Hedge funds sank almost 5% last year amidst market volatility and the European sovereign debt crisis. The Bloomberg Aggregate Hedge Fund Index ended 2011 down 4.9% after a 0.9% decline in December. By contrast, the Standard & Poor’s 500 Index ended the year essentially flat. Most of the industry’s losses were suffered in September, when the Bloomberg index fell 4.7%.
Burkle Said To Be In Accord To Acquire Relativity Media Stake From Elliott (Bloomberg)
Billionaire Ron Burkle agreed to buy Elliott Management Corp.’s minority stake in Relativity Media LLC, the independent film studio run by Ryan Kavanaugh, according to two people with knowledge of the situation. The sale price is in the hundreds of millions of dollars, said one person, who declined to be identified because the deal hasn’t been announced. Elliott, a New York-based hedge fund, will continue to hold a small stake, said one of the people. The accord ends a fraying partnership with Elliott that allowed Kavanaugh, Relativity’s 37-year-old chief executive officer, to build the Los Angeles-based film studio. Elliott said on Jan. 4 that Michael Joe, who oversaw the Relativity stake, was leaving as the fund reduces its movie focus.
Hedge Fund Manager Ted Weschler is Being Primed to Replace Berkshire Hathaway CEO Warren Buffett (WSJ)
WSJ’s Steve Eder stops by Mean Street to profile hedge fund manager Ted Weschler, who has been tapped to help Berkshire Hathaway CEO Warren Buffett manage the company’s $110 billion portfolio and is in the running to replace Buffett someday.
SAC’s Cohen Brings Trader Simonian Under His Wing (FINalternatives)
Steven Cohen is adding some more firepower to his own team at SAC Capital Advisors. Cohen is moving industrials trader Charles Simonian onto the so-called Cohen Account, personally overseen by Cohen and managing about $3 billion of the $14 billion firm’s assets. Simonian will oversee the account’s industrials trading with longtime Cohen protégé Chandler Blockage. Reuters reports.
Credit Suisse’s Sohn Said To Plan Hedge Fund This Year (Bloomberg)
Albert Sohn, the former head of securitized products at Credit Suisse Group AG (CSGN), plans to start a hedge fund this year within the bank’s asset-management unit, according to a person familiar with the matter. Sohn, 41, is planning to oversee money for the Swiss bank’s clients and will be joined by Gary Buchalter, Amar Sujanani and Alok Verma, said the person, who asked not to be named because the information is private. Steven Vames, a New York-based spokesman for Credit Suisse, declined to comment on the plans.
Was Baupost’s Mega-Quarry Investment A Mega-Mistake? (Value Walk)
Only one thing pertaining to The Highland Companies’ Ontario mega-quarry is gaining notable momentum. Unfortunately for Seth Klarman’s Baupost Group, it is serious opposition—not progress—for which the proposed facility has become known. The Boston-based hedge fund owns a rumored 16% stake in the project, which has more than $40B in gross revenue potential. Yet, the effort has been a non-starter, with stormy skies looming grayer than before. If executed, the project would be the second-largest mega-quarry in the history of North America (a “mega-quarry” characterized as one with mineral deposits of 150 million tons or more). The project in question would produce 1 billion tons of aggregate, the name for the spectrum of building materials that can be fashioned from the underlying limestone. It has been estimated that each acre of quarry would yield $18M in revenue at current market prices. Yet, the project has seen unexpected obstacles at every turn.
Partners Share 27 Mln Stg At Paulson’s London Arm (Reuters)
Profits at Paulson Europe, the UK-based arm of John Paulson‘s hedge fund firm, fell 17 percent in the year to end-March, reflecting losses in the billionaire investor’s funds, although its four partners still shared a 26.5 million pounds bonus pool. Profit available for discretionary division among the partnership’s four members dropped to 26.5 million ($41 million) pounds over that period from 32.1 million pounds the previous year, the firm said in a regulatory filing this week. The results, which do not cover all of 2011, come after a dismal period for Paulson, one of the $2 trillion dollar hedge fund industry’s biggest stars. He has suffered recently from big bets on Bank of America, Hewlett Packard, Hartford Financial Services and Sino-Forest.
