Sears to exit S&P 500 (CNN)
Sears Holding Company has had its membership in the S&P 500 revoked. The ailing retailer, which owns Sears and K-Mart chains as well as apparel brand Land’s End, will exit the index at the close of trading on Tuesday, Sept. 4, said S&P late Wednesday. S&P said the number of Sears shares available to the public, known as its public float, has long been below the 50% threshold needed to be considered “representative of the index.”
The New York Times’ Michael Barbaro reports that legendary hedge fund manager Julian Robertson asked Mitt Romney to be the chief executive of Tiger Management after his failed bid to secure the Republican presidential nomination back in 2008. Robertson offered Romney an annual salary of $30 million plus profits from investment performance, the report said citing anonymous sources familiar with the matter.
SAC Capital Increases Stake in TiVo to 5.2% (ValueWalk)
Steve Cohen’s SAC Capital has just increased its stake in TiVo Inc. (NASDAQ:TIVO). Steve Cohen’s hedge fund previously held two million shares in the company. According to a 13G filing with the securities and Exchange Comission (SEC), SAC Capital now owns over 4.4 million shares of the company. The filing was triggered due to the 5% threshold which Cohen has just passed. Cohen’s fund now owns 6,464,344 common shares equal to 5.2% of the company. With a market capitalization of approximately $1.2 billion, Cohen’s has slightly over $62 million invested in the company. With total assets under management close to $20 billion, this is a small holding for SAC.
Hedge Fund Proposal Would Allow Secretive Enclave to Open Up (NYTimes)
The tight-lipped world of hedge funds might soon be able to speak more freely. The Securities and Exchange Commission on Wednesday proposed rules that would remove a longtime prohibition against general solicitation by hedge funds, a huge change for an industry that has ballooned in size and influence in recent decades.
Hedge Fund Advertising, Bankers, Barclays: Compliance (Bloomberg)
Hedge funds may go from soliciting individual investors behind closed doors to conducting wide advertising campaigns without restriction under a rule proposed yesterday by the U.S. Securities and Exchange Commission. …The Jumpstart Our Business Startups Act, signed into law by President Barack Obama in April, ended the ban as part of a wider effort to expand funding options for fledgling companies. The shift drew criticism from investor-protection groups and the mutual-fund industry, including the Washington-based Investment Company Institute, which have said that lifting the ban without restrictions may expose investors to misleading advertisements by some private funds.
Pimco, the quiet giant among commodity investors – Kemp (Reuters)
Pimco is well-known as the world’s largest bond fund. But how many people realize it is also the largest investor in commodities, with a portfolio dwarfing the more high-profile pension funds? And according to one of the most widely used databases, Pimco’s flagship fund has been the most successful general commodity fund over the last decade.
QEH: Another Hedge Fund Replication Attempt (SeekingAlpha)
AdvisorShares QAM Equity Hedge ETF (QEH) hit the tape on August 8, 2012. The actively managed fund-of-funds will try to beat long/short equity hedge fund performance, while trying to replicate the characteristics of the benchmark HFRI Equity Hedge Total Index. The QEH portfolio is directed by Kurt Voldeng and Akos Beleznay of Memphis-based Commerce Asset Management. The firm manages about $43 million. Its subsidiary, Quantitative Asset Management, develops alternative investment products and is apparently the source of the “QAM” brand name. AdvisorShares is a turnkey administrative platform that helps firms like Commerce/QAM offer ETFs to the public. Voldeng and Beleznay are experienced hedge fund consultants, according to the QEH promotional materials, with a combined 30 years in the business.
ArXiv’s funding future boosted by hedge-fund charity (Nature)
The financial sustainability of the arXiv preprint server at Cornell University Library in Ithaca, New York, received a boost yesterday with the announcement that the Simons Foundation, based in New York City, would provide the repository with up to US$300,000 a year in funding for the next five years. The sum would include a yearly $50,000 unconditional grant, with the remainder being matched to funds provided by arXiv’s other donors. ArXiv has been looking to put itself on more solid financial footing since January 2010, when Cornell University Library announced that it would seek outside financial support from the academic institutions that account for most of the usage of the preprint server.
IKEN Capital: Engineering A Hedge Fund (Finalternatives)
George Hutson earned a master’s degree in engineering at Imperial College, London, but it took him only a short time to realize it wasn’t for him. But it did offer the future IKEN Capital chief investment officer a chance to pursue something that might be. “During that time, I started doing a little bit of trading for my own accounts, so I decided to transfer, when I finished up, to a master of finance,” Hutson told FINalternatives. And he not only continued to trade while he studied—he made enough to pay for his degree.
