Tag Archives: united kingdom

Hedge Funds See Further Profit From Glencore-Xstrata

Hedge funds are betting that commodities trader Glencore will succeed in its battle for miner Xstrata, in a long-running deal that has been profitable for arbitrageurs and is still attracting funds looking to make money.

Arbs, hungry for action after a lean period for M&A, have been buzzing around the deal for months, attracted by its size, liquidity and complexity, and many profited from last week’s move by Glencore(GLEN.L) to sweeten its now 23 billion pound all-share bid.

Reported by Laurence Fletcher and Sophie Sassard, Reuters, Xstrata (XTA.L) was expected to recommend the offer as early as next week, although Qatar Holding Рits second-biggest investor after Glencore Рhas yet to make its decision public.

However, after a breakthrough in talks last week, brokered by former British prime minister Tony Blair, many funds believe it is only a matter of time before the deal gets the Qataris’ stamp of approval.


Hedge Fund Charges Not Catching on with UK Mutual Funds

Britain’s mutual funds are shunning a hedge fund-style method of charging clients, where investors pay fees as a proportion of outperformance by the fund manager, following a revolt by financial advisers selling the funds, a study has found.

Reported by Chris Vellcott, research by Lipper published on Monday shows that after initial enthusiasm for performance fees in 2007, the number of funds using the structure stands at 80, compared with 112 having charged the fees at one time.

In a 2007 study, Lipper found 34 funds had adopted performance fees, rising to 81 funds three years later.

The fact the number has not risen since 2010 “reflects not only a slowing of funds being launched with performance fees but also the closure of funds and the removal of performance fees,” Lipper said.