Stark Investments will close three of its hedge funds, including its flagship, as its assets under management dwindle. The Wisconsin firm said a “meaningful reduction” in the assets of its Shepherd Investments International, Shepherd Guardian and Stark Investments funds led to the decision. Stark informed investors by letter on Tuesday, Pensions & Investments reports.
Citigroup Moves Trader Putcha To Help Internal Hedge Fund (Bloomberg)
Citigroup Inc. (C) has moved Ramakrishna Putcha, a former proprietary trader, into an internal hedge fund that makes bets with about $200 million of the firm’s money after the portfolio slid 14 percent last year. Putcha, 61, was named co-portfolio manager of a credit fund in the Citi Capital Advisors unit, or CCA, according to Danielle Romero-Apsilos, a spokeswoman for the New York-based lender. For now, Citigroup owns about 97 percent of the fund and bank employees own the rest, according to a person with direct knowledge of the operation.
Obama versus the Hedge Fund Industry (MarketOracle)
Most investors are aware that the 4-year cycle peak comes into play this year. What few realize is how both Washington and Wall Street are using this cycle as a fulcrum for gaining political as well as economic advantage. In this commentary we’ll look at how the hedge fund industry is manipulating certain key markets for political ends as much as financial gain, and how even the president has been forced to respond. It will quickly become apparent how the puerile and self-serving actions of the top hedge fund managers serves to create friction for everyone concerned. Hedge funds have come a long away in the 60+ years of the industry’s history. One byproduct of the industry’s influence is its growing political clout. Consider the cover of a recent issue of The New Republic. The cover shows President Obama dodging tomatoes being hurled at him from an unseen source. The headline reveals the perpetrators of this metaphorical act: angry hedge fund managers. According to the article, Obama has raised the ire of the hedge fund industry by his proposal to raise the top marginal tax rate and increase the 15% tax on capital gains.
Hedge Fund-Backed Charity ‘Stocks Up’ for Good Cause (HedgeFund)
While the general public may be pessimistic about the generosity of the hedge fund industry, eVestment|HFN has come across a philanthropic endeavor that suggests otherwise. Stacey Asher, founder of hedge fund consulting firm IMB Partners, held a launch party Thursday for her new charitable venture, Portfolios with Purpose, at Le Poisson Rouge in New York City.
Book Review: Hedge Fund Market Wizards, And The Series That Launched A Thousand Funds (SeekingAlpha)
I owe Jack Schwager. It was the original “Market Wizards,” stumbled across in the mid-1990s, that really opened my eyes to trading. I had previously discovered “the Investment Biker,” by Jim Rogers, and knew I wanted to forego a life in academia and pursue markets. William J. O Neil’s “How to Make Money in Stocks” then convinced me to intern at a stock brokerage (Raymond James) my last two college summers.
Book Review: The Little Book Of Hedge Funds (SeekingAlpha)
I have worked for a hedge fund, and I have many friends that work for hedge funds. I understand hedge funds well. The “Little Book” people at Wiley should indeed have done this book, but with a different author. Why? When there are significant areas of controversy around a topic, and you write a book as if there is no controversy, it means you haven’t done your homework.
Investors bemoan tax implications of ‘Obamacare’ (GreenwichTime)
There’s a new incubator in the clash between right and left over “Obamacare.” And it doesn’t have marble columns. From hedge fund row in Greenwich to the massive trading floors of Stamford to the country club set of Southport, wealth centers like Connecticut’s Gold Coast could now find themselves at the forefront of the national debate over the Affordable Care Act.
‘Octopus’ Review: Sam Israel, the Ponzi Schemer Who Got Duped (TheDailyBeast)
Bayou Hedge Fund founder Sam Israel, frantic to deliver the returns he promised to investors, was taken in by a crazy scheme involving the Rothschilds and a ‘secret market,’ Guy Lawson writes in ‘Octopus.’ If you dig movies about cons, like Catch Me If You Can, The Sting, and The Spanish Prisoner you will blow through Octopus, Guy Lawson’s deftly and enthusiastically told tale of Sam Israel and the Bayou hedge fund fraud. If you think you know all about Ponzi schemes and have had enough, you don’t know the whole story. The Israel caper is the best real-life scam story since Ivar Kreuger convinced post-World War I America he had loaned money to Europe’s broken governments in exchange for monopoly rights to sell matches on the continent.
