The European arm of the Tudor Group, the US hedge fund founded by Paul Tudor Jones II, paid its staff a bumper $62m last year after a profitable 2011, despite the travails of the eurozone. The 20 members of Tudor Capital Europe were paid $62.6m for the 12 months to March 31, according to a Companies House filing. This compared to the $8m that was paid to the firm’s two European staff in the previous financial year, which covered the 15 months to March 31, 2011. The highest-paid member at Tudor Capital Europe last year was awarded $23.2m. Pre-tax profits rose to $66m compared to the $6.5m in previous financial year.
Ex-Nomura trader readies $250 mln Asia vol hedge fund (Reuters)
Former Nomura Holdings Inc trader Jean-Noel Payer is preparing to launch a $250 million Asia-focused volatility hedge fund aiming to take advantage of price swings in Asian securities, in one of the biggest startups in the region this year. Payer, 36, who was a managing director at Nomura and worked with trader Benjamin Fuchs at the bank, told Reuters that he was setting up Voltex Asia Capital Ltd in Hong Kong. His firm received regulatory clearance on Tuesday.
Israel belatedly joins the global hedge fund boom (Haaretz)
To join the mystery-shrouded world of hedge funds you need money – oodles of it. Only the filthy rich can afford to frolic in this exclusive playing field, which probably accounts for its pervasive secrecy. But the hedge fund, an increasingly popular investment vehicle in the United States since the 1980s among those who can afford it, has also begun carving out a presence in Israel over the past few years. Globally, hedge funds control about $2.3 trillion in assets, compared to $23.8 trillion for mutual funds at the end of 2011. While the latter are subject to ever-increasing supervision and growing transparency, regulation of hedge funds remains weak. But more and more hedge fund managers are coming to the realization that greater transparency is needed for the business to continue growing while remaining lucrative.
BlueMountain Credit Fund Is Up 10.17% in First-Half 2012; No Mention of J.P. Morgan (WSJ)
Hedge-fund manager BlueMountain Capital Management LLC posted a 1.43% gain for June in its $4.5 billion Credit Alternatives Fund, bringing its gain for the first half of the year to 10.17%, according to a letter sent to investors this week. The credit fund’s performance beat both the June and first-half returns of the hedge- fund industry and the broad credit market index. The Hedge Fund Weighted Composite Index rose 0.05% in June and 1.70% in the first six months of the year, while the Barclays Capital Government/Credit Bond Index fell 0.02% in June but rose 2.79% in the first half. New York-based BlueMountain managed a total $9.5 billion.
How to Trade Apple’s Big Miss: Hedge Fund Manager (CNBC)
Shares of Apple traded down as much 5.1 percent on Wednesday — their worst day in 2012. And it’s still early yet, cautioned Eric Jackson, long-time Apple [AAPL 574.97 -25.95 (-4.32%) ] shareholder and founder of hedge fund Ironfire Capital, who thinks it’s very possible the stock will trade down to $500 this summer. “I think it’s going to happen gradually, over the next four weeks or so, before the iPhone 5 comes out,” Jackson told CNBC’s “Squawk on the Street.” “People forget; this happened last October, when earnings were a disappointment. Shares dropped initially, then continued to drop over the next five weeks to about 7 percent below its pre-earnings announcement level.”
Notice to Harbinger Hedge Fund Investors (MarketWatch)
Attorney Advertising — The Law Firm of David A. Weintraub, P.A. (DAW) ( www.stockbrokerlitigation.com ) is investigating the conduct and due diligence of Citigroup Inc., Morgan Stanley and their subsidiaries in connection with their recommendations to invest in HF Harbinger LLC and Hedgeforum Harbinger LLC. DAW is attempting to determine: whether Citigroup and/or Morgan Stanley violated any duties they may have owed to investors who purchased Harbinger hedge funds; whether Citigroup and/or Morgan Stanley failed to provide material information to investors who purchased Harbinger hedge funds; and whether Citigroup and/or Morgan Stanley knew by November 2008 that Harbinger was blowing up.
