THE Reserve Bank of Australia risks provoking market speculators to raise their bets that it will intervene to lower the strong Aussie dollar after it allowed its foreign currency holdings to grow, according to an influential former RBA board member. “It does look as if the RBA is willing to intervene,” Warwick McKibbin said. “But if you are not careful you can add to speculation and the market starts playing the central bank . . . which is what Soros did with the Europeans in the 1990s.” Mr McKibbin was referring to an episode in 1992 when George Soros challenged the Bank of England’s efforts to keep the British pound within a designated range.
Where New York hedge fund managers find investment opportunities (Opalesque)
Where do fund managers see opportunity these days? Participants at the recent Opalesque New York Roundtable mentioned strategies such as long/short equity, merger arbitrage, event driven, and prospects in structured credit, pharma, European volatility, emerging markets and niche products. So a lot to chose from. When looking around at what to invest in and how to invest, things don’t look so great in general, Matthew Denning told the Roundtable. “Many markets have been trend-less, creating issues for macro funds and various asset classes. Then spikes of volatility have been torturing those same trading strategies. It is very tough to get bullish in general within credit given where we are in the cycle…” Denning is senior Research Analyst at PineBridge Investments, a $68bn asset manager that runs FoFs.
HEDGE FUNDS: TRANSPARENCY AND DUE DILIGENCE ARE ESSENTIAL (Advisor)
More than one third of investors have included hedge funds in their portfolio, found an informal poll of execs at a recent CIBC Mellon event in Toronto. When asked if they were invested in or plan to be invested in alternatives, hedge funds also drew the most interest. While these funds can provide some investors with great returns, however, they often use riskier strategies. They also have a lack of liquidity and there’s little public information about them. This is where operational due diligence comes in, since it ensures the operation of the hedge fund is above board and managed in accordance with best practices, says Esther Zurba, director of Castle Hall Alternatives.
North eastern US struggles back to business after ferocious Storm Sandy (Opalesque)
The lion’s share of the global hedge fund industry found itself at the epicentre of the north eastern corner of the US that Storm Sandy hit with such ferocity on 29th and 30th of October. For the non-American hedge fund community, yesterday was as if someone had switched the power off in the US, as communications pretty much stopped and news, once the country reached daybreak on the 30th October, came in the form of increasingly shocking images of devastation and post-Apocalyptic scenes. Time for all the disaster recovery and business continuity planning to step up to the plate but with Storm Sandy’s breadth of 800 to 1000 miles, concerns are that data recovery facilities might have been a tad too close.
Shashank Tripathi, hedge fund analyst, becomes ‘Sandy’s biggest villain’ (Opalesque)
Shashank Tripathi is a hedge fund analyst, previously affiliated with Stone Street Advisors a hedge fund consultancy in New York, and more recently worked as a consultant for Christopher R. Wight, this year’s Republican candidate for the U.S. House from New York’s 12th Congressional District. On Twitter, however, Tripathi maintained an anonymous identity as @ComfortablySmug, a purported Romney bundler, who regularly boasted about is media and personal connections on the social media site. Early today, following a series of purposefully false tweets aimed at inciting chaos during the height of superstorm Sandy, the website Buzzfeed outed his identity and his false tweets. Since then, a New York City Councilman has called for charges against him, he’s resigned from Wright’s campaign and made a public apology – providing an object lesson in the self-correcting and shaming power of social media.
Coupland Cardiff shuts Asia event-driven strategy (AsianInvestor)
Coupland Cardiff, the UK-based hedge fund manager, has recently closed its CC Asia Advantage Fund, following a redemption from its sole investor. The Asia event-driven strategy is understood to have had a negative return of -5.98% in 2011 and -3.6% in this year to August. It had about $80 million in assets, which were attributable to just one investor, at the time of closure, according to Coupland Cardiff chief executive Richard Cardiff.