Texas Pension Picks Five Hedge Funds For $50 Million Allocation (Finalternatives)
The San Antonio Fire & Police Pension Fund is making its most recent hedge fund buy go a long way. The Texas pension, which has been reducing and remaking its hedge fund portfolio, has spread $50 million across five hedge funds. Each of the funds received $10 million from the $2.2 billion plan.
SEI completes first Form PF filing for hedge fund client (HedgeWeek)
SEI has completed its first Form PF filing on behalf of a global, multi-billion-dollar hedge fund client. SEI files the Form electronically as part of its multi-faceted Form PF service, designed to help managers ease the time, infrastructure, and expense burdens related to managing the volumes of information necessary to complete the regulatory filing.
Avondale Hires 2 For Hedge Fund Team (Finalternatives)
Nashville, Tenn.-based Avondale Partners has hired Patrick Davis and David Hale for its long/short equity hedge fund, Avondale Conquest. Davis joins Avondale as a director responsible for growth of Avondale Conquest and other alternative products for the eastern half of the U.S. and Texas. Previously, he was president and CEO of F.P. Davis & Company, a boutique financial services firm he founded in 2004 catering to institutional investors and hedge fund managers. Davis’ time in the hedge fund space had included stints at several firms, including Silver Leaf Partners in New York City, Alternative Investment Resource in Chicago and Van Hedge Fund Advisors in Nashville.
Hawaiian Fund Manager Reaches Settlement with SEC (HedgeFund)
The Securities and Exchange Commission has settled with a hedge fund manager from Hawaii over charges that he falsely represented his funds to investors. According to the SEC, Gary Marks has agreed to pay disgorgement of $321,702, a penalty of $100,000, and prejudgment interest without admitting or denying the allegations brought against him.
Funds Do Commercials Using Serene Images Of Nature (BusinessInsider)
As part of a provision in the JOBS Act (Jumpstart Our Business Start-ups Act), the SEC could lift a long-standing ban that would then allow hedge funds and private equity firms to advertise. We can only imagine the billboards and TV commercials that we might be seeing in the future.
Hedge Funds Love These 4 BRIC Stocks Positively Correlated To Volatility (SeekingAlpha)
Do you worry about the emerging stock market’s volatility? One idea is to consider a stock’s recent correlation to volatility. We ran a screen on BRIC stocks with this idea in mind. …2. Companhia Siderurgica Nacional (SID): Operates as an integrated steel producer in Brazil and Latin America. Market cap at $7.39B, most recent closing price at $5.07. Brazil.
Veritas – Why investors may question if hedge funds are worth the money this year (InvestmentEurope)
When Alfred Winslow Jones established the first hedge fund in 1949, its fee structure raised eyebrows, notably the fact Jones kept one fifth of his fund’s profits for himself. Twenty years later, after Jones had made about 5,000% by 1968, investors didn’t care. Jones had made 100 percentage points more between 1960 and 1965 than the 225% over the same period from the best mutual fund.
Hedge Funds Among Plaintiffs Suing Over Libor (Finalternatives)
Investors are racing to U.S. courthouses to sue banks implicated in the Libor rate-fixing scandal, and hedge funds aren’t about the be left out of the potential for billions in payouts. Hedge funds are among the plaintiffs in the growing number of lawsuits over the scandal. Austrian hedge fund FTC Capital is seeking class-action status for a complaint that seeks damages against banks on the U.S. dollar Libor rate-setting panel, The Wall Street Journal reports. That suit deals with the futures market, with a notional value of more than $560 trillion.
Milwaukee Einhorns get spotlight in NY Times (BizJournals)
In the Milwaukee area, Stephen Einhorn and his son, Daniel, are fairly well known for running the Capital Midwest Fund, but in national financial industry circles, they are not the famous members of the family. That would be David Einhorn, an outspoken and fabulously successful New York City hedge fund manager. An article in Tuesday’s New York Times business section explores the lesser-known Einhorns and their Wauwatosa business. David is Stephen’s son and Daniel’s brother.
