Blackstone acquires Emdeon for $ 3B

Private equity and hedge fund firm Blackstone Group will receive medical data provider Emdeon to approximately 3 billion dollars.

The deal, announced Thursday by both parties, will result in Emdeon becomes a private company and Emdeon shareholders to receive $ 19 per share in cash.

The acquisition is expected to be completed in the second half of 2011.

Emdeon stock jumped 14 percent, after news of the acquisition, for $ 18.50 during trading Thursday afternoon. Emdeon, based in Nashville, Tenn., last year made 19.5 million dollars in net income on $ 1 billion in revenue.

The New York-based Blackstone has total assets under management of 159 billion dollars.

HFN regional focus report: the Middle East and Africa

Click here to read the full report.

Overview: hedge funds invest in MEA

HFN active and inactive databases have performance and asset information for 85 unique funds investing primarily in the region of the Middle East and Africa (MEA). Of these, 59 unique products of the active database. For this report, are resources grouped into one of three classifications for their regional investment focus, the Middle East/North Africa, Pan-Africa and South Africa only.

• South Africa focused funds performed well in 2011 after backlogged 2010 while MENA funds have lagged the rest of the hedge fund industry over the past three years.
• Pan-Africa funds directly the hedge fund industry since becoming a recognizably classification in 2006, but since the beginning of the uprising in Tunisia and Egypt, average performance is almost 6%.
• HFN estimates the total assets in funds that invest primarily in all three regions was 8.78 billion dollars at the end of May 2011 with AUM in MENA strategies narrowly higher than South Africa.

Months after the initiation of the revolutions in Tunisia and Egypt, MENA average fell almost 6% and Pan-African agents decreased more than 6% while South Africa focused funds increased 7%. Themes such as investment in regions vary, obviously, but each face serious headwinds shortly.

The following pages break down the qualitative composition, investors flow trends and performance of MEA focused resources to shed light on the source of their different yields and current investor sentiment against these products.

HFN database composition and its properties
The qualitative features of the Middle East and Africa focused resources in HFN database gives an indication of the dominant characteristics of these products:

• South Africa focused Fund launches was greatest in 2003 and continued in the above average by 2006, but has declined while the liquidations of cow's milk added in 2010.
• Mena Fund launches peaked in 2006 and 2007, followed by the above, average liquidation in 2009. New launches have not been near the pre-2008 prices.
• Pan-Africa funds is a relatively new group, with the launches were originally ursprungshalten 2007 and again reaches a high 2010.
• Compared to MENA focused resources, South Africa and the Pan-African agents had minimal shutdowns after the financial crisis.
• The majority of MENA funds operated by the arab States and South Africa running out in South Africa funds, but the majority of the Pan-Africa funds operated out of London.

Total assets levels
HFN has not historically tracked assets and routes for Pan-Africa and South Africa focused means of MENA. In addition, estimates the AUM below for funds which invest mainly in the regions and the total hedge fund AUM invested in the region. Total AUM hedge fund invested in the region is probably much higher because of the multi-regional emerging market funds, including investing:

• Mena focused funds AUM peaked in Q2 2008 nearly 10 billion dollars. The Summit was concurrent with high total hedge fund industry AUM, while supply decline after the financial crisis was more dramatic and recovery slower. MENA Fund AUM reached a low of less than 4 billion dollars in Q1 2009, and is now only slightly larger.
• Investor reactions to civilian uprising in the MENA region was net redemption 2011. Redemption from MENA focused strategies speeded up in March and April 2011 peaked.
• South Africa focused funds had approximately 3.27 billion dollars in AUM at end of May. Investor redemption passed appropriation during the first three quarters of 2010, but the trend seems to have reversed in 2011, but the growth has been slow.
• Pan-Africa focus Fund AUM reached estimated 977 million dollars at the end of May 2011. Despite good performance relative to industry in 2010, there were net redemption during the year. Core growth in 2011 is 2.8 per cent, which is slightly lower than average in the industry.