Canyon Value Hedge Fund Up 10.4% Year to Date (ValueWalk)
Canyon Partners manages over $19 billion in assets. The firm was started by ex-Drexel Burnham traders; Josh Friedman , Mitchell Julis. The flagship hedge fund is the Canyon Value Realization Fund. According to sources with direct knowledge of the matter, the Canyon Value Realization Fund had a 1.2 percent return for the second quarter, and 9.21 percent year-to-date for the period ending June 30, 2012. as of late July, the Fund was up 1.0 percent, bringing year-to-date returns to 10.4 percent. The S&P 500 for the same quarter was down 2.8 percent, and year to date was up 9.2 percent.
Fund managers to lose securities lending profits (FT)
European fund managers will have to return all profits made from securities lending transactions to their investors according to new rules announced on Wednesday by the European Securities Markets Authority (Esma). Securities lending – where shares or other assets held in a portfolio are lent, typically to a hedge fund or other short-seller, in return for a fee – is common practice across the fund management industry.
Alternatives boutique launches weather fund on DB platform (CityWire)
Alternative asset manager Coeli Asset Management has launched its power markets fund based around trends in Nordic weather on Deutsche Bank’s liquid hedge fund platform. The Coeli Power Surge fund was launched by the Swedish firm on as a means of capturing price trends and changes in power generation markets caused by fluctuating seasons and climates.
Dutch Pension Dumps Hedge Funds (Finalternatives)
A multi-billion euro Dutch pension fund is getting out of hedge funds after suffering losses on the asset class last year. The TNO pension fund, which manages the retirement assets of the Dutch institute for applied technical research, plans to redeem its entire hedge fund portfolio, which accounts for 2.9% of its €2.4 billion in assets. “Because research has shown we can get a comparable risk/return profile with traditional asset classes, we have said goodbye to hedge funds for the time being,” the pension said in its annual report.
Paladyne Introduces Reference Data Suite 8.0 (HedgeFund)
Hedge fund business solutions provider Paladyne Systems has released a new version of its Paladyne Reference Data Suite. The company said on Monday that the Paladyne technology, which services over a trillion dollars of assets run by a variety of financial institutions including hedge funds, has been upgraded with several new features.
OrbiMed Plans to Cap Hedge Fund Inflows (HFAlert)
One of the industry’s largest and most successful healthcare investors, OrbiMed Advisors, will bar entry to its hedge fund once it reaches $2 billion of net assets. OrbiMed’s Caduceus Capital vehicle currently has $1.8 billion under management. With a year-to-date gain of 20% through July 18 and a steady flow of subscriptions, the long/short equity fund is expected to reach the $2 billion mark in the fourth quarter. In the second quarter alone, the fund’s assets grew by $300 million. The New York firm has been managing its hedge fund program for two decades. Since its inception in January 1993, Caduceus has generated a 19% average annual return — versus an 8.3% total return for the S&P 500. The fund primarily invests in the stocks of pharmaceutical and medical-device companies.
More than $3 Trillion AUM for Top 100 Alternative Investment Managers (AllAboutAlpha)
Towers Watson, the professional services firm, for their survey of the top alternative investment managers of 2011, expanded the scope of their coverage. In earlier years, they had surveyed private equity funds, funds of hedge fund, and funds dedicated to real estate, infrastructure, and commodities. This year, they included all those categories, too, but added direct hedge fund and direct PR results. TW ranked the top 100 AI managers by total AUM, and separately created top 100 lists by client type: pension funds, insurance funds, sovereign wealth funds, endowments/foundations.
Oakum Bay Gets Investment from Insurance Firm (HedgeFund)
New York-based hedge fund firm Oakum Bay Capital has agreed to a strategic minority stake by a Bermuda insurance company. According to a statement from both firms, the investment by White Mountains Insurance Group will allow Oakum Bay to “accelerate its strategic plan of adding key personnel and upgrading its infrastructure to better serve its investors.”
Earnings reports leave FTSE directionless (FT)
The hedge fund manager jumped 9.4 per cent to 78.8p after weekly data showed its AHL Diversified fund, which analysts say provides about two-thirds of group earnings, was up a further 2 per cent last week. Since hitting a two-year low at the start of July, AHL has strongly outperformed world markets with a rebound of 7.4 per cent. Man shares have slumped by two-thirds over the past 12 months amid fears that market-wide volatility had rendered AHL’s algorithms defunct.
