One year ago Assets at Marc Lasry’s Avenue Capital Group dipped to $12.3 billion by midyear 2011, from $18 billion just six months earlier, as the firm had been liquidating a private equity vehicle launched in 2007. The firm’s capital base has held steady since then, sliding to $12.2 billion at the start of 2012 and landing at $12.4 billion in the upcoming Billion Dollar Club survey for midyear. Its figure next year is likely be higher; Avenue raised nearly $3 billion this summer for a new European distressed fund. Lasry said in July that he was buying up debt on the Continent because the risk premium was so high.
Bill Gross’s Bond Fund Has Acquired $9.3 Billion in New Cash This Year (WSJ)
The world’s biggest bond fund, run by Bill Gross, took in $1.3 billion in new cash in August, lifting the total inflow for the year to $9.3 billion. Investors flocked to the $270 billion Pimco Total Return Fund (PTTRX) as Mr. Gross’s fund has churned out a return that has been more than twice the gain on the benchmark index so far this year.
Hartford To Sell Retirement Plans For $400 Million (Bloomberg)
Hartford Financial Services Group Inc. (HIG) agreed to sell a retirement-plans business for $400 million after billionaire investor John Paulson pressured the insurer to improve results. The sale to Massachusetts Mutual Life Insurance Co. may be completed by year-end, Hartford said today in a statement. The deal, structured as a reinsurance transaction, will boost capital by $600 million and won’t affect financial results under generally accepted accounting principles, the Hartford, Connecticut-based insurer said.
Brummer launches longer-term hedge fund (FT)
Stockholm-based Brummer & Partners is preparing one of the largest new European hedge fund launches of 2012 with a vehicle which will demand longer-term monetary commitments from investors in order to overcome current volatile trading conditions. The fund, named Carve, will require investors to commit to locking up their money for a minimum of a year, preferably three – cutting against the push for ever more liquid terms from hedge fund investors that has come to dominate the industry since 2008.
New Hedge-Fund Ad Game’s Loose Verification Rules (Barrons)
A vote last week at the Securities and Exchange Commission cleared the decks for hedge funds and other privately offered investment vehicles to advertise to the public. But combing the airwaves and papering billboards for new clients also means screening the new folks to make sure they’re “accredited” investors. How to do that, exactly? It’s one of those important details that apparently is yet to be ironed out. Law firm Bingham McCutchen LLP notes in a legal alert that the proposed rule requires the issuer to take “reasonable steps” to verify that buyers are accredited, but that “the SEC expressly declined to propose specific methods of verification that it would deem reasonable,” write authors Richard A. Goldman,Miriam S. Gross and Caroline L. Harrington.
Where’s the harm in hedge fund advertising? (InvestmentNews)
Despite all the noise and complaining, I’m having a hard time recognizing the real downside of allowing advertising by certain private investments like hedge funds. It is completely understandable – and even predictable – that the Investment Company Institute would be protesting last week’s proposed ruling by the Securities and Exchange Commission.
Scarsdale woman sues hedge-fund executive husband, alleging he hid assets from her (Lohud)
The estranged wife of a hedge fund executive is suing her husband in federal court after she says he hid assets from her in the Cayman Islands and engaged in a wide-ranging fraud to destroy a financial services company. Elizabeth Bingham-Perry, of Scarsdale, married Jeffrey R. Perry in 1989, before he made at least $40 million on Wall Street as hedge fund executive, most recently with Third Point LLC, which is controlled by the billionaire Daniel S. Loeb, according to the suit.
SEC Charges California Man for Illegal Tips to Hedge Fund Manager (LAHT)
The Securities and Exchange Commission charged on Tuesday a California man with illegally tipping a hedge fund manager with inside information about Nvidia Corporation’s quarterly earnings that he learned from his friend who worked at the company. The SEC alleges that Hyung Lim of Los Altos, Calif., received $15,000 and stock tips about a pending corporate acquisition for regularly providing a fellow poker player, Danny Kuo, with nonpublic details ahead of Nvidia’s quarterly earnings announcements.
Study: Institutional Trash is Hedge Fund Treasure (ai-CIO)
Hedge funds are buying what institutional investors are selling, according to new research into major public equity trades. A recent whitepaper asserts that when a hedge fund picks up more than 5% ownership in a certain stock, it’s usually because a pension or mutual fund has unloaded its holdings. Nickolay Gantchev and Pab Jotikasthira, both finance professors at the University of North Carolina in Chapel Hill, analyzed scores of trading data from major hedge fund acquisitions and high frequency trades by non-hedge fund institutions.
