In January 2017, Lawrence Minicone and Zachary Squire launched Tekmerion Capital Management, a systematic macro investment firm. Their former employer, Bridgewater Associates, was not happy about it and sought to settle its complaints via a private arbitration proceeding. But what was meant to be a private matter has now been thrust into public view, owing to a new court filing.  

Months after Tekmerion launched, Bridgewater sought to take the firm to arbitration for the “misappropriation of trade secrets, breaches of contract, and unfair competition,” court documents show. Arbitration —  a process for settling disputes outside of court, with a neutral party mediating — is meant to prevent such disputes from becoming public. But that's exactly what happened last week because of a dispute over legal fees. Here’s how it happened.

Both Minicone and Squire worked as investment associates at Bridgewater — Minicone for nearly five...

Middle-market companies decimated by the Covid-19 crisis may soon be in need of cash — but deal-making has all but stopped.

“The market is shut down; the M&A process is dead; volume is at levels we haven’t seen since ’09,” said Ian Fowler, co-head of Barings’ Global Private Finance Group, speaking at a webinar for clients on Thursday.

In the second quarter of 2020, middle-market syndicated loan issuance hit $14.1 billion, a little more than the $10 billion recorded in the first quarter of 2009, according to data from financial and risk firm Refinitiv. 

Fowler said a recovery in deals may be far off into the future. “It’s going to take a long time. We haven’t seen the emergence of opportunistic situations,” he added.

Fowler said that in a crisis, he would expect to see a number of secondary deals, including companies with impaired balance sheets and in need of restructuring.

“We know a lot of companies out there...

For the most part, hedge funds were not among the small businesses announced this week that qualified for the 4.9 million low-interest government loans granted so far under the Paycheck Protection Program. But several of the public relations firms they employ to burnish their brands and finesse negative headlines were.

Among the recipients are Prosek Partners, which was approved for a loan of between $2 million and $5 million, according to data from the Small Business Administration; Gasthalter & Co., which was approved for between $150,000 and $350,000, Dukas Linden Public Relations, which was approved for between $350,000 and $1 million; and Peppercomm, which received between $350,000 and $1 million, according to the data. 

Prosek’s clients include Bridgewater Associates — the largest hedge fund firm in the world, managing roughly $160 billion — while Gasthalter & Co. represents several other boldface hedge fund names....

A former Wellspring Capital Management employee filed a lawsuit against the son of Wellspring chief executive Bill Dawson, alleging that he raped her and that Bill Dawson threatened to “ruin” her if she publicly shared these allegations.  

Taylor Lawrence, who said she worked as the head of marketing and investor relations for the private equity firm from 2010 to 2018, filed her complaint against Christopher Dawson on Thursday in New York State Supreme Court.  

Lawrence is alleging that the younger Dawson violated the Gender Motivated Violence Act and is seeking both a declaratory judgment that he violated the law, as well as compensatory and punitive damages.  

A spokesperson for SquareFoot, a commercial real estate company, did not return a phone call and emails seeking comment. Christopher Dawson did not return a LinkedIn message seeking comment.

Wellspring Capital did not return a phone...

In the summer of 2008, Ryan Kirlin’s career seemed full of promise. 

He was interning at the New York Stock Exchange and had fall job interviews lined up at Citigroup and Barclays. He liked the stock exchange, but figured it would be smart to interview at all three places before making any decisions. After all, Kirlin had options.

“Nobody thought anything real of it,” Kirlin said of the market’s choppiness that summer. “Then it started to get really bad really fast.”

Barclays and Citi canceled Kirlin’s interviews. That left him with one option: the New York Stock Exchange. Kirlin and about 50 other would-be financiers crowded into a conference room for the interviews, competing for ten spots at the organization. 

One rival applicant, Kirlin remembers, was set to graduate from New York University — a top finance feeder school. He had turned down a full-time offer at JPMorgan Chase during the summer because he wasn’t...

Hackers have hit TCW Group, a major Los Angeles-based investment firm and the parent company for Metropolitan West Funds. 

TCW salespeople contacted clients Thursday about the breach, an email obtained by Institutional Investor shows. 

