Einhorn Says Hard to Find Investments Amid Market’s Climb (BusinessWeek)
Hedge-fund manager David Einhorn is struggling to find value amid a five-year stock market rally. “We had a difficult time finding new investments this quarter,” he said today on a conference call discussing results at Greenlight Capital Re, Ltd. (NASDAQ:GLRE), the Cayman Islands-based reinsurer where he is chairman. “As the market continues to rise in the face of conflicting economic data, global unrest, and looming overdue Fed exit from quantitative easing we remain cautiously positioned.”
Och-Ziff reports record assets that help boost earnings (Reuters)
Hedge fund company Och-Ziff Capital Management Group LLC reported higher quarterly earnings on Tuesday as assets rose to record levels amid fresh demand for portfolios that invest in real estate, stocks and credit. The New York-based company, one of only a handful of publicly listed hedge fund firms, reported second-quarter distributable earnings of $90.4 million, or 18 cents a share, as assets under management hit $45.9 billion on June 30. Distributable earnings exclude costs from Och-Ziff’s November 2007 initial public offering.
SEC Doles Out Record WhistleBlower Award (HedgeCo)
The SEC has awarded over $400,000 to an un-named whistleblower who reported a fraud to the SEC after the company failed to address the issue internally. “The whistleblower did everything feasible to correct the issue internally. When it became apparent that the company would not address the issue, the whistleblower came to the SEC in a final effort to correct the fraud and prevent investors from being harmed,” said Sean McKessy, chief of the SEC’s Office of the Whistleblower. “This award recognizes the significance of the information that the whistleblower provided us and the balanced efforts made by the whistleblower to protect investors and report the violation internally.”
Ex-Bridgewater Analyst Wang Starts No-Fee Hedge Fund (Bloomberg)
Howard Wang, a former analyst at Ray Dalio’s Bridgewater Associates LP, says most hedge fund performance mirrors the broader market, failing to justify the high fees collected. That’s why Convoy Investments LLC, the global macro fund he started in November with former Bridgewater software engineer Robert Wu, isn’t charging a performance fee to investors and only a 1.25 percent management fee, he said. The New York-based firm will even manage money pro bono for foundations and underfunded pensions for up to 25 percent of the firm’s assets.
Hedge funds amass short positions in private equity-backed IPOs (FT)
Hedge funds are building up multimillion pound bets against companies recently listed by private equity after a number of high-profile flotations this year have fallen sharply in value, leaving institutional investors nursing large losses. Hedge funds have built up short positions – essentially wagering that a share price will fall in value – in a number of recent private equity-backed listings including Pets at Home, Saga and Just Eat in the UK, according to regulatory filings. Private equity groups have attracted criticism from investors this year after a number of companies that have publicly listed across Europe have fallen sharply from their original price.
Squawk takes a stand on Valeant (CNBC)
The Hedge Fund Manager On The FBI’s Most Wanted List (HedgeCo)
Florian Wilhelm Jürgen Homm, a German hedge fund manager who was on the run for more than five years, is wanted by the FBI for his alleged involvement in a market manipulation scheme designed to artificially improve the performance of eight Cayman Islands-based hedge funds managed by Absolute Capital Management Holding Limited. The fraud led to at least $200 million in losses to investors around the world, the FBI alleges. Homm was arrested in Italy last year by Italian authorities. While extradition procedures were pending, Homm was released and fled to Germany in June of 2014.
Goldman rethinks services it provides to hedge funds (Reuters)
Goldman Sachs Group, Inc. (NYSE:GS) is jettisoning less-profitable hedge-fund clients and raising fees on others as it tries to adapt to new banking rules, the Wall Street Journal reported on Monday, citing people familiar with the matter. The bank has told hedge fund clients the regulations have forced it to set aside more capital, crimping profits at its prime-brokerage business, which executes and finances the funds’ trades, the newspaper said. …he move is part of an attempt by Wall Street banks to scale down from capital-intensive businesses in order to comply with stricter capital requirements by U.S. regulators.
Baroness Betty Boothroyd blasts David Cameron for promoting cronies to House of Lords (Mirror)
Former Commons speaker Betty Boothroyd led protests at David Cameron’s plans to stuff the House of Lords with more donors, cronies and B-list celebrities. Baroness Boothroyd blasted Mr Cameron for filling Parliament’s Upper Chamber with “lobby fodder” to do his bidding – with the PM set to appoint at least 20 more peers. Apprentice star Karren Brady, and former Marks & Spencer boss Sir Stuart Rose are among those who will be draped in ermine this week. Hedge fund boss Michael Farmer is also likely to be among a dozen or so new Tory peers after donating nearly £6million to the party.
Kleinberg, Kaplan Expands Hedge Fund Practice (Finalternatives)
Joseph Iskowitz has joined Kleinberg, Kaplan, Wolff & Cohen as a partner in the hedge fund practice. Previously a partner in the New York office of Katten Muchin Rosenman, Iskowitz focuses his practice on the formation and structuring of domestic and offshore investment funds, including hedge funds and private equity funds, and advises funds on operational, securities, corporate and compliance issues. He also represents fund managers, investors and third-party marketers of private investment pools.
Starboard raises Darden stake to 8.8 percent (OrlandoSentinel)
Starboard Value announced Tuesday that it now owns 8.8 percent of Darden Restaurants, Inc. (NYSE:DRI), up from 6.2 in May. Starboard is a hedge fund with a hostile plan to replace Darden’s entire board. Starboard and Darden have been feuding since late last year. Starboard criticizes Darden for selling Red Lobster, the original Darden chain, for $2.1 billion this summer. On Monday, Darden released a statement blasting Starboard and calling its criticisms inaccurate and misleading. Darden said shareholder dividends could be at risk if Starboard takes over.
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