Dan Loeb’s Third Point has been accused again of conspiring to destroy Fairfax Financial Holdings Limited (TSE:FFH) (PINK:FRFHF), after it is alleged that the hedge fund was involved in driving down Fairfax Holding’s stock price about a decade ago. These allegations come as an echo to previous allegations made by the Canadian insurer some months ago, which were later dismissed two months ago. According to reports, the latest allegations have been made by the wife of a Third Point executive, who two years ago filed a divorce, and claims that her husband started to transfer his investments to “secret” Cayman Islands Accounts seven years ago, in a bid to keep them out of her reach, and consequently, far from the White Plains, N.Y., court where the divorce case is being heard.
Hedgies rest on asset$ (NYPost)
D.E. Shaw, the über-geeky New York hedge fund that stumbled after moving into real estate and private equity, is back on its game. This year, Shaw has had the biggest asset growth among the top 20 hedge fund firms in Absolute Return’s Billion Dollar Club, which tracks the biggest hedgies twice a year. Shaw added $2.4 billion to its hedge-fund coffers this year, a 14 percent gain, bringing its assets to $19.4 billion as of July 1, according to the ranking out today.
HFRX Global Hedge Fund Index up 0.51% in August (+2.29% YTD) (Opalesque)
Global equity markets posted gains for the 3rd consecutive month in August, with significant sector contributions from Energy and Telecom and geographic contributions from Italy and Spain; Asian equities experienced mixed performance. Trading volumes declined throughout the month, as implied volatility declined despite an early month spike associated with a trading loss at a large US executing broker dealer. US yields rose and the yield curve steepened as investors discounted optimism with regard to the resolution of the European sovereign debt crisis; the US dollar declined against the Euro and Pound, despite rising against the Japanese Yen. Oil, Gold and most precious metals posted gains while Agricultural Commodities posted declines on drought relief. Hedge funds also posted the 2nd consecutive month of gains, with the HFRX Global Hedge Fund Index gaining +0.51% with contributions from Equity Hedge and Event Driven strategies; the HFRX Market Directional Index gained 0.82% for the month.
Fletcher to get federal trustee (NYPost)
A Manhattan bankruptcy judge yesterday granted a motion to put a federal trustee in charge of bankrupt hedge fund Fletcher International over the protests of its parent firm, which is managed by Alphonse “Buddy” Fletcher. The ruling was a win for three Louisiana pension funds that invested $100 million in one of Fletcher’s funds in 2008 and have been battling to get their money back for more than a year. Judge Robert Gerber said the decision was in the “best interest” of all stakeholders to “maximize value and decrease the need for litigation.”
More Gains, Even More Pain (WSJ)
It was the rally that left many fund managers behind. Stocks jumped nearly 10% over the summer, defying the expectations of many hedge- and mutual-fund managers who had bet on a decline. They saw a multitude of headwinds from Europe’s woes to the slowing U.S. economy and sluggish corporate earnings. Now, those defensive fund managers are facing what’s known in Wall Street lingo as the “pain trade”: having to buy stocks just to avoid being left in the dust.
Balestra Capital Down 2% Year to Date, 73% Cash (ValueWalk)
Balestra Capital Partners, L.P fund was down 1.5 percent in July, which is slightly better than the -2.66 percent returns in the month of June, while the year to date returns till the end of July were -1.57 percent. The hedge fund gained 11 percent on the S&P 500 in the month of July, up from 9.49 percent in June. The strategy assets amount to $2.1 billion, total firm assets are $2.36 billion, up from $2.35 billion in June. The fund was down in all of its major strategies during the month, the major losers were short side investments in equities and foreign exchange, and lost on the long side of commodities like Gold. BCP gained moderately in corporate bonds, real estate trusts, and US high yield bonds.
