This ain’t no pleasure cruise. Hedge fund billionaire Paul Singer wants investors to know that he’s all business when it comes to the recent seizure of an Argentinian naval vessel, the ARA Libertad. Singer, whose Elliott Management has been racking up wins in a protracted legal battle with Argentina over its default in 2001, detained the three-masted frigate in Ghana in a bid to force the South American country to pay up. Singer “did not purchase [Argentinian] debt in order to acquire a ship too large to sail in Long Island Sound,” according to an Oct. 26 letter that was sent yesterday to investors.
Einhorn’s New Letter: I’m Still Long on These Big Stocks (WallStCheatSheet)
David Einhorn, the president and founder of Greenlight Capital, recently issued his latest quarterly letter to investors. As normal, the hedge fund superstar manages to eloquently describe his macroeconomic view and investment ideas in just a few short pages. He begins the letter by identifying the significant obstacles the financial markets faced in the third quarter. These include: slowing economics in Europe, Asia and United States, higher oil prices and agricultural shocks due to America’s worst drought in decades. In regards to corporate earnings, he explains that “earnings growth disappeared, as many companies missed revenue and earnings estimates and lowered guidance.” A trend that is becoming more evident by the day in the current earnings season.
Fund offers bets on top trades (eFinancialNews)
Maverick Capital has launched a new fund that places concentrated bets on the firm’s best stock trades, reflecting the hedge-fund industry’s push to juice returns that have lagged behind the market and disappointed investors. The hedge fund, called Maverick Select, will hold 15 to 20 long positions and 15 to 20 short positions from the firm’s more than $9bn portfolio, subject to certain constraints, people familiar with the firm said. The fund is betting on positions that Maverick’s new quantitative system believes have the most upside going forward.
Dukas Public Relations Receives HFMWeek Award (Pamil-Visions)
Dukas Public Relations (DPR) was the only PR agency servicing hedge funds to receive the “Highly Commended – PR Firm of the Year” distinction from HFMWeek. The distinction was awarded based on client satisfaction and service, innovation, financial growth and adaptability, the criteria used in analyzing delivered services. The New York based agency offers several services – like media relations, message development, media coaching, speakers’ bureaus, search engine optimization and editorial services – to its clients.
Asia Hedge Funds Turn to Fixed Income (WSJ)
Asia’s record level of bond issuance is luring the region’s start-up hedge funds into fixed income, altering a long-standing focus on equities and signaling that Asia’s nascent hedge-fund industry is slowly maturing. Hedge funds in the region have traditionally been largely what are known as equity long/short funds, which bet that some stocks will fall and others will rise. In Europe and the U.S., where the industry is more mature, funds use a more diverse mix of strategies. So-called macro funds, for example, bet on large economic events, and multistrategy funds employ a combination of investment methods.
Reinsurance hedge fund start-ups on CEA programme (InsuranceInsider)
Several of this year’s start-up reinsurers are among the new names on the first part of the California Earthquake Authority (CEA)’s 2013 reinsurance programme. The CEA board met on the 25 October to approve its proposed 2013 reinsurance programme, which includes plans to buy $1.68bn of cover in January – slightly above the $1.505bn it bought in January 2012. New capacity providers on the programme include the 2012 reinsurance start-ups SAC Re and PaCRe, which have each subscribed for $10mn…
Asia Volatility at Six-Year Low Spurs Hedge Fund Wagers (BusinessWeek)
Asian hedge funds are forming to bet on the return of volatile asset prices, undeterred by the failure of predecessors after the 2008 financial crisis when governments stepped in to calm markets. The HSI Volatility Index (VHSI), a measure of Hang Seng Index (VNKY) option prices, reached a six-year low earlier this month, and Japan’s Nikkei Stock Average Volatility Index is trading near a 20-month low. Fortress Convex Asia Fund in Singapore, with more than $50 million, and Voltex Asia Capital Ltd. in Hong Kong are tapping investor demand for returns independent of market direction and for protection against a rebound in price swings if government stimulus runs out of steam.
Grant Capital Partners to shut down (FT)
Grant Capital Partners, the hedge fund manager set up by the former Goldman Sachs trading star behind Peloton Partners – one of the industry’s biggest collapses – is shutting down. In a letter to investors, a copy of which was seen by the Financial Times, Geoff Grant, founder of the $1bn firm, said he did not have an “edge” in the current markets. It is an admission that is gaining frequency among the big operators in the hedge fund world. According to an investor, Grant Capital’s flagship Liquid Macro fund, which specialises in trading around global economic trends, is down 6.2 per cent so far this year after losing 1.7 per cent last year. The fund is still up 7.39 per cent since its inception.
Tetragon Financial buys Polygon Management (PIOnline)
Tetragon Financial Group bought Polygon Management, a hedge fund firm founded by the same management team, for about $99 million as the publicly traded investor in structured loans expands its business. Tetragon used 11.7 million of its non-voting shares to buy Polygon, a London hedge fund started by Reade Griffith and Paddy Dear, the Guernsey, Channel Islands-based company said in a statement Monday. The purchase price is based on the $8.43 closing price of Tetragon shares on Oct. 26.
Christopher R. Hansen’s Valiant Capital Adds Facebook To Its Portfolio (Benzinga)
Christopher R. Hansen’s Valiant Capital Management, a San Francisco-based long/short equity Hedge Fund, filed a SEC form 13F revealing the newly acquired stocks, additions, reductions, and sold-out stakes. The $2.7 billion hedge fund was founded by Christopher R. Hansen in early 2008. Valiant Capital biggest investment is Apple Inc. (NASDAQ:AAPL), whereby the iPhone maker represents 15.34 percent of the overall assets value of Assets under management. Search Engine giant Google Inc. (NASDAQ: GOOG) accounts for 9.72 percent while Liberty Global Inc. (NASDAQ:LBTYA) came in third with 9.08 percent. The hedge fund has nearly 70% of its assets invested in the Technology sector, while the top ten holdings account for more than 80 percent.
