Editor’s Note: Related tickers: American International Group, Inc. (NYSE:AIG), Yahoo! Inc. (NASDAQ:YHOO), Morgan Stanley (NYSE:MS), SandRidge Energy Inc. (NYSE:SD), Chesapeake Energy Corporation (NYSE:CHK), Hess Corp. (NYSE:HES), JPMorgan Chase & Co. (NYSE:JPM), Prudential Financial Inc (NYSE:PRU), Berkshire Hathaway Inc. (NYSE:BRK.B), Transocean LTD (NYSE:RIG)
Daniel Loeb’s Third Point Offshore Fund extended its gains in April, posting a 1.4 percent increase for the month. As a result, the $6.3 billion fund is up by 10.5 percent for the first four months of the year, compared with a gain of 12.7 percent for the S&P 500. Altogether, Third Point was managing $12.9 billion as of the end of April. The New York hedge fund firm is an eclectic investor, looking for value opportunities in most asset classes throughout the world. In fact, a snapshot of winners, losers and current top positions underscores its wide-ranging approach. …Rounding out the firm’s top five winners for April were its bets on Greek government bonds, American International Group, Inc. (NYSE:AIG) and Japan Tobacco. Only Yahoo! Inc. (NASDAQ:YHOO) and American International Group, Inc. (NYSE:AIG) were singled out as major winners in April among the stocks that constituted Third Point’s largest positions.
Man Group’s new CEO faces surge in client outflows (ChicagoTribune)
Man Group is set to post an increase in client outflows on Friday, showing that new chief executive Many Roman still has much work to do to turn around the hedge fund manager’s fortunes. The former FTSE-100 firm, whose shares are down by almost two-thirds since the start of 2011, could post its highest level of net outflows since the credit crisis and above levels seen under ex-CEO Peter Clarke when it updates investors on first-quarter trading. Broker RBC Capital Markets, for instance, forecasts $3.8 billion of net outflows in the first quarter, with withdrawals across every product line, and says it doesn’t expect net inflows until the final quarter of next year. Morgan Stanley (NYSE:MS), meanwhile, expects $4 billion of withdrawals.
TPG-Axon won’t find quick fixes for SandRidge (Reuters)
Hedge fund TPG-Axon Capital has won nearly half the seats on SandRidge Energy Inc. (NYSE:SD)‘s board but faces an uphill battle to reverse the oil and gas company’s slumping stock price. SandRidge Energy Inc. (NYSE:SD) shares have tumbled 20 percent this year to around $5 on disappointing forecasts for its wells in Oklahoma and Kansas, as well as investor uncertainty over its strategic direction. While natural gas prices have risen from last year’s 10-year lows, they remain depressed, adding pressure to SandRidge Energy Inc. (NYSE:SD) and peers like Chesapeake Energy Corporation (NYSE:CHK) and Hess Corp. (NYSE:HES) to cut costs and improve well efficiency. SandRidge Energy Inc. (NYSE:SD) faces additional uncertainties over the future of Chief Executive Officer Tom Ward, who TPG-Axon has accused of making strategic mistakes and self-dealing at the expense of shareholders. Under a deal reached in March, the board has to let go of Ward by June 30 or give TPG-Axon a controlling number of seats.
Asian hedge fund Senrigan rides African rollercoaster (Opalesque)
When China’s newly installed president Xi Jinping visited the Democratic Republic of Congo in March, nobody analyzed the official statements from the trip more carefully than Nick Taylor, founder of one of the largest hedge funds in Asia. He was particularly heartened by a statement pledging joint co-operation between the two countries. Mr Taylor was looking for evidence of a cordial relationship because Senrigan, his hedge fund, had invested heavily in mining company Sundance Resources, betting that…
Ex-JPMorgan traders launch Asia firm with backing of $64bln Canada fund (Reuters)
Dhimant Shah, 41, the former head of proprietary trading at JPMorgan Chase & Co. (NYSE:JPM) in Singapore, told Reuters that the plan is to launch two funds investing in credit markets. The funds will also bet on foreign exchange, equity indices and interest rates. U.S. regulators have effectively ended the traditional practice of banks trading their own money through prop desks, prompting hordes of traders to strike out on their own. What makes the JPMorgan Chase & Co. (NYSE:JPM) Singapore spin-out unique is the support it is getting from Canada’s Mackenzie Investments, the $64 billion money manager. …Shah did not disclose the initial investments in the funds but people with direct knowledge of the plan said Mackenzie’s backing includes a $100 million start-up capital for a long only fixed income fund, and $20 million for a long/short hedge fund that will combine credit and macro strategies.
