SAN FRANCISCO San Francisco City & County Employees Retirement System named CB Richard Ellis, Citi Alternative Investments, European Investors, ING Clarion Real Estate Securities and Morgan Stanley as finalists to manage $150 million in global real estate, confirmed David Kushner, deputy director for investments. Officials at the $16.9 billion fund expect to select at least one of the managers at the Feb. 12 board meeting, he said. The $1.63 billion real estate portfolio has no investments now in publicly traded real estate securities. Funding will come from equities. An RFP issued was issued in October.
Alternative Investing Briefs-San Francisco narrows global real estate list
SACRAMENTO, Calif. CalPERS acquired a 9.9% stake in Silver Lake, a technology-focused private equity firm, confirmed Clark McKinley, spokesman at the $253.6 billion California Public Employees Retirement System, Sacramento. Under the arrangement, CalPERS which already invests more than $700 million combined with four Silver Lake funds will make additional commitments as a limited partner, and a fund representative will join Silver Lakes management advisory board. CalPERS investments will provide seed money to new Silver Lake funds, according to a news release from Silver Lake.
In June, CalPERS took a 10% stake in Apollo Management Group. The fund also has a 5% stake in Carlyle Group.
Mr. McKinley would not provide terms of the deal. Elizabeth Hanahan, spokeswoman for Silver Lake, did not return a call for comment.
CHICAGO Hedge funds attracted record net inflows of $194.5 billion in 2007, 54% more than the $126.5 billion in the previous year, according to Hedge Fund Research. Net inflows last year raised global hedge fund assets to $1.87 trillion as of Dec. 31, an 11.6% increase from the $1.675 trillion at year-end 2006. Hedge funds of funds accounted for $798.6 billion of the 2007 industry total, up 8% from $739.4 billion at the end of 2006. Net inflows into hedge funds of funds were $59.2 billion in 2007, up 19% from $49.7 billion in 2006 and 523% from $9.5 billion in 2005, according to HFR data. Among single-strategy hedge funds tracked by HFR, equity hedge was the largest with $507 billion as of Dec. 31, followed by relative value arbitrage with $273 billion and event-driven with $244 billion.
NEW YORK Venture capital firms raised $34.7 billion in 235 funds in 2007, up from $31.7 billion raised by 229 funds in 2006, according to Thomson Financial and the National Venture Capital Association. About a third (31%) of the capital was raised in the fourth quarter, when $11 billion was raised by 63 funds, up from $5.6 billion in 65 funds a year earlier. Overall, 55 of the funds raised in 2007 were by new firms, compared with 46 in 2006.
The largest funds raised included $3 billion for Technology Crossover Ventures TCV VII, a later-stage fund; $1.3 billion for Bessemer Venture Partners VII, a balanced-stage fund; and $1.2 billion for Vector Capital IV, an expansion-stage fund.
NEW YORK Blackstone Group, the private equity firms publicly traded partnership, is buying multistrategy hedge fund GSO Capital Partners, which has $10 billion in assets, said Blackstone spokesman John Ford. The $930 million purchase price includes the 20% portion of GSO owned by Merrill Lynch, he said. The price comprises $620 million in cash and parent Blackstone Holdings units and up to an additional $310 million in cash to be paid over the next five years, depending on realization of GSO earnings targets.
Blackstone plans to buy back up to $500 million in Blackstone Group and Blackstone Holdings common units to help fund the deal because Blackstone executives believe the companys units are undervalued, Mr. Ford said.
Blackstone wants to add the credit-based hedge fund to complement its total $30 billion in hedge fund of funds and more than $4 billion in distressed and long-short hedge funds, Mr. Ford said.
GSO founders Bennett Goodman, Doug Ostrover and Tripp Smith will manage the company; Mr. Goodman will join Blackstones executive committee.
CHICAGO Mesirow Financial is adding an institutional real estate investment business, said Katie Schimmel, spokeswoman. The firm hired three executives for the business from Capri Capital Partners: Alasdair R.J. Cripps, former Capri partner, is now Mesirow senior managing director and head of direct investments, and former Capri principals Guy Chairiello and Charles L. Kendrick are now Mesirow managing directors. At Capri, the three were replaced by Stephen D. Lane, partner, and principals Sarah Marsh Ahern and Dori Nolan, said Capri spokeswoman Trish Hoffman.
MINNETONKA, Minn. Executives of hedge fund manager Deephaven Capital Management exercised an option to acquire 49% of the company from parent Knight Capital, according to a Jan. 10 SEC filing. Knight acquired Deephaven in 2000. Terms of the current deal, expected to close Feb. 1, were not disclosed. Margaret Wyrwas, Knights senior managing director of corporate communications and investor relations, declined comment. According to the 8-K filing, Deephaven executives prior to the end of 2012 could acquire an additional 2% of Deephaven Holdings, which was established jointly by Deephaven executives and Knight. Deephaven has about $4.5 billion in hedge fund assets.
LONDON La Fayette Investment Management (U.K.) opened its first activist hedge fund of funds to investors that eventually will allocate assets to as many as 12 hedge funds. The fund currently has invested in seven activist funds in the U.S. and Europe, according to a news release. The funds investment team is headed by Andre Pierre Visser, founder, chairman and CIO, and Kevin Dolan, CEO. La Fayette manages about $6 billion in hedge funds of funds for institutional investors.
NEW YORK Julius Baers five-person alternative risk trading unit was renamed GAM structured investments and moved into GAM, the firms hedge fund-of-funds manager subsidiary. Joseph Gieger, GAM managing director for the Americas, said GAMs investment teams have long been linked at the corporate level with the ART unit and have worked closely together. The integration of the trading team into GAM will expand the hedge fund of funds structured product offerings, and new strategies are planned, including principal-protected funds of funds for insurance entities and liability-driven investment approaches, Mr. Gieger said. The team is headed by Yoshiki Ohmura, managing director, and will remain based in Zurich.
NEW YORK ING Investment Management, Americas, has taken a minority stake in Lincoln Vale, an alternative asset management firm with specialty hedge funds, private equity and structured products. ING will be a primary distributor of Lincoln Vales strategies, Paul Gyra, executive vice president and head of alternatives for ING, said in an interview. Terms of the deal were not disclosed.
The deal marks the first time the unit has taken a minority stake in a hedge fund manager. Mr. Gyra said ING Investment will look for stakes in other small, alternative shops so it can offer a broader range of alternative products beyond the strategies it manages internally. Lincoln Vale has offices in London and Boston; the amount under management was not disclosed.
NEW YORK Hedge funds and funds of funds handily outperformed major market indexes in 2007, according to early reports from hedge fund index providers. The Eurekahedge Hedge Fund index returned 13.61%, followed by the Hennessee Hedge Fund index, 11.64%; the HFN Hedge Fund Aggregate Average index, 10.85%; and the HFRI Fund Weighted Composite index, 10.36%. By contrast, the S&P 500 index returned 3.56% for the year; the MSCI EAFE index, 6.96%; and the Lehman Brothers Aggregate Bond index, 8.62%. Hedge funds of funds also beat the indexes, judging from the 9.94% one-year return of the HFRI Fund of Funds Composite index and the 9.53% return of the Eurekahedge Fund of Funds index.