Billionaire hedge fund manager Paul E. Singer is one of the Republican Party’s most important money men, raising millions for presidential candidate Mitt Romney and giving even more to a super PAC supporting his campaign. But Singer is also a longtime backer of marriage rights for gay men and lesbians, putting him in stark conflict with Romney and the Republican establishment.
Plural Investments hedge fund founded by SAC alum to shutter (Reuters)
Plural Investments, a New York-based hedge fund founded by the former chief investment officer at SAC Capital’s CR Intrinsic division, will shutter his firm by the end of September, according to people familiar with the decision. Plural was founded in 2008 by Matt Grossman, and focused on going long and short equities.
Keynes, the hedge fund pioneer (FT)
The macroeconomics of John Maynard Keynes continue to dominate the global economic policy debate to this very day. But many have forgotten that the great intellectual was also one of the most active investors of his era. He made and lost several fortunes, for himself, his friends, his college (King’s, Cambridge) and for City institutions which he chaired or founded. In some respects, he was an early hedge fund investor, first in macro in the 1920s, and then in equities in the 1930s. He ended as one of the most successful investors of the first half of the last century, but along the way he learnt many lessons which resonate to this day.
Inside The A+ Hedge Fund ETF (BusinessInsider)
The proliferation of ETFs has opened up the investable universe to virtually anyone with a brokerage account; novice investors can trade alongside seasoned money managers in any number of asset classes that were previously simply out-of-reach for most, with everything from emerging markets bonds to commodities and in between. With innovation comes complexity, however, and with over 1,400 ETPs to choose from, some investors are undoubtedly intimidated by the sheer product lineup [see also How To Buy The Right ETF Every Time].
Hedge Fund Industry’s Summer Habits (HedgeFund)
Most people think of summer as more laid-back than its seasonal counterparts, and that view is no different for the hedge fund industry. eVestment|HFN spoke to Jonathan White of hedge fund administrator Viteos, Donald Steinbrugge of alternative investment marketing firm AgeCroft Partners, and George Schultze of hedge fund Schultze Capital Management about what it is like working during the warmer months.
Florida is latest state pension to invest with Och-Ziff (Reuters)
Hedge fund titan Och-Ziff Capital Management has added another prominent investor to its list of closely guarded top-tier clients — the state of Florida. On July 31, the Florida State Board of Administration, whose pension fund ranks as the fourth largest U.S. public pension with $125.6 billion in assets, sent $150 million into the OZ Domestic Partners II LP fund, according to state documents.
Hedge Funds in Giveback Mode (HedgeFund)
It seems investors are taking their money out of hedge funds as much as they are putting in. The eVestment Global Asset Summary, published on Tuesday, found that outflows for all hedge funds in July were $9.15 billion, due in part to investor redemptions continuing for the fourth month in the last five. The summary is based on data from eVestment’s combined traditional and hedge fund datasets comprised of 53,200 investment products and more than $15 trillion in active assets under management.
Q&A: An Endowment-Style Portfolio In Closed-End Form (Finalternatives)
Times are tough for private equity—which means, according to Hatteras Funds’ Bob Worthington, that opportunities are ripe. Hatteras, which has $2 billion in assets under management, is trying to profit from those opportunities, investing a substantial chunk of its flagship fund of hedge funds in private equity funds starving for funding. The balance of the fund is invested in more than 100 hedge fund managers, which may make Hatteras as close to a university endowment as is available to individual investors, who can get a piece of the fund for a minimum investment of just $50,000.
Moore Capital echoes macro funds’ woes (FT)
When Greg Coffey goes on holiday, the 42-year-old Australian trading star at hedge fund Moore Capital Management takes his work with him – in a very literal sense. Once he checks out of Moore’s offices in the posh Mayfair district of London, a team of technicians starts to dismantle his workstation. They deconstruct Mr Coffey’s serried ranks of screens and trading terminals, carefully catalogue and pack the scattered detritus of his desk, and then fly the collected contents to wherever Mr Coffey is holidaying.
Matt Taibbi Bashes Wall Street Analysts: ‘Our Best Minds Kind Of Suck At Investing’ (HuffingtonPost)
Matt Taibbi just doesn’t think that young hedge fund analysts deserve their stratospheric pay. “One of the most frequently-overlooked problems of the financialization age is that a lot of our brilliant financial engineers are actually pretty damned average, when it comes to playing the market,” Taibbi wrote in a Tuesday Rolling Stone blog post titled “More Evidence Wall Street Is Overpaid.” “It seems like our best minds kind of suck at investing.”
