Editor’s Note: Related tickers: JPMorgan Chase & Co. (NYSE:JPM), Hess Corp. (NYSE:HES), Goldman Sachs Group, Inc. (NYSE:GS), BlackRock, Inc. (NYSE:BLK), Berkshire Hathaway Inc. (NYSE:BRK.A), Teledyne Technologies Incorporated (NYSE:TDY)
The Baupost Group, the Boston-based investment firm headed by noted value investor Seth Klarman, will probably return some capital to investors at year-end, according to a quarterly letter to clients obtained by Institutional Investor’s Alpha. Klarman says that unless investment opportunities dramatically increase by later in the year, he anticipates returning some money “to better match our assets under management with the opportunity set we see for new investments,” according to the letter, dated April 29. Klarman says he will provide more information and specifics in the fall regarding the return of capital.
Paul Tudor Jones Gave An Impassioned Interview About Poverty On 60 Minutes (BusinessInsider)
Hedge fund legend and billionaire Paul Tudor Jones rarely gives interviews, but last night he appeared on 60 Minutes to discuss his charity, The Robin Hood Foundation. The organization funds charter schools, job training, food programs and more. It all started back in the 80s when Jones saw a 60 Minutes segment about another philanthropist and decided that he wanted to get involved with NYC school children. He threw money at one school for 5 years, but it was a flop. “I felt like I had failed a great deal of those kids, but failure, a lot of times is the fire that forges the steel for success, right? There are going to be stops, there are going to be failures, there are going to be setbacks but you grow from those and you get better and it becomes transformative.”
Dumb money still drives hedge fund merry-go-round (BelfastTelegraph)
More money than God. That’s one of the colourful descriptions of hedge fund managers and the title of a fine history of the industry by Sebastian Mallaby. Leaving aside the Almighty’s personal finances, it’s certainly true that hedge funds have more money from investors than ever before. Figures from Hedge Fund Research last month showed $15.2bn of net new capital flowed in during the first quarter of this year. Total funds under management have hit $2.375trn, up fourfold since the turn of the millennium. The enduring popularity of hedge funds is odd. The HFRX index, a rough measure of the industry’s performance, rose by 3% last year. Meanwhile, the S&P 500 share index put on 18% and the FTSE 100 returned 6% last year. A passive stock market/bond market tracker would easily have beat the aggregate of the actively managed hedge fund sector over the past decade.
Understanding the legal issues of structuring a hedge fund and Fund Management Company (HedgeWeek)
One of the discussion panels at the Bloomberg Hedge Fund Start-up Conference on 28 November 2012 in London explored some of the legal issues start-up managers need to think about when establishing both the fund, and the fund management structure. Entitled Legal: Getting it Right from the Start, the panellists included Gus Black, Dechert LLP (pictured); Richard Perry, Simmons and Simmons LLP and Chris Hilditch, Schulte Roth & Zabel LLP. The first and obvious point is that no single fund structure is going to suit everybody. Ultimately, it depends on how the start-up manager envisages the fund-raising process and where his investors are likely to be based:…
Hess boss says adviser ‘biased’ (NYPost)
John Hess, the chairman and CEO of New York oil giant Hess Corp. (NYSE:HES), says influential proxy advisory firm ISS is full of hot air. Hess yesterday blasted ISS as “biased” and “flawed” after it sided with activist investor Elliott Capital Management in a proxy battle. Last week, ISS recommended that Hess Corp. (NYSE:HES) shareholders vote for the hedge fund’s slate of nominees at the annual shareholder meeting on May 16. “Instead of objective analysis … recent history suggests that ISS has adopted a pervasive policy of bias in favor of the activist,” Hess wrote in a so-called white paper. Hess said ISS is so biased that it has favored activist investors in 73 percent of proxy contests this year.
Three of JPMorgan’s top investors undecided on Dimon’s role – WSJ (Reuters)
JPMorgan Chase & Co. (NYSE:JPM) has yet to convince three of its largest shareholders to support the company in an upcoming vote on whether Jamie Dimon should retain both his CEO and Chairman titles, the Wall Street Journal said. …The investors, BlackRock, Inc. (NYSE:BLK), Vanguard Group Inc and Fidelity Investments – which together control 12 percent of the shares – are still on the fence, the Journal said quoting people close to the firms. Two of the bank’s top 10 shareholders have told Reuters that they will consider voting in favor of the proposal. JPMorgan Chase & Co. (NYSE:JPM)’s $6.2 billion loss stemmed from bets by London-based Chief Investment Office trader Bruno Iksil on an index for credit default swaps. His outsized positions earned him the nickname “London Whale” from hedge fund traders taking the other sides of his positions.
Hedge funds come to Vegas, but they’re not always the be$t bet (NYPost)
The hedge fund honchos descending on Las Vegas for the fifth annual industry conference have a lot in common with the casinos of Sin City: The house always wins. That truism has never been more evident than during the past four years. Forty hedge-fund managers have now made the Forbes billionaire list, and the conference, known as SALT, beginning Wednesday has become the place for them to hobnob with world leaders, former presidents, political pundits and Hollywood celebrities. But the people whose money hedge funds manage haven’t exactly hit the jackpot. …But playing with billionaire star managers remains something of a crapshoot. Just consider the differences between the two keynote speakers at this week’s Vegas schmoozefest: John Paulson and Dan Loeb.
