Fed taper will hurt markets, though hedge funds unconcerned about rates impact (Opalesque)
Aksia’s third annual institutional hedge fund manager opinion survey revealed that managers are overwhelmingly negative on the potential impact of Federal Reserve tapering on markets. Most managers surveyed expect tapering to begin within the next few months (during Q1 ‘14), and 75% of respondents expect a significant negative impact on global markets. However, just 10% of managers view rising rates as hurtful to their strategy. The survey, conducted in late October through early November, polled 198 managers collectively managing more than $1 trillion in hedge fund assets. “The survey gets inside the heads of managers and illustrates their opinions about both the markets and the hedge fund business,” commented Jim Vos, CEO of Aksia in announcing the findings.
Unlikely Legacy of Ponzi Scheme: A Bonanza for Newfangled Funds (WSJ)
Five years later, the most ironic part of Bernard Madoff’s legacy is clear: After his Ponzi scheme made hedge funds seem scary, especially to individual investors, the industry got busy making them seem safe enough for everybody. So-called liquid alternative funds have become the hottest thing in the mutual-fund business. These portfolios—essentially hedge funds with a longer, trendier name—employ such strategies as betting on mergers, wagering that stocks will go down as well as up, and using derivatives like futures and options. Their assets are up 33% this year to more than $244 billion, with nearly $53 billion flowing in through Sept. 30, according to Strategic Insight, a fund-industry research firm.
Sandell adds FirstGroup to target list (FT)
Thomas Sandell may be unusually quiet for an activist investor, but his record speaks volumes. The 52-year-old founder of New York-based hedge fund Sandell Asset Management has waged more than 15 activist campaigns against companies over the past eight years and on Wednesday he added UK bus and rail operator FirstGroup to his target list. Born and raised in Sweden, Mr Sandell showed his competitive streak from an early age, practising badminton 15 hours a day to eventually become the country’s national junior badminton champion.
Icahn Enterprises Looks Grossly Overvalued (Barrons)
If Carl Icahn is selling, do you want to be buying? Probably not. Partnership units of Icahn Enterprises LP (NASDAQ:IEP), the investment vehicle controlled and managed by the billionaire, are down $13, or nearly 9%, to $135.53, after the company announced the sale of two million units yesterday after the market close. The partnership units look overpriced because the company’s indicative net asset value (NAV) on Nov. 30 was around $75 per unit, or $8.7 billion, according to a filing today. There were about 115 million outstanding units prior to the offering today and Icahn owns about 90% of them. The units now trade at an 80% premium to the Nov. 30 NAV.
Bankers and Hedge Fund Managers: 82% Believe FCA Fails to Balance Investor Protection and Growth Promotion (IBTimes)
Around 82% of senior executives at banks, asset managers, and hedge funds believe that the UK’s Financial Conduct Authority is failing to strike the right balance between protecting investors and underpinning growth. According to a Kinetic Partners, which surveyed more than 300 senior executives globally for its 2014 Global Regulatory Outlook report, only 18% thought that the FCA had achieved the balance between safeguarding investors while also promoting growth. Meanwhile, nearly half of financial services professionals (49%) globally said that they don’t believe that any regulator has managed to strike the right balance.
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