Fund of Funds - http://fundof-funds.info

#MIPIM 2012: #Privateequity : European distressed investing …

In this session we examined how Europe is becoming an arena for distressed real estate investors.

On top of outlining how private equity firms are approaching the market, our experts also dissected how investors in their funds (including corporate pension plans, sovereign wealth funds and insurance companies) are reacting to Europe’s economic disorder, compared to North America and Asia.

Our experts discussed whether European banks have become true sellers, how private equity funds can finance €1 bn-plus transactions, and where capital for private equity firms is coming from.
Some questions they answered:

What are the large private equity real estate funds doing?
Do investors still have appetite for risk?
Is Europe the best region for distressed real estate deals?
How do you finance €1 bn-plus transactions?
Are the banks really selling yet?
@resilient-ent benny quetell resilient media entertainment private equity

#PRIVATEEQUITY #VENTURECAPITAL, #HEDGEFUNDS, #INVESTMENTBANKING & a few fun things as well. Check US OUT: http://on.fb.me/vch6FQ http://linkd.in/oiB29l http://on.fb.me/sdaWqc http://bit.ly/uhH9hQ http://bit.ly/trKLuj http://goo.gl/Q376nkeywords: #PrivateEquity, #HedgeFunds, #VentureCapital, #InvestmentBanking, #AlernativeAssets, #CapitalMarkets, #MergersAndAcquisitions, #WallStreet, #IPO #ResilientMediaEntertainment, #IPO, @Resilient_Ent, #Film, #Music, #VideoGaming, #Media, #Fashion, #TV, #Technology #JointVentures #FaceBook #Magazines #PublicRelations #Radio #WealthManagementtags: +PrivateEquity, +HedgeFunds, +VentureCapital, +InvestmentBanking, +AlernativeAssets, +CapitalMarkets, +MergersAndAcquisitions, +WallStreet, +IPO +ResilientMediaEntertainment, +IPO, +@Resilient_Ent, +Film, +Music, +VideoGaming, +Media, +Fashion, +TV, +Technology +JointVentures +FaceBook, +Magazines +PublicRelations,+Radio, +WealthManagement

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Posted by Admin - May 19, 2012 at 10:59 pm

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PEU Report: Texas Tech's PEU Investing of Carr Funds

Texas Tech University’s Long Term Investment Fund Policy speaks eight times of private equity underwriters (PEU’s). The policy details how Tech’s LTIF mimics PEU’s: The university added a Schedule C to clarify matters:

Alternative investments provide added diversification and thereby reduce the risk of the portfolio, without sacrificing expected returns. To mitigate risks unique to alternative investments, the principles contained in this document reflect suggested best practices and are intended to serve as the basis for the due diligence process. For simplicity, alternative investments are segmented into two broad categories: private equity funds; and hedge funds.

Alternative assets increase the risk of a portfolio, otherwise what needs mitigation? Note the focus on expected returns.

However, before the PEU or Hedgie gets their share of investment funds, Texas Tech’s LTIF PEU has to shave 0.5% off the top:

The TTU system will assess and retain an investment management fee at the annual rate of up to 0.5% of the average market value of each endowment for those entities utilizing the services of the TTUS Office of Institutional Advancement or the Angelo State University Development Office.

Take Angelo State’s Carr Foundation with $96 million in assets, as reported by ASU’s website. The 0.5% TTU management fee equals $480,000. That’s before any PEU or Hedge Fund management fees: TTU’s Asset Class descriptions (pages 16 and 17) conceivably encompass PEU’s across all three classes.

c. Real Assets:
(1) Real assets are investments in tangible/physical assets such as commodities, real estate and other investments that generally display a positive correlation to the rate of inflation, including gold and inflation-linked bonds.
(2) Investment strategies: Commodities, Commodities-related, Private Real Estate, Real Estate Investment Trusts, Infrastructure, Inflation-linked bonds, Gold, Hedge Funds, and Agriculture.

Texas Tech’s Long Term Investment Fund clearly wants a piece of PEU action. Under Private Equity Fund Manager Selection (page 22), the policy states under “Terms:”

Fees generated by the fund (deal fees) should flow through to the limited partners – a minimum of 50% is expected.

TTU wants a cut of PEU deal fees on top of their 0.5% annual management fee. That’s PEU like, as is their categorization of investment types (page 17):

c. Private. Private investments represent a broad spectrum of investment activity, with investments in non-public securities, lack of liquidity, unpredictable cash flows, longer investment horizons and wide dispersion of returns being the most common characteristics. Typically, lock-ups can be 5 to 10 years in duration.

Welcome Texas Tech PEU to PEU Report. I’ve long said PEU love is a bipartisan affair. Who knew academics would remain asleep as university foundations and endowments roll the PEU dice? It’s been going on since 2005.

Texas Tech’s Board of Regents recently revisited its target asset allocation.

No risk, no reward! However, it seems odd to use Student Scholarship money on the PEU craps table. I wonder how Robert G. and Nona K. Carr would feel about their estate being 99% invested in Texas Tech’s Long Term Investment Fund? Surely, someone in West Texas remembers their investment predilections.

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Posted by Admin - May 19, 2012 at 10:59 pm

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FACEBOOK IPO LIVE: The social network goes public

It’s Facebook‘s big day.

The site, which was born in a dorm room eight years ago and has grown into a worldwide network of almost a billion people, is making the most talked-about stock market debut in years.

Here’s some of what Associated Press reporters are finding. Check back all day for updates. All times EDT.

___

5:22 p.m.

ABOUT THAT $38 FLOOR

For most of the last half-hour of trading, Facebook was at, or pennies above, the offering price of $38 per share. But it never traded at $37.99, or at any other price that would have put it in the red for the first day.

No coincidence, said Jay Ritter, a finance professor at the University of Florida: The banks that underwrote the IPO put in enough “buy” orders at $38 to keep the price from dropping below that level.

Underwriters are allowed under regulatory rules to buy back, for 30 days, a certain amount of the shares they sell on the open market.

Ritter said that his research showed 9 percent of IPOs close at exactly the offering price on the first day, 16 percent of IPOs fall, and 75 percent increase in value.

Facebook made it into the “increase” category, but just barely.

— Pallavi Gogoi, AP Business Writer

___

4:56 p.m.

SEC LOOKING INTO NASDAQ GLITCHES

The Securities and Exchange Commission is looking into glitches in the trading of Facebook stock around the time of scheduled debut Friday on the Nasdaq Stock Market.

The glitches caused traders problems changing and canceling their orders and delayed the start of trading by about a half-hour. Nasdaq said around noon that it was “investigating an issue in delivering trade execution messages” for Facebook stock.

The SEC staff “will review the incident with Nasdaq to determine its cause and steps that will be taken to address it,” agency spokesman John Nester said.

— Marcy Gordon, AP Business Writer

___

4:47 p.m.

NASDAQ ON GLITCHES

Nasdaq posted a message on one of its websites telling investors who had problems buying or selling Facebook stock between 11:11 and 11:30 a.m. to call Nasdaq before 5 p.m. with their order information.

Nasdaq went on to say:

“Our intention is to reach resolution of those trades today through an offline matching process If at the end of that process, a firm continues to have questions or concerns, the firm needs to submit a formal accommodation request to us through the normal channels. Those requests will be reviewed and ruled upon and further information will be forthcoming concerning those. This is a voluntary process and the normal accommodation rule process is available to those that do not want to participate will be made available.”

___

4:26 p.m.

FINAL STAT CHECK

Facebook closed at $38.23, a gain of 23 cents, or 0.61 percent.

About 570 million shares were traded on its first day as a public company. For perspective, that is roughly equal to the combined trading volume of 28 of the 30 stocks in the Dow Jones industrial average — every Dow stock except Bank of America and JPMorgan Chase.

___

4:16 p.m.

CHECKING BACK IN WITH AN EARLY INVESTOR

Alper Aydinoglu, the student at DePaul University in Chicago who got 50 shares via Etrade at $38, said that he was “disappointed with the first day of trading.”

His gain on paper: $11.50.