Holland & Knight agrees to $25 mln settlement in Ponzi case (ThomsonReuters)
Holland & Knight has agreed to pay $25 million to settle a lawsuit accusing the law firm of missing red flags that would have revealed that its client, the hedge fund manager Arthur Nadel, was operating a Ponzi scheme that duped investors out of $168 million. The settlement, announced Wednesday, would put an end to three years of litigation between Holland & Knight and the receiver for hedge funds controlled by Nadel, who was dubbed a “mini-Madoff” after his scam came apart shortly after the arrest of Bernard Madoff. Trial had been scheduled for October in a Florida state court.
A little-seen Wall Street film emerges (CrainsNewYork)
Anyone intrigued by the world of Wall Street in general, and hedge funds in particular, should click—immediately—to this documentary unearthed by New York magazine writer Kevin Roose. The documentary is a one-hour film made in 1987 called Trader. It stars a young Paul Tudor Jones, a veteran hedge fund manager who you can learn more about here and here.
Hartford’s best 401k at hedge fund (HartfordBusiness)
Hartford hedge fund George Weiss Associates, Inc. has the best 401k retirement program for employees in the region, according to a study from San Diego financial information provider BrightScope. George Weiss knocked The Phoenix Cos. out of the No. 1 spot this year of the Hartford area companies with the highest ranked 401k plans containing more than $100 million in assets.
Hutchin Hill Profits off Trades Related to LIBOR Miscalculations (Valuewalk)
Hutchin Hill Capital LP’s flagship hedge fund, had over $1.1 billion in assets under management till the end of the June quarter, which has now increased to $1.15 billion in July. In the month of July, the fund was up 0.73 percent overall, with +1.39 percent in S&P 500 companies, and +0.5 percent on the global index. On a year-to-date basis, the master fund is up 1.5 percent with an 11 percent increase in returns on S&P index, and 1.77 percent on HFRX global index.
Winning the loser’s game comes full circle (MarketWatch)
Investors love a good metaphor. Bulls vs. bears. A wall of worry. The madness of crowds. One of our favorites, of course, is the classic Charley Ellis tennis comparison, “winning the loser’s game.” We’ll explain in a second… At the other end, to continue with the ship theme, you have the super-deluxe cruise package: the hedge funds. They’ll charge you 2% for your trouble and take 20% off the top, but you should expect the very best — top-shelf advice, cutting-edge talent, an outstanding experience commensurate with the cost.
New methodology whacks Alternative Liquidity’s NAV (ShareCast)
Alternative Liquidity Solutions (ALS), an investment company which hoovers up secondary hedge fund positions, has revealed a sharp drop in its net asset value (NAV) following a big adjustment for fair market and recovery values. Even before the adjustments for fair market and recovery values, the NAV per share eased by 2.3% to 56.47p at the end of June from 57.80p at the end of 2011, despite the company buying back 58,526 shares for cancellation – about 0.16% of the company’s total shares in issue – during the period
Cambridge Associates Appoints Jeffrey Mansukhani Director of Strategy for Research Navigator, Firm’s Comprehensive Alternative Asset Manager Research Platform (EINNews)
Cambridge Associates, provider of independent investment advice and research to institutional and private clients worldwide, has named Jeffrey D. Mansukhani, 47, a Managing Director of the firm, Director of Research Navigator(SM) Strategy. In this role, Mr. Mansukhani will lead the ongoing expansion of the firm’s sophisticated Research Navigator offering. Research Navigator gives experienced owners of assets access to a Cambridge alternative assets specialist and a continually updated online platform containing both quantitative data and qualitative insight on managers and funds within the firm’s hedge fund and private investment manager databases.
Hedge fund to J. Alexander’s board: Stop hindering bidding process (NashvillePost)
The largest shareholder and most vocal critic of J. Alexander’s says the restaurant chain’s board should hit the reset button on their sale negotiations and level the playing field for bidders to compete with chosen buyer Fidelity National Financial. In their latest missive to directors Townes Duncan, Brenda Rector and Joe Steakley, Privet Fund managers Ryan Levenson and Ben Rosenzweig say the recent bids by two unidentified suitors — both were higher than Fidelity National’s $13-per-share offer — should remind the board members of their fiduciary duties to accept the best offer if all other conditions are equal.
LORD COPPER: Will Corzine open up a hedge fund? (MetalBulletin)
I expect most readers will be able to remember October 2011, although it seems that one person would appear to be hoping that such a span is too much for the memory of speculative investors. Just to refresh, in October of last year, MF Global, a US-based commodities broker, imploded, among strong rumours about the misuse of client funds and reckless trading in rapidly devaluing eurozone government bonds. At the helm was Jon Corzine, formerly head of Goldman Sachs and governor of the state of New Jersey. With that collapse, lots of people lost a great deal.
