Bill Hwang was once a star at Tiger Management, the gilded hedge fund empire run by the billionaire investor Julian Robertson. In 1995, as an ambitious young stock salesman, Mr. Hwang won Tiger’s annual award given to the person outside of the fund who had made the greatest contribution to its success. Tiger soon hired Mr. Hwang, and after he earned millions of dollars for himself and the fund trading in Asian markets, Mr. Robertson gave him the money to start Tiger Asia, which at its peak managed more than $5 billion.
Investors and hedge fund managers must come to a common understanding about what is possible (Opalesque)
According to Dr. Sassan Zaker, head of Alternative Investments at the CHF2bn Julius Baer Pension Fund, the key to investing is simplification. This summer at the GAIM conference, Zaker reportedly called for fundamental changes to the way institutional investors approach hedge fund manager selection and suggested pooling with other pension funds to create a fund of hedge funds. A lot of people are looking for new ways of defining risk and returns for various asset classes and hedge funds nowadays, he said during Terrapinn’s Hedge Funds World conference in Zurich last month.
Some hedge funds dump their bets against France (III)
Some hedge funds are calling it quits on one of their biggest trades of the year – shorting French government bonds. Earlier this year many in London’s hedge fund industry were lining up bets against the euro zone’s second-largest economy, reckoning the May election of President Francois Hollande, a socialist, would accelerate the country’s deteriorating economic outlook. But the trade has not worked out as planned. France’s long-term borrowing costs fell to a record low at auction last week as investors sought out safe havens. So some funds are now cutting their losses or changing tactics, for instance betting against French equities instead.
Asset Allocation 101 (ResourceInvestor)
There is no single answer to asset allocation, and it is every man for himself. One thing that I can tell you with certainty is how a hedge fund approaches the issue. The biggest hedge funds run thousands of positions across countries, industries, sectors, and currencies that are dynamically hedged on a real time basis. To monitor this they need a global 24-hour multilingual trading desk backed by the latest mainframe computers using custom designed, cutting edge software. They have gobs of bandwidth too, as a nanosecond can make the difference between winning and losing on a trade. You can put together something like this for, oh, maybe $100 million, give or take a few dozen million. It’s all enough to send an MIT math PhD’s head spinning.
Fraudster to hedgies: ‘Sorry’ (NYPost)
He’s sorry all right. Sam Israel, the hedge-fund manager convicted of running a $450 million Ponzi scheme who faked his own suicide to avoid the slammer, apologized for dragging the industry through the mud. “I am deeply ashamed to have disgraced you all by proxy,” Israel told roughly 150 members of the New York Hedge Fund Roundtable in a letter last week. “I am sorry to have tarnished the business I loved and lived for my entire life.”
Swiss Fund Moves, Swaps Rule Testimony, GDF (BusinessWeek)
Swiss hedge fund managers are considering relocating to neighboring Liechtenstein to sidestep tougher regulations being introduced in Switzerland and gain access to the European Union, PricewaterhouseCoopers LLP said. About 47 percent of 92 firms surveyed, including managers of hedge funds, private equity and real estate, would pick EU member Liechtenstein over being supervised by the Bern-based Swiss Financial Market Supervisory Authority, PwC said. The move would allow them earlier access to EU markets under a new regulatory regime for alternative investment managers.
Texas Pension Manager Paid $1 Million Trails Peers Who Make Less (BusinessWeek)
Britt Harris arrived at the Teacher Retirement System of Texas in 2006 from the world’s biggest hedge fund with a mandate to improve the pension’s performance. He also brought a Wall Street attitude about pay. Harris, the Texas fund’s chief investment officer, made $1 million last year in salary and bonuses, the most of any public pension employee in the 12 most populous U.S. states, according to data compiled by Bloomberg. Four other employees made at least $500,000, and the fund paid $9.7 million in bonuses in 2011, more than any in those states.
Star-Studded Concert to Benefit HF-Backed Charity (HedgeFund)
The Robin Hood Foundation, founded by hedge fund veteran Paul Tudor Jones in 1988, will be in the spotlight in a major way Wednesday night due to its efforts to help victims of Hurricane Sandy. The “12-12-12” concert featuring the likes of Bruce Springsteen, Paul McCartney and Alicia Keys will be held at Madison Square Garden in New York to raise funds for the foundation’s Sandy relief fund.
