The opening of Art Basel Miami Beach, under way here this week, looked like the start of the most glamorous doorbuster sale in history, with hundreds of V.I.P.’s streaming into the convention center wearing high-end resort casual, ready to rummage through more than 200 of the world’s most prestigious galleries. …But one notable titan of this realm was missing: Steven A. Cohen, the hedge fund billionaire, who in less than six years has acquired one of the market’s richest troves, with works by Manet, Monet, Jackson Pollock, Andy Warhol and Damien Hirst, to cite just a few.
Lyxor Hedge Fund Index up 0.41% (1.98% YTD) as alternative strategies generate alpha in volatile November (Opalesque)
Thirteen Lyxor Strategy Indices out of 14 ended the month in positive territory, led by the Fixed Income Arbitrage (+1.2%), the Lyxor Long/Short Credit Arbitrage Index (+1%) and the L/S Equity – Market Neutral Index (+0.9%). The Lyxor Hedge Fund Index posted a positive performance at 0.4% in November 2012 (+2% in 2012 to date). The rising uncertainty related to the U.S. fiscal cliff issue focused investors’ attention in November. Risky assets started the month on the wrong foot amid mounting fears over policy issues but rumors of progress on the fiscal cliff negotiations, rising expectations of a solution for Greece (that materialized on 27 November) and to a lesser extent the smooth leadership transition in China helped equity markets recover the lost ground. Hedge fund managers navigated well in this context.
HC gives UK hedge fund TCI time to respond to govt’s reply (Livemint)
The Delhi high court on Friday granted four weeks’ time to UK-based The Children’s Investment (TCI) Fund, a shareholder in Coal India Ltd (CIL), to respond to the reply of the Union government opposing the hedge-fund management’s allegation that the Centre was interfering with the pricing of coal. “The petitioner (TCI) is allowed to file the rejoinder (to the reply of ministry of coal) within four weeks. List the matter for hearing on 9 May,” justice Rajiv Shakdher said. Earlier, TCI had moved the high court alleging that the ministry of coal has not been allowing state-run CIL to function independently as a company and the interference on coal pricing has been detrimental to the commercial interests of the hedge-fund management.
Fidelity Offers Hedge-Fund Access Via Arden Tie (WSJ)
Fidelity Investments is offering its retail clients access to hedge-fund firms through a mutual fund launched in partnership with Arden Asset Management. The mutual fund opened for business last week with more than $700 million from Fidelity, according to people familiar with the fund. It has made investments with nine managers, including Chilton Investment Co., Jana Partners and York Capital Management, according to a securities filing.
Hard times see Chris Hohn’s hedge fund profits slide (Telegraph)
Tough trading conditions have dented profits at TCI Fund Holdings, the hedge fund group run by Chris Hohn that ultimately supports the Children’s Investment Fund Foundation. TCI Fund Holdings saw its net profits fall by 60pc over the year to the end of February to £17.6m, according to its latest accounts, while revenue, derived primarily from management and performance fees based on the assets managed, fell from £110m to £65m.
Transport for London tunnels cash into hedge funds (Reuters)
The pension fund for Transport for London, the government body in charge of the capital’s giant transport network, is putting more of its money into hedge funds. TfL’s fund is in the final stages of investing with hedge funds Och-Ziff Capital Management Group LLC (NYSE:OZM) and Arrowgrass Capital Partners, and is set to boost its holding with Bridgewater Associates, the world’s largest hedge fund, TfL’s investment officer Padmesh Shukla told Reuters.
Diamondback Is Shutting Down (WSJ)
Hedge fund Diamondback Capital Management LLC told investors Thursday that it plans to close and wind down its funds after receiving redemptions requests totaling more than a quarter of its assets. In a letter to investors Thursday, the Stamford, Conn., hedge fund’s founders Richard Schimel and Larry Sapanski said they received redemption requests for Dec. 31 of about $520 million, or 26% of its assets under management. As a result, the fund would be left with about $1.45 billion in assets under management.
