Editor’s Note: Related tickers: Dell Inc. (NASDAQ:DELL), Citigroup Inc. (NYSE:C), The Blackstone Group L.P. (NYSE:BX)
The most successful campaign initiated by billionaire hedge-fund operator George Soros has been the legalization of marijuana. California has been the focus of most of his efforts. But there are indications that the campaign has gone too far, too fast in Colorado, prompting a backlash from the black Democratic mayor of Denver, who fears his city is becoming a new capital for the marijuana industry. During my recent trip to Denver to cover the National Conference for Media Reform, I visited a “Native Roots Apothecary,” an official dispensary of “medical marijuana” in Denver, and discovered that a Colorado resident can get two ounces of marijuana a day (at an average of $150 an ounce), and “self-medicate” for almost any reason. Even a heavy marijuana user goes through only a quarter of an ounce a day. So fears are growing that “medical marijuana” is quickly becoming integrated into the illegal drug business. It was not supposed to happen this way, but state “regulation” of the industry has been a tragic joke.
Hedge Funder Dan Loeb Bought Sandy Weill’s Sick Yacht (BusinessInsider)
Hedge fund hot-shot Daniel Loeb, the founder of Third Point LLC, recently purchased Sandy Weill’s 200-foot yacht, CNBC’s Kayla Tausche and Robert Frank report. He paid between $50 to $52 million for the former Citigroup Inc. (NYSE:C) CEO’s “April Fool”, sources told CNBC. It was listed $69.5 million in 2011, according to the Wall Street Journal. The price was lowered to $59 million, according to CNBC. Loeb was one of the best paid fund managers in 2012 taking home an estimated $380 million, according to Institutional Investor’s Alpha.
Roubini: ‘Sleeper cell’ behind Boston attack (Politico)
Nouriel Roubini, the rock-star economist who is credited with predicting the collapse of the U.S. housing market, believes he knows who is responsible for Monday’s attack at the Boston Marathon. “So it looks like 1 of the sleeper cells on the Eastern Seaboard woke up. & since the NYC Marathon was cancelled they went for the Boston one,” he tweeted on Monday night, more than seven hours after the explosions. When asked by a follower how he knew, Roubini cited “informed sources.” POLITICO sent multiple emails to Roubini over the last 18 hours requesting comment or more information. We also spoke with Roubini’s assistant, who said she would relay the inquiry to him. He has yet to respond.
Gold’s Fall Costs Paulson $1.5 Billion This Year (CNBC)
The tumbling gold price has personally cost billionaire hedge fund manager John Paulson at least $1.5 billion so far this year, as a decline in the price of the metal turned into a rout. The estimated losses for Mr. Paulson, who has made and lost more money on gold than almost any other hedge fund manager, reflect a bold all-in bet on the precious metal While many investors hold some gold in case of financial calamity or a return of the rampant inflation of the 1970s, since 2009 Mr. Paulson has allowed clients of Paulson & Co to denominate their holdings in gold, rather than US dollars.
HFRX: Hedge Funds Up 0.86% In March, 3.27% In Q1 (Finalternatives)
Hedge funds rose last month amidst a market rally that left the Standard & Poor’s 500 Index up more than 10% in the first quarter, according to data from Hedge Fund Research. The HFRX Aggregate Index wasn’t quite so lucky, closing out the first quarter up 3.27% after a 0.86% rise in March. Master-limited partnerships continued to lead the way, rising 4.8% on the month and 15.39% on the year. Technology and healthcare funds rose an average of 3.49% on the month (6.46% year-to-date), energy infrastructure funds 2.79% (9.08% YTD), yield alternative funds 2.48% (6.37% YTD), real estate funds 2.15% (3.67% YTD) and activist funds 2.1% (4.85% YTD).
Former top T. Rowe Price manager to launch Baltimore hedge fund (BaltimoreSun)
Kris H. Jenner, the manager of T. Rowe Price Health Sciences Fund until his resignation in February, has raised more than $100 million to launch a Baltimore-based hedge fund, Bloomberg News reported. The hedge fund, which will be called Rock Springs Capital, will have a similar investing strategy as Price’s Health Sciences Fund, said Bloomberg, quoting an unnamed person knowledgeable about Jenner’s plans. Jenner had managed the Health Sciences Fund since 2000. It has been one of Price’s top funds, achieving a 15.3 percent annualized return over 10 years, according to Morningstar. Along with Jenner, two of the Health Sciences Fund analysts, G. Mark Bussard and Graham M. McPhail, also resigned. Bussard and McPhail will be running the hedge fund with Jenner, Bloomberg reported.
