Friday, 29 August 2014
Last updated 9 hours ago
Aug 6 2010 | 3:09am ET
Morgan Stanley is nearing a deal to spin-off FrontPoint Partners, the $7 billion hedge fund it bought four years ago, but plans to retain a significant stake in the independent firm.
The Wall Street giant and FrontPoint’s management have in recent days discussed an arrangement in which no cash would change hands. Instead, Morgan Stanley would get preferred equity in FrontPoint in exchange for giving up control of the Greenwich, Conn.-based firm, The Wall Street Journal reports. That would give the bank a big chunk of FrontPoint’s profits over the next five years as Morgan Stanley seeks to recoup the $400 million it paid for the hedge fund in 2006.
After the five years, Morgan Stanley could retain its minority stake of between 20% and 25%, or end its investment in FrontPoint entirely.
While the newly-enacted Volcker rule, which strictly limits the amount banks are allowed to invest in hedge funds, is a catalyst for the current talks, Morgan Stanley has mulled withdrawing from the business for some time. FrontPoint, it seems has not proven nearly as lucrative as Morgan Stanley hoped.
FrontPoint executives have been pushing for a spin-off for more than a year. But negotiations frequently broke down over the price; FrontPoint’s leaders offered $150 million, while Morgan Stanley believes the hedge fund to be worth about $350 million.
Aug 25 2014 | 11:21am ET
As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…
Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...