Alpha - September 2007 - (Page 77)

Through 2008, Braman will concentrate on consolidating Cadogan and Fortis’s other business areas. For example, Fortis has a small fund of private equity funds that could fit inside Cadogan. Fortis also runs a long-only fund-of-funds business, while Cadogan uses long-only managers and short-sellers in its funds of funds. “There’s obviously some sense in considering how to leverage the two against each other or put them together,” Braman says. Outside the fund-of-funds arena, Fortis would be more inclined to buy a promising single-manager fund than a multistrategy boutique. “We might go out and look for a manager who’s got a small fund that needs support,” Braman says. “Maybe he’s got E30 million and good numbers but he’s not going anywhere.” But that still leaves International Asset Management, which Fortis Investments will acquire if Fortis Group, RBS and Santander win their bid for ABN Amro. Founded in 1989, IAM is one of the world’s oldest funds of hedge funds. It took over ABN Amro’s fund-of-funds business after the Dutch bank acquired it in June 2006. In early August the RBS-led group got shareholder approval to raise its offer for ABN Amro by 10 percent, to E71.1 billion. London-based Barclays, the other contender, may yet sweeten its all-share bid of E64 billion. In a statement, CEO John Varley suggested that Barclays would walk away if buying ABN Amro threatened to hurt shareholder returns. Wohanka declines to comment on how Cadogan and IAM might mesh, saying only that the ABN Amro acquisition would make Fortis Group a top-tier European money manager with some E300 billion in assets. Leaf is more forthright. Even if Cadogan doesn’t need IAM to grow, he says, their combined $10 billion footprint would make it easier to do things like alpha transport and large structured products. But he wouldn’t pursue a partnership unless he was sure the two ﬁrms could work together harmoniously and Cadogan investors were onboard. “We need to look at it very carefully internally, and we also need to look at what our clients feel,” he says. “If all our clients hate the concept, it just doesn’t work.” In the end, though, the ABN Amro play isn’t about bolstering Fortis’s asset management business — at least not directly. Chris Hitchings, an analyst at New York–based investment bank Keefe, Bruyette & Woods, says Fortis Group’s main goal in pursuing ABN Amro is to establish a strong retail banking presence in the Netherlands. The more powerful Fortis Group becomes as a bank, Hitchings adds, the more likely its wealthy clients are to park their cash with Fortis Investments. “You don’t need to be a brand name to be able to make quite a lot of money out of managing assets for your private or commercial banking customers,” he says. Regardless of what happens with the ABN Amro deal, Wohanka will be looking ahead to his next trade. MONDAY TO FRIDAY. TYPICAL WORK DAYS. TYPICAL WORK WEEK. BUT AT KNIGHT, THERE ARE NO TYPICAL DAYS OR WEEKS. WE BID THEM GOODBYE LONG AGO WHEN WE CREATED A VIRTUAL EXCHANGE. TODAY AND EVERY DAY, BUY- AND SELL-SIDE FIRMS RELY ON OUR DEEP POOLS OF LIQUIDITY AND HAVE BECOME ACCUSTOMED TO HAVING ACCESS TO MULTIPLE MARKETS ACROSS MULTIPLE ASSET CLASSES. IT ALL COMES DOWN TO A VIEW OF THE MARKET THAT’S ANYTHING BUT TYPICAL. TO LEARN MORE ABOUT KNIGHT CAPITAL GROUP (NASDAQ: NITE) GO TO KNIGHT.COM. http://KNIGHT.COM http://KNIGHT.COM

Table of Contents Feed for the Digital Edition of Alpha - September 2007

Contents Letter from the Editor Longs & Shorts Pension Corner: Keeping the Faith The Good Guys: Going Public Interview: Barry Bausano - A Delicate Balance Cover Story: Cruel, Cruel Summer Profile: Phil Cooper - Alternative Flight Plan Strategies: Marshall Wace - TOPS in Its Field Profile: Fortis Investments - Banking on Alternatives Research Center: Top Equity Trading Firms Alpha Bytes: Desktop Duel Unhedged: Commentary - The Taxman Cometh

Alpha - September 2007

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