MMX Management LLC announces launch

MMX Management is a business development, consulting and outsourced marketing firm dedicated to working with investment managers in the alternative investment industry. Founded by Mark Marxer and Brian Leftwich with offices in New York and Minneapolis, the founding members bring over 50 years of industry experience most recently running the Hedge Fund Placements Group at Citi, in guiding hedge funds and private equity firms through all aspects of their business cycle. MMX Management will lend its years of expertise to a suite of services ranging from drafting all documentation and assessing the competitive landscape, to growing an investor base in a strategic and targeted fashion. Together, the three founding members have raised over $16 billion in various funds, strategies and geographies. Our mission is to help position managers to capitalize on the present generational opportunity and to build and enhance each business according to its specialized needs. Finding strategic partners throughout the globe from banks, endowments, foundations, family office groups, public/private pension funds and sovereign wealth funds, the firm will look to launch in the early fall, 2009. MMX will be partnering with select groups of best in class funds, offering a full range of alternative strategies from sector specific (healthcare), long-short equity, deep value credit and distressed. We will also be announcing a key joint venture with international player in short order and together, our combined venture will give us a global presence in size and stature that will catapult us to the upper echelon of global placement agents. Marxer recently was the Global Head of the Hedge Fund Placements business in New York prior to Citi deciding to depart from placements business after a merger with its internal CAI team to concentrate on its on proprietary offerings. The Placements Group which included Private Equity, Hedge Funds, Infrastructure and Real Estate was one of the most successful and well regarded teams in the business. Marxer helped put the Hedge Fund Placements division on the map which later migrated to working with a broad array of alternative investments. Marxer and company had been negotiating with a few high profile platforms over the last few months and has decided to forgo several offers and go independent. “In the end we felt the opportunity to build a quality franchise, maintain the proper focus and avoid being affected by events out of our control, and or not specific to our direct efforts, was best served going independent and developing few key strategic joint ventures. Prior to Citi, Mark was the Chief Marketing Officer of Blackriver and a founding partner of RedSky Partners.

Opportunity sets in 2009 and beyond.....

·The massive dislocation and global financial crisis has brought:
–Unprecedented changes in the market that will continue to drive investor demand for the highest quality managers, interesting managers with an edge, best surviving athletes, niche strategies and managers with pedigree
–Liquidity, transparency, “road-tested” risk management , and an institutional platform are in high demand
–Managers that did not impose gates and those whose capital pools, liquidity and infrastructure are still intact should prosper
–Institutional investors with liquidity, flexibility to allocate and the ability to look through the current environment towards the present day opportunities are focusing on the following strategies: global macro, equity long/short, CTA’s with a focus on absolute returns, credit strategies (distressed, bank debt, ABS/MBS, DIP Funds)
–Greater transparency needs and regulation will raise barriers to entry so those with strong institutional relationships and ability to identify and access capital should be in a much better position to prosper
–Clients have become more interested in separate managed accounts (SMA) however many still do not understand what that means and the problems associated with them. Managers will need to be very flexible in how they partner with LP’s as the future structure of relationships will focus on clients’ needs, managers skill set and ability to provide multiple investment structures
–Clients are looking for managers with extensive, relevant experience who have had success through several investment cycles with emphasis on the current cycle

Risk Management

Great Article..........

http://www.nytimes.com/2009/01/04/magazine/04risk-t.html?pagewanted=1&_r=1&sq=risk&st=cse&scp=1

Looking through the turmoil

The current market turmoil with its associated dislocation of asset prices is presenting and will continue to present investors with a multitude of compelling opportunities to invest capital. It is during times like these that people need to be especially disciplined to focus both their people and their capital on the largest and most fruitful long term opportunities...........


http://www.thestreet.com/story/10455102/1/activist-the-bullish-case-for-hedge-funds.html

Hedge Fund Restructuring of 2009 cont..

Against the background that hedge funds have generally outperformed both the equity and debt markets year to date, it is a little surprising that confidence in the asset class is at such a low ebb. Perhaps some of this can be laid at the door of many political commentators and media of so called experts who seek to wrongly portray hedge fund managers and industry as responsible for much of the ills of the financial world, but certainly the damage of being caught on the wrong side of the Porsche-Volkswagen bear squeeze, the implications of Petters, Madoff, poor performance and or decisions by a limited number of people has done nothing to enhance the confidence of investors in troubled markets.
The reality of this lack of confidence is that the initial trickle of redemptions has not so much turned into a gush, but rather the dam seems to have been well and truly breached (Q3 net outflows of $31.7 billion against $1,722 billion assets under management according to the HFR Global Hedge Fund Industry report – but with outflows expected to be substantially higher in Q4 and things not looking good for Q1). An increasing number of hedge funds are struggling to meet liquidity needs by selling assets at distressed prices which risks becoming a downward spiral of falling NAVs triggering more redemptions, which in turn force sales at even more depressed levels. In essence, the major issue faced by the majority of funds is one of timing. If funds had the luxury of holding investments for an extended period, in the way private equity funds do, they would have much greater flexibility to value their investments other than on a potentially forced realization basis. It is for his reason that, in an attempt to pull out of the tailspin in which they find themselves, a number of funds have resorted to various mechanisms that address accelerated redemptions and illiquid assets in their portfolios which include managers suspending redemptions enacting gates, side pockets, staged redemptions, shareholder consents, fee concessions etc.
With confusion in the marketplace as to what are acceptable fair value levels for illiquid investments, hedge fund managers need to be providing investors with full disclosure and information allowing them to take financial decisions in the fast moving market in which we live. The right answer for a particular fund will inevitably depend on the existing bye-laws of the fund and the detailed management agreement provisions; the identity and concentration of the end investors and the fund’s relationship with those investors.

The Great Hedge Fund Restructuring of 2009

Mark Marxer............Redemption's are large everywhere, and several HFs (some very large) are likely going to shut down and PE firms are likely not going anywhere in the near future. Estimates range from 1/3-1/2 of the HF industry is in real trouble. The HF market is continuing to deal with an abundance of problems with high profile managers . The losses in the months of September and October and November have been disastrous. Performance has been driven by a number of factors, hedge funds deleveraging, short regulations changing, equity and credit markets imploding, prime brokers faltering, hedge funds failing, volatility spiking and crowded trades gone bad to name a few

Generically investors across the board from Tier 1 institutions to Fund of Funds have been reducing their exposures, pulling in risk and trying to raise cash and focusing on their own portfolios and assessing risk and resetting expectations. Some select top tier institutional investors are looking at Distressed, Credit, Commodities and niche plays and a few have dry powder and have stated the will be looking to redeploy when they get through a very difficult year end.

Although its to early to tell, it looks like investors are targeting new allocations for end of Q1,Q2 and will be deploying capital as they focus their attention from fire drill mode to the opportunity sets that have come out of this massive dislocation, managers that have done well navigating the storm and look to be in a position of strength going forward. I also believe that managers who were previously closed that are likely to reopen will be targeted by investors.

The Market and opportunity sets going forward are going through major restructurings right now. Alternative Asset Managers need to make the financial, operational and structural changes to survive and then put themselves in a position to thrive in the environment ahead. The large Banks and Financial powerhouses need to partner with the key players in the industry and help them solve and structure for the future, not just provide them cookie cutter products and services. The opportunities coming out of this structural change in business will be outstanding and those who are looking beyond the immediate crisis, who have the sustainability and intelligence to look through and get in front of structural changes will be handsomely rewarded.

http://hedgefund.blogspot.com/

http://mmxmanagement.com/

http://hedgecapadvisor.com/