Man down as hedge fund’s credit rating nears junk status (ThisIsMoney)
The credit rating of Man Group was slashed to one notch above junk yesterday in a humiliating blow for one of the world’s biggest hedge funds. Ratings agency Moody’s blamed the fund’s poor performance which has caused it to haemorrhage £14.5bn from disillusioned investors over the last four years. It cut Man’s rating from Baa2 to Baa3 and, in another blow, put the group on ‘negative watch’, meaning its rating could be downgraded to junk within months.
Expert report not necessarily privileged: appeals court (NewsAndInsight)
An analyst’s reports prepared in response to a discovery request are not automatically privileged as work product if they are used to prepare testimony, a New York state appeals court ruled Tuesday. The Appellate Division, First Department, found that the trial judge should have reviewed the report in camera to determine whether any portion was privileged. The report was prepared as part of a $50 million employment lawsuit involving prominent hedge fund Touradji Capital Management.
Whale of a tale (NYPost)
Hotshot trader Boaz Weinstein may have harpooned the London Whale, but his main fund barely has its head above water. Weinstein’s Saba Capital Master Fund is up only 0.62 percent for the year through July 31, according to an investor letter obtained by The Post. If the 38-year-old investor doesn’t fashion a second-half comeback,his reputation for trading genius will no doubt take a big hit.
TCI calls for CAG, CBI investigations into Coal India’s under-priced FASs (IndiaTimes)
The Children’s Investment Fund Management (TCI), the UK-based activist hedge fund, on Thursday said that the failure of the directors of Coal India to raise fuel supply agreement (FSA) coal prices to thermal coal market prices is similar to misallocation of coal blocks by the government of India, as pointed out by the Comptroller and Auditor General (CAG) recently. “(It has) strong parallels with the captive coal block allocation scandal (known as Coalgate) in both its motive and effect,” a statement from TCI noted.
NY fund seeks 50 percent of WKRN parent (Tennessean)
A New York-based hedge fund that already is the largest stockholder of the parent of Nashville’s WKRN-TV, Channel 2, has filed applications with the Federal Communications Commission to take control of the company and its 14 television holdings. Standard General Fund L.P., which holds a 36percent share of New Young Broadcasting Holding Co., Inc., asked the FCC for permission to take control of the stations by exercising some stock options in New Young that would raise its shares to just over 50 percent.
Pimco joins Paulson and Soros in bet on gold (eFinancialNews)
Gold has been lacklustre this year, but some high-profile fans say the future is brightening. After soaring to an all-time high last year, gold prices have dropped 13%. Gold has crept higher in 2012, though it has lagged behind stocks and some other commodities. But some investors, including Pacific Investment Management Co and hedge-fund managers John Paulson and George Soros are doubling down on gold, while others are trumpeting bullish forecasts.
Super PAC Contributions Top $300 Million, Most Goes To GOP Groups (HuffingtonPost)
The Republican presidential campaign of Mitt Romney and Paul Ryan got another boost from big donors in July. Republican super PACs, particularly the pro-Mitt Romney Restore Our Future and the Karl Rove-founded American Crossroads, both of which are spending big to help the Romney-Ryan ticket, continued to dominate in fundraising after raising $19.4 million in July, compared to $9.73 million raised by their Democratic counterparts. After pulling in nearly $30 million in July, super PACs have now raised more than $300 million for the 2012 election. Mega-donors giving $500,000 or more to these unlimited money groups remain the biggest source of funds, accounting for 68 percent of all contributions.
Indus Valley Partners Adds 12 Hedge Fund Clients, Expands Global Offices (BobsGuide)
Indus Valley Partners (IVP), a leading provider of technology solutions to alternative asset managers, announced today the expansion of its New York City and Noida, India offices in order to accommodate the significant growth driven by the addition of new clients as well as the expanding needs of its existing hedge fund clients. Year-to-date, IVP has added 12 new hedge fund clients globally, driven largely by managers’ needs for greater efficiency and control in managing complex portfolios in an increasingly burdensome compliance environment. To further support the office expansion, IVP has hired over 50 new employees.
Prime Management Scores 6.79 out of 7 in Global Custodian’s 2012 Hedge Fund Administration Survey (BusinessReviewUSA)
Prime Management Limited, a leading fund administrator, has again excelled in the annual Global Custodian Hedge Fund Administration Survey, achieving an overall score of 6.79 out of 7 and receiving “Best in Class” awards in all 14 of its eligible categories. This is the fourth consecutive year that Prime has been recognized by the survey for the quality of its client service and the specialized knowledge of its staff. In addition to servicing traditional hedge fund clients, Prime continues to solidify its reputation as the premier provider to investment structures, sponsors and managers in the insurance linked securities (“ILS”) market.
