Hedge Funds Reject Argentine Delay Request (Finalternatives)
The hedge fund holdouts battling Argentina for full payment on its defaulted debt urged a federal judge to refuse the country’s bid for more time—while holding out the possibility of a deal, if Argentina behaves. Argentina on Monday asked U.S. District Judge Thomas Griesa, whose ruling that Argentina must pay the holdouts if it wishes to continue paying its other creditors was allowed to stand earlier this month by the U.S. Supreme Court, to reinstate a stay allowing it to pay the latter while negotiating with the former. The country pledged “good-faith negotiations” with the legally victorious hedge funds, and is mulling a payment to them in exchange for more time.
Hedge Fund AUM Hit Record $3T (Finalternatives)
Hedge fund assets under management have crossed the $3 trillion threshold for the first time on record, according to new data from eVestment. The figure represents an all-time high, surpassing the industry’s previous Q2 2008 peak, and is the result of both new allocations—$22 billion in May, $93.3 billion year to date—and performance gains, which added $37.8 billion to total AUM in May. Equity funds continue to register high inflows, a trend that has persisted since June 2013. Investors poured $11.5 billion into equity strategies in May, bringing YTD allocations to $59.4 billion.
Booms, busts and human nature (Business-Standard)
The recent international financial meltdown following the failure of two hedge funds owned by the US investment bank Bear Stearns and the subprime crisis has spawned a large number of books that review similar episodes in the past, in an effort to trace the common threads through them and the lessons to be learnt. Bob Swarup’s book belongs to this genre. He has organised the material not by chronology but around common human foibles. It deals with 25 centuries of financial bubbles, investment manias and human folly with historical details relating to the period from ancient Rome to the crisis of 2008.
LPs Eager to Back Ex-Highbridge Team (HFAlert)
It looks like Pagoda Asset Management, a startup led by a former Highbridge Capital investment team, is on track to launch with more than $200 million. Investors appreciate the fact that founders Adam Bernstein and Mark Hoffman, along with sector head Glenn Vogelman, spent more than six years working together at Highbridge before leaving the hedge fund giant in April to start their own fund shop. The team’s specialty at Highbridge — technology, media and telecommunications stocks, as well as consumer stocks — will be the focus of Pagoda. “The coolest thing about these guys is it’s a lift-out more than a startup,” one source said. “The three of them worked together.”
Rajaratnam’s driver sues former billionaire, wife (CNBC)
A former driver for Raj Rajaratnam has sued the one-time billionaire, claiming he was fired for complaining about secret wire transfers the founder of the Galleon Group hedge fund made to fellow prisoners following his conviction for insider trading. Peter Malaszuk, a longtime assistant to Rajaratnam, sued his former boss, his wife, and a company she owns, saying the wire transfers were made to 20 inmates at the prison for several months, in violation of federal law.
Florida Hedge Fund Firm Charged With $17 Million Fraud Scheme (HedgeCo)
A West Palm Beach-based hedge fund advisory firm and its founder have been charged by the SEC with fraudulently shifting money from one investment to another without informing investors, the South Florida Business Journal reports. The firm’s founder and another individual later pocketed some of the transferred investor proceeds to enrich themselves. “Investment advisers owe their clients a fiduciary duty of utmost good faith and full disclosure about what they’re doing with their money,” said Eric I. Bustillo, director of the SEC’s Miami Regional Office. “Weston and Hallac dishonored that duty with Wellner’s assistance by secretly steering investor proceeds to a third party and then pocketing some of those funds.”
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