Before Etrade’s standard commission of $9.99.

He called it an excellent learning opportunity, though. Plus this: “On top of everything, I now have the bragging rights that I participated in one of the most popular IPOs of all time.”

— Pallavi Gogoi, AP Business Writer

___

4:09 p.m.

ZUCK: PLAY ALONG AT HOME II

The closing stock price of $38.23, multiplied by a holding of 503,601,850 shares, gives CEO Mark Zuckerberg a stake worth $19,252,698,725.

And 50 cents.

___

4:02 p.m.

‘LIKE KISSING YOUR SISTER’

There’s the close on Facebook: $38.23.

All that excitement for a gain of — 23 cents. And it took a rush of buyers in the final minutes to achieve even that. Facebook was hugging the $38 mark for much of the final hour of trading.

In theory, closing near the IPO price is good. It means that the banks that took the company public judged demand almost perfectly, and got the most money possible for selling stockholders.

But in practice, it’s bad: The institutions that buy from the sellers — typically big investors like hedge funds, mutual funds and pension funds — have come to expect big profits on the first day.

“This is like kissing your sister,” said John Fitzgibbon, founder of IPO Scoop, a research firm. “With all the drumbeats and hype, I don’t think there’ll be bar room bragging tonight.”

— Bernard Condon, AP Business Writer

___

3:46 p.m.

ZUCK: PLAY ALONG AT HOME

If you want to figure up Mark Zuckerberg’s wealth at the end of the trading day, here’s the math: He still holds 503,601,850 shares of Facebook after the initial public offering.

If the stock closes at $38 — and it is hovering just pennies above that level with about 15 minutes of trading left — that would make Zuckerberg’s stake worth about $19.1 billion.

— Barbara Ortutay, AP Technology Writer

___

3:30 p.m.

TEACHABLE MOMENT

The Associated Press spoke earlier with Ann Sherman, an IPO expert and associate finance professor at DePaul University, and asked her to check back in with her thoughts at the end of the trading day.

With Facebook almost back to its offering price of $38 per share, she said that even the best stocks can be over-hyped.

Sherman added: “From now on, I’ll be able to use Facebook as the perfect example of what I tell the students in my IPO and venture capital class — that even apparently hot IPOs can be risky to price, and that no company can perfectly control the timing of their offering.”

— Pallavi Gogoi, AP Business Writer

___

3:23 p.m.

MAD MONEY

Earlier this week, Mad magazine imagined a Facebook stock certificate, complete with a photo of Mark Zuckerberg smiling from inside an oval, like George Washington on the dollar bill.

“Thank you for funding our ongoing effort to collect and control every single piece of personal information on the Internet,” the certificate says. “Every photograph, every song, every social cause, every event listing, every opinion, every breathless description of a recently eaten pulled-pork sandwich.”

Facebook is drifting back toward its offering price of $38. It’s up just 10 cents for the day now as volume nears half a billion shares.

___

3:11 p.m.

TILL THURSDAY

Bruno del Ama, the CEO of asset management firm Global X Funds, said that he will wait five full trading days, until after the market closes Thursday, to get in on Facebook.

“On the first day you see a tremendous amount of volatility,” he said. By the fifth day, investors should see more stability, he said.

He believes Facebook is here to stay: “Once companies have built a network, it’s really difficult to displace them,” he said. He added that while massive companies such as Google are trying to compete with Facebook, and may even have better technology, “we care about where our friends are.”

— Barbara Ortutay, AP Technology Writer

___

3:02 p.m.

AN HOUR TO GO

Facebook stock is trading at $39.02, up a little more than a buck. Volume just passed 450 million shares.

It’s another bleak day for the rest of the market, by the way. The Dow Jones industrial average appears headed for its 12th loss in the past 13 trading days. The Nasdaq composite, representing Facebook’s stock exchange, is down 1 percent.

___

2:54 p.m.

BUT SERIOUSLY, FOLKS

Twitter users are joking about the Facebook IPO.

From Conan O’Brien: “Today, Facebook went public, just as MySpace’s last user went private.”

And from the Twitter feed of the website Someecards: “My favorite Facebook public offerings are still your beach photos.”

— Peter Svensson, AP Technology Writer

___

2:29 p.m.

WE ARE THE ONE-QUARTER PERCENT

Conversations about the Facebook IPO accounted for 0.25 percent of all online discussion during the first part of the workday, according to NM Incite, a company that tracks social media traffic.

That may sound small, but it’s an increase of 5,000 percent compared with the buzz about the Facebook IPO a month ago. It is also four times greater than the chatter for the LinkedIn IPO and 10 times greater than the Groupon IPO.

— Scott Mayerowitz, AP Business Writer

___

2:18 p.m.

POP CULTURE

Francis Gaskins, president of IPOdesktop, a market research company, said that it wasn’t a bad thing that Facebook didn’t get a “pop” on its first day, similar to what happened during the 1990s dot-com frenzy.

He said that most tech companies going public want a big rise in their debut to show they’re “strong, dynamic companies standing out in the crowd” but that Facebook already has that image, and so may not care.

Gaskins said that the banks taking Facebook public have learned from the IPOs of social media companies in the past year and are better able to gauge demand and supply for a new stock.

He said a rise of 5 percent to 8 percent in this “tough market” is a success.

Facebook stock is up 5.5 percent as volume approaches 400 million shares.

— Bernard Condon, AP Business Writer

___

2:13 p.m.

ZUCK ON WHAT TODAY MEANS

CEO Mark Zuckerberg, speaking before he symbolically rang the opening bell for the Nasdaq from Menlo Park, Calif.:

“Right now this all seems like a big deal. Going public is an important milestone in our history. But here’s the thing: Our mission isn’t to be a public company. Our mission is to make the world more open and connected. In the past eight years, all of you out there have built the largest community in the history of the world. You’ve done amazing things that we never would have dreamed of, and I can’t wait to see what you guys all do going forward.”

___

2:05 p.m.

VITAL SIGNS

With two hours to go in the trading day, Facebook is at $40.50, or $2.50 higher than its offering price. Volume has just passed 380 million shares.

By comparison, Bank of America, frequently the most active stock in the Standard & Poor’s 500 index, has traded only 155 million shares today. The next most active stock in the S&P, JPMorgan Chase, is at 59 million.

___

1:57 p.m.

THE RUSH FROM SMALL INVESTORS

TD Ameritrade, the online brokerage, reports that in the first 45 minutes that Facebook was trading, it accounted for a record 24 percent of trades executed by its customers.

By comparison, on its first day back on the stock market, in November 2010, General Motors represented 7 percent of overall trades on TD Ameritrade. For the LinkedIn IPO, in May 2011, the figure was 5 percent.

Steve Quirk, who oversees trading strategy at TD Ameritrade, said that about 60,000 orders were lined up before Facebook opened.

“The volume has been unbelievable even though the stock hasn’t moved dramatically,” Quirk said. “It’s a hot topic in our chat rooms, and most people expected to see the stock move more than it has.”

— Pallavi Gogoi, AP Business Writer

___

1:47 p.m.

UPDATE ON SOCIAL MEDIA STOCKS

Facebook stock is trading at about $41.25, a healthy gain of more than $3, but the gain is not translating to other social media companies, especially those with ties to Facebook.

LinkedIn is down 3.3 percent, Groupon is down 6 percent, and Zynga, which is trading again, is down more than 8 percent.

— Bree Fowler, AP Business Writer

___

1:23 p.m.

CALIFORNIA DREAMING

Gov. Jerry Brown of California must not have seen “The Social Network.”

In an appearance on “CBS This Morning,” Brown said that his state is the land of innovation and that it was where Facebook was invented. He added: “Not in Texas, not in Arizona, not in Manhattan and certainly not, you know, under the White House or the Congress.”

But interviewer Charlie Rose pointed out that CEO Mark Zuckerberg and others developed the site at Harvard University, all the way across the country in Cambridge, Mass.

Brown responded that the Facebook inventors quickly came to California, “where all the other innovative people are.”

— Juliet Williams, AP Sacramento bureau

___

1:16 p.m.

