John Paulson, the billionaire hedge- fund manager coming off record losses in 2011, further pared declines in his Gold and Advantage funds last month, according to two people familiar with the matter. Paulson’s Gold Fund, which can buy derivatives and other gold-related investments, rose 13 percent in September as bullion rallied, cutting losses this year to 3.9 percent, said the people, who asked not to be named because the information is private. The Advantage Plus Fund, which seeks to profit from corporate events such as takeovers and bankruptcies and uses leverage to amplify returns, gained 3.6 percent last month, reducing losses since the start of the year to 14 percent.
Hedge Funds Care — yes, they do (BizJournals)
Hedge Funds Care may read like an oxymoron. But there’s indeed a nonprofit by that name with a growing chapter in Boston, spawned from the segment of the financial services industry widely considered to be the most cold-hearted. Despite the bad rap that dogs their business — or, in part, because of it — Hedge Funds Care serves as a foundation, raising and granting money each year to nonprofits working to prevent and educate about a range of child abuse issues. Its financial support comes from a combination of hedge fund managers and firms, along with companies that provide services …
Former JP Morgan Alternative Investment Director Provides Insight Into Hidden Fees, Transparency and Alternative Investor Rights (Opalesque)
In his book The Hedge Fund Mirage: The Illusion of Big Money and Why It’s Too Good to Be True (Wiley 2012), author and industry practitioner Simon Lack mentions many unmentionables as he reviews the industry with a critical eye.‚ In this article he discussed his views on the hedge fund industry.‚ As a former leader of JP Morgan’s alternative investment efforts, having allocated over $1 billion to various hedge funds, Mr. Lack knows the industry from the inside.‚ …Simon Lack: Well, no, I did not find it difficult at all, although I could not have done it when I was at J.P. Morgan (Mr. Lack is now independent). I did not have the time to do the research first of all and of course, they would want to approve anything that I wrote. If it was controversial I am sure it would not have come through the process. But I never thought about writing the book when I was working there anyway.
Small, But Beautiful – Canadian Hedge Funds (PR)
Over the last five years, the assets of Canadian hedge funds grew from $12 billion to $30 billion. Given the times we are in, that’s a nice growth rate. Currently, 48 hedge funds and fund of funds are members of AIMA Canada, the Alternative Investment Management Association. While $30 billion is still small compared to other hedge fund centers, the industry has become quite diversified in terms of strategies, and many top service providers are active in the country. The hedge fund managers at this Opalesque Canada Roundtable make their point that they also deliver. For example, Donville Kent has outperformed the TSX Composite every year since launch in 2008; cumulative return since inception is a gain of 132% versus a loss of 1% for the TSX Composite.
New moves among Asian hedge fund teams (IPE)
More hedge fund moves to report, in an alternatives jobs market that has remained fairly quiet throughout the second and third quarter. Remi Colinmaire joined Alphadyne Asset Management in a volatility portfolio management role during the summer. Alphadyne was founded by CIO Philippe Khuong Huu and chief risk officer Bart Broadman. Colinmaire is an ex-Goldman Sachs equity derivatives trader who used to head index trading for that company in London. He joins Alphadyne from RSR Capital, where he was co-founder of that firm’s $50m volatility strategy, which is named Caerus Arbitrage Asia Fund. It was down 11.75% during 2011.
Betting on pain (NYPost)
The Apocalypse has not arrived — but that hasn’t stopped some of the country’s wealthiest investors from betting on it. The investors, mostly pensions funds, hedge funds of funds and deep-pocketed individuals that were burned during the financial meltdown in 2008, are jumping into these so-called Black Swan investments that carry promised returns of up to 1,000 percent — if another financial Armageddon strikes. The Cassandras of the hedge-fund world that are offering these funds — also called tail risk funds and often with a geographic focus — would suffer terribly in the absence of disaster.
Hedge Fund Lenders Eye Nine Entertainment Bid (FoxBusiness)
U.S. hedge funds owning more than 1 billion Australian dollars (US$1.02 billion) worth of Nine Entertainment Co.’s senior debt are considering a lender bid for the company as it gears up for an auction, the Australian Financial Review reported Friday. Nine Chairman Peter Bush told the company’s lenders that the debt-laden Australian media company may be put up for sale if an agreement wasn’t reached by early next week, according to the paper. Oaktree Capital Group LLC (NYSE:OAK) and Apollo Global Management are considering a bid as part of that process, the AFR reported, without saying where it got the information.
Is This Hedge Fund Manager Wrong About Apple? (WallStCheatSheet)
Hedge-fund manager Doug Kass says he is unimpressed by Apple Inc. (NASDAQ:AAPL) performance this year and feels the company may be losing its golden touch. Kass is concerned that the iPhone 5 launch and the reaction of most analysts to the device has not been as positive as previous Apple products have seen. “Apple is losing some mojo and mindshare,” Kass wrote in a memo titled “More Bruises on Apple” on Wednesday, according to The Wall Street Journal. “This [The iPhone 5] is the first product launch by Apple with no wow factor and much less cool than other products on the market such as Samsung Galaxy S III and HTC One X.”
Chinese investor eyeing opportunities in Downtown Jacksonville (BizJournals)
The CEO of a Chinese hedge fund looking for investment opportunities in Northeast Florida has an idea that could help revitalize Downtown Jacksonville: Creating a Chinatown in the urban core. Paul Porter, a sales associate with Watson Commercial Realty Inc., shared the story of a Chinese businessman’s interest in the region at a luncheon Thursday hosted by GrayRobinson PA that focused on Downtown Jacksonville.