Cambridge Associates Works to Increase Number of Hedge Funds With Socially Responsible Investing Screens (BusinessReviewUSA)
A lack of hedge funds employing socially responsible investment (SRI) screens has created an opportunity deficit — for hedge funds themselves, as well as for religious and other institutions that wish to extend their values to their investment programs. In response, Cambridge Associates, the investment consultant to endowments, foundations, pensions and other institutional and private investors, is spearheading efforts on behalf of clients to deepen the pool of attractive hedge funds with SRI screens.
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC TO PRESENT AT THE BARCLAYS GLOBAL FINANCIAL SERVICES CONFERENC (Melodika)
Och-Ziff Capital Management Group LLC (NYSE: OZM) announced today that Daniel S. Och, Chairman and Chief Executive Officer of Och-Ziff Capital Management Group LLC, is scheduled to present at the Barclays Global Financial Services Conference in New York on Monday, September 10, 2012 at 2:45 p.m. Eastern Time. Mr. Och will discuss Och-Ziff’s business and the hedge fund industry as part of his remarks. Mr. Och may also comment on the estimated investment returns of Och-Ziff’s funds as of August 31, 2012 and estimated assets under management as of September 1, 2012. This information is expected to be made publicly available in a filing on Form 8-K on September 5, 2012.
Envestnet to Focus on Fiduciary with Fund Evaluation Group Announcement (AdvisorOne)
Envestnet announced Wednesday that it has partnered with Fund Evaluation Group, a hedge fund research and due diligence provider. The partnership is meant to complement the research on separate account managers, mutual funds, ETFs and liquid alternative investments already available on the Envestnet Prima platform. …“We also wanted a firm with an independent process; one that was nonconflicted and took the fiduciary aspect into account in their due diligence process,” added Ryan Tagal, vice president of product management with the firm.
Pruning Hedge Fund Regulation Without Cultivating Better Rules (NYTimes)
Fresh from having declined to constrain money market funds, the Securities and Exchange Commission has moved to loosen marketing constraints on hedge funds. Two weeks ago, the agency threw up its hands and said it would not be able to defend millions of investors from money market funds that do things like invest in dodgy European bank bonds yet proclaim themselves to be perfectly safe.
The Baupost Group’s Favorite Stocks (Benzinga)
The Baupost Group is one of the largest hedge funds in the world and boasts a terrific stock picking track record. The fund’s founder and president is Seth Klarman, one of the most respected value investors in the world. In fact, Klarman has even been called “the Warren Buffett of his generation.” Here is a look at what equity positions the fund was holding at the end of the second-quarter, when investment managers filed their most recent 13-Fs.
US hedge fund hires ex-Goldman executive (FT)
US hedge fund Strategic Value Partners has hired Steve McGuinness, a senior former executive of Goldman Sachs’s investment arm, highlighting how distressed debt funds are hiring in anticipation of a raft of opportunities in Europe. Mr McGuinness spent 19 years at Goldman, most recently as co-chief operating officer of Goldman Sachs Asset Management until he left the group in early 2011. From 2006 to 2008 he was co-head of the US investment bank’s Special Situations Group, its proprietary distressed debt arm.
How Will the JOBS Act Impact Hedge Funds? (ai-CIO)
The advertising ban for hedge funds is over, thanks to the Jumpstart Our Business Startups (JOBS) Act, leveling the playing field with traditional managers, according to Margolis Advisory Group’s President Jeffrey Margolis. “The JOBS Act will accelerate the institutionalization of hedge funds,” Margolis states in a report. “Hedge funds who embrace the new, less restrictive environment will need to build mature, comprehensive strategic communications programs,” he continues.
China’s Dirt Cheap, But Hedge Fund Manager Doug Kass Wonders If US Stocks Could Follow (Barrons)
The latest data out of China, a weaker-than-expected August non-manufacturing index reading, suggests that China’s third quarter real GDP growth may be 6.5% or lower, says hedge fund manager Doug Kass in his latest missive about China. While Kass, head of Seabreeze Partners, says the Chinese stock market is in bear market territory, the slower Chinese growth hasn’t swayed global markets as much as he would expect. But Kass writes that the rapid pace of the decline in economic activity “is probably now at a tipping point for the world’s non-Asian markets.” While next month’s leadership change in China may come alongside some monetary easing, he says it may be too late.
