Louis Moore Bacon plans to give back $2 billion, or 25 percent of his main hedge fund, to investors, saying it may be too big for him to achieve past returns as “liquidity and opportunities have become more constrained.” Bacon, who seeks to exploit macroeconomic trends such as changes in interest rates and currencies, returned a “disappointing” 0.35 percent in the first half and a “tolerable” 6 percent in the past year, according to letter sent today to clients. He has gained more than 18 percent a year since starting the Moore Global Investments fund in 1989.
Icahn sells MGM stake for $590m (eFinancialNews)
MGM Holdings, the parent of Metro-Goldwyn-Mayer, reached a deal on July 29 to pay activist investor Carl Icahn more than $590m for all his shares in the film studio, as the company makes preparations to go public, sources said. Icahn is understood to have sold his roughly 17.6 million shares in the company at $33.50 apiece, representing a premium to the about $27 level where the stock was trading in private markets on Tuesday morning.
Dan Loeb Is Looking To Cash In On The European Crisis (BusinessInsider)
Hedge fund manager Dan Loeb, who runs the $8.7 billion Third Point fund, just put out his second quarter letter to investors. The fund is not doing great – it was down 2.3 percent in the second quarter as the S&P 500 was down 2.8 percent, and it’s underperforming the S&P 500 by 5.6 percent year-to-date.
Equity hedge funds brave eurozone storm (FT)
It is hardly the most electrifying of hedge fund strategies: keep calm and carry on. But amid the sometimes violent, sentiment-driven movement of equity markets, there have been signs this year that for some hedge fund managers – those content to keep their heads down and soldier through the macro headwinds and unfolding eurozone debt crisis – money is there to be made in stocks.
The Hedge Fund Manager That Helped JP Morgan Unwind The Whale Trade Is Finally Talking About What Happened (BusinessInsider)
Now that the smoke is clearing, we’re finally getting a sense of what was happening as JP Morgan scrambled to unwind the $2 billion trading lost discovered in its London Chief Investment Office. CNBC’s Kate Kelly just reported that Andrew Feldstein, the head of Blue Mountain Capital— the hedge fund that bet against, and then helped JP Morgan unwind their trade, has spoken out about what happened.
Prosecutor: Florida cooperator linked to notorious hedge fund boss to testify at NY trial (WashingtonPost)
A Florida woman with long ties to a one-time billionaire hedge fund founder jailed on insider trading charges will testify at the New York trial of a San Francisco hedge fund operator. Prosecutor Christopher LaVigne (luh-VEEN) told a jury in an opening statement Tuesday that Roomy Khan will testify at the trial of Doug Whitman. Whitman is accused of taking tips from Khan and others to make nearly $1 million illegally since 2007. His attorney told jurors that Whitman did not buy or sell any stock based on insider information.
CICC to Launch New Fund With Brevan Howard (WSJ)
A Hong Kong-based asset management company under securities broker China International Capital Corp. said Wednesday it would team up with hedge fund giant Brevan Howard Capital Management to launch a new fund to attract investors in Asia. China International Capital Corp. Hong Kong Asset Management Ltd. and U.S.-based Brevan Howard plan to establish a fund of funds that will invest in a range of funds managed by Brevan Howard, the asset management company said in a statement.
Investment losses at hedge fund backed reinsurers show correlation risk (Artemis)
Correlation is a word that often crops up in articles here on Artemis and within the financial services industry as a whole. Correlation can be better understood as an interdependence, mutual relationship or connection between two or more things. In the risk and reinsurance markets we cover, we use the term correlation to describe how tightly linked investments in the insurance and reinsurance linked asset classes are with the wider financial markets and global economic climate. We regularly discuss the low level of correlation in the insurance-linked securities, catastrophe bond market and across the reinsurance-linked investment space.
South Korea To Ease Hedge Fund Restrictions (Finalternatives)
South Korea is moving to speed the development of its nascent hedge fund industry. The country got its first local hedge funds in December, more than two years after it technically legalized the asset class. Currently, there are 19 hedge funds managing 717.9 billion won (US$633 million), but the South Korean Financial Services Commission aims to change that.
Hedge Fund Pro Sees Value in Automakers (CNBC)
Looking for an early read into General Motors’ upcoming earnings report on Thursday? Then, check out Fiat’s release, said one hedge fund managing partner, who listed the Italian automaker among the most important emerging market producers right now. On Tuesday, Fiat reported that its net income dropped by 92 percent in the second quarter as its slumping European business offset its profitable Chrysler sales. But there is a bright spot, says Tim Seymour of Triogem Asset Management.
