Renowned hedge fund manager Ray Dalio added more ETFs to his portfolio in the third quarter as his fund extends exposure to the emerging markets. Bridgewater Associates, the world’s largest hedge fund with US$130 billion assets under management, invested an additional US$640 million in two emerging markets ETFs on top of existing stakes: namely – Vanguard MSCI Emerging Markets ETF (VWO) (+10,479,574 shares) and the iShares MSCI Emerging Market ETF (EEM) (+1,576,092 shares). Together with the SPDR S&P 500 (NYSEARCA:SPY) (+145,700 shares), the ETFs make up the top three additions that Ray Dalio added to his fund in the third quarter by market value.
Hedge fund Omega sees disappointing corporate earnings in 2013 (Reuters)
Omega Advisors, one of this year’s best-performing hedge funds, is preparing to see less robust corporate earnings next year, Steven Einhorn, the firm’s vice chairman, said on Wednesday. “We expect earnings will be disappointing to consensus in 2013,” Einhorn said at the Reuters Investment Outlook 2013 Summit. …Omega Advisors, which oversees $7 billion in assets, has been among the year’s standouts with double-digit returns at a time when the average hedge fund is up only in the low single digits. Bets on Apple (AAPL.O) and Sprint (S.N) have paid off handsomely for the fund, founded by Leon Cooperman in 1991.
Clearstream opens hedge fund processing center in Dublin (FTSEGlobalMarkets)
Clearstream has established a branch in Dublin to extend its post-trade offering in the area of investment funds to hedge funds. The Dublin Branch, will extend the company’s investment funds business to alternative funds and allow Clearstream to service mutual funds, exchange-traded funds and hedge funds. The hedge fund investor services were set up following a increase in client demand for such investments and will over time be fully integrated into Clearstream’s fund processing environment. The new venture has already signed six pilot customers. Christian Westerholt, previously head of product development in Clearstream’s Investment Fund Services area, will be the General Manager of the Dublin branch.
SEC nears taking action against SAC Capital (KCRA)
The Securities and Exchange Commission is getting closer to taking enforcement against SAC Capital related to the largest insider trading case ever. SAC Capital, a $14 billion hedge fund run by billionaire Steven A. Cohen, received a Wells notice from the SEC late last week, according to a source familiar with the situation. The SEC issues Wells notices to warn firms that they are likely to bring an action against them. Cohen and SAC’s President Tom Conheeney informed SAC Capital’s investors of the Wells notice on a conference call Wednesday morning, according to the source.
Hedge-Fund Chief, Picasso Heir to Toast Rare Menil Gala (BusinessWeek)
Houston’s Menil Collection will celebrate its 25th anniversary tomorrow night with a sold-out party that has already raised $2.2 million, well beyond its $1.5 million goal. It’s only the third gala staged by the free museum, which holds a major art collection including works by Paul Cezanne, Mark Rothko and Andy Warhol. An endowment of about $200 million and generous support from the board, donors and corporate sponsors keeps the budget healthy. “We now raise about 40 percent of our operating budget” without galas, the director, Josef Helfenstein, said by phone.
Donald Sussman supports increase in hedge fund taxes (PressHerald)
The recent letter about U.S. Rep. Chellie Pingree and her husband, Donald Sussman, notes that Mr. Sussman is in the hedge fund industry, and notes that President Obama had been critical of the law that allows hedge fund managers to pay only 15 percent of their income on money which is treated as a capital gain. …Sussman does not think that opponents of unlimited spending should allow its advocates to engage in it unilaterally. I believe that neutralizing the partisan advantage that comes from the Republican super PACs is not only a matter of electoral fairness in the short term, it is the best way to get agreement that we would be better off — as Sussman believes — if we put an end to this unlimited spending.
Ridley Park becomes latest hedge fund casualty (eFinancialNews)
Julian Barnett, who launched the Ridley Park Paragon fund, a long/short equity strategy, in May 2010, is closing his doors after disappointing performance, according to a person close to the firm. A spokesman for Ridley Park declined to comment. Ridley Park launched with around $350m, offering discounted fees for early-stage investors. The firm’s current assets under management could not be learned. The fund lost 27% last year and is up 6.5% this year to the end of October, according to investors. The average equities hedge fund lost 8.38% last year and is up 5.67% in the first 10 months of this year, according to data provider Hedge Fund Research.
