Hedge Fund Manager Kyle Bass Bets on a J.C. Penney Stabilization (InstitutionalInvestor)
Expectations for outsize gains on the downtrodden shares of J.C. Penney Company, Inc. (NYSE:JCP) purchased by major hedge fund firms have deflated like a punctured balloon. In a September 19 interview with Institutional Investor , Kyle Bass, founder and principal of Dallas-based Hayman Capital Management, one of the hedge fund firms holding J.C. Penney equity, said, “We’re not investing in a turnaround. We’re investing in a stabilization.” Hayman has also taken a position in J.C. Penney’s debt, selling credit default swaps written against the company’s five-year bonds.
SAC’s Cohen faces $1.4B fine (NYPost)
Billionaire hedge-fund manager Steven Cohen could get off easy. The man who ran what prosecutors this summer called “a magnet for market cheaters’’ — allegedly the biggest insider-trading ring ever — could end up paying just 15 percent of his personal fortune to settle criminal charges against his SAC Capital hedge-fund firm. Cohen and the government have a tentative deal that would force his firm to pay a fine between $1.2 billion to $1.4 billion, according to the Wall Street Journal, which first reported on the tentative deal.
Hedge funders couldn’t be happier about this politician (CNBC)
A new senator is coming to Washington, and hedge fund managers couldn’t be more excited. Democrat Cory Booker beat Republican challenger Steve Lonegan in a special election this week to represent New Jersey in the U.S. Senate. Booker, now the mayor of Newark, has received financial support from some of the biggest names in investing. Backers include Seth Klarman of Baupost Group, Julian Robertson of Tiger Management, retired hedge fund pioneer Michael Steinhardt, Bill Ackman of Pershing Square Capital Management, John Griffin of Blue Ridge Capital, David Greenspan of Slate Path Capital and Rick Gerson of Falcon Edge Capital.
Rhode Island Public Pension Reform: Wall Street’s License to Steal (Forbes)
Two years ago, Rhode Island’s state pension fund fell victim to a Wall Street coup. It happened when Gina Raimondo, a venture capital manager with an uncertain investment track record of only a few years—a principal in a firm that had been hired by the state to manage a paltry $5 million in pension assets—got herself elected as the General Treasurer of the State of Rhode Island with the financial backing of out-of-state hedge fund managers. Raimondo’s new role endowed her with responsibility for overseeing the state’s entire $7 billion in pension assets.
Hedge Funds Seek to Trade in Comfort as Bankruptcy Inside (BusinessWeek)
Hedge funds that invest in bankrupt companies are demanding protection from insider-trading lawsuits before agreeing to take part in restructuring talks — a reaction by the industry’s top performers to an obscure court decision involving the 2008 collapse of Washington Mutual Inc. (WAMUQ:US) The ruling by a Delaware federal judge let shareholders pursue allegations that four hedge funds involved in the bankruptcy traded on inside information about talks between WaMu, JPMorgan Chase & Co (NYSE:JPM) and the Federal Deposit Insurance Corp.
Hedge fund Managers making significant investments to comply with regulatory changes, says survey (HedgeWeek)
A global survey of hedge fund managers reveals that they are making significant investments in their firms’ infrastructure to comply with new regulatory requirements. According to The Cost of Compliance , a new report produced by KPMG International, the Alternative Investment Management Association (AIMA) and the Managed Funds Association (MFA), the average spend on compliance was at least (US)USD700,000 for small fund managers, USD6 million for medium-size fund managers, and USD14 million for large fund managers.
SAC moving closer to settlement: CNBC’s Kelly (CNBC)
The Hedge Fund Formula For Philanthropy (HuffingtonPost)
The financial crash posed a series of questions about capitalism, many of which have not been adequately answered. Most significantly, a majority of people now expect companies, and especially those in financial services, to have a purpose beyond simply making money. They need to articulate their role in society, it’s not enough simply to be the tendons of Adam Smith’s invisible hand. Nowhere is this more necessary than the hedge fund sector, which has in the past often been happy for most people to remain in the dark about what it does and why.
‘Forensic investigation’ financed by union blasts Raimondo’s handling of R.I. pension fund (ProvidenceJournal)
In a scathing report commissioned by the largest state employees union, national financial industry critic Edward “Ted” Siedle accuses Gen. Treas. Gina Raimondo of selling out Rhode Island’s public workers and retirees to create an “opportunity to enrich herself and her hedge fund backers.” Siedle titled the report, unveiled Thursday afternoon at the Charles Street headquarters of Rhode Island Council 94, American Federation of State, County and Municipal Employees, “Rhode Island Public Pension Reform: Wall Street’s License to Steal.”
Complaint says hedge fund managers bilked investors (OrlandoSentinel)
When their brokerage statements arrived, the wealthy investors thought their holdings were going gangbusters with profits. Soon, they ponied up another $4 million for the Orlando-based hedge funds managed by their brokers. The problem? It was all a mirage. They had actually lost millions of dollars already; and only a fraction of their holdings were left, regulators say. Now officials at an Altamonte Springs-based stock brokerage face allegations of misconduct stemming from the $23 million hedge-fund operation – much of it involving penny stocks — that used falsified account statements to bilk clients, according to a regulatory complaint.
GLG Said to Start Global Stock Fund Based on European Strategy (Businessweek)
GLG Partners Inc., the investment firm acquired by Man Group Plc (EMG) in 2010, has started a hedge fund modeled after its flagship European equity pool that will trade the stocks of global companies, according to three people with knowledge of the matter. The fund started trading this month and is overseen by Pierre Lagrange, Simon Savage and Darren Hodges, who manage the London-based firm’s $3 billion European Long-Short Fund, said the people, who asked not to be identified because it hasn’t been announced publicly. GLG plans to hire traders and analysts with experience investing in U.S. and Asian companies to work on the fund, said one of the people.
What Bond Guru Jeffrey Gundlach Thinks About The Fed & The US Economy (InsiderMonkey)
Jeffrey Gundlach, Fed, bonds: Jeffrey Gundlach is the founder of the Double Line investment firm, and Institutional Investor Magazine has called him the Money Manager of the Year in the past. Tracking the activity of Gundlach and following his ideas and suggestions is important, since he represents a notorious figure in the investment universe. After yesterday when Warren Buffett spoke about Apple and J.C. Penney, today, on CNBC, Gundlach shared his opinion regarding the U.S. credit situation and the Fed’s corresponding policies.
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