Mithril Capital Raises $402 Million for Venture Fund (IndiaWest)
Venture capitalist and hedge fund investor Peter Thiel and his longtime investment partner Ajay Royan said June 19 they have co-founded San Francisco-based Mithril Capital Management, a growth-stage venture fund. The fund has raised $402 million to date and has a target of $1 billion, according to an SEC filing, reported peHUB, a global investment forum.
Japan Advisory Business Registration Revoked on Insider Trading (BusinessWeek)
Japan Advisory Ltd., a hedge-fund adviser, had its business registration revoked by the nation’s authorities and the securities watchdog recommended the company be fined for its involvement with insider trading of Nippon Sheet Glass Co. (5202) shares. The Securities and Exchange Surveillance Commission recommended Tokyo-based Japan Advisory pay a penalty of 370,000 yen ($4,655) for breaching insider trading rules related to a Nippon Sheet Glass share offering in 2010, according to a statement by the watchdog. The registration was suspended for breaching securities laws related to insider trading, the Kanto Local Finance Bureau said today in a statement.
Chicago Equity Partners hires Brian Portnoy as head of alternatives and strategic initiatives (HedgeWeek)
Chicago Equity Partners has hired Brian Portnoy as Managing Director and Head of Alternatives and Strategic Initiatives. In this newly formed role, Portnoy will report to the firm’s President, Patrick Lynch, and will help to lead the firm’s ongoing efforts in creating innovative solutions for the firm’s institutional clientele. The role will involve leveraging the firm’s internal equity and fixed income capabilities, as well as externally pursuing select partnerships. Previously, Portnoy served as Portfolio Manager and Director of Research at the Vestian Group, Associate Head of Hedge Fund Research at Mesirow Advanced Strategies, and Senior Analyst at Morningstar. He received his bachelor’s degree from the University of Michigan and masters and Ph.D. in international political economy from the University of Chicago. Portnoy also holds the Chartered Financial Analyst (CFA) designation.
German corporates outperform hedge funds in EURUSD (EuroMoney)
If you are looking for the near-term direction of the euro, you are better off asking a German toolmaker than a Mayfair hedge fund manager. That at least appears to be the message from Commerzbank data that suggest the predictive powers of German corporates in EURUSD outshine those of hedge funds and other currency managers. Commerzbank has surveyed the FX expectations of its main export-orientated corporate clients each month since February 2011 to produce its FX Compass Index. It simply measures the proportion of bulls minus the proportion of bears in a number of EUR crosses over three, six and 12-month horizons.
Billionaire Leon Cooperman’s Top 5 Dividend Picks (SeekingAlpha)
Leon Cooperman, a former general partner and Chairman/CEO of Goldman Sachs Asset Management, started his hedge fund, Omega Advisors, in 1991. He grew his fund’s assets under management to the current $5.6 billion. Omega Advisors is an equity long/short fund that applies a macro approach and fundamental valuation in investment decisions. The fund primarily invests in U.S. equities and hedging markets. Returning 12% in first quarter of 2012, Omega Advisors outperformed the average hedge fund by a margin of 7 percentage points.
Can Social Media Sharpen Quant Models? (AdvancedTrading)
Social media may be here to stay, but the chatter surrounding the closure of the Twitter-based hedge fund operated by Derwent Capital Markets shows the platform is in its infancy as a buy-side trading tool. Under normal circumstances, a hedge fund with a paltry $40 million in assets under management wouldn’t get a second look from the media or the investment community. But the world’s eyes were fixed on Derwent Capital’s Absolute Return fund from Day One, since the hedge fund’s strategy was built solely on an algorithm that used Twitter to predict the direction of the stock market.
Arctic Glacier to remain in Winnipeg after company’s sale (WinnipegFreePress)
H.I.G.N., the U.S. hedge fund buying the assets of Artcic Glacier, is paying $434.5 million for the Winnipeg ice company. The deal is expected to close July 31. As previously disclosed, on closing, all of the employees of Arctic Glacier will be offered employment and the company’s head office will remain in Winnipeg It is expected that the net proceeds of the sale will be sufficient to pay all the company’s remaining creditors and there will likely be enough for a distribution to shareholders.