EXPERIENCING THE FACEBOOK IPO ON FACEBOOK

Facebook’s IPO has Wall Street abuzz. But what about Facebook’s 900 million users?

Some were debating whether they should get in on the buying frenzy. Others were guessing the closing price. Several were lamenting that they hadn’t thought to invent the social media site themselves.

A few treated even the company like a person, congratulating it on the public offering as they might a friend on the birth of a child.

“Hey Facebook! Have a good first day on the stock market,” a swimming pool maintenance and repairman from Petaluma, Calif., wrote from a mobile device. Within two hours, eight other Facebook users had “liked” the post.

Not all Facebook users were obsessed with the company’s entrance to the stock market. The went along with their everyday lives, posting photos of drunken debauchery that they might one day regret, weighting in on the presidential election, celebrating Haitian flag day or just welcoming the start of the weekend.

— Scott Mayerowitz, AP Business Writer

___

1:05 p.m.

NASDAQ ON THE DELAY

Seconds before noon, with demand for Facebook stock overwhelming, Nasdaq issued a message on one of its websites saying that it was “investigating an issue in delivering trade execution messages” from the Facebook IPO.

Nasdaq initially planned the first trades of Facebook stock for 11 a.m., then 11:05 a.m. The stock opened at about 11:30.

Facebook is trading at about $41, or $3 higher than its offering price. Volume is approaching 320 million shares traded.

— Tali Arbel, AP Business Writer

___

12:55 p.m.

A FUND MANAGER WEIGHS IN

Chris Brown, manager of the Pax World Balanced mutual fund, made a roughly $14 million investment when his $1.9 billion fund acquired private shares of Facebook on a secondary market before the IPO.

As shares traded publicly for around $40 at midday Friday, Brown said the rise from the stock’s $38 opening price was unsurprising.

“Going into the IPO, there has been a lot of skepticism from investors, in particular institutional investors, questioning anything from whether the price of the stock is fair, to whether Facebook can successfully monetize and sell ads,” he said.

“We’re long-term investors. It’s nice to have the stock up for one day, but it’s only one day. It’s hard to extrapolate much as to the future of the company.”

In coming days, Brown expects plenty of ups and downs for the stock, as investors assess a company whose prospects are hard to pin down because of its evolving business model.

“You’re going to see obviously an extreme amount of volatility over the next week as people evaluate the stock,” Brown said.

— Mark Jewell, AP Personal Finance Writer

___

12:50 p.m.

THE OUTSIDER’S VIEW

“I’m part of the 99 percent. I don’t buy stock shares,” Jerry Urban said as he waited for a bus in Baltimore. “I wish them good luck. Tell them to stop selling my information.”

Facebook stock is at about $40.50, or $2.50 higher than its offering price.

— Alex Dominguez, AP Baltimore bureau

___

12:24 p.m.

SHOULD YOU BUY? A VIEW FROM ONE BANKER

Facebook stock is up about 6 percent from its offering price. More than a quarter-billion shares have been traded.

Blessing Oguguam of Nashville, Tenn., a vice president in business banking for Wells Fargo who has worked in commercial lending for 15 years, said he was not comfortable buying Facebook stock:

“I’m thinking it’s great for now. But 10 years from now, is that crave still going to be there? So if I go ahead and invest now, I know Facebook is not producing any product. It’s just a social media site. So in 10 years to come, if this hype dies down, then what happens to my investment?”

— Lucas L. Johnson II, AP Nashville bureau

___

12:19 p.m.

WATCHING OTHER SOCIAL STOCKS

Some recent quotes from other social media stocks:

LinkedIn: Down 2.2 percent.

Groupon: Down 6 percent.

Zynga: Down 13 percent, and apparently halted. Its last trade was about 40 minutes ago.

___

12:17 p.m.

ELSEWHERE IN TECH LAND

It’s a good day for some other big-name technology stocks.

Stock in Yahoo is up more than 5 percent after a report from All Things D, a website devoted to technology news, that Yahoo was close to selling part of its valuable stake in the Chinese Internet company Alibaba Group.

Apple, which has fallen more than $100 per share from its all-time intraday high of $644 on April 10, is up 1.3 percent at $537. Google is up 0.3 percent at $624 per share.

Meanwhile, Facebook has nudged back over the $40 level, and volume has surpassed 250 million shares traded.

___

12:02 p.m.

BACK UP FOR THE DAY

Facebook stock has climbed back to about $40 as trading volume surpasses 220 million shares. The stock had opened at $42.05 and sunk back to $38, its offering price, but did not cross below that level. That indicates heavy buying interest in the stock at $38.

___

11:50 a.m.

DRIFTING BACK TOWARD $38

Facebook stock, which opened with a gain of about $4 over its offering price of $38, has steadily drifted lower in the first half-hour of trading. It is hovering now at about $38. Trading volume is closing in on 200 million shares.

___

11:47 a.m.

150 MILLION SHARES

Facebook’s trading volume is surging. It passed 150 million shares traded about 15 minutes after its debut on the Nasdaq. The price has drifted back toward the offering price and is now at about $39, a rise of $1.

The stock of another Internet company, Zynga, responsible for the popular FarmVille game on Facebook, appears to be halted for trading after it plunged minutes into the Facebook debut. There is no immediate word on why.

___

11:38 a.m.

BIG VOLUME

Facebook topped 100 million shares traded in the first four minutes after its debut on the Nasdaq. By comparison, Amazon.com has traded about 2.2 million shares today and Google about 2 million.

Seven minutes after its first trade, the stock was hovering at about $40, a $2 gain over its offering price.

___

11:32 a.m.

FACEBOOK STOCK OPENS

More than 80 million shares have traded in the first minute at the Nasdaq. The stock opened with a jump of about 11 percent, at $42.05, or $4.05 higher than the listing price.

— Seth Sutel, AP Business Writer

___

11:28 a.m.

REPORT OF DELAY AT NASDAQ

The Wall Street Journal reports that traders are experiencing problems changing and canceling their orders for Facebook stock ahead of the debut. There is no immediate comment from Nasdaq.

___

11:19 a.m.

SNAGGING SOME SHARES

Alper Aydinoglu, a student at DePaul University in Chicago, said that he got 50 shares via an Etrade account that he opened specifically to buy Facebook shares.

“It’s my first IPO experience,” Aydinoglu said.

He added: “I bought the stock for a couple of reasons. No. 1, there’s so much hype about Facebook and everybody is going to be getting in on it, so there will likely be a huge pop in the stock today. Another reason is that Facebook is a great company. Mark Zuckerberg created something huge.”

He said that if the stock rises 15 percent to 50 percent, he may sell half and keep the rest. If the stock drops, he said, he plans to get out altogether.

— Pallavi Gogoi, AP Business Writer

___

11:07 a.m.

WAITING IN TIMES SQUARE

People are huddled outside the windows of the Nasdaq site in Times Square, waiting for the stock to open. People are holding up cell phones and cameras pointed at the Nasdaq board, waiting to get a picture of the first price change.

— Joseph Pisani, AP Business Writer

___

11:02 a.m.

A WARNING FROM GERMANY

A German data protection official has warned Facebook investors that the site’s $38 starting share price is based on practices that may breach European privacy rules.

Thilo Weichert, data protection commissioner for the northern German state of Schleswig-Holstein, said shareholders should be aware that if European privacy authorities have their way, “Facebook’s business model will implode.”

Weichert was quoted by German daily Frankfurter Allgemeine Zeitung on Friday saying Facebook could be ordered to stop transferring user information to the United States.

Facebook’s IPO prospectus warns investors that its business is subject to “complex and evolving U.S. and foreign laws and regulations regarding privacy, data protection, and other matters” that could harm its business.

___

10:52 a.m.

THE ARGUMENT AGAINST JUMPING IN

The banks helping take Facebook public want us to value this 8-year-old upstart at as much as $104 billion, more than Disney or Kraft Foods, though those companies earn three and four times more. That top valuation is also more than 100 times Facebook’s earnings last year, versus 13 times for the average company.