SEC to review hedge fund ad ban (FT)
Hedge funds and other private investment companies moved one step closer to gaining permission to publicly solicit and advertise for business, under a rule change proposed by US regulators on Wednesday. The Securities and Exchange Commission – in a 4-1 vote – said it would begin a consultation period on a proposal that would end a more than three-decade long ban on public marketing by certain securities issuers, including hedge funds. At present, funds are cautious about even speaking publicly about their businesses, fearing a breach of the regulations.
Marc Faber Agrees, ‘Get the Hell Out’ (FyxNews)
The message to investors should be most clear by now: Quickly get your cash out of financial institutions and buy some gold. “It’s very dangerous to put everything in cash with MF Global or another financial institution, because I’m not too sure about the law . . . if the law will protect you as a depositor or an account holder,” editor of the Gloom Boom Doom Report Marc Faber tells Bloomberg. Whether the messenger comes way of an up-straight and straight-up N.Y. City Italian, an exiled American living in Central America, a young woman totting firearms and a Bible, or an eccentric Swiss-born money manager living in Chiang Mai, Thailand, each warn investors and savers that cash on account is not safe at financial institutions—no matter how much the FDIC or SIPC insures.
Legendary Investor Jim Rogers Eyes Russia (RSX, RSXJ, ERUS, RBL) (ETFDailyNews)
After 18 long years of negotiations, Russia has finally joined the World Trade Organization (WTO), marking a major stride forward in the nation’s continued effort to grow its presence in international affairs and on the global economic stage. Russia is now the 156th member of the WTO and many might find it surprising it is also the last G-20 member to join the global free-trade group. This noteworthy development comes at a time when neighboring eurozone member nations are plagued with debt, while growth prospects at home remain clouded with uncertainty, thus presenting a lucrative opportunity for those with a stomach for risk and a long-term investment horizon [see also Euro Free Europe ETFdb Portfolio ].
Validus To Buy Flagstone In $623 Million Reinsurane Deal (Bloomberg)
Validus Holdings Ltd. (VR) agreed to buy Flagstone Reinsurance Holdings SA for 19 percent more than yesterday’s closing price to expand in property-catastrophe reinsurance. Flagstone investors will get 0.1935 share of Bermuda-based Validus and $2 in cash for every one of their shares, according to a joint statement today from the companies. The transaction represents an aggregate equity value of $623.2 million, the companies said. The deal values Luxembourg-based Flagstone at $8.43 a share, based on Validus’s closing price yesterday.
Billionaire Fails To Find Paradise Betting On Costa Rica Resort (Bloomberg)
When Charles Brewer was shown the piece of land in Guanacaste province, Costa Rica, back in 2006, he knew immediately it was what he had been looking for. Located on the Central American nation’s Pacific coast, it consists of 1,200 acres of rolling hills, with numerous overlooks, a crescent beach and roaming monkeys. …One of the first calls Brewer made while negotiating a purchase option on the Costa Rican land was to fellow Atlantan Tom Claugus. Claugus jumped at the chance to invest, Bloomberg Markets magazine reports in its October issue. He’s a hedge-fund billionaire who three years earlier had decided hard assets such as property were a good bet.
The Morning Leverage: Mad Men May Soon Get Hedge Fund, PE Business (WSJ)
Industrial Opportunity Partners has closed on the first platform investment for its sophomore fund, picking up Aarrowcast Inc., a maker of ductile iron castings from a pair of buyout sponsors, Mo Sergie reports. And a few stories available exclusively to LBO Wire subscribers: Siris Capital Group is nearing the target for its debut fund, and could hold a close at its hard cap within the next two months, Mike Wursthorn and Laura Kreutzer report . . . John Shieber has the scoop on a new Carribean-focused fund from AIC International Investments.
Low yield environment increases sovereign wealth fund pressures (Opalesque)
Low nominal rates and the end to so-called “risk free” investing is adding to the growing pressure on sovereign wealth funds (SWFs) to perform. Relative to pre-2008 levels, official institutions which hold some $10tn in foreign exchange reserves lose approximately $250bn a year. This reality is forcing sovereign wealth funds to critically examine their investments and look for ways to recapture some of those losses. “Managers of public wealth have been impacted by the crisis like every other investor, institutional and individual. They have realized that there are no longer assets that are entirely risk free.
