| NEW YORK
NEW YORK Jan 9 Three months after FX Concepts
filed for bankruptcy protection, its founder John Taylor said he
will manage funds again and focus on technical and quantitative
research for the company that once ranked as the world's largest
currency hedge fund.
"The market is my home, not administration; I am back,"
Taylor said in a letter to clients dated Jan. 9.
"The newsletter business will be the primary business asset
and livelihood of John R. Taylor as it was years ago."
In his letter, Taylor addressed FX Concepts' troubles for
the first time since it filed for bankruptcy protection on Oct.
17. He has not responded to requests for interviews and sources
said he is currently in the midst of negotiations with banks.
"Things have changed and are still changin' at FX Concepts
where it is fair to say the world has been turned upside down,"
said Taylor. "FX Concepts filed Chapter 11 in October, an
ignominious end for our company."
It was a drastic reversal for the company that at its peak
in 2007 managed $14 billion in assets.
"It is difficult to operate without phones, e-mail
addresses, or even business cards, but I have rented an office
and we have Bloomberg, CQG (market data provider), and friends
in the banking world giving us information galore," said Taylor.
He added that all of FX Concepts' assets have been sold
except the newsletter and the research process surrounding it.
FX Concepts' so-called "intellectual assets" were sold to
Ruby Commodities for $7.48 million in cash, court filings showed
on Nov. 26.
An auction was held on Nov. 25 at FX Concepts' Park Avenue
office for the sale of the bankrupt hedge fund's assets,
consisting primarily of the firm's computer models, data and
Taylor said the sale of the assets to Ruby Commodities has
yet to be finalized because its primary creditor, Credit Suisse,
will not let the transaction close until it has a global
agreement with Taylor and FX Concepts on the debt settlement.
"This has taken longer than our team would like, stalling
our sales, collection, and communication with clients and
prospects," he said.
Less than a year before FX Concepts filed for bankruptcy,
Taylor personally guaranteed a part of the debt his firm owes to
Asset Management Finance, a Credit Suisse unit that has invested
in a number of hedge fund-management firms.
According to court documents, AMF provided $40 million in
debt financing to FX Concepts through two revenue-sharing
agreements in 2006 and 2010. But in December 2012, as earning
opportunities in the currency market diminished and redemptions
from the fund grew, Taylor had to renegotiate the financing.
The Credit Suisse unit agreed to defer eight quarterly
revenue-sharing payments in exchange for Taylor's personal
guarantee for those obligations.
As of Oct. 17, when the firm filed for Chapter 11, FX
Concepts owed AMF $34 million, with Taylor guaranteeing $5
million of the total.
"I do believe there will be a settlement with Credit Suisse
in the near future," Taylor said.
He added a new series of updated medium-term and intra-day
models have been created and will be launched as soon as Credit
Suisse gives FX Concepts the approval.