John Paulson, the hedge fund manager who made a fortune during the downturn but more recently blamed a bad 2012 performance on Europe, didn’t let that stop him giving friends holiday gifts from Thomas Pink of Jermyn Street, London. We’re told restaurateur Nello Balan was amazed when Paulson dropped off a dozen Pink shirts on Christmas Eve. It’s not all bad for Paulson — a witness tells us, “The two had a Champagne toast to the new year before Paulson hopped his jet with his wife, Jenny, and daughters to his mansion in Aspen that he recently purchased from Saudi Prince Bandar bin Sultan at a fire-sale price of $49 million, which included two properties that might have fetched $150 million in 2006.”
Is The Shorting Frenzy Behind Herbalife, The Alleged Pyramid Scheme, Over? (Forbes)
Another day, another hedge fund manager says he’s short Herbalife. Investors at large seem to have stopped caring much. Whitney Tilson, owner of T2 Partners, today revealed that he is short Herbalife. He’s only into the stock for a small amount, noting that shares are hard to borrow these days. Tilson confirmed this to me, but it was earlier reported by The Wall Street Journal. Less than a week ago, Pershing Square Capital’s Bill Ackman threw an elaborate presentation in New York in which he outlined why he has shorted the stock. Ackman called Herbalife a pyramid scheme, a type of fraud not dissimilar to Ponzi schemes…
Hedge funds’ disappointing decade for some (Opalesque)
The Economist is wondering why the Nobel Foundation plans to increase its investment in hedge funds. After all, the paper says in its year-end issue, hedge funds’ returns were mediocre in 2012. Furthermore, “the S&P 500 has now outperformed its hedge-fund rival for ten straight years, with the exception of 2008 when both fell sharply,” the article notes. “A simple-minded investment portfolio—60% of it in shares and the rest in sovereign bonds—has delivered returns of more than 90% over the past decade, compared with a meagre 17% after fees for hedge funds. As a group, the supposed sorcerers of the financial world have returned less than inflation. Gallingly, the profits passed on to their investors are almost certainly lower than the fees creamed off by the managers themselves.”
Profits dip at Odey (eFinancialNews)
Retained profits available for discretionary division among members were £26m for the 12 months to April 5, according to the group’s most recent accounts filed with Companies House. This figure was down from £33.4m a year previously. The firm suffered a drop of more than two thirds in performance fees from £8.5m to £2.5m over the period. An Odey spokesman confirmed the contents of the results. The most recent accounts reflect the calendar year of 2011, in which Crispin Odey’s flagship Odey European hedge fund lost 20.6%, according to investors. During 2011, a quarter of its long exposure was to financials, which was the sector worst hit by the sovereign debt crisis.
Canandaigua software firm names new CEO (RBJ)
ClearMomentum Inc., a Canandaigua-based provider of financial performance software and services, has named a new president and CEO. The company announced Wednesday that financial technology and hedge-fund industry veteran Dan Dykens will replace founder John Grabski, who will continue to serve as the company’s chairman. “After searching for nearly two years for a CEO candidate with deep domain expertise, leadership skills and a passion for customer service, we successfully engaged with one of the most talented CEOs in the industry,” Grabski said. “We could not be more pleased with having Dan on board to take ClearMomentum to the next level.”
Israel Hedge Funds Defy Iran Threat Multiplying in Tech Center (BusinessWeek)
Tal Keinan, an Israeli fund manager, was ready for the question he’s always asked when he met with investors in New York in October: Why put your money with a manager whose country Iran has threatened to obliterate. “We tell them ‘if the Iranians attack, the worst thing that can happen is you lose your money manager not your money,’” Keinan, chief executive officer of Tel Aviv-based KCPS & Company, which oversees $1 billion in assets, said in an interview on Oct. 14. “The notion is trade global markets with global assets and clients, but just do it from Israel because of the concentration of talent here.”
Hedge Fund Seeks Ouster of SandRidge Energy’s Board (NYTimes)
A New York hedge fund filed papers with federal securities regulators on Wednesday seeking to oust the board at SandRidge Energy Inc. (NYSE:SD), the latest salvo in its continuing campaign against the struggling Oklahoma City oil and gas company. The hedge fund, TPG-Axon Capital Management, which owns nearly 7 percent of SandRidge’s shares, submitted so-called consent solicitation documents with the Securities and Exchange Commission, offering up its own slate of directors to replace the current board.
