FX Concepts’ Taylor Shorter on Dollar Than Euro on Fed’s Low-Rate Pledge (Bloomberg)
John Taylor, founder of currency- hedge fund FX Concepts LLC, said he’s betting against the dollar after Federal Reserve policy makers extended their pledge to keep interest rates close to zero and indicated they’re prepared to make additional asset purchases. “I am shorter the U.S. dollar than I am the euro,” Taylor said in an interview on Bloomberg Television’s “Inside Track” with Erik Schatzker. “We are going to have QE3 at some point and they stretched the time we are not going to have higher rates. That was a tremendous hit to the dollar. The dollar was doing fine until Bernanke came up with that idea.”
Kyle Bass Urges Texas Endowment Fund to Hold Gold Hedge as Assets Shrink (Bloomberg)
Kyle Bass, the Dallas hedge-fund manager, urged overseers of Texas (STOTX1)’s state university endowment, the second-largest U.S. college fund, to stick with a $1 billion investment in gold bullion even as the fund’s assets decline. “I’m against selling any of the gold,” Bass said today at a meeting of fund directors in Austin, citing the need for a hedge against mounting risks driven by government deficits in the U.S. and Europe. “As every day goes by, I see deflation in the things you own and inflation in the things you need.”
European Hedge Fund Stars Profit In Buoyant January (Reuters)
Star European hedge fund managers including Crispin Odey and Pierre Lagrange were among the top performers in an upbeat January for the industry, as the European Central Bank’s cash boost for battered banks fuelled a stock market rally. Shrugging off a disappointing 2011, in which the average hedge fund lost around 5 percent according to HFRI, managers profited from gains in most assets as investors bet a solution could be found for the euro zone’s deepening debt crisis.
Breakingviews: Gupta Trial Could Herald Financial ‘CSI Effect’ (Thomson Reuters)
Past success against insider traders might actually hurt not help the case against Rajat Gupta. U.S. prosecutors took down Galleon Group founder Raj Rajaratnam with wiretaps and nailed arbitrageur Ivan Boesky with a cooperating witness. But they may have neither to support their case against the former McKinsey boss and Goldman Sachs director. Circumstantial evidence could be enough to win, though juries also could just as easily be conditioned now to expect more. The case against Gupta isn’t weak. Phone records, for instance, show him calling Rajaratnam minutes before the convicted fraudster made a lucrative trade in Goldman shares. And expanded charges filed this week include suspicious conversations as far back as 2007.
Is The Insider-Trading Crackdown Behind Lousy Hedge Fund Returns? (Forbes)
In October 2009, federal agents arrested hedge fund manager Raj Rajaratnam on charges of insider trading. The arrest sent shock waves through Wall Street and in 2011 a jury convicted the former billionaire, who is now serving an 11-year jail sentence. Rajaratnam’s friend, Rajat Gupta, formerly a director of Goldman Sachs and a general corporate big shot, will go on trial in April on federal charges that he gave Rajaratnam valuable inside information on stocks.
9 Dividend Stocks Insiders Are Bullish About (Market Watch)
During the past few years, the financial markets have been hit by one crisis after another and central banks all over the world have been applying inflationary monetary policies to stimulate the market. For example, the Fed has committed to the ultra-low interest rates until the end of 2014. We do not like these expansionary policies and we are concerned that these policies will lead to inflation in the near future. Therefore, we have been recommending investors to play defensively by purchasing high dividend yielding stocks instead of long term Treasury bonds. One of the best ways of picking dividend stocks is to focus on what corporate insiders are bullish about. Insiders understand their companies much better than ordinary investors, and they sometimes have material non-public information. Insider purchaseson average beat the market over the next 12-month period.
Hedge Funds Add 1.34% To Start Year, Credit Suisse Index Shows (FINalternatives)
Hedge funds got off on the right foot—to an extent—in 2012, posting gains for January, according to a set of industry replication indices. The Credit Suisse Liquid Alternative Beta Index rose 1.34% last month. Of course, the LAB indices needed a good start less than other hedge fund benchmarks: The LAB index fell just 0.06% last year, which many indices showed was the second-worst year ever for hedge funds.
Bulldog Takes Mass. Fight To Supreme Court (FINalternatives)
Bulldog Investors has made good on its pledge to take its free-speech fight to the U.S. Supreme Court. The New Jersey hedge fund on Wednesday filed its petition for writ of certiorari with the country’s highest court, seeking to have a three-year old fine for providing information about itself to a non-accredited investor overturned. Bulldog and its outspoken founder, Philip Goldstein, had no luck on that front in the courts of Massachusetts, where the fine was levied by Secretary of the Commonwealth William Galvin.
Hedgies The New Kings Of London Real Estate (FINalternatives)
In terms of residential real-estate, the City of London is set to cede pride of place to Mayfair. West End financial professionals, many of them hedge fund managers, are set to outspend bankers from the City on houses this year for the first time. The hedgies and their neighbors are expected to drop £1.5 billion on houses in London costing more than £500,000. By contrast, City folks will spend just over £1 billion.
Cook County Pensions Hire Blackstone, Two Other Funds Of Funds (FINalternatives)
A pair of Chicago pension funds have jumped into hedge funds, hiring three funds of hedge funds to run some 9% of their assets. The Cook County Retirement Board picked Blackstone Alternative Asset Management, Diversified Global Asset Management and Rock Creek Group to serve as the first hedge fund managers for the two Cook County Annuity & Benefit Fund plans.