“I am writing to inform you that TCW is investigating and working to resolve a cybersecurity incident,” a Florida-based employee wrote. “As part of this investigation, we have engaged third-party cybersecurity experts and law enforcement to address the incident. We have implemented a series of containment and remediation measures to resolve this issue.”

Spokesperson Doug Morris declined to elaborate on the nature or timing of the attack, noting that it is actively under investigation. 

TCW managed $212 billion as of the end of March. But custody banks house the actual accounts, meaning that hackers who breached TCW did not get access to investor money. Client data wasn’t stolen as far...

Asset managers are increasingly using nontraditional data to make investment decisions — but it doesn’t always come cheap.

According to consulting firm Neudata, which helps investors evaluate data providers, yearly subscriptions for alternative data sets can range from less than $25,000 to $500,000 or more. The most expensive include transactional data like credit card spending, as well as location and web- and app-tracking data. About 30 percent of transactional data subscriptions, for example, cost more than $150,000 a year, Neudata said.

“To us, this makes perfect sense given that data providers operating in these three categories typically collect data on vast panels (often comprising millions of users), requiring a lot of work from the provider in terms of cleaning the data and preparing it for use by the investment world,” the firm said in its 2020 report on data pricing.

Assuming that asset managers use multiple data sets,...

Asset manager DWS has formed a joint venture with a division of Northwestern Mutual Life Insurance Co. to invest in private markets, seeking to scale up in an area popular with large asset allocators like pensions.

The partnership will help DWS — which spun out from Deutsche Bank through an initial public offering in 2018 — move into direct lending and expand its private equity business, said Mark McDonald, global head of private equity at the asset manager, in a phone interview. The firm’s roughly €100 billion ($113 billion) of alternative assets are mostly in infrastructure and real estate, he said, with private equity now representing only a small portion of around $2 billion.

Its new partner, Northwestern Mutual Capital, provides debt financing and co-invests equity in new deals done by buyout firms — capabilities DWS has not had, according to McDonald. DWS, which has a global base of institutional investor clients, will help raise...

In the summer of 2008, Ryan Kirlin’s career seemed full of promise. 

He was interning at the New York Stock Exchange and had fall job interviews lined up at Citigroup and Barclays. He liked the stock exchange, but figured it would be smart to interview at all three places before making any decisions. After all, Kirlin had options.

“Nobody thought anything real of it,” Kirlin said of the market’s choppiness that summer. “Then it started to get really bad really fast.”

Barclays and Citi canceled Kirlin’s interviews. That left him with one option: the New York Stock Exchange. Kirlin and about 50 other would-be financiers crowded into a conference room for the interviews, competing for ten spots at the organization. 

One rival applicant, Kirlin remembers, was set to graduate from New York University — a top finance feeder school. He had turned down a full-time offer at JPMorgan Chase during the summer because he wasn’t...

Asset manager DWS has formed a joint venture with a division of Northwestern Mutual Life Insurance Co. to invest in private markets, seeking to scale up in an area popular with large asset allocators like pensions.

The partnership will help DWS — which spun out from Deutsche Bank through an initial public offering in 2018 — move into direct lending and expand its private equity business, said Mark McDonald, global head of private equity at the asset manager, in a phone interview. The firm’s roughly €100 billion ($113 billion) of alternative assets are mostly in infrastructure and real estate, he said, with private equity now representing only a small portion of around $2 billion.

Its new partner, Northwestern Mutual Capital, provides debt financing and co-invests equity in new deals done by buyout firms — capabilities DWS has not had, according McDonald. DWS, which a global base of institutional investor clients, will help raise funds...

Private equity funds backed off from buying companies as the coronavirus pandemic shut down economies around the world, and investors likewise stopped allocating.

Between April and June, data firm Preqin recorded 888 buyout deals globally worth a total of $61.3 billion — a sharp drop-off from the first quarter, when buyout funds made 1,321 deals valued at $95 billion.

Not a single deal crossed $10 billion, Preqin said.

The decline in deal flow was sharpest in North America and Europe, which together had 744 buyouts — down from 1,166 in the first quarter. In dollar terms, European deals “virtually disappeared,” Preqin said, falling from $37 billion in the first quarter to $6.8 billion over the last three months.

