Hedge world

REFILE-DEALTALK-Canada private equity could see banner 2011

Mon Mar 7, 2011 5:46pm EST

(Refiles to right spelling of Venture in first section)

* Dealmaking seen rising in 2011 from 2010-CVCA president

* Most activity likely in midmarket

* Canadian PE firms seen active in global arena in 2011

By Pav Jordan

TORONTO, March 7 (Reuters) - Canadian private equity is set
for another strong year in 2011, driven by dealmaking in its
midmarket and an improved fundraising climate, the head of the
Canadian Venture Capital and Private Equity Association says.

CVCA President Greg Smith told Reuters that large Canadian
private equity players will again turn in a strong
international performance.

"I reckon we'll have growth in the midmarket arena in
Canada, but we'll see some of the larger transactions happen on
the global arena," Smith said in an interview in Toronto.

About C$4.9 billion ($5 billion) in private equity was
invested in Canada last year, the first rise for the asset
class in three years, with deals like the Canada Pension Plot
Investment Board's C$900 million hold of a 10 percent stake
in the 407 toll highway near Toronto.

The recovery came as confidence returned to the market
after the global economic crisis, when dried-up credit markets
made it nearly impossible to bring to somebody's attention new private
equity funds.

"With a firming economy, people can be much more
comfortable about forecasts than they could have been 18 months
ago, and that generates comfort in doing deals" said Mark
McQueen, chief executive at Wellington Financial.

Already, more private equity capital has been raised in
2011 than in all of 2010.

Birch Hill Equity Partners closed a fourth private equity
fund in February, raising C$1.04 billion to invest in mid-sized
Canadian companies.

And private equity management firm Clairvest Group Inc
(CVG.TO) said in January it had its final closing for its
Clairvest Equity Partners IV Limited Partnership. It raised
C$467 million and overshot its original C$400 million target.

Total funds raised in 2010 were C$1.4 billion.

"My sense is that 2011 is vacant to be a strong year for
private equity...perhaps the strongest since the peak of the
last cycle,"," said Rick Nathan, administration director at
Kensington Capital Partners, a Toronto-based firm with some
C$500 million in capital under management.

Source: Reuters.Com

Citigroup in, Goldman out at top funds

By Maria Aspan and Ben Berkowitz

NEW YORK | Mon Mar 7, 2011 5:12am EST

NEW YORK (Reuters) - Top hedge funds turned conventional wisdom on
its head in the fourth quarter by swapping out Wall Street powerhouse
Goldman Sachs Group Inc (GS.N) for battered bailout survivor
Citigroup Inc (C.N).

Viking Global Investors manager Andreas Halvorsen sold off all his
shares in Goldman while adding to his stake in its commercial banking
rival.

Halvorsen was part of a broad rush toward Citigroup, which finished
2010 as the most well loved holding of the "Smart Money 30," a group
of some of the largest stock-picking equity hedge funds.

Investors are betting on brightening prospects for the third-largest
U.S. bank -- and insulating themselves from the regulatory risk
lynching over Goldman Sachs and other investment banks. Regulatory
restrictions on proprietary trading have mandatory Goldman to close
down some of its operations, and investors are uncertain about how
the firm can grow long-term revenue when its core businesses are
curtailed.

"To the extent that banks are vacant to be restricted from betting on
market movements with their own capital, that makes headwinds to
Goldman Sachs' business model," said Adrian Cronje, chief investment
officer at Atlanta-based wealth manager Balentine, which indirectly
owns bank stocks.

"People are more interested in dull ancient businesses in the
financial sector that take deposits and start high-quality loans," he
said.

Other hedge funds buying into Citigroup or increasing their stakes in
the fourth quarter included Coatue Capital, Eminence Capital and Lone
Pine Capital.

Chilton Investment Co and Lee Ainslie's Maverick Capital sold out of
Goldman.

Not everyone followed the trend, though. Chilton also sold out of
Citi, and Brookside Capital Investors sold out of Citi even as it
raised its Goldman spot nearly 10 percent.

COMEBACK MOMENT

Source: Reuters.Com

Citi launches technology platform for funds of hedge funds

_*Citi's global transaction air force unit has launched a global
technology platform specifically calculated for servicing funds of
hedge funds.*_

The new service, which integrates into Citi's global operating
platform for hedge fund air force, enables Citi to provide a suite of
fund of hedge fund solutions through a single front-to-back online
service.