Hedge fund boss Mitt Romney launches new hostile takeover (SocialistWorker)
Mitt Romney is now the US Republican party’s official nominee to take on Obama in the presidential election. But just who is Mitt Romney anyway? Well, he’s just an ordinary all-American down-home rootin-tootin apple-pie hedge fund vulture with a fortune of £150 million. Willard Mitt Romney, to give him his full name, made his cash from Bain Capital. Bain specialises in buying companies using “leverage”—debt—and then making the firms pay its interest.
Former Fidelity colleagues reunite at hedge fund boutique (eFinancialNews)
Jonathan Relph, who was the number-one rated analyst in construction and building materials in Thompson Extel’s 2007 survey of the sector, joined Pensato Capital on Monday as an investment analyst, the firm confirmed. Relph worked as an analyst at Fidelity between 2005 and 2009. He then spent two years at Citadel Investment Group between 2009 and 2011, where he was a basic materials analyst on the Citadel Global Equities Market Neutral Hedge Fund, according to his LinkedIn profile.
Och-Ziff Gains as Pension Funds Rush To Hedge Funds (ValueWalk)
Back in the heady days of 2009, when America was beginning to come to terms with the financial crisis and the dark mathematics used by some of the finance world’s most lucrative practitioners, the New York Times published an article entitled “Public Pension Managers Rethink Hedge Fund Ties.” The article discussed the losses that had damaged many American pension funds, and detailed the reactions to them. Many in the pension management world were leaving the hedge fund world behind. It was too unstable, and too prone to large losses. That was probably an unfair assessment. In the meltdown it was nigh impossible to find an escape route unfurnished with loss.
Lisa Marie Falcone, wife of embattled hedge fund manager, crashes car in Hamptons, charged with impaired driving (NYDailyNews)
The wife of a well-known Manhattan hedge fund manager under investigation by the feds was tipsy and on prescription drugs when she crashed her car in the Hamptons, police said Tuesday. Lisa Maria Falcone, 48, collided with another vehicle Saturday afternoon at Montauk Highway and Hayground Road in Bridgehampton, police said. “Upon investigation it was determined that she was under the influence of alcohol and prescription drugs,” Southampton Town Police said in a statement.
BofAML: Hedge Funds Up 0.17% (Finalternatives)
Hedge funds were up 0.17% month-to-date as of August 29, according to the Bank of America Merrill Lynch investable hedge fund composite index. The best-performing strategies were event-driven and equity long/short, up 0.87% and 0.76%, respectively during the monitored period. CTAs trailed the pack, according to the latest BofAML Hedge Fund Monitor, losing 1.44%.
Most Influential 50 In 2012 Shows Turmoil: Bloomberg Markets (Bloomberg)
The ability to move markets or shape ideas and policies. The clout to affect the price of a security or the structure of a deal. These are the attributes that define the people who hold sway in the world of finance — those who make up the second annual 50 Most Influential list in the October issue of Bloomberg Markets magazine. To find this year’s 50, we drew on the reporting and expertise of Bloomberg News journalists in 150 bureaus around the globe. The chances of making the list go up if someone finishes at the top of the rankings of hedge-fund managers, economists or investment bankers that Bloomberg Markets publishes during the year.
Where Hedge Funds Are Allocating Their Investments (iStockAnalyst)
Broadly, hedge funds have mostly trailed their market benchmarks; however, investors may find interest in tracking changes in positions and sectors for the hedge fund group. Investors should keep in mind that hedge fund positions are reported once a quarter and the report can be as late as 45 days following a quarter. Consequently, a fund’s report may not be reflective of the fund’s current allocations. A recent Factset report notes changes in hedge fund positions and sector allocations in the second quarter. Highlights from the report: The fifty largest hedge funds increased their equity exposure by 3% and forty-five of the fifty managers showed an increase in equity assets in Q2 2012.
Billionaire George Soros’s 4 New Picks Paying Dividends (SeekingAlpha)
George Soros is one of the world’s most renowned investors and financiers of all time. He founded his investment firm Soros Fund Management in 1969, which served as advisor to the Quantum Group of Funds. The firm is known as one of the pioneering macro hedge funds. It has been recognized as one of the most successful hedge funds in history, averaging total returns of over 20% per year over the past four decades. Last year, the fund closed doors to outside money and returned about $1 billion in the process to transition into a family office due to increased regulatory scrutiny. Currently, the fund has about $25 billion in assets under management.
