Renaissance Technologies is one of the most mysterious hedge funds in the world. With over $15 billion in assets, it is one of the largest single trading entities on the planet. Its flagship fund has one of the greatest long-term records in the history of modern financial markets. And almost no one — perhaps not even the folks who run the company’s hedge funds — knows how it is done. And now, the company founded in 1982 by mathematician James Simons is a bit more mysterious. In the past, when people drove past the hedge fund company’s headquarters, they would have seen a sign reading “Renaissance Technologies LLC.”
Argentina appeals against US hedge fund ruling (Guardian)
Argentina has appealed against a US court order forcing it to pay $1.3bn (£810m) to hedge funds holding debts from the country’s 2001 default. The economy minister in Buenos Aires said the US ruling was an “attack on sovereignty” as it filed an appeal in New York on Monday. Last week, US district judge Thomas Griesa ordered Argentina to pay out $1.3bn to the tiny minority of bondholders who refused to sign up to a hard-fought writedown of its debts after the country’s sovereign debt default a decade ago. About 93% of bondholders agreed to a restructuring that gave them back about 30p in the pound, but some hedge fund creditors refused the deal and are pursing Argentina through courts across the world. Argentina has refused to pay the hedge funds, which it describes as “vultures”
PEAK6 Advisors LLC Implements Paladyne FastStart in Their Investment Management Platform (EINNews)
Paladyne Systems®, Inc., a Broadridge Financial Solutions, Inc. (NYSE:BR) and leading provider of next generation investment management solutions, today announced that PEAK6 Advisors LLC, an investment advisory firm launching a multi-asset class hedge fund, has selected Paladyne FastStart as part of its institutional-grade investment management platform. PEAK6 Advisors LLC is a unit of PEAK6 Investments, L.P., a leading financial institution based in Chicago with businesses spanning the proprietary trading, investment advisory, and online brokerage sectors. The newly formed fund is led by former UBS AG executive Joseph Scoby, Chief Executive Officer of PEAK6 Advisors LLC and Chief Investment Officer of the fund.
FBI scours social media for securities fraud (ITWeb)
The FBI sees social media as a potential breeding ground for securities fraud, and has agents scouring Twitter and Facebook for tips, according to two top agents overseeing a long-running investigation into insider trading in the $2 trillion hedge fund industry. April Brooks, a special agent in charge of the New York field office of the Federal Bureau of Investigation, and David Chaves, a supervisory agent, said it is hard to predict the next wave of securities fraud, but they add that it will have a lot to do with advances in technology and social media.
Ex-trader’s wife smiles as hubby faces music (NYPost)
Mathew Martoma surfaced yesterday in Manhattan federal court for the first time since he was charged in the “most lucrative” insider-trading scheme in history. Martoma, who was arrested last Tuesday at his country club home in Boca Raton, Fla., was arraigned and released on $5 million bond secured by $2 million in cash or property. The former trader for CR Intrinsic, an affiliate of $14 billion hedge fund giant SAC Capital Advisors, was accompanied by his pediatrician wife, Rosemary. The couple, who were married in 2003 and have three children, held hands as they left the courtroom.
3Q Hedge Fund Holdings for David Einhorn’s Greenlight Capital (Kapitall)
Famed value investor David Einhorn’s hedge fund Greenlight Capital released its latest list of stock holdings on November 14th and it included some additions and changes that will intrigue Kapitall Wire readers. Even though Apple Inc. (NASDAQ:AAPL) remains Greenlight’s largest position at US$728 million, Einhorn has sold about a quarter of its shares in the third quarter – possibly reflecting a change in the hedge fund’s investment thesis on the company as Apple continues to undergo supply chain problems with its production. In the same quarter, Greenlight Capital also sold 6.6 million shares of Seagate Technology, its second largest position, to bring its total holding down to US$514 million.
