Goldman Says CDO Insurer Knew Paulson Was Short (Finalternatives)
The insurer suing Paulson & Co. and Goldman Sachs Group, Inc. (NYSE:GS) over a collateralized debt obligation knew perfectly well that the hedge fund was shorting it, the bank said. In a court filing on Friday, Goldman said that ACA was aware that Paulson was shorting residential mortgage-backed securities at the time of the 2007 CDO, Abacus-2007-AC1. The bank added that ACA Financial Guaranty, the insurer, “cherry-picked” the evidence it offered in its lawsuit. Among the evidence left out was a May 2007 phone call between a Morgan Stanley bond trader and an ACA executive.
Hedge-fund investor William Ackman won’t realize his bet that Hong Kong will amend its 29-year-old peg to the dollar, said K.C. Chan, the city’s secretary for financial services and the treasury. The Hong Kong Monetary Authority has injected almost $14 billion since Oct. 19 as the local currency’s move to HK$7.75 obliged it to buy U.S. dollars in the foreign-exchange market. Ackman, the founder of New York-based Pershing Square Capital Management LP said Oct. 20 he was keeping his call contracts on the city’s currency and suggested Hong Kong revalue its dollar 30 percent higher versus the greenback to curb inflation.
Linedata Signs Magenta in Asia (WatersTechnology)
Buy-side technology vendor Linedata has announced that its Global Hedge product has been selected by Magenta Advisors PTE, a Singapore-based hedge fund. Magenta, which is taking a hosted package from Linedata, will be using the portfolio management and middle office modules in order to support the fund.
JURISDICTIONS SHOULD COMPETE, BUT IN A FAIR AND EQUITABLE MANNER (Opalesque)
The success of the Cayman fund regulations are based on the innovation, creativity and forethought of the local legal and structuring talents more than a decade ago. Very quickly, the Cayman hedge fund has become the default model for an entire industry, and investment managers as well as investors have been attracted by the jurisdiction because of its efficiency. By a significant margin, Cayman remains the leading hedge fund jurisdiction selected by existing and new launch managers.
Many Chinese onshore hedge funds look to set up offshore presence in Hong Kong (Opalesque)
Hedge fund managers from the Chinese mainland are looking to diversify their operations into Hong Kong, AsianInvestor.net reports, citing sources from South African firm Skybound Capital. The firm’s China Red fund of hedge funds (FoHF) invests in mainland-focused hedge funds strictly through offshore managers, who typically have an office in Hong Kong. The FoHF runs $20m in AuM and returned 6% in 2012, says AsianInvestor. About a year ago, China Red was merged with another of Skybound’s FoHF, the Dragonfly Asia Pacific Fund, which has a regional focus.
LindenGrove launches first hedge fund with NewAlpha seed capital (HedgeFundsReview)
LindenGrove Capital, the hedge fund manager established by former Nomura proprietary traders, has launched a global macro hedge fund and received capital from Paris-based seeder NewAlpha Asset Management. The management company was founded in 2009 by Borut Miklavcic, former global head of liquid markets proprietary trading at Nomura. LindenGrove Capital Master Fund was launched in December 2012 and in January 2013 received seed money from NewAlpha to take its assets under management to more than $50 million.
Quest’s Greyhound Asia Fund returns 6.9% in 2012 (Opalesque)
Asia ex-Japan hedge fund Greyhound Asia Fund, which is managed by Doug Barnett’s Quest Management’s Sergej Belozerov, posted positive gains of 6.9% in 2012 compared with the MSCI Asia ex-Japan Index which gained 19.4% last year. In a letter, Barnett said Greyhound achieved positive performance last year while holding mostly cash during the critical European uncertainties during the late spring, protecting shareholder capital. He added that 2012 was a very challenging year for the markets because of uncertainties from the U.S., EU and China.
Why Twitter and Facebook are stockpickers’ friends (Telegraph)
Does Twitter make a difference to trading? Can Facebook Inc (NASDAQ:FB) make you a fortune? A trading company is launching the first platform that will show you how the companies you are investing in are performing in social media terms. Derwent Capital Management (DCM), which used to run a hedge fund based on Twitter feeds, said it wanted to “create a community of better informed traders”.
SS&C GlobeOp Hedge Fund Index returns 10.32% (gross) in 2012; January net flows decline 2.58% over December (Opalesque)
The gross return of the GlobeOp Hedge Fund Performance Index for December 2012 measured 1.27% (10.32% YTD gross). Hedge fund flows as measured by the SS&C GlobeOp Capital Movement Index declined 2.58% in January 2013. Cumulatively, the SS&C GlobeOp Capital Movement Index for January 2013 stands at 146.93 points, a decrease of 2.58 points over December 2012. The Index has advanced 6.58 points over the past 12 months. The next publication date is February 13, 2013.
Hedge Fund Zais Plans $140 Million REIT IPO (Finalternatives)
Hedge fund Zais Group plans to list its real-estate investment trust in an initial public offering worth up to $140 million. Zais Financial Corp. filed to list on the New York Stock Exchange last week. The year-and-a-half old REIT is managed by Zais REIT Management, a division of Red Bank, N.J.-based Zais.
