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The Blackstone Group L.P. (NYSE:BX) founder Stephen Schwarzman will personally donate $100 million to a scholarship fund at China ‘s Tsinghua University as part of the largest internationally funded philanthropic project in the country’s history. Schwarzman has already raised another $100 million from a group of mostly Western donors including BP plc (NYSE:BP), The Boeing Company (NYSE:BA), General Electric Company (NYSE:GE) and hedge fund magnate Ray Dalio. He’s working to raise a further $100 million to fill out the program’s planned $300 million endowment. “The goal is to build the most prestigious and well-funded international scholarship program in the most populous country in the world,” Schwarzman said. Classes of 200 students recruited from the United States, China and other countries will study a specially designed curriculum in a one-year master’s program.
Apple’s dimming luster roils suppliers, investors (Reuters)
Apple Inc. (NASDAQ:AAPL) marketing chief Phil Schiller let slip during last August’s courtroom battle with Samsung that when setting forecasts for new iPhones, the inside joke was that people should assume sales would equal all previous versions combined. That quip, uttered in front of Samsung Electronics Co Ltd’s trial lawyers and the media, no longer rings true as Apple Inc. (NASDAQ:AAPL) appears to be losing a once vice-like grip on its supply chain and Wall Street. Suppliers and investors are struggling to gauge demand for the iconic smartphone as Samsung and up-and-coming rivals grab market share. Indications of reduced shipments now send shares in Apple Inc. (NASDAQ:AAPL) and its component-makers into a tailspin. And criticism that innovation has stalled after the death of its legendary co-founder Steve Jobs 18 months ago is hurting sentiment in a stock that closed the week below $400 for the first time since December 2011.
Hedge Fund Manager “Earns” $1 Million an Hour (AllGov)
Last year, even as 15 million Americans continued to look for work and the average wage barely kept up with the cost of living, the 25 best paid hedge fund managers raked in a total of $14.14 billion, an average of $565.6 million per year, according to an analysis published last week by Institutional Investor Alpha. The top ten took home $10.1 billion, and top manager David Tepper—who did not even make the top 25 last year—made off with $2.2 billion, equivalent to $1,057,692 an hour, as much as the average American family makes in 21 years. As the report points out, the 2012 numbers were actually the lowest since 2008, when hedge fund managers lost money because of the financial crisis they largely caused. In 2011, the top 25 made $14.4 billion.
Hedge-Fund Billionaire Leads Donors in Pushing Obama on Keystone (BusinessWeek)
President Barack Obama faces growing pressure from Democratic donors to reject the Keystone XL pipeline amid signs that the project is headed for approval. Donors and party activists are seeking to influence Obama through personal pleas and by pumping money into elections. Their goal: to demonstrate that turning down TransCanada Corporation (NYSE:TRP)’s petition to build the $5.3 billion pipeline to carry tar-sands oil from Canada to U.S. refineries can be a political winner. “The way we can make a difference on this is to show that there’s public support for our position,” said Tom Steyer, the founder of hedge fund Farallon Capital Management LLC and a Keystone foe who has pledged to spend millions on elections such as this month’s Democratic Senate primary in Massachusetts.
Hedge fund AUM up by USD122bn in Q1 (Hedgeweek)
Total capital invested in the global hedge fund industry expanded during the first quarter at the fastest rate since 2010 as global financial institutions positioned for both growth and volatility across fixed income, equities, currencies and commodities. Total assets under management increased by USD122bn, the largest increase since Q4 2010, bringing industry capital to a record USD2.375trn, according to the latest HFR Global Hedge Fund Industry Report. Investors allocated USD15.2bn of net new capital to hedge funds in Q1 2013, marking the highest inflow since 1Q12. Hedge funds have experienced capital inflows in 14 of the 15 quarters.
China, India will boost gold: Analyst (VancouverSun)
John Paulson, the hedge-fund manager who’s lost money this year after a 16 per cent decline in gold, told clients that purchases by central banks and demand in Asia will support the metal in the near term. “We believe that ongoing central bank purchases and strong gold demand from China and India will help support the gold price in the near-term,” Paulson & Co. said in a letter to clients that was obtained by Bloomberg News. Gold plunged 13 per cent in two sessions through April 15, the biggest slump since 1980.