After Weak Returns, the Endowment Fund Limits Withdrawals (NYTimes)
The sales pitch for the fund was simple: a chance for individual investors to get in on the same high-octane private equity and hedge funds that have fueled successful returns for large university endowments for years. But now investors in the fund, the nine-year-old, $3.3 billion Endowment Fund, are finding it was much easier to get in than it is to get out. The fund, run by Mark Yusko, the charismatic former chief of the endowment for the University of North Carolina at Chapel Hill, sent letters on Friday to investors saying it was limiting the amount of money that could be taken out each quarter. Investors withdrew more than $1 billion, or about a quarter of the fund’s assets, this year through September, according to a filing with the Securities and Exchange Commission.
Manhattan Tower Builds on a Foundation (WSJ)
The developers of a planned $1.25 billion residential tower on New York City’s Park Avenue are turning to an unlikely source for a construction loan: a foundation launched by a hedge-fund manager famous for donating a portion of his profits to charity. The Children’s Investment Fund Foundation has agreed to lend $400 million to CIM Group, the Los Angeles real-estate investors said. With $3.5 billion in assets, the foundation is one of Europe’s largest. It was started 10 years ago by London-based investor Christopher Hohn and his wife.
Hedge fund manager pounds DeFazio with barrage of spending (TheWorldLink)
Low on cash in the final seven days of the election, a New York hedge fund manager continues to fill the spending gap in Art Robinson’s bid for Oregon’s 4th Congressional District. A group backed by Robert Mercer, CEO of Renaissance Technologies, has spent $175,000 in the past week to continue a barrage of television ads against Robinson’s rival, Democratic incumbent Peter DeFazio. That outside money is proving pivotal in closing the cash gulf between the two campaigns in the election’s closing days.
British Columbia Court Of Appeal Permits Hedge Fund To Requisition A Shareholder Meeting Despite Concerns Of Empty Voting (Mondaq)
The British Columbia Court of Appeal released its decision in Telus Corporation v. Mason Capital Management LLC, 2012 BCCA 403, overturning a lower court decision invalidating a shareholder requisition for a shareholder meeting. The appellate court found that under the British Columbia Business Corporations Act, the court does not have inherent jurisdiction, in the face of a technically compliant requisition, to prevent a beneficial shareholder from using its intermediary to requisition a shareholder meeting on its behalf, even where that beneficial shareholder may have a limited interest in the well-being of the company or the value of its shares and is thereby engaging in the process known as “empty voting”.
How Not To Run A Hedge Fund: Geoff Grant Edition (Forbes)
Most amusing indeed. And good evidence that timing is the most important part of any investment strategy. Which brings me to a lovely piece of research The Economist did some years back. Over the century or two that we’ve got decent historical financial records they tested out two basic investment strategies. The first was, each year (I think, memory doesn’t oblige, it might have been decade) to invest in whatever had been the previous year’s best performing asset class. Stocks, bonds, real estate that sort of level of asset class. The second was to invest in the previous year’s worst performing asset class.
SYSTEMATIC ALPHA FUTURES FUND WINS HFMWEEK US PERFORMANCE AWARD (Melodika)
Systematic Alpha Futures Fund, Ltd. (Class B), managed by the New York based CTA Systematic Alpha Management, LLC, has won the HFMWeek US Performance Award 2012 in the following category: Managed Futures (CTA) Under $250m. The Awards ‘determine the pick of the crop for hedge fund strategies’, according to HFMWeek, and are designed to recognize firms that have outperformed their peers over the course of the last 12 months. “We won a similar award back in 2009. However, winning it in 2012 makes us feel particularly proud given the challenges we faced last year,” noted Peter Kambolin, CEO of Systematic Alpha Management.
Councillor backs calls to reinstate Brodie path (Forres-Gazette)
A LOCAL councillor has come forward to support calls for a path between Forres and Brodie. Moray Councillor Douglas Ross, who originally comes from Forres, has made it clear that he believes Transport Scotland’s recent decision to take no action over the calls is unreasonable. He made his comments after Kintessack men Neil Jeronim and Jim Rogers spoke out against the transport authority who have refused to press the issue further.