VIXH: Next-Generation Or A Me-Too ETF? (IndexUniverse)
My colleagues recently provided an overview of the new fund. Today I want to underscore a few key points and then look at performance. First, the First Trust CBOE S&P 500 Tail Hedge Fund (NYSEArca: VIXH) is emphatically not a short-term, high-octane volatility product like the iPath S&P 500 VIX Short-Term Futures ETN (NYSEArca: VXX). Instead, VIXH aims to deliver one-stop shopping for a basket of U.S. stocks that also includes some protection against major downside risk.
The fear bubble (Macleans)
Earlier this month Louis Moore Bacon, the head of New York hedge fund Moore Capital Management, wrote to his investors offering them a $2-billion refund. Bacon had made investors a fortune exploiting macroeconomic trends such as interest-rate and currency movements. But these days, he complained, the markets had become far too manipulated by fear for Moore Capital to promise the kind of double-digit returns its investors had come to expect.
Schroders boosts Multi Asset Investment team (ProfessionalPensions)
Schroders has announced two appointments to its multi-asset investment team. Matthew Joyce and Jingjing Cui join a 90-strong division as senior analysts, in a move that expands Schroders current provision. Joyce will work as research analyst to portfolio manager Aymeric Forest within the multi-asset team after building ten years of hedge fund and boutique asset management experience. His previous roles include European equities analyst at Occam Asset Management and Paragon Global Opportunities Hedge Fund analyst at Polar Capital LLP.
GlenRock Global Partners Down 11% Year to Date (ValueWalk)
Glenrock Global Partners equity hedge fund reports a 5.2% loss in the second quarter of 2012. Overall in the second quarter, the fund gained profits on the short side from most of its investments in Asia except Japan. The winners on short positions were in the sector of apparels, electronics and recreational equipment. On the long side, US food companies came at the top while Japanese motorcycle manufacturers, airport management and US real-estate, oil, and homebuilding were among the bottom most.
‘I am deeply sorry’, says Herman Pretorius broker, Morton (Citizen)
The client, Betty*, asked Morton to set up an investment portfolio for her retirement. Morton’s advice was for Betty’s husband to withdraw funds of R1 150 000 from Stanlib. Morton recommended that half this money be placed in an unorthodox ‘‘hedge fund’’. The other half was to be split between an unlisted company called SA Superalloys, a junior platinum company called Wesizwe, and a ‘‘new fund’’ called Abante Holdings.
AIMA releases 2012 AIMA Canada Handbook (Opalesque)
The handbook provides a good overview of the Canadian hedge fund industry and in addition to having informative essays on virtually all aspects of the Canadian hedge fund landscape, contains a directory of Canadian hedge funds and service providers. It is my hope that international investors will find the handbook useful and given that Toronto – Canada’s financial center – is only a short flight away from many US cities, I would encourage those investors who are used to making manager research/due diligence trips to New York, Chicago, etc., to consider adding a stop in Toronto.
JANA Partners: A Solid Record of Successful Ventures (ValueWalk)
Barry Rosenstein’s JANA Partners been increasing the pressure on the agriculture company, Agrium Inc (NYSE: AGU), JANA’s largest holding and Agrium Inc (NYSE: AGU)’s largest single shareholder. The hedge fund is asking for a split of the company’s wholesale and retail divisions. JANA owns more than 6.5 million shares of Agrium Inc (NYSE: AGU) and this makes up 23 percent of the hedge fund’s total portfolio. Barry Rosenstein will be speaking at the ValueInvestingCongress.
With Lax Regulation, a Risky Industry Flourishes Offshore (NYTimes)
The hedge fund industry has been rushing headlong to open Bermuda-based reinsurers. Reinsurance, already something of a murky business, may become even more complicated as a result. And while the hedge funds are likely to profit, the question is: Who’s watching to make sure this doesn’t lead to another financial calamity?
Agio Technology Adds Veteran Business Development Executives (BusinessWire)
Agio Technology, the provider of superior managed IT services to the world’s premier hedge funds, today announced the appointment of two veteran business development executives, Jessica Golle and Scott Brightman, to further strengthen the company’s coverage of the strategically important Northeast U.S. market. …Golle joins Agio Technology in New York from Gravitas, where she was Executive Director of Business Development for their suite of managed IT products. Previously, she was Sales Director of Roubini Global Economics managing the Alternative Investment Business Development Team in New York and London.
How To Hedge Your Investments In High Yielding mREITs (SeekingAlpha)
Mortgage REITs are said to have been benefiting from the actions of the Federal Reserve Bank for some time now. These mortgage REITs continue to provide investors with elevated returns. However, these elevated returns are not without risks. This report aims to look into how these mortgage REITs work and how they are affected by changes in the yield curve and the general interest rate levels. We also look into possible hedging strategies to hedge mortgage REIT investments.