Hedge Fund Manager Admits to Fraud (HispanicBusiness)
A Charlotte hedge fund manager has agreed to plead guilty to securities fraud for hiding investment losses that cost his victims at least $8.9 million, according to court documents. Stephen Ewing Maiden agreed to plead guilty to one count of securities fraud, which carries a maximum sentence of 20 years in prison and up to a $250,000 fine, according to an agreement signed in February by Assistant U.S. Attorney Mark Odulio. A final plea hearing has not been scheduled. Maiden’s attorney, Richard Glaser Jr., declined to comment. A spokeswoman for the U.S. Attorney’s Office for the Western District of North Carolina also declined to comment.
Hedge Fund Firm Wants to Block Cayman Transparency Reforms (HispanicBusiness)
One of the largest hedge fund services firms in the Cayman Islands is attempting to block reforms that would make the world’s principal offshore location for hedge funds more transparent. DMS Management, a provider of hedge fund management and fiduciary services, including the provision of so called independent directors for Cayman registered funds, has filed a law suit against the local financial services regulator, the Cayman Islands Monetary Authority (CIMA), seeking to prevent the agency from moving forward with a number of proposed transparency and corporate governance reforms.
Asian Pay Television IPO Draws Soros, Prudential (WSJ)
Financier George Soros and Prudential Financial Inc (NYSE:PRU) +2.16% PLC’s funds arm are among the nine investors in the latest Southeast Asian initial public offering to attract foreign interest: the up to 1.4 billion Singapore dollar (US$1.1 billion) listing of Taiwanese pay-television operator Asian Pay Television Trust. Asian Pay Television Trust is the investment vehicle of Taiwan Broadband Communications, which is owned by two funds managed by Australia’s Macquarie Group Ltd. MQG.AU +10.88% —the Macquarie International Infrastructure Fund, or MIIF, and Macquarie Korea Opportunities Fund. Asian Pay Television said in a prospectus filed with the Monetary Authority of Singapore that the nine cornerstone investors will take up nearly S$451 million of the IPO, or about a third of the deal, at the top end of the price range. It is selling 1.44 billion units at S$1 each. The bottom end of the price range has been kept at 92 Singapore cents per share, a person with knowledge of the deal said.
Why Dr. Doom Is Bullish on Stocks (Business2Community)
Economist Nouriel Roubini, also known as Dr. Doom, is finally on board with the stock market upswing; in fact, he believes the stock market can go even higher over the next two years. Now, if you are familiar with the often bearish opinions of Roubini, you’ll know that his hawkish view of the stock market is somewhat bizarre, but you’ll also understand why he thinks this way. The thinking behind Roubini’s view is similar to my own view on the stock market. Roubini believes that the concerted move by the world’s central banks to provide easy access to money via aggressive monetary policy is helping to drive the current buying in the stock market.
Buffett Lieutenants Score Big Payday (WSJ)
Warren Buffett told investors in March he “hit the jackpot” hiring two former hedge-fund managers to help run Berkshire Hathaway Inc. (NYSE:BRK.B) +1.11% investing business. Todd Combs and Ted Weschler likely feel the same way. Each stands to make at least $27 million—and probably much more—in bonuses for 2012, according to an analysis by The Wall Street Journal of company data and Mr. Buffett’s public comments. The payouts reflect the double-digit percentage gains in both managers’ investment portfolios above the Standard & Poor’s 500-stock index. The sums are a fraction of what some hedge-fund titans make, but they catapult Messrs. Combs and Weschler into the ranks of highly paid U.S. public-company employees.
