Hedge fund manager Dan Loeb has gained control of another seat on the board of internet company Yahoo! Inc.(NASDAQ:YHOO). The New York Times reported that Max Levchin, co-founder of e-commerce service PayPal, will serve as the fourth director nominated by Loeb, whose hedge fund firm Third Point is a Yahoo shareholder. He joins fellow corporate turnaround expert Harry Wilson, media consultant Michael Wolf and Loeb himself. The article also said that Intuit CEO Brad Smith and David Kenny, the head of the Weather Channel, are stepping down from Yahoo’s board.
White House, Hedge Funds Discuss Fiscal Cliff (HedgeFund)
When eVestment|HFN put out a poll recently asking visitors to the website if President Barack Obama should meet with hedge fund managers to discuss the “fiscal cliff” crisis, little did it know that the White House would go forward with such a proposition. That’s what Bloomberg reported this week as the president’s senior adviser Valerie Jarrett was scheduled to meet Wednesday with Daniel Och of Och-Ziff Capital Management. The meeting followed one with Avenue Capital founder Marc Lasry, a longtime Obama supporter, earlier this month.
Florida hedge fund III Associates celebrates 30 years, is optimistic for 2013 (Opalesque)
Few hedge funds can say they’ve lasted 30 years, fewer still can say that they have lasted that long, and are seeing consistent investor interest. For Boca Raton-based III Associates, at 30 the future looks bright. III Associates, is a hedge fund that specializes in relative value portfolios in the global fixed income and credit markets with $2.1bn in assets under management. I spoke with Garth Friesen, co-CIO and Principal about where he sees the firm, and financial markets headed going into the new year. As a firm, III Associates offers its clients including fund of funds and pension funds, with a targeted selection of innovative fixed income, credit, and tail risk products as well as individualized trading strategies. Friesen has been with the firm since 1998, and also currently serves on the Federal Reserve Bank of New York’s Investor Advisory Committee on Financial Markets.
Former Hedge Fund Founder Ordered to Pay $5 Million for Securities Law Violations (JDSupra)
The US District Court for the Southern District of New York recently ordered the investment adviser to two hedge funds, and its managing director, to pay nearly $5 million in disgorgement, prejudgment interest and civil penalties for violations of the federal securities laws. Defendant Chetan Kapur, through his company ThinkStrategy Capital Management, LLC, induced investors into buying shares in two hedge funds he managed by making misstatements about the hedge funds’ past and present performance, their assets, longevity, and other material misrepresentations. Defendants subsequently entered into consent judgments with the Securities and Exchange Commission and the court, and agreed to pay disgorgement of ill-gotten gains, prejudgment interest thereon, and civil penalties.
Man Group faces heavy GLG write-off (FT)
Man Group is weighing up significant accounting write-offs next year relating to its 2010 acquisition of GLG Partners, a move that will raise eyebrows after the announcement on Monday that former GLG boss Emmanuel Roman is to be the new chief executive of the company. People at Man told the Financial Times it was likely that further impairments would have to be taken in February, when the company announces its full-year results, after a difficult 12 months of lacklustre performance and investor outflows.
Falcone’s Harbinger Not Scrambling to Meet Redemptions (TheStreet)
Harbinger Group Inc (NYSE:HRG), a holding company majority owned by Philip Falcone’s struggling hedge fund Harbinger Capital Partners traded nearly 27% lower after the company announced a secondary offering on Thursday of 20 million shares at a price of $7.50. While the offering states that three Harbinger Capital funds are the selling shareholders, a source familiar with the situation denies that the sales are a reaction to investor redemptions. Instead, the share sale is part of a long-term plan to increase Harbinger Group’s public float on the New York Stock Exchange, the source said.
Asian hedge funds reverse slow start to outperform this year (BusinessTimes)
Asian hedge funds are set to outperform the world in 2012, gaining for the fourth straight month in November as the US Federal Reserve’s low- rate policies boosted credit and stock investments. Top performers in 2012 include Income Partners Asset Management (HK) Ltd’s Asian Credit Hedge Fund, GCI Japan Hybrids and Algebris Coco Credit Fund. The Eurekahedge Asian Hedge Fund Index returned 5.8 per cent this year through November, outperforming the 4.5 per cent return by the index tracking global hedge funds, according to a preliminary report by Eurekahedge, a Singapore-based data provider.
A Secret Agreement Between Mathew Martoma and Cohen’s SAC Capital? (StreetInsider)
Steven Cohen’s SAC Capital hedge fund is under intense scrutiny after former portfolio manager Mathew Martoma was charged by the SEC with insider trading, and the agency implicated Mr. Cohen himself for being involved in trading on the insider information. Now reports suggests that the hedge fund and Mr. Martoma have an agreement to share information about the government’s building case against the hedge fund giant. FOX Business Network (FBN) senior correspondent Charlie Gasparino reports that there is a “cooperation agreement” between SAC Capital and former SAC Capital portfolio manager Mathew Martoma. This agreement allows the two to “share documents” and gives SAC founder Steven Cohen “additional insight into the government’s case against him.”
Uncertain 2013 challenges hedge fund strategy performance (HedgeFundsReview)
Unpredictable consequences of political interference and central bank intervention on markets are set to continue in 2013. Hedge fund managers need to cope with the new reality and boost performance. Entering 2013 life appears as complex and uncertain as ever. The eurozone crisis – the slowest train wreck in history – continues to drag down economies in and around Europe. The US, whether or not it avoids plunging off a fiscal cliff, is not exactly a shining beacon of growth for the world.