Avenue Capital Cutting Employees (HedgeFund)
New York-based hedge fund Avenue Capital Group is reportedly laying off some of its workforce to improve the firm’s efficiency. Reuters reported that Avenue Capital is cutting 16 positions, which are mostly in its back-office and administration units. Two employees in the investment team are also being let go.
Asian billion-dollar club shrinks, Harcourt Investment Consulting appoints Claire Liou… (HedgeWeek)
Hong Kong and Singapore have suffered a reverse of fortunes as they compete with New York and London as major centres for the world’s biggest hedge funds. Referring to a survey produced by an industry publication, the Financial Times this week reported that the number of hedge fund groups managing more than USD1billion has fallen to 18, having stood at 21 six months ago. By contrast, New York has further strengthened its position as the hedge fund industry’s leading centre; its “billion dollar club” has grown from 139 to 153. London is pretty much unchanged, its number dropping by one to 56, with collective AUM holding steady at USD255billion. Total global hedge fund assets rose 4 per cent in the first half of 2012 to USD2.2trillion, roughly half of which came from net new inflows.
Dalton Vets Launch $200M Mortgage Hedge Fund (Finalternatives)
Todd Sherer and Christopher Gaughan, both vets of Dalton Investments, are now at the helm of their own firm: Illumination Asset Management. The Los Angeles-based IAM’s first fund, the Credit Opportunities Fund, will focus on residential mortgage-backed securities without U.S. government backing, a market worth an estimated $1 trillion. The vehicle launched this month with $205 million and continues strategies Sherer, IAM managing principal and CIO, ran at Dalton.
Former Goldman Traders To Launch Global Macro Fund (Finalternatives)
A pair of Goldman Sachs veterans are readying a global-macro fixed-income hedge fund, backed by Investcorp. Rishi Chadda and Cyrus Pouraghabagher’s Kingsguard Advisors will launch its maiden hedge fund next month. The strategy has been seeded with $50 million from Bahrain-based Investcorp, among the first bond-based global-macro funds backed by the firm. Investcorp will also provide risk-management, marketing and operational services to Kingsguard, Bloomberg News reports.
SEC Sues Former Chicago Hedge Fund Managers (Finalternatives)
The Securities and Exchange Commission has sued a husband-and-wife team, accusing them of ripping off investors in their hedge fund. Norman Goldstein and the appropriately-named Laurie Gatherum took at least $147,000 more than they were entitled to through excessive fees and capital withdrawals. While the Chicago couple’s GEI Financial Services returned $3.6 million to investors after losing their state license last year due to a number of violations, they still owe the rest, the SEC said.
Duke Energy nears milestone in Progress merger integration (BizJournals)
Duke Energy Corp. is on track to have all its employees in their post-merger positions by the end of the month, the Triangle Business Journal reports, citing a letter Duke Chief Executive Jim Rogers sent to the N.C. Utilities Commission this week. Charlotte-based Duke Energy Corp (NYSE:DUK) merged July 2 with Progress Energy Inc., and the integration of several large departments is complete, Rogers told regulators.
Hedge Fund Group Buys Disneyland Mall (HedgeCo)
Real estate Advisor Arcturus Group and $12.5 billion hedge fund Avenue Capital Management announced that a group they have formed has purchased a mall located at the main entrance to Disneyland Resort and the Anaheim Convention Center, the Anaheim GardenWalk. The terms of the GardenWalk acquisition, in which Arcturus and Avenue have been joined by Elliott Management, were not disclosed.
Hedge Fund Events: GAIM USA 2013 (HedgeCo)
GAIM USA 2013 announced the investor speakers for its upcoming conference, which runs from January 21-24, 2013 in Boca Raton, Florida. “These allocators hail from some of the top pension funds, endowments, foundations and funds of funds in the world,” said Daniel Strachman, Director of Research and Strategy for the GAIM Conference Series. “Managers attending this year’s conference will gain significant insights from these experts and discussions on new models in institutional investing and how to properly pitch investors.”
Why MetroPCS Is Truly in Play (NYTimes)
There are three fundamental things to know about the deal between MetroPCS and T-Mobile USA. First, this is really just an acquisition of MetroPCS by Deutsche Telekom. After the transaction is completed, Deutsche Telekom, the German telecommunications behemoth, will own 74 percent of the combined company, which will be renamed T-Mobile. MetroPCS’s public shareholders will own the rest.
JPMorgan Dealmaker Jimmy Lee Gets All the Best Lines (Observer)
Two giant JPMorgan profiles landed this week, and it was a familiar character who delivered some of the more memorable lines in each of them. James Bainbridge Lee Jr.—better, Jimmy—is the legendary deal maker this paper once described as “the maestro of the syndicated loan market, Wall Street’s most famous corporate bailout artist,” now the vice chairman for investment banking at JPMorgan. That position—and, we suppose, that he was willing to pick up the phone and go on record—made him a natural source for Vanity Fair’s profile of Jamie Dimon, in which Mr. Lee offers the first (and last?) word on the JPMorgan chief executive (“[He] has moral courage running through his veins”); and also serves as a catalyst for the tidbit VF used to hype the story—in the middle of the hubbub over the London Whale, Mr. Lee asked New England Patriots quarterback to tell Mr. Dimon “to hang in there.
Wet deal: Seal OKs, then KOs board pact (NYPost)
You win. Or maybe not. Hedge fund Clinton Group said troubled teen retailer Wet Seal agreed to give up four seats on its board — only to reverse course just hours later. The activist investor, which has been angling for control of the board, said it got a call from Wet Seal’s investment banker on Tuesday, saying the company was ready to concede the seats. According to Clinton, which gave its version of events in a regulatory filing yesterday, the banker said, “It appears you have won.” The banker — who told Clinton he was authorized to act on the company’s behalf — said the directors, including the chairman, were prepared to resign that day.
