Bloomberg’s Dominic Chu reports that Warren Buffett, the former hedge fund manager who built Berkshire Hathaway Inc. into a $195 billion company by gaining leverage through insurance premiums, said this traditional source of new funds is drying up. He speaks on Bloomberg Television’s “Inside Track.”
Buffett’s Insurance Growth Engine May Stall After 45 Years (Bloomberg)
Warren Buffett, the former hedge fund manager who built Berkshire Hathaway Inc. into a $195 billion company by gaining leverage through insurance premiums, said this traditional source of new funds is drying up. Berkshire’s (BRK/A) insurance units, which cover risks from fender benders to asbestos-related hospital bills, can no longer be relied on to provide new investment funds in the form of float, or accumulated premium, Buffett said in a Feb. 25 letter. Float, which rose to $70.6 billion as of Dec. 31 from $65.8 billion a year earlier and $39 million in 1970, is unlikely to “grow much — if at all — from its current level,” Buffett said.
Warren Buffett Chooses Hathaway Successor (Financial Times)
Warren Buffett this week told shareholders in Berkshire Hathaway, the bricks to business jet conglomerate that he controls, that he has identified the person who will one day take over as chief executive. The so-called “Sage of Omaha” declined to name the chosen successor however. In his annual letter to investors the 81-year-old billionaire said that the board had picked “an individual to whom they have had a great deal of exposure and whose managerial and human qualities they admire” to one day replace him.
Seth Klarman Knows Exactly Why His Hedge Fund Is So Successful (Business Insider)
Although no exact figures have been released, we know from Baupost Group‘s final 2011 letter to investors that the Boston-based hedge fund ended the year on a gain. Without any quantitative factors, that in itself is good news—we all know how badly 2011 crushed hedge funds.
NYC Pension Funds to Invest With D.E. Shaw (Bloomberg)
D.E. Shaw & Co. and Brevan Howard Asset Management LLP each will get $350 million from New York City’s police, fire and civil-employee pensions as the retirement plans expand into hedge funds. The pensions, with about $70 billion in assets as of Nov. 30, will also invest $200 million with Brigade Capital Management LLP, Michael Loughran, a spokesman for city Comptroller John Liu, said in an e-mail. With the agreements, New York’s hedge-fund investments will reach $1.35 billion, almost half the $3 billion target, Loughran said.
Man Group Assets Rise as Outflows Slow (Bloomberg)
Man Group Plc (EMG), the world’s largest publicly traded hedge fund, said outflows slowed and assets under management rose 1.9 percent in the first two months of 2012, stemming last year’s decline. The stock jumped the most in 15 months. Funds increased to $59.5 billion at the end of February from $58.4 billion at the end of December, London-based Man Group said in a statement today. The increase was triggered by investment gains and a slowdown in the rate at which clients pulled money, Man Group said.
Lampert’s $40 Million Fla. Mansion Miami’s Priciest (FINalternatives)
When ESL Investments chief Edward Lampert finds his dream home, it doesn’t matter that it’s not on sale. Lampert is buying a 17,000-square-foot mansion on an exclusive island in Florida’s Biscayne Bay for almost $40 million, The Wall Street Journal reports. According to records, the home was not on the market prior to Lampert’s purchase.
Dan Loeb Checks Into The Apple Five Star Hedge Fund Hotel (Zero Hedge)
There is one name one won’t find on Third Point latest 13F. Curiously, it is the same name that is now Third Point’s fifth largest position as of February 29, 2012. As we said: every hedge fund is now in it. More importantly, we wonder, when will Apple, which is effectively an Alphaclone of itself, start charging its shareholders 2 and 20 for the privilege of owning its stock?
Bridgewater Associates’ Biggest Sells – Microsoft and Two Prior Top Holdings: MSFT, CSC, LLL (Forbes)
Bridgewater Associates has $125 billion in assets under management which makes it the world’s largest hedge fund. Superior returns in 2010 and 2011 also ranked it as the best-performing hedge fund both years. Ray Dalio, the mastermind behind it all, is an innovative thinker and global macro investor. He is also the newest guru GuruFocus tracks.
CORRECTED-Henderson, Tantallon shut Asian hedge funds (Reuters)
Henderson Group said it has shut its Asia-Pacific Equity Multi-Strategy Fund, and a source said Singapore-based Tantallon Capital is winding down its long-only Asia ex-Japan Bass Rock Fund, signaling tough time for Asia’s hedge fund industry. Asian hedge funds suffered net outflows in the last four months of 2011, according to Eurekahedge. The fund tracker estimates nearly seven in 10 Asia funds have fallen below their “high water mark” — the peak net asset values above which they can charge performance fees.
U.S. Court Revives Portfolio Pumping Fraud Case (Thomson Reuters)
A federal appeals court has breathed new life into a lawsuit accusing a Beverly Hills broker-dealer of defrauding nine hedge funds out of nearly $200 million through an international penny stock fraud. The 2nd U.S. Circuit Court of Appeals in New York said on Thursday that the funds would deserve another chance to sue Hunter World Markets Inc. and others in federal court if they could show that their securities purchases were “domestic transactions.”
Aima Defends Credit Funds Against ‘Shadow Banking’ Label (HFM Week)
Aima, the industry trade body, has released a paper arguing that credit hedge funds should not be considered part of the ‘shadow banking’ sector, in its latest attempt to defend the reputation of the hedge fund industry. The research highlights the differences between the key functions of traditional banks and credit hedge funds, which “do not take deposits, do not offer daily liquidity nor otherwise hold themselves out as guaranteeing the return of the invested principal,” according to an Aima statement.