At such a high price, it will take years for this so-called earnings multiple to fall to a more reasonable level, and that’s assuming the company can maintain its torrid earnings growth.

To make money in Facebook, you’re betting that other buyers will be just as willing as you to hold their nose at the valuation, and keep doing so for years.

Facebook grew its earnings 65 percent last year, faster than at most companies, so you should pay more for it than you would the typical company. But how much more? Profits at Apple grew 85 percent last year. Its stock is trading at 13 times earnings per share.

— Bernard Condon, AP Business Writer

___

10:47 a.m.

THE REACTION ONLINE

Facebook’s IPO was trending on Twitter, but it wasn’t the No. 1 item. God, a retiring Chicago Cubs pitcher, Kanye West’s new film and Haitian Flag Day all were trending higher in the U.S. at 10:30 a.m.

Down at No. 9 was “$FB,” a tag used to talk about the offering. At the top of the list? The hashtag “ThingsWeAskGod2helpUsWith,” along with news about the possible retirement of Cubs pitcher Kerry Wood and “Cruel Summer,” the name of Kanye West’s short file that will debut at the Cannes Film Festival.

The IPO was No. 2 in trending Google searches, right after the death of disco queen Donna Summer.

— Scott Mayerowitz, AP Business Writer

___

10:40 a.m.

AT INTRADE, BETTING ON A BIG FIRST-DAY GAIN

Intrade, the online betting market, is getting in on the early Facebook action. Its top item for bidding is a wager on Facebook’s share price at the close of the first day of trading.

Based on its orders to date, Intrade said that the market is predicting a 77 percent chance that the close is $45 or higher. A closing price of $45 would represent a first-day gain of 18 percent for the stock.

The odds that the price would close at $60 or higher were only 15 percent. But there was a widespread assumption the stock would finish up for the day. Intrade put the odds of a close of $40 or higher at 92 percent.

To bet on a prediction, you need to open and fund an account at Intrade.com.

— Dave Carpenter, AP Personal Finance Writer

___

10:33 a.m.

ONE ARGUMENT FOR BUYING

Facebook will sell on the open market for 20 times the company’s projected 2012 revenue, based on its IPO price of $38. Google, by comparison, is trading at about six times its projected revenue for this year.

But Facebook hasn’t been as aggressive as it could have been about selling ads or finding other ways to make money where its visitors, on average, dwell for an average of 6½ hours per month, according to comScore Inc.

Instead of ramping up revenue, Facebook has concentrated on attracting users — an emphasis that is bound to pay off.

Facebook also has a big personnel advantage: Sheryl Sandberg, hired as the company’s chief operating officer in 2008. She played a key role in expanding Google’s advertising system during its first few years as a publicly held company, a period when the company’s stock hit its peak so far.

— Michael Liedtke, AP Technology Writer

___

10:24 a.m.

THE RIPPLE EFFECT: OTHER IPOs?

Ann Sherman, an expert on initial public offerings and an assistant professor in the department of finance at the DePaul University, said that the IPO will lead other technology companies to go public.

“Facebook is unique in so many ways, but its IPO will certainly inspire other companies to try an IPO if they are already thinking of it,” she said.

But other companies won’t get a reception anything like Facebook’s, she said. They will face much more muted investor demand, like that for Groupon and Linkedin, she said.

— Pallavi Gogoi, AP Business Writer

___

10:15 a.m.

A POP FOR THE NASDAQ

The stock market is flat so far, but it’s a good day for one stock in particular — Nasdaq OMX Group, which operates the Nasdaq Stock Market.

Facebook announced in April that it would list its shares there, under the stock ticker symbol “FB.” The Nasdaq is also home to Google and Microsoft.

Stock in Nasdaq OMX Group is up 1.7 percent for the day. The Nasdaq composite index is up just 0.06 percent.

___

10:04 a.m.

Highlights from Facebook's debut

Facebook’s debut on the stock market was preceded by epic hype, delayed by a technical glitch and tracked minute-by-minute by investors around the world. In the end, the fuss was over a gain of 23 cents.

Here are some highlights of the day, as gathered by reporters from The Associated Press:

___

STATUS UPDATE

On Mark Zuckerberg’s Facebook page, under recent activity, was this, posted shortly after 9:30 a.m. EDT:

“Mark listed FB on NASDAQ.”

___

STAT CHECK

Facebook closed at $38.23, a gain of 23 cents, or 0.61 percent.

About 570 million shares were traded on its first day as a public company. For perspective, that is roughly equal to the combined trading volume of 28 of the 30 stocks in the Dow Jones industrial average _ every Dow stock except Bank of America and JPMorgan Chase.

___

`LIKE KISSING YOUR SISTER’

All that excitement for 23 cents. And it took a rush of buyers in the final minutes to achieve even that. Facebook was hugging the $38 mark for much of the final hour of trading.

In theory, closing near the IPO price is good. It means that the banks that took the company public judged demand almost perfectly, and got the most money possible for selling stockholders.

But in practice, it’s bad: The institutions that buy from the sellers _ typically big investors like hedge funds, mutual funds and pension funds _ have come to expect big profits on the first day.

“This is like kissing your sister,” said John Fitzgibbon, founder of IPO Scoop, a research firm. “With all the drumbeats and hype, I don’t think there’ll be bar room bragging tonight.”

_ Bernard Condon, AP Business Writer

___

THE EARLY INVESTOR

Alper Aydinoglu, a student at DePaul University in Chicago, got 50 shares via Etrade at $38, the offering price. He said that he was “disappointed with the first day of trading.”

His gain on paper: $11.50.

And that was before Etrade’s standard commission of $9.99.

He called it an excellent learning opportunity, though. “On top of everything,” he added, “I now have the bragging rights that I participated in one of the most popular IPOs of all time.”

_ Pallavi Gogoi, AP Business Writer

___

VIEW FROM THE NASDAQ

In Times Square, home of the Nasdaq, people took pictures of the giant Nasdaq billboard, which featured the Facebook logo. Some were “checking in” to the Nasdaq on Facebook.

As they waited for Facebook stock to start trading, people huddled outside the windows of the Nasdaq site holding up cellphones and cameras to take pictures of the first price change.

Nasdaq is an electronic market, and the site is a TV studio featuring monitors with constantly changing stock prices.

Frederick Nolde, 31, of Richmond, Va., was in New York for meetings and said that he bought 100 shares of Facebook through Etrade. He thinks the company is worth $100 billion, but he said the real question is how Facebook performs with mobile users.

“If they can figure that out, they’ll do well,” he said.

Dennis Hitchings, a retiree from Columbus, Ohio, said that he did not think Facebook is worth $100 billion _ “They don’t have the revenue” _ but he did say he would buy the stock at $38.

_ Joseph Pisani, AP Business Writer

___

ABOUT THAT $38 FLOOR

Underwriters are allowed under regulatory rules to buy back, for 30 days, a certain amount of the shares they sell on the open market.

Ritter said that his research showed 9 percent of IPOs close at exactly the offering price on the first day, 16 percent of IPOs fall, and 75 percent increase in value.

Facebook made it into the “increase” category, but just barely.

_ Pallavi Gogoi, AP Business Writer

___

ZUCK: DOING THE MATH

The closing stock price of $38.23, multiplied by a holding of 503,601,850 shares, gives CEO Mark Zuckerberg a stake worth $19,252,698,725.

And 50 cents.

In Menlo Park., Calif., Zuckerberg addressed Facebook employees Friday morning and said: “Right now this all seems like a big deal. Going public is an important milestone in our history. But here’s the thing, our mission isn’t to be a public company. Our mission is to make the world more open and connected,” Zuckerberg said. “In the past eight years, all of you out there have built the largest community in the history of the world. You’ve done amazing things that we never would have dreamed of and I can’t wait to see what you guys all do going forward.”

___

MAD MONEY

Earlier this week, Mad magazine imagined a Facebook stock certificate, complete with a photo of Mark Zuckerberg smiling from inside an oval, like George Washington on the dollar bill.