Backstop Acquires PerTrac CMS from eVestment (HedgeCo)
Backstop Solutions Group (BSG), a leading Software-as-a-Service provider to the alternative asset management industry, announces the acquisition of the PerTrac CMS product line, a specialized customer relationship management tool built exclusively for the institutional investment community, from eVestment, a premier global provider of comprehensive institutional investment data and intelligence solutions. Terms of the deal were not disclosed. With this acquisition, Backstop now serves over 575 clients in the private investment community, including hedge funds, funds of hedge funds, endowments and foundations, institutional investors, family offices, pensions, private equity firms and consultants. Backstop also opened new offices in New York and London this week to accommodate existing Backstop employees as well as new Backstop team members coming over from eVestment.
SEC Charges Gatekeepers of Two Mutual Fund Trusts for Inaccurate Disclosures About Decisions On Behalf of Shareholders (SEC)
The Securities and Exchange Commission today charged the gatekeepers of a pair of mutual fund trusts with causing untrue or misleading disclosures about the factors they considered when approving or renewing investment advisory contracts on behalf of shareholders. Some trusts are created as turnkey mutual fund operations that launch numerous funds to be managed by different unaffiliated advisers and overseen by a single board of trustees. The federal securities laws require all mutual fund directors to evaluate and approve a fund’s contract with its investment adviser, and the funds must report back to shareholders about the material factors considered by the directors in making these decisions. The SEC Enforcement Division’s Asset Management Unit has been taking a widespread look into the investment advisory contract renewal process and fee arrangements in the fund industry.
Event-Driven Hedge Fund Centaurus To Return External Capital (Finalternatives)
Battling redemptions and investors unhappy with its strategy, Centaurus Capital will return outside money. The London-based hedge fund will move forward exclusively with internal capital—and without its Hong Kong office, which is also to be jettisoned, Reuters reports. Centaurus reportedly elected to forego client capital due to disagreements with investors about the best investment opportunities, and expects to return all investor cash within a few weeks. “We have taken the decision to return investors’ funds and go private,” Randel Freeman, Centaurus’ chief investment officer, said. “We are extremely grateful for the support of our investors over many years; however, we are keen for the investment flexibility that running our own money will deliver.”
Five Questions: K2’s David Saunders Weighs Changes in Fund-of-Funds Industry (InstitutionalInvestor)
The hedge fund industry has changed dramatically since David Saunders and his business partners founded K2 Advisors, the $9.4 billion Stanford, Connecticut-based fund-of-hedge-funds firm, in 1994. Hedge fund assets have exploded from $167 billion in 1994 to over $2.37 trillion today; the investor base has become increasingly institutional; and the variety and number of hedge funds has increased. Outsize returns have become harder to come by, while manager transparency and the understanding of what creates non-market-driven performance, or so-called alpha, has increased. Meanwhile, the fund-of-hedge-funds space has become increasingly competitive as these managers vie to prove they can add value for clients who otherwise might choose to invest directly in one or more hedge funds…
Transocean Refuses Icahn’s Statements; Urges To Support Its Board Nominees (RTTNews)
Refuting Carl Icahn‘s statements, Transocean LTD (NYSE:RIG) said it believes Icahn’s proposals are misguided and highlight his poor understanding of the cyclical and capital-intensive nature of the offshore drilling industry. In its presentation to its shareholders, Transocean LTD (NYSE:RIG) urged them to support for the company’s five Director nominees and reiterated that the Board’s proposed $2.24 per share dividend will maximize value creation for its shareholders. The company also urged its shareholders to vote FOR the Board’s proposal that its authority to issue shares out of the company’s authorized share capital be renewed for an additional two-year period.
