Canadian Pacific Railway Ltd (CP) said William Ackman‘s hedge fund Pershing Square Capital Management has asked to elect five of its nominees to the company’s board as the proxy battle between the company and activist investor Ackman heats up.
Falcone Faces New LightSquared Questions (Bloomberg)
LightSquared Inc.’s effort to win support in Washington faces new scrutiny after a U.S. senator questioned hedge fund billionaire Philip Falcone about contacts with the lawmaker’s staff. Grassley said yesterday that Falcone, whose Harbinger Capital Partners hedge fund is LightSquared’s main backer, and a telecommunications executive implied that they wanted the lawmaker to “pull punches” in an investigation.
Uptick Rule Could Curb Quant Fund Risk-Man Group CEO (Reuters)
The head of Man Group, the world’s biggest listed hedge fund manager, is backing the reintroduction of the so-called ‘uptick rule’ to reduce the risk of a market crash prompted by lightning-fast computer traders. Peter Clarke told a conference on Monday that the U.S. rule, which only allowed short-selling — bets on a share price falling — if the last sale price of a stock was higher than the previous price, could help stop some rapid-fire computer hedge funds fuelling market falls.
Hedge Funds Prepare Legal Battle With Greece (Reuters)
Hedge funds are combing through the small print of Greece’s planned rescue deal with private creditors, readying a wave of potential litigation to squeeze a better payout from the country. Most bondholders face an uphill battle in wringing a payment from Athens through the courts, but shrewd funds picking up specific bond issues with investor-friendly smallprint have a much better chance of succeeding.
Hedge Fund Veteran Andrew S. Schneider Named CEO Of Rotoblock Corp. (Market Watch)
Rotoblock Corp. (RTBC), a publicly-owned California-based corporation investing in emerging technology opportunities in China, has appointed veteran Hedge Fund manager Andrew S. Schneider as Chief Executive Officer. The CEO appointment follows the 2011 acquisition of daifuWaste Management Holding Limited, a medical waste treatment company with headquarters in Beijing. Andrew S. Schneider, 37, is a veteran Hedge Fund manager as well as an authority on hedge funds and related financial services. Schneider helped establish HedgeCo Networks in 2001. He participated in numerous private placements, PIPE transactions and public offerings with a total value of over $250 million. Earlier in his career, Schneider held positions with Morgan Stanley and Prudential Securities. In 2011, he established Global Hedge Fund Advisors.
Relativity Makes It Official: Ron Burkle Buys Stake In Studio (Reuters)
Relativity officially announced on Monday that Ron Burkle’s investment firm Yucaipa Companies purchased a “significant” equity stake in Relativity Media. Burkle will buy a portion of hedge fund investor Elliott Management‘s stake in the independent studio. The supermarket magnate’s involvement will go a long way to quiet rumors that Relativity chief Ryan Kavanaugh was facing a capital crunch with Elliott eyeing the exit door.
Insider Trading At Hedge Funds: A Risk Area That Is Difficult To Address (Forbes)
Insider trading is an area of risk that hedge fund management finds very difficult to identify and prevent. While the problem has become increasingly prevalent, the tools to be able to assist hedge fund managers have not expanded proportionately. A break-down in personal trust in the industry as a whole may be to blame. The problem in the area of insider trading at hedge funds is well-known. Recent high profile hedge fund cases are in the press day after day: the Galleon case, the expert network cases, followed by the Diamondback/Level Global/SAC case of last week. Assuming the problem doesn’t originate from top management, what tools do hedge funds have to combat insider trading by their employees? And, more importantly, are they effective?
NY Civil Trial Begins For Billionaire Perelman (WSJ)
Jury selection is set to start Tuesday at a trial resulting from a $20 million civil dispute between billionaire Ronald Perelman and a one-time close friend and business partner. The jury will be asked to decide the merits of claims Donald Drapkin brought against Perelman in 2009 after he left Perelman’s company to run a hedge fund. He said he did not receive roughly $20 million in compensation that he was promised. Perelman countersued, saying Drapkin abused the health care plan he was given when he left and failed to return some documents.
Travelers Profit Slips 31% on Investment Income (Bloomberg)
Travelers Cos. (TRV), the only insurer in the Dow Jones Industrial Average, said fourth-quarter profit fell on lower investment income and a smaller reserve benefit, capping the company’s least profitable year since 2004. Net investment income fell to $541 million in the fourth quarter from $644 million a year earlier. A decline in income from alternative investments, such as private equity, real estate partnerships and hedge funds, fueled for the drop.
Warren Buffett Takes Betty Liu For A Ride (Bloomberg)
Bloomberg Television’s Betty Liu sat down with Warren Buffett and U.S. Representative Scott Rigell earlier today for a live interview from Omaha, NE. Tune in to “In the Loop” at 8am ET tomorrow for the full ride-along.
Euro Dips After PMI Boost, Greece Uncertainty Weighs (Reuters)
he euro slipped after hitting a near three-week peak versus the dollar in choppy trade on Tuesday, as concerns over the outcome of talks to avert a messy Greek default outweighed the impact of a better-than-expected survey of the euro zone service sector. The single currency rose to $1.3063 on trading platform EBS, its highest level in nearly three weeks, before falling back to $1.2997, down 0.2 percent on the day. Traders cited strong selling by a hedge fund that pressured on the euro.
Q+A: What Romney’s Taxes Reveal – And What They Omit (Reuters)
Mitt Romney disclosed early on Tuesday that he expects his tax bill to come to $6.2 million on income of $42.5 million the last two years, succumbing to public pressure to shed light on how he became one of the wealthiest Americans ever to run for president. WHAT ABOUT ROMNEY’S PRIVATE EQUITY PROFITS? Much of Romney’s fortune likely qualifies as what known as “carried interest,” a share of profits is earned by private equity managers taxed at the 15 percent capital gains tax rate rather than the maximum 35 percent wage rate. Private equity managers, some hedge fund executives and venture capitalists benefit from carried interest.
Diamondback To Settle Insider-Trading Charges (Reuters)
Diamondback Capital Management will pay more than $9 million to settle allegations of insider trading at the Stamford, Connecticut-based hedge fund.
Commerzbank’s Eurohypo Division To Lose Profit Certificates Appeal Case (Bloomberg)
Commerzbank AG (CBK)’s Eurohypo (EHY) unit is likely to lose a second case over so-called profit certificates filed by a U.S. hedge fund, a judge said at a hearing today. The Frankfurt appeals court will probably rule in favor of QVT Financial LP, which brought the case, Associate Judge Klaus Maier said in a preliminary assessment. QVT won in a lower court over certificates originally issued by Hypothekenbank in Essen AG and is likely to now also win on those issued by Rheinische Hypothekenbank AG, Maier
Record U.S. Beef Sales Seen As Japan Reviews Curbs On Cattle: Commodities (Bloomberg)
U.S. farmers, poised to ship record beef cargoes for a second straight year, may get a further boost as Japan, once their biggest overseas customer, considers easing trade curbs imposed after an outbreak of mad-cow disease. Hedge funds and other large speculators are getting less bullish on cattle. They cut their net-long position, or bets on rising prices, by 39 percent to 66,997 futures and options since Oct. 18, Commodity Futures Trading Commission data show.
Art Investors Lured By 12% Return Offer By $80 Million Fund (Bloomberg)
Investors are being invited to join a European-based group that plans to buy about $80 million worth of art and forecasts annual returns of 12 percent. The international market for art-investment funds was worth an estimated $960 million last year, up from $760 million in 2010, according to a report by Deloitte Luxembourg and the London-based research company ArtTactic published in December last year. The industry is relatively small compared stocks and hedge funds.
Sino-Forest Halt Extended By Regulator On Lack Of Disclosure (Bloomberg)
Canada’s main securities regulator said it extended the trading ban on Sino-Forest Corp. (TRE), the Chinese timber company fending off fraud allegations, because the company’s disclosures remain “incomplete.” Holders of Sino-Forest shares lost about C$3.3 billion ($3.27 billion) following the June 2 publication of the Muddy Waters report. Hedge fund Paulson & Co., formerly Sino-Forest’s largest shareholder, sold its entire 12.5 percent stake in June, telling clients it had lost C$462 million since May 31 on the investment.
Gas Jumps 7.8% On Chesapeake Output Cut: Commodities At Close (Bloomberg)
Natural gas, the worst-performing commodity in 2012, rose the most in two years in New York after Chesapeake Energy Corp, the second-largest U.S. producer, said it will cut production and reduce spending. Futures climbed 7.8 percent after Chesapeake said it will “immediately curtail” output of 500 million cubic feet a day and lower planned investment in gas fields by 70 percent from 2011 levels to $900 million. Hedge funds and other large speculators last week cut bets that gas would fall as it traded at its lowest levels since 2002, a government report showed.
After A Rough Year, Hedge Fund Industry Gathers In Florida (Deal Book)
The 2012 GAIM conference for hedge fund professionals is drawing managers, investors and service providers from across the country this week to the opulent Boca Raton Resort and Club, a rambling pink structure replete with fanciful trimmings. Panels are addressing a wide array of issues. Among the most enticing early Monday was the Top Manager Panel. What, you may ask, is a top manager panel? It’s “Generating Alpha in 2012 – Legendary Managers Share Their Unique Insights Into Where the Best Sources of Return Lie in the Year Ahead.”
Dodgers Bidders Starting To Talk With Each Other (WSJ)
Some bidders for the Los Angeles Dodgers have started talking with each other about combining their groups, even before initial offers for the bankrupt team were submitted Monday. Two bidders said talks about possible group mergers were ongoing. They both spoke on condition of anonymity because Blackstone Group, which is managing the sale for owner Frank McCourt, made them sign nondisclosure agreements. “It would be a shock if they don’t start talking merger,” said Marc Ganis, president of the Chicago-based consulting firm Sportscorp, which is not involved. “I think we’ll get a half-dozen parties that are actually in the bid, plus or minus one.”
Goldman’s Sears Bet Stings Investors (WSJ)
Edward Lampert’s hedge fund made a big bet on Sears, and a deal to allow certain Goldman clients to invest in his fund hasn’t paid off for them.
Spruce Opens Atlanta Office, Hires Industry Vet (FINalternatives)
Stamford, Conn.-based wealth manager Spruce Private Investors has hired Courtlandt Bromwell Ault as a director in the portfolio management group. Ault will be based in the firm’s new Atlanta office where he will be responsible for managing and building client relationships in the southeastern U.S.
Nikko AM Taps Coutts Vet To Develop Global Products (FINalternatives)
Tokyo-based Nikko Asset Management has appointed Geoffrey Post, formerly of Coutts, to head international product development (ex-Japan). With more than 12 years’ experience in product development, Post has worked in various roles around the world, including Europe, Hong Kong and Singapore. Prior to joining Nikko AM, he was at the wealth manager Coutts, where his responsibilities included heading product development. Before this, he was responsible for the international mutual fund range at Merrill Lynch Investment Managers. He has also held audit roles at SG Warburg and Price Waterhouse, specializing in the asset management sector.
Otkritie Capital Offers Access To Ukraine’s UX Index (Finalternatives)
Otkritie Capital, the investment banking arm of Russia’s Otkritie Financial Corporation, is offering institutional investors access to Ukraine’s UX Index Futures. Otkritie claims Ukrainian Index Futures, launched by the country’s exchange (UX) in May 2010, have become the most liquid investment and “the only true way to hedge macro,” with 30% of the market’s capitalization and 85% of the total trading volume as of January this year. Key industries include heavy machinery (25%), energy (18%) and telecommunications (16%).
Philadelphia Financial Buys Hartford’s Private Placement Ops (FINalternatives)
Philadelphia Financial Group, a leader in the ultra-high net worth private placement insurance market, will pay $117.5 million to acquire the private placement business of New Jersey-based Hartford Life Private Placement. The deal, reached with affiliates of The Hartford Financial Services Group, is expected to close in 2012, subject to regulatory approvals.
Attention Would-Be Thieves: Bridgewater Associates Take Their Buns Of Steel Tapes Very Seriously (Deal Breaker)
Last Friday afternoon, while many a financial services employee was dealing with the fallout of receiving a bonus they did not believe to be commensurate with the work they put in for 2011, Bridgewater was dealing with a far weightier issue. The hedge fund had a thief in its ranks and said thief’s jig was up. A Bridgeport woman who worked as a security guard in Westport was arrested Friday on a warrant for allegedly stealing from her workplace, police said. Katlyne Lauture, a former security guard at Bridgewater Associates, was spotted on camera in November taking an iPad out of an employee’s desk and then leaving the building, police said.
George Soros On The Economy – ‘I Am Not Here To Cheer You Up’ (Insider Monkey)
George Soros is a financial celebrity. In spite of having nothing more to do with the world’s financial markets than his investments made as Soros Fund Management and whatever effect his philanthropic work may have on those markets, Soros is quoted on just about anything to do with the economy – and why not? He is, after all, “the Man Who Broke the Bank of England.” He has the record for making more in one day trading than any other investor after making £1 billion after betting against the sterling on Black Wednesday in 1992.