“Thank you for funding our ongoing effort to collect and control every single piece of personal information on the Internet,” the certificate said. “Every photograph, every song, every social cause, every event listing, every opinion, every breathless description of a recently eaten pulled-pork sandwich.”

Facebook is drifting back toward its offering price of $38. It’s up just 10 cents for the day now as volume nears half a billion shares.

___

THE RUSH FROM SMALL INVESTORS

TD Ameritrade, the online brokerage, reported that in the first 45 minutes that Facebook was trading, it accounted for a record 24 percent of trades executed by its customers.

Steve Quirk, who oversees trading strategy at TD Ameritrade, said that about 60,000 orders were lined up before Facebook opened.

_ Pallavi Gogoi, AP Business Writer

___

BUT SERIOUSLY, FOLKS

Twitter users were joking about the Facebook IPO.

From Conan O’Brien: “Today, Facebook went public, just as MySpace’s last user went private.”

And from the Twitter feed of the website Someecards: “My favorite Facebook public offerings are still your beach photos.”

_ Peter Svensson, AP Technology Writer

___

CALIFORNIA DREAMING

Gov. Jerry Brown of California must not have seen “The Social Network.”

But interviewer Charlie Rose pointed out that CEO Mark Zuckerberg and others developed the site at Harvard University, all the way across the country in Cambridge, Mass.

Brown responded that the Facebook inventors quickly came to California, “where all the other innovative people are.”

_ Juliet Williams, AP Sacramento bureau

___

WE ARE THE ONE-QUARTER PERCENT

Conversations about the Facebook IPO accounted for 0.25 percent of all online discussion during the first part of the workday, until about 1 p.m., according to NM Incite, a company that tracks social media traffic.

_ Scott Mayerowitz, AP Business Writer

___

EXPERIENCING THE FACEBOOK IPO ON FACEBOOK

Facebook’s IPO has Wall Street abuzz. But what about Facebook’s 900 million users?

A few treated even the company like a person, congratulating it on the public offering as they might a friend on the birth of a child.

_ Scott Mayerowitz, AP Business Writer

___

POP CULTURE

Francis Gaskins, president of IPOdesktop, a market research company, said that it wasn’t a bad thing that Facebook didn’t get a “pop” on its first day similar to what happened during the 1990s dot-com frenzy.

Gaskins said that the banks taking Facebook public have learned from the IPOs of social media companies in the past year and are better able to gauge demand and supply for a new stock.

_ Bernard Condon, AP Business Writer

___

THE OUTSIDER’S VIEW

“I’m part of the 99 percent. I don’t buy stock shares,” Jerry Urban said as he waited for a bus in Baltimore. “I wish them good luck. Tell them to stop selling my information.”

Facebook stock is at about $40.50, or $2.50 higher than its offering price.

_ Alex Dominguez, AP Baltimore bureau

___

TILL THURSDAY

Bruno del Ama, the CEO of asset management firm Global X Funds, said that he will wait five full trading days, until after the market closes Thursday, to get in on Facebook.

“On the first day you see a tremendous amount of volatility,” he said. By the fifth day, investors should see more stability, he said.

_ Barbara Ortutay, AP Technology Writer

___

A WARNING FROM GERMANY

A German data protection official warned Facebook investors that the site’s $38 starting share price is based on practices that may breach European privacy rules.

Weichert was quoted by German daily Frankfurter Allgemeine Zeitung on Friday saying Facebook could be ordered to stop transferring user information to the United States.

___

SOME PERSPECTIVE ON MARKET VALUE

The IPO price valued Facebook at $104 billion. By comparison, here are the top five companies in the Standard & Poor’s 500 index by market value, based on Friday’s closing stock prices:

Apple, $496 billion

Exxon Mobil, $381 billion

Microsoft, $245 billion

IBM, $227 billion

Wal-Mart Stores, $212 billion

_ Seth Sutel, AP Business Writer

___

THE RIPPLE EFFECT: CALIFORNIA CASH

Besides minting Internet billionaires, the Facebook IPO should provide a little help for the cash-starved state of California.

The state’s nonpartisan Legislative Analyst’s Office says the IPO will generate $1.6 billion to $2.6 billion for the state through the middle of next year as shareholders cash in their stock.

___

A FUND MANAGER WEIGHS IN

Chris Brown, manager of the Pax World Balanced mutual fund, made a roughly $14 million investment when his $1.9 billion fund acquired private shares of Facebook on a secondary market before the IPO.

As shares traded for about $40 at midday Friday, Brown said the rise from the stock’s $38 opening price was unsurprising.

“We’re long-term investors. It’s nice to have the stock up for one day, but it’s only one day. It’s hard to extrapolate much as to the future of the company.”

In coming days, Brown expects plenty of ups and downs for the stock, as investors assess a company whose prospects are hard to pin down because of its evolving business model.

“You’re going to see obviously an extreme amount of volatility over the next week as people evaluate the stock,” Brown said.

_ Mark Jewell, AP Personal Finance Writer

___

A BANKER WEIGHS IN

Blessing Oguguam of Nashville, Tenn., a vice president in business banking for Wells Fargo who has worked in commercial lending for 15 years, said he was not comfortable buying Facebook stock:

_ Lucas L. Johnson II, AP Nashville bureau

___

TEACHABLE MOMENT

As Facebook hovered near its $38 offering price toward the end of the day, Ann Sherman, an IPO expert and associate finance professor at DePaul University, said that even the best stocks can be over-hyped.

Sherman added: “From now on, I’ll be able to use Facebook as the perfect example of what I tell the students in my IPO and venture capital class _ that even apparently hot IPOs can be risky to price, and that no company can perfectly control the timing of their offering.”

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Posted by Admin - May 19, 2012 at 10:59 pm

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Fidelity Mutual Funds Relevant Ideas « broadway

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Posted by Admin - May 19, 2012 at 10:58 pm

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Mutual Funds Better Than Indvidual Stocks? | Class Act Homes

Though it can’t be said usually that mutual funds are all the time better than individual shares, it still cannot be denied that they normally involve decrease risks, much less money and generally yield lower however protected returns.

It all is determined by the danger perspective of the investor. That is understood clearly by looking at the disclaimer connected with any mutual fund options which are practically similar with that relevant to every other (type of) stock. They have their advantages and loopholes like any other type of investment. And as in different forms of funding, one has to be fully conscious of potential pitfalls and whereas driving high with mutual funds, has to be alert sufficient to avoid them.

Mutual funds are seemingly the best and least worrying way to invest in the inventory market. Quite a considerable amount of new money has been put into mutual funds through the previous few years.

Briefly put, a mutual fund is a pool of cash contributed to by particular person buyers, companies, and different organizations. There will be a fund supervisor employed to take a position this money with a major goal that depends upon the kind of fund. The manger normally diversifies in a way such that the net common incomes is expected to be significantly positive. S/he may be a hard and fast-revenue fund manager. In that case s/he would work hard to supply the best return at the lowest risk. Then again a long-time period development supervisor should strive at least to beat the Dow Jones Industrial Common or the S&P 500 in a given fiscal year.

But that’s what any profitable investor makes an attempt to do, and anyone with the same strategy can be anticipated to make the same earnings.

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This post is written by Aaron Lewis 31

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Posted by Admin - May 19, 2012 at 10:58 pm

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Inspect the Fees in Your 401(k) | drax29.info

By GEORGETTE JASEN

More than 50 million Americans have invested some $3.64 trillion in 401(k) and 403(b) retirement savings plans, more than half of it in mutual funds. Chances are, few of them know how much they’re paying in fees and expenses.

It isn’t easy to find that information, yet those fees can amount to hundreds of dollars a year or more and significantly reduce what you’ll have when you retire. An AARP survey of plan participants 25 and older found that seven of 10 didn’t know they were paying any fees at all.

“Investors today are increasingly responsible for their own retirement, so it’s critical that they have all the information they need to plan,” says Jean Setzfand, AARP vice president of financial security. “Fees are often hard to read and understand even when you know you are paying them.”

That will change this summer when new disclosure requirements from the Department of Labor take effect.

