It is the latest in-vogue accessory among hedge-fund managers: a “masked fund.” Bridgewater Associates has “ZQPGGAV00000,” John Paulson has “Paulson Fund 1” while Cliff Asness’s AQR Capital Management prefers “805-1355888867.” The cryptic monikers, more product barcodes than real handles, enable the hedge-fund managers to shield the identities of their funds from the prying eyes of regulators and outsiders in forms filed with the Securities and Exchange Commission.
Einhorn Enters $1 Million Buy-In Poker Tournament For Charity (Bloomberg)
Greenlight Capital Inc. co-founder David Einhorn entered next month’s $1 million buy-in tournament at the World Series of Poker, donating any profits to the charity City Year. Einhorn, who finished 18th in the World Series of Poker’s main event in 2006, is among at least 42 entrants for the July 1-3 charity event in Las Vegas, known as the Big One for One Drop, Jonathan Gasthalter, a spokesman for Einhorn, said in a telephone interview.
Investors cast doubt on “end of world” hedge strategies (Reuters)
Hedge fund investors have voiced their concerns about complex funds designed to protect against major market meltdowns, just as fears of a break-up of the euro zone have spurred huge interest in these products. So-called “tail risk” funds, also known as “black swan” strategies after the popular book by Nassim Nicholas Taleb, are supposed to hedge against rare but dangerous events, such as the market sell-off following Lehman Brothers’ demise.
Troubling times for high fee ‘concierges’ (MoneyControl)
In early 2008 Union Bancaire Privée was the world’s biggest investor in hedge funds. The bank – a polished and publicity-shy member of the Swiss financial scene run by the de Picciotto family since being founded in 1969 – had USD 55bn channelled into the then booming industry…Its fund of funds business, through which its private clients invested together in vast portfolios of hedge funds, was the toast of Geneva, rivalling the size of its regular banking operations.
Ace gas trader Esse finds feet as hedge fund manager (Reuters)
Even after two decades of surfing the tumultuous natural gas market, Todd Esse found the transition from hotshot merchant trader to hedge fund manager a humbling experience. So far this year, Esse’s $625-million Sasco Energy Partners fund in Westport, Connecticut, is up 10 percent. It is a rare double-digit gain in one of the industry’s most challenging years, marked by the retirement of billionaire gas trader John Arnold and the fall of several other commodity trading stars.
Pensions Eye Hedge Funds At GAIM (Finalternatives)
Pension funds made a splash at the GAIM Conference in Monaco yesterday, telling the gathered industry players that they planned—or were mulling—big new allocations to hedge funds. Investments are not the first thing one thinks about the European Organization for Nuclear Research, better known as CERN. But, home to the world’s largest particle accelerator and some of the most cutting-edge physics research in the world, the Geneva-based center is also home to some 2,400 permanent employees—with pensions.
Funds ready to move in on Biffa (FT)
Distressed debt funds including Apollo and Avenue, are circling Biffa, the struggling UK waste management group, which looks set to become the latest indebted company to be snatched away from its private equity owners. In the most recent example of this, Strategic Value Partners, a US hedge fund, is set to take control of Klöckner Pentaplast from private equity group Blackstone, according to people familiar with the situation, after an ill-tempered battle for the German plastic film producer. Biffa was acquired for £1.2bn by Montagu Private Equity and Global Infrastructure Partners in 2008, but has since struggled to grow amid the weak UK economy, causing the price of its debts to fall – attracting the attention of so-called distressed debt funds, which specialise in troubled companies.
SmartStream and Empaxis Partner to Provide Hedge Funds and Asset Managers with a Turn-Key, Service Based Trade Reconciliation Platform (MarketWatch)
Empaxis, a leading provider of back-office outsourcing and trade reconciliation services, today announced that it has partnered with SmartStream Technologies, the financial transaction lifecycle management specialist, to offer a robust, service-based trade reconciliation platform for the buy-side. The joint offering will provide a complete, turn-key technology and processing service for trade reconciliation and will target small and medium-sized hedge funds and asset managers, leveraging SmartStream’s industry-leading reconciliation and exception management platform to manage their middle- and back-office workflow.
Chicago hedge fund now owns 11 percent stake in Dollar Thrifty (TulsaWorld)
A Chicago hedge fund has purchased 77,800 shares of Dollar Thrifty Automotive Group Inc. in the last month, anticipating a rising share price in conjunction with a renewed takeover bid by Hertz Global Holdings Inc., industry analysts said Thursday. The hedge fund, Pentwater Capital Management LP, now controls 3.2 million shares of the Tulsa-based rental car company or 11 percent of Dollar Thrifty’s 29.5 million shares outstanding as of March 31, company filings with the Securites and Exchange Commission show.