George Soros Stocks with Highest Earnings Yield (NASDAQ)
Investors frequently use earnings yield as an important for estimating the worth of a stock. GuruFocus has developed a new Valuations feature that automatically calculates key metrics such as earnings yield for every stock in gurus’ portfolios – gurus such as George Soros . Soros, one of the best money managers of all time, gave up investing outsider investors’ money in 2011, but still manages his own family fortune. His extensive portfolio contains a smattering of high-earnings-yield stocks, but the ones he has are quite robust. Earnings yield is defined as the earnings per share for the trailing 12 months, divided by the current share price, i.e., the inverse of the P/E ratio. A slightly different ratio developed by investor Joel Greenblatt , and the one GuruFocus uses, is EBIT divided by enterprise value.
Anticipating the anticipation of others (MarketWatch)
Earlier this month I reached out to Marc Faber of the Gloom Boom and Doom Report after watching one of his recent interviews making the case that equities in Germany look relatively attractive given dividend yields in the over 3% range for many strong growing companies. I put together a column for him coming out next month expanding on this within the context of some of my own recent themes here on MarketWatch.
Financial ‘Armageddon’ Will Happen Despite EU Deal: Rogers (CNBC)
Even as markets cheered the agreement by European leaders to allow the direct use of the bloc’s bailout funds to recapitalize struggling banks, well-known investor Jim Rogers told CNBC the move does nothing to help solve the region’s biggest problem, which is its high debt levels. “Just because now you have a way to get them (the banks) to borrow even more money, this is not solving the problem, this is making the problem worse,” Rogers said on Friday.
Full House: $1 Million Hold ‘Em Ante (WSJ)
Months ago, Noah Schwartz approached several investors asking for help. By last week, the 28-year-old had raised $900,000. A professional poker player whose game, no-limit Texas hold’em, is struggling financially, Mr. Schwartz is one of a lucky few now who found a way to play the highest-stakes tournament ever attempted thanks to wealthy backers. Their success in drumming up interest in the game from hedge fund managers, real estate moguls and wealthy businessmen will be evident on Sunday when at least 24 professional poker players and 22 amateurs put up $1 million apiece for the chance to win millions in The Big One for One Drop tournament. The buy-in is four times the previous record for a poker tournament.
SEC Charges Peter Madoff With Fraud and False Statements to Regulators (SEC)
The Securities and Exchange Commission today charged Peter Madoff, the brother of Bernie Madoff, with committing fraud, making false statements to regulators, and falsifying books and records in order to create the false appearance of a functioning compliance program over Madoff’s fraudulent investment advisory operations. The SEC alleges that Peter Madoff, who served as Chief Compliance Officer and Senior Managing Director at Bernard L. Madoff Investment Securities LLC (BMIS) from 1969 to December 2008, created stacks of compliance documents setting out supposedly robust policies and procedures over BMIS’s investment advisory operations.
Hedge Fund Manager Wants Lehman Brokerage Trustee Cash Soon (FoxBusiness)
A hedge fund manager is demanding that the trustee unwinding the brokerage of Lehman Brothers Holdings Inc. use more than $3 billion in its reserves to quickly make payments to customer claimants, saying the trustee’s “aspirational date” to pay those claims keeps slipping “further and further into the future.” In a Friday morning filing with U.S. Bankruptcy Court in Manhattan, New York-based Elliott Management said the trustee unwinding the brokerage in accordance with the Securities Investor Protection Act, James W. Giddens, should make at least an initial distribution of the money in its reserves, even as it sorts out how much it owes to the Lehman parent and U.K. affiliate Lehman Brothers International Europe.
Bristol-Myers in $7 Billion Deal for Amylin (NYTimes)
Bristol-Myers Squibb agreed late on Friday to buy Amylin Pharmaceuticals, the maker of a promising new diabetes drug, in a complicated deal that is valued at about $7 billion. To help finance the transaction, Bristol-Myers is teaming up with AstraZeneca, which will pay about $3.4 billion in cash and will share in the profits from Amylin’s sales.