"For the benefit of servicing fund of hedge fund managers around the
world, we have pulled together the entire client experience under one
seamlessly integrated, globally consistent platform," says Neeraj
Sahai, global head of securities and fund air force, Citi. "Managers
have direct, on-line access to our custody air force, our suite of
middle-office solutions and all standard administrative reports,
resulting in greatly improved efficiency, accuracy, transparency and
risk mitigation."

Citi's fund of hedge fund air force product suite offers clients a
modular end-to-end solution, supporting the entire trade lifecycle:
middle office, custody, securities finance, back office, cash and
liquidity.

The new technology platform delivers the following types of customised
tools for portfolio managers:

• Analysis of liquidity terms of underlying hedge fund investments
• Ability to track and analyse underlying fund performance
• "What-if" trade scenario analysis
• Pre and post trade compliance reporting against investment
guidelines
• Real-time dynamic NAV reporting
• Automated FX hedging functionality for share classes denominated
in non-base foreign currency

Citi entered into an agreement with youDevise to ticket the platform.
youDevise is the developer of an online platform used by fund of hedge
funds and administrators for front, middle and back office management
information.

Source: Hedgeweek.com

Headstart Fund of Funds tops rankings

_*The investable Headstart Fund of Funds, advised by Headstart
Advisers, has claimed its place at the top of the leader board of the
Investhedge rankings for multi-strategy funds of hedge funds over the
last three, six and 12 months.*_

The fund has a year to date return of 13.94 per cent to the end of
November 2010.

Headstart's performance this year compares favourably with fund of
funds indices such as the HFRI Fund of Funds Composite Index (+3.43
per cent year to date), the Barclay Fund of Funds Index (2.85 per
cent) and the EurekaHedge Fund of Funds Index (2.6 per cent).

The fund has been advised by Headstart Advisers' chief investment
officer Najy Nasser since it started in November 1999.

Its 11 year track confirmation has an annualised return of 6.82 per
cent with a volatility of 8.01 per cent per cent. An investment at the
inception of the fund would have approximately doubled by now, whereas
the S&P 500 index is down 13.18 per cent in the same 11 year time
period.

Since January 2009 the Headstart Fund of Funds has had an annualised
rate of return of 16.62 per cent with a volatility of 6.68 per cent.

Nasser says: "Our fund has performed consistently during 2009 and
throughout 2010 after what was a hard 2008 for nearly everyone in our
industry.

"We are particularly pleased with our outperformance against the
indices we are most usually compared. In what has been a hard year for
hedge funds with a wide disparity of returns, all of our underlying
positions are positive for the year to date which is a strong
testament to the quality of the funds within the portfolio."

Source: Hedgeweek.com

PDAC-New investors bring financing bonanza to junior miners

Sun Mar 6, 2011 4:44pm EST

* Pension funds, sovereign wealth funds dabbling more

* Appetite for investment growing, new companies emerging

* Financing window fully open since late 2009

* Copper favored, gold, uranium, rare earths well loved

By Pav Jordan

TORONTO, March 6 (Reuters) - A whole new class of
conservative investor is piling into the mining sector -- once
the exclusive domain of daring risk-takers -- bringing a
bonanza of funding options to junior miners racing toward
production.

Pension fund managers and sovereign wealth funds are now
hungry to provide financing for projects deemed worthy of
delivering stable, long-term returns.

"That's a very strong signal that this asset class is large
enough now and the returns are steady enough, or expected to be
steady enough," said Mike White, the president of IBK Capital
Corp, a Toronto specialist in equity financing for miners with
projects under development.

"You now have more demand than this world has ever seen for
metals," he said. "So what do we see? We see the investment
bankers of the world and other investors and institutions
reacting."

White comments some ahead of the PDAC prospectors and
developers convention running March 6-9 in Toronto. The show,
sponsored in part by IBK Capital, will bring together hundreds
of tiny-cap miners with financiers looking for new projects.

Newfound interest in mining finance is clearly evident.