Correlation of returns
Figure 6 shows the relationship between monthly for MEA focused funds to other regional and country specific emerging market HFN indices and relevant equity benchmarks for three specified time frames. Information is useful to compare historical relationships and how they have changed.

• South Africa focused funds have historically had a low correlation to the country's stock markets. The ratio has been reversed in the last 12 months.
• Mena focused funds historically had low but positive correlations to other emerging markets and regional equity benchmarks, but these correlations increased and be high after the financial crisis.
• Pan-African Fund correlations have been added during the financial crisis, but has fallen back in recent months, but they still remain above historical levels.
• Mena fund performance resembles most closely that traditional emerging markets, while the Pan-Africa and South Africa funds tend to be less correlated. This illustrates the different growth stories in Africa and the larger emerging markets which are more closely related to the buy-out market influences.

Compared to other emerging markets
The table below, Figure 7 and 8 and the table at the bottom of the report, compare the returns from Mea funds to emerging market hedge fund HFN indices and regional equity indices.

• Since 2001, South Africa focused funds crisis management MSCI South Africa Index during the down months only once, the best against the record in the three groups.
• The average outperformance in the index, with South Africa funds down months since 2001 is more than 700 points. The average underperforming during positive index is slightly worse months than 450 bps.
• In the past two years, South Africa funds have seen their average outperformance in equity benchmark down months decreased and have also seen underperforming during index up months from worsening.
When comparing historical returns the last two years, only MENA resources has continued to produce returns with greater average outperformance in equity index benchmark down months than average underperforming under benchmark up-months.

Middle East and Africa UCITS products and funds of funds
HFN can create benchmarks for further subclassification of MEA products that meet the standards set out in the directive on UCITS funds of funds investing in the region.

Forward
Investors ' interest in funds focused on the markets of the Middle East and Africa have been below average for the year 2011, which is a clear indication investors aren't comfortable with the current social and political climates in the region. Outside of South Africa, has so far shown decision performance wise. In hedge fund space there is a history of the returns covered by investors who recognizes emerging opportunities sooner than the rest. The last known example is in based security after the financial crisis.

There are a number of reports from the Oakland Institute require attention for private investments, including hedge funds and other institutional investors, in soil in Africa with an eye on the development of agriculture. Reports that raises the questions of the extent to which government interests adapt to the local population and to long-term best use of land, but the existence of the research is evidence of potentially profitable opportunities in these markets. Still, there will always be political uncertainty and given the effectiveness of the insurgency in northern countries, there is still a high risk to invest in the region. In addition, it is important to remember that past performance has proven that the MENA and Pan-Africa focused funds showed high correlation to developed markets in times of global stress.

Click here to read the full report.

Shadow sows: will we or not we?

Recover, that is, from our collective economic hangover.

Economists debate about the great recession of 2008 is on the way to go for another round or if it is about to slip into history books.

You can see them lining up on both sides of the recession, closely followed by investors and, of course, politicians.

Nouriel Smirk, his gloomy prognostication and hard partying ways, is convinced that a double dip just around the corner. Oh, okay, he is 40% convinced, but it remains very high.

Then there are Ross DeVol, Milken Institute, which has made his case for a moderate and sustainable recovery.

Gold afiocionados and hedge fund managers, John Paulson, Eric Mindich, David Einhorn and George Soros have all loaded up on variations of the lovely element, if it is in the form of ETFs, mining company shares or bullion itself, although some of their effect on that particular play is murky. Is it because of inflation, or is it that when everything else is heck around you, you just want to hang on something that has a nice heft to it?

The latest figures are not doing too much for the crystal globe gazers after long hot summer: the number of long-term unemployed (those jobless for 27 weeks or more) reduced the 323,000 in August, although the overall unemployment rate remained much the same of 9,6%. Total business sales were up to $ 1.09 trillion (+ 0.7%) in August, while new orders for manufactured goods also increased 0.1 percent to 409.5 billion dollars. Retail trade and food services saw a small check-up (0.4%) to 363.7 billion dollars.