James Steinberg

Mutual-fund companies and other plan administrators must provide detailed information to employers by July 1. Employers must deliver that information to plan participants by Aug. 30 and annually thereafter, in a clear and readable format. Most plans will be subject to the new rules, although there are a few exceptions, such as 403(b) plans established or maintained by government employers for federal, state and local government employees.

“It will be the first time that all participants [in covered plans] will have access to comparable information about all the investments in a plan,” says David Abbey, senior counsel for pension regulation at the Investment Company Institute, the mutual-fund trade group in Washington, D.C.

Here are some things you need to know:

What are all these fees I might be paying?

There are investment-related fees and fees for administering the plan itself.

Investment-management fees tend to be the largest component of costs, and usually are assessed as a percentage of assets. In the case of variable annuities, there are also charges for the insurance element of these products, which typically provides the return of at least your original investment in case of your death.

With both funds and annuities, there can be charges that help compensate a financial adviser who was involved in selling the plan to your employer and who may provide continuing assistance to the employer and/or individual employees.

Fees for the administration of the plan cover such things as record keeping, accounting, and legal services to ensure regulatory compliance. Individual participants may also be charged fees for specific transactions, such as taking a plan loan.

How are the investment and other fees charged?

Most investment-related fees are automatically subtracted from fund and annuity assets, and the quoted returns on those holdings are generally net of those charges. When sales commissions are paid, there can also be upfront commissions—or redemption fees when funds or annuities are sold within a certain number of years since purchase.

Participants can be charged for plan-level costs in a couple of ways. There can be explicit fees, expressed either as dollar amounts or a percentage of assets. Or these expenses can be bundled into the investment options: For instance, the plan could use a particular class of fund shares that includes a half-percentage-point fee to cover administrative costs.

How much do these fees add up to?

The fees can vary enormously among plans, depending on the number of participants, the amount invested overall and the number and type of investment options. Plans with more participants and higher average balances typically have lower fees because some costs can be spread over a larger group. In some cases, employers pay all or part of the administrative costs.

In a recent ICI study of 525 defined-contribution plans, Deloitte Consulting LLP calculated that the 10% of plans with the lowest costs had “all-in” fees of less than 0.87% a year, which includes plan administration, record keeping, investment management, and consulting or financial advice for plan sponsors and sometimes, educational programs and financial advice for participants. Fees were more than 1.8% for the 10% with the highest costs. More than half the plans in the survey were small, reflecting the 401(k) universe as a whole. There are many more participants in larger plans, which typically have lower costs. Thus, the median participant pays “all-in” fees of 0.78%, according to Deloitte’s calculations. That would be $140 on what the Employee Benefit Research Institute and ICI say is the median 401(k) account balance of about $18,000, or $78 for every $10,000 invested.

How much you pay now in fees can make a big difference in how comfortable you’ll be in retirement. Tim Courtney, chief investment officer for Burns Advisory Group in Oklahoma City, estimates that a 23-year-old who invests $5,000 a year in a 401(k) plan returning 8% a year before fees, on average, would have more than $1.3 million when he turns 65 if fees are just 0.5%. Raise those fees by one percentage point, to 1.5%, and the account would have $317,136 less, or just over $1 million.

Where can I look now to see what I’m paying?

Quarterly and annual statements from your plan may include some information about fees. If you invest in mutual funds, you can find information about fees and other expenses in each fund’s prospectus. Many plans also include fund fact sheets that include things like returns and fees, although that and the prospectus usually come only with the initial investment. Expense and return information is also available on websites including The Wall Street Journal’s WSJmarkets.com and morningstar.com.

Information about fees for administering the plan itself should be available from your employer, but you usually have to ask. Some employers include it on quarterly or annual statements.

AARP has a free online tool, with registration, a 401(k) fee calculator (www.aarp.org/ 401kfees) that estimates fees associated with individual plans and approximates in dollars the potential impact on the balance at retirement age. The tool was developed with BrightScope Inc., a financial-information company that publicly rates more than 40,000 401(k) and 403(b) plans. BrightScope also offers fee information if you register on its website, BrightScope.com.

What will change with the coming disclosure rules?

Employees will get a multipage document listing all the investment options in their plan, with one-, five- and 10-year returns compared with their benchmarks, as well as fees and expenses for each and a description of what those fees are for. It will be sent to all employees eligible to participate, not just to those who have already invested.

Besides mutual funds, the list will include investments such as guaranteed investment contracts, stable-value funds and annuities, if they are offered by the plan. The form will also include a Web address to get additional information, such as updated returns, about each investment.

Employers “have been polishing up their plans in anticipation of fee disclosure, making sure the fees are appropriate,” says David Wray, president of the Plan Sponsor Council of America. He says nearly two-thirds of 401(k) plans changed their investment lineup last year, and 57% did so the year before, compared with a “normal number” of about 10%.

To be sure, fees shouldn’t be your only consideration when making an investment decision. “You have to take a holistic view, [consider] the objective of the fund and its performance relative to its benchmark as well,” says Larry Goldbrum, general counsel of the Spark Institute, a Simsbury, Conn., trade group for the retirement-plan industry. That information will be part of the required disclosures.

Ms. Jasen is a writer in New York. Email her at reports@wsj.com.

Corrections & Amplifications

The new 401(k) disclosure rules from the Labor Department don’t require employers to list investment choices by asset class, although most will probably do so. An earlier version of this article implied that an asset-class breakdown is required.

A version of this article appeared April 5, 2012, on page C19 in the U.S. edition of The Wall Street Journal, with the headline: Inspect the Fees in Your 401(k).

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Posted by Admin - May 19, 2012 at 10:58 pm

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Treadstone Energy Partners, LLC Completes Acquisition of Fort …

Treadstone Energy Partners, LLC Completes Acquisition of Fort Trinidad Field Assets

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HOUSTON–(BUSINESS WIRE)–Treadstone Energy Partners, LLC (“Treadstone”) announced today that it has completed the acquisition of an Undisclosed Seller’s interest in the Fort Trinidad Field in Madison and Houston counties, Texas. The acquisition includes the Upper Glen Rose (“C”) Unit producing field which encompasses approximately 15,000 acres covering multiple oil and liquids-rich stacked pays. Treadstone will assume operatorship of the producing wells and gas compression facilities which were previously operated by the Undisclosed Seller. Treadstone plans to pursue well workovers, recompletions and new drilling opportunities to increase production and recovery from this asset.

Treadstone’s President & CEO, Frank McCorkle, had this to say about the acquisition: “This is an exciting time for Treadstone. The Fort Trinidad acquisition complements our existing asset base in East Texas, where we now hold over 20,000 net acres of proven oil and liquids-rich acreage. We expect significant production and reserves growth over the next year, providing a solid foundation for the future of Treadstone.”

Treadstone is a Houston-based, privately held company engaged in the acquisition and development of oil and natural gas reserves. Treadstone was formed in March 2011 as a Kayne Anderson Energy Funds portfolio company.

About Kayne Anderson Energy Funds

The first Kayne Anderson Energy Fund was launched in 1998, and the Kayne Anderson Energy Funds currently manage $2.7 billion of committed capital for energy private equity investments. With offices in Houston, Texas and Los Angeles, California, the Kayne Anderson Energy Funds invest private capital primarily in high-growth oil and gas companies. For more information on Kayne Anderson’s energy private equity investing, please visit www.kaynecapital.com, or contact Mike Heinz, Senior Managing Director, at (713) 655-7352.

