Posts tagged ‘Investing’

April 13, 2011

Bad investment products cost Citigroup $54M in compensation claims

[Maya Levins, Investments Contributor]

Huffington Post: Citigroup Inc. (C.N) will have to pay its investors $54.1 million in compensation for losses suffered from its municipal securities funds between 2006 and 2008 according to the ruling of a New York arbitration panel. It is the biggest of such awards against the bank in recent times.

The speculators, Gerald Hosier, Brush Creek Capital and Jerry Murdock, claimed in June 2009 and then had wanted $48.2 million in compensation, plus incidentals relating to spectacular failures of three each of the municipal bond arbitrage funds and three ASTA Finance funds that they had purchased from Citigroup Global Markets brokers.

This week’s adverse ruling against Citigroup is the culmination of the problems that had started for it when just before the financial crisis had started  it sold funds via MAT Finance LLC which short-borrowed at low rates and provided long term lending.  However, when the financial crisis came into force back in 2007, things had gone sour for the speculators who lost around 80% of their money.

March 21, 2011

Amazing hedge fund’s 25% net fees and 16.5% return in turbulent Europe

Whilst European Union economies are still registering hideous negative returns on investments, but Lucerne Capital Management, one of Europe‘s youngest hedge funds, is doing quite well, thank you very much!

Run by two Dutchmen and based in Westchester, NY, USA, the company has been achieving high returns trading European equities. The owners, Pietar Taselar and Thjis Hovers are ex-ABN Amro. Having got seed capital from the bank, they set up Lucerne in 2002 which has been outstandingly successful since then.

Last year the company went up to more than 25% net in fees and made an average return of 16.5% net since inception. At slightly more than US$200M in assets under its management, its marketing has been sparse and its staff minuscule with more, or less the two owners being the firm’s ‘chief cooks and bottle washers’. But that is how they like it apparently as they say that this structure keeps then free to act quickly and decisively in their client’s interests away from the bother of corporate politics.

The firm has focused on mid-cap equities listed in Europe exploiting weaknesses in markets that have not been the traditional stomping ground of its competitors. As ‘long-shotters’ the owners have a penchant for intense analysis and an appetite for risk when their convictions are high. Taselaar’s view is that as they focus on potential deals that show an 20% annualized return and a non-too-risky profile, they have done well as for the past ten years as mid-sized European stock has abounded with such deals.

International Times of Dominica salutes Thjis and Pieters – keep up the good work!

[Finance & Economy Contributor]

March 17, 2011

Real Estate boom in Australia – opportunities for international investors

G’day, yes its official, Australia’s city of Sydney is now the fourth most popular city in the world for international investment according to News.com.au.

2011 has seen money is coming in thick and thin from Asia and Europe and the inward cash surge is stoking up demand for properties in the stylish CBD, North Shor and Eastern Suburb of the city.  Real estate agents are reported to be doing well and are feverishly advertising Australian real estate in Asia and Europe promising investors great deals with built-in security.

News.com.au says that according to CBRE senior managing director of international investments Rick Butler: “…the foreigners are there because they see Australia as safe, secure and actually having growth, which puts us in a much better position than old Europe and the US.”.

[International Real Estate Contributor]