Acquitted Hedge Fund Exec’s Legal Fees Bid Deemed Untimely (Law360)
A former Lancer Management Group LLC executive acquitted on charges of aiding a $200 million investment scam lost his bid for approximately $500,000 in attorneys’ fees on Wednesday after a Florida federal judge said he made the request too late. Martin Garvey, who was acquitted in 2011 of all charges related to the scheme, can’t recoup his legal fees because he issued his request after a deadline established by the receiver overseeing the dispersal of funds from the hedge fund, U.S. District Judge Kenneth A. Marra…
Dismal year for quantitative hedge funds (FT)
Quantitative hedge fund managers are facing up to one of their worst years on record as losses mount for many of the sector’s biggest names. BlueTrend, the $11bn Geneva-based fund run by Leda Braga, dropped 5.3 per cent in October, bringing year-to-date losses to 3.1 per cent, an investor in the fund said. Winton Capital, the world’s largest quant fund, with $26bn under management, has seen its flagship futures fund drop 5.65 per cent in the year to November 27. Aspect Capital, another large London-based quant fund, is down 11.7 per cent in the year to November 21.
Morningstar MSCI Composite Hedge Fund Index down -0.8% in October (+4.0% YTD) (Opalesque)
Morningstar, Inc., a leading provider of independent investment research, today reported preliminary hedge fund performance for October 2012 as well as estimated asset flows through September. The Morningstar MSCI Composite Hedge Fund Index, an asset-weighted composite of nearly 1,000 hedge funds in the Morningstar Hedge Fund database, fell 0.8% in October, but was up 4.0% year to date as well as during the last 12 months. “Hedge funds were a mixed bag in October, as managed futures strategies performed particularly poorly, but international equity-focused and short-biased funds posted gains on average,” Nadia Papagiannis, director of alternative fund research at Morningstar, said.
Conifer Promotes Howard Eisen To Head Of Business Development, Names Manish Garg As Chief Information Officer (SacBee)
The Conifer Group, LLC (Conifer), a leading provider of fund administration, middle office, trading and prime brokerage services to the hedge fund industry, is pleased to announce the promotion of Howard Eisen to Head of Business Development. Mr. Eisen joined Conifer as a Managing Director in January 2012 to add his hedge fund experience to Conifer’s business development team. Eisen will be reporting to Conifer President and CEO Jack McDonald. In addition, Conifer also named Manish Garg as the firm’s Chief Information Officer. Mr. Garg has been serving as acting Head of Technology. Garg will be reporting to Conifer COO, Sal Campo.
Chicago hedge fund discloses 6.1 percent stake in Zillow (GeekWire)
Citadel, the Chicago hedge fund led by billionaire financier Kenneth Griffin, has filed documents with the SEC disclosing that it owns 6.1 percent of Seattle online real estate company Zillow Inc (NASDAQ:Z). The filing comes as Zillow’s stock continues to slump, though it is up nearly three percent in trading today at about $26 per share. The stock is down more than 35 percent in the past six months, after a spectacular run on Wall Street in which it at one topped $45 per share. Citadel is one of the largest hedge funds in the world, and Griffin is estimated to be worth $3.1 billion, according to Forbes.
London Hedge Fund Struggles to Raise Capital (HedgeFund)
Sutesh Sharma’s hedge fund firm Portman Square Capital is struggling to reach its initial target of $500 million. Financial News reported that London-based Portman Square, which plans to launch before the end of the year, has only about $200 million in committed capital. The article also said that firm is unable to launch with its current sum given the “size of its team and infrastructure.” Sharma, who was the head of proprietary trading at Morgan Stanley and the former global head of proprietary trading at Citigroup, confirmed to Financial News that Portman Square is in “discussions with a number of potential strategic investors.”
