Editor’s Note: Related tickers: Berkshire Hathaway Inc. (NYSE:BRK.A)
Billionaire hedge fund manager John Paulson lost over $300 million of his personal wealth and his investors lost $62 million on Friday as gold tumbled to nearly 2-year lows, reports Katherine Burton for Bloomberg. Eighty-five percent of Paulson & Co.’s $9.5 billion is invested in gold share classes with the biggest stake held in AngloGold Ashanti. AngloGold’s share price fell 5.6% in the midst of Friday’s sell-off. The past couple of years have been tough ones for Paulson, who told investors that gold would remain an attractive safe haven and hedge against inflation. His gold fund was down some 28% by the end of March this year.
David Rothberg: Investors cannot quite dispel a feeling that something just ain’t right (Opalesque)
The Friedberg Global Macro hedge fund is now closed to new investors, reports David Rothberg, a Canadian fund and risk manager, but the Niagara Discovery fund, a multi-strategy fund, remains open. Rothberg also comments on the weird current equity trend, the weak recovery and the potential bubbles in sight. Friedberg Global-Macro Hedge Fund is closed to new investors The Friedberg Global-Macro Hedge Fund Ltd., which now has US$935.7m in AuM, was up 3.04% in March and up 6.77% YTD, annualising 16.7% since its December 2001 inception. The Cayman domiciled fund is a multi-strategy global macro fund managed by Albert Friedberg, co-founder of Toronto, Canada-based Friedberg Mercantile Group, and a practitioner of global macro investing since 1971. The Friedberg family is the Fund’s lead investor, and Niagara Capital – also based in Toronto – is the international sales agent for the fund.
SAC Capital Loses Hong Kong Staff At A Critical Time (IVCPost)
SAC Capital Advisors has lost seven Hong Kong staff and relocated five others, but the hedge fund had declined to explain the departures. Sources said that the departures were ill-timed, coming at a time when investors have submitted redemption notices for $1.7 billion of the $15 billion fund following an investigation on insider trading in the U.S. that led to the arrest of Michael Steinberg, a veteran portfolio manager. Analysts are also looking at a broader picture in the Asian hedge fund industry where the investment returns have not met expectations.
Pay Stretching to 10 Figures (NYTimes)
In recent years, the criticism about giant Wall Street hedge funds — those that command billions of investor dollars from pension funds, endowments and the wealthy — is that they’re simply too big to beat the market. But a number of the hedge fund leaders who had giant paydays last year bucked the trend. They earned their riches the old-fashioned way: by posting big returns on their investments.
Jitters fail to spook solid first quarter (eFinancialNews)
Most of the 18 strategy and five regional indices published by data provider Hedge Fund Research posted positive gains for the quarter, with the exception of short-biased funds, indices focused on energy strategies and those investing in Russia/eastern Europe. The average hedge fund gained 3.9% in the quarter, with equity strategies leading the way. Against a more robust economic backdrop, macro volatility dropped and the level of correlation between assets and regions decreased, with developed markets outperforming emerging markets. Tony Gannon, chief executive at Abbey Capital, a managed futures-focused fund of funds, said: “It was quite an important quarter because we saw a dissipation of the ‘risk-on/risk-off’ environment that had characterised the previous two years.
Asset managers criticize proposed bonus cap on UCITS managers… uptick seen in UCITS fund launches in response to impending AIFM Directive… (HedgeWeek)
There’s been an uptick in the number of alternative fund managers launching UCITS-compliant funds in recent months in response to growing uncertainty around the Alternative Investment Fund Managers’ Directive (AIFMD) reported CooConnect.com, citing comments made by panellists at an ALFI conference in London. Serge Weyland, head of regional coverage for North America and UK at CACEIS Bank said that managers running SIFs and hedge funds launching UCITS funds to avoid running AIFMD-compliant was “a noticeable trend”. He caveated the point by saying that it was only those managers running strategies such as CTAs or emerging markets-focused products “which can easily be replicated in UCITS that are doing this”. One anonymous attendee, however, said that he hadn’t seen a surge in hedge fund managers entering the UCITS space but rather it appeared to be a “minority”, noting that the costs and the number of strategies which hedge funds can realistically put into a UCITS “do not make it an attractive proposition for the majority”.
Barington Urges Focus for Jones Group (IVCPost)
Barington Capital Group, the activist hedge fund, is advising fashion company, Jones Group, to sell off part of its asset portfolio. The incident was reported by the Wall Street Journal citing an anonymous source with knowledge on the matter. The hedge fund owns about 2% of the company’s shareholdings and aside from the divestment, other options include cutting costs and expanding the number of directors on the board. The newspaper reported that Jones Group CEO Wesley Card had met with Barington representatives upon the latter’s request earlier in the month.
Ex-Soros Adviser Says BOJ’s Massive Easing to Backfire (GNom)
The Bank of Japan (8301)’s “huge bet” by boosting quantitative easing won’t turn the economy around and is instead sending the nation toward default, said Takeshi Fujimaki, former adviser to billionaire investor George Soros. The BOJ said April 4 it will double monthly debt purchases to 7.5 trillion yen ($76 billion). That’s about 70 percent of planned bond issuance from the world’s most heavily indebted government. Governor Haruhiko Kuroda set a two-year horizon for achieving the 2 percent annual inflation target adopted in January at Prime Minister Shinzo Abe’s urging and said the monetary base will grow to 270 trillion yen by the end of 2014.
