Hedge fund Elliott lifts stake in Celesio (Reuters)
Hedge fund Elliott International has lifted its stake in German drugs distributor Celesio, bringing it close to a position where it could block the $8.3 billion takeover bid by McKesson Corporation (NYSE:MCK). Celesio said on Tuesday that Elliott gained control of 25.16 percent of the voting rights in the company. However, when additional shares from Celesio’s two convertible bonds are taken into account, Elliott’s voting stake stands at 21.05 percent. …Elliott, run by U.S. investor Paul E. Singer, is known for building up stakes in takeover targets with the aim of extracting a better price, such as with Kabel Deutschland in September.
Hedge Funds See Repeat of Yen Slide That Paid Soros (Bloomberg)
Hedge funds are betting on another run of yen weakness, a trade that made money earlier this year for billionaire George Soros, putting them in opposition to economists who see Japan’s currency little changed into 2014. Futures traders pushed net shorts, or wagers the yen will fall versus the dollar, to the highest since July 2007, according to the Commodity Futures Trading Commission. That contrasts with the median estimate of more than 50 analysts surveyed by Bloomberg, which puts the currency at 102 per dollar at the end of the first quarter of 2014, from 101.43 today.
U.S. regulator fines, partially bans poker player from trading (Reuters)
A small hedge fund manager turned professional card player who came to fame for a mammoth gold trade two years ago, was fined and banned from some trading for attempting to manipulate oil markets in 2008, the U.S. futures market regulator said on Monday. Daniel Shak, 54, and his fund, SHK Management LLC, must pay a total of $400,000 in civil penalties for violating the Commodity Exchange Act, through a trading gambit known as “banging the close”. The method involves a trader flooding the market with orders in the final minutes before the day’s close to sway prices, according to a settlement from the Commodity Futures Trading Commission (CFTC).
Carlyle to buy firm that invests in hedge funds (eFinancialNews)
The deal is valued at $33 million, plus a possible $70 million if the hedge-fund firm achieves a certain level of performance. Carlyle is a private-equity powerhouse but until recently hadn’t developed a big presence in other businesses as some rivals have, including The Blackstone Group L.P. (NYSE:BX), which runs a large real-estate operation. In 2011, Carlyle began to focus on advising institutional investors on so-called alternative investments, which include everything from real estate to timber. That year, Carlyle purchased AlpInvest Partners, an adviser to investors on private equity. Earlier this month, Carlyle acquired Metropolitan Real Estate Equity Management, which invests in global real estate.
Small FoHF proves experience and nimbleness produce performance (Risk)
Size and experience are critical factors in the risk-adjusted return potential of funds of hedge funds (FoHFs). In most cases one does not exist without the other. As with single hedge funds, the greater a company’s experience, the greater its size and as a result the lower its potential returns. A sweet spot exists in the middle, however, where funds with longstanding experience remain small and nimble enough to outperform. This happy medium sits at the heart of Headstart Advisers’ offering. Headstart Advisers was established more than two decades ago and currently manages or advises on $104 million. “Investors are acutely aware of the direct correlation between increasing assets and decreasing returns in single hedge funds,” says Najy Nasser, chief investment officer.
Hedge-Fund Fight Club Traded Illegal Tips Instead of Punches (SFGate)
The hedge-fund analysts vacationed together in the Hamptons, gambled in Las Vegas and adopted a creed that parodied the rules in the Brad Pitt film “Fight Club.” Instead of trading punches, they traded illegal tips that allowed their portfolio managers to reap tens of millions of dollars in profit. Having pleaded guilty to insider trading, four of the men are now set to be witnesses against SAC Capital Advisors LP fund manager Michael Steinberg. Ex-SAC analyst Jon Horvath could take the stand as early as today in Manhattan federal court against his former boss after ex-Diamondback Capital Management LLC analyst Jesse Tortora concludes his testimony.
Culling ‘giant green hedge fund’ will hit Abbott budget, body says (Eco-Business)
Scrapping the $10 billion Clean Energy Finance Corp will strip between $110 million and $171 million a year from the federal budget rather than save the government money, the fund will tell a Senate inquiry today. The fund uses cheap government borrowing rates to lend money for clean energy and energy saving projects. It was set up as part of the Gillard government’s climate change policies. The costs to the budget’s cash balance of abolishing the fund are based on assumptions that only half of its investment base – or $5 billion – is deployed, according to a submission by the corporation to the one-day inquiry.