It is, of course, the housing market, which, after a slight increase on the back of a tax credit for first time home buyer, took a horrifying dip in July (tax credit expired at the end of June). Sales of new homes was down 12.4% to 276,000.

Then there are those markets that aims to bedevil all and sundry. In addition, the famous "flash crash" on May 6, the Dow Jones Industrial average is rather left around 10,000 as it climbed out of the stagnant in November 2009. But each time it fell below the magical six-figure numbers, there was a hue and cry about double-dip recession, every minute is now, just around the corner, can see it coming into focus in the near future ... Oh, not so much?

What Amuses The Shadow in all this are some of the whining from the hedge fund industry on how tough it is to monetize "those markets" and "in these economic times."

Whatever happened to "uncorrelated?" What happened to "alpha?"

Most important, whatever happened to "secured?"

Stanley Druckenmiller, one of the most famous managers, who worked with George Soros, when he made his winning bet on the British pound, closed his hedge fund Duquesne Capital Management. While the man is more than entitled to time with his family and his charity after 30 years in the industry, were his reasons for getting that he did not like the stress of trying to navigate today's markets.

There is no doubt that times are tough. But is it not what hedge fund industry was born to do--take on the risk of greater yield, but at the same time, to keep the hedges in place so that the risk would be handled correctly?

The great recession of 2008-2009 goes into the history books as just that, or if another year (or two) is added to its title, hedge funds should be out in choppy water, swim against the tide, earn money for their investors and hedge risk.

The views expressed in this column do not necessarily reflect the views of HedgeFund.net.

HFN industry report: June 2011

Click here to read the full report.

HFN industry overview: June 2011

On July 22, 2011 with 3,560 hedge fund products, reporting, HFN Hedge Fund aggregated Index was-1.16% in June and + 0.42% of the current year 2011 while S & P 500 Total Return Index (S & P) was-1.67% during the month and + 6.02% YTD.

Hedge fund industry highlights June:
• Total industry assets decreased approximately 0.91% to $ 2.562 trillion in June. Performance accounted for the majority of the reduction of the supply and net investors funding was a good thing for the month.
• The primary factors that affect performance in may continued in June and downward pressure on raw materials and increased risk aversion hurt CTA/managed futures and equity strategies for the second straight month.
• Fixed income strategies generally performed equity funds, but both groups were down in June. Mortgage sector funds posted returns lowest since November 2008, but the average yield was still positive.
• Japan focused funds posted their first positive overall results since the natural disaster in March. Resources in Japan had the best collection of regional results in June.

Before had may and June, the industry had two losing months in a row since the economic crisis. European debt crisis is likely to have resulted in reduced exposures to risky assets and losses in May and June was the result of this deleveraging. Defensive sectors and volatility strategies have done during the journey. Index HFN healthcare was + 4.10% in the second quarter and the HFN short Bias Index was + 2.80% in June.

HFN developed outliers ratio to determine which sectors producing returns outside of their normal ranges. In June, mortgage-related strategies, but positive on average, had the second lowest average ratio which is an indication that lower levels of gains and losses arise from the group.

China focused medium was the biggest drag on emerging market returns in June and equity EM strategies lost much more than the EM fixed income funds during the month. Exposure to India produced the only positive average regional yields from EM funds in June, + 0.02%, but for the year India funds still lagging all others-9.45%. Brazil is the only EM-group to remain in positive territory through the first half of 2011, + 2.88%.

For the second month, focused Australia funds declined more than any other developed market, falling-3.03% in June. The Group continued to be hurt by the fall in commodity prices and again could not surpass ASX under a month that dun, formerly a rarity for Australia focused funds.

