This content is from: Portfolio
The Morning Brief: Platinum to Repay Investors $80 Million
Platinum Partners, the New York hedge fund firm at the center of a bribery scandal and whose business practices are the subject of a federal investigation, plans to return $80 million — or less than 10 percent of the assets owed to investors — over the next few months, according to a Wall Street Journal report. The firm, which recently said it had $1.25 billion under management, had reportedly promised to return to investors all of the money they are owed.
Among those to be paid first is Bernard Fuchs, one of Platinum’s co-owners, who reportedly sought to redeem some of his money last year. Platinum employee Murray Huberfeld was charged over the summer with wire fraud after he allegedly paid $60,000 to Norman Seabrook, president of the Correction Officers’ Benevolent Association, to secure an investment from the union in Platinum’s funds. The firm is also reportedly being investigated for fraud, along with founder and CIO Mark Nordlicht. The government is looking into whether the firm inflated the value of some of its illiquid assets.
Clifton Robbins’ Blue Harbour Group cut its stake in Rackspace Hosting by half, bringing it down to 7.4 percent of the total shares. In late August, Apollo Global Management agreed to buy the cloud computing company for $4.3 billion in cash. At the end of the second quarter, Blue Harbour was Rackspace’s second-largest shareholder.
The HFRI Fund Weighted Composite Index rose 0.6 percent in September, its seventh consecutive profitable month. As a result, it gained 3 percent in the third quarter and is now up 4.2 percent for the year. September hedge fund gains were led by specialized technology, healthcare and energy, according to HFR. Equity hedge strategies led industry performance in September, with the HFRI Equity Hedge index climbing 1.1 percent. It gained 4.7 percent for the quarter and is up 4.2 percent for the year. HFR’s technology healthcare index returned 4 percent for the month and 7.6 percent for the quarter.