In a market where people don’t care: Greenberg (CNBC)
GOLDMAN: Here Are 25 Stocks That Hedge Funds Are Shorting Like Crazy (BusinessInsider)
The S&P 500 closed at an all-time high of 1,804 on Friday, and Wall Street’s short sellers with the resources to ride out the high have been salivating waiting for the market to crumble. Goldman Sachs Group, Inc. (NYSE:GS)‘ new Hedge Fund Monitor report, which looks at 783 funds with nearly $2 trillion in gross equity positions, lists the 50 favorite short positions among the world’s largest hedge fund managers. “More than half of the 50 key short positions have outperformed the S&P 500 YTD, and five have returned over 100%,” noted Goldman’s Amanda Schneider.
SEC Will Investigate Hedge Fund Investors Stealing From State And Local Pensions (Forbes)
State and local pension investments in hedge, venture capital and private equity funds—alternative investments—have doubled in recent years and now amount to 24 percent of portfolios. The percentage of assets allocated to these lightly-regulated, secretive funds is staggering. Tens of billions in public workers’ retirement savings across the country are currently at risk from pervasive, yet largely unknown, abuses related to alternative investments. The need for an immediate, focused response by securities regulators and law enforcement is compelling.
Once giant FX Concepts’ assets now just $2 mln-court filings (Reuters)
FX Concepts, once the largest currency hedge fund in the world, has less than $2 million in assets now and $79 million in liabilities, according to the latest court filings on Monday. The fund filed for bankruptcy protection more than a month ago as its assets dwindled due to market losses and redemptions from major clients. At its peak in 2007, the $14 billion that FX Concepts had in assets under management made it the largest currency hedge fund in the world. The latest court filings showed FX Concepts has $1.62 million in assets and about $79.2 million in liabilities. The biggest part of those assets is a $1.61 million loan note from FX Concepts Chairman and Chief Investment Officer John Taylor.
Trader admits to ‘gambling’ and big losses (HereIsTheCity)
The New York Post reports that Jesse Tortora, the former tech professional turned U.S. government witness – who was at the centre of what prosecutors call a ‘corrupt circle’ of insider-trading pals – said he lost most of his millions gambling in Vegas, day trading and paying legal fees. The 37-year-old Tortora, testifying for the third day in the case against SAC top money man Michael Steinberg Monday, said his big year at now defunct hedge fund Diamondback was 2008, when his compensation hit $2.5m. He only made $800,000 in 2009 and left the firm that was founded by former SAC portfolio managers early in 2010. Tortora, who is living with his parents in Florida while he awaits sentencing for his cooperation in the Steinberg trial, said he has only $100,000 left from his years of living high as a hedge-fund analyst.
The Warren Buffett Bear Case For AstraZeneca plc (Fool)
Many investors who focus on a low price-to-earnings (P/E) ratio and high dividend yield in their search for value will have a hard time swallowing the maxim legendary investor Warren Buffett lives by: “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price”. Today, I’m considering whether FTSE 100 pharmaceuticals firm AstraZeneca plc (ADR) (NYSE:AZN) is a ‘wonderful’ company, and whether its shares are trading at a ‘fair’ price. A number of times during…
Is Lady Gaga’s “Artpop” a warning to tech investors? (USAToday)
Carl Icahn says we’re in a bubble. Larry Summers says we’re not. Financial media have debated the topic in recent weeks, and both sides have offered some seemingly irrefutable points. Low interest rates would tend to drive up asset prices; however, high unemployment would tend to hold them back. Stocks aren’t historically overvalued, but then again the economy is historically weak. Corporate leverage is now at 2008 levels, and the picture is even worse overseas, but cash holdings are at record highs. It’s quiet – but is it too quiet? Personally, I haven’t paid much attention to the discussion. When Lady Gaga calls a press conference in Brooklyn to introduce an environmentally-friendly, flying dress – and the press actually shows up – it seems pretty clear to me that we’re in a bubble.
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