Kaye Scholer Says Fund’s Claims Imperil Deal In GSC Row (Law360)
Kaye Scholer LLP on Monday pushed for approval of its $1.5 million settlement with the government over alleged ethics violations in GSC Group Inc.’s bankruptcy, but the firm suggested it will back out of the deal if it is forced to defend related claims from an objecting hedge fund. Black Diamond Capital Management LLC, which purchased GSC out of bankruptcy in 2011, objected last month that the law firm’s settlement with the U.S. Trustee’s Office goes “a step too far” in foreclosing third parties like the…
GLG Vet Berger Plans Summer Hedge Fund Launch (Finalternatives)
Former GLG Partners trader James Berger is readying a new hedge fund for launch this summer. Berger’s B1 Capital will launch a Europe-focused, fundamental long/short equity fund, Financial News reports. He has won a seed investment and will debut with that and investments from a handful of anchor investors. Pfäffikon, Switzerland-based B1 has a team of six, including Berger and Megan Kenney, who serves as CEO. Kenney was European head of capital services at Credit Suisse until October.
LACERA Seeks Fund Of Hedge Funds (Finalternatives)
The Los Angeles County Employees’ Retirement Association has issued a request for information for a fund of hedge funds manager. The $42 billion pension hopes to add to its 3% hedge fund target allocation with a customized, diversified hedge fund solution, Pensions & Investments reports. The mandate is for $250 million. Responses to the RFI, which is available on LACERA’s Web site, are due April 25. LACERA already has two funds of funds in its portfolio. The pension last week also approved $200 million in new commitments to a pair of private equity fund. Insignia Capital Partners and Marlin Equity Partners will each get $100 million.
What Would You Ask Investing Legend, Jim Rogers? (WallStreetDaily)
He was the Co-founder of the Quantum Fund with George Soros, which famously returned 4,200% to investors in the first 10 years. (The S&P only mustered up a 47% gain over the same period.) He’s traveled around the world (over 100,000 miles) on a motorcycle, which earned him his first Guinness World Record – and, of course, invaluable global insights. In 2006, he started selling short U.S. financial stocks, homebuilders and Fannie Mae. (A trio of prescient calls, indeed.) He needs more than one hand to count the number of bestselling books he’s penned.
Investing in water will make some extremely rich: Jim Rogers (Business-Standard)
Jim Rogers, the investor who foresaw the start of a commodity rally in 1999, said he was “extremely optimistic” about investing in water amid a scarcity of supply in countries from India to the US. “If you can find ways to invest in water, you will be extremely rich because we do have a serious water problem in many parts of the world like India, China, the southwestern part of the US, and west of the Red Sea,” Rogers, chairman of Rogers Holdings, told reporters at his home in Singapore today.
Hedge Fund Focus: Leading Practices in Risk Assessment (WSJ)
As the hedge fund industry matures, new compliance requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act are forcing many CFOs—especially those also serving a secondary role as Chief Compliance Officer—to adopt structures, practices, policies and procedures covering a range of areas, from enhanced governance models to enterprise risk management programs. More traditional asset managers and complex financial service companies have had to address similar compliance requirements for decades. Many hedge funds, however, are still in the early stages of developing compliance and risk management programs, and some are finding the task difficult. “There’s a lot of convergence occurring between compliance and risk management at many asset managers we see,” says Michael Chung, a director at Deloitte & Touche LLP, speaking at Deloitte’s Second Annual Hedge Fund Symposium. “Risk professionals are looking at compliance issues and compliance professionals are looking at risk management,” a result of the fact that compliance and risk management are becoming increasingly interconnected at hedge fund managers. The New York symposium was part of a 10-city series of events for senior hedge fund executives, with panels on tax, business strategy, investing and regulation.
SEC Charges Two Arizona-Based Brokers with Defrauding Investors in Tankless Water Heater Venture (SEC)
The Securities and Exchange Commission today charged two former brokers in Arizona with stealing investments in a project to develop tankless water heaters. The SEC alleges that Jeffrey Stebbins of Mesa, Ariz., and Corbin Jones of Gilbert, Ariz., diverted at least $1.8 million of investor money for their personal use and fraudulently obtained more than $6 million in stock for themselves to the detriment of investors. Typically used in residences, tankless water heaters are generally designed to instantly heat water as it passes through pipes rather than in large containers like traditional water heaters.
Dell, Icahn agree on a share ownership cap as board committee considers takeover bids (WashingtonPost)
Dell Inc. (NASDAQ:DELL) and Carl Icahn have agreed to cap his stake in the personal computer maker while a special board committee considers competing takeover bids from the billionaire investor, a group led by CEO Michael Dell and buyout specialist The Blackstone Group L.P. (NYSE:BX). The Round Rock, Texas, company said Tuesday that its board approved the agreement with Icahn under which he and entities tied to him pledge not to buy up more than 10 percent of the company’s shares. The deal also covers other shareholders who, together with Icahn, would own more than 15 percent of Dell’s shares. In exchange, Icahn is allowed to talk to other shareholders about putting together a superior proposal to a $24.4 billion buyout offer backed by company founder Michael Dell.