Funds of Hedge Funds May Be Down, But Don’t Count Them Out (AllAboutAlpha)
When was the last time you read some good news about the funds of hedge funds industry? Judging by the tenor of most articles in the trade press and general business news outlets, funds of hedge funds (FoHFs) are losing assets, losing interest and losing relevance. As trumpeted by a recent headline in The Economist, “Going, going, gone?” seems to be the prevailing view of their status. It’s certainly true that the industry’s numbers trace a downward trajectory. In contrast to the strong rebound in assets under management (AUM) by single-manager hedge funds after the financial crisis, total assets managed by FoHFs fell from their 2007 peak of $798 billion to less than $644 billion as of year-end 2011, according to Hedge Fund Research.
Hedge fund executive, 31, dies after tragic high-speed crash puts his Mercedes up into a tree (DailyMail)
Police are investigating the deadly crash that killed a Dallas-based hedge fund manager on Tuesday morning. The car crash occurred at around 1 a.m. when Galen Weston Swank, 31, lost control of his 2009 Mercedes car near to Turtle Creek Boulevard and Blackburn Street and his car left the road and hit several trees above a river. Witnesses to the married father-of-ones accident said that Swank spun his tires at a stop light and was traveling too fast around a steep curve when he lost control, hit one tree and then hit several others.
Grifphon hedge fund case expands (BizJournals)
Three additional men have been charged in relation to the failed Portland hedge fund Grifphon Asset Management. As the Oregonian reports, Dominic O’Dierno of Portland, Stephen Persad of Milwaukie and Benjamin R. Daniels of Indio, Calif. have been charged with violating federal securities registration laws. According to the report, the men steered investors to hedge fund manager Yusaf Jawed, accused of running a $37 million Ponzi scheme.
Hedge fund growth slows amid new regs, weak returns (BizJournals)
The hedge fund industry’s growth out of a harrowing 2008 has recently flattened as it gets tougher for the fund managers to raise money, please investors and placate new regulators. The number of hedge fund liquidations nationwide fell to the mid-700s in 2010, and seems to have stabilized there, according to Hedge Fund Research Inc. of Chicago. Fund launches increased steadily to slightly more than 1,100 last year, but were basically flat at about 550 through the first half of 2012 compared to 2011.
Greece Faces Off With Hedge Fund Investors Ahead Of Buyback Scheme (IBTimes)
Hedge funds are playing a dangerous game of chicken with Greece this week, according to insider sources quoted in various financial media outlets, a game whose denouement could devastate plans to keep Greece in the euro zone. It’s all coming out now as a result of a plan, whose details were announced Monday, that seeks to use $10 billion in bailout funds provided by the International Monetary Fund to buy almost three times that amount in outstanding Greek debt. The move would nearly halve the amount of government debt that is currently in private investor hands, some $63 billion, and reduce the amount of total debt owed by the country. And its execution is being set as a precondition by the IMF to disburse the next round of rescue funds.
Hedge Fund Investor Jen: 2013 ‘Not a Lucky Number’ for Euro (WSJ)
Next year will be better for euro bears, says Stephen Jen, a longtime believer in the trade. Mr. Jen, managing partner at hedge fund SLJ Macro Partners LLP in London, said his negative euro bets took a hit after the European Central Bank announced its bond-buying program in September. The euro has traded near $1.30 since then, after falling close to $1.20 during the summer. Mr. Jen said he believes the euro will resume its slide in 2013 as a faltering euro-zone economy, stung by fiscal tightening to fix the debt crisis, may push the ECB to resume cutting its key interest rate. The year 2013 “will not be a lucky number for the euro,” said Jen in an interview Thursday.