Bill Ackman’s Pershing Square Third Quarter Hedge Fund Holdings (Kapitall)
In true value investing style, the New York-based hedge fund is concentrated in very few positions with big stakes in each of them. Pershing Square Capital Management, the activist hedge fund run by famed value investor Bill Ackman, added two new positions in the third quarter to a grand total of nine positions in its portfolio. In the third quarter, Pershing Square initiated positions in Burger King Worldwide (BKW) by purchasing 38,361,360 shares worth US$535 million and in Matson Inc (MATX) by purchasing 3,644,870 shares worth US$76 million. In addition, the hedge fund also bought an additional 6,030,684 shares in Proctor and Gamble (PG) to take its total stake in the company to 27,946,892 shares. It also boosted its stake in General Growth Properties Inc. (GGP), a real estate investment trust, by 2,500,000 shares to a total of 74,733,712 shares.
Duke Energy CEO: Shale gas key to changes (Equities)
Jim Rogers, CEO of Charlotte-based Duke Energy Corp., said there’s been a turnaround in the last five years tied to the “shale gas revolution,” and the utility has increasingly turned to electricity production from natural gas. Rogers was a keynote speaker at the Duke University Energy Conference held Wednesday at Duke’s Fuqua School of Business. He delivered a talk called “The Future of Energy: How will Today’s Challenges Shape the Future of the Industry?” In his remarks, he spoke about changes for the industry in the last five years, including a decline in electricity demand since 2007, and cheaper and more abundant U.S. natural gas resources.
How The Ruling On Argentina’s Sovereign Debt Could Seriously Mess Things Up For Greece (BusinessInsider)
Nouriel Roubini has an interesting paper out on how New York Judge Thomas Griesa’s ruling on Argentina’s sovereign debt payments could impact the entire world, especially Greece. If you’re just tuning in, Argentina has all but lost a lawsuit against it spearheaded by hedge fund billionaire Paul Singer. Singer bought Argentine bonds in 2001 when the country’s economy collapsed and he wants all his money for them. Argentina refuses to pay him, though, saying that he didn’t take the opportunity to restructure that debt in 2005 and 2010 like most other bondholders did.
Whatever You Do, Don’t be Fooled by the ‘Icahn Effect’ (Nasdaq)
Very few hedge fund managers get to have an investing maxim named after them. But so many people follow in the slipstream of activisthedge fund manager Carl Icahn, trying toprofit from his moves, that there’s even a phenomenon named after him — “The Icahn Effect.” Though this effect can be seen every few months — most recently with quick spikes for Netflix (Nasdaq: NFLX) and Greenbrier Cos. ( GBX ) — it’s a trend you should ignore or even bet against. Simply put, Icahn is great at rattling cages, but has a pretty poor track record when it comes to spotting truly undervalued companies. Looking at trading data during the past few years, it’s hard to understand why hisinvestment moves have gleaned a cult following.
Ackman investors to convert $2.2 bln into permanent capital (Reuters)
Hedge fund manager William Ackman moved one step closer to getting permanent capital for his Pershing Square funds when more than 120 investors committed to convert $2.2 billion of their investments into stakes in Pershing Square Holdings when it goes public. “Our principal goal in launching Pershing Square Holdings, Ltd was to convert existing capital to an eventual permanent form,” Ackman wrote in a letter to investors. “We are off to a good start,” he added. A copy of the letter was obtained by Reuters.
The K-Cup Patent Is Dead, Long Live The K-Cup (WSJ)
Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) +27.32% managed to get tens of millions of Americans paying per cup for the coffee they brew in their own kitchens, and as long as its patents lasted, it was the only company that could sell the single-serve pods their Keurig coffee machines needed. …The threat of looming patent expiry and new competitors was a major factor in hedge fund manager David Einhorn‘s argument that tough times were ahead for Green Mountain. He made that argument back in October 2011, prompting a sell-off in Green Mountain stock.
Testimony backs up Ganek (NYPost)
Hedge fund honcho David Ganek can breathe easier. Sam Adondakis, a former analyst at Ganek’s $4 billion Level Global, testified that while he told plenty of folks at the now-defunct firm that he was getting illegal stock tips from a Dell insider, Ganek wasn’t one of them. Sandy Goyal, a former Neuberger Berman analyst, pleaded guilty to obtaining confidential earnings data from his contact at Dell and then passing it on to Adondakis and others.
