SAC pulls plug on Chi. shop (NYpost)
Hedge fund SAC Capital said yesterday it is closing down its Chicago office and laying off staff from the four portfolio teams that work there. The Stamford, Conn.-based firm has $14 billion in assets with offices worldwide, including in New York, Hong Kong, London and Boston. The government told SAC and its founder Steven A. Cohen late last year that it may bring civil fraud charges in relation to a case in which a former SAC fund manager has been charged with having traded in pharmaceutical companies Elan and Wyeth, now owned by Pfizer Inc. (NYSE:PFE), with illegally obtained information about drug-trial results.
The battle between Herbalife Ltd. (NYSE:HLF) and hedge fund manager William Ackman over the company’s business practices is likely to continue for a while, with ongoing stock volatility, an analyst said Friday. On Thursday Herbalife Ltd., which uses a network of distributors to sell its offers nutrition and weight loss products, fought back against Ackman’s claims that the business amounts to a pyramid scheme. A series of Herbalife’s executives attempted to refute Ackman’s allegations during an analyst and investor meeting, laying out everything from how the business operates to who its customers are.
Lyxor Hedge Fund Index up 1.1% in December (+3.1% in 2012) (Opalesque)
The Lyxor Hedge Fund Index was up +3.1% in 2012 (+1.1% in December). Twelve Lyxor Strategy Indices out of 14 ended the month in positive territory, led by the Merger Arbitrage Index (+3%) and the Long/Short Credit Arbitrage Index (+2.6%). Over the year, eleven Lyxor Strategy Indices out of 14 posted positive performances, three of them being up double digits: Long/Short Credit Arbitrage Index (+12.1%), Long/Short Equity Long Bias (+11.2%) and Fixed Income Arbitrage (+10.5%). Hedge funds benefited from comforting macro news flow and the Lyxor Hedge Fund index gained 1.1% over December, bringing year-to-date performance to 3.1%. The headline numbers hide an even more positive picture. A growing number of funds have participated in rising markets and 20% of the funds in the Lyxor investment universe are up double digits in 2012.
WOMEN HEDGE FUND MANAGERS BEAT INDUSTRY (Advisor)
Women hedge fund managers beat the industry through the third quarter of 2012, according to the Rothstein Kass Institute’s second annual Women in Alternative Investments survey. “The Rothstein Kass Women in Alternative Investments Hedge Index produced a year-to-date net return of 8.95%, in comparison to the HFRX Global Hedge Fund Index, which generated a 2.69% net return through September,” the report explains.
New York-based hedge fund manager and firm fined USD5m (HedgeWeek)
The Securities and Exchange Commission has secured final judgments against hedge fund manager Chetan Kapur and his firm, ThinkStrategy Capital Management, ordering them to jointly and severally pay disgorgement and prejudgment interest of USD3,988,196.59 and civil penalties in the amount of USD1m. The final judgments stem from a civil injunctive action filed by the Commission on 10 November 2011. The SEC’s complaint alleged that over nearly seven years, Kapur and ThinkStrategy engaged in a pattern of deceptive conduct designed to bolster their track record, size, and credentials.
Clive Hedge Fund Assets Said to Fall by $1.7 Billion After Loss (SFGate)
Clive Capital LLP’s assets plunged 46 percent in 2012 after the commodity hedge fund lost money for a second year running and investors withdrew their cash, said two people with knowledge of the matter. Clive ended the year managing $1.95 billion, down from $3.6 billion at the end of 2011, said the people, who declined to be identified because the London-based hedge fund is private. The fund declined 8.8 percent in 2012 after falling 11 percent a year earlier, causing some clients to lose patience with its investment performance, the people said.
Active management’s slow bleed (IFRAsia)
Punished by another year of bad performance from active investment managers, there is some encouraging evidence that investors are finally wising up. …And don’t kid yourself that only “dumb” retail money goes into mutual funds, and the big boys and girls find their alpha in hedge funds. As of the last week in December, 88% of hedge funds were lagging the S&P 500. The average hedge fund logged a return for the year of just 3.5%, according to the HFRX Global Hedge Fund Index, a good sight better than their nearly 9% loss in 2011 but hardly the kind of reward you want for paying the standard hedge fund charge of 2% in fees and 20% of the profits.
Buy Side Eyes Korea as Regulatory Barriers to Entry Fall (WatersTechnology)
Despite relaxed rules, the South Korean marketplace has proven a tough nut to crack. Vendors are still looking for ways to break into the country at a time when the hedge fund space is growing—even if that growth is slower than expected. When regulators in South Korea eased restrictions on the launching of, and investing in, hedge funds, it was hoped that this would provide a windfall of investment into the emerging market. While growth has been slower than expected—amid calls for further regulatory intervention—these new rules are clearly having an effect.
Judaica collection owned by ex-hedge fund manager Michael Steinhardt coming to NYC auction (TheProvince)
Philanthropist and former Wall Street money manager Michael Steinhardt began collecting objects of Jewish history and culture three decades ago, eventually amassing a collection of manuscripts, textiles and art worth millions of dollars. Now, the 72-year-old wants to sell his more than 500-piece collection so others can enjoy it. Sotheby’s will auction the collection in New York on April 29 after also exhibiting it in Moscow and Jerusalem and offering special presentations in Hong Kong, Singapore, Brazil and several European and U.S. cities.