What to do when you lose patience with your illiquid hedge fund investment (Opalesque)
Multiplicity Partners sees a massive increase in long-term investors like pension funds, UHNWIs and family offices losing patience with their hedge fund providers over their progress in liquidating side pockets or other illiquid/impaired investments. As a Zurich-based independent investment boutique that helps investors liquidating their illiquid hedge fund investments, Multiplicity should know what it’s talking about. Since 2009, its team has managed the wind-down of various hedge fund portfolios with assets of more than $2 billion for clients.
Supreme Court Won’t Revisit $62M Lancer Exec Penalty (Law360)
The U.S. Supreme Court refused Monday to review a decision ordering an acquitted former Lancer Management Group hedge fund manager to pay $62 million in a U.S. Securities and Exchange Commission suit over a $1 billion investment fraud. The court denied a petition for writ of certiorari by Michael Lauer, the former manager of Lancer Management Group. The decision keeps in place an April 19 Eleventh Circuit decision finding Lauer liable for $44 million in ill-gotten gains and $18 million in prejudgment interest.
“Quant” hedge funds headed for worst month since August 2007 (Yahoo)
Computer-driven hedge funds are headed for their worst monthly performance since the start of the credit crunch after making losing bets in dozens of markets including bonds, currencies and commodities. Many of the funds, known as managed futures or commodity trading advisors (CTAs), came into October with “risk on” trades, such as long positions on equities and commodities, and a short position on the U.S. dollar.But the trends that these managers try to detect and profit from – using ultra-complex algorithms designed by legions of astrophysicists and mathematicians – have “reversed” and gone against them in multiple markets.
Eurozone Hedge Funds To Shrink (Finalternatives)
Some very unfavorable headwinds could lead to a markedly smaller European hedge fund industry, according to a new report. Hedge funds in the eurozone—which, of course, excludes the continent’s largest hedge fund centers, Britain and Switzerland—will manage as much as 12.5% less four years from now, Ernst & Young predicts in a new economic forecast for the region. Assets under management will fall between 1% and 3% every year until 2016, the accounting firm expects.
Bill Ackman And Pershing Square Helped Build And Pay For This New Playground In Newark (BusinessInsider)
Hedge fund titan Bill Ackman’s Pershing Square Capital Management and the Pershing Square Foundation helped do something truly remarkable this past Saturday. Employees from the hedge fund and the Pershing Square Foundation helped build and pay for a brand a new playground on an empty lot in Newark, New Jersey. This was done in partnership with the Greater Newark Housing Partnership, the Urban League of Essex County, organizers from the non-profit KaBOOM! and residents of the Fairmount Heights neighborhood.
Marc Faber: “Money printing will destroy the world” (MoneyWeek)
Central bank money-printing “will destroy the world”. Contrarian investment expert Dr Marc Faber, who writes the Gloom, Boom and Doom Report newsletter, came out with that one in a recent interview with Bloomberg. It sounds extreme. But he might just be right. Here’s why – and what you should hold onto to protect yourself in the meantime…
Hedge Funds Returning to Palladium as ETPs Retreat (Bloomberg)
Hedge funds are siding with analysts predicting decade-high palladium prices even as investors cut holdings in exchange-traded products backed by this year’s worst-performing precious metal. The funds’ wagers on a rally more than doubled since August as ETP holdings slumped to a seven-month low this month, data compiled by Bloomberg show. Prices for the metal used mostly in catalytic converters will average $800 an ounce in the third quarter, 35 percent more than now and the highest since 2001, based on the median of 13 analyst estimates.
Stop Order Proceedings Instituted Against Caribbean Pacific Marketing (SEC)
The Securities and Exchange Commission today announced that it has instituted proceedings to determine whether to issue an order that would prevent sales of shares in Caribbean Pacific Marketing, Inc., based on allegations that the company’s disclosure is misleading. “The Division of Enforcement is seeking a stop order to protect investors by preventing any potential sales of stock under a materially misleading and deficient offering document,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office.
Hurricane Threat Shuts Wall Street Tuesday (Finalternatives)
U.S. stock markets will be closed for a second day tomorrow, and will be joined by the bond markets, as the New York area braces for the effects of Hurricane Sandy. NYSE Euronext, which runs the New York Stock Exchange, said that it had agreed with other exchanges and market players to close on Tuesday. In addition, U.S. bond markets closed early today and will remain shuttered until at least Wednesday. NYSE said it hoped to reopen Wednesday, if possible. The Big Board hasn’t closed for two straight days due to weather since Hurricane Gloria struck New York in 1985, and hasn’t had an unscheduled trading stoppage since Sept. 11, 2001.
Hedge Funds Drawn to Fannie-Freddie Risk-Sharing Plan (Bloomberg)
Bond buyers are vying with insurers to strike deals with Fannie Mae (FNMA) and Freddie Mac as their regulator seeks to draw private capital to the government- dominated mortgage market. The taxpayer-supported companies, which own or guarantee $5 trillion of residential debt, have held discussions with NMI Holdings Inc., a new mortgage insurer that raised $500 million in April, as they explore new ways of sharing risks. American International Group, Inc. (NYSE:AIG) is also interested, while Angelo Gordon & Co. and Pine River Capital Management LP are among fixed- income investors that could jump on the opportunity.