Admin. Viteos Expands To Singapore (FINalternatives)
Viteos Fund Services has opened an office in Singapore, its first base in the Asia-Pacific region outside of India. The hedge fund administrator has already won a client for the new office and is in talks with two others. Viteos has entrusted the new venture to Jay Moghe, formerly of Credit Suisse.
Colo. Pension Hires Coatue (FINalternatives)
Coatue Management is the first beneficiary of the Colorado Fire & Police Pension Association’s new hedge fund program. The long/short equity hedge fund became the first to win a mandate from the $3 billion pension’s new 20% hedge fund allocation. Coatue will get $34.5 million from the public plan, Pensions & Investments reports.
BREAKING NEWS: Boyer Allan To Shut (HFM Week)
Boyer Allan Investment Management, one of London’s longest-running hedge fund managers, is to shut, HFMWeek can confirm. The London- and Hong Kong-based emerging markets specialist, established in 1998, is returning money to outside investors and is in the process of spinning out its final vehicle, the Boyer Allan Emea Fund. Complete liquidation of the firm is expected to have been finalised “within weeks,” unnamed sources told HFMWeek.
US University And College FY2011 Hedge Fund Allocations Relatively Steady On-Year (HFM Week)
US college and university endowment allocations to hedge funds remained relatively consistent between FY2011 and the previous year, the latest Nacubo-Commonfund Study of Endowments (NCSE) report has revealed. Released at the end of January, it showed that of those allocating to alternatives, 38% opted for hedge funds in FY2011, compared with 41% a year earlier. Furthermore it showed smaller endowments had greater hedge fund exposure than the larger ones.
World’s Best Hedge Fund Actually A Pension? (Pension Pulse)
Mark Cobley of Financial News reports, Danish pension fund makes record 26% return: This impressive looking result was mostly due to a hedging strategy, which enabled it to keep ahead of substantial growth in its financial liabilities resulting from low interest rates. But ATP also took further risk-reducing steps in the middle of 2011, selling off assets such as equities, credit and commodities, which helped protect the fund against falling markets.
Battle Between the Hedge Fund Manager and Senator Continues (Value Walk)
Using hedge funds as one of his campaign strategies and frequently speaking out against them, Senator Charles E. Grassley, Republican of Iowa, usually doesn’t get a response from his targets. But this time, he may have recently rattled the wrong hornets’ nest by poking at Philip A. Falcone, head of Harbinger Capital Partners.
Fortress Group: January Was Likely Great for Most Hedge Funds (Value Walk)
Fortress fund manager Michael Novogratz talked about his fund’s investment strategy with Bloomberg TVs Erik Schatzker and Stephanie Ruhle. Novogratz talked about improving investing conditions for 2012, and said that “I bet January returns were great for most hedge funds because we’re seeing a breakdown of correlation.”
The Invisible Hands: Top Hedge Fund Traders On Bubbles, Crashes, And Real Money (Frank Voisin)
I read Steven Drobny’s The Invisible Hands shortly after reading Vincent Veneziani’s The Greatest Trades of All Time. While both books feature profiles of successful traders, readers of my review of Veneziani’s book will be pleased to know that this is where the similarities end. Drobny’s book is as well researched and thoughtful as Veneziani’s is superficial and poorly written, and despite the thematic similarities, Drobny holds the reader’s attention and achieves a level of authority without even disclosing the names or firms of nearly all of the traders profiled.
Friedberg’s Global Macro Fund Posts 40% For 2011 As Strategy Shifted To Respond To Market Volatility (Opalesque)
Friedberg Mercantile Group’s flagship fund, Friedberg Global-Macro Hedge Fund Ltd, was down 8.8% in Q4 but was up 40.9% overall for 2011. Comparatively, the Dow Jones Credit Suisse Global Macro index was up 0.38% in 2011. The Cayman-domiciled fund launched in 2001 is a traditional discretionary global macro fund managed by Albert Friedberg. It manages $964.2m and has returned 495% since inception. Niagara Capital Partners Ltd., based in Toronto, is the international sales agent – the fund is not available to U.S. investors.
Software Group Misys in Talks with Rival Temenos (CNBC)
Banking software firm Misys and Swiss rival Temenos are in talks about an all-share merger in response to weak demand from their customers, six months after another suitor dropped a bid for the British company. Investors have long speculated that Misys, which is 21.5 percent owned by hedge fund ValueAct Capital, would at some point find another partner, and the shares rose to a five-month high on Tuesday on bid rumours. But analysts on Friday were sceptical about the prospect of a tie-up with Temenos, suggesting a deal could be a quick fix to tackle weak demand rather than making long-term strategic sense.
GSAM Private Investment Fund Petershill Maintains Stake In Hedge Fund Manager Altana (Hedge Funds Review)
Hot Links: YOU’RE HIRED! (The Reformed Broker)
CWS Market Review – February 3, 2012 (Crossing Wall Street)
Morning News: February 3, 2012 (Crossing Wall Street)
10 Friday AM Reads (The Big Picture)
Blackstone Fund of Hedge Funds Business Has Net $6.4 Billion Inflow (Hedge Funds Review)
MARKET REPORT: Waste management group Shanks tipped for takeover (Daily Mail)
Frontrunning: February 3 (Zero Hedge)
Friday 7atSeven: bull market stages (Abnormal Returns)
HFMWeek Daily Snapshot – 3 February (HFM Week)
The Insider Trading Crackdown and Hedge Fund Returns, MF Global-Age, Strategic Value Partners Raises $918 Million And More (Reuters Hedge World)
