Bailey to start new hedge fund

DUBLIN (Bloomberg) - Jonathan Bailey, whose hedge fund closed in June after investment losses and redemptions, is starting a new hedge-fund business with former Citigroup Inc. manager Patrick Spens and without his former business partner.

The 37-year-old's new firm, Copenhagen, plans to start business in November, having had indications of interest from potential clients, Bailey said. His former partner at Bailey Coates Asset Management LLP, Stephen Coates, isn't involved in the new venture.

“At some point I will switch over and Bailey Coates will cease,” he said in a telephone interview.

The Bailey Coates Cromwell fund, which had about $1.3 billion at it peak, closed after losing 20 percent of its value in the first half of the year. Assets in the fund had dropped to $750 million by March.

The fund was hit by losing bets on brokerage firm Morgan Stanley, cable television provider Cablevision System Corp. and computer company Gateway Inc.

Spens, who was Citigroup's head of cash, programme and proprietary trading, will head risk management at Copenhagen, the Financial Times said at the weekend.

“We screwed up,” Bailey told Bloomberg yesterday. The Cromwell fund had “a risk management problem”.

Man places portfolio with insurer

ZURICH (Bloomberg) - RMF Investment Management, a unit of Man Group Plc, the world's largest hedge fund company, said it placed a 150 million-euro ($182 million) hedge fund portfolio with an unidentified German insurer.

The placement “is one of the biggest transactions of its kind” in Germany, RMF said in a statement and “indicates the increasing appetite” for such products. RMF did not name the client. A spokeswoman said only that the customer was “a German insurer”.

The portfolio guarantees a return of 100 percent of the initial investment at maturity on August 31, 2017, and is based on what it called three “hedge fund approaches,” including buying and selling equity investments with a focus on Asia-Pacific and commodity trading.

Shrimpton to head FSA hedge unit

LONDON (Bloomberg) - Britain's securities watchdog named Andrew Shrimpton to head a six-member hedge fund supervisory team as the Financial Services Authority starts to increase scrutiny of the $1 trillion industry.

Shrimpton, presently the head of the FSA's asset management management team, will start in his new role on October 31, said FSA spokesman David Cliffe. A replacement hasn't yet been appointed. His team will manage the relationship between the FSA and 25 hedge funds that the regulator has identified as having the most impact on the industry, Cliffe said. He declined to name the hedge funds.

The appointment of Shrimpton comes after the FSA said in June it will step up scrutiny of hedge funds because of concern that some managers may be “testing the boundaries of acceptable practice with respect to insider trading and market manipulation”.