CIO rises to top spot on hedge fund pay scale according to a new survey from Infovest21 (Opalesque)
Infovest21, a global investment information services provider has published the results of its latest hedge fund compensation survey. The results are based on data from 14 separate hedge fund management firms, all with assets over $1bn. In the eleventh annual survey, Infovest21 found that the Chief Investment Officer, with a total compensation of $5.4m, topped the list of 24 positions at the typical hedge fund firm. The role of CEO was next with compensation topping out at $4.4m. Portfolio Manager and Chief Operations Officer followed with an average total compensation of $2.7m and $1.2m respectively. Positions in sales and marketing fell below the $1m threshold with salaries ranging from just under to $800,000. For positions such as General Counsel, or Head Trader the compensation ranged from $799,999-400,000.
A Legendary Hedge Fund Manager Owns 1.9 million Shares of This Gold Stock (StreetAuthority)
Gold has exploded higher during the past several years. The bullishness has been ignited by massive global fiscal stimulus programs, slowing production growth and aggressive purchasing of the yellow metal by several central banks. It’s no wonder gold prices are up nearly 100% during the past five years. …The fact that hedge fund wizard David Einhorn doubled his position in the stock during the third quarter and held it steadily this quarter, despite the price drop, gives me even more confidence in Barrick Gold. The gold miner makes up about 1.3% of his U.S. long portfolio (1.9 million shares), indicating a strong bullish bias for the company.
Hedge Funds Badly Beaten by S&P 500 Performance (AdvisorOne)
Low cost indexing might just have been vindicated in the starkest way possible. According to Goldman Sachs data, just 13% of hedge funds are outperforming the S&P 500, and a fifth of all hedge funds are actually in the red during 2012. To make matters worse, hedge fund managers have crowded into the same trades, with turnover at a record low, Goldman reports. What does this mean? “Hedge fund investors are paying 2% fees up front and 20% of profits thereafter to managers delivering poor performance and apparently doing little about it,” CNBC said Monday, when discussing the report.
A Journalist’s Defense Of Steve Cohen (BusinessInsider)
If you’re a journalist with any kind of honesty and ambition, I don’t see how the dubious tactics of aggressive hedge fund traders can’t have a gut appeal. Steven A Cohen, the hedge funder now being hotly pursued by the Feds, does what I do. Many of the people who work for Cohen seem to do what I do. We call up people and ask for information. The government frames this differently. It casts this as a conspiracy between a small number of individuals: one who has the information, passing it, for some benefit, to others who will act on it. The metaphor is spying. Trafficking in secrets. Often, the government has wire taps that reinforce this sense of organized crime and its cryptic vulgarity.
Howard, Harding Richest Hedge Fund Managers In Britain (Finalternatives)
Brevan Howard Asset Management founder Alan Howard is Britain’s richest hedge fund manager—by a comfortable margin. Howard’s fortune stands at £1.4 billion, according to the Sunday Times’ biannual rich list. That’s a full half-billion pounds more than the second-richest hedge fund manager in the U.K., Winton Capital Management‘s David Harding, who boasts a fortune of £900 million. None of the U.K.’s nine richest hedge fund managers made the newspaper’s top 20 among their fellow British billionaires and millionaires.
When “More” Isn’t “Better” (DailyReckoning)
Here’s a factoid that might shake you out of your leftover turkey-tryptophan stupor: You’re better off putting money in an index fund than a hedge fund. That was the most interesting tidbit to emerge over the long holiday weekend: “Occupy Wal-Mart” was a bust. “Black Friday” sales improved on last year — barely. And Greece was fixed for the umpteenth time. Thus, the euro soared on Friday, and the dollar got stomped — which drove up stocks and precious metals alike. According to a Goldman Sachs report, a mere 13% of hedge funds have outperformed the S&P 500 during 2012. A fifth of hedge funds are in the red. For the record, the S&P is up 14% year to date. The average hedge fund is up only 6%.
Hedge funds’ small-cap picks (MarketWatch)
Hedge funds spend lots of money hiring bright people to do exhaustive research on a broad universe of stocks — not just the megacaps that dominate financial journalism. The research may not be public, but to some extent the results are. …American Eagle Outfitters , which was the favorite stock in this valuation range, is up 10.4% since we published our article on June 6. These days it seems to be a more popular sell than buy among hedge funds; while billionaire Ken Griffin’s Citadel Investment group owned the stock at the end of September, it had cut its stake by about a third over the course of the quarter (see what stocks Citadel is buying instead) . American Eagle trades at 24 times trailing earnings, and doesn’t seem to be growing its net income much.
