It doesn’t seem likely that Superstorm Sandy, which wreaked havoc across the Northeastern U.S. coastal regions little over a month ago, will claim Hartford Financial Services Group Inc (NYSE:HIG) as one of its casualties. True, the insurance giant has exposure to the massive losses incurred across the region – but a relatively small amount of the possibly $20 billion of insured losses, cushioned by the fact that the Hartford is a diversified insurer, whose business lines include life insurance as well as property and casualty, which does business not only in the United States but also Japan, and which also offers mutual funds. Since Sandy, however, the Hartford is lagging a broad index of its giant peers, as seen in a stock chart, in spite of a big vote of confidence by hedge fund manager David Tepper. Tepper, founder of Appaloosa Management, tripled his stake in the Hartford during the third quarter according to SEC filings, and now owns more than 3.6 million shares.
Orangefield Group Acquires Columbus Avenue (Reuters)
Orangefield Group, a global service provider of administration, management and trust services announced it has acquired leading hedge fund administrator Columbus Avenue Consulting LLC. The division will officially operate under the Orangefield-Columbus brand. Orangefield-Columbus has over $25 billion in assets under administration. Clients will continue to work with their same management teams and benefit from a global suite of operational capabilities and services. Entering into North America with a hedge fund focus is a strategic choice. To maximize the level of service to clients worldwide, Orangefield takes on a very focused expansion approach. According to Joep Bruins, CEO of Orangefield, the acquisition of Columbus Avenue is a perfect example of that approach.
S. Korea’s Hedge Fund Industry Grows Sevenfold (CRI)
S. Korea’s hedge fund industry has grown sevenfold over the past year since the so-called Korea-style hedge fund was introduced in December 2011, the financial regulator said Thursday. Assets managed by homegrown hedge funds reached 1,017.5 billion won (940 million U.S. dollars) in November, sevenfold from 149 billion won in December last year, according to the Financial Services Commission (FSC). The number of hedge funds rose to 19 last month from 12 in December 2011 when those homegrown hedge funds were licensed for the first time in the country’s history.
Hedge Funds Bullish as India Banks’ Premium Double Peers (Businessweek)
Indian bank debt offering almost double the yield premium of global lenders is attracting hedge funds impressed by Prime Minister Manmohan Singh’s reaction to the threat of a junk credit rating. Finisterre Capital LLP is betting on a decline in bond risk for State Bank of India (SBIN) Ltd. and Bank of India Ltd., while Observatory Capital Management LLP bought dollar-denominated notes of ICICI Bank Ltd. (ICICIBC) The nation’s corporate debt yields 353 basis points more than Treasuries, according to a JPMorgan Chase & Co. index of 55 issuers, including 39 lenders. The spread on global banks is 181, a Bank of America Corp (NYSE:BAC) index shows.
South Africa’s hedge fund landscape driven by institutional demand (Opalesque)
South Africa has long been considered one of the less risky, more defensive emerging market plays for investors. The country offers a diverse economy, and relatively strong exports that are not solely reliant on a specific natural resource. These themes extend into its growing hedge fund industry, which saw early interest from institutions through the fund of funds structure. Taken together, the needs of institutions and fund of funds have institutionalized this market early, making new entrants organically less risky and lower in volatility if they wish to respond to the expectations of investors in the country.
Paulson official says real estate fund performing well (eFinancialNews)
A $298.4m real estate fund managed by Paulson & Co. would be worth as much as twice the total amount invested if the properties were sold today, a Paulson official said at the fund’s annual meeting in Manhattan yesterday. The fund has made 11 land purchases and acquired two hotel portfolios. But Paulson said at the meeting that he was not interested in cashing much out today. He believes the fund could return several times its initial investment as the housing market continues to rebound.