UK investor sues govt for messing around with Coal India (FirstPost)
After what looked like several empty threats, The Children Investment Managagement Fund (TCI), a UK-based hedge fund, has finally gone to court against Coal India. TCI today said it has filed a writ petition in the Delhi High Court seeking to quash the coal ministry’s order on lowering FSA coal prices. FSA coal is coal which is supplied to power producers under Fuel Supply Agreements (FSAs). In a letter dated 25 January 2012, then Coal Secretary Alok Perti asked CIL to revise the price hike the company had announced in December 2011. A statement by TCI Partner Oscar Veldhuijzen said that the “Delhi High Court was pleased to issue notice to both CIL and Union of India” on quashing this order by Perti.
Hedge Funds Care “Behind the Hedges” Raises $60,000 For Child Abuse Awareness (HedgeCo)
About 150 hedge fund professionals turned up for the Hedge Funds Care “Behind the Hedges” cocktail party in the Hamptons last weekend. The event raised more than $60,000 for the charity, which gives grants to nonprofits that prevent and treat child abuse. Silent-auction items raised $10,000 of the total. “Based on tonight’s experience I would say this is going to be the first of many Hamptons events.” Hedge Funds Care founder Rob Davis said. The event was organized by the charity’s NYC Young Professionals Committee.
Affiliated Managers Group Ups BlueMountain Stake (WSJ)
Affiliated Managers Group Inc. (AMG) said Tuesday it has “significantly” increased its investment in credit hedge fund BlueMountain Capital Management LLC. AMG declined to disclose terms of the recent transaction. While mum on the terms, AMG, which first invested in BlueMountain in 2007, said its interest in BlueMountain remains a minority stake. AMG has stakes in nearly 30 hedge-fund groups and other asset managers. The company has minority holdings in two other hedge funds: Clifford Asness’s quantitative fund AQR Capital Management, and activist hedge fund ValueAct Capital. Some traditional asset managers AMG owns, including Third Avenue Management and Genesis Management, also have alternative investment products.
Sir Richard Branson To Speak at Cayman Hedge Fund Summit (HedgeCo)
Institutional investors, hedge fund CEOs, economists and academics are meeting November 1-2, 2012 at the Ritz-Carlton in Grand Cayman to discuss the global alternative investment industry. The key theme of the Summit is ‘Innovation in Alternative Investments: Seeing What’s Next’. One of the keynote speakers is Sir Richard Branson, the founder of multi-billion company Virgin Group.
Barclays Under Fire For Fundraising With Hedge Fund Buddy Romney (HedgeCo)
UK newspaper The Telegraph reports that 11 Members of Parliament have demanded that Barclays Bank stop raising money for former hedge fund manager and Republican presidential hopeful Mitt Romney, and instead work to rebuild the public’s trust in banks following the Libor rate-setting scandal. …Former Barclays Bank co-head, Jerry del Missier, who resigned after the $455 million interest-rate rigging scandal, received a pay-off of almost $14 million, the Telegraph said.
Einhorn Says GM, Marvell Poised to Rebound (BusinessWeek)
Hedge-fund manager David Einhorn said General Motors Co. (GM) (GM) and Marvell Technology Group Ltd. (MRVL) (MRVL) are poised to rebound after declining since March 31. There is “further embedded value in some of the longs that have underperformed in the quarter, including General Motors and Marvell Technology,” Einhorn said today in a conference call discussing investments at Greenlight Capital Re Ltd. (GLRE) (GLRE), the Cayman Islands-based reinsurer where he is chairman. Both companies trade at low valuations relative to earnings and have “strong cash positions,” he said.
Which billionaire is passing on Heinz? (MarketWatch)
Trian Partners, managed by billionaire Nelson Peltz, held 603,250 shares of Heinz HNZ -0.25% as of March 31— its eleventh largest holding. On July 27, Peltz sold 500,000 shares of the famous ketchup company at $55.30 per share. As we reported earlier this month , Trian also trimmed some of its holdings of Family Dollar, selling about 600,000 shares at $70 after exercising its call options at $37 and $39 last year to purchase about 670,000 shares.
Lazard Shuts Korean Governance Fund (Finalternatives)
Lazard has shuttered an activist hedge fund focused on Korea, a vehicle that never lived up to its promise. The Korea Corporate Governance Fund debuted in 2006 with a US$600 million capacity; Lazard called it the first socially-responsible investment fund in South Korea. Despite a US$100 million investment from the California Public Employees Retirement System at the beginning of 2008, the fund never neared that capacity, topping out at about US$300 million just in time to lose more than 40% in 2008.
BlackRock Expands Top Management To Boost Active Returns (Bloomberg)
BlackRock Inc. (BLK), seeking to reverse withdrawals from active funds and boost assets as its acquisition spree ends, is expanding top leadership and shaking up its investment unit in the most sweeping overhaul since it became the world’s largest asset manager. BlackRock is adding eight executives to its global executive committee, led by Chief Executive Officer Laurence D. Fink, bringing the total to 21, according to an internal memo sent today to employees, a copy of which was obtained by Bloomberg News. The portfolio-management group headed by Rich Kushel will be replaced by five new investment units, and Kushel will become deputy chief operating officer, working under President Robert Kapito and COO Charles Hallac.
