Activist investor Carl Icahn bumped up his stake in Chesapeake Energy Corporation (NYSE:CHK), a company where he has already pushed for sweeping changes in governance. A regulatory filing shows Icahn now owns 8.98 percent, compared with a 7.6 percent stake in the Oklahoma City company he held this summer. Icahn first invested in Chesapeake Energy Corp. in May. Chesapeake is one of the nation’s largest natural gas producers. It has been reeling from a combination of historically low natural gas prices and questions from investors about its management.
Breaking News: Here are Other Hedge Funds That Also Sold Elan and Wyeth (InsiderMonkey)
Mathew Martoma was charged with insider trading today. “This is an insider trading case where affiliated investment advisers and their hedge funds made over $276 million in illegal profits or avoided losses in July 2008 by trading ahead of a negative public announcement involving the clinical trial results for an Alzheimer’s drug being jointly developed by Elan Corporation, plc (“Elan”) and Wyeth,” SEC says in its complaint. SEC alleges that Dr. Sidney Gilman provided confidential information to Mathew Martoma who then “caused hedge fund portfolios managed by CR Intrinsic as well as hedge fund portfolios managed by an affiliated investment adviser (“Investment Adviser A”) not only to liquidate their combined long positions in Elan and Wyeth, worth over $700 million, but also to take substantial short positions, eventually selling over $960 million in Elan Corporation (NYSE:ELN) and Wyeth securities in just over a week”
The Top Stock Held By Each Of The World’s 50 Biggest Hedge Funds (BusinessInsider)
Factset’s recently released report on the equity holdings of the 50 largest hedge funds also includes a table which shows the top stock held by each fund. Apple is once again the undisputed number one pick of hedge fund managers, serving as the top holding for 12 of the 50 funds. That this happened after Apple’s stock fell 9.1% in the quarter suggests the high degree of confidence hedge fund managers have for the type of rebound that happened today.
Investing In, Not Gambling Within, The Casino (ForexPros)
AIMA has issued an updated “roadmap to hedge funds,” written by Alexander Ineichen for the benefit of actual and potential investors. Much of the road map is Ineichen’s effort to steer investors away from some myths. From the point of view of the hedge fund industry, some of the myths are negative (such as the idea that hedge fund investing is just gambling) some are positive (such as the notion that hedge funds generate strong returns in all market conditions.) Let’s stick with just those two.
Wrong sort of volatility hits trend followers (VCCircle)
In the days of British Rail, in the depths of winter, there was a particularly notorious excuse for tardy trains: the wrong type of snow on the lines. So it is too with some of the world’s biggest hedge funds. The snow, in their case, is volatility. So-called managed futures funds, also known as CTAs, are running into their fourth successive year of disappointing returns. The average CTA, which uses complex computer algorithms to spot and ride market trends, has lost more than 7 per cent in the past two years alone, according to Hedge Fund Research. While hedge funds in general have hardly fared well, they have fared better, averaging losses of about 1 per cent over the same period.
Brevan Howard on Hiring Spree as Hedge Fund Rebuilds in New York (SFGate)
Brevan Howard Asset Management LLP, Europe’s second-biggest hedge fund, is rebuilding in the U.S. after largely pulling out during the 2008 financial crisis. The $39 billion firm, run by billionaire Alan Howard, is seeking traders for its New York office after adding 14 people to its U.S. unit in the past five months, four people familiar with the matter said. Among those recently hired by London-based Brevan Howard are Don Carson, who ran Credit Suisse Group AG’s U.S. dollar swaps desk, Josh Bertman, a mortgage trader from the Zurich bank, and strategists from Deutsche Bank AG.
Groupon shares up 8% on N.Y. hedge fund investment (Equities)
Groupon shares were up 8 percent, to $3.38, in late trading on the Nasdaq a day after New York-based hedge fund Tiger Global Management disclosed it had taken a 9.9 percent stake in daily deals company. The battered stock had been up as much as 13 percent earlier in the session. The firm’s filing with the Securities and Exchange Commission said it owns 65 million shares of Class A common stock amassed around Nov. 9, one day after Chicago-based reported disappointing third-quarter earnings that sent its stock reeling.
London fund pares down iCapital stake (TheStar)
City of London Investment Management Co Ltd has pared down its stakes in iCapital.biz Bhd after disposing of 155,000 shares in the latter at an undisclosed price last week. Filings at Bursa Malaysia showed that the London-based hedge fund now owns 9.14 million shares, or 6.53% stake, in iCapital.biz following the disposal. City of London was widely seen as a party aligned to Laxey Partners Ltd. Laxey had earlier attempted to gain a board representation on closed-end fund iCapital.biz, but had failed to do so after shareholders voted against the motion.
Matterhorn Readies Southeast Asia Hedge Fund (Finalternatives)
Matterhorn Investment Management will launch an emerging-markets hedge fund focused on Southeast Asia early next year. The London-based firm aims to raise US$30 million for the vehicle, which will invest primarily in Indonesia and the Philippines. In particular, it will focus on banking, consumer and infrastructure opportunities in the region, The Wall Street Journal reports. “I have seen absolutely enormous change,” Paul Bate, founder of the US$400 million firm, said. “There are a very large number of companies that have very good prospects because it is such an early stage and they have so much more growth to go.”