Monthly access Flow estimates
• Estimated Total hedge fund assets at the end of June 2011 was $ 2.562 trillion, a fall of 0.91% or $ 23.6 billion in May.
• Performance accounted for a reduction of 28.1 billion dollar and investors accounted for a net inflow of 3.99 billion dollars.
• The core (% access change due to investor funding/redemption), growth was 0.17%, a decline in growth for the second month and second slowest growth rate in the past 12 months.
• Overall, the notorious AUM is now 15% during the historically high as in the second quarter of 2008.

The trend in Q2 was three months of declining growth. While investors continued to allocate more than was redeemed, moderated off. For the quarter investors to an estimated net 32.4 billion dollars for the year, a net of 75.3 billion dollars. This is much larger than either the first or second halves of 2010.

Some sector specific feeds
• The uptick in flows into Japan focused funds for the two months (April/May) after the disaster in March ended in June and the Group had little net outflows during the month.
•Insert the two months of net outflows, there was an increase in funds to funds investing in Latin America, while Eastern European focused funds continued the trend of redemption.
• For the first month of the last seven trading be focused funds had net redemption while credit strategies continued to grow at a higher rate than equity strategies.
The Angel's second consecutive month of higher than average loss, investors funding for tech sector funds continued in above average.
• Market neutral equity funds had the highest proportion of inflows strategy special in June and statistical arbitrage strategies suffered greater than average redemption.

Performance Review
Fixed income (FI) strategies
• The average return of all fixed income focused strategies was-0.18% in June and + 3.69% this year.
• Government bond strategies done best in June, + 0.41%. Mortgage strategies was the only other positive group + 0.10%. All other classifications to fixed income was down in June.
• Fixed Income Fund's assets increased 0,51% in June to an approximated 696.6 billion dollars. Investors to net 4.1 billion dollars during the month.

Equity capital (EQ) strategies
• The average return in all equity focused strategies was-1.13% in June, + 0.56% YTD.
• Short bias funds led all others in June, + 2.80%. Natural resource sector funds was at the other end of the spectrum,-3.10%.
Assets of • Equity fell an estimated-1.05% to 843.6 billion dollars in June. Investors that have been assigned a net 690 million dollars, the second lowest total in 2011.

Commodity and foreign exchange (FX) related strategies
• Broad natural resource commodity strategies was-2.56% in June and-2.34% YTD.
• Funds which invest in metals markets lost most in June-7.20-%. FX strategies followed their worst month since 2003 with another down month-0.66%, leaving Group-1.99% YTD.
• Agriculture sector funds led the sector commodity group, but were still down in June,-0.52%.

Summary analysis
Effects of broad market uncertainty seems to have finally materialized in the hedge fund flows in June. It is important to remember that an investor's decision to award or redeem General lag current or even a month earlier return data indicating June flows was evidence for increasing caution two or three months before. Given this scenario, probably it will be a slow start to the second half of 2011 in industry growth.

Click here to read the full report.

Paul singer's angry letter to investors

So, Paul Singer, tells us how you really feel?

Founder of 17 billion dollar hedge fund Elliott Management recently aired his views on the world economy in an ARG 14.000-word letter to investors, according to an article in the New York Times.

Among the many criticisms singer States in the letter, he shoots at Federal Reserve for their quantitative easing and artificially low interest rates to get the economy moving, and in European countries for supporting up Greece rather letting it fail.

Singer also provides advice to Washington politicians curmudgeonly that they should continue cutting off programs such as Medicare and Social Security (which they are engaged in recently sent the debt ceiling bill) rather than raise taxes to finance them, describing it as a strategy that will drive companies to move abroad "to places where they are not only considered may be bypassed."

He lighten up a little when he talks about the growth of his hedge fund, says it is "currently in the process of raising additional capital," reported the Times.

Singer is a libertarian conservatives, who have blasted the U.S. fiscal policy in the past including his knock on Dodd-Frank as "completely nutty."

