Tuesday, 2 September 2014
Last updated 3 days ago
Oct 31 2012 | 11:41am ET
In the thriving and surprisingly robust market for claims against Lehman Brothers Holdings, hedge funds are playing a big part.
Hedge funds are among both the biggest buyers and sellers of claims; many found their assets with Lehman's London-based prime brokerage frozen in the wake of the investment bank's collapse. But what could have proven a disaster may turn out a boon.
That's because Lehman's liquidators are doing a better job than perhaps initially expected in recovering assets. Most now expect that claimants will be paid at least the full amount of their claims, and possibly more: Under British law, a bankruptcy estate must pay 8% annual interest on claims if it can.
That prospect, plus a deal with Lehman's U.S. brokerage earlier this year, has investors positively bullish on the bankrupt bank. Claims are fetching at least face value on the secondary market; some are even selling at a premium, where in the wake of the collapse they got less than half of par.
Hedge funds are taking advantage on both sides. Claren Road Asset Management recently sold a $400 million claim for approximately face-value. And hedge funds including Elliott Management Corp., King Street Capital Management and Paulson & Co. are buying and holding claims, The Wall Street Journal reports.
What's more, the biggest buyers of the claims include investment banks—which may be buying them on behalf of hedge fund clients.
The first payments on claims are expected in November.
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 ...