The £22m football bet: Hedge fund guru Crispin Odey shorts Manchester United shares (ThisIsMoney)
Hedge fund guru Crispin Odey has made a £22million bet that Manchester United’s poor performance on the field will be echoed in the stock market. The founder of Odey Asset Management has taken out a 0.78 per cent ‘short position’ on the club, signalling his belief that its shares will fall. A short position is when an investor borrows stock in the expectation that it will lose value, then sells it immediately. If and when the price drops, they buy the shares back and pocket the difference.
Hedge funds attract billions in new money (FT)
Hedge fund managers are attracting new money and preparing expansion plans, even though their performance has fallen behind roaring equity markets this year, thanks to a shift in how investors view the industry. Funds brought in $360bn this year in investment returns and inflows from investors, an increase of 15.7 per cent on their assets under management at the end of 2012, according to new figures from the data provider Preqin. The continued growth comes as investors lower their expectations of returns from hedge funds and instead view them as a way of increasing diversification and reducing volatility in their portfolio.
European hedge funds pay ‘premium’ (GlobalInvestorMagazine)
The gap between European and US hedge funds is widening, according to a new survey by Citigroup Inc (NYSE:C)’s prime finance business. European hedge funds are paying a “premium” running their firms, the 2013 Business expense benchmark survey found. Their management company costs appeared to be higher than the same charges being realises by US firms. Hedge funds with $100m, $500m, $5bn and more than $10b AuM are paying a premium of at least 20% in expenses compared to their US counterparts.
Wilton’s Commonfund Appoints New Head Of Hedge Fund Research (Wilton)
Wilton’s Commonfund, an institutional investment firm serving nonprofits, pension funds and other institutional investors, has named Kristofer S. Kwait as the new head of hedge fund research. Kwait, a 12-year veteran of the firm, is already the managing director of Commonfund. He will perform the duties associated with both titles moving forward. “Since joining Commonfund, Kris has been instrumental in our ability to set a high standard in manager identification and selection, portfolio analysis, due diligence and investment monitoring,” Nicholas De Monico, Chief Executive Officer, Commonfund Hedge Fund Strategies Group said in a statement.
Hedge Fund Lions’ Den: Emerging managers face the test (Risk)
Pitching funds to investors is a talent. In episode three of Hedge Fund Lions’ Den, the lions hear a two-minute offer from each manager. First up to face the lions are CJ Donley and Robert Toffel from Strategis Capital Management followed by Neil Meadows of Laurentia Funds. The third pitch is by Christina McGuire and Gordon Eichhorst from Aperios Partners Investment. All the managers are then interrogated by the lions: Andrew McCaffery from Aberdeen Asset Management; Luke Ellis, president of Man Group; and the godfather of the hedge fund industry, Stanley Fink, now chief executive of ISAM. The Strategis offering, started just under a year ago, takes a quantitative approach to portfolio management but risk management is at the heart of its strategy, both at portfolio and trade level.
Valuation is like beauty in eye of beholder: Cramer (CNBC)
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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