SEC Announces Agenda For Market Technology Roundtable (SEC)
The Securities and Exchange Commission today announced the agenda for its upcoming market technology roundtable that will focus on the relationship between the operational stability and integrity of the securities markets and the ways that market participants design, implement, and manage complex and interconnected trading technologies. The roundtable, announced earlier this month, will take place on September 14 in Washington D.C. Participants will be finalized and announced at a later date.
SEC Proposes Rules to Implement JOBS Act Provision About General Solicitation and Advertising in Securities Offerings (SEC)
The Securities and Exchange Commission today proposed rules to eliminate the prohibition against general solicitation and general advertising in certain securities offerings. Under the proposed rules, which are mandated by the Jumpstart Our Business Startups Act, companies would be permitted to use general solicitation and general advertising to offer securities under Rule 506 of Regulation D of the Securities Act and Rule 144A of the Securities Act.
SEC Announces Advisory Committee Meeting in San Francisco to Discuss Small Business Issues (SEC)
The Securities and Exchange Commission today announced that its Advisory Committee on Small and Emerging Companies will hold its next meeting in San Francisco on September 7 to discuss market structure and disclosure rules among other issues affecting smaller companies. The Advisory Committee was formed last year to provide a formal mechanism for the SEC to receive advice and recommendations on privately-held small businesses and publicly-traded companies with a market capitalization of less than $250 million.
SEC Charges Florida Brokers for Defrauding Brazilian Public Pension Funds in Markup Scheme (SEC)
The Securities and Exchange Commission today charged two former brokers in Miami with fraud for overcharging customers approximately $36 million by using hidden markup fees on structured notes transactions. The SEC alleges that Fabrizio Neves conducted the scheme while working at LatAm Investments LLC, a broker-dealer that is no longer in business. He was assisted by Jose Luna. The pair defrauded two Brazilian public pension funds and a Colombian institutional investor that purchased from LatAm the structured notes issued by major commercial banks.
Anthony Scaramucci: ‘The Mooch’ Is Mitt Romney’s Man on Wall Street (TheDailyBeast)
On Wednesday, as Mitt Romney’s mega-donors clinked glasses aboard a Caymans flag-bearing yacht, one of his biggest, ballsiest bundlers was nowhere to be seen. Anthony Scaramucci, Mitt’s Wall Street matchmaker, has had a busy Republican National Convention. “I was at the Republican Jewish Council’s fashion show,” he tells me, “and I can assure you and your readers: the Republicans have just as many good-looking women as the Democrats.” For a guy who stumped for the Democrats in 2008, only to jump over to Romney’s well-heeled finance team in 2012, that’s important.
Mercer taps new Canadian alternatives boutique leader (PIOnline)
Ryan Bisch, a principal in Mercer’s investment consulting business, was named Canadian leader of the firm’s alternatives boutique, effective Oct. 1, confirmed Jeff Schutes, global leader of manager research and private wealth management. …Mr. Bisch will advise current and prospective Canadian clients on alternative investments, as well as manager research and consulting on hedge funds, infrastructure and exotic alternatives coverage, according to a news release.
Hedge Funds May Finance AMR Bankruptcy Plan (Finalternatives)
A group of hedge funds may give the bankrupt parent of American Airlines as much as $2 billion in new financing. The creditor group includes Carlson Capital, Claren Road Asset Management, Cyrus Capital Partners, Litespeed Management and Pentwater Capital Management. AMR Corp., which owns AA, yesterday sought court permission to pay the fees for the hedge funds’ lawyers and financial advisers as the group considers a deal that could help AMR exit bankruptcy on its own—and would give it greater leverage in its negotiations with US Airways Group over a merger.
Barclays Names C.E.O. Amid Upheaval (NYTimes)
Signaling a return to its British banking roots, Barclays has appointed an insider, Antony Jenkins, to be chief executive, as the bank aims to restore its reputation after a rate-manipulation scandal. Mr. Jenkins, an Oxford-educated Briton who led the retail and business banking unit, steps into the top spot during a period of continued upheaval for Barclays.
Carlyle to Acquire DuPont Performance Coatings for $4.9 Billion (NYTimes)
The Carlyle Group has agreed to buy DuPont Performance Coatings, a maker of automotive paints, for $4.9 billion in cash, as the private equity firm continues its deal-making frenzy. The private equity firm, which is purchasing the business from DuPont, said it was attracted by the unit’s technology and brands, as well as its exposure to developing markets like China and Brazil. The group is expected to generate more than $4 billion in revenue this year.
