TXU Bankruptcy Is a Boon to Some Hedge Funds (InstitutionalInvestorsAlpha)
The late April bankruptcy filing by the Dallas-based power giant formerly known as TXU Energy is proving to be a highly profitable trade for a handful of credit and multistrategy hedge fund firms this year. Although the bankruptcy filing had been anticipated for some time, the actual filing by entities related to the company, now called Energy Future Holdings Corp., still sparked a rally in the paper in various parts of its capital structure…
Paul Singer Gets OK to Chase Argentina Money Trail to Nevada (Bloomberg)
Billionaire Paul Singer, the hedge fund founder seeking to collect on more than $1.5 billion in judgments over Argentina’s defaulted bonds, may search the deserts of Nevada for some of that money, a judge ruled. Singer asked a Las Vegas court in April to order 123 companies in Nevada to turn over information about assets belonging to Argentine businessman Lazaro Baez, who is accused in that country of embezzling $65 million from government contracts. U.S. Magistrate Judge Cam Ferenbach in Reno granted that request Aug. 11, ruling that Singer’s hedge fund was attempting to execute a valid judgment against Argentina.
Investors raise hedge fund bets in August (Reuters)
Investor interest in hedge funds rose in August as they added more cash than they redeemed, even as performance dipped during July, data showed on Tuesday. The SS&C GlobeOp Capital Movement Index, which calculates monthly hedge fund subscriptions minus redemptions, rose 0.62 percent in August to 149.05 points. The index compiled by the fund administrator is based on data provided by its clients and represents about 10 percent of assets invested in the hedge fund sector globally, or about $300 billion.
Investors Pay for Hedge-Fund Illusions (BloombergView)
In an earlier article for Bloomberg View, I described a danger facing investors: the put-option illusion. This is when investors, who tend to extrapolate too much from recent trends, are fooled into thinking that a string of good returns means an investment has very little risk. Often the risk is just lurking way out in the tail of the distribution, ready to jump out and crush your wealth. In that article, I also talked about some research by Vikas Agarwal and Narayan Naik from the mid-2000s showing that many hedge funds had returns that looked a lot like selling out-of-the-money puts on the Standard & Poor’s 500 Index…
Prospective NHL owner, Chris Hansen working on Seattle arena deal (SeattlePI)
Would-be Seattle Sonics owner Chris Hansen has signed a “non-binding” agreement with a prospective NHL owner from Vancouver, B.C., regarding the proposed arena in Seattle’s Sodo neighborhood, according to a report from KING/5 TV. Citing sources with knowledge of talks between Hansen and Vancouver’s Victor Coleman, KING’s Chris Daniels reported on Tuesday that “the two potential ownership groups have signed a ‘non-binding’ agreement which lays out the terms for Coleman’s contribution to the project and his potential revenue streams for a hockey franchise.”
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