We’ve reported that hedge funds are having a hard go of it, as investor appetite for risk is diminishing, and market volatility refuses to abate. Today, Reuters profiles one struggling fund, Merchant Commodities, as it aims to stay afloat after losing two-thirds of its capital over the past 18 months – $500 million to redemptions and another $500 million to poor bets. Three other commodity funds – London’s BlueGold and Fortress, as well as Houston natural gas trader John Arnold – shut down earlier this year.
Merchant, whose trading team is based in London and headquartered in Singapore, is down 5 percent for the year – off by 15 percent for May and June alone. Hedge funds on average are off by 1 percent since the first of the year.
In an effort to save the business, co-founder Michael Coleman has moved from a trading role to managing risk full-time at the 8-year-old fund. Writes the news wire:
“We’re not thinking about closing shop,” said Coleman … The challenge now: Halting the investor exodus that partly shrunk the Singapore-based fund from $1.5 billion at the start of 2011 to less than $500 million now … “We're probably going to have a bit of the same issue over July to August this year: Should we be thinking very defensively or should we be focused on upside opportunity?”
Wells Fargo reported its 10th consecutive quarter of earnings growth on its mortgage business. [DealBook]
J.P. Morgan reported a Q2 profit was down 9 percent on trading losses. [NY Times]
Three London-based employees at the center of J.P. Morgan’s trade blunder have left. [WSJ]
London’s damaged banking culture. [Time]
Bain aims to raise $6 billion for a new fund. [Bloomberg]
Private equity firms scope out mortgage firms. [American Banker]
Q&A with a PWC recruiter. [BusinessWeek]
Blackstone created a $125 million land banking partnership with Hovnanian Enterprises. [WSJ]
In a rare federal criminal case, four top execs of a failed Virginia bank were charged with fraud. [WSJ]
National Financial Partners bought Fusion, with its 240 reps. [Investment News]
Profile of Merchant Commodity Fund, and its struggle to stay afloat. [Reuters]
The Mormon church’s holdings include a $3.3 billion life insurance company and Ensign Peak Advisors, which deals in the billions. [Businessweek]