Editor’s Note: Related tickers: BlackRock, Inc. (NYSE:BLK), Dell Inc. (NASDAQ:DELL), Credit Suisse Group AG (NYSE:CS), Loews Corporation (NYSE:L)
“Hedge funds are the antithesis of baseball,” says Julian Robertson, 80, billionaire founder of one of the most successful hedge funds ever, Tiger Management. “In baseball you can hit 40 home runs on a single-A-league team and never get paid a thing. But in a hedge fund you get paid on your batting average. So you go to the worst league you can find, where there’s the least competition.” This rule has guided Robertson’s investing strategy and is a big reason he has found some of his best ideas “buying into forgotten markets,” which he thinks are mostly in emerging countries today. Says Robertson, “I suppose if I were younger, I would be investing in Africa.“
Long Line to Short Australian Dollar, BlackRock Says (WSJ)
U.S. hedge fund managers are lining up to sell the already battered Australian dollar, BlackRock, Inc. (NYSE:BLK) Managing Director Michael Trudel said. Mr. Trudel told The Wall Street Journal that “there are some pretty prominent hedge fund managers back in the states that have been vocal on getting short the Australian dollar.” “We’ve rarely spoken to a person–either here or among strategists back in New York–that are long the Australian dollar,” said Mr. Trudel, who helps manage more than US$90 billion. New York-based BlackRock, Inc. (NYSE:BLK) had US$3.94 trillion in assets under management as of March 31.
Icahn a bit short (NYPost)
Dude, you should sell your PCs. A Dell Inc. (NASDAQ:DELL) special committee yesterday continued to back a buyout bid from CEO Michael Dell, saying a rival offer from Carl Icahn comes up a bit short — like $3.9 billion short. Icahn and his partner, Southeastern Asset Management, hope shareholders turn down the founder’s $13.65-a-share offer in favor of their plan for a $12-a-share dividend. But the board said Icahn had enough funding only to pay for a $9.35 dividend. The committee, in a dour, 42-page regulatory filing, said the negative trends in the company’s core PC markets make the Michael Dell bid, backed by Silver Lake Management, the only way to go.
November trial date set for ex-hedge fund manager (WSJ)
A judge on Wednesday set a November trial date for the insider trading trial of a former hedge fund portfolio manager for SAC Capital Advisors. Mathew Martoma is accused of earning $9 million in bonuses after persuading a medical professor to leak secret data from an Alzheimer’s disease trial between 2006 and 2008. U.S. District Judge Paul Gardephe set the Nov. 4 trial date during a hearing in federal court in Manhattan.
Say Hello To The New Hedge Fund: The Family Office (HereIsTheCity)
A string of billionaire hedge funders-including George Soros and Carl Icahn-have all transformed their hedge funds into family offices managing billions of dollars. For hundreds of years, family offices have been the financial equivalent of social registers-small, musty preserves of the rich that have little impact on the real world. But now, due to a giant regulatory loophole, family offices are becoming major players in financial markets. A string of billionaire hedge funders-including George Soros , Carl Icahn , and Stanley Druckenmiller-have all transformed their hedge funds into family offices managing billions of dollars. SAC, the giant hedge fund run by Steve Cohen, could become next in line, as the fund grapples with redemptions and government investigations.
Here’s What This $5 Billion Hedge Fund Has Been Buying (Fool)
Every quarter, many money managers have to disclose what they’ve bought and sold, via “13F” filings. Their latest moves can shine a bright light on smart stock picks. Today let’s look at Farallon Capital Management, founded by Thomas Steyer in 1986, and employing a bottom-up fundamental investing strategy. …The biggest new holdings are Virgin Media and Constellation Brands. Other new holdings of interest include Sunesis Pharmaceuticals (NASDAQ: SNSS ) , which has many investors hopeful about the phase 3 trials of its leukemia drug vosaroxin, which could be a blockbuster.
CQS plans equity hedge fund launch (Reuters)
Hedge fund firm CQS is planning to launch its first so-called long-short equities fund, a source familiar with the plans said, as it looks to seize on a recovery in investor demand for managers who bet on shares both rising and falling. London-based CQS, which manages $12 billion in assets, already invests in equities as part of its flagship Directional Opportunities fund, but is best known for playing in credit markets. The rally in stocks this year has encouraged hedge fund investors to return to funds betting on shares. According to a survey by Credit Suisse Group AG (NYSE:CS) published in March, long-short equity funds are the most sought-after hedge fund investments in 2013.