Why Argentina refuses to pay hedge fund managers (VOXXI)
Here’s what you have to understand: Argentina isn’t refusing to pay angry hedge fund managers like Elliott Capital’s Paul Singer because they don’t have the money. They do. The country’s intransigence comes from a force far more powerful than that—the fabric of their modern political ideology. “This was a political decision handed leaders made,” said bankruptcy expert William A. Brandt, CEO of Development Specialists Inc., a firm specializing in turnarounds. “Argentina is an incredibly sophisticated economy and brought this problem on itself by doing the unthinkable and defaulting on its debt.”
Fiat and Petrobras among hedge funds’ top short picks (Reuters)
Singapore commodities trader Olam is not the only stock on shortsellers’ radar – higher-profile names such as Italian carmaker Fiat and Brazilian oil group Petrobras are also being targeted. Speaking at a conference, hedge fund managers including Chris Cooper-Hohn – the founder of The Children’s Investment Fund (TCI), U.S. shortseller Muddy Waters, and Kynikos founder Jim Chanos named stocks they saw as overvalued.
George Soros Buys Millions In Gold: Forbes Warns Investors Not To Imitate Him (Inquisitr)
According to the figures in the form 13F reports from the SEC, genius billionaire investor, convicted currency manipulator, and Obama financial backer, George Soros, bought millions of dollars worth of gold recently. While the news has investors buzzing and speculating about Soros’ view of America’s faltering economy, Forbes Magazine is warning investors that imitating George would be foolish. Soros and another billionaire investor, John Paulson, have managed to accumulate the largest combined private bullion holdings in history. Paulson, who became a billionaire by investing against the sub-prime mortgage market, now owns 21.8 million shares in the SPDR Gold Trust. His 66 tons of gold exceeds the official reserves of Brazil, Bulgaria, or Bolivia.
HP accuses Autonomy of wrongdoing, takes $8.8 billion charge (Reuters)
Hewlett-Packard Company (NYSE:HPQ) stunned Wall Street by alleging a massive accounting scandal at its British software unit Autonomy and taking an $8.8 billion write-down, the latest in a string of reversals that renewed questions about the competence of the storied company’s board and senior managers. HP said on Tuesday it discovered “serious accounting improprieties” and “a willful effort by Autonomy to mislead shareholders,” after a whistleblower came forward following the May ouster of former Autonomy Chief Executive Mike Lynch.
SEC Sanctions Two Investment Advisers for Impeding Examinations (SEC)
The Securities and Exchange Commission today sanctioned two investment advisory firms for impeding examinations conducted by SEC staff. An SEC investigation found that Evens Barthelemy and his New York-based firm Barthelemy Group LLC misled SEC examiners by inflating the firm’s claimed assets under management (AUM) ten-fold in an apparent attempt to show that the firm was eligible for SEC registration. Another SEC investigation found that Seth Richard Freeman and his San Francisco-area firm EM Capital delayed nearly 18 months in producing books and records related to the firm’s mutual fund advisory business.
Lorraine Echavarria Named Associate Regional Director to Lead Enforcement Program in SEC’s Los Angeles Office (SEC)
The Securities and Exchange Commission today announced that Lorraine B. Echavarria has been promoted to lead the Los Angeles Regional Office’s enforcement program as an Associate Regional Director. Ms. Echavarria, who joined the SEC staff in 2000, has served as an Assistant Regional Director for more than five years and has served in the Enforcement Division’s national Municipal Securities and Public Pension Specialized Unit for more than two years. Ms. Echavarria has worked on significant cases throughout her career at the SEC, including the SEC’s first-ever Sarbanes-Oxley Act “clawback” case against an individual required to return bonuses and stock profits while not personally charged for the company’s misconduct.
Worries on U.S. taxes drive hedge fund exits to near 3-year high (Reuters)
The demand from investors to pull money out of hedge funds neared a three-year high this month, industry data showed, amid concerns over U.S. taxation of wealthy individuals under President Barack Obama and lacklustre hedge fund performance. Hedge fund administrator SS&C GlobeOp’s (SSNC.O) forward redemption indicator, a monthly snapshot of clients giving notice to withdraw their cash as a percentage of its assets under administration, measured 5.19 percent in November.
Mila Kletsky places Russian HFs in global context (InvestmentEurope)
Mila Ketsky, professor at the Russian Presidential Academy of National Economy, compares Russian hedge funds to their global peers. Hedge funds in Russia operate under the strict control of the government, with the goal to manage the high market volatility and hedge investors’ risks. Practically, this means short selling, typical leverage and other hedge fund specific instruments are not permitted here.
UBS Trader Gets Guilty Verdict (HedgeCo)
Kweku Adoboli, a ”rogue” UBS employee has been convicted on one count of fraud, the UK jury are still considering one more count of fraud and four of false accounting, the Guardian reports. “Adoboli bowed his head when the jury foreman gave the unanimous verdict of all 10 jurors. Judge Brian Keith told the jury to seek similar verdicts on the remaining counts, but told them he would accept majority verdicts of 9-1 if necessary.” Adoboli’s unofficial trades cost UBS more than £1.5 billion ($2.4 billion), Adoboli said that he was “under enormous pressure to increase profits” and that his colleagues knew about his activities.
State Street Corp. CFO Edward Resch to Retire Next Year (Bloomberg)
State Street Corporation (NYSE:STT), the third- largest custody bank, said Edward Resch will retire next year as chief financial officer after more than a decade in the role. Resch, 60, will step down after a successor has been found, Boston-based State Street said yesterday in a statement. Resch joined State Street in September 2002 after serving as CFO at Jersey City, New Jersey-based Pershing LLC. “He did a solid job as CFO, but this is not a job where you win popularity contests,” Brad Hintz, an analyst at Sanford C. Bernstein & Co. in New York, said in an interview.