Go to the New York Times article

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Mesirow open new HK Office

Chicago-based asset manager Mesirow financial planning to open a Hong Kong s.a.r. offices during the fourth quarter of this year.

The new subsidiary, Mesirow Financial Hong Kong Limited, will be staffed initially with personnel from the company's Fund of hedge funds group, Mesirow advanced strategies, according to an announcement by the company.

With its business to Hong Kong s.a.r., only the last post in Mesirow's expansion abroad. The company entered a joint venture partnership with Mubadala Development Company in Abu Dhabi in February, and opened a London Office in June 2007.

The company overall has 57 billion dollars in assets under management with 14.3 billion dollars managed by Mesirow advanced strategies.

MSMB capital offers $ 378 M to Amag Pharma

New York-based hedge fund MSMB Capital Management has offered an unsolicited proposal for Amag pharmaceuticals to get all its outstanding stock for $ 378 million, or $ 18 per share in cash.

In a letter to the Amags Board on Tuesday, Martin Shkreli, said the company's chief investment officer MSMB offer stems from his rejection of Amags recently proposed merger with Colorado-based drug developer, Allose Therapeutics.

Shkreli also said MSMB, a long-term investor in Amag, believes that the current management strategy "does not protect shareholders ' interests and ensure Amags Amags long-term viability."

He said since hedge fund proposal is contingent upon export performance to reach an agreement with Amag before 1 September.

Amag, Massachusetts-based manufacturer of anemia drugs, replied MSMB letter by saying its Board of Directors will carefully consider and evaluate "MSMB proposals and will inform the Amag shareholders its position.

Mass pension moveable $ 1B in hedge funds

The Massachusetts Pension reserves investment is $ 1 billion in hedge funds and another billion for local currency emerging markets debt.

50.3 Billion dollar pension is also cut three billion dollars from shares as part of the new allocation plan as an asset, a pensions and investments, the report.

The changes were approved Tuesday and will cut Prim ' S global equity allocation to 43 percent from 49 percent, with the reduction, which focused on International shares and domestic large-cap shares.

Steve Grossman, Massachusetts state Treasurer and PRIM President, said transferring the asset mix of the current assignment may take up to nine months, pensions and investment reported.

Go to pensions and investment article

Hedge Fund Manager accused of embezzlement

Pennsylvania hedge fund manager was indicted by a grand jury for allegedly lying to investors and transferred hundreds of thousands of dollars to his personal account.

Federal prosecutors in Alabama last week accused Anthony Klatch and his partner, Timothy Sullivan misleading investors in his company, activity Capital Partners, which solicited more than 2.3 million USD from eight investors, half of them Alabama residents, reported JOB options.

Prosecutors asked to Klatch and Sullivan only invested 60% of the money they raised for the task at the end of 2009, and lost it all through bad investments. The other 40% was used to pay off "angry investors" or went against the Klatchs personal account.

Go to job options article here

Hedge Fund Manager agrees to Permanently ban

Former hedge fund manager Francisco Illarramendi might see another line of work when he agreed to a permanent ban from working in the security industry.

The Securities and Exchange Commission announced the agreement on Wednesday.

The ban stems from Illarramendis guilty plea in March to four counts of securities fraud and one count of conspiracy.

The SEC alleged that Illarramendi misappropriated $ 53 million in investor assets managed by his Connecticut hedge fund firm Michael Kenwood Capital Management (MK capital), including funds from retirement as Venezuelan State oil company PDVSA.

He was also the task of the unauthorized private equity-type investments with the embezzled money as sinking 23 million dollars to the NuScale power, a startup company nuclear power in Oregon, United States.

The US Government also seized as part of his case, 230 million dollars kept in an offshore account of his hedge fund, which is kept in an unnamed U.S. bank until the completion of his case.

Illarramendi, 42, faces 70 years in prison at his sentencing.

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