Hedge Fund Boss Preying on African-Americans Arrested (CNBC)
“Two things are infinite: the universe and human stupidity; and I’m not sure about the universe.” Those were the words that Fredrick Douglas Scott attached to most of the emails sent to the clients of his boutique investment banking and financial advisory firm, ACI Capital. What the clients didn’t realize was that the joke was on them, according to federal prosecutors. In addition to being one of Ebony magazine’s “Top 30 under 30” and claiming to be the youngest African-American to found a hedge fund, Fredrick Douglas Scott was a fraudster, according to the criminal complaint filed Monday in U.S. District Court for the Eastern District of New York. The complaint was unsealed Tuesday after Scott was arrested.
Even Hedge Fund Managers Get Suckered by Nigerian Prince Scams (Motherboard)
James Altucher is a hedge fund manager, entrepreneur, and self-help business book guru. He was a columnist for Financial Times, sold a startup called StockPickr for $10 million, and is currently the managing director of Formula Capital, an asset management firm. And he almost got suckered by one of the oldest investment scams in the book. In a hilariously hyperbolic Facebook post Altucher published today—it begins with the all caps disclaimer that his wife “CLAUDIA IS WORRIED I WILL BE KILLED FOR POSTING THIS” and immediately pivots to the self-aggrandizing “I stopped a $10 million robbery last week”—this titan of finance reveals that he is in fact less financially savvy than nearly anyone you’ve ever met.
Hedge Funds Are Hardly a Panacea (WSJ)
I fear that The Wall Street Journal’s opinion piece by hedge-fund specialist Bob Rice (“The Hedge-Fund Investment Puzzle,” June 1) conceals more than it reveals. Yes, as he writes, “it is plain common sense” to seek “downside protection, strategies that tend to zig when markets zag, and broader opportunities for profit.” But while the idea of market timing is indeed simple, many hedge fund managers have tried, but precious few have succeeded. Citing Benjamin Graham as the first “hedged fund” operator is an especially unfortunate example. “The trick,” Mr. Rice writes, was Graham’s “clever way to make money . . . whether it [the market] continued to rise, or started to fall.”
Tisch says hedge funds envy him amid insecurity over withdrawals (CTPost)
James Tisch, who invests in hedge funds to boost returns at Loews Corporation (NYSE:L), said he avoids managers with the largest pools of money and sleeps better at night knowing he doesn’t face the same prospect of client withdrawals. “We are very wary of managers that have $10 billion, $15 billion, $20 billion, because you have to wonder, how can they generate outsize returns with so much money,” Tisch, Loews’ chief executive officer, said Tuesday at the Bloomberg Hedge Funds Summit in New York. “We are constantly looking and probing and trying to find the new guys on the street, the people that aren’t loaded to the gills.”
Ethnic Violence Isn’t Stopping Legendary Investors From Betting On Myanmar (BusinessInsider)
One of the biggest emerging market stories in 2012 was Myanmar. Sanctions were rolled back and outsiders finally had the opportunity to invest in the resource-rich nation. Jefferies’ Sean Darby wrote that Myanmar will be the next major global trading hub. …Commodities guru Jim Rogers also continues to be optimistic on Myanmar. “We in the U.S. had numerous problems as we were rising toward becoming the greatest success of the 20th century: civil war, many Depressions in the 19th century, few human rights, little rule of law, collapse of 1907, etc, etc.,” he said.
The Richest Families In The World Are Staging A Quiet Rebellion Against Hedge Funds (BusinessInsider)
It’s no secret that since 2008, most hedge funds have lagged the S&P 500. Because of that, now the world’s richest families are starting to wonder if hedge funds are really worth their incredibly expensive price tag. And they’re starting to ask hedge fund managers some tough questions about it. Yesterday, Bloomberg hosted a conference called “The Hedge Funds Summit” for (you guessed it) hedge funds and the people that invest in them. Many of the attendees were from Family Offices — investment houses where the fortunes of the world’s wealthy are put to work.
Bruce Lipnick Invited to The Champions of Change Ceremony at White House (HedgeCo)
Hedge fund pioneer, Bruce H. Lipnick, also the Founder and CEO of Crowd Alliance, has been invited to attend the Champions of Change Program on June 4, 2013 at the Eisenhower Executive Office Building at the White House. “I am pleased to represent Crowd Alliance in joining the White House’s recognition of pioneers of Crowdfunding and to participate in the Champions of Change Program. We are a firm believer that the Jobs Act initiative will grow and provide much needed capital to small businesses leading to sustained job growth in the USA.” Lipnick said.
Struggling Commodity Funds Faced More Losses in May (InstitutionalInvestorsalpha)
Several high-profile trend-following and commodity hedge funds that have been struggling for the past year or two suffered big losses in May. Their woes look especially stark since the high-profile macro funds that use fundamental methods to make their investment decisions are faring pretty well this year. One of the losing funds is Man Group’s trend-following AHL Diversified fund, which lost a whopping 8.74 percent in May, putting it in the red for the year by 0.59 percent. Its investors are mindful that the fund lost money in both 2012 and 2011.
