Editor’s Note: Related tickers: Facebook Inc (NASDAQ:FB), Dell Inc. (NASDAQ:DELL), Deutsche Bank AG (USA) (NYSE:DB)
Billionaire hedge-fund manager Steven A. Cohen declined to testify before a grand jury about allegations of insider trading at his SAC Capital Advisors, according to three people familiar with the matter. Cohen, 57, made use of his Fifth Amendment right not to incriminate himself after being summoned, said the people, who asked not to be identified because the information is private. He was excused from appearing before the grand jury after informing prosecutors through his lawyers that he planned to use the right, said one of the people.
Facebook’s Hedge Fund Problem (TheStreet)
Facebook Inc (NASDAQ:FB) is in desperate need of a hedge fund spokesperson as the company’s shares remain mired well below a $100 billion valuation given to the social network in its May 2012 initial public offering. For the ordinary investor, or even a burned buyer of Facebook Inc (NASDAQ:FB)’s IPO, the seeming lack of interest by big money investors is troubling. Buying among hedge funds in upcoming quarterly Securities and Exchange Commission filings or in large individual holdings, however, could be a sign Wall Street’s most influential investors finally see value in the billion-member social network’s shares.
Icahn requests Dell meeting after securing $5.2 billion loan (ZDNet)
Dell Inc. (NASDAQ:DELL) investor Carl Icahn has asked for a meeting with Dell Inc. (NASDAQ:DELL)’s special board committee after lining up $5.2 billion in loans to show there is financial backing for his alternative buyout bid. In a letter to Dell Inc. (NASDAQ:DELL) shareholders, Icahn said that investment includes a commitment of $1.6 billion from Jefferies Finance, as reported by Reuters. In the letter, Icahn said he hopes that the newly-filed loan agreements will set aside “unwarranted speculation by Dell Inc. (NASDAQ:DELL) that our money would not be available.” …The investor’s proposal is meant to secure more value for shareholders, but has previously been branded “unrealistic” by Dell Inc. (NASDAQ:DELL)’s special committee. Dell Inc. (NASDAQ:DELL)’s board suggested that Icahn’s proposal would result in a shortfall, reduce dividends to $8.15 per share.
Deutsche Bank survey highlights investor emphasis on hedge fund operational due diligence (InvestmentEurope)
Deutsche Bank AG (USA) (NYSE:DB)‘s Hedge Fund Consulting Group’s second annual operational due diligence survey, which polled investors globally representing over $2.13trn of total assets, with a hedge fund allocation in excess of $724bn,shows almost three quarters rank a fund’s compliance and regulatory framework as the top priority for 2013. Operational due diligence has continued to grow in importance and an overwhelming 70% of ODD teams now have explicit veto authority in the investment decision making process, which was exercised in almost 10% of manager reviews. In a further sign of the influence ODD teams now hold, 63% of investors won’t reconsider investing in a fund previously vetoed by the ODD team.
Greenlight Funds Down In June; Gold Fund’s Losses Hit 20% (Finalternatives)
June proved a month to forget for Greenlight Capital. The firm’s gold hedge fund plummeted 11.8% last month and is now down 20% on the year, Reuters reports. The gold fund had $929 in assets under management at the end of March. Greenlight also suffered losses in its $8 billion flagship, albeit much more modest ones. The fund dropped 1.1% last month, but it up 7.4% on the year. And while it may be cold comfort for Greenlight and founder David Einhorn, things could be worse: Paulson & Co.’s Gold Fund was down 54% through May—before the June swoon in the metal’s price that so badly burned Greenlight.
Hedge Fund Tipsters Avoid Jail (Finalternatives)
Two corporate insiders who passed confidential tips to hedge funds were spared prison terms yesterday as a reward for their cooperation. Mark Longoria and Walter Shimoon were each sentenced to time served—a day in jail each—and two years of supervised release. The two were also ordered to forfeit money they received as expert-networkers for providing the information: $170,000 for Longoria and $45,000 for Shimoon. …“It is because the very nature of this crime and the very nature of its discovery is usually dependent on the use of cooperators,” U.S. District Judge Jed Rakoff said. “The cold, realistic fact is a price has to be paid for that cooperation and it takes the form of a substantial reward in the form of reduced jail time.”
What’s Eating Einhorn’s Greenlight Fund? (WallStCheatSheet)
“Gold does well when monetary and fiscal policies are poor and does poorly when they are sensible” – famous words spoken by a famous hedge fund manager. David Einhorn is the man behind the $8-billion Greenlight Capital fund and is known for, among other things, issuing warnings about the financial conditions of Lehman Brothers before it collapsed. The collapse — and the call — is significant because it marked the beginning of economic crisis and the start of a new chapter for the markets. …As Einhorn pointed out in 2009, when he spoke on adopting a position on gold, all the chaos made for a surge in prices that has been a boon to hedge funds.
West Virginia picks Elementum’s catastrophe reinsurance fund (PIOnline)
West Virginia Investment Management Board, Charleston, hired Elementