Ken Fisher Has a Side Bet on a Risky Corner of Wall Street (Bloomberg)
Billionaire Ken Fisher made his name and fortune picking stocks. But over the years he’s also become a huge player in an arcane — and controversial — corner of Wall Street: exchange-traded notes. With little fanfare, his Fisher Investments has come to dominate more than a quarter of the $22 billion market in ETNs, whose outsize risks and hefty costs have drawn scrutiny from federal regulators. ETNs are debt instruments issued by banks that can enable investors to make leveraged bets on investments including stocks, bonds and commodities.
How Billionaire Jim Simons Learned To Beat The Market—And Began Wall Street’s Quant Revolution (Forbes)
In the summer of 1978, Jim Simons was bursting with self-confidence. He had conquered mathematics, figured out code-breaking, and built a world-class university department at Stony Brook University. Now, he was sure he could master financial speculation. Later that year, the 40-year-old mathematician, who had received his PhD from the University of California, Berkeley, launched his new investment company. He called it Monemetrics, combining the words “money” and “econometrics” to indicate that he would use math to analyze financial data and score trading gains. Simons would hire a team of big brains to pore through the market’s data to identify trends and develop mathematical formulas to profit from them.
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Musk Mocks Hedge Fund Owner Einhorn Over Tesla Shorts (Reuters)
(Reuters) – Tesla Inc (TSLA.O) Chief Executive Officer Elon Musk took to Twitter on Friday to taunt short-seller David Einhorn in an open letter after the hedge fund owner wrote to clients about losing money on his short position in the Silicon Valley car maker. A copy of the letter posted by the Zerohedge here blog and dated Oct. 30, quoted Einhorn as saying that his Greenlight Capital fund made material losses on Tesla in the second quarter.
Steyer’s Cash for Endorsements Scheme Legal, but Optics aren’t Great (Fox Business)
Billionaire Tom Steyer’s 2020 campaign came under fire on Thursday after it was revealed that at least one worker was offering donations to local politicians in Iowa in exchange for endorsements. The offers were made by a top Steyer aide, the Associated Press reported, citing multiple people with direct knowledge of the conversations. So far, the publication noted, it is not clear whether any local campaigns accepted payments – which would not technically be illegal. Steyer, however, would be required to disclose them.
Investors Want Hedge Fund-like Strategies – But Some Don’t Want to Deal with the Notoriously Secretive Hedge Fund Space. Other Ssset Managers See an Opportunity (Business Insider)
Hedge funds are not always known for their transparency, even with their own investors, but side industries have popped up offering investors hedge fund-like strategies in a more open wrapper. Some asset managers are pinning their hopes on growth in liquid alternative ETFs. Those kinds of ETFs are expected to triple in assets over the 12 months, according to a Greenwich Associates survey on behalf of IndexIQ. Money continues to pour into managed account platforms like BNY’s HedgeMark, despite the hedge fund industry losing assets.
Vontobel Jettisons Hedge Fund Unit in $350 million Sale (Pensions&Investments)
Vontobel Asset Management sold its $350 million hedge fund solutions unit to alternatives firm Progressive Capital Partners, Baar, Switzerland, in efforts to focus on core businesses, a spokeswoman said Friday. Details of the transaction, which will boost Progressive Capital Partners’ AUM to $830 million, were not disclosed, the spokeswoman said. The hedge fund unit’s team, headed by Ilario Scasascia, will become part of Progressive Capital effective Dec. 1, while maintaining existing mandates, 80% of which are institutional. Following the acquisition, Ms. Scasascia was named head of customized solutions at Progressive Capital.
Sears Spending Another $250 Million It Doesn’t Have To Shrink By One Third (Deal Breaker)
Some legendary retailers destroyed by hedge fund manager owners are allowed to finally die, sold for scrap, their inventories liquidated at marginally discounted prices. And then there is Sears. For more than a decade, it has been in a spiraling, mutually self-destructive relationship with its owner and former CEO, Eddie Lampert, although it must be said that most of the destruction has been on the Sears end of things. And for some time now, it’s been pretty clear to everyone except Eddie Lampert that this is a lost cause. Still, Lampert clings, and clings, and clings, keeping her on life support, providing the occasional infusion of life-giving money and sawing off the gangrenous parts as they appear, either for love or because he’s managed to financially engineer this patently disastrous situation into something he’s still making money on.
Hedge Funds in Positive Territory in October, Says HFR (Hedge Week)
The hedge fund industry was in positive territory to begin the fourth quarter, extending industry-wide YTD gains with strong contributions from Healthcare, Quantitative Equity, Activist and Fundamental Value funds, according to data released today by HFR. The HFRI Fund Weighted Composite Index advanced +0.4 per cent in October as equities recovered from early intra-month declines and as the U.S. Federal Reserve lowered interest rates. Performance gains across Equity Hedge, Event-Driven and Relative Value Arbitrage strategies were partially offset by declines in Macro strategies. The HFRI 500 Fund Weighted Composite Index, an investible index of 500 leading hedge funds, gained +0.5 per cent in October.