Twin Capital Management CEO David Simon Provides 2013 Market Predictions (EON)
David Simon, CEO of Twin Capital Management LLC, an event-driven hedge fund firm, offered his insight on the trends he expects will take place in the coming year. His predictions are based on more than 25 years of experience as an investor. …”For 2013, given the looming standoff in U.S. Congress regarding resolution of the fiscal deficit, corporate CEOs will sit on the sidelines until there is certainty in government spending and taxes. If and when some real decisions are made, expect to see a robust event and deal environment for the remainder of the year,” said Mr. Simon.
Mason Capital cuts its Telus stake down to 3.4% (TheGlobeAndMail)
The long-standing battle between Mason Capital and TELUS Corporation (NYSE:TU) over the telecom’s dual share structure took another twist Thursday with the disclosure that the New York-based hedge fund had sharply reduced its holdings. Mason, in a mandatory disclosure document filed with regulators, said it has reduced its common (voting) share holdings to just over 5.9 million shares. …“This confirms Mason Capital has sold down its empty voting position in TELUS, selling off 26.9 million of the 32.8 million common shares they held when they last reported, while similarly reducing its short trading position,” Telus chief corporate officer Josh Blair said in a statement Thursday night.
Hedge giant Citadel soars to 25pc return (CityAM)
HEDGE fund giant Citadel, one of the biggest investors in the world, continued its winning streak last year after revealing a 25 per cent return for its main funds in 2012. Citadel, led by founder and chief executive Ken Griffin, told investors it had been one of the firm’s strongest years of performance, after it surpassed the six per cent average return delivered across the rest of the industry.
Soros builds stake in UK’s “tortoise” developer (Reuters)
Billionaire investor George Soros has built a stake of more than 5 percent in the UK’s only listed property company that produced a negative total return in 2012, due to its unfashionable bet on the long-term health of the economy outside London. The man who made his name and a reported 1 billion pounds ($1.6 billion) by betting Britain would leave the European Exchange Rate Mechanism in 1992, bought the stake in Development Securities through his Quantum fund.
Carl Icahn May Have Entered the Bloody Hedge Fund Battle Over Herbalife (Benzinga)
The Herbalife (NYSE: HLF) battle is shaping up to be the bloodiest hedge fund battle ever, having pulled in Bill Ackman, Dan Loeb, and Bob Chapman. Today, The New York Post is reporting that legendary activist investor Carl Icahn has entered the fray by taking a long position in the stock. This follows yesterday’s news that Dan Loeb’s fund Third Point took an 8.24 percent long position. Loeb called Bill Ackman’s thesis for his 20 million share short position “preposterous” in a letter to investors.
Soros Veteran Leaves To Launch Hedge Fund (Finalternatives)
Jixin Dai, who spent more than a decade at Soros Fund Management and helped set up the firm’s Hong Kong office two years ago, will launch his own hedge fund. The Chinese native has founded Jixin Capital in Hong Kong, HedgeFund Intelligence reports. Dai is the most recent top Soros executive to leave the firm in the wake of founder George Soros’ decision to return outside capital in July 2011.
WallStreetWindow’s Swanson: Hedge Funds Manipulating Gold Prices (MoneyNews)
Although it might not pass as willful financial manipulation, hedge fund actions are influencing gold prices, according to Mike Swanson, founder and chief editor of WallStreetWindow, an online community of independent investors and analysts. The price gold is being suppressed as poor-performing hedge fund — and there are many of them — are forced to meet investor redemptions, he says But gold will rise again when those redemptions end in a week, predicts Swanson, himself a former hedge manager.
Currency Funds Face Diminishing Returns (WSJ)
John Taylor, who has run one of the biggest currency hedge funds for more than three decades, is facing a harsh reality: The good times, at least for now, are gone. Mr. Taylor says the past few years have been among the most difficult in the 31-year history of his company, FX Concepts. In 2011, the firm’s flagship Global Currency Program portfolio was down 19.4%, when Europe’s sovereign-debt crisis shook financial markets, and last year it eked out a gain of just 0.93%. That compares with average returns of 11.1% a year from 2001 to 2010, according to the firm.
IMCA awards prize in first academic paper competition (PIOnline)
Associate professor Russell R. Wermers won the Investment Management Consultants Association’s $5,000 academic paper competition for “Monitoring Daily Hedge Fund Performance When Only Monthly Data is Available,” confirmed spokesman Ryan Hoffman. Mr. Wermers, associate professor of finance at Robert H. Smith School of Business, University of Maryland, College Park, co-authored the paper with Daniel Li, research analyst at Markov Processes International, and Michael Markov, Markov chairman.
AC casinos were bad bet, with 8% revenue hit (NYPost)
Turns out, the house doesn’t always win. Hedge-fund high rollers who bet big on a comeback for Atlantic City’s casinos are watching their gambling profits dwindle. The city’s casino industry suffered its sixth straight decline last year, with winnings down 8 percent to $3.05 billion, the New Jersey Division of Gaming Enforcement said in its latest annual report, released yesterday. …Billionaire investor Carl Icahn owns Tropicana Casino and Resorts, which he bought out of bankruptcy in 2010.