Hedge Fund Fraudster Hu To Be Sentenced (Finalternatives)
Hedge fund fraudster Albert Hu should spend almost 20 years in prison for ripping off investors of $6.5 million, prosecutors told the federal judge who will sentence him. Hu was convicted in July of wire fraud and faces up to 24 years in prison. By that measure, prosecutors are being lenient: They recommended U.S. District Judge Ronald Whyte send Hu away for 19½ years—the low end of federal sentencing guidelines.
Diluted draconian measures still contain some significant bite (eFinancialNews)
Its draconian proposals included hard leverage caps for managers, a freeze on all non-European Union managers accessing EU investors, strict liability on custodians for losses and very strict controls on delegation, where firms are a fund manager in theory but delegate all responsibilities to third parties. One hedge fund participant close to Brussels said: “It’s gone from being potentially fatal to very burdensome and fiddly.”
SAC may face civil fraud claims in US (ChinaDaily)
HSBC Holdings plc (NYSE:HBC)‘s private bank advised clients to not add money to Steven A. Cohen’s SAC Capital Advisors LP amid a US government insider-trading investigation into the hedge fund, according to a person with knowledge of the matter. The bank made the recommendation to some clients last month after SAC disclosed that regulators may file civil fraud claims against it, said the person, who asked not to be named because the information is private. SAC, based in Stamford, Connecticut, has told some employees and outside advisers that it expects investors to withdraw at least $1 billion, or 17 percent of the money it manages for outside clients, according to a person familiar with the discussions.
Hedge-Fund Leverage Rises to Most Since 2004 (BusinessWeek)
Hedge funds are borrowing more to buy equities just as loans by New York Stock Exchange brokers reach the highest in four years, signs of increasing confidence after professional investors trailed the market since 2008. Leverage among managers who speculate on rising and falling shares climbed to the highest level to start any year since at least 2004, according to data compiled by Morgan Stanley. Margin debt at NYSE firms rose in November to the most since February 2008, data from NYSE Euronext show.
Hedge fund buys extra help (FT)
Hedge fund company Bridgewater Associates has divided opinion with a “transformative” new approach to asset servicing, bringing in Northern Trust to duplicate and back up the work of its existing administrator BNY Mellon. The arrangement, which goes live in 2014 and has been hailed as unprecedented in the asset management industry, is a result of an “extensive two-year due diligence process to identify a firm with the financial stability, expertise, global scale, and technological infrastructure to support Bridgewater”, Northern Trust said in a statement.
Hedgies fall short but investors happy (FT)
The highly paid alchemists of the hedge fund industry once held out the promise of racy returns, or at the very least solid gains over a market cycle. But over the past five years these market maestros have, in aggregate, eked out a cumulative gain of just 7.8 per cent, according to Chicago-based Hedge Fund Research, well below many funds’ target annual return of 300-400 basis points above Libor.
Soros’ liberal think-tank releases ‘demands’ for gun control (BizPacReview)
As a result of Vice President Joe Biden’s task force to explore changes to gun laws, the Center for American Progress, an influential liberal think-tank funded by George Soros, has released 13 recommendations to “prevent gun violence in our nation.” Neera Tanden, president of the Center for American Progress, told Fox News Sunday that her group will “absolutely” mount a full-scale campaign to push for more gun control.
Hungary Says Forint Falling On Roubini Advice (WSJ)
Hungary’s economy ministry said Monday investors are speculating against the Hungarian forint on the advice of a financial analyst, and that is why it is weakening significantly against the euro. “Nouriel Roubini, one of the most influential financial analysts in the world, recommended to take a forint short position in an investment note,” the ministry said in a statement. “It seems that speculators have taken Mr. Roubini’s advice and started their attack on the forint,” the ministry said.
Transocean Says Icahn Acquired 1.6% of Shares, Seeks More (BusinessWeek)
Transocean LTD (NYSE:RIG), the world’s largest offshore rig contractor, said billionaire investor Carl Icahn and his affiliates have acquired a 1.56 percent stake in the company and are seeking to expand that to more than 3 percent. Transocean said Icahn notified the company that he’s seeking regulatory approval to potentially acquire shares worth more than $682.1 million, according to a statement yesterday on its website. The move came 10 days after Transocean said it agreed to pay $1.4 billion in penalties for its role in the worst U.S. maritime oil spill in the Gulf of Mexico in 2010. Transocean shares lost more than half their value in the months following the spill and remain 41 percent below their pre-spill price.
Hedge Funds Cut Bets to Six-Month Low Before Rally (Bloomberg)
Hedge funds cut bullish commodity wagers to the lowest since June before prices rallied to a two- month high on signs of a rebound in Chinese economic growth. Speculators trimmed net-long positions across 18 futures and options by 5.4 percent to 654,443 contracts in the week ended Jan. 8, the lowest since June 19, U.S. Commodity Futures Trading Commission data show. Wagers on a corn rally dropped for a fifth week before a reduction in U.S. stockpile data sparked the biggest jump in prices in five months. Gold holdings fell to the lowest since August as the metal snapped a six-week slump.
