Search results for

Hedge funds are resorting to fee cuts in an attempt to discourage investors from redemptions. Ramius Capital, which has two funds totalling $11 billion in assets, reduced its incentive fee last month from 20% to 15% for current investors who agree to leave their money in its funds. Those investors would enjoy the lower fees until the end of 2010. Investors that add capital won’t pay an incentive fee on the additional funds until the beginning of 2010.

The BBC has launched a new series in the UK that seems eerily well timed considering the current financial situation. Little Dorrit, which premiered on Sunday October 26, is the story of a family that has fallen into debt and lost its house thanks to the overly aggressive lending policies of banks on the brink of world recession.

Central bank governor reveals the extent of intervention required by the FX losses of a Mexican retailer.

"This is a profound ethical issue. These are very sophisticated operations where the counterparty was not a hedge fund – it was not even a financial institution. Should a grocery chain be selling volatility protection?"

The credit crisis has crossed the Pacific and hit home in Asia and is now even being felt in the streets of Kuala Lumpur, the capital of oil-rich Malaysia.

When structured products started turning into four-letter words, investors should have taken heed.

63,300,000,000 the amount in dollars of equity capital raised by financial institutions in the third quarter of 2008. The quarterly amount is the second highest on record after the second quarter of 2008, when financial institutions raised a record $109.1 billion. Finance sector ECM deals accounted for nearly half of the total volume of transactions in the third quarter.

Cash-strapped Pakistan is trying every trick in the book to stave off a humiliating default on its mountain of foreign borrowings and inject some life into its moribund share markets. Mirroring the financial crisis elsewhere, the State Bank of Pakistan on October 16 moved to inject liquidity into the country’s financial system, cutting the cash reserve ratio – the amount banks are required to hold in reserve – by two percentage points, to 6%, and promising a further one percentage point cut by November 15. SBP governor Shamshad Akhtar promised the country’s embattled bankers that the move would immediately inject up to Rs180 billion ($2.2 billion) into the banking system, with a further Rs90 billion in capital to be freed up "at a later date".

Mitsubishi UFJ Financial Group closed its $9 billion investment in Morgan Stanley on October 13, ending speculation that the deal might not go ahead. The terms of the deal were more favourable to the Japanese institution than had originally been agreed, reflecting Morgan Stanley’s troubles. Rather than spending $3 billion of the total on ordinary shares at $25.25 each and the rest on convertible preferred shares with a conversion price of $31.25, MUFG will get a total of $7.8 billion-worth of the convertible preferred shares converting at $25.25 and the remaining $1.2 billion in preferred shares. The new deal offers substantially more protection for MUFG on its investment since preferred shares offer a fixed yield and their holders rank above common equity owners.

Under pressure from investors to put money to work, private equity firms are reconsidering the structure of their investment strategies.

Russia, Iran and Qatar have signed a framework agreement with a view to establishing a gas cartel. Commenting on the deal, Alexei Miller, chief executive of Russian gas company Gazprom, says: "We have decided to have closer contacts, and it can be said that a large gas trio has been formed." It remains to be seen if the new agreement will extend beyond ensuring commonly agreed production targets into regulating gas prices on the world market as Opec does for the oil market.