Volcker Rule may hurt mutual funds, investors: ICI (MarketWatch)
A proposal set up to implement the Volcker Rule is intended to limit speculative activity of big banks and limit their hedge fund activity. However, a top lobbyist for the mutual fund industry told lawmakers Thursday that the measure may cause major problems for many mutual funds and limit fund options for retail investors. “This could have the effect of essentially barring banking entities from sponsoring the most highly regulated type of investment vehicle [mutual funds] and, thereby, limiting investment options for investors,” Paul Stevens, president of the Investment Company Institute, told lawmakers at a House Financial Services Committee hearing.
Houston Firm Launches HF with $100M Seed (HedgeFund)
TPH Asset Management announced Wednesday that it has received seed capital from an Asian institution for its new hedge fund. Houston-based TPH said in a statement that the new fund, which launched with $100 million in assets, focuses on public equity investments across the energy infrastructure spectrum. The fund is managed by Diego Kuschnir, who joined TPH in November. The firm also said that the unnamed institution will have the opportunity to seed additional strategies as TPH continues to grow.
StatPro and Pacific Fund Systems to Offer Calculations (WatersTechnology)
Users of PFS-Paxus, the share registry, fund accounting, and allocations platform of Hong Kong-based hedge fund tech provider Pacific Fund Systems (PFS) will now be able to perform online portfolio analysis and Value-at-Risk (VaR) calculations through StatPro Revolution, a cloud-based portfolio analysis platform from London-based StatPro. “Creating a seamless interface between our two systems allows PFS clients to view detailed portfolio metrics and VaR,” says PFS director James Eldershaw. “We believe that with increased industry regulation it will become necessary for all funds to have access to this type of information and to have it provided directly from the fund’s official accounting records.”
What It Takes To Start A Hedge Fund Has Completely Changed Over The Last Decade (BusinessInsider)
If you think you’re going to be like Ray Dalio or Dan Loeb, starting an incredible hedge fund from your apartment, it’s time to let go of that dream. Over the last ten years, starting your own fund has gotten way more complicated than it used to be. Gone are the days when a guy with a Bloomberg machine could convince investors to fork over that 2% and 20% (the common hedge fund compensation scheme) because of their investment thesis or their trading prowess.
Hedge fund manager orders gold bullion to fill Christmas crackers (ManagementToday)
If you thought the days of corporate excess were over, you’re crackers. According to Hailliday-Stein, whose online bullion company delivers gold bars and coins through the post, a hedge fund manager ‘for a well known City bank’ recently placed a sizeable order – for cracker fillers. The chap explained that he was after ‘something special’ to put in the crackers for the annual Christmas bash for clients.’The one-gram gold bars are about the size of a thumbnail so they are the perfect fit,’ explains Halliday-Stein. The hedge fund man promptly ordered fifty.
Costs on the rise for hedge funds and investors as regulations bite (HedgeFundsReview)
Running a hedge fund is getting more costly and investors may ultimately pay the price in 2013 as managers look to pass on more of their expenses to clients. The rising regulatory burden and investor demands for better risk management and reporting have driven up the cost of doing business for 49% of hedge funds, according to a survey by Ernst & Young. For those managers reporting a rise in operating expenses in 2012, costs were up 15% on average. This is hardly surprising. For one, the increased compliance burden faced by hedge funds is reflected in the rising cost base.
Carl Icahn, MHR Set Sights On Navistar International Corp (NAV) (InsiderMonkey)
In a recent 13D filing with the SEC, Navistar International Corp (NYSE:NAV)’s largest shareholder, MHR Fund Management increased its stake by 17% to 12 million shares. The recent purchase adds to MHR’s already robust Navistar position. Navistar was MHR’s 4th largest 13F holding at the end of the third quarter, accounting for 9% of the firm’s total 13F assets. Another big name shareholder of Navistar is billionaire investor and famed corporate raider Carl Icahn.
Activist Investor Elliott Increases Stake in Emulex to 11% (Bloomberg)
Elliott Management Corp., the activist investor that pushed Novell Inc. to sell itself in 2010, has amassed more than an 11 percent stake in Emulex Corporation (NYSE:ELX), a provider of converged networking solutions for data centers. Elliott, the New York-based hedge-fund investor, said in a regulatory filing yesterday it bought an additional 1.34 percent stake in the company through derivative agreements. Elliott reported a 9.96 percent stake in Emulex with a 13D filing Nov. 23, becoming the largest shareholder and gaining an opening to agitate for change at the Costa Mesa, California-based company.
Atlantic City’s Revel Casino Eyes New Loans (WSJ)
Revel, a struggling Atlantic City casino that has been bailed out by investors several times since opening in April, is nearing yet another reprieve. Revel Entertainment LLC, which runs the luxury casino, appears on track to secure loans that would provide around $150 million cash toward operations and investments in the property, people familiar with the matter said. The loan package would be provided by a group of the project’s existing lenders, including hedge funds and money-management firms, these people said.
Jefferson County Lawyer Says Creditors Threaten Talks (Bloomberg)
Jefferson County, Alabama, may break off debt-reduction talks with hedge funds holding more than $700 million in defaulted sewer warrants because of the group’s litigation tactics, the county’s lead bankruptcy lawyers said. Should the hedge funds try to question county commissioners under oath about settlement talks the county is holding with its major creditors, negotiations with the funds will end, attorney Kenneth Klee said in an interview. Yesterday, the hedge funds, who call themselves the ad hoc group of sewer warrant holders, won court permission to depose three commissioners about their efforts to end the county’s bankruptcy.