When The Prime Minister Of Greece Says A Eurozone Exit Would Be ‘Catastrophic’, This Might Be What He Means (BusinessInsider)
Today in Athens, Greek Prime Minister Antonis Samaras said that a Greek exit from the Eurozone would be “catastrophic.” What did he mean? Well many people have predicted that a Grexit would lead to another leg down in the economy, but there’s also a political angle. Earlier in the week we posted the thoughts of a Greek hedge fund manager, who commented on the likely outcome of elections if Greece left…
Mike Tyson to Hit Hong Kong Investor Forum (WSJ)
A buttoned-down state-controlled Chinese firm may have bought brokerage CLSA, but that’s not stopping the company from carrying on with its trademark quirky party-cum-conferences. This year’s guest is American boxer Mike Tyson, the former heavyweight world champion who is known for once having bitten a chunk out of an opponent’s ear—a man who more recently has starred in a one-man Broadway show and engineered a movie career through comedy films such as “The Hangover.” … “I guess it’d be comical the drunker I got,” said Jeb Altonaga, who heads Northern Trust Hedge Fund Services. “If he was in a celebrity boxing match, that’d be better, especially if they’d have one of their managing directors jump in the ring with him.”
George Soros Buys Robin Van Persie in His First Big Manchester United Move: What’s Next? (Policymic)
Perhaps some of you have heard that infamous liberal billionaire George Soros has recently purchased a significant amount of stock in the now-publicly traded soccer club Manchester United. (What’s that? You didn’t hear about this? Oh.) Well, perhaps some of you are wondering what the vast implications are of Soros purchasing 7.85% of Manchester United’s Class A shares. And perhaps you’re also wondering what the difference between Class A shares and Class B shares is. Well, Class B shares have 10 times the voting power of Class A shares. Taking that into account, Soros holds roughly 2% of the total stake in Man U and has even less than a 50th of a say in how the team is run. In other words, even the fleeting attention that Soros’ purchase has garnered in the press is virtually unjustified; his purchase literally has no effect on the team.
George Soros Buys Digital River Convertible Debt (ValueWalk)
In a Securities and Exchange Commission S-4 regulatory filing dated August 17, billionaire investor George Soros has increased his holdings to 10 percent in Digital River, Inc. (NASDAQ:DRIV), via his investment management firm, Soros Fund Management LLC. This comes after the money man previously took a 7.98 percent stake in the company back on March 29. The 13-G filing showed that the Soros Fund Management bought 3,084,460 Digital River, Inc. (NASDAQ:DRIV) shares of Digital River 2.00% convertible bonds due November 1, 2030. The filling also shows that Soros owns over 10% of the eCommerce provider website.
Ex-Perry Asia head raises $940 mln in top Asia hedge fund launch of 2012 (Reuters)
Alp Ercil, the former Asia head of New York-based Perry Capital, closed his own Asia-Pacific fund to fresh money this week after raising $940 million in the biggest hedge fund launch in the region for 2012, a source with direct knowledge of the matter said. Ercil’s success contrasts with the struggle of hedge funds to raise capital in the region, where investors have pulled a net $1.7 billion from the $125 billion industry so far this year, according to estimates by industry tracker Eurekahedge.
Citigroup slams Nasdaq’s Facebook compensation plan (Reuters)
Citigroup slammed Nasdaq OMX Group Inc’s plan to compensate firms harmed by Facebook’s botched market debut to the tune of $62 million, saying in a regulatory filing the exchange should be liable for hundreds of millions more, according to a letter seen by Reuters. Citi said Nasdaq’s actions in the May 18 initial public offering amounted to “gross negligence,” in the letter to the U.S. Securities and Exchange Commission, which had not yet been made public.
Nomura Appoints New Asia Fixed Income Head, Global FX Head (WSJ)
Nomura Holdings Inc. has reshuffled senior staff at its fixed-income and foreign-exchange businesses, appointing Rig Karkhanis as head of fixed income for Asia excluding Japan and Jai Rajpal as global head of foreign exchange, according to a statement Thursday. Mr. Karkhanis was previously head of fixed income, based in Singapore, where he will remain in his new role. He previously worked at hedge fund Millennium Partners as a portfolio manager, as well as at Merrill Lynch and Deutsche Bank AG.