Investigators Use Insiders’ Own Words To Convict Them (KUHF)
It was another busy year for federal authorities pursuing insider trading cases. Seventy-five people have now been charged in the last three years, and investigators say that success comes largely from their decision to attack insider trading the way they take down the Mafia and drug cartels — with tools such as wiretaps, informants and cooperators. The story behind how the government decided to go after insider trading as hard as it goes after the mob is really just a story about dead ends. “It was a product of sitting around the table and saying, ‘OK, nothing else has worked. Where do we go now?'” said FBI Agent David Chaves, sitting in the FBI’s New York field office in downtown Manhattan.
Morningstar MSCI Composite Hedge Fund Index up 0.5% (est.) in November (4.8% YTD) (Opalesque)
Morningstar Inc., a leading provider of independent investment research, reports preliminary hedge fund performance for November 2012 as well as estimated asset flows through October. The Morningstar MSCI Composite Hedge Fund Index, an asset-weighted composite of nearly 1,000 hedge funds in the Morningstar Hedge Fund database, rose 0.5% in November, and was up 4.8% year to date and 5.0% over the last 12 months.
Hedge Funder Builds $75M Home (DailyVoice)
The tiny hamlet of Hastings-on-Hudson will boast one of the largest and most valuable homes in the country when hedge fund founder David E. Shaw’s new residence is completed. Shaw’s Rivertowns residence, which is perched on a hill with a panoramic view of the Palisades overlooking the Hudson River, is being built on several prime properties along a stretch of Broadway just south of the Dobbs Ferry-Hastings line. The founder of D.E. Shaw & Co. had been planning the large house for several years.
Jim Cramer and Billionaire George Soros Agree on Apple Inc. (AAPL), AIG, and More (InsiderMonkey)
CNBC host Jim Cramer has a sizable following thanks to his years as a successful hedge fund manager and to his personal style. Investors can get a good idea of his stock picks from watching his show, but can also see which stocks his charitable trust has reported owning. We compared the stocks that the trust most recently reported owning to those disclosed on billionaire George Soros’s most recent 13F filing (see Soros’s stock picks); here are the five largest holdings by market value in Soros’s portfolio that the trust also owned: Soros initiated a position of over 15 million shares in American International Group, Inc. (NYSE:AIG) last quarter, making it the largest stock holding by market value in his 13F portfolio. Cramer’s trust also owned AIG, and in fact the insurer made our list of the most popular stocks among hedge funds for the third quarter…
Rajaratnam agrees to pay $1.5 million disgorgement in SEC case (Reuters)
U.S. hedge fund manager Raj Rajaratnam has agreed to pay disgorgement of about $1.5 million in a civil lawsuit filed by the Securities and Exchange Commission, and to waive his right to appeal the judgment, court papers showed. Rajaratnam would make the payment, representing the profits obtained by unlawful means, to the SEC within 90 days after the entry of the final judgment in court records, according to a filing.
Rejection of InterMune’s Drug Told Early to FDA Advisers (Bloomberg)
Three members of an independent advisory panel say they received as much as a day’s notice in May 2010 before U.S. regulators rejected a drug from InterMune, Inc. (NASDAQ:ITMN), now tied to an insider trading probe of SAC Capital Advisors LP. InterMune’s shares fell 5.4 percent the day before the company announced the rejection, at a time when the panel members knew the product was doomed. Others at the company and at the Food and Drug Administration were aware of the rejection too, and there’s no evidence the 11 panelists did anything wrong. The members reached by Bloomberg said they hadn’t been contacted by U.S. authorities and weren’t aware of a probe.
Math is anything but boring at NYC’s newest museum (WSJ)
Squealing schoolchildren ride a square-wheeled tricycle and a “Coaster Roller” that glides over plastic acorns. Downstairs, they fit monkey magnets together at the “Tessellation Station.” …The museum, nicknamed MoMath, opened Dec. 15 on two floors of an office building north of Manhattan’s Madison Square Park. It is the brainchild of executive director Glen Whitney, 42, a mathematician and former hedge fund analyst who helped raise $23.5 million for the 19,000-square-foot museum.
SEC Charges Research Analyst with Trading and Tipping Ahead of IBM-SPSS Merger (SEC)
The Securities and Exchange Commission today announced additional charges in an insider trading case against two brokers who traded on nonpublic information ahead of International Business Machines Corp. (NYSE:IBM)’s acquisition of SPSS Inc. In an amended complaint filed in federal court in Manhattan, the SEC is now charging research analyst Trent Martin, who was the brokers’ source of confidential information in an insider trading scheme that yielded more than $1 million in illicit profits.