MassMutual Buying The Hartford’s Retirement Plans Business (Courant)
The Hartford will sell its Retirement Plans business to MassMutual for $400 million, but how that will affect the division’s 1,300 employees — 700 in Greater Hartford — is unknown. This is the second of three business sales that the company planned after a large hedge fund investor demanded that the divisions be spun off because he felt that the company stock was underperforming. “With The Hartford’s sharper focus on its historical strength in insurance underwriting, along with efforts to improve expense efficiencies, increase capital generation and reduce market risks, we are on the right path to deliver greater shareholder value,” said Chairman and CEO Liam McGee in a written announcement of the sale Tuesday afternoon.
Passive or Active? No Contest, He Says. (WSJ)
Active or passive? To Dale Yahnke, the verdict is clear. “The academic evidence and research is pretty compelling,” he says, that a vast majority of money managers can’t consistently beat a broad market index over time. As a result, Mr. Yahnke, co-founder of San Diego financial advisory firm Dowling & Yahnke LLC, generally favors passive funds. He uses several funds from Dimensional Fund Advisors, which uses computer models to gauge risk-return characteristics and generally holds stocks for years. He also uses numerous Vanguard Group funds, most of which track indexes.
Here’s What This Huge Long-Term Winner Has Been Buying (DailyFinance)
Every quarter, many money managers have to disclose what they’ve bought and sold, via 13F filings. Their latest moves can shine a bright light on smart stock picks. Today let’s look at Lone Pine Capital, founded by Steve Mandel in 1997. Prior to that, Mandel was a managing director at Tiger Management. Lone Pine is one of the biggest hedge fund companies, and reportedly beat the S&P 500 for 11 years in a row. Like many value investors, Mandel is known to dig deep into companies, aiming to buy undervalued ones.
Soros Purchases Gold Futures. Should We Copy His Gold Trades? (Profi-Forex)
Well-known traders and investors as well as their trading and investment activities certainly deserve attention. Many traders around the globe try to copy the gurus’ trading styles in effort to be successful speculators. These days, you can often hear a beginning trader boasting: “I trade like Soros!” However, professional traders only smile when hearing anything like that. …What does Soros’ return really mean? Is gold really a bargain at the moment? Let the experts of Masterforex-V Academy help us to answer these questions?
In Stadium Building Spree, U.S. Taxpayers Lose $4 Billion (Bloomberg)
New York Giants fans will cheer on their team against the Dallas Cowboys at tonight’s National Football League opener in New Jersey. At tax time, they’ll help pay for the opponents’ $1.2 billion home field in Texas. That’s because the 80,000-seat Cowboys Stadium was built partly using tax-free borrowing by the City of Arlington. The resulting subsidy comes out of the pockets of every American taxpayer, including Giants fans. The money doesn’t go directly to the Cowboys’ billionaire owner Jerry Jones. Rather, it lowers the cost of financing, giving his team the highest revenue in the NFL and making it the league’s most-valuable franchise.
SHFA launches strategic partnership program (Opalesque)
The recently launched Shanghai Hedge Fund Association (SHFA) has announced an initiative designed to launch a strategic partnership program between foreign and domestic institutions in China. In an interview with Opalesque, Clark Song, Representative and Managing Director of the Shanghai Hedge Fund Association (SHFA) explained that the strategic partnership program will welcome global fund of fund firms to join as a foreign partner. “In the domestic side we hope big Chinese financial institutions such as insurance companies, mutual funds, securities firms and trust companies could be partners” he said.
Hedgebay calls on hedge fund managers to take advantage of secondary market platforms (Opalesque)
Hedgebay, the pioneer of the secondary hedge fund market, has called on hedge fund managers to take advantage of secondary market platforms, claiming that they can provide a permanent source of funding. The call comes in the wake of a recent survey on the private placement industry by trading and risk solutions provider Simplify LLC. The survey, which polled around 500 private placement users, showed that 100% of respondents had traded hedge fund shares on a secondary basis – proving the popularity of secondary markets among hedge fund investors.
SEC Charges China-Based Company and Top Executive with Inflating Financial Results through Phony Sales (SEC)
The Securities and Exchange Commission today charged a China-based company and its chief executive with fraud for recording fake sales of a weight loss product to inflate revenues in the company’s financial statements by millions of dollars. The SEC alleges that China Sky One Medical Inc. (CSKI) falsely stated in 2007 annual and quarterly reports that it had entered into a strategic distribution agreement with a Malaysian company that would become the “exclusive” distributor of CSKI’s “slim patch” in Malaysia and generate $1 million per month in sales.