Mongolia, one of the fastest growing frontier markets (Opalesque)
Simon Potter is a veteran hedge fund seeder who has recently moved to Hong Kong to start a Mongolia focused fund and head up Quam Asset Management. Quam is focused both in the capital markets and wealth management, with products that are broadly involved in the Asia region. Potter was recently interviewed by Matthias Knab for Opalesque TV. The Mongolia fund is an open ended vehicle designed to give investors liquid access to longer-term, very fast commodity driven emerging market. According to Potter, few investors have taken Mongolia seriously, but the country has a thriving economy. Prior to the launch of the Mongolia fund, the firm launched a Middle Eastern fund in partnership with InvestAD; that now acts as a sub-advisor to the fund. Quam also has a China fund that is managed from Hong Kong. The firm is also active in the private equity space and maintains a partnership with Global Alliance Partners in order to offer clients more access to deal flow an optionality in their investments.
Rich donors back gay marriage (FT)
A group of wealthy pro-Republican hedge fund managers is backing efforts to legalise same-sex marriage in four US states that will vote on the issue in November, as the party’s more socially liberal donors try to regain ground ceded to social conservatives. The campaign to win same-sex ballots in Maine, Maryland, Minnesota and Washington has received financial support from Paul Singer, the hedge fund billionaire who is one of the party’s biggest donors, and Cliff Asness, the founder of AQR Capital Management.
3 Outperforming Semiconductors Being Sold Off By Hedge Funds (SeekingAlpha)
Do you value the buying and selling trends of smart money investors? If so, you may be interested in this list of stocks. We created our list by first screening the semiconductors industry for stocks that have outperformed the market over the last quarter, with quarterly performance above 10%. We then screened for those with bearish sentiment from institutional investors, with significant net institutional sales over the last quarter representing at least 5% of share float. This indicates that institutional investors such as hedge fund managers and mutual fund managers expect these names to underperform into the future.
‘Crisis alpha’ is created when strategies are flexible at times of crisis – Monaco Roundtable (Opalesque)
Hedge fund managers should develop strategies that can manoeuvre during times of crisis and still be able to generate alpha, this was the gist of the views of Kathryn Kaminski, CIO and Co-founder of Alpha K Capital, a new thematic fund focusing on tail risks, during the latest Opalesque Monaco Roundtable which took place in Monaco last month. The Roundtable and was sponsored by Salus Alpha and Eurex. Kaminski was reacting to a question posed by Opalesque CEO and Roundtable moderator Matthias Knab about her paper on crisis alpha.
Vulture in distress (NYPost)
The grandfather of vulture investing is producing results of late that are for the birds. Randy Smith, the 69-year-old reclusive head of Alden Global Capital, who came out of semiretirement in 2008, is showing a 7.5 percent decline in his main distressed fund through June 30. The poor results are in stark contrast to the 5.75 percent median gain for distressed funds, according to the AR Distressed Index. Smith’s troubles date back at least 18 months — his Manhattan-based Alden Global Distressed Opportunities fund fell 22 percent in 2011. The stumble by the investor who helped invent vulture investing has surprised hedge-fund industry insiders.
What if Dr Doom is right? (Fool)
Perennial doomsayer Nouriel Roubini (known as Dr Doom) has poured cold water on hopes of a faster US recovery, suggesting US growth is likely to remain, below-trend at best for many years to come. Former Federal Reserve Chairman Paul Volcker has also suggested that the individual states in the US cannot continue their current spending, taxation and budget practices, and the US federal government’s attempts to reduce its deficit could wreak havoc on the individual state budgets.
Icahn Sounds The Alarm on Forest Labs (FoxBusiness)
Carl Icahn has fired back at Forest Laboratories Inc.’s (FRX) board, writing another harshly worded letter despairing the company’s prospects, the latest move in a long-running battle between the drug maker and the billionaire investor. In his latest salvo, Mr. Icahn said the company is unprepared for the upcoming patent cliff for Alzheimer’s drug Namenda, which could be “devastating” for the company, and was “completely unprepared for the Lexapro patent cliff.”
