Loeb shorts Nu Skin (NYPost)
Dan Loeb’s Third Point hedge fund is playing both sides of the multilevel-marketing field riveted by the battle over Herbalife Ltd. (NYSE:HLF). Loeb has taken an 8 percent stake in nutritional supplement company Herbalife, helping it fend off a $1 billion short attack from fellow hedgie Bill Ackman, who believes Herbalife is a “pyramid scheme” that should be shut down by the feds. …In contrast, Third Point takes a dim view of fellow multilevel-marketing company Nu Skin, whose stock trades in tandem with Herbalife. Third Point took a sizable short position in Nu Skin Enterprises, Inc. (NYSE:NUS), which sells anti-aging products, after it began researching the company in the summer of 2011, said a source familiar with the situation who is neither long nor short in either company.
Now some hedge funds and money managers are pitching something they see as a Holy Grail: a strategy that often uses leverage to boost returns of bonds that usually occupy the low-risk, low-return portion of pension-fund investment portfolios. Leverage relies on borrowing money or using derivatives to make large investments while putting up less cash. The tactic’s widespread use helped inflate the world-wide debt bubble that burst during the financial crisis, and it was blamed for ruinous losses at banks and securities firms.
Robert Peston benefits from hedge fund boss’s generosity (Telegraph)
News has reached this column of an alliance between Andrew Law, the chief of macro hedge fund Caxton Associates, and the BBC’s business editor Robert Peston. Law is bankrolling Peston’s schools charity, Speakers for Schools, after the pair were introduced by a “mutual friend” that Peston was reluctant to disclose — perhaps because this business arrangement was not due to be announced until early March. Now the cat’s out of the bag, Peston tells Diary that Law “shares my determination to ensure that young people in state schools, like those we both attended, can benefit from access to inspirational speakers”.
Hedge fund manager, Patrick Wolff, sees rise of fortress USA in 2013 (Opalesque)
Patrick Wolff is founder of Grandmaster Capital, the first hedge fund seeded by Peter Thiel. Thiel is a well-known Silicon Valley leader and investor. Grandmaster is a fundamentals based long/short equity manager with some macroeconomic analysis added in – a layer supported, in part, by Wolff’s relationship with Thiel. He recently spoke with Greg de Spoelberch for Opalesque TV on his outlook for 2013. “The U.S. has relatively stable macroeconomic fundamentals, the U.S. economy is recovering, the U.S. can decouple to some degree from the rest of the world so long as there is not a full on 2008 style financial contagion, and it’s a good place to look for businesses whose earnings are mostly tied to the United States,” he says by way of explaining one of his current investing themes – fortress USA.
Galena Drops as Commodity Hedge Funds Trail for Second Year (BusinessWeek)
Hedge funds lost money for commodity investors for a second straight year as managers from the Galena Metals Fund to Clive Capital LLP trailed benchmark indexes of raw materials. The Newedge Commodity Trading index of 56 hedge funds fell 2.6 percent last year, while the Standard & Poor’s GSCI Total Return Index of energy, metals and agricultural products added 0.1 percent. Galena retreated 8.9 percent, the first annual loss since its inception in 2004, according to a letter to investors obtained by Bloomberg News. The performance was confirmed by the company. Clive, Europe’s biggest commodity hedge fund, declined 8.8 percent after a 9.9 percent slide in 2011.
Veteran hedge fund consultant still believes in value of alternatives (Opalesque)
Veteran hedge fund consultant Anthony Hodges is back in the UK and back offering his services to hedge funds and their investors. Hodges has spent some 30 plus years in the industry, having started working as a commodity trading advisor developing what were then revolutionary mechanical trading systems back in 1978. He has most recently spent seven years in Dubai, as the Executive Director in charge of the Ruler’s $1.5bn hedge fund portfolio. In the 1980s and 90s he was Managing Director of Rudolf Wolff Fund Management, a multi-manager hedge fund and subsequently he was at Sabre Fund Management in charge of their fund of funds.