‘Big Short’ Author Lewis Asks Judge To Dismiss Libel Suit (Bloomberg)
Lawyers for Michael Lewis, the author of “Liar’s Poker” and “Moneyball,” asked a judge to dismiss a lawsuit by a bond manager who claimed Lewis’s book about subprime mortgage investing, “The Big Short,” defamed him. U.S. District Judge George Daniels heard arguments in Manhattan today on Lewis’s motion to dismiss the libel suit by Wing Chau and his company, Harding Advisory LLC, without trial.
Hamptons Art: Superman’s Hometown, Catwoman, Warhol Grave (Bloomberg)
In a darkened room, oversize images of bell jars pulsed and sparked with color. The works are part of Mike Kelley’s “Kandors” series (2000-2011), named after Superman’s birthplace and the capital of the fictional planet of Krypton. They are now on view in “Mike Kelley: 1954-2012” at the Watermill Center in Water Mill, New York, along with colorful Kandor posters, a white cardboard model of the futuristic metropolis and videos of Kelley’s performance pieces.
South Africa Court Orders Fund Of Basileus CEO Killer Wound Up (Bloomberg)
South Africa’s High Court approved an application for an investment fund run by Herman Pretorius, who shot the chief executive officer of Basileus Capital Ltd. dead before killing himself, to be wound up. An investor in the fund and lawyer, Morne Strydom, applied for the sequestration after the July 26 shooting, Strydom said by phone from Cape Town. Judge Barton Fourie granted the order today, he said.
Burger King’s revamped menu is a hit, profit rises (Reuters)
Burger King Worldwide Inc reported a better-than-expected quarterly profit on Wednesday as new items on the fast-food chain’s menu, and accompanying advertising campaigns, helped boost sales in the United States and Canada. The Miami-based chain, known for its “Whopper” hamburgers, has historically focused on young males, but it has recently attempted to broaden its appeal by adding fruit smoothies, salads, bacon ice cream sundaes and BBQ sandwiches to its menu.
No viable options for mortgage insurance unit for now: Genworth (Reuters)
Genworth Financial Inc (GNW.N) said that a sale or spin-off of its loss-making mortgage insurance unit were not viable options at this time, sending its shares down 8 percent. The company has been reviewing options for the unit, which has been struggling with soaring foreclosures and defaults after the housing bubble burst.
Herbalife Still Haunted By Ghost of David Einhorn (WSJ)
Hedge fund giant David Einhorn continues to affect shares of Herbalife, by not saying a word. Three months after his appearance on the company’s first-quarter conference call sent shares reeling, Einhorn’s no-show at today’s second-quarter call appeared to fuel a spike in shares.
Five Hedge Funds That Could Be Getting Whacked On The Knight Capital Implosion (BusinessInsider)
Shares of Knight Capital are getting spanked today on unconfirmed reports and trader chatter that an algo program at the market-maker caused some wild swings in a bunch of stocks this morning. Bloomberg TV reports that Knight Capital has told its clients to trade elsewhere.
SEC Recommends Improvements to Help Investors in Municipal Securities Market (SEC)
The Securities and Exchange Commission today issued a comprehensive report with recommendations to help improve the structure of the $3.7 trillion municipal securities market and enhance the disclosures provided to investors. The report is the culmination of an extensive review of the municipal securities market that was initiated by SEC Chairman Mary L. Schapiro in mid-2010 and led by SEC Commissioner Elisse B. Walter.
G2 FinTech forms tax management advisory board, advises managers to demand proof of performance from service providers (Opalesque)
G2 FinTech has formed a strategic advisory board comprised of leading members of the tax, asset management, financial software and academic communities that will provide guidance and counsel as G2 FinTech continues to develop software to address the complex tax issues facing the investment management space. The Advisory Board will meet on a regular basis to contribute meaningful advice and guidance related to the current and future work at G2 FinTech.
Apple’s Quiet Deal for AuthenTec (NYTimes)
Apple wants you to ask Siri questions. But Apple isn’t too keen on anyone asking questions about AuthenTec. Apple agreed to buy AuthenTec, the fingerprint sensor technology company, last week for $356 million in cash, or $8 a share. AuthenTec is a publicly traded company on the Nasdaq, and such announcements are typically accompanied by a news release as well as an analyst call with the buyer and the target.
Doshi, Ex-Tiger Management, Plans Similar Hedge Fund (Finalternatives)
Tiger Management cub Chase Coleman may soon have a litter of his own. A former manager at Coleman’s high-flying Tiger Global Management will launch his own fund, tentatively by the end of the year, Hedge Fund Alert reports. Amit Doshi, a managing editor and four-year veteran of the firm, left New York-based Tiger Global to prepare his new firm in April.