Man Group Hires Makena’s John Rohal as North America Chairman (Bloomberg)
Man Group Plc (EMG), the world’s largest publicly traded hedge fund manager, hired John Rohal as its first-ever executive chairman for North America as the London- based firm seeks growth outside the U.K. Rohal joins on Jan. 1 from Menlo Park, California-based Makena Capital Management LLC, where he oversees the firm’s public equity and so-called tactical hedged equity investments, Man Group said in a statement today. Rohal will help develop the company’s products for the U.S. market and “deepen Man’s relationships” with institutional clients such as pension funds, foundations and family offices, the statement said.
Some Quick Thoughts On What It Takes To Start A Hedge Fund These Days (BusinessInsider)
The Bloomberg Hedge Fund Summit just wrapped up a panel on hedge fund start-ups, and they made a few points that we had to share right away. The panelists were Jason Ader, CEO and CIO of Ader Investment Management, Gregory Hall, Senior Managing Director from Blackstone Alternative Asset Management (BAAM) and Ted Seides, President and Co-CIO of Protégé Partners, LLC.
Investors Pressure SAC, but Performance Rises (CNBC)
Citigroup’s private bank has put the embattled hedge-fund company SAC Capital Advisors on watch, say people familiar with the matter, making it the latest big investor to either part ways with SAC or say it’s considering doing so. Putting a hedge-fund on watch is a standard step for the Citigroup private bank when a fund is subject to some sort of news event, adds one of the people familiar with the matter. Nonetheless, it’s a signal that, while no final decision has yet been made, SAC Capital may be fired from the bank’s hedge-fund platform, removing its clients’ ability to invest through Citigroup Inc. (NYSE:C) in the Stamford, Conn. fund.
Hedge Funds And The New Risk Management Paradigm (Finalternatives)
As alternative investment strategies become significant and substantial parts of institutional investors’ portfolios, the risk management practices that they have traditionally employed are no longer adequate. Generic, static risk measurement templates can create a false sense of comfort. Supposed enhancements such as position-level transparency are often useless without methods for effectively distilling and utilizing such information. A flexible definition of risk has become essential in an era of unprecedented sophistication in investment strategies and enhanced governance practices. Furthermore, the ability to not just measure risk, but foster ongoing risk awareness and dialogue with a broad audience—particularly including fund fiduciaries—should be the new objective.
Hedge Fund Manager Describes The Biggest Problem With Carson Block’s Newest Short (BusinessInsider)
When Muddy Waters’ founder Carson Block announces that he’s shorting a company, the Street listens. That’s why everyone is talking about Olam, a commodities trading firm based in Singapore. Anybody can be wrong though, so it’s important to get other arguments in the mix as well Dwight Anderson is a Managing Partner of Ospraie Management, LLC, a hedge fund with a history of working in the commodities space. Anderson sat down with Bloomberg’s Stephanie Ruhle for an interview, and she asked him what he thought of Block’s short.
It’s All In The Name – Building A Successful Brand (MetroCorpCounsel)
When a hedge fund or private equity fund is initially formed, its reputation is inextricably linked to that of its founders. As with any successful business, however, the value of hedge and private equity fund names over time will evolve from the goodwill and reputation that they have developed, distinct from the founder’s individual reputation. To maximize this value, hedge and private equity funds would be best served to plan and execute a tailored trademark strategy to successfully brand their company and fund names. A well-developed trademark strategy begins by selecting a name that is protectable, differentiates you from your competitors, communicates your core message, and avoids violating the rights of others…
New pay structure created by MassPRIM hoped to help staff retention (PIOnline)
Massachusetts Pension Reserves Investment Management Board, Boston, approved a new compensation structure for geared toward helping recruit and retain investment professionals, said Michael Trotsky, executive director and chief investment officer. Asset class heads — public markets, hedge funds, private equity, real estate and risk management — will now be eligible for a bonus of up to 40% of compensation, from 30%. Currently, only the executive director, chief investment officer, chief financial officer and general counsel are eligible for bonuses that high.