Jury Begins Deliberations in Insider Trial of Ex-Fund Managers Chiasson, Newman (WSJ)
A Manhattan federal jury began deciding the fate Wednesday evening of two former hedge-fund managers accused of making tens of millions of dollars in illegal trades based on corporate secrets about technology companies. Federal prosecutors have alleged that Anthony Chiasson, a co-founder of Level Global Investors, and Todd Newman, a former portfolio manager at Diamondback Capital Management LLC, another hedge fund, traded in Dell Inc., DELL -0.94% Nvidia Corp. NVDA -1.03% and other technology companies based on inside information they learned from a group of hedge-fund analysts who sought out and shared such secrets.
U.S. man pleads guilty to wire fraud in hedge fund scheme (Reuters)
A man who stole money from clients after convincing them he was a Harvard-trained hedge fund manager with more than $1 billion under management plead guilty on Wednesday to five counts of wire fraud, the U.S. Department of Justice said. Andrey Hicks pleaded guilty before U.S. Federal Judge Patti Saris in Boston, admitting that he had stolen $2.3 million from 10 people who believed he was investing the money into his firm, Locust Offshore Management.
Goldman Energy Research Head Greely Leaves for Bridgewater (Bloomberg)
David Greely, Goldman Sachs Group, Inc. (NYSE:GS)’s head of energy research, is joining Bridgewater Associates LP, according a spokeswoman for Bridgewater. Greely is joining the Westport, Connecticut-based employee- owned hedge fund sponsor as a portfolio manager, said the spokeswoman, who did not want to be identified. Leslie Shribman, a New York-based spokeswoman for Goldman Sachs, declined to comment.
To get cash back, some hedge fund investors will have to wait (Reuters)
Some investors in hedge funds will have to wait to have part of their investments returned in cash. Alden Global Capital’s Alden Global Distressed Opportunities Fund LP, known for snapping up stakes in media and publishing companies, told investors that redemption of a portion of their investments would be delayed. According to a letter reviewed by Reuters, Alden Global Capital has put some of its clients’ redemption requests into a sidepocket, effectively restricting immediate access to some of their money. “A portion of your withdrawal request for the August 31 withdrawal date will be placed into an Alternate Withdrawal Account,” said the letter, dated that day.
Harvard Endowment Hires Four Fund Managers in Equities Expansion (SFGate)
Harvard Management Co., which oversees the endowment of the world’s richest university with $30.7 billion, hired Sanjiv Bhatia and three other portfolio managers as it expands it stock markets team. Bhatia, who once headed the Asia office of Minnetonka, Minnesota-based hedge fund Deephaven Capital Management LLC, started this month as portfolio manager for emerging markets stocks, Harvard Management said today. The endowment also hired Al-Wadhah Al-Adawi, formerly at GLG Partners Inc., Amit Tiwari, who used to work at the Lakshmi Mittal family office, and Srdjan Tanjga, most recently at 40 North Industries LLC.
Regiment Capital hedge fund founder to step down in 2014 (PIOnline)
Tim Peterson, who founded the $7 billion Regiment Capital Advisors in 1999 after a decade at Harvard University’s endowment, plans to step down from day-to-day management of the hedge fund in mid-2014. Mr. Peterson will take on a mentoring role at the firm after he stops managing money, said Diana Pisciotta, a Regiment Capital spokeswoman. Regiment partners Mark Brostowski and Bill Heffron will continue to run the portfolios, while Thomas Sorbo, managing director, and Chris Kaster, CFO, will head the non-investment parts of the business.
Ex-Hedge Funder Sells $29.6 Million Co-Op In One Of NYC’s Most Famous Buildings (BusinessInsider)
Former hedge fund manager Bruce Barnes has sold his three-bedroom apartment at The Dakota, a storied apartment building on Manhattan’s Upper West Side where he is also the president of the co-op board, Curbed reports. The apartment was listed for $29.6 million in April, and had recently undergone a renovation to restore its 19th century details, according to the listing with Brown Harris Stevens.