Funds look to analytics for risk management, compliance (Opalesque)
As hedge funds look for ways to meet increasing regulatory and investor demand for more information, many are going to firms offering data analytics solutions. More than traditional risk reporting, analytics firms offer multi-model risk and portfolio testing and reporting – an approach that is beneficial to both investors and managers looking to understand performance, tail-risk and overall portfolio risk. “Dodd-Frank is forcing more funds to come on board,” explains David Merrill, CEO, FinAnalytica, a US-based predictive performance analytics firm in an interview with Opalesque. He notes that even while more are clients are asking about analytics, some firms are coming in looking for a report they can hand over to regulators. “When someone comes in asking about price first, that’s a red flag for us, they are usually looking for something to hand off to a regulator. But from our perspective, if you are paying for the product, you should understand what is there and how to use it.”
As Form PF Filing Deadline Looms for Large Liquidity and Hedge Funds, AxiomSL Software Finishes Successful Test Run (MarketWatch)
Axiom Software Laboratories, Inc. (AxiomSL), the provider of regulatory reporting and risk management solutions to the top 20 global financial firms, today announced that it has successfully submitted test versions of Form PF to the federal electronic filing system for investment advisers, the Investment Adviser Registration Depository (IARD). This development means that both large liquidity funds and hedge funds can still quickly meet their summer reporting deadlines using a version of AxiomSL’s software, one that can be rapidly and cost-effectively implemented while simultaneously laying the groundwork for a comprehensive software solution in the future. “Many managers are racing against time to prepare for filing Form PF, leading some to choose software that seems like a quick, low-cost fix. Eventually, integrating these quick fixes will require more time and money than if firms had chosen a more flexible program at the beginning,” said AxiomSL CEO Alex Tsigutkin.
Here’s How This Hedge Fund Company Invested $37 Billion (DailyFinance)
Every quarter, many money managers have to disclose what they’ve bought and sold via 13F filings. Their latest moves can shine a bright light on smart stock picks. Today let’s look at the D.E. Shaw company, founded by David E. Shaw and with a reportable stock portfolio totaling nearly $37 billion in value as of March 31, 2012. Shaw is known as a math wizard, and a quantitative investing pioneer. His firm is reportedly extremely selective, hiring less than 1% of applicants — and Amazon.com CEO Jeff Bezos once made the cut.
What next for Arpad Busson? (FT)
Arpad “Arki” Busson is about as bright a star as the finance firmament holds. While his celebrity romances – Farrah Fawcett, Elle Macpherson and most recently Uma Thurman – have put him front and centre of popular culture, it is funds of hedge funds, a rather less glamorous field, which have made him rich. Mr Busson is the founder of one of the longest-running of such businesses, EIM, which takes money from clients, pools it and invests it in separate third-party hedge funds that it believes will perform well.
Kinetic Observes Investors Becoming Eager to Find Ways of Recouping Value from “Locked Up” or “Zombie” Funds (BusinessWire)
With a reported $100 billion of notional value of the total $1.5 trillion invested in private equity funds being categorized as “illiquid,” and potentially similar levels still tied up in gated/suspended hedge funds and side-pockets, investors are now considering options to recover their invested capital from these “zombie” funds. Adding insult to injury, is that while these investors continue to wait for redemptions from these zombie funds, which generally trace their claims of illiquidity to the 2008 collapse, they continue to be charged fees, despite claims by the incumbent manager’s of its to sell assets at or close to the values being reported – raising questions by some as to whether these values are truly at market, or are simply being pegged at unrealistically high levels to generate on-going fees.
Growing commodities merchants recruit top traders (Reuters)
The landscape is changing for commodities merchants as global economic strength swings east, encouraging them to diversify into new products and increase scale while they also can skim the best traders off struggling hedge funds and banks. Moves by European and U.S. trading houses to leverage and expand their businesses from a focus on only one or two markets have led to a flurry of recruitment of high-profile traders in metals and agricultural commodities.
Japan Tobacco: Shareholders Reject Dividend Hike Proposal (WSJ)
Japan Tobacco Inc. (2914.TO) shareholders on Friday rejected a proposed sharp dividend hike and other measures put forward by U.K.-based activist hedge fund The Children’s Investment Fund. …
Luxembourg fund assets hit new high in April (HFMWeek)
Total assets in funds domiciled in Luxembourg, one of the biggest hedge fund domiciles in Europe, reached an all-time record at the end of April 2012, according to the Association of the Luxembourg Funds Industry (ALFI), with €2.23trn ($2.8trn) under management. The small nation, whose SIF and SICAV structures have been utilised by an increasing number of hedge fund managers keen to access onshore investors, is the largest fund centre in Europe, closely followed by neighbours France and Germany.
New Palmer Square Capital fund brings hedge investing to the masses (BizJournals)
Leawood-based Palmer Square Capital LLC has raised $160 million to launch a vehicle that offers hedge fund strategy investing for the everyday investor. Palmer Square continues to carve out a niche by providing access to such strategies, which usually are reserved for big institutional clients. Palmer Square’s two alternative investment funds have invested a total of about $305 million, all raised within the past year.
French authorities clear Boussard & Gavaudan co-founder of insider trading (InvestmentEurope)
French regulators have cleared one of the founding partners of hedge fund Boussard & Gavaudan of charges relating to allegations of insider trading, clearing a cloud that has hung over the group for two years. Emmanuel Boussard as well as Boussard & Gavaudan Gestion S.A.S. were discharged from all alleged breaches of French insider trading regulations by the French Market Authority.