Novogratz Wrestles Wall Street For Funds To Lure U.S. Olympians (Bloomberg)
The former University of Oklahoma wrestler approached Michael Novogratz a few years ago at a fundraiser for the inner- city wrestling program Beat the Streets and asked the Fortress Investment Group LLC (FIG) principal and director for a job. Novogratz, 47, a former Princeton University wrestler who is chairman of Beat the Streets, had taken up the sport again and was feeling pretty strong, so he made Waldhaus an offer: Take him down two out of three times and Novogratz would find Waldhaus a job.
Osborne Economy Plan Draws Fire, Critics Question Competence (Bloomberg)
Chancellor of the Exchequer George Osborne came under renewed criticism after Britain’s recession deepened in the second quarter, prompting questions about his economic plans and whether he should remain at the Treasury. The opposition Labour Party and economists including Stewart Robertson at Aviva Investors said Osborne should reconsider his fiscal squeeze after the economy shrank 0.7 percent, the most in more than three years. One coalition lawmaker questioned whether the chancellor should keep his job.
Payday Lenders Seek U.S. Oversight To Avoid State Rules (Bloomberg)
The U.S. Securities and Exchange Commission may sue Miami over whether the city adequately disclosed financial information when it raised money from investors. The SEC on Monday told Miami that its staff, after a more than two-year probe, plans to recommend that the agency’s commissioners bring civil fraud charges, the Florida city said in a disclosure to investors yesterday.
Ex-Diamondback Manager Aided FBI Insider Probe, U.S. Says (Bloomberg)
Anthony Scolaro, a former portfolio manager for Diamondback Capital Management LLC, provided “substantial assistance” to a federal probe of insider trading at hedge funds, according to U.S. prosecutors. Scolaro, who pleaded guilty in November 2010 to conspiracy and securities fraud, made at least 43 recorded calls with various individuals that were monitored by the FBI, assistant U.S. attorneys Reed Brodsky and Antonia Apps said in a letter to the court filed today in Manhattan.
Nintendo Posts First Loss In Three Quarters On Yen Gains (Bloomberg)
Nintendo Co., the world’s largest maker of video-game machines, posted its first loss in three quarters as the stronger yen eroded overseas earnings and its 3DS handheld player remained unprofitable. The net loss was 17.23 billion yen ($220 million), the Kyoto, Japan-based company said in a statement today. That compared with the 16.4 billion-yen loss average of three analyst estimates compiled by Bloomberg and a loss of 25.5 billion yen a year earlier. Nintendo kept its full-year forecast for a 20 billion-yen profit.
How Geithner Can Turn His Bad Week to Good (Bloomberg)
This may not be Treasury Secretary Timothy F. Geithner’s best week. Beset by accusations in a new book that he put Wall Street ahead of Main Street, Geithner (once again) faced a hostile reception on Capitol Hill. During a hearing this morning, lawmakers grilled him about the ballooning Libor rate-fixing scandal and continued to criticize his handling of the 2008 financial crisis. Yet the most damning blow comes from a report out today detailing the Treasury’s failure to regulate AIG, the giant insurer that helped bring the economy to its knees and required a $182 billion bailout in 2008.
British Land Buys Mayfair Offices Valued At $202 Million (Bloomberg)
British Land Co. (BLND), the U.K.’s second- largest real estate investment trust, agreed to buy two buildings in central London’s Mayfair district and plans to convert them into luxury homes, shops and offices. British Land spent 129.6 million pounds ($202 million) for the properties, the company said in a statement today. The purchase includes almost an acre of land in the neighborhood, which along with nearby St. James’s comprise the London districts with Europe’s biggest concentration of hedge funds.
Ex-Goldman trader in Asia plans credit hedge fund (Reuters)
Former Goldman Sachs managing director in Hong Kong Christopher Mikosh is preparing to launch a credit hedge fund by the fourth quarter of this year or early 2013, sources said on Thursday, lifting prospects for the $127 billion industry in Asia. Mikosh, who was a trader within the special situations group of Goldman Sachs in Hong Kong, left the Wall Street bank at the beginning of the year to start his own firm called TOR, said six sources familiar with the plan.
