The Leona M. and Harry B. Helmsley Charitable Trust continues to expand its combined exposure to hedge funds and private equity (PIOnline)
The $3.874 billion Leona M. and Harry B. Helmsley Charitable Trust continues to expand its combined exposure to hedge funds and private equity, which totaled $1.598 billion as of March 31, 2012, the most recent data available. That is an 85% increase from the $864 million in 2011. In 2009, hedge funds and private equity accounted for $159.1 million. The number of hedge fund strategies and private equity funds in the trust’s portfolio increased to 40 from 21 in 2011 and only nine in 2009. The foundation’s largest hedge fund investment was Coatue Offshore at $111.9 million. Notable new hedge fund and private equity investments included $108 million each with Daruma Capital Management and Highclere International Investors, $107 million with L.A. Capital and $101 million with Colchester Global Investors.
Retired Arnold Eyes Pension Reform (Finalternatives)
Another hedge fund manager is weighing in on the thorny issue of public pension reform. John Arnold, who made billions running Centaurus Advisors before shutting the hedge fund last year, is turning his foundation and fortune to reforming California’s public pensions. Arnold aims to back groups seeking to limit public-employee pension deals, which are threatening the fiscal health of states and municipalities across the country. Arnold has been involved in the pension reform movement for years, having given $150,000 to the California Foundation for Fiscal Responsibility two years ago, out of a total of about $10 million spent nationwide on the issue.
Hedge Fund Revenue Climbs Past Pre-Crisis Peak (Hedgeco)
Median pre-tax operating margins rose to 32%, the highest since 2007, according to a new survey by Casey, Quirk & Associates. The new high in profit margin was driven by market appreciation, which also lifted 2012 revenue in the global asset management industry past the previous 2007 peak, Reuters says. However, net inflows of 1.2% last year – compared with 3.7% in 2007 – increasing fee pressure, and a widening economic divergence among firms post-financial crisis point to growing industry challenges, according to Performance Intelligence: 2013 Survey Results. The global survey participants largely came from the U.S. Institute and European Institute, members-only forums established by Institutional Investor’s conference division for CEOs of leading investment management firms.
Roubini and Bremmer on Charlie Rose: Unveiling New Abnormal (EconoMonitor)
After the Great Recession, commentators have espoused their idea of the “New Normal”—a post-growth era of stagnant developed economies. But is it so simple? Nouriel Roubini and Ian Bremmer appeared on Charlie Rose to discuss their take on what the new paradigm will be like. Roubini differentiated what he is calling the “New Abnormal”: “Our point is that this situation is one that is not a stable equilibrium, is not even a stable disequilibrium. It’s an unstable disequilibrium. Take for example the eurozone. You cannot have just a monetary union without banking, political, economic, fiscal union.
Fashionable ‘Risk Parity’ Funds Hit Hard (WSJ)
Investors who piled into “risk parity” funds, which follow a popular strategy that promises to make money in most environments, are being hit hard by the current market turmoil. The losses are touching a broad swath of investors, ranging from hedge-fund firms Bridgewater Associates LP and AQR Capital Management LLC, to mutual funds and local pension funds. Risk-parity funds use leverage to try to increase returns on bond investments so they more closely resemble returns of stocks. The basic idea of the strategy is that by equally distributing risks among stocks, bonds and commodities, the portfolio can weather huge price…
Consultants Can’t Quit Hedge Funds (InstitutionalInvestorsAlpha)
What do hedge funds have to do to fall out of favor with consultants? This group is more bullish on hedge funds than it was a year ago, even though the average fund continues to lag the broad market averages for a fifth straight year, a new survey shows. Some 38 percent of consultants polled by London-based alternatives data provider Preqin said they plan to commit slightly more capital to hedge funds on behalf of clients, while another 17 percent said they will invest “significantly more.” This compares with last year, when 28 percent said they planned to commit slightly more and 10 percent significantly more…
