Mainframe computers have continued to endure, defying decades of technological change and overcoming predictions of their coming extinction. Now a billionaire New York hedge fund manager is making a big bet on big iron computers. Paul Singer’s Elliot Management, a New York hedge fund firm with $20 billion under management, on Monday offered to purchase Compuware Corporation (NASDAQ:CPWR), a provider of software and service solutions for the management of mainframe systems. Singer is a hedge fund titan, not a private equity raider, and it’s rare for him to offer to buy an entire company—although not unheard of.
Swiss pension funds shy about hedge funds, but not CERN (Opalesque)
Swiss allocators and fund managers at the recent Opalesque Geneva Roundtable agreed that non-U.S. pension funds are generally twice shy about investing in the hedge fund world; although single hedge funds have more a chance of finding institutional money than funds of hedge funds, some say other alternative products now seem to be their main way of diversifying away from bonds and equities. In this article we cite two exceptions to this trend: CERN Pension Fund, which has been investing in hedge funds for about two years and recently increased its allocation, and Argos Investment Managers, a new Geneva-based fund manager with two new products that got seeded by Swiss pension funds.
Ex-hedge fund bosses convicted in NY trading case (WSJ)
Two former hedge fund managers were convicted Monday of insider trading charges, including allegations that one of them had made as much as $50 million on a tip about Dell earnings. Todd Newman and Anthony Chiasson were convicted in federal court in Manhattan after a five-week trial that included testimony from two analysts for the men. The jury reached its verdict after two days of deliberations. Newman, of Needham, Mass., is a former portfolio manager with Stamford, Conn.-based Diamondback Capital Management who had been accused of making about $2.8 million from illegal tips.
Hedge fund manager to pay $44 million for short selling (SecuritiesLendingTimes)
Sung Kook Hwang, a manager of two New York-based hedge funds, and his two firms have agreed to pay $44 million to settle US SEC charges over short selling. Hwang, who is the founder and portfolio manager of Tiger Asia Management and Tiger Asia Partners, carried out two trading schemes with Chinese bank stocks. The US SEC alleged that Hwang and his firms committed insider trading when they sold short three Chinese bank stocks based on confidential information that they received in private placement offerings. Hwang and his firms made $16.7 million in illicit profits, according to the US SEC.
Goldman Bullish With Hedge Funds Amid Citi Warning (Bloomberg)
Investors almost doubled purchases of commodities this year, at a time when Goldman Sachs Group, Inc. (NYSE:GS) and Morgan Stanley are forecasting higher prices and Citigroup Inc. (NYSE:C) says the best returns are over. Money invested in commodity funds increased by $21.6 billion this year, up 92 percent from the gain in 2011, according to Cambridge, Massachusetts-based EPFR Global, which tracks the flows. Hedge funds’ bets on a rally are 51 percent bigger than a year ago, U.S. government data show. Precious metals will lead returns in 2013, rising as much as 25 percent, as grains advance 18 percent and industrial metals 16 percent, according to a Bloomberg survey of 131 traders, investors and analysts across 15 raw materials.
World’s Most Expensive Office Now Somewhat Less Expensive (DealBreaker)
The market for literally palatial office space does not appear to have recovered. Take poor Zimmer Lucas Capital, a New York hedge fund that bought itself a five-story West 54th Street townhouse—formerly owned by a Lehman brother—in 2005. In May, ZLC listed the place for $65 million, or almost $4,000 per square foot. But with no takers seven months later, it’s looking for bargain hunters.
Paulson, Griffin, DiMenna Keep Ballerinas on Their Toes (BusinessWeek)
As the year closes, Scene Last Night takes a look at the causes that people in finance tend to cluster around. Today: The Hedge Funder Balletomanes. …Naturally the Paulsons help the ballet raise money, as do many families with hedge-fund pedigree. Lisa Falcone, wife of Philip A. Falcone, is on the board of New York City Ballet. William Ackman, of Pershing Square Capital Management, and Kinga Lampert, wife of Edward Lampert of ESL Partners LP, are on the board of American Friends of the Paris Opera & Ballet, whose dance company had a U.S. tour this past summer.
Hedge Funder Dan Benton Buys $39 M. Penthouse at 730 Park (Observer)
Psst… do you want to hear a secret? The whisper listing at 730 Park Avenue, a 12-room duplex penthouse with Central Park views, has sold to hedge fund titan Daniel Benton for a whopping $39 million, according to city records. Mr. Benton, who recently re-opened his technology-based hedge fund Andor Capital Management, is apparently feeling financially confident enough to move up in the world. Literally. Mr. Benton and wife Anna currently own another 12-room duplex on a lower floor of the same building that they paid $21 million for back in 2007. We guess they were a shoe-in with the board?
How to Track Hedge Funds (WSJ)
In the Weekend Investor cover story, we looked at cheaper and easier ways investors can capture most of the performance of hedge funds. We argued that while individual hedge-fund managers might make big, idiosyncratic bets that pay off or fail, hedge funds as a group don’t look all that different from a basic portfolio of exchange-traded funds. …Chances are, you will. Even though hedge funds have a low-beta, growth-stock tilt right now, there’s evidence that they change their market exposure over time. A working paper released in October by researchers from the University of California, Berkeley; the University of Waterloo; San Diego State University, and the University of Cambridge finds that hedge funds take on more market risk when markets rise but lower their market risk when they fall.