Dell CIO Focused on ROI (WSJ)
Dell this week lost the support of hedge fund manager David Einhorn, who wrote in a letter to investors that “non-PC growth [at Dell] was smaller than we’d hoped and the PC deterioration was worse than we’d anticipated.” But while many in the investment community hold a dim view of Dell’s ability to rebound, the company is working to drive new revenue and contain costs. The company is in the midst of a challenging shift from a hardware vendor to a combined hardware, software and services business, growing through acquisitions, and navigating the same difficult European economic waters as everyone else. CIO Andi Karaboutis, who sits on the company’s Business Architecture Team committee, says she’s working with other business leaders on a number of key initiatives, including supply chain efficiency, the integration of newly acquired companies, and providing individual employees with the tools they need to work more productively. She says each technology-driven initiative “has to have a return on investment. We have a complete laser focus on that internally,” she told CIO Journal during an interview.
SEC Charges Phony Company President for Role in Facilitating Fake Investment in Penny Stock Company (SEC)
The SEC alleges that Ronald Feldstein pretended to be the president of a private company, LED Capital Corp., and entered into an investment agreement with penny stock issuer Interlink-US-Network Ltd. Feldstein in fact held no such position at LED Capital Corp. and was merely being paid by Interlink’s management to play the role of a purported Interlink investor so they could spread news of a much-needed capital infusion. Feldstein then helped Interlink disseminate the false information in an SEC filing. The SEC charged Interlink last year as part of a complaint against several perpetrators of an alleged green product-themed Ponzi scheme.
SEC Charges Close Friend of Staffing Company CEO with Insider Trading Around Acquisition (SEC)
The Securities and Exchange Commission has charged the close friend of a CEO with insider trading in the stock of a Houston-based employment services company by exploiting confidential information he learned while they were spending time together. The SEC alleges that Ladislav “Larry” Schvacho, who lived in Georgia at the time of his illegal trading, made approximately $511,000 in illicit profits by using inside information to trade around the acquisition of Comsys IT Partners Inc. by another staffing company. Schvacho gleaned nonpublic information while the Comsys CEO called other Comsys executives to discuss the acquisition and through confidential, merger-related documents to which Schvacho had access.
Nomura Chief Resigns Over Insider Trading Scandal (NYTimes)
In a resignation more reminiscent of Nomura’s scandal-plagued 1990s than the global investment bank it has sought to become, the firm’s chief executive and his top lieutenant resigned on Thursday over recent revelations their employees abetted insider trading. The bank’s chief executive, Kenichi Watanabe, who was the architect of Nomura’s takeover of Lehman Brothers‘ assets in Asia and Europe, resigned to take responsibility for the scandal, together with Takumi Shibata, the chief operating officer.
Former Top Barclays Official in Line for $13.6 Million Payout (NYTimes)
A senior Barclays executive at the center of the rate-rigging scandal is set to receive an £8.75 million ($13.6 million) payout, according to a person with direct knowledge of the matter. The compensation for Jerry del Missier, the bank’s former chief operating officer who resigned in early July, is likely to spark renewed scrutiny on Barclays.
David Einhorn’s Greenlight Still Waiting for Obamacare Pay-off (InstitutionalInvestor)
David Einhorn’s Greenlight Capital made a big bet on a pair of managed care companies leading up to the Supreme Court’s historic decision regarding the Patient Protection and Affordable Care Act — or Obamacare — in late June. The hedge fund manager told clients in the firm’s second quarter letter that it established “substantial new positions” in Cigna and Coventry Health Care, noting that the entire sector had been battered in anticipation of the High Court’s ruling.
Oaktree Hires Julio Herrera for Emerging-Markets Opportunities (InstitutionalInvestor)
The $77.9 billion alternative investment firm Oaktree Capital Group has hired former Fintech and Lehman Brothers executive Julio Herrera to run a new emerging-markets opportunities business. The Santa Monica, California–based firm expects to start raising money for an emerging-markets credit opportunities fund shortly and will also use Herrera’s expertise, and that of the team he is building, to advise on investments across the firm.
Peregrine Trustee Hires Team to Trace Missing Money (HedgeWorld)
Peregrine Financial Group’s bankruptcy trustee has hired a team of forensic accountants to help figure out what money remains at the failed futures brokerage after its chief executive’s arrest and confession to years of looting his customers’ accounts. Ira Bodenstein, the trustee, hired PricewaterhouseCoopers over the weekend and the accountants started work on Monday [July 23], he told Reuters on Wednesday [July 25]. Their task is to secure data and gather information, he said.
