Paul Singer: ‘Cushion to Withstand Risks Is Very Low’ (CNBC)
Paul Singer thinks the recent dramatic move in the Swiss franc—and resulting losses—shows just how exposed most investors are to market risk. “Given the pricing and the still opaque and over-levered financial system, the sensitivity … to risks is extremely high … and the cushion to withstand risks is very low,” the founder of Elliott Management said at the World Economic Forum in Davos, Switzerland, on Wednesday.
Scene Last Night: Druckenmiller, Julianne Moore, Harvard Pudding (Bloomberg)
Private investor Stanley Druckenmiller and nonprofit leader Geoffrey Canada headlined a Bowdoin College event in New York last night as actress Julianne Moore picked up an honor on Park Avenue and Harvard’s Hasty Pudding finalized plans to fete music industry executive Clive Davis. Oh, and President Barack Obama in his State of the Union talked of helping working families by closing “loopholes that lead to inequality by allowing the top one percent to avoid paying taxes on their accumulated wealth.”
Brevan Howard’s Biggest Fund Said to Avoid Loss on Swiss Turmoil (Bloomberg)
Brevan Howard Asset Management’s largest hedge fund has so far avoided losses after the Swiss central bank scrapped its cap on the franc, helping the pool to rebound this year, said a person with knowledge of the matter. The Brevan Howard Master Fund, managed by billionaire Alan Howard, was up 1.88 percent in the month through Jan. 16, compared with 1.09 percent as of Jan. 9, said the person, who asked not to be identified because the matter is private. The pool had a 0.8 percent loss last year, its first annual decline since it started trading in 2003.
Andurand Fund Sees Oil at or Below $40 for Up to Six Months (Bloomberg)
Pierre Andurand, whose hedge fund gained 38 percent in 2014 from a well-timed wager that oil prices would fall, expects a further slide to $40 a barrel or lower that could last for as long as six months. West Texas Intermediate could plunge to the high $30s from $46.47 and brent crude could slip to $40, the manager of the London-based hedge fund firm wrote in a letter to clients that was obtained by Bloomberg News.
At Davos, it’s not all about the money…seriously (CNBC)
The World Economic Forum is teeming with elite investors this week, and it’s not just to talk their own book. Indeed, most of the more than two dozen hedge and private equity fund managers—including Ray Dalio of Bridgewater Associates, Paul Singer of Elliott Management and David Rubenstein of Carlyle Group—make the long trip to the Swiss Alps to actually think about investing in the year to come, not just to sell potential clients or show their macroeconomic smarts on stage.
Fortress Macro Hedge Fund Lost 7.6 pct in week to Jan. 16 – Investor Letter (Reuters)
Fortress Investment Group LLC’s macro hedge fund lost 7.64 percent in the week to Jan. 16, according to a letter to investors, in a week in which the Swiss National Bank removed a cap on the Swiss franc, sending the currency higher. The Fortress Macro Fund Ltd did not give a reason for the loss in the letter obtained by Reuters. This increases the loss for the fund to 7.9 percent for the year, the letter to investors sent on Wednesday showed.
Braga’s Systematica Gains 7% This Month Amid Swiss Franc Turmoil (Bloomberg)
Leda Braga, the former BlueCrest Capital Management executive who started her own computer-driven trading firm this month, gained about 3 percent last week when the Swiss National Bank abandoned the franc’s cap against the euro, according to an investor update. The $5.6 billion BlueTrend Fund, which she spun out of BlueCrest, gained 7 percent this month through Jan. 16, the update from her Geneva-based firm, Systematica Investments, shows. Ed Orlebar, a spokesman for the firm at Temple Bar Advisory, didn’t return messages seeking comment.
BlueCrest Said to Shut Trader’s Book on Losses Tied to Franc (Bloomberg)
BlueCrest Capital Management shut a portfolio run by Peter Von Maydell after the Swiss franc’s surge last week sparked losses, according to a person with knowledge of the decision. Von Maydell, a currency trader, remains at the hedge fund, said the person, who asked not to be identified because the matter is private. Von Maydell joined the $15 billion, Jersey-based firm two years ago from Credit Suisse Group AG, where he was global head of foreign-exchange strategy. He didn’t respond to phone calls and e-mails seeking comment.
Hedge Fund COMAC to Return Money After Swiss Franc Move, Poor Returns (Reuters)
COMAC Capital is returning money to outside investors after suffering heavy losses on a currency trade last week, becoming the second hedge fund in less than a week to take dramatic steps after being battered by the Swiss franc’s unexpected surge. The London-based firm’s $1.2 billion COMAC Global Macro Fund lost 8.0 percent when the Swiss franc surged as much as 40 percent against the euro after Swiss National Bank (SNB) lifted its 1.20 per euro cap last week, two sources said on Tuesday.