This slowdown was echoed in private equity fundraising, with just 225 funds closing — the lowest number in the five-and-half-year period Preqin analyzed. The data firm also found that private equity funds that closed in the...

Just under a year after Anilesh Ahuja, the founder of hedge fund Premium Point Investments, was convicted on charges that he fraudulently inflated the value of the firm's investments, he is alleging that a federal prosecutor hid evidence in his case.  

Attorneys for Ahuja, who was the chief executive and chief investment officer at Premium Point, filed a letter in the U.S. District Court for the Southern District of New York on Monday asking for the court to require the government to more broadly disclose evidence related to his case.  

In May 2018, authorities arrested Ahuja, Premium Point trader Jeremy Shor, and Premium Point portfolio manager Amin Majidi for allegedly mis-marking certain securities held in their structured credit hedge funds between 2014 and 2016, Institutional Investor previously reported. The complaint also alleged that the three manipulated performance numbers and lied to investors about...

In the summer of 2008, Ryan Kirlin’s career seemed full of promise. 

He was interning at the New York Stock Exchange and had fall job interviews lined up at Citigroup and Barclays. He liked the stock exchange, but figured it would be smart to interview at all three places before making any decisions. After all, Kirlin had options.

“Nobody thought anything real of it,” Kirlin said of the market’s choppiness that summer. “Then it started to get really bad really fast.”

Barclays and Citi canceled Kirlin’s interviews. That left him with one option: the New York Stock Exchange. Kirlin and about 50 other would-be financiers crowded into a conference room for the interviews, competing for ten spots at the organization. 

One rival applicant, Kirlin remembers, was set to graduate from New York University — a top finance feeder school. He had turned down a full-time offer at JPMorgan Chase during the summer because he wasn’t...

U.S. bank shares, weighed down by fears over the Covid-19 pandemic, look good to GMO.

With price-to-book valuations close to lows during the global financial crisis, stronger U.S. banks represent an unusual opportunity for investors, GMO’s focused equity team said in a recent paper. “There is the potential for decent returns for bank investors without improvement in the current environment, and the potential for enormous returns if the rate of change in the economy remains positive.”

The pandemic has created an “extraordinary risk/return trade-off” for shares of high-quality banks in the U.S., as investors struggle to shake off memories of the financial crisis of 2008, according to GMO. They fear the Covid-19-induced recession will lead to significant loan losses at banks, and that a move by the Federal Reserve to mandate more regulatory capital to cushion such a blow would limit their growth and lead to dividend cuts.

“We can...

A lot has changed in a month.

Just four weeks ago the II Fear Index recorded the most optimistic views yet from institutional investors, who were feeling ever more upbeat about the economy’s trajectory as they grew less concerned about the spread of Covid-19.

Since then, sentiment has reversed sharply, with asset managers and allocators polled this week fearing a major resurgence of coronavirus infections and sharing mounting pessimism about their countries’ economic prospects.

Florida’s state investment office is looking to take advantage of the “biggest distressed cycle yet,” with eight distressed debt funds in its pipeline of new opportunities.  

The State Board of Administration of Florida’s investment advisory council held its quarterly meeting on June 30, where the council discussed how its investments are faring amid the coronavirus pandemic.  

Trent Webster, the senior investment officer for the retirement system’s strategic investments team, shared that the strategic investment portfolio is focusing on “all distressed, all the time” in his presentation, published in a packet of meeting documents online.

This is a shift from Webster’s December outlook, which made the case for investing in commodities, including shale oil and gas production, through the strategic investment portfolio.  

The strategic investments team has a broad mandate, investing in asset classes...

A small group of venture capital firms have ramped up investing this year, even as the Covid-19 pandemic dampened dealmaking for many large U.S. VC firms, according to PitchBook.

F-Prime Capital and General Catalyst had the biggest jump in investing pace versus the first half of last year, a report Monday from the private-markets data provider showed. SOSV, Greycroft, and Insight Partners, which focuses on software, also accelerated activities during the first half of 2020. 

