Vega Asset Management

Vega’s Other Letter To Investors

lope-de-vega.jpgYesterday we gave you a mission. And now we can say that the mission was a resounding success. It’s not just an event, it’s an internal transformation. Failure was not an option. Impossible is…
Sorry. Our brains are still burning from this.
Back to the matter at hand. We asked for Michael Mann’s letter to Vega investors. And you produced. Click the link below to download a pdf of Mann’s letter.
[Michael Mann’s Letter to Vega Investors]

Vega Confirms $5 Billion Letter

So just had a nice chat with the folks over at Vega. And they’ve confirmed that the letter we printed earlier today was sent out by Grant Hutchison.
Incidentally, Grant was already done for the day when we called at 3 PM. So apparently they’re not exactly in crisis mode there.
[Earlier DealBreaker coverage of Vega]

Vega: “We’re Not Broke Yet”

lope-de-vega.jpgIt seems that all this talk of the Madrid-London-New York hedge fund Vega Asset Management possibly being down to their bottom billion has caught their attention. It certainly has caught the attention of Vega’s investors. After a few days of refusing to disclose how much they have left in their coffers, it seems that Vega has decided it needed to be a little less reticent in order to avoid investor panic. We’re told they’ve written a letter to investors reassuring them that they haven’t lost quite as much as the rumors had it.
And we’ve got the letter, or possibly an excerpt of it, right after the jump. This is totally unconfirmed, of course. No one at Vega could be immediately reached for comment.

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How Far Can Vega Fall?

lope-de-vega.jpgThe largest hedge fund run by Vega Asset Management has been hit up for redemption requests for as much as $400 million, according to Bloomberg’s sources. The Vega Select Opportunities once had around $2.2 billion of assets but was down to $1 billion at the beginning of September. And since September seems to have been a rough patch for the fund as well, it’s unclear whether the fund will be able to continue after the redemptions.
We hear that Vega’s other funds are not quite down as much but it’s not clear how much money the firm still has under management. Rumors consistently say that the overall assets at Vega may be as low as ten percent of its one time high of $12 billion. That, however, would mean that all the funds at Vega add up to only $200 million, which seems rather low.
Vega managers are holding their cards pretty close to their chests now, refusing to confirm how much they are still managing. But, as one of our commenters asked, it’s fair to ask whether the folks at Vega are now managing any money other than their own.
[Note: As always, we’d love to hear more on Vega from our readers. Leave a comment or drop us an email : tips (at) dealbreaker (dot) com. And don’t worry. All tips are presumably anonymous. We’ll protect your identity with every last fiber of our beings.]

Vega Select Investors Seek Return of $400 Million, People Say

More Losses At Vega

lope-de-vega.jpgVega sent a letter to investors today giving some details on its recent losses, Reuters reports. Its Vega Select Opportunities Fund is down 16.7 percent so far this year, after a net loss of 10.6 percent in September alone.
In the letter, Vega president Michael Mann attempts to reassure investors that the fund is “strong and stable” and is not in danger of a total collapse. But remember that’s what we heard from Amaranth at first. And now the fund is said to be liquidating all its assets.
So how badly has Vega been hit overall. Rumors are still circulating that total assets under management are down to $1 billion.
Anyone have a copy of the letter? We’d like to see it for ourselves. Send it to tips (at) dealbreaker (dot) com. (And, of course, we’ll keep your identity strictly confidential. Bess will even do a Judy Miller turn in jail if it really comes down to it.)
Vega says Select fund down 16.7 pct in 2006 [Reuters]

Vega Asset Management Hit Hard

We told you this on Tuesday, but now the Financial Times is reporting that the assets under management by Vega may be down as low as $1 billion.

Steep trading losses at Vega Asset Management, an embattled hedge fund firm, may lead some investors to withdraw money, cutting its assets to as low as $1bn, from a peak of about $12bn.
Hedge fund industry insiders said a Vega bet on bond prices had sparked redemptions and inquiries about withdrawals from some fund of hedge fund investors. Ben Mann, a spokesman for Vega, said: “It is not the case that redemptions for this month are material or that they have added to trading losses.” But Mr Mann said he expected redemptions, although it was “too early to speculate about these”.
The investors’ actions, coupled with Vega’s losses as a result of a losing bet on the direction of Japanese, US and European bonds, which have rallied recently, have seen the fund’s assets sink.

Vega facing withdrawals after steep losses
[Financial Times]

Trouble at Vega

IIt’s definitely not a good sign when a hedge fund has to say it “has no plans to cease operations.” Let’s call that the Amaranth line, and acknowledge that when you have to keep saying you’re still in business you might not be for very long.
Following up on rumors Dealbreaker first reported yesterday, the Wall Street Journal gives us the skinny on Vega. The shorter version: assets under management down to $3 billion.

The latest to falter: Vega Asset Management. One of the world’s largest hedge funds a few years ago, Vega has suffered losses from a bad bet against U.S. bonds, and is now down roughly 75% from its peak two years ago to about $3 billion in assets. The firm says it has no plans to cease operations…
Vega, which has offices in Spain, London and New York, managed about $12 billion a couple of years back and about $6 billion as recently as January. It once was seen as a winner in the growing popularity of hedge funds among large institutions.
But Vega has suffered a series of losses in various markets in the past few years. Most recently, Vega placed a big wager that the price of U.S., European and Japanese bonds would fall, a Vega executive says. Instead, the bond market has rallied sharply in recent weeks, amid signs of slowing global economic growth, leading to losses as bond prices rose. Vega’s largest fund, Vega Select Opportunities fund, which manages about $1.4 billion and is run by star trader Ravinder Mehra, lost about 11.5% of its value in September — much of it coming in the last week of the month — and is down about 17.5% so far this year.

Got any news on Vega/Pirate/Amaranath? Send word to tips (at) dealbreaker (dot) com. We won’t tell anyone who told us. Promise.

Despite Blue-Chip Gains, Hedge Funds Increasingly Are Faltering and Closing

Another Hedge Fund In Trouble?

It’s pretty public knowledge that funds run by Vega Asset Management suffered some serious losses recently. Rumors have begun to circulate, however, that those losses might have triggered redemptions by funds-of-funds that have seriously depleted the assets under management by Vega. We’ve heard that total funds under management may now be as low as $1 billion, down from a one-time high of $12 billion.
[Editors note: Keep in mind that this is at exactly the stage we’re saying it is—“rumors.” Vega could not immediately be reached for comment and we could not find any independent corroboration for the rumors.]