Credit Suisse Liquid Alternative Beta (“LAB”) Index Up 0.53% in August (Equities)
The Credit Suisse LAB Index was up 0.53% in August according to Dr. Jordan Drachman, Head of Research for Alternative Beta Strategies at Credit Suisse. …Dr. Drachman noted, “The Credit Suisse Liquid Alternative Beta Index (“CSLAB”), which aims to reflect the performance of the overall hedge fund industry, finished up 0.53% in August. The Long/Short strategy was the most significant contributor to performance, finishing up 2.05% for the month. The Event Driven strategy was the second-highest contributor to performance, finishing up 1.38% for the month, yet has the highest performance year-to-date, up 7.10%.”
New study sees clearly growing trend in hedge fund risk management (Opalesque)
Investors and hedge fund managers are all paying a lot more time and attention to the exercise of risk management, especially since the scare of ’08. So the new white paper, published today by alternative assets administrator BNY Mellon, the Managed Funds Association (MFA), a Washington DC-based industry body, and HedgeMark, a hedge fund managed accounts platform and an affiliate of BNY Mellon, comes as no surprise as it claims that risk management and transparency practices are here to stay and to grow.
Simon Lack And The Hedge Fund Mirage (Finalternatives)
Simon Lack knows there are hedge fund investors who have done well on their investments—he just thinks they’re the exception, not the rule. “There are great hedge funds, there are happy clients,” the author of The Hedge Fund Mirage: The Illusion of Big Money and Why it’s Too Good to Be True, says. “But I have to tell you that, when I think about the people I know that are happy with their hedge fund investments, they don’t have that many of them. They haven’t got a conventional, institutional, diversified portfolio. It’s a high net-worth investor who’s got a couple of funds where he knew the manager well and invested a long time ago and it’s worked out really well.”
SOROS QUESTION PROMPTS ABRUPT END TO INTERVIEW (WND)
A left-wing broadcaster cut short an interview with Aaron Klein at the Democratic National Convention after the WND senior staff writer responded to a question about the influence of casino billionaire on the Republican Party with a question about George Soros’ considerable support of leftist groups that influence the Democratic Party. Klein, co-author with Brenda Elliott of the new book “Fool Me Twice: Obama’s Shocking Plans for the Next Four Years Exposed,” was interviewed by Democracy Now!, which broadcasts its programs on Pacifica radio, NPR, college radio stations, public access, PBS, satellite television and the Internet.
Election software controlled by Obama contributor (Wpcva)
Today, I’m expressing a grave concern about the upcoming 2012 U.S. presidential election. I understand that President Obama is sending “voting services” to George Soros’ company in Spain. SCYTL is the name of the Barcelona-based company that now owns the rights to count most of the votes in the upcoming U.S. election. SOE, the Tampa-based corporation purchased by SCYTL in January, supplies the election software which records, counts, and reports the votes of Americans in 26 states — 900 total jurisdictions and growing — across the nation.
Is Marc Faber’s Fear Of Gold Confiscation Unwarranted? (Forexpros)
Marc Faber, author of the Gloom, Boom and Doom Report, came out today on King World News and repeated his mantra about how our government may some day confiscate gold. I like Marc Faber and have quoted him on my site a few times. However, when it comes to his comments about potential confiscation and what the government may or may not do in relation to people’s gold investments, I view it as fear mongering and utter nonsense. Gold Dealers Love To Scare You With Claims of Potential Confiscation
Duet Hires Macquarie’s Dali To Start Emerging Markets Hedge Fund (Bloomberg)
Duet Asset Management Ltd. has hired a Macquarie Investment Management LLC managing director to start a hedge fund to bet on macroeconomic trends in emerging markets. David Dali has been appointed chief investment officer of the Duet Emerging Markets Macro fund, London-based Duet said in an e-mailed statement today. Dali led the emerging markets team at Macquarie Investment, which is a unit of Macquarie Group Ltd. (MQG), Australia’s biggest investment bank, the company said.