Source: Reuters.Com

TransAlta to phase out coal boilers in Wash. state

SAN FRANCISCO, March 5 | Sat Mar 5, 2011 6:55pm EST

SAN FRANCISCO, March 5 (Reuters) - A bill to close two coal
boilers at a TransAlta Corp (TAC.N) (TA.TO) power plant in
Centralia, Washington, and phase out coal-fired power in the
state will go to lawmakers under a deal on Saturday between the
company and the state's governor.

One coal boiler will be shut no later than the end of
December 2020 and the other by the end of December 2025 under
terms of the agreement, which allows TransAlta to sell
long-term contracts for coal-fired power to help finance a
transition to gas-fueled energy, a proclamation from Governor
Christine Gregoire's office said.

The agreement requires TransAlta to install additional air
pollution control technology to further reduce emissions of
nitrogen oxides at its plant in the Centralia area.

The Calgary, Alberta-headquartered energy provider will
also provide $30 million to a community investment fund for
energy efficiency projects and $25 million for an energy
technology transition fund to support innovative energy
technologies and companies in Washington state.

"This compromise promises cleaner air for our future, while
providing the necessary time to make sure economic stability, job
protection and enough power on the grid to keep our homes and
businesses running," Gregoire said in the proclamation.

The agreement will be incorporated into a proposed bill.

A spokesman for the Sierra Club environmental group
predicted lawmakers would approve the bill, adding, "We were
approaching for a quicker retirement but this agreement allows for a
smooth transition in the community and time to reconfigure the
electrical grid to integrate the region's abundant wind and
solar resources instead of rushing to gas."

The legislation "meets our commitment to a low-carbon
future through transition from coal to gas in Washington,
significantly reduces our environmental risk and allows us to
provide honest shareholder value through favorable long-term
contracts while protecting jobs and the economy of the local
community," TransAlta Chief Executive Stephen Snyder said in
the proclamation. (Reporting by Jim Christie; Editing by Peter Cooney)

Source: Reuters.Com

Volatile trading on hedge fund market likely to extend in 2011

_*Prices on the hedge fund lesser market remain volatile, according to
the latest data from Hedgebay. *_

A lack of price stability has been the recurring theme of 2010,
evidenced once again when the average trade price dropped to 74 per
cent in November after registering the highest average in six months
during October.

October's high of 81 per cent was the third time in a row the index
had risen, suggesting that consistency might slowly be returning to
the market after a turbulent year. But, the drop shown in November has
cast doubts over that theory, with the volatility now expected to
extend into 2011.

The Hedgebay Index has been inhibited by a distinct absence of funds
trading near par over the last year, suggesting a continued lack of
confidence in the market. A relative lack of pricing transparency has
also bent uncertainty in the market, although Hedgebay believes that
its newly launched Pricing and Valuation Consultancy Service will help
to bring superior insight to this area.

Elias Tueta, co-founder of Hedgebay, says: "In many ways, this
month's results have been typical of 2010. After an unsettled year
of trading on the lesser market, the general sentiment among investors
is one of caution. This has bent an artificial 'cap' on the price
they are keen to pay, and the fluctuations in the index have reflected
that. Every time the price looks as though it is rising consistently,
we saw a fall in the index. There is currently modest to suggest that
that will change in the ahead of schedule part of 2011."

Tueta has also pointed to the recent governmental interventions at
several large hedge funds as a reason for November's drop. The
interventions have made investors nervous that their managers, or
managers on offer on the lesser market, could face the same behavior.

Meanwhile, Hedgebay's Illiquid Asset Index which measures trading in
gated or floating funds rose quite significantly to 44.09 per cent.
Notably, the majority of transactions in November took place in this
part of the market. Hedgebay believes that the surge of trading in
these illiquid assets shows a renewed determination among investors to
clean their portfolios. Two years on from the credit crisis, the
ongoing cost of servicing illiquid assets has proved to be a drain on
investor capital, making the disposal of such assets a necessity.

Tueta says: "There is something approaching fatigue in the illiquid
end of the lesser market, as investors try to start anew in 2011. A
clean portfolio free from illiquid assets will allow investors a clean
bill of health vacant into the first quarter of next year, and free up
capital for some of the funds that have shown excellent performance
this year. This sample of trading will likely continue throughout
December."

Source: Hedgeweek.com

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