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Posted by Admin - May 18, 2012 at 10:51 pm

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Ipso Facto » Blog Archive » Where was 38 Studio's board of …

Mr. Macrae began his career in videogames in 1981 when he founded General Computer in Cambridge, Massachusetts. Within a few years the company grew to over a hundred employees designing arcade and home games for Atari and Bally / Midway. Between original games and arcade conversion to home systems, General Computer was responsible for versions of Ms. Pac-Man, Centipede, Galaxians, Galaga, Asteroids, Joust, Robotron, Pole Position, Jungle Hunt, Xevious, Berserk, Desert Falcon, Dig Dug, Ballblazer, Jr. Pac-Man, Kangaroo, Moon Patrol, Food Fight, Phoenix, Quantum, Rubik’s Cube, Realsports Tennis, Track & Field, and Vanguard. In 1993, he founded a new company, VideoGuide, to design interactive program guides. In 1996, VideoGuide was merged into Gemstar; in 2000 Gemstar acquired TV Guide. Doug became President of TV Guide Consumer Electronics with offices in Boston, Los Angeles, London, Luxemburg, Hong Kong, and Tokyo. After retiring in 2005, Mr. Macrae became an avid World of Warcraft player, spending many hours of quality time with his sons. Desiring to get back into the videogame world, Doug, co-created the Azeroth Advisor, a personalized newsletter for players of Blizzard’s World of Warcraft game.

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Posted by Admin - May 18, 2012 at 10:51 pm

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Matrix Asset Management Inc. Reports First Quarter Results and Declares Dividend

VANCOUVER, BRITISH COLUMBIA–(Marketwire – May 15, 2012) – Matrix Asset Management Inc. (the “Company” or “Matrix”) (TSX:MTA.TO – News) reported today its financial and operating results for the first quarter ended March 31, 2012 and announced the next regular quarterly dividend of $0.015 per share would be payable on June 12, 2012 to shareholders of record on May 29, 2012. The Company has a dividend reinvestment plan in place for which details are available on Matrix’s website (www.matrixasset.ca).

Highlights

Revenues compared to the first quarter in the prior year are down, mainly due to decreases in AUM, but did increase by 4% relative to the last quarter of 2011, primarily due to incentive participation dividends being paid or becoming payable during the first quarter of 2012 to the Company in connection with successful divestments by managed retail venture capital funds. Total expenses before merger, acquisition and other special project costs were down from the first quarter in the prior year by 7% and down by 14% relative to the last quarter of 2011. Non-recurring expenses for mergers, acquisitions and terminations also decreased compared to the first quarter of 2011.

For the quarter ended March 31, 2012, EBITDA was $0.5 million, or $0.6 million on a recurring basis, and Free Cash Flow was $0.3 million. Net income for the quarter was $(0.5) million, and recurring (loss) income before taxes was also $(0.5) million.

David Levi, President and CEO of Matrix, commented: “In many respects, the first quarter of 2012 was a continuation of a difficult 2011 fiscal year. AUM, and in turn revenue, has not yet grown to targeted levels as we continue to develop and refine our asset management platform. We seek to continue to build on our national asset and wealth management platform in 2012 through financed acquisitions, new investment mandates and new products. Finally, we are pleased to report that since the announcement of SEAMARK acquiring LeeSide, we have experienced 100% client retention.”

Corporate Overview

Matrix is a diversified, asset and wealth management company with offices across Canada. The Company manages approximately $1.6 billion in assets through three operating divisions:


--  Institutional asset management, operated through SEAMARK, which offers    portfolio management to institutional and high net worth private    clients, including through managed portfolio advisory ("wrap") programs    of leading Canadian investment dealers. --  Fund management, operated through Matrix Funds Management (a division of    GrowthWorks Capital Ltd.), which manages the Matrix family of mutual    funds and specialty funds (formerly Mavrix Funds and SEAMARK Mutual    Funds) and distributed through investment dealers and financial planners    across Canada. --  Venture capital and private equity, operated through GrowthWorks, which    manages funds in the venture capital and private equity sector. With    seven offices located in major and regional centres across Canada,    GrowthWorks has a true national investment presence and manages venture    capital funds for individual and institutional investors.

Summary of First Quarter Financial Results – Unaudited

Results of operations for Matrix for the first quarter consolidate the results of Matrix and its subsidiaries. Matrix reports its consolidated statement of financial position, statement of income (loss), statement of comprehensive income (loss), statement of shareholders’ equity and cash flows in accordance with International Financial Reporting Standards (“IFRS” or also referred to as generally accepted accounting principles or “GAAP”) in Canadian dollars.

The following table sets out selected consolidated financial information about Matrix for the three months ended March 31, 2012 compared with financial information for Matrix for the same period in 2011.


                                             For the three    For the three                                               months ended     months ended                                             March 31, 2012   March 31, 2011                                           (in $ thousands) (in $ thousands) ----------------------------------------------------------------------------Revenue                                                                       Management and administration fees      $          5,879  $         7,209   Additional administration fees                       343              368   Incentive participation dividends                    584              353   Interest income                                        9               14   Other income                                          92              160 ----------------------------------------------------------------------------Total Revenue                                        6,907            8,104                                                                             Expenses                                                                      Selling, general and administrative                5,727            5,993   Share-based compensation                             144               96   Servicing commissions                                618              708   Amortization - property and equipment                 82               70   Amortization - deferred sales                                                commissions                                         491              634   Amortization - asset management                                              contracts                                           192              287   Interest                                             187              228 ----------------------------------------------------------------------------                                                     7,441            8,016 ----------------------------------------------------------------------------(Loss) income before merger, acquisition                                     and other special project costs                      (534)              88 ----------------------------------------------------------------------------Merger, acquisition and other special                                        project costs                                          82            1,392 ----------------------------------------------------------------------------(Loss) income before taxes                            (616)          (1,304)  Income tax recovery                                  (81)          (2,671)----------------------------------------------------------------------------Net (Loss) Income                         $           (535) $         1,367                                                                             Basic earnings (loss) per share (in $)               (0.01)            0.03 Diluted earnings (loss) per share (in $)             (0.01)            0.03 --------------------------------------------------------------------------------------------------------------------------------------------------------                                                                            NON-GAAP MEASURES                                                           ----------------------------------------                                                                                                                EBITDA(1)                                              480               11 Add (deduct) non-recurring items, net(2)                82            1,501 ----------------------------------------------------------------------------Recurring EBITDA(3)                                    562            1,512                                                                             Free Cash Flow (5)                                     345              978                                                                             (Loss) income before taxes                            (616)          (1,304)Add (deduct) non-recurring items, net(2)                82            1,501 ----------------------------------------------------------------------------Recurring (loss) income before taxes(4)               (534)             197 --------------------------------------------------------------------------------------------------------------------------------------------------------                                                                            Dividends declared and paid                             17              711                                                                                                                                                                                                    As at        As at          As at                                       March 31,    March 31,   December 31,                                            2012         2011           2011                                           (in $        (in $          (in $                                      thousands)   thousands)     thousands)----------------------------------------------------------------------------                                                                            Cash, cash equivalents and                                                   investments                         $     2,162  $    11,334  $       1,767Total assets                              28,593       43,696         28,133Total long-term liabilities               10,263        8,277         11,799Total assets under management(6)       1,600,000    2,400,000      1,600,000                                                                                                                                                        Notes:                                                                                                                                                  (1)   EBITDA (defined by Matrix as earnings before interest, taxes,               depreciation and amortization and other non-cash items) is a measure        used by many investors to compare issuers on the basis of their             ability to generate cash from operations. Management believes EBITDA        is a useful supplemental measure of operating performance as it             provides an indication as to cash available for working capital needs,      capital expenditures and dividends.                                   (2)   Non-recurring items are described in Matrix's Management's Discussion       & Analysis posted on SEDAR.                                           (3)   Management believes "recurring EBITDA" is a useful supplemental             measure of operating performance because it provides readers with           greater insight into what the core or run-rate EBITDA generating            capacity of the business may be by adjusting EBITDA for various non-        recurring items. Without presentation of this measure, there can be a       lack of transparency of the effect of non-recurring revenues or             expenses on EBITDA.                                                   (4)   Management believes "recurring income (loss) before taxes" is a useful      supplemental measure of operating performance because it provides           readers with greater insight into what the core or run-rate income          before taxes generating capacity of the business may be by adjusting        income before taxes for various non-recurring items. Without                presentation of this measure, there can be a lack of transparency of        the effect of non-recurring revenues or expenses on income before           taxes.                                                                (5)   Management believes "Free Cash Flow" (defined by Matrix as EBITDA less      interest paid, commissions paid and net taxes (payable/refundable as        filed)).                                                              (6)   Assets under management or "AUM" means the fair value of the net            assets of the funds and accounts managed by Matrix and its                  subsidiaries in respect of which fees are earned.