Nagaswami Departs New York Pension To Join Bridgewater (Bloomberg)
Ranji H. Nagaswami, who was appointed the city’s first chief investment officer for pensions by New York Mayor Michael Bloomberg two years ago, has left to join Bridgewater Associates LP, the world’s biggest hedge fund. Nagaswami, 48, whose last day was Aug. 21, has been replaced by Janice Emery, 51, the former chief investment officer at Pinnacle West Capital Corp. (PNW), said Lauren Passalacqua, a spokeswoman for the mayor.
CNO Hits Four-Year High On Recapitalization Plan: Chicago Mover (Bloomberg)
CNO Financial Group Inc. (CNO), the life insurer that counts John Paulson’s hedge fund as its largest investor, reached a four-year high after announcing a recapitalization plan that may boost per-share profit. CNO gained 5.5 percent to close at $9.45 in New York, the highest since July 2008. The Carmel, Indiana-based firm has advanced 50 percent this year.
General Growth board looking to hire banker (Reuters)
General Growth Properties Inc’s (GGP.N) board is looking to hire an investment bank, a week after activist investor Bill Ackman stepped up pressure on the No. 2 U.S. mall owner to consider putting itself up for sale, two sources familiar with the matter said on Wednesday. Ackman, who runs the $10 billion hedge fund Pershing Square Capital Management and has a 10.5 percent stake in General Growth, has urged the mall operator’s independent directors to form a special committee to consider a sale.
Waiters At New York City’s Restaurants Know Never To Seat Bill Ackman Next To Carl Icahn (BusinessInsider)
There’s an awesome piece in the New York Times Dining section that talks about the codes New York City restaurant staffers use to identify customers and personalize their experience (h/t @Dutch_Book). And while we find it fascinating that waiters at fine establishments all over the city are making note of your love of bread ends or marking customers as ‘HWC’ (handle with care), we really only got excited about one tidbit — what happens when Bill Ackman and Carl Icahn show up at the same restaurant.
Larger hedge funds more resilient post financial crisis – Conclusion (Opalesque)
Before the 2008 global financial crisis, smaller Asia-focused hedge funds generally outperformed their much larger peers. But this trend was reversed after the crisis with the exception of funds with assets between $200m and $500m, said GFIA’s latest Asia Note report. However, hedge funds with assets under management between $500m and $1bn performed reasonably well during the pre- and post-crisis periods. The Singapore-based data provider attributed this to the eventual consolidation in the industry with capital inflow to strong performers or superior managers joining large funds. But GFIA noted that there is still strong outperformance against the benchmark from individual funds of all sizes, especially in smaller funds.
Opportunities in real estate offer a silver lining to otherwise uncertain markets (Opalesque)
Investors are facing a unique dilemma according to Giles Keating, head of research for private banking and asset management at Credit Suisse. If current global macroeconomic situations such as the European and US debt crises are resolved, assets will be considered cheap. On the other hand, if these situations worsen or new ones spring up, asset values may decrease further. The overall uncertainty of this situation is making investors cautious and is likely keeping some money on the sidelines. …Within this context, the first principals of investing still apply – maintain a diversified portfolio, hedge against current and potential future risk. This is also true for assets such as gold which have been viewed as bastions of safety. “I think the levels in gold are high enough now that investors should have a small part of their portfolio in gold. But I think we could see a correction in the next 2-4 years,” Keating sa…
SunGard identifies ten asset management trends affecting the fund management industry (Opalesque)
Martin Boyd, president of SunGard’s asset management business said, “The lines between institutional asset managers and alternative investors are becoming increasingly blurred due to investment strategies, priorities and goals becoming aligned. The relocation of assets to either alternative or traditional strategies puts greater pressure on funds to perform. Therefore, fund managers are looking to technology solutions that help reduce platform complexity, increase risk management and maintain compliance to ultimately assist in the generation of alpha.”