The Twitter Wars (WSJ)
Former hedge fund manager Andy Kessler on how social media will affect this year’s election. Plus, Manhattan Institute senior fellow Robert Bryce on the stealth carbon tax
Optima’s Boardman Takes CIO Reins (FINalternatives)
Optima Fund Management founder Dixon Boardman is adding three letters to his business card. The founder and managing member of the New York-based hedge fund has named himself chief investment officer. He succeeds Fabio Savoldelli, who has left the firm to pursue other interests.
Ex-PA Denies Stealing $900K From Hedge Fund Manager (FINalternatives)
Hedge fund manager Todd Meister has accused his former personal assistant of stealing almost $1 million from him. But Meister, better known as the son of former Aon Group executive Robert Meister and the ex-husband of socialite Nicky Hilton—herself best known as the sister of reality television star Paris Hilton—was more than Renata Shamrakova’s boss, her lawyer said. Mark Agnifilo suggested that the two had a sexual relationship after his client pleaded not guilty yesterday in Manhattan state court.
Coadum Fraudsters Jailed For $30 Million Scam (FINalternatives)
A pair of hedge fund fraudsters was sentenced to a combined 17 years and three months in prison for ripping clients off to the tune of more than $30 million. A federal judge in Atlanta sent Thomas Repke up the river for a decade and James Jeffrey for more than seven years. Both men were also ordered to serve five years of supervised release there after and were hit with $29.7 million in restitution.
BlueCrest To Move US$5 Billion To HSBC Admin. (FINalternatives)
BlueCrest Capital is poised to entrust more than one-sixth of its assets to HSBC Securities Services, a mandate encompassing some US$5 billion. London-based BlueCrest said last year that it would begin to use HSBC’s administration services in addition to those of GlobeOp Financial Services, which had previously handled all of BlueCrest’s funds. But the first fund didn’t fully migrate until January, giving HSBC US$250 million of the hedge fund’s assets.
Campion Hires Martin Currie’s Graham (FINalternatives)
Hedge fund research and due diligence specialist Campion Capital has added a Martin Currie Investment Management salesman as it seeks to expand into the retail market.
Whitney Tilson’s T2 Up 11.5% for 2011: Biggest Winner First Solar Short 24% Return (Value Walk)
Whitney Tilson’s T2 fund fund declined 0.9% in February vs. gains of 4.3% for the S&P 500, 2.9% for the Dow and 5.5% for the Nasdaq. Year to date, the fund is up 11.5% vs. 9.0% for the S&P 500, 6.5% for the Dow and 14.0% for the Nasdaq. On the long side, winners included Citigroup (8.5%) and SanDisk (7.8%), offset by Netflix (-7.9%), Grupo Prisa (B shares) (-7.4%), and J.C. Penney (-4.7%).
CVR Energy Against Icahn’s Bid (Value Walk)
CVR Energy (CVI) is the next takeover target for activist investor, Carl Icahn and the company is desperately trying to get shareholders to vote against the proposed takeover. Icahn proposed $2.6 billion to take over the oil refiner however the board of directors is calling it “inadequate” and urging it to be overturned.
7 Stocks Hedge Funds Are Getting Bullish About (Market Watch)
You probably know by now that Apple is the most popular stock among hedge funds (see the 10 most popular stocks among hedge funds ). What you didn’t know is that 13 of the 375 hedge funds we are tracking sold their Apple holdings, and only 15 hedge funds initiated new positions. Overall, the increase in the number of hedge funds with bullish Apple bets was only 2. Hedge funds’ sentiment towards Apple didn’t change much during the fourth quarter.
Dr. Meier: many fund of hedge funds managers are still not adequately equipped to execute proper selection and DD (Opalesque)
Prof. Dr. Peter Meier heads the Centre for Alternative Investments & Risk Management at the Zurich University of Applied Sciences (Zhaw), as well as hedgegate, a free database and index for Swiss funds of hedge funds. He talked to Opalesque about hedge funds’ performance in 2011, guidelines for fund selection and investing in funds of hedge funds, and the state of the fund of hedge funds industry, globally and in Switzerland.
Hedge Fund Manager’s Terrifying Treatise Assesses The True State Of Today’s Global Economy And Calls For Action (Opalesque)
In a tightly argued and fearless delivery of his controversial views, arrived at from a ringside seat as a hedge fund manager operating throughout the financial crisis, Mitch Feierstein has written a terrifying book, indicting our rulers and financiers for running an elaborate Ponzi scheme that will most likely end in all of us losing everything.
Two Hedge Fund Managers Sentenced to a Combined 17 Years Behind Bars (Hedge Co. Net)
Utah-based hedge fund managers Thomas Repke and James Jeffery were sentenced today to federal prison on charges of conspiracy to commit wire and mail fraud. The pair were principals of hedge fund operator known as Coadum Capital Advisors, which at its height (2005-2008) attracted nearly 250 investors and nearly $40 million in investments.
Hedge Futures Trades Roil Markets, MF Globals Flash Transfer, Investors And Emerging Managers And More (Reuters Hedge World)
Morning Read: Junk Bond Flows Slow, Pimco’s Win (Barrons)
Morning News: March 2, 2012 (Crossing Wall Street)
Friday 7atseven: The Correction Camp (Abnormal Returns)
HFMWeek Daily Snapshot – 2 March (HFM Week)
Daily US Opening News And Market Re-Cap: March 2 (Zero Hedge)
Hot Links: Inflows (The Reformed Broker)
10 Friday AM Reads (The Big Picture)
