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 As the
three publicly traded U.S. hedge funds, Och-Ziff Capital Management
Group LLC, GLG Partners Inc. and Fortress Investment Group LLC, have
been battered by Wall Street over the past year, it makes you scratch
your head as to why Steel Partners LLC is volunteering for the same
possible punishment as it plans to take its $1.2 billion Steel Partners
II LP fund public via a reverse merger with WebFinancial LP.
Och-Ziff
shares fell more than 80% in 2008, GLG Partners stock slid more
than 83%, and Fortress Investment shares fell about 94%. And
the beating continues. Och-Ziff on Wednesday fell 7.19% to
close at $4.63, Fortress fell 6.86% to close at $1.63, and GLG declined
8.76% to $2.50, following Barclay Capital downgrade reports on all
three to equal weight from overweight driven in part by redemptions at
the funds.
News of Citigroup Inc.'s plans to shed businesses served as a stark reminder that the banking debacle is far from over and helped to bring down the aforementioned hedge fund stocks as well as the broader market. Although Citi has not said anything officially, a source confirmed that the bank will possibly announce Friday, when it releases its fourth-quarter earnings, that it plans to sell off one-third of its business. Media reports said this could include sales of
Concerns about Citigroup's viability pulled down the Dow Jones Industrial Averages, which dropped 248.42 points to close at 8,200.14 Wednesday. - Michael Rudnick CategoriesComments
From: Steve Taylor,
Tax loss carryforwards? or anticipated chance in ability to utilize those, following a change in control or transfer of a certain percentage of the stock.
Posted on:
January 16, 2009 6:26 AM
From: Anon,
This posts incorrectly compares the planned Steel Partners fund listing with the listing of the hedge fund managers Och-Ziff, GLG Partners, and Fortress. Steel Partners is listing one of its funds to avoid redemption requests. The others still have unlisted funds, but listed managers, to raise capital for and enrich the manager. Very different situations that you incorrectly conflate here.
Posted on:
January 17, 2009 1:06 PM
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As I understand it, it is in order for fund redemptions to cease affecting the price of the underlying holdings. Redeeming shareholders will now be able to sell new share holders, likely at a discount to NAV, rather than receive cash or assets. The strategy is quite cute. c.f.:
http://www.ft.com/cms/s/0/1af3a1d2-dd9d-11dd-930e-000077b07658.html