Sprint Puts Investment In Lightsquared On Hold, Hesse Says (Bloomberg)
Sprint Nextel Corp. (S) put its investment in a partnership with LightSquared Inc. on hold as the wireless venture seeks an operating license from U.S. regulators, Sprint Chief Executive Officer Dan Hesse said. The CEO told a Citigroup Inc. conference in San Francisco today that he hopes LightSquared, backed by billionaire Philip Falcone’s hedge fund, can resolve technology hurdles needed to gain regulatory approval. “The companies have agreed to realigning our deployment timeline to coincide with potential FCC actions,” Scott Sloat, a spokesman for Overland Park, Kansas-based Sprint, said in an e-mail. Until approval is received, “both companies believe it is prudent to pull back on expenses,” he said.
Gold Traders Most Bullish In Month After Bear Market Averted: Commodities (Bloomberg)
Gold traders are the most bullish in a month as Europe’s deepening debt crisis and increasing tensions over Iran drove the metal to its longest winning streak since October. Hedge funds and other money managers cut bets on higher prices to 111,919 futures and options in the week ended Dec. 27, the lowest since January 2009, U.S. Commodity Futures Trading Commission data show. The drop preceded the rally in prices. The last time the net-long position was that low, prices climbed about 16 percent in the next four weeks
Gupta Says U.S. Case Hurt By Rajaratnam Lies (Bloomberg)
Rajat Gupta, the former Procter & Gamble Co. (PG) director indicted last year for insider trading, illegally tipped now-convicted hedge fund manager Raj Rajaratnam about P&G’s 2008 sale of Folgers Coffee Co. to J.M. Smucker Co. (SJM), federal prosecutors said. J.M. Smucker, the Orrville, Ohio-based maker of jams and other food products, bought Folgers for about $3 billion in June 2008. Prosecutors told U.S. District Judge Jed Rakoff in Manhattan yesterday at a pre-trial hearing that the government may file a superseding indictment against Gupta, also a former director of Goldman Sachs Group Inc. (GS), by the end of the month. Also yesterday, Rakoff said Gupta should “not be too optimistic” about his request to bar Rajaratnam’s wiretapped calls as evidence in the case.
Quantedge Hedge Fund Surges 32 Pct In 2011 (Reuters)
Singapore-based hedge fund Quantedge Capital aims to double assets to $400 million (258 million pounds) by end of 2012 after a 32 percent gain in its global macro fund last year, a top executive said on Friday. The return came in a tough year for peers, with hedge funds down about 4 percent and global macro funds down about 2 percent in 2011, data from industry tracker Eurekahedge showed. Macro hedge funds focus on major economic trends and events and bet anywhere they see value, including in stocks, bonds, currencies, commodities and derivatives markets.
Hedge Fund Administrator Globeop In Takeover Talks (Reuters)
GlobeOp Financial Services (GO.L) is in talks with private equity firms Advent International Corporation and TPG over possible takeover offers, as the hedge fund services firm carries out a strategic review to try and boost its share price. The London and New York-based firm, which has $173 billion (112 billion pounds) in client assets under administration and which last month said it was encouraged by net inflows, said the talks have come after it appointed Evercore Partners to advise on a review. The firm has formed an independent committee to conduct discussions as some directors may take part in an offer. Talks are still at a preliminary stage, GlobeOp added.
Ex-SAC Cap Trader’s Fund Hits $150M (HFN)
London hedge fund firm Carrhae Capital has raised $150 million since its launch in early December. The fund, headed by former SAC Capital trader Ali Akay, first offered to investors on Dec. 12, according to a filing with the Securities and Exchange Commission. The filing also indicates that so far only one investor is involved with the firm, and is responsible for the sizable amount that Carrhae has raised. The minimum investment set by the firm for any outside investor is $5 million.
Big Hedge Fund Stories From 2011, Renaissance No. 1, Simon Lack’s ‘Devastating’ Hedge Fund Return Analysis And More (Reuers Hedge World)