Adoboli’s Girlfriend Said Confess, Co-Worker Said to Run (Bloomberg)
Kweku Adoboli, the former UBS AG (UBSN) trader on trial over a $2.3 billion trading loss, said his girlfriend encouraged him to confess his losses to managers while another trader on his desk told him to flee the country. Adoboli, 32, “lost control” over his trading decisions in July of last year after pressure from senior managers prompted him to change his strategy and bet the markets would improve, he said yesterday during his third day on the stand. He and his girlfriend broke up for two weeks, he said, with stress mounting and his losses accelerating. After they reunited, she told him he must ask for help.
Green Mountain Investors Sue Claiming Keurig Deception (Bloomberg)
Green Mountain Coffee Roasters Inc. investors filed a consolidated securities lawsuit accusing the maker of Keurig coffee brewers of misleading them about the demand for Keurig and K-Cup products. “Unbeknownst to investors, and contrary to defendants’ statements that they were barely able to ship orders as they came in, Green Mountain Coffee Roaster’s warehouses were overflowing with unused and expiring coffee products that were not being sold to consumers,” according to the complaint filed yesterday in federal court in Burlington, Vermont.
A Year Later, All Eyes Still on ‘Edie’ (WSJ)
Who broke the law by raiding customer accounts at MF Global Holdings Ltd.? Investigators seem no closer to the answer than they were when the New York brokerage firm filed for bankruptcy exactly a year ago Wednesday, owing thousands of farmers and ranchers, hedge funds and other investors an estimated $1.6 billion. Their money was supposed to be stashed safely at MF Global, but company officials used much of it for margin calls and other obligations. The last, best hope for a breakthrough in the probe is Edith O’Brien, the former assistant treasurer at MF Global. Working in the company’s …
Ford fuels pension plans with $600 million contribution (PIOnline)
Ford Motor Co., Dearborn, Mich., contributed $600 million to its worldwide pension plans in the quarter ended Sept. 30. That included $500 million in discretionary payments to U.S. funded plans “in line with the company’s previously disclosed long-term strategy to derisk its funded pension plans,” according to a news release from the company. According to the company’s third-quarter earnings report, the $600 million contribution brings year-to-date worldwide pension contributions to $2.5 billion. Ford announced plans earlier this year to offer lump-sum pension payouts to about 98,000 U.S. salaried retirees and former vested employees beginning in August. The company is also reducing the risk of its pension plan by reallocating 80% of assets to fixed income and 20% to return-seeking assets.
Reality check for PREA conference attendees (PIOnline)
After a long evening of wining and dining, attendees at the Pension Real Estate Association’s 22nd Annual Investor Real Estate Conference were brought back to earth by presentations giving a dismal view of the global economy and real estate landscape. In the opening speech, Carmen Reinhart stabbed a fork in many real estate investors’ next great hope for returns. Ms. Reinhart, the Minos A. Zombanakis Professor of the International Financial System at Harvard Kennedy School, told the crowd that while emerging markets are considered the engine of growth, that doesn’t mean investors have an easy time investing in those regions. The conference was held at the Beverly Hilton in Beverly Hills, Calif., Oct. 22-24.
Are These Stocks Also on Carl Icahn’s Acquisition List? OSK, NAV, MOTR, WBMD & FRX (SmallCapNetwork)
Truck maker Oshkosh Corporation (NYSE:OSK) has recently spurned activist investor Carl Icahn’s $3 billion unsolicited takeover offer while engine maker Navistar International Corp (NYSE:NAV), which avoided a proxy fight with Icahn by giving him more board representation, is reportedly consider a sale but investors might want to ask if stocks like Motricity Inc (NASDAQ:MOTR), WebMD Health Corp. (NASDAQ: WBMD) and Forest Laboratories (NYSE: FRX) aren’t also on the acquisition target list. That’s because Icahn has either increased his holdings in them or he has waged proxy battles with their management. Moreover, all three of these companies have good reason to incur the wrath of an activist shareholder given their performance lately. Hence, should Motricity, WebMD Health Corp.