Best Power And Utilities Stocks Recommended By Barclays (Insider Monkey)
Barclays Capital published a report entitled “Go with the Flow” on January 03, 2012. Daniel Ford, Gregg Orrill, Theodore W. Brooks, Ross A. Fowler, M. Beth Straka and Noah Hauser have identified their most preferred power and utilities stocks for investment in 2012. Here are the five power and utilities stocks Barclays Capital is bullish about
6 Airline Stocks To Buy, 2 To Avoid By UBS (Insider Monkey)
UBS Research Analyst Kevin Crissey and Associate Analyst Kevin Grasmick published a report titled “US Airline Sector Note: That was ugly” on January 03, 2012. The analysts have analyzed the US Airline sector’s performance during 2011 and concluded that it was disappointing. Although the airline sector witnessed a strong revenue growth over the last year, their final results have been dismal (excluding Alaska and Allegiant). Hence, on average, airline stocks lost 25%. Revenue estimates for the airline sector were increased to 10% from 7%, while the estimates for growth in fuel cost were also 20% higher. Moreover, analysts believe that managements of these companies were not able to pass on the fuel price increase entirely to the consumer, generating a negative impact on the bottom-line. Given that the revenue outlook for the sector remains strong in the US, analysts are bullish on selected stocks like DAL and LCC.
Avenue Capital’s European Fund Hits $2B (HFN)
Marc Lasry’s Avenue Capital has reportedly seen its recent European-centered fund reach the $2 billion mark. The fund has been set up by the distressed-debt hedge fund firm to purchase debt, equities or other financial obligations of financial struggling companies in Northern Europe, according to news reports.
Survey: Investors Want More Transparency (HFN)
A new survey finds that many hedge fund investors are increasingly concerned with performance in 2011. According to asset management provider SEI Knowledge Partnership’s fifth annual survey of institutional investors, absolute return was named the number one objective by nearly one-third of respondents.
Former SAC Manager Freeman Banned By SEC (HFN)
A former SAC Capital portfolio manager has been banned from much of the financial industry by the Securities and Exchange Commission. The SEC issued the ban order against Noah Freeman on Friday, barring him from “association with any broker, dealer, investment adviser, municipal securities dealer, or transfer agent.”
Obama Puppetmaster Warren Buffett Biggest Winner From Keystone Pipeline Rejection (Zero Hedge)
Just when one thinks American crony capitalism couldn’t hit new lows, here comes Warren Buffett and his personal puppet, the president, proving everyone wrong once more. Because if one thinks there is no (s)quid pro quo for all that “sage” advice that Buffett has been giving to Obama on extracting as much wealth as possible from future wealthy Americans (before they decide they have had enough with this crony shit and leave the country for good), one would be fatally wrong. As it turns out, it is not just natural resources and aquifer purity that Obama had in mind when sealing the fate of the Keystone XL pipeline.
Carl Icahn Dragged Into GOP Mudslinging (Value Walk)
Billionaire Investor Carl Icahn, Icahn Enterprises chairman, on the campaign attacks that compare him to Mitt Romney. A lot of investors, who are mostly apolitical, have been discussing politics very frequently recently, including Carl Icahn.
Hedge Funds’ Foreign Holdings (Value Walk)
Nowadays preeminent perception is to get utmost profit or return in diminutive time. Therefore hedge funds provide exceptional benefit to those, who anticipate smart returns over short period of time. Investing in hedge funds is beneficial as money is invested in gamut of different instruments, which are more flexible in its investment strategies and are professionally managed. Though American hedge funds are well known but change can be seen conspicuously in terms of returns. According to the survey hedge funds in Australia has been growing at the colossal pace and assets tripled in less than two years. “Our regulatory environment and transparency helped rapid growth in Australia, said chairman of Australian chapter of the AIMA, Kim Ivey.
Merrill: Hedgies Short S&P 500, Stick With Nasdaq, Crude & Gold (Barron’s)
Large managed futures funds, including hedge funds, in the past week held steady on the U.S. dollar and kept buying the tech-heavy Nasdaq 100 while adding to their short positions in blue chip domestic stocks, according to an analysis by Merrill Lynch using data from the Commodity Futures Trading Commission as well as its own sources.
‘Hedge Fund 3.0’: Five Steps To Get In On The Action (CNBC)
So you want to start a hedge fund? After a year in which most fund managers got bludgeoned by the high-correlation risk-off market, there’s still a clamor on Wall Street for anyone wishing to step off the curb and the safety of long-short funds and into the rush-hour traffic of the hedge world.
Are Hedge Fund Managers Meeting In Boca Villains Or Victims? Let Their Schedule Help Decide. (New Times)
There are two very distinct ways to think of the hedge fund managers meeting right now in Boca Raton for the annual GAIM USA conference. If you side with the Occupy Palm Beach protesters, you believe that they’re responsible for the global financial crisis and that they serve as “pawns and agents of the global elite.”
Sahm Adrangi’s Kerrisdale Capital 4Q 2011 Letter (Distressed Debt Investing)
Managed Futures 2012 Outlook / 2011 Review (Reuters Hedge World)
More Hedge Fund Investments Come With Higher Standards, Hedge Funds Under Water, GAIM Coverage And More (Reuters Hedge World)