Hedge fund firm LNG bets on short-dated Greek bonds (Ekathimerini)
Hedge fund firm LNG Capital is betting on short-dated Greek bonds as one of a number of managers to believe the debt-laden country could end up paying back some of its bondholders at face value. Louis Gargour, chief investment officer at the London-based firm, told Reuters he has built up positions in Swiss franc-denominated Greek bonds maturing in May next year and U.S. dollar-denominated bonds maturing in July. The bet is that Greece, which is currently buying back some longer-dated bonds in the secondary market at a discount to nominal value in an effort to cut its debt and unlock aid from international lenders, will be relatively unconcerned about small tranches of debt with just months to run.
Man Who Broke The Bank of England – George Soros Third Quarter Stock Holding (Kapitall)
The investor who famously “broke the Bank of England” has released his third quarter holdings and he has made a few changes that may be of interest. The 82-year old billionaire George Soros returned outside investor’s money last year and converted it into a US$25 billion family office running his own money. In the latest quarter, Soros Fund Management initiated 68 new positions worth a total of US$2.2 billion and got rid of 59 positions worth US$490 million.
SEC Completes 18th Annual International Enforcement Institute (SEC)
The Securities and Exchange Commission announced the completion of its 18th Annual International Enforcement Institute, held from Nov. 5 to Nov. 9 at SEC headquarters in Washington, D.C., with participants from 60 different countries. In all, 161 officials from foreign stock exchanges and other regulatory and law enforcement agencies attended the weeklong training program. SEC Chairman Mary L. Schapiro said, “The commitment of securities regulators around the globe to protecting their investors and markets from those that would cause them harm has never been stronger. Through this program, the SEC staff teaches and learns enforcement best practices. We stand alongside our foreign law enforcement partners, ready to protect our capital markets from fraudsters, manipulators, and schemers, wherever they may lurk.”
S.E.C. Warns Netflix Over a Post on Facebook (NYTimes)
Reed Hastings, the chief executive of Netflix, Inc. (NASDAQ:NFLX), congratulated his team for a job well done in early July. On his public Facebook Inc (NASDAQ:FB) page, he crowed about the one billion hours of video that subscribers watched the previous month. The message was just 43 words. Now, Netflix and its chief may be in deep trouble for that brief post. On Thursday, Netflix disclosed that the Securities and Exchange Commission was considering taking action against the company and Mr. Hastings for its Facebook communication. The agency, in a so-called Wells notice, warned that it may file civil claims or seek a cease-and-desist order.
BlueMountain, Pine River Say Structured Credit Boom Could Carry Into 2013 (InstitutionalInvestorsAlpha)
Structured credit, one of the best performing hedge fund strategies so far this year, will continue to provide opportunities in 2013 for those who understand it well, said fund managers speaking at the Bloomberg Summit in New York this week. Credit funds in general have returned 8.15 percent for the year through October 31, according to the Absolute Return Credit Index, while the Absolute Return index of mortgage backed securities funds, which tracks structured credit products, rose 13.33 percent over the same period. As banks and other traditional lending institutions have retreated from lending activities, hedge funds have been able to step in to provide financing through securitized…
Hedge Funds Face Increased Costs (Hedgeco)
Nearly 60% of hedge fund managers in North America say the cost of business has increased in the past year, according to a new study. However, there continues to be a disparity between managers’ and investors’ views about what costs should be borne by the fund. “Our survey found that 68% of funds passed along these increased costs — up from only 34% in 2011,” says Joseph Micallef, Financial Services Partner at Ernst & Young. “There will continue to be a greater push and pull on this issue of cost allocation for the foreseeable future as investors increasingly show less appetite for costs to be charged to the fund than they did a year ago. We don’t see this trend changing unless funds greatly improve investment performance returns.”
FOUR to launch long/short multi-asset fund for Pinggera (InvestmentWeek)
FOUR Capital Partners is launching a retail long/short fund for former Insight and Credit Suisse manager Michael Pinggera, who joined the boutique in October. The group plans to launch the FOUR Multi-Strategy fund next month. The portfolio will be managed in a hedge fund style, employing a core and satellite investment approach.