Outlook

The asset management industry is affected by economic and market conditions which strongly correlate with asset inflows/outflows and asset values, both of which drive Company fee revenues. For the quarter ended March 31, 2012, economic and market conditions were volatile. While the S&P/TSX Composite Index gained 3.66% over the period, it lagged behind the major US indices (Dow, NASDAQ, and S&P 500) significantly which rose 8.14%, 18.67%, and 12.00%, respectively. The markets rose amidst uneven economic growth. While Europe’s economy faces austerity induced recession, North America, Asia, and other emerging markets had growth albeit at lower levels at similar points in past economic cycles. For the month of February, Canada’s economy shrank which surprised economists. The world economy is dealing with a number of issues, including fears of European sovereign debt default and banking system solvency, signs of an economic slowdown in China, and government austerity measures negatively affecting economic output.

Central banks around the world continue to apply monetary stimulus to the economy. Unemployment rates remain stubbornly high in many countries and productive capacity is not fully utilized. As a result, central banks are keeping interest rates low to spur investment and economic activity. While the Bank of Canada has made statements that interest rates will begin to rise later this year, recent weakness in the Canadian economy might delay that move. The US Federal Reserve is on record that it won’t raise interest rates until 2014 at the earliest. The Bank of Canada is also concerned about Canadian housing prices. The low interest rate environment has pushed Canadian housing prices and consumer debt levels to record levels and sparked concerns of an asset bubble. On a positive note, low interest rate environments typically cause investors to seek returns in higher risk equity investments with greater return potential, which generally provides positive momentum for equity markets.

While monetary policy is accommodative around the world, accommodative fiscal policy is complicated by high sovereign debt levels. Governments in Japan, many western European countries, and the United States have record debt levels, resulting in governments having to balance fiscal initiatives aimed at promoting growth with demands from the bond market for tighter spending controls. Austerity measures have already pushed many European countries into recession and many analysts believe most of Europe will be in recession for the balance of 2012, including countries like Germany which to date have avoided the worst of the economic malaise.

Despite the problems already outlined, we are cautiously optimistic on the economy and equity markets. Many of Canada’s trading partners, including the US, Asia, and South America are growing and the European banking crisis to date has been contained. Corporate earnings remain impressive as does the strength of corporate balance sheets which should support higher equity market levels and, in turn, drive higher management fees. Large corporations have record cash balances which should bode well for M&A exit market activity for venture capital backed companies. High value M&A exit activity in funds managed by the Company’s venture capital division increases the prospect for incentive participation dividends. Overall, should these industry trends develop and be sustained, then this should present favourable opportunities for the Company’s asset management business.

The asset management industry in Canada continues to experience a consolidation trend. Many small players realize they need to attain greater scale in the current environment. Firms with less than $1 billion in AUM are the most challenged to achieve sustainability and profitability. This trend presents an ongoing opportunity for Matrix as it has proven experience in mergers and acquisitions. It also has a desire to work with other organizations to create greater value through suitable strategic transactions.

The Company, through its operating units, will also continue to seek to attract additional AUM through competing for new investment management mandates and through positioning and re-positioning its investment fund offerings to meet the current needs of investors. The recent addition of the three former principals of LeeSide to the SEAMARK operating division strengthens Matrix’s institutional management capabilities. Strategic assessment and planning to strengthen the Company’s mandates and offerings will continue to be a focus. The Company also expects to realize additional operating efficiencies over the coming quarters as it continues to integrate its diversified asset management platform.

Matrix’s first quarter financial statements and year end 2011 financial statements and MD&A are available on the SEDAR website at www.sedar.com

About Matrix (www.matrixasset.ca)

Matrix (TSX:MTA.TO – News) is a diversified asset and wealth management company with approximately $1.6 billion in assets under management and offices across Canada. The Company’s mission is to provide a diverse array of investment choices and the best possible investment management service to Canadian investors and institutions. The Company delivers its services through three main operating subsidiaries serving institutional, high net worth, and retail investors.

Forward-Looking Statements

Certain statements in this press release are forward-looking statements, including statements regarding the operations, business, financial condition, expected financial results and profitability, dividends, dividend policies, performance, targeted acquisitions, prospects, opportunities, new products, priorities, goals, strategies, accounting policies and estimates and outlook of Matrix for the current fiscal year and subsequent periods. Forward-looking statements are predictive in nature and are not based upon historical fact. Forward-looking statements are based upon beliefs and assumptions, including with respect to levels of Matrix’s AUM and expenses and related assumptions as to levels of portfolio returns and managed fund sales and redemptions, beliefs and assumptions concerning prevailing and future economic and market conditions and the impact of such conditions and other factors on Matrix’s AUM, the continuation of portfolio and fund management and advisory engagements, the extent and effectiveness of cost-saving measures and the impact of such measures and other factors on earnings, tax rates and laws, performance of managed venture capital investments relative to performance fee return thresholds, and the absence of extraordinary or one-time expenses not currently known to management. While management considers these beliefs and assumptions to be reasonable based on information currently available to it, these statements are subject to numerous risks and uncertainties and no assurance can be given that such beliefs and assumptions will prove to be correct. Accordingly, actual results may differ significantly from those expressed or implied by forward-looking statements due to many factors including, but not limited to, risks associated with institutional, mutual fund and venture capital fund management sectors generally, market, economic, political and other risks affecting portfolio performance, interest and foreign exchange rates, managed fund sales and redemptions, demand for financial products offered by Matrix and the impact of a lack of demand on Matrix’s AUM, revenues and earnings, changes to regulatory requirements, accounting and reporting policies (including the adoption of IFRS) and tax laws, Matrix’s ability to effectively respond to competition and technological change and recruit and retain key management personnel, uninsured losses, risks associated with completing proposed financings and targeted acquisitions, introducing new products, accessing needed capital resources from internal and external sources and Matrix’s ability to successfully integrate acquired operations and implement cost savings measures and growth strategies. Many of these risks are beyond the control of Matrix.

Readers are cautioned to consider these and other risks, uncertainties and potential events carefully and not place undue reliance on forward-looking statements. Other than as specifically required by law, Matrix undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which such statements are made, or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results or other factors.

Non-IFRS Measures

“EBITDA”, “recurring EBITDA”, “Free Cash Flow” and “recurring income (loss) before taxes” are not measures recognized under International Financial Reporting Standards (“IFRS”). However, management of Matrix believes that most shareholders, creditors, other stakeholders and investment analysts prefer to have these measures included as reported measures of operating performance, a proxy for cash flow, and to facilitate valuation analysis. These non-IFRS measures do not have any standard meanings prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. Readers are cautioned that these non-IFRS measures are not alternatives to measures determined in accordance with IFRS and should not, on their own, be construed as indicators of performance, cash flows or profitability or measures of liquidity. These non-IFRS measures should be read in conjunction with the financial statements of Matrix posted on SEDAR. For additional information regarding Matrix’s use of non-IFRS measures, including reconciliations of these measures to the nearest IFRS measures, please refer to the “Non-IFRS Financial Measures” and “Non-Recurring Items, EBITDA & Free Cash Flow” sections of its MD&A available on the SEDAR website at www.sedar.com.

Contacts

David Levi
Matrix Asset Management Inc.
President & CEO
(604) 895-7274 and (416) 934-7700
david.levi@matrixasset.ca

Isabelle Gervasio
Matrix Asset Management Inc.
Vice President, Investor Relations and Business Development
Toll Free: 1-866-687-9363 ext. 222
isabelle.gervasio@matrixasset.ca
www.matrixasset.ca

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Posted by Admin - May 18, 2012 at 10:51 pm

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By GEORGETTE JASEN

What are all these fees I might be paying?

How are the investment and other fees charged?

How much do these fees add up to?

Where can I look now to see what I’m paying?

What will change with the coming disclosure rules?

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