SEC Charges Radio Personality for Conducting Misleading Investment Seminars (SEC)
The Securities and Exchange Commission today charged a nationally syndicated radio personality and financial advice author for spreading misleading information about his “Buckets of Money” strategy at a series of investment seminars that he and his company hosted for potential clients. The SEC’s Division of Enforcement alleges that investment adviser Ray Lucia, Sr. claimed that the wealth management strategy he promoted at the seminars had been empirically “backtested” over actual bear market periods.
SEC Charges Attorney and Two Other South Florida Residents in $27.5 Million Investment Fraud (SEC)
The Securities and Exchange Commission today charged an attorney and two others living in South Florida for their roles in a $27.5 million investment scheme that led investors to believe they were purchasing securities consisting of “pre-sold” commodities contracts with a pre-determined profit. However, the supposed profits actually distributed to investors were largely taken from other investors’ funds. The SEC halted the scheme last year when it obtained an asset freeze and a court-appointed receiver over the companies involved: Commodities Online LLC and Commodities Online Management LLC. The SEC’s follow-up charges are against the founder and former president of the company, James C. Howard III, as well as the company’s vice president Louis N. Gallo III and outside counsel Michael R. Casey, who later became the president.
SEC Charges Public Relations Executive With Insider Trading in Client’s Stock (SEC)
The Securities and Exchange Commission today charged the CEO of a Los Angeles-based public relations firm with insider trading on nonpublic information she learned from a client that was about to acquire a bank in a deal assisted by the Federal Deposit Insurance Corporation (FDIC). The SEC alleges that Renee White Fraser and her firm Fraser Communications were contacted by Pasadena-based East West Bancorp (EWBC) for marketing and public relations support during its acquisition of San Francisco-based United Commercial Bank.
Why Wall Street Needs More Women Traders – A Conversation With Hedge Fund Boss Lex van Dam (Forbes)
Apparently married men make better traders than single men. But do you know which group trumps them both in trading? It’s women. According to one of London’s top traders, encouraging more women into the profession would be good for society. ‘Women have a much higher sense of risk control than men and it can help avoid many of the disasters that risk taking by a male dominated trading environment has caused over the years.’ Yessir. Lex van Dam is a former Goldman Sachs trader and a partner in the London based hedge fund, Hampstead Capital.
Carlson and SAC vet Jason Karp preps new fund for $100M+ launch (Absolutereturn-Alpha)
Jason Karp, a veteran of George Weiss Associates, SAC Capital Advisors and Carlson Capital, is in the final stages of preparing his new long/short equity hedge fund firm for launch on January 1. The New York based venture will be called Tourbillon Capital Partners, a reference to the French word for whirlwind and to an innovation in watch making around 1800 that increased clock accuracy. Joining the Tourbillon team, according to marketing materials obtained by AR, is Carlson’s Amy Zipper as chief operating officer; Argonaut Capital Management’s Brian Kessler as chief financial officer; SAC’s…
Former West Midlands chief speaks of hedge fund process (HedgeFundIntelligence)
In what are challenging times for funds of hedge funds, Judy Saunders, formerly one of the UK’s most influential pension fund chiefs, continues to endorse their benefits. The strategy she spearheaded and implemented at the $13.5 billion West Midlands Pension Fund (WMPF), increasing the fund’s allocation to alternatives to 35% by 2012, certainly backs up her assertions. Since leaving WMPF earlier this year, she has also taken on a part-time senior advisory role at Man Group, where she will work with the Man UK institutional team to tailor products and strategies specifically to the needs of UK local government pension schemes. In addition, Saunders is also an independent investment adviser to the Newham Pension Fund, which has a meaningful alternatives portfolio of its own.