Hedgie’s debt bet a $$ mill (NYPost)
A small New York hedge fund has found a new way to profit from the unfolding Greek economic tragedy. Greylock Capital Management — whose founder Hans Humes helped fashion the Greek bailout earlier this year — has just landed a $100 million investment from an unnamed Scandinavian foundation. The cash will push the assets at Greylock past the $500 million mark. Greylock’s profile rose earlier this year with Humes’ involvement on the Greek creditors’ committee.
Emanagers Total Index loses 0.74% in May (+1.69% YTD) (Opalesque)
Emerging manager hedge funds and managed futures funds posted losses for the turbulent month of May, according to our first estimation based on the data of 294 funds listed in Opalesque Solutions’ Emanagers database. The Emanagers Total Index declined 0.74% in May, but is still up 1.69% for the year, thanks to strong results in January and February. Estimates for April and March were corrected to -0.78% and -0.35% respectively. Since inception in January 2009, the index grew 59.4% and outperformed both the global stock market and hedge fund indices.
SEC Charges Florida Broker in Astrology-Based Ponzi Scheme (SEC)
The Securities and Exchange Commission today charged that a former broker in Orlando, Fla., defrauded investors in an astrology-based Ponzi scheme. The SEC alleges that Gurudeo “Buddy” Persaud lured family, friends, and others into investing in his firm, White Elephant Trading Company LLC, by falsely guaranteeing their money would be safe and yield lofty returns ranging from 6 to 18 percent. Persaud told investors he would invest in the debt, stock, futures, and real estate markets, but did not reveal that his trading strategy was based on his belief that markets are affected by gravitational forces.
SEC Charges Two New Jersey-Based Firms and Owner in Stock-Lending Scheme (SEC)
The Securities and Exchange Commission today charged a New Jersey businessman with running a stock-lending scheme that defrauded public company officials and brought restricted stock to the market. Ayuda Equity Funding, LLC and AmeriFund Capital Holdings, LLC, both located in North Butler, New Jersey, and owner Manuel M. Bello, agreed to settle the SEC’s complaint without admitting or denying the allegations. Bello and the firms jointly agreed to return $3.2 million of allegedly ill-gotten gains, plus interest. Bello, of Kinnelon, New Jersey, also agreed to pay a $500,000 penalty and be permanently barred from the securities industry.
JPMorgan PB client onboarding chief to be reassigned (HFMWeek)
Maureen Kodweis, who worked as global head of client onboarding for equities and prime services at JPMorgan, is to be reassigned to a new role at the investment bank, HFMWeek has learned. According to a source familiar with the plans, her subsequent role has not yet been revealed and her replacement has also not been named.
Breaking news: University of California seeks three new managers (HFMWeek)
The University of California (UC), which manages around $41bn across it’s retirement and endowments funds, is currently searching for three hedge fund managers to add to its growing portfolio. UC is searching for a long/short equity manager “with a demonstrated ability to find alpha shorts”, a European distressed manager “whose smaller fund allows it to be opportunistic” and a manager focused on emerging markets, according to UC’s Absolute Return (AR) Programme review published this month.
Newedge names Babulea as new US head (HFMWeek)
Newedge, a joint venture between Société Générale and Crédit Agricole CIB that offers prime brokerage services to hedge funds, has appointed Antoine Babulea to lead its US operations, according to a company announcement. In addition to his new role as CEO of Newedge USA, Babuleas will also be regional head of Americas and be responsible for overseeing the strategic direction of the company in the area.
Emergence seeds Bernheim, Dreyfus’s event driven Ucits fund (HFMWeek)
Emergence, the seeding platform designed specifically to help new France-based hedge fund firms, has seeded its second fund, awarding $40m to Bernheim, Dreyfus & Co.’s Diva Synergy Ucits fund, according to an announcement. The Diva Synergy UCITS Fund, which launched in mid-2011, pursues an absolute return strategy focusing on equity M&A situations in Europe and North America. It deploys capital in two sub-strategies: merger arbitrage and pre-event.
Navistar becomes hot takeover target (JournalGazette)
Navistar International Corp. is turning into the cheapest takeover target in the world among commercial truckmakers as billionaire Carl Icahn and his former protégé push the company to boost its valuation. Icahn increased his stake to 11.9 percent this month and hedge fund manager Mark Rachesky disclosed he had taken an even bigger position as Navistar slumped to a three-year low, prompting the company to adopt a poison pill to help fend off hostile bids.
American Legacy Foundation eyes long/short emerging markets and structured credit (HFMWeek)
The $1bn American Legacy Foundation has plans to build out its hedge fund exposure and is looking at structured credit and long/short emerging market managers in particular, HFMWeek can reveal. The foundation, which develops programmes that address the health effects of tobacco use in the US, is a “big believer” in emerging markets and is looking for dedicated long/short managers in the space to complement an existing 10% long-only exposure, Anthony O’Toole, chief financial and investment officer told HFMWeek at the GAIM 2012 conference in Monaco.