Hedge funds increased net bet on higher gold prices during last week’s selloff (Opalesque)
Hedge funds are piling up on gold despite the drop in prices, data from the U.S. Commodity Futures Trading Commission (CFTC) showed, BusinessWeek reported. Indeed, gold prices plunged the most in 33 years last week. Data from the CFTC showed that hedge fund managers and other speculators had raised their gold net long positions by 9.8% to 61,579 futures and options in the week ended April 16. “Money managers cut the number of bets on lower gold prices by 8.2% during the week ended Tuesday, and left their amount of bets on higher prices nearly unchanged,” confirmed Dow Jones. The move to raise wagers on gold gives speculations that hedge fund manager John Paulson is on his way to recover the money he lost on his gold bets.
Hedge funds find new Swiss rules good for business (Reuters)
At least ten new hedge funds are set to launch in Switzerland this year, after none in 2012, in a boost to the country’s $24 billion industry, sources familiar with the plans said. Fund managers had feared tighter legislation passed this year would damage the hedge fund sector in Switzerland, but the new rules have in fact attracted institutions previously unable to invest in such funds by giving them more protection. …Ex-JPMorgan Chase & Co. (NYSE:JPM) star trader Deepak Gulati, who named his Argentiere Capital after a picturesque ski resort in the French Alps, and former Man Group/GLG Partners (EMG.L) manager James Berger who has set up B1 Capital will both launch funds shortly, people close to them said. Their funds are expected to be among the larger global hedge fund launches this year.
It’s Never Been Harder To Start A Hedge Fund (BusinessInsider)
If setting up a hedge fund were easy, more people would do it: bar inheritance or winning the lottery, there are few swifter paths to immense riches. Sadly for aspiring plutocrats, it is getting ever harder to launch a fund. Swaggering financiers once joked that launching with less than $1 billion of outside money to invest was hardly worth their time. Debuts that splashy are now notable only for their scarcity. A new fund typically opens with $50m-100m in assets under management. …Punier funds make for a less attractive business model. A $50m pile might once have been enough to sustain a small firm. Creaming off 2% of assets and 20% of profits—the standard hedge-fund fee formula—could generate around $2m a year given decent performance. No longer. Declining fees and low industry-wide returns have halved that amount.
Private banks must revamp to regain clients (AsianInvestor)
Private banks in Asia will need to change their approach to serving the high-net-worth segment in the post-crisis era, according to fund-of-hedge-fund executives. Once a vital distribution channel for fund of hedge funds, private banks have lost the confidence of HNW individuals and are now used as a conduit to sell the banks’ own products, according to FoHF panellists at the Fund Forum Asia event in Hong Kong last week. Prior to the crisis, private bank channels had an “open architecture” for fund distribution, notes Daniel Ghirardi, Asia-Pacific chief executive for Swiss-based Syz Group. The firm’s business spans private banking, asset management and investment funds.
D.E. Shaw Multistrategy Fund Chalks Up Gain in Q1 (InstitutionalInvestorsAlpha)
David Shaw’s multistrategy fund, D.E. Shaw Composite Fund, posted a 4.6 percent gain in the quarter ended March 31, according to the D.E. Shaw Group’s March report sent recently to clients. Its performance is more or less in line with other well-known multistrategy funds, such as those managed by Kenneth Griffin’s Citadel and Daniel Och’s Och-Ziff Capital Management Group. Citadel’s Kensington and Wellington funds and Och-Ziff’s OZ Master Fund were each up around 4 percent in the same period.As of April 1, one fourth of the Composite family of funds’ assets were invested in equity arbitrage strategies. Another 13 percent to 14 percent was allocated to equity-linked strategies,with about 10 percent to discretionary macro strategies and another 10 percent to corporate credit-related strategies, according to the report, a copy of which was obtained by Institutional Investor’s Alpha.
