Gold Plunges on Hedge Fund Selling, Budget Deal Hopes (InvestorPlace)
Heavy end-of-year selling by hedge funds and signals of potential progress in U.S. budget talks sent gold tumbling in Thursday trading, falling below $1,650 an ounce for the first time in months. Gold futures for February delivery dropped to $1,648 on Thursday, according to CME Group. Gold traded as high as $1,672.80 and as low as $1,636. Gold bullion closed in London at $1,651, according to BullionVault. Silver futures for February delivery sank to $29.96 per ounce. Thursday’s high for silver was $31.15, while the low was $29.66.
Ohio Public Employees commits to long/short equity fund (PIOnline)
Ohio Public Employees’ Retirement System, Columbus, committed $100 million to Tiger Consumer Partners, a long/short equity fund, confirmed spokesman Michael Pramik. The commitment brings the $76.4 billion pension fund’s total direct hedge fund investments to $3.22 billion. Hedge fund consultant Cliffwater assisted. Also, the retirement system allocated an additional $75 million to Bridgewater Associates for its risk-parity program, giving the manager a total of $100 million. The other risk-parity managers — AQR Capital Management, BlackRock (BLK), First Quadrant and PanAgora Asset Management — are running $25 million each.
Time to stop addiction to momentum trading (FT)
In recent decades, Harold Ehrlich has enthused about America’s hedge fund world. No wonder: not only is he an adviser to JPMorgan’s fund of hedge funds, but he used to run Bernstein-Macauley, the asset management group. But these days Mr Ehrlich is disenchanted. So much so that he has circulated a memo to clients admitting that, “sad to say, the vast majority of all hedge funds worldwide have well under performed virtually every major stock or bond index for some four years”. “What explains such a fall from grace of even many long-time masters of the financial universe?” he asks. “Have such highly skilled super savvy ‘best of the best’ gone from being ‘smart’ to ‘dumb’? What went wrong?”
Hedge Fund Lobby Criticizes Final EU Rules (Finalternatives)
The hedge fund industry is greeting the final text of the European Union’s new alternative investments regulations with guarded relief, mixed with a heavy dose of criticism. The European Commission this week accepted the implementing rules for the Alternative Investment Fund Managers Directive, giving national regulators six months to put it in place. “We are pleased that the implementing measures of the AIFMD has been published,” AIMA chief Andrew Baker said. “This will enable the industry to make its final preparations for implementing the Directive by July 2013.”
Citigroup Said to Give CCA Managers 75% Stake in Funds for Free (BusinessWeek)
Among Vikram Pandit’s last jobs as Citigroup Inc. (NYSE:C)’s chief executive officer was to decide the fate of the bank’s hedge-fund unit, which employs some of his oldest colleagues. He agreed to give them most of it for free. While Citigroup is keeping a 25 percent stake, managers at the Citi Capital Advisors unit will pay nothing for the remaining 75 percent of that business as it becomes a new firm managing as much as $2.5 billion of the bank’s money, according to people with knowledge of the plan. The lender will pay the executives fees while gradually pulling out assets to comply with impending U.S. rules, said the people, who requested anonymity because the terms aren’t public.
U.S. stock futures fall sharply on fiscal worries (Reuters)
U.S. stock index futures fell sharply after a Republican proposal on how to avert the “fiscal cliff” failed to muster enough support on Thursday, raising concerns a deadlock could cause the world’s largest economy to slip into recession. S&P 500 stock futures shed as much as 3.8 percent at one point, and were down 1.6 percent by 0331 GMT Friday. Dow Jones stock futures dropped 1.6 percent and Nasdaq futures were down 1.5 percent. “This is happening on the evening before the last day of the week — ahead of the weekend. There is a lot of complacency in the market — as many, attracted to the favourable ‘action’ became too comfortable over the last few weeks,” said Douglas A. Kass, founder of hedge fund Seabreeze Partners Management Inc.
SEC Charges Eli Lilly and Company with FCPA Violations (SEC)
The Securities and Exchange Commission today charged Eli Lilly & Co. (NYSE:LLY) with violations of the Foreign Corrupt Practices Act (FCPA) for improper payments its subsidiaries made to foreign government officials to win millions of dollars of business in Russia, Brazil, China, and Poland. The SEC alleges that the Indianapolis-based pharmaceutical company’s subsidiary in Russia used offshore “marketing agreements” to pay millions of dollars to third parties chosen by government customers or distributors, despite knowing little or nothing about the third parties beyond their offshore address and bank account information. These offshore entities rarely provided any services and in some instances were used to funnel money to government officials in order to obtain business for the subsidiary.