Sidley Adds Singapore Partner (AmericanLawyer)
Sidley Austin has recruited a mergers and acquisitions partner for its Singapore office. Gregory Salanthe was previously co-managing partner of the Tokyo office for Philadelphia’s Morgan, Lewis & Bockius. He will relocate to Sidley’s Singapore office after a transition period in Tokyo. Salanthe has spent much of his career advising U.S. corporations and investments funds on their investments in Japan, with a particular focus on private equity and hedge fund clients. He has acted for Japanese clients on both inbound and outbound transactions as well.
Sun rising over Japan hedge funds (AsianInvestor)
Strong performance by Japan-focused hedge fund managers has sparked investor interest in the past few months. Japanese funds returned an average of 21.7% in the six months through March, according to data provider Eurekahedge, with managers telling AsianInvestor they’re seeing a recent uptick in investor meetings. “The amount of investor enquiries into what we’re doing in Japan, and how we’re generating returns, hasn’t been this high since 2005” says David Baran, co-chief executive officer of Tokyo-based Symphony Financial. The firm’s SFP Value Realization Master Fund, a Japan event-driven strategy, has returned 44% in the three months to end-March.
Cantab to Shut UCITS Fund After Restrictions on Commodity Bets (BusinessWeek)
Cantab Capital Partners LLP, the $5.5 billion hedge-fund firm led by former Goldman Sachs Group, Inc. (NYSE:GS) quantitative traders, will shut a pool that is regulated like mutual funds because of restrictions on commodity investments. Investors in the CCP Quantitative UCITS fund, which has more than $320 million in assets under management, will be given the option of redeeming their money or moving to the firm’s hedge funds, Cambridge, England-based Cantab said in a statement today. The UCITS fund will be closed at the end of June. Cantab, started in 2006 by former Goldman Sachs Group, Inc. (NYSE:GS) traders Ewan Kirk and Erich Schlaikjer, said it’s no longer possible to invest in commodities “within a UCITS wrapper.”
Soros Rumor Underpins Turning Tide Against Aussie (CNBC)
Rumors that George Soros was planning to short the Australia dollar has taken the wind out of the robust currency, fueling expectations that the tide is turning for the Aussie dollar. The Aussie fell 0.6 percent against the U.S. dollar late Monday on a report in the Sydney Morning Herald that bets against the currency totaling $1 billion were placed via Hong Kong and Singapore, believed to be by Soros Fund Management. CNBC has not been able to independently confirm the rumor. The selling momentum escalated Tuesday after the Reserve Bank of Australia cut interest rates by 0.25 percent to a record low of 2.75 percent. The currency dropped over half a cent to as deep as $1.0178, its lowest since early March.
Jim Rogers’ Gold Investment Philosophy (MorningStar)
Jim Rogers, the legendary maverick investor, recently spoke to Morningstar about investing in gold. Below are excerpts from the interview. …Gold had gone up 12 years in a row, without a down year, which is extremely unusual in any asset. Equally important, gold has only had one 30% correction in 12 years. Again, that is extremely unusual. Most things correct 30-40% every year or two. So the action in gold has been very unique and gold needed a correction. The main thing that caused it as far as I am concerned was that the market was ready. It needed it and it is good for gold to have a proper correction. Whenever there is a correction people always find reasons. Cyprus was going to sell its gold, which means other European countries might have to. There were various and sundry things that came up. At the time bitcoin was collapsing. A lot of people that own bitcoin own gold.
SEC Charges City of Harrisburg for Fraudulent Public Statements (SEC)
The Securities and Exchange Commission today charged the City of Harrisburg, Pa., with securities fraud for its misleading public statements when its financial condition was deteriorating and financial information available to municipal bond investors was either incomplete or outdated. An SEC investigation found that the misleading statements were made in the city’s budget report, annual and mid-year financial statements, and a State of the City address. This marks the first time that the SEC has charged a municipality for misleading statements made outside of its securities disclosure documents. Harrisburg has agreed to settle the charges.
For Buffett, the Past Isn’t Always Prologue (NYTimes)
A little under an hour into the question-and-answer session at Berkshire Hathaway Inc. (NYSE:BRK.A)’s annual meeting here on Saturday, a name searing with history but now largely forgotten was mentioned: Henry E. Singleton. Mr. Singleton was, arguably, the Warren E. Buffett of the 1960s and ’70s, though hardly famous. His company, Teledyne Technologies Incorporated (NYSE:TDY), became a remarkably successful and huge conglomerate, with an assortment of related — and unrelated — businesses. Like Mr. Buffett, Mr. Singleton was a modest man with a rare sense of rationality. He didn’t pay his shareholders dividends; he was convinced he could allocate the money more profitably. And he was right more often than not.
Drooping Weiner got boo$t from shady bros (NYPost)
Sugar daddies bailed out Anthony Weiner when he was down and out — giving him work after stuffing his many political campaigns with donations. Hedge-fund brothers David and Eugene Grin helped Weiner with consulting work after he resigned from Congress following his sexting scandal, The Post has learned. The Grins also assisted his mayoral and congressional races, raising nearly $50,000 for Weiner, who is now considering a mayoral run. Through two hedge funds, the Grins control Parabel, a company that claims to harvest an algae-like crop.
Paulson Said to Lose 27% in Gold Fund Last Month in Rout (BusinessWeek)
Billionaire John Paulson, the hedge- fund manager seeking to reverse two years of losses in some of his strategies, lost 27 percent in his Gold Fund last month after the precious metal and related securities plummeted, according to two people familiar with the matter. The loss brings the strategy’s decline to about 47 percent this year, said the people, who asked not to be identified because the information isn’t public. The fund is made up primarily of Paulson’s own money, one of the people said. The strategy had $700 million at the end of March.