Cohen’s land deals (NYPost)
Hedge-fund billionaire Steve Cohen is on a real-estate buying spree as his SAC Capital insider-trading woes continue. Cohen, whose firm got a conditional court agreement to pay the Securities and Exchange Commission $602 million this week, snapped up 145 Perry St. in the West Village for $38.8 million, according to public records of the sale. The apartment building was being developed by David Halpern Architects, but that deal fell through. Records show it was sold to Cohen’s Greenwich Heights Corp. in Stamford, Conn.
The shame of hedge fund masterminds (TampaBay)
From the “nice work if you can get it” desk, the New York Times business section offered this headline the other day: “Pay Stretching to 10 Figures.” No, this isn’t about innovators being paid for their smart and indispensable products, a la Steve Jobs. It is a story of hedge fund managers, the tin-pot potentates of the financial world. They are America’s top-dog moneymakers, pulling in more than movie stars, top athletes, even banking CEOs. They tend to shun the spotlight, and for good reason. An average family would have to work for 18 years and 146 days to make what an average hedge fund manager makes in one hour. We must all look like barbarians at the gate to them.
Former mega hedge fund Stark Investments liquidates while fund closures globally decrease (Opalesque)
Stark Investments announced it would close down its operations after assets fell by 85% from $14bn to $2.1bn; a report by HedgeFund Intelligence suggested that the rate of closures in the global hedge fund industry went down for the fourth year in a row, with 302 fund shutdowns in 2012 (HFI also reported that hedge funds assets topped $2.2tln in 2012 on the back of solid average performance across the industry and new inflows from investors worldwide); the SS&C GlobeOp Forward Redemption Indicator for April 2013 measured 2.95%, down from 4.33% in March; data from eVestment showed that hedge funds flow turned negative in March amounting to $12.4bn, but flows for the quarter were still positive $7.6bn and total industry AUM reached $2.664tn; and Tower Fund Services commented many investment funds are struggling to raise capital as only 5% of them attract 80%to 90% of all capital flows.
Solaise doubles assets as clients eye smaller hedge funds (Reuters)
A hedge fund set up by alumni from some of the world’s biggest computer-driven traders of futures markets has almost doubled assets in recent months, as investors in the sector look to smaller firms to help them ride out tough market conditions. Solaise Capital, set up in late 2010 by former employees of Winton, Man Group’s (EMG.L) flagship AHL fund and Aspect Capital, told Reuters that inflows from a pension fund client in December and further inflows this year have lifted its assets to around $165 million. That compares with the $86 million it ran at the end of November. Meanwhile Man Group has seen assets at its AHL computer-driven investment fund fall to $14.4 billion at the end of last year from $21 billion a year before, while Winton Capital, one of the world’s biggest funds, has also seen outflows.
‘Oblivion’ Proves Cruise Still Controls Box Office (WSJ)
Proving that Tom Cruise still has mass Hollywood appeal even after his last few flops, “Oblivion” delivered one of the star’s biggest ever openings at the box office this weekend. The science-fiction film grossed $38.2 million in the U.S. and Canada, according to an estimate from distributor Universal Pictures, owned by Comcast Corporation (NASDAQ:CMCSA) +1.43% That is a solid, if not fantastic, start for a movie of its size. “Oblivion” cost about $150 million to produce, according to a person involved in the production. A studio spokeswoman said the final cost after tax credits from shooting locations including the United Kingdom and Louisiana was $120 million. Universal co-financed the movie with a fund managed by hedge fund Elliott Associates LP.
Hedge Fund Strategy – Motif Investing Raises $25 Million (HedgeCo)
Motif Investing, the company that pioneered ideas-based stock investing, has raised an additional $25 million in financing from a group of investors including Goldman Sachs Group, Inc. (NYSE:GS) and existing Motif investors Foundation Capital, hedge funds Ignition Partners and Norwest Venture Partners. Darren Cohen, Managing Director of Principal Strategic Investments at Goldman, is joining Motif’s board as an observer. This coupled with the investment is expected to deepen the firm’s relationship with Motif.