Azerbaijan starts property spree in London (FT)
The government of Azerbaijan has bought a trophy building in the heart of London’s hedge fund district as the oil-rich state warms up for a £1bn spending spree on luxury properties across Europe. The State Oil Fund of Azerbaijan (Sofaz), the country’s sovereign wealth fund, confirmed on Monday that it had acquired a £180m office block on St James’s Street as the maiden purchase in its bid to build a European real estate portfolio. The deal is the latest example a foreign government becoming a landlord in one of London’s most expensive postcodes. The high-end property markets of the City, the West End and Mayfair, have attracted billions of pounds of investment in 2012 from Asia, the Middle East and Europe.
Odey Fund Up 33% (Finalternatives)
There aren’t many hedge funds that have enjoyed 2012 as much as Odey Asset Management. The London-based hedge fund’s UK Absolute Return Fund is up 33.3% through November, when it added a further 1.4%. The fund manages US$582 million. According to ValueWalk, Odey’s best bets last month were its long stock portfolio. By contrast, its short bets cut into its returns for the month.
Rhode Island pension fund CIO to leave for private sector (Reuters)
The chief investment officer of Rhode Island’s state pension fund, Kenneth Goodreau, will become CIO of TIG Advisors on January 1, the private New York-based investment manager said. The move is the latest in a string of departures by top U.S. pension fund executives for the private sector where salaries tend to be significantly higher than in state governments. Goodreau helped the $8 billion state fund invest with hedge funds during his six-year tenure. He is the founder of hedge fund Knollwood Capital Management.
David Tepper Probably Just Made Some People In Hedge Funds And Private Equity Pretty Angry (BusinessInsider)
David Tepper just finished a rare appearance on Squawk Box this morning, covering everything from the Fed to the situation in Europe. The billionaire founder of hedge fund Appaloosa Management also got into politics, as people are wont to do during these fiscal cliff days, and lucky for us, the folks at Squawk got him right to the point. They asked Tepper what he would do as President of the United States right now.
Nouriel Roubini: ‘Market Reaction’ Will Force Fiscal Cliff Deal (AdvisorOne)
Nouriel Roubini said Friday “there’s a highly likely chance we’re going to go over the cliff. If we do so, the market reaction is going to force the two sides to reach an agreement.” Roubini, appearing on “Bloomberg Surveillance,” said that U.S. growth will be “barely 1.7%” in 2013. On whether he’s bullish on the United States: “In the long term, I think that the fundamentals of the U.S. are a lot stronger than other advanced countries. In the short run I think we will have another year of very anemic economic growth. Next year we will have barely 1.7% including a modest amount of fiscal drag and lots of tail risk could make it worse in the U.S–bigger fiscal cliff, the eurozone crisis, a Chinese hard landing, maybe tensions will raise oil prices in the Middle East–so the downside scenario is actually having a meaningful probability.”
What if Buffett and Icahn retire in 2013? (MSN)
While neither Berkshire Hathaway’s (BRK.A 0.00%) Warren Buffett nor Carl Icahn, who runs Icahn Enterprises (IEP 0.00%), have shown any signs of slowing, the thought is in the back of investors’ minds and it begs the question: Who will be the next generation of Wall Street leaders. For decades, Buffett and Icahn have been a sort of yin and yang when it comes to investing styles, and their outspoken ways have been a compass for many investors. Buffett, who champions stock investments with a holding period of “forever,” is often cited as an ambassador of long-term investing and his annual letter is required reading for many.
Vitro Seeks as Much as $1.6 Billion in Damages From Funds (Bloomberg)
Vitro SAB (VITROA), Mexico’s largest glassmaker, filed a lawsuit seeking damages of as much as $1.6 billion from bondholders including U.S. hedge funds that shunned the company’s restructuring plan and tried to force it into involuntary bankruptcy in Mexico. Under the company’s restructuring, approved by a Mexican court in February and subsequently rejected by U.S. courts, a trust holds newly issued bonds and payments for bondholders not accepting the plan. Vitro, which defaulted on $1.2 billion in bonds in 2009, will seek to collect damages from the trust related to efforts by dissident bondholders to put the company and 17 units into involuntary bankruptcy in Mexico, the company said in a filing yesterday to the Mexican stock exchange.
ConvergeEx Adds PortfolioScience Risk Tools To Eze OMS (Finalternatives)
Technology company ConvergEx has incorporated risk management tools by PortfolioScience into its Eze OMS risk solution. PortfolioScience specializes in risk management technology for financial institutions, investment services, financial advisers and hedge funds. Its products allow fund managers, traders and investors alike to access risk analysis capabilities on-demand.
Sweden continues dominance of Nordic hedge fund market (InvestmentEurope)
Sweden accounts for 69% of hedge funds in the Nordic region, according to the latest annual industry report from Stockholm-based OE Capital. The company’s third annual report on the regional industry is based on data covering 209 funds with at least five years of activity, with performance and other figures calculated between the end of June 2011 to the end of June 2012.
Malta home to estimated €80 billion in hedge funds (MaltaToday)
Malta has seemingly begun to win business from more-established fund jurisdictions, benefiting from a growing demand by investors for transparency as well as from fears among hedge funds that the EU was becoming increasingly hostile to firms based outside of it. According to the Malta Financial Services Authority, over the past year and a half, companies from British Virgin Islands, the Cayman Islands and Luxembourg are switching their legal domicile to Malta. In addition, at least a dozen large UK hedge funds have shifted part of their operations, including accounting and investor relations, to Malta.