‘Tiger Cub’ Hedge Fund Manager Lee Ainslie Is Killing It This Year (BusinessInsider)
“Tiger Cub” Lee Ainslie III is making a huge turnaround so far this year. Bloomberg News Katherine Burton reports that his ~$10 billion AUM long/short equity hedge fund Maverick Capital’s biggest fund was up 20% through July. That’s a huge comeback compared to the flagship fund’s performance last year.
Midway Group’s Market Neutral Fund (+16.66% YTD) implements new liquidity terms (Opalesque)
The Midway Market Neutral Fund, managed by New York –based fixed income fund manager The Midway Group, ended the first seven months of 2012 up almost +17% (+2.20% (est.) in July) compared to +3.78% for the Barclays Aggregate, +11.01% for the S&P 500 (Total Return) and +2.88% for the HFR Hedge Fund Index during the same period. In 2011, the Midway Market Neutral Fund returned up +22.24% (See Opalesque Exclusive here). John K. E. Morri…
No one-size-fits-all solution for hedge fund succession planning (Opalesque)
Succession planning can be a touchy subject in the hedge fund space. After the death of well-known hedge fund manager Barton Biggs, his firm, Traxis Partners provided a transition plan for investor capital that attempted to absorb investors in the funds Biggs managed himself into the funds managed by others in the firm. However, they also gave investors the opportunity to ask for their money back despite the firm’s established track record, a situation may be an object lesson for fund managers currently examining their own succession plans. “With hedge funds you have a fairly unique situation where the value of the fund is usually tied up in one person, or a few people, and that is what draws the investor. It makes handing them off to another team in the event that something happens more difficult,” explains Kyle Vataha, Vice President, Pluris Valuation Advisors in an interview with Opalesque.
Statement of SEC Chairman Mary L. Schapiro on Money Market Fund Reform (SEC)
Securities and Exchange Commission Chairman Mary Schapiro today made the following statement: Three Commissioners, constituting a majority of the Commission, have informed me that they will not support a staff proposal to reform the structure of money market funds. The proposed structural reforms were intended to reduce their susceptibility to runs, protect retail investors and lessen the need for future taxpayer bailouts.
SEC Adopts Rule for Disclosing Use of Conflict Minerals (SEC)
The Securities and Exchange Commission today adopted a rule mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act to require companies to publicly disclose their use of conflict minerals that originated in the Democratic Republic of the Congo (DRC) or an adjoining country. The regulatory reform law directed the Commission to issue rules requiring certain companies to disclose their use of conflict minerals that include tantalum, tin, gold, or tungsten if those minerals are “necessary to the functionality or production of a product” manufactured by those companies. Companies are required to provide this disclosure on a new form to be filed with the SEC called Form SD.
SEC Charges New York-Based Firm and Owner in Penny Stock Scheme (SEC)
The Securities and Exchange Commission today charged a New York-based firm and its owner with conducting a penny stock scheme in which they bought billions of stock shares from small companies and illegally resold those shares in the public market. The SEC alleges that Edward Bronson and E-Lionheart Associates LLC reaped more than $10 million in unlawful profits from selling shares they bought at deep discounts from approximately 100 penny stock companies. On average, Bronson and E-Lionheart were able to generate sales proceeds that were approximately double the price at which they had acquired the shares. No registration statement was filed or in effect for any of the securities that Bronson and E-Lionheart resold to the investing public, and no valid exemption from the registration requirements of the federal securities laws was available.
HedgeCo™ (HCN) Hedge Fund Indices Through July 2012 (HedgeCo)
The HedgeCo.Net Hedge Fund Aggregate Index showed an average annual return of 3.25% through July 2012. The fund of funds index ranked highest, at 11.59%. “Most of the industry decided to sit tight and ride the rising markets we have seen this summer. A number of hedge fund managers have mentioned the September Fed meeting as a marker to start identifying catalysts that will drive the markets through the end of 2012 and into 2013. “ Evan Rapoport, CEO of HedgeCo Networks, LLC, said. ”Furthermore, CTA’s have benefited from domestic droughts and rising energy prices.”
Hedge fund firms accepting screens to get faith-based business (PIOnline)
Hedge fund managers hungry for institutional assets are increasingly willing to incorporate exclusionary screens into their investment approaches to keep portfolios in line with the socially responsible investment values of church-affiliated investors. It was nearly impossible before the financial crisis of 2008-’09 to convince hedge fund managers to share the contents of their portfolios with investors, much less to apply any type of constraint to the managers’ investment strategies.