George Soros caught up in alleged smear campaign (LegalBrief)
A leading London consulting firm chaired by Mark Malloch-Brown, the former Foreign and Commonwealth Office Minister, is being sued by one of its former clients, the Israeli businessman Beny Steinmetz, over an alleged smear campaign. According to a report in The Daily Telegraph, the name of George Soros – the man who famously broke the Bank of England – has also been caught up in the High Court battle between FTI Consulting, one of the City’s leading PR firms, for which Lord Malloch-Brown works, and a mining company. The court papers explain how BSG, founded by Steinmetz, obtained permission in March 2010 from the government of Guinea to mine half of the country’s giant Simandou iron ore deposit…
Investor Jim Rogers Says Gold Needs Correction, Isn’t Buying Yet (Businessweek)
Gold, which tumbled into a bear market last week, is in need of a correction, according to investor Jim Rogers, who said that he’s not buying the commodity yet as it hasn’t dropped enough. “This may be the correction that gold needs,” said Rogers, chairman of Rogers Holdings. “If it goes down enough, I will start buying it,” Rogers told reporters in Singapore today, without identifying a level.
Carl Icahn Guest Lecture At Yale University (Nasdaq)
I’ll let Carl Icahn introduce himself (from his site “The Icahn Report”): I was born in Brooklyn and grew up in Far Rockaway, Queens. My father was a frustrated opera singer and settled on being a cantor in Cedarhurst, Long Island. The fact that he was a dogmatic atheist did not exactly help him to get ahead in this profession and after a number of years he became a substitute teacher. My mother also worked as a schoolteacher. I attended the local public school, Far Rockaway High, later heading to Princeton University. My mother wanted me to be a doctor, so after earning an A.B. in Philosophy in 1957, I went to medical school. I quickly realized the medical field was not for me. After two years, I joined the army and soon after eagerly returned to New York to start a career on Wall Street.
Australia’s Scout Global joins IMQ in backing Romanseco fund (HedgeWeek)
Australian hedge fund seeder Scout Global Funds has joined IMQ as co-seed of Romanesco Capital Management’s systematic trading strategy, the Persistence Fund. Scout aims to identify and invest in best of breed emerging managers worldwide. The firm’s mandate is to allocate to well-researched, innovative and disciplined strategies with smaller assets under management, as these emerging managers often offer a compelling investment case. Scout’s backing of the Romanesco Fund alongside IMQ provides the new fund with another endorsement and connects it with a complementary group of investor candidates.
Highest Hedge Fund Managers Paid Well, as They Should Be (247Wallst)
Hedge fund managers are more vilified for their pay packages, by the media and the public, than public company CEOs are. To some extent, the attacks are understandable, at least on the surface. Hedge fund managers can make hundreds of millions of dollars a year, while the highest paid CEOs make only tens of millions. The difference is that hedge fund managers are generally paid by very specific performance measures. Hedge fund managers may be well paid, but the effects of poor performance can be extreme. It is not unusual for funds that have done poorly to lose a large portion of money that they manage, even to the extent that funds can be forced to close. That is the ultimate “pay for performance” penalty.
Group seeking to bring Sacramento Kings to Seattle raises offer price (Reuters)
Ahead of a meeting of NBA leaders this week to decide the fate of the Sacramento Kings, an investor group seeking to move the team to Seattle has raised its offer to $550 million, the hedge fund manager behind the offer said. The revised bid comes in advance of a National Basketball Association’s Board of Governors meeting to be held on Thursday and Friday, where a decision is expected on whether to have the team stay in Sacramento, California, or award it to Seattle by allowing the investor group to buy it from the Maloof family.
Meet The 30-Year-Old Ex-Water Ski Instructor Who Made $2 Billion Trading For Dan Och (BusinessInsider)
The Wall Street Journal’s Gregory Zuckerman has a piece about a young trader at Och-Ziff who made $2 billion last year. James Levin, 30, the head of a 14-person credit team for Daniel Och’s Och-Ziff, had one of the most profitable trades of 2012. According to the Journal, he bet $7.5 billion on structured credit debt instruments and it paid off big time. His team’s $2 billion gain, before fees, accounted for more than half of Och-Ziff’s $3.4 billion trading gains from last year, the report said. Och-Ziff employs 468 people.
LACERA on lookout for hedge fund-of-funds manager (PIOnline)
Los Angeles County Employees’ Retirement Association, Pasadena, Calif., is looking for a hedge fund-of-funds manager to run a $250 million, according to an RFI for the $42 billion pension fund. Pension fund executives launched the RFI to identify a manager that can offer a customized diversified hedge fund solution for its 3% hedge fund target allocation. Currently, LACERA has 1% of the portfolio invested in two hedge funds-of-funds; one is diversified and the other is focused on opportunistic credit strategies.
The 20 Most Inspirational Warren Buffett Quotes on Business, Investing and Life (InsiderMonkey)
Inspirational quotes are plentiful on the blogosphere. There are a few individuals, though, that readers, particularly in investing circles, should pay attention to. Let’s look at Warren Buffett‘s best quotes on business, investing, and life in general. …Buffett’s success in business has brought him the nickname the “Oracle of Omaha,” and it only takes a little bit of market-watching to see that investors follow each step Buffett makes, particularly shareholders of the illustrious Berkshire Hathaway Inc. (NYSE:BRK.A).