New York City Hedge Fund Purchases 8.4% of CHS Shares (BeckersHospitalReview)
Glenview Capital Management has grown its ownership of Franklin, Tenn.-based hospital operator Community Health Systems, as the New York City-based hedge fund now owns 7.65 million CHS shares — roughly 8.4 percent of CHS’ outstanding shares, according to a recent Schedule 13G form filed with the U.S. Securities and Exchange Commission. Previously, Glenview Capital held roughly 1.63 million shares of CHS stock. Lawrence Robbins, CEO of Glenview Capital, has several other hospital stocks in his company’s portfolio, including Naples, Fla.-based Health Management Associates (25.6 million shares), Dallas-based Tenet Healthcare (13.2 million shares), Nashville, Tenn.-based Hospital Corporation of America (8.4 million shares) and Brentwood, Tenn.-based LifePoint Hospitals (2.4 million shares).
Northern Trust wins hedge fund mandate (GlobalInvestorMagazine)
Northern Trust Hedge Fund Services has won a mandate from CarVal Investors to provide middle office and fund administration for its global portfolios. Northern Trust will provide the alternative investment fund manager with a unified operations and technology platform to support investment teams and strategies on four continents worldwide. This is the first time that CarVal has appointed an external fund administrator.
Muddy Waters Founder May Launch Short-Selling Hedge Fund (Finalternatives)
The founder of research firm Muddy Waters, whose attacks on a Chinese timber company cost Paulson & Co. some $100 million, is mulling a hedge fund of his own. …Block has said he’s considered a short-selling hedge fund “for a while” as he seeks to find ways to profit from his calls on Chinese companies. His most notable may have been against Sino-Forest Corp., which he claimed lied about the value of its timberland holdings. Paulson, which owned more than 14% of Sino-Forest, lost some $105 million when the company’s stock cratered in the aftermath of Block’s pronouncement last year; Sino-Forest filed for bankruptcy in March.
‘Wait and See’ No More (WatersTechnology)
Many US hedge funds were hoping for a new president on the morning of November 7. That did not happen. Anthony wonders whether this means the industry will finally start to see some momentum for stalled IT projects geared toward regulation. In the US, the hedge fund industry made a rather substantial bet on the presidential election as it largely backed Republican nominee Mitt Romney, who promised to repeal as much of the Dodd–Frank Act as possible. Obviously, their money was not well spent, as President Barack Obama easily won a second term. So Dodd–Frank marches on.
What is ‘Vulture Investing?’ (HedgeFund)
Vulture investing is not as barbaric as it sounds. In fact, New York hedge fund manager George Schultze states in his new book, “The Art of Vulture Investing” [Wiley, 2012] that vulture investors are actually “good guys” who get a “bum rap.” “The Art of Vulture Investing” provides an in-depth look into investment in the distressed corporate securities market from an internal perspective. Readers will also be left with some “a-ha!” moments after finishing the book as well as a clearer understanding about a type of investor that many believe is taking advantage of a failing company and/or economy.
Starboard Adds Nardelli and Ex-Staples Exec for Office Depot Fight (WSJ)
Activist hedge fund Starboard Value LP, which is pushing for changes at office supplies retailer Office Depot Inc (NYSE:ODP), has added two individuals as advisors to its group, according to an amended filing. Bob Nardelli, the former chief of companies such as Home Depot and Chrysler, and Joseph Vassalluzzo, a former vice chairman of Staples Inc., are teaming up with Starboard to provide counsel and insight into how Office Depot can improve its operations and strategy, according to the amended 13D filing.
SEC Chairman Mary Schapiro to Step Down Next Month (SEC)
After nearly four years in office, SEC Chairman Mary L. Schapiro today announced that she will step down on Dec. 14, 2012. Chairman Schapiro, who became chairman in the wake of the financial crisis in January 2009, strengthened, reformed, and revitalized the agency. She oversaw a more rigorous enforcement and examination program, and shaped new rules by which Wall Street must play.