Camulos Co-Founder Returns With Europe-Focused Hedge Fund (Finalternatives)
Camulos Capital co-founder William Seibold is back, three years after he was forced to shutter his last hedge fund. Seibold has founded Recipero Capital and plans to launch its maiden hedge fund in the second half of next year, Bloomberg News reports. He said he hopes to raise €800 million for the fund, which, unlike Seibold’s previous ventures, will be based in Europe. Recipero will provide capital to middle-market business in Europe, primarily in France, Germany, Italy and the U.K., Seibold told Bloomberg.
Hedge Fund Apson Closes After 18 Months (Finalternatives)
The hedge fund industry’s attrition rate continues to accelerate as the year draws to a close with the exit of another prominent new hedge fund. Apson Capital, founded last year by former Deephaven Capital Management star trader Edouard Salet, will close its doors at the end of the year, after less than 18 months in business, Financial News reports. Investors will get their money back early next year.
Hedge fund boss in building row with Duke of Westminster (Telegraph)
George Papamarkakis wanted to carry out piling work at his home in Chester Row, London SW1 which is owned by the Duke’s Grosvenor Estate in preperation for a basement extension. The estate argued it would disturb “significant nuisance to the neigbours and nearby residents” in the street where properties can sell for £5 million. Mr Papamarkakis took his case to the high court arguing that the Duke’s estate had the “wrong mental attitude” towards him and said personal “animus” was clouding its judgment.
Twin Capital’s David Simon Honored by The Young Jewish Professionals with Equity Event Driven/Merger Arbitrage Hedge Fund Award (TimesUnion)
David Simon, founder and chief executive officer of Twin Capital Management LLC, was recently honored by The Young Jewish Professionals (YJP) with the “Equity Event Driven/Merger Arbitrage Award” at the 2012 YJP Finance and Hedge Fund Summit. “I’m extremely honored to accept this award,” said David Simon, founder of Twin Capital Management LLC. “Although my name is on the award, it really is a group honor. I view this honor, as well as the recent award from HFMWeek, as a tremendous recognition of our entire team’s hard work and dedication to our business and clients.”
SEC Charges 10 in Insider Trading Ring Around Investment Banker’s Illegal Tips on Impending Mergers (SEC)
The Securities and Exchange Commission today charged an investment banker who was primarily based in Charlotte, N.C., and nine others involved in an insider trading ring that garnered more than $11 million in illicit profits trading on confidential information about impending mergers. The SEC alleges that John W. Femenia misused his position at Wells Fargo Securities to obtain material, nonpublic information about four separate merger transactions involving firm clients. Upon learning inside information about an impending deal, Femenia’s first call to set the insider trading ring in motion was typically to his longtime friend Shawn C. Hegedus, who worked as a registered broker.
Trail to a Hedge Fund, From a Cluster of Cases (NYTimes)
In April 2009, an F.B.I. agent visited the Silicon Valley home of Richard Choo-Beng Lee, a hedge fund manager with deep contacts inside technology companies. The government, the agent said, had overwhelming proof that Mr. Lee had engaged in insider trading. Within weeks, Mr. Lee confessed and began cooperating. A year and a half later, in the parking lot of a New England prep school, the same agent approached Noah Freeman, a Harvard-educated money manager turned teacher. After the agent played a secretly recorded conversation of Mr. Freeman swapping illegal tips, Mr. Freeman admitted to crimes and started assisting the authorities.
Hedge Fund CEO Predicts Financial Catastrophe (HedgeCo)
The co-founder and chief executive officer of hedge fund DoubleLine Capital LP predicts bleak financial times ahead, according to a Bloomberg article. Jeffrey Gundlach says that the first phase of the coming debacle consisted of a 27-year buildup of corporate, personal and sovereign debt. That lasted until 2008, when unfettered lending finally toppled banks and pushed the global economy into a recession, spurring governments and central banks to spend trillions of dollars to stimulate growth.