“The software sector displayed resilience in ’08 and ’09, and now, with the highest unemployment since the Great Depression, software is still showing strong signs of resilience and even growth in some areas” Insight managing director Deven Parekh said in an emailed statement to Institutional Investor. “Covid-19 has been an unprecedented test of the resiliency of every business and every business model, and while some companies were certainly impacted, we did...

A hedge fund said to be closing up shop, a former fund manager’s family office, and a venture capital fund launched in 2015 are among the thousands of businesses listed as recipients of loans through the federal government’s Paycheck Protection Program.  

On Monday, the Small Business Administration made public a list of the more than 660,000 companies that received a loan larger than $150,000 through the program, which is intended to help businesses keep people employed during the coronavirus pandemic.  

If a company meets certain eligibility standards, part, or all, of the loan will be forgiven. The loans also carry a one percent interest rate, according to the SBA’s website.  

Some firms listed in the SBA’s data have called its accuracy into question, however. Electric scooter company Bird shared on Twitter that it was “erroneously” listed among loan recipients. According to Bird, the firm neither...

Marto Capital — a former wunderkind founded by an ex-Bridgewater Associates star — got approved for emergency funds from the U.S. government, records showed Monday. 

Katina Stefanova’s New York City-based firm would have received between $150,000 and $350,000 in potentially forgivable loans under the Paycheck Protection Program, which aims to help save small businesses hurt by the coronavirus pandemic. Marto did not confirm or comment on the loan.

Notably, Marto retained zero jobs with the funds, according to the released data. Signature Bank approved its application April 28, per the official records.

But it’s not clear what Marto Capital’s business actually is, or if it plans to repay any money received. 

Marto gave up its active status with the industry’s main U.S. regulatory bodies. On its website, the company calls itself a “new age investment company.”  

Founded as a hedge fund firm in 2015,...

Before asset managers can successfully invest in companies according to environmental, social and governance principles, they need to get their own houses in order. But such a cultural reset takes a big investment in time and money, according to a paper released Monday from Willis Towers Watson’s Thinking Ahead Institute. 

“Cultures can change, but it takes time and strong leadership. Weak and poor cultures come about because organizations were misled or misdirected,” said Roger Urwin, global head of investment content at the Thinking Ahead Institute, in an interview. “Organizations can escape from bad culture, but it takes a lot of leadership.” 

Effective ESG investing is strongly connected to culture, said Urwin. Pensions and other institutions will want managers who specialize in investing through an impact or sustainability lens to have real, working examples of these philosophies taking root in their own asset management...

Asset owners in Australia, Canada, and the Netherlands are trying to solve one of the biggest problems plaguing sustainable investing: There’s no consistent way to measure it.

Their solution: a new, global platform for collecting and measuring data on how companies adhere to the United Nations’ Sustainable Development Goals, a set of sustainability initiatives established by the UN in 2015.

The platform was launched Monday by Dutch pension managers APG and PGGM, alongside AustralianSuper and the British Columbia Investment Management Corporation. Dubbed the Sustainable Development Investments Asset Owner Platform, it will provide data for investors to assess companies based on how they contribute to sustainability goals like clean energy and reduced inequality.

“Any investor will be able to subscribe to the platform and it will allow them to very easily identify to what extent a company’s business is aligned with the Sustainable...

• The 3 Weeks That Changed Everything: Imagine if the National Transportation Safety Board investigated America’s response to the coronavirus pandemic. Instead, it was a challenge that the United States did not meet. (The Atlantic) • Private Equity Makes ESG Promises. But Their Impact Is Often Superficial. Private equity is very private. Different from public companies that have regular and extensive reporting requirements, most private equity firms disclose far less. (Institutional Investor) • Is investors’ love affair with commercial property ending? Covid-19 has severely impaired tenants’ ability to pay rent. It also upended questions about where shopping, work or leisure will happen once the crisis abates. (The Economist) • Our Ghost-Kitchen Future: Opening a brick-and-mortar restaurant is high-risk and expensive, whereas ghost kitchens are lower-risk, offering a more affordable way for entrepreneurs to enter the business. A once marginal, pre-pandemic business model now...