World Economic News
Hedge Funds Tanking in Japan: End of Yen Carry Trade?
One of Japan's biggest hedge funds, run by U.S.-based Whitney & Co., has lost about 23% so far in 2006, while another Whitney fund has dropped about 29%, as rumors that interest rates may rise of zero percent spelled the end of the yen carry trade. According to the Wall Street Journal Aug. 16, Eurekahedge Pte. Ltd., a Singapore firm that monitors hedge-fund financial results, reported that of 104 hedge funds speculating only in Japanese shares, 62 that have reported financial results, and 47 have lost money through July.
Locust Funds' Summer Offensive
The Houston Investment Group is making a grab for a leading German supplier of municipal water-technology, according to news wires Aug. 15. The HIG private equity fund, based in New York and Tel Aviv, plans to buy Lurgi Lentjes, a firm specializing in design and development of equipment for water, waste water, and waste management, notably in municipalities. One of the HIG bosses is Walter Kuna, long-time Lazard banker, who built up Lazard's Germany operation in 1999.
At the same time, Westdeutsche Landesbank (West LB) wants to sell its 27% share in HSH Nordbank, the central bank of the two northern states, Hamburg and Schleswig-Holsteinit would be the first privatization of state bank shares. The Cerberus fund has been a favorite candidate for the takeover, but there is opposition in Hamburg and Schleswig-Holstein to the fund, which has a bad name for its aggressive investment conduct. Cerberus has been a favorite also, because West LB chairman Thomas Fischer was among the consultants who helped to establish the German operation of Cerberus, in 2002.
Is the "alternate candidate," Corsair Capital, any better? Corsair, which runs the same portfolio of takeovers as Cerberus, was originally groomed at JP Morgan Chase, one of the core synarchist banking houses. "Corsair", by the way, is just another name for "pirate."