Say What!? Pickens’ Newlywed Bliss, Einhorn’s Casino Blues (InstitutionalInvestorsAlpha)
Globally the entire world thinks the governments have their back in asset markets. Generally speaking when everybody thinks something, you might want to take a few chips off the table and say maybe that’ s not going to work out so that everybody’s going to get rich. But I could be wrong.” James Chanos of Kynikos Capital on why he thinks asset prices are in a bubble. Alpha reported this week that Chanos’ long-short strategy has lost money in the bull market. (via CNBC) “So I have a casino and I want to start a poker game in the casino, so I get three card sharks and I tell them, go sit there and start the game. Make it look like a good game’s going on. There are no 4s, 9s, there are no queens in the deck…
Hedge funds’ leveraged bets on market rally to magnify sell-offs (Reuters)
Hedge funds are borrowing record amounts of money to fund bets that stock markets will continue rising, creating conditions that could accelerate price falls if those leveraged positions are hurriedly closed. Although global equities look set to advance for the remainder of the year, nervousness about the strength of China’s economy and the U.S. Federal Reserve’s plans to scale back its stimulus programme could mean a rocky ride for markets.
Hedge Fund Merger: Investcorp and Eyck Capital Management (HedgeCo)
Investcorp’s US based hedge fund business is teaming up with UK manager Eyck Capital Management LLP to offer its investors’ access to a specialized event-driven and distressed credit strategy spanning the European opportunity set. The London-based investment manager led by Khing Oei, is the latest asset manager backed by Investcorp, which has more than $11 billion in client and proprietary assets under management. Historically, Investcorp provides initial seed and acceleration capital ranging from $50 to $100 million.
Lampert’s Sears Still Has Turnaround Options (TheStreet)
Though recent media reports have cast Edward Lampert‘s decision to back off from holding Sears Holdings Corporation (NASDAQ:SHLD) commercial paper as a bad sign for the department store retailer, its financials counsel against immediate panic. And Lampert, who engineered the merger of Sears with Kmart in 2005 and has been CEO for a little over a year, continues to be in it for the long term, according to people familiar with his thinking. Lampert’s hedge fund, ESL Partners, has been steadily dropping its holdings in Sears commercial paper over the past year. The latest pullback was from $140 million in November, to nothing currently, according to regulatory filings. The company still has $9 million in short-term debt, filings show.
Why hedge fund manager is bullish on jobs report (USAToday)
One hedge fund manager is bullish on the U.S. jobs market. “The monthly employment report shows us what good old-fashioned, bread-and-butter job creation is about: Higher consumer demand equates to job growth,” says Todd Schoenberger, managing partner at hedge fund LandColt Capital. Indeed, at first blush the stock market likes the March jobs report. The latest government reading on jobs saw a solid 192,000 non-farm jobs created last month (a tad lower than the 200,00 estimate) but also got a bump from upward revisions to the February jobs number (revised up 22,000 to 197,000) and January (revised up 15,000 to 144,000).
Third HFMWeek Award win for Legis Group (BusinessLife)
Legis Group was named ‘Best administrator – under $30bn Fund of Hedge Funds’ at the HFMWeek European Service Provider Awards 2014 last week (27 March). The awards, which were announced at a ceremony held at The Hurlingham Club in London, recognised companies that have outperformed their peer group and provided outstanding service and support to the European hedge fund industry over the past year. Hosted by Andy Zaltzman, the awards featured a number of categories and were judged by a panel of independent senior industry representatives who took into consideration financial progress, growth and genuine innovation across a number of different business areas to identify the eventual winners of each category.
Hedge funds meet the masses (CNBC)
Matt Bevin: Founding Fathers ‘Very Involved’ In Cockfighting ‘And Always Have Been’ (Inquisitr)
Matt Bevin, the hedge fund manager and Tea Party member who is running for Senate in Kentucky to knock off the Senate Minority Leader Mitch McConnell, has a weird idea of how Thomas Jefferson, Benjamin Franklin, George Washington and the other founders of the United States of America spent their free time. “It’s interesting when you look at cockfighting and dogfighting as well,” said Bevin said in an interview on Louisville’s WHAS radio Thursday. “This isn’t something new, it wasn’t invented in Kentucky for example. I mean the Founding Fathers were all many of them very involved in this and always have been.”
Hong Kong Jockey Club Starts Direct Hedge Fund Allocations (Bloomberg)
Hong Kong Jockey Club began making direct allocations to hedge funds, said Jacob Tsang, director of group treasury at the city’s only horse-racing operator, which has invested more than $1 billion in alternative assets. It made its first two such allocations to Och-Ziff Capital Management Group LLC (OZM) and Millennium Management LLC recently, he said. In addition to controlling horse-racing in the city, the club operates authorized betting on football games and lotteries, according to its website.
Hedge funds’ leveraged bets on market rally to magnify sell-offs (Reuters)
Hedge funds are borrowing record amounts of money to fund bets that stock markets will continue rising, creating conditions that could accelerate price falls if those leveraged positions are hurriedly closed. Although global equities look set to advance for the remainder of the year, nervousness about the strength of China’s economy and the U.S. Federal Reserve’s plans to scale back its stimulus program could mean a rocky ride for markets. With equity leverage levels sitting at all-time highs, a mild retreat in stocks could morph into a sharp correction as investors faced with paying back the debt on top of taking a loss tend to sell out quickly when shares start to dip.
Loeb: ‘Failed’ board dragging down Sotheby’s stock (CNBC)
Call it the art of a Wall Street war. In a new letter sent to Sothebys (NYSE:BID) shareholders Friday, activist investor Dan Loeb said the art auction house’s stock slide is the result of what he called “failed leadership by the board of directors.” He claims the board has too little “skin in the game,” since it collectively owns less than 1 percent of the company, and that its members are “overly focused on short-term metrics.” Loeb’s New York-based hedge fund, Third Point, has put up a slate of candidates for the auctioneer’s board. He says the nominees “will bring fresh perspectives” to the company, which he says suffers from “poor corporate governance.”
Prosecutors Ask Federal Judge To Accept $1.8 Billion Plea Agreement With Steven Cohen’s SAC Capital Advisors (JewishBusinessNews)
Under the terms of the plea bargain SAC Capital agreed to pay a fine of US$900 million and accept an additional forfeiture of US$900 million, for a total penalty of US$1.8 billion. The Judge in the case, in the New York Southern District Court, Judge Laura Taylor Swain, did not automatically accept the arrangement, saying she wanted to further consider herself whether it was indeed appropriate. In the mean time resolution of the case has been held up pending the trials of two of SAC employee’s, Mathew Martoma and Michael Steinberg, who have since been individually found guilty of insider trading in separate cases. Steven Cohen himself has not been charged personally for engaging in any such insider trading practices.
Cartica Sues Billionaire Saieh Over Fraud In CorpBanca-Itau Merger As Hedge Fund Activism Arrives In Latin America (Forbes)
While the world of Wall Street is entertained by a rowdy band of activists including of Bill Ackman, Carl Icahn, and Dan Loeb, a different kind of battle has made its way to the New York courtrooms, involving Chilean billionaire Alvaro Saieh Bendeck and a DC-based hedge fund named Cartica Capital. The billionaire is accused of defrauding investors by “siphoning” special benefits from a merger deal between CorpBanca (NYSE:BCA) +1.67%, a publicly traded bank he controls, and Brazilian powerhouse Itau, at the expense of minority shareholders. Saieh, who is also accused of withholding information along with his board, has seen his net worth drop after the financial debacle of his retailer and supermarket chain SMU, which has been amassing losses and debt over the past few years.
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