We posted this yesterday but it’s not available through our old link (nor is it on FT Alphaville, or Naked Shorts, where it was previously…fishy indeed). So we’re putting it up again as an easy to view image file. No downloading necessary. See especially: “Each fund contains margin restrictions and maximum capital restrictions to prevent serious liquidity and contagion risks from arising” and “Violation of restrictions eliminates ALL capital locks for investors in the fund,” p.2. Though the pictures are our favorite parts, particularly the one of the flames, also p. 2 (“Our fund is on FIRE!”? “Investing in our fund will be like putting your money in a paper bag and lighting it on fire”? These things are so subjective).
After Amaranth
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After Amaranth
Nick Maounis: ‘What would you say if I told you I could get your money to you in a timely fashion if you’d agree not to sue me? Is that something you’d be interested in?’
By Bess LevinPretty exciting proposal today from a “group of Amaranth investors” offering those who lost money in the Brian Hunter-led debacle of ’06:
1. Don’t sue us and we’ll get you your money faster OR
2. Don’t agree not to sue us and we’ll take a portion of the money you are owed and use it defending ourselves.
Amaranth tests the lawsuit waters [CNN Money]
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After Amaranth
It’s Going To Reach Out And Grab Yah! Blackstone’s Business Plan
By John Carney
Writing about Wall Street for Time Magazine is a bit like writing about Williamsburg nightlife for the New York Times. Most of your readers have no idea what you’re talking about, so you can get away with almost anything. It probably gets a bit frustrating to know that none of the people you write about ever notice you but as a trade-off they never write angry letters to your editors either.
Still, Mike Kinsley’s take on the how Blackstone’s business works is pretty much just as clear as what Blackstone describes in its prospectus:
What do Schwarzman and Blackstone do for all this money? Oh, this and that, but mainly they buy publicly traded companies, take them private (that is, replace the public stockholders with private equity from institutions and rich individuals), do some abracadabra that increases the companies’ value and then take them public again.
We’d say that “it’s all done with smoke and mirrors” but the drug references are getting a bit heavy today.
Abracadabra for Sale [Time Magazine]
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After Amaranth
Investors In Brian Hunter’s New Hedge Fund Can Opt Out Of Brian Hunter
By John Carney
Details are emerging about the funds managed by the hedge fund reportedly founded by Brian Hunter, the energy trader who became famous when his natural gas bets helped topple Amaranth Advisors just six months ago. Notable features of the fund they are calling Solengo: quick exits for investors if portfolio managers cross risk control lines and the ability to opt out of funds managed by Brian Hunter himself. (We’re cribbing all this from Ann Davis, the Wall Street Journalreporter who had the cover story interview with Hunter shortly after news broke of Amaranth’s woes. The closest we’ve ever been to Hunter is hearing he ate at Sparks. Maybe he’s pissed about that fish picture.)
One other notable feature: the fund’s founders won’t discuss why they’ve named it after an Italian wine. Which raises the hairs on the back of our neck. These guys are going to make the very name of their fund an inside joke, and they expect you to give them your money? We’re kind of worried that Solengo might also be the name of the best stripper in Calgary.
Trader Behind Amaranth Collapse Launches Fund Focusing on Commodities [Wall Street Journal]
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After Amaranth
Brian Hunter’s New Fund Looks To Make Money, Delight With Chocolatey Aftertaste
By Bess LevinCNBC has just reported that famed Amaranth trader and icthyophile Brian Hunter is starting his own hedge fund to be called “Solengo,” like the wine. Run out of Calgary, Alberta and Greenwich, CT, “Solgengo” is still hiring traders and seeking money for a series of funds across the commodities space, an area that Hunter is still apparently “very comfortable in,” even after that little snafu that happened last year. For “Solengo,” Hunter has wrangled former Amaranth energy traders Shane Lee and Matthew Calhoun, as well as former quantitative analyst for risk management, Karl Koster.
“Solgengo,” potential investors should note, is a wine whose “concentrated aromas of berries and chocolate make the aftertaste last for minutes.” Its color is deep ruby to purple, with a captivating, rich, dense nose, replete with “ripe fruits and sweet spicy aromas. The palate is structured and “temerped by silky tannis.” A sometime wine writer and DB director of beverages notes that “Solengo” is a “California monster,” a description from which there is much to extrapolate: Hubris. Inferiority complex vis-avis better quality European wines. A need to crush everything in its path. And things of that nature.
On a related note, we’ll be starting our own hedge fund in Second Life later this year called Franzia. More info TK.
Trader in Amaranth Failure Starts New Hedge Fund [WSJ]
At least one Democratic senator doesn’t seem to be afraid of taking on hedge funds, with the rest of Congress’s new majority party safely in thrall to hedgies’ campaign generosity. Senator Jeff Bingaman (D-NM) sent letters to FERC and CFTC yesterday wondering aloud why some weird/unexplained price movements in natural gas contracts just happened to have occurred right around the time a “multi-strategy” hedge fund in Greenwich lost a sizeable chunk o’ change. Alternatively, Sens. Chris Dodd and Pat Leahy prefer a less combative approach by which we either mean whatever it takes to not create tension at the cocktail parties they all attend together or just taking things easy around the office (No pants Thursdays!—or was that just when we were interning in the Corzine office, summer ’05?).
Hate mail, after the jump.
*the only reason this is our third Amaranth post of the day is because we’re indulging the J-man, as it’s his first day back from prison.
While Citadel and JP Morgan may have benefited greatly from their cannibalization of that “multi-strategy” hedge fund up in Greenwich, some others aren’t fairing so well. Ivy Asset Management, having lost a report $1 billion in redemptions as a result of its Amaranth investments, will not be giving out any bonuses this year.
The absconded cash, pony rides and gumball machines, in conjunction with an exec-level shake-up (former CIO Adam Geiger left in December, replaced by Peter Noris, of Northstar Financial Services) and a difficulties raising assets have purportedly encouraged some employees to look for jobs at other funds, a source told HFMWeek. We hear Tom Hudson is currently looking for some new deck-swabbers and plant-waterers.
Ivy employees lose out on bonuses [HFMWeek reg required]
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