Thursday, 2 October 2014
Last updated 1 hour ago
Aug 13 2007 | 8:44am ET
The proliferation of sub-prime and stock market woes in recent days may have dimmed memories of May’s miseries, but some are set to be thrown into sharp relief tomorrow when UBS announces it second-quarter results.
Dresdner Kleinwort analysts predict that legacy positions from the Swiss bank’s recently-shuttered hedge fund unit, Dillon Read Capital Management, could cut its fixed-income revenue by a quarter, on top of the US$150 million in losses that led to the fund’s closure.
According to Dresdner, UBS was left holding some 20 billion Swiss francs (US$16.7 billion) worth of illiquid Dillon Read positions.
“Assuming leverage of at least five times (conservative in light of previous returns, we believe), UBS held at least 20 billion Swiss francs of related assets,” the report said. “This may have been partly hedged or sold since but we believe the majority of the positions exist, owing to unfavorable market liquidity.”
Further losses in Dillon Read positions are not the only problem for UBS: It will cost the bank about 300 million Swiss francs (US$250.4 million) in restructuring costs related to closing the hedge fund.
Sep 22 2014 | 4:15pm ET
"I tell people that everybody likes good news and so if you have good performance that’s wonderful,” explains Mike McKitish of Peddie School's endowment, “but it’s the people that want to talk about the bad news or where they drifted and how they came back and how they stayed to their discipline…” that he wants to hear from. Read more…
Sep 30 2014 | 9:29am ET
The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…
High frequency trading is not evil, it is not a conspiracy and it really is not new; it is the natural evolution of the professional trading community making markets, providing liquidity and hopefully...