Hedge funds and private equity are thriving … thanks to pension funds (TheGuardian)
Five years after the collapse of Lehman Brothers and two years after the Occupy Wall Street protests erupted in Zuccotti Square, hedge funds and private equity funds are alive and well. This was not a foregone conclusion during the darkest days of fall 2008. Many critics were more than eager to write their obituaries, dismissing these alternative funds as simply a byproduct of the excesses that plagued an era now clearly drawing to an end. In the cold light of day, hedge funds and private equity funds would be revealed as the financial flim-flam artists that many doubters assumed them to be.
US Hedge Funds Dominating and Outpacing Peers (ai-CIO)
US-based hedge funds have outperformed the global benchmark so far this year, seeing an increase in assets of over $150 billion, according to Preqin. European funds, on the other hand, experienced a rise of only $33 billion in assets in 2013. The research found that US hedge funds recovered faster and grew stronger than other regions, managing over $508 billion in assets, or 65% of capital handled by hedge funds globally. Examining data from more than 2,700 US institutional investors and more than 3,200 fund managers, Preqin concluded that US hedge funds produced a net return of 13.54%, much higher than the global average return of 11.09%.
John Paulson goes long on Puerto Rico (FT)
John Paulson, the hedge fund manager who came to prominence betting against the US housing market before its crash, has taken another contrarian position, with an investment in Puerto Rico that he says could be the first of several in the island. The vote of confidence comes as the Puerto Rican government tries to reignite economic growth and stave off concerns about its creditworthiness. Paulson & Co took an 80 per cent stake in an upscale hotel and condominium complex outside the capital San Juan, in a bet that recent tax changes will lure rich financiers to the island.
Carl Icahn’s Bet On ‘Grand Theft Auto V’ Paying Off As Sales Top $1 Billion (Forbes)
Like many of America’s teens and twenty-somethings, legendary corporate raider Carl Icahn has been anxiously awaiting the release of Grand Theft Auto V. He may never buy an actual copy of the video game, and he likely doesn’t spend a whole lot of time on an Xbox 360, but few stand to gain more from the highly anticipated release last Tuesday from Rockstar Games than the corporate agitator and billionaire investing savant, who has a 12.6% stake in parent company Take-Two Interactive Software, Inc. (NASDAQ:TTWO) +1.35%.
Nouriel Roubini: it’s time to buy equities (AFR)
Nouriel Roubini, the New York University economics professor whose bearish view of the world economy has earned him the nickname Dr Doom, says investors should focus on equities as tapering of quantitative easing in the US is bad news for bonds and commodities. ”You probably want to be underweight in bonds, and overweight in equities, mainly in the US,” Professor Roubini said at IndexUniverse’s Inside Commodities conference. “Higher interest rates will be a negative for commodities prices.” He said the US is coming out of recession and bringing the world with it, but commodities would not recover in the short term, IndexUniverse.com reported.
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