Lloyds bet starts to pay off for hedge fund Lansdowne (III)
Lansdowne Partners, a European hedge fund which made millions betting against UK banks in the financial crisis, is starting to see the benefits of sticking with a big position in Lloyds Banking Group PLC (NYSE:LYG). Its flagship $7.5 billion (4.6 billion pounds) Developed Markets fund is up 14.21 percent this year, according to a letter sent to clients and obtained by Reuters, aided by a recovery in Lloyds shares. Last year Lansdowne’s holding in the lender cost it dearly, with the Developed Markets fund losing a fifth of its value, dragged down by a 60 percent slump in Lloyds’ share price.
Hedge Funds To Face “Industry Defining Issues” In 2013, According To Gravitas CEO Jayesh Punater (SacBee)
Rethinking the cloud, a heightened call for operational freedom and an arms race to scale will be industry-defining issues for the alternative asset management industry in 2013, according to Gravitas, a co-sourcing platform providing cloud technology, co-sourcing and risk support to the alternative investment industry. …”With the lessons learned from a string of major frauds, the ripple effects of an epic financial crisis and regulatory upheaval, the alternative investment industry finds itself on the threshold of a new era marked by the emergence of exciting new business models,” said Gravitas CEO Jayesh Punater. “More than ever, the hedge fund and private equity industries are embracing innovation across the value chain in order to build sustainable, increasingly global businesses.
Hedge Fund Numbers, Assets Hit Record (Finalternatives)
Hedge fund liquidations continued apace in the third quarter, but a growing industry was able to shrug it off as both the total number of hedge funds and their total assets hit records. Hedge funds globally manage $2.2 trillion, spread among 9,764 hedge funds and funds of hedge funds, according to Hedge Fund Research. While that total figure is down from the 2007 record of 10,096 total funds, that can be attributed entirely to the continuing decline of funds of funds. Another 74 funds of funds have closed their doors this year, leaving just 1,897, a level not seen since 2005 and down from the record 2,462 in 2007.
Forensic examination reveals surprising insights into the UK’s hedge fund industry (Opalesque)
A new hedge fund research consultancy Hedge Forensics, has published the first of two planned reports covering the UK hedge fund industry. The UK Hedge Fund Industry Report reveals new insights into the size of the industry and its impact on the UK economy, while the Top 200 Report lists the top 200 hedge fund firms, ranked on a combination of size, profitability, efficiency, balance sheet, pay and growth. Hedge Forensics’ Crosley Williams explains that these reports have been sourced primarily from UK Companies House filings, with the Hedge Forensics research team scouring over 1000 sets of company accounts to extract the information.
Super PACs spent more than $600K during homestretch of George Amedore-Cecilia Tkaczyk race in NY 46th Senate District (DailyFreeman)
Two super PACs backing 46th Senate District candidate Cecilia Tkaczyk spent more than $600,000 in the final two weeks of the campaign, state Board of Elections filings show. Friends of Democracy, a group bankrolled by a son of Democratic heavyweight George Soros, spent $274,372, mostly on TV ads through SKDKnickerbocker, a political consulting firm, the records show. Protect Our Democracy, a group controlled by the same-sex husband of Facebook co-founder Chris Hughes, spent $336,165. The Protect Our Democracy PAC’s biggest expense was paying for mailers at a cost of $182,688, followed by $107,000 on TV ads, again through SKDKnickerbocker.
Legg Mason (LM) to Acquire Hedge Fund Fund Manager Fauchier Partners; Sees non-Cash Charge (StreetInsider)
Legg Mason, Inc. (NYSE:LM) and affiliate Permal have today announced a definitive agreement to acquire Fauchier Partners, a leading European based manager of funds of hedge funds, from BNP Paribas Investment Partners. Fauchier Partners will be combined with Permal, one of the largest alternative asset managers in the world, to create an institutionally focused platform (the ‘Group’) with approximately $24 billion in assets under management, offices in nine locations around the world, and a global investment team based in New York, London, Paris and Singapore.
