.33.1 Reference Article 528 26.33.2 Background 528 26.33.3 Observations 529 26.34 ING (NZ) Limited 529 26.34.1 Reference Article 529 26.34.2 Background 529 26.34.3 Observations 530 26.35 Insana Capital Partners LP 531 26.35.1 Reference Article 531 26.35.2 Background 531 26.35.3 Observations 532 26.36 Lahde Capital Management LLC 532 26.36.1 Reference Article 532 26.36.2 Background 532 26.36.3 Observa
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