Imagine that a multibillion-dollar hedge fund is accused of fraud and pays a huge fine to settle with the Securities and Exchange Commission while its famous founder personally ponies up millions more to move past the scandal. No, this is not SAC Capital Advisors, the $14 billion hedge fund that may face civil charges over an alleged insider-trading scheme. It was Israel “Izzy” Englander’s Millennium Management, whose $180 million settlement on fraud charges related to market timing shook the hedge-fund industry in 2005. Today, Millennium has more money under management than ever — $17 billion — and boasts an annualized return of 14.45 percent and a reputation for having the toughest compliance in the industry.
Hedge Fund Association launches HNW advisory board (HedgeWeek)
The Hedge Fund Association has created a high net worth advisory board focused on developing educational programmes and networking events globally for HNW investors. Its chairperson will be April J Rudin, who has over 20 years of marketing experience in both corporate and financial services settings. In a separate move, the HFA promoted Ryan Mitchell to HFA west coast chapter regional director.
Apple: A hedge fund liability? (CNN)
Once a friend of the hedge fund industry, Apple’s stock may have already turned into a foe. With roughly one out of every five hedge funds counting Apple Inc. (NASDAQ:AAPL) among their top 10 stock holdings, the recent sell-off in Apple’s stock could start cutting into their returns. Shares of Apple have dropped nearly 25% since mid-September, when they hit an all-time high of $705. In a year where hedge funds have been struggling to generate returns, firms with outsize Apple holdings have been among the best performers. Returns for the average hedge fund haven’t been pretty. The Dow Jones Credit Suisse Core Hedge Fund Index was up just 2.37% through the end of the November, according to Goldman Sachs’ research.
BarclayHedge and TrimTabs: Hedge fund investors redeemed $10.8bn (0.6% of assets) in October (Opalesque)
BarclayHedge and TrimTabs Investment Research reported today that hedge fund investors redeemed $10.8 billion (0.6% of assets) in October, reversing a combined $9.8 billion inflow for August and September. Based on data from 3,040 funds, the TrimTabs/BarclayHedge Hedge Fund Flow Report estimated that industry assets stood at $1.8 trillion in October, down 26.1% from the June 2008 peak of $2.4 trillion. “From a cash-flow standpoint, the hedge fund industry has been losing ground for the past year,” said Sol Waksman, founder and president of BarclayHedge. “October’s redemptions pushed year-to-date outflows to $13.7 billion and 12-month outflows to $22.9 billion.”
Hedge fund take off to short airlines stocks despite tie-ups (Equities)
SHORT selling of airline stocks by hedge funds has continued to remain buoyant despite a spate of proposed deals between national carriers, data out yesterday revealed. Demand to borrow stock from Air-France-KLM has increased by just over six per cent, with 4.9 per cent of the stock out on loan, a record high, in spite of its US partner Delta taking a stake in Virgin Atlantic, according to the data from Markit. Shares in Virgin Australia, which is also part-owned by Sir Richard Branson and listed in Australia, have also soared in demand. The total shares out on loan have jumped 142.4 per cent over the month and now stands at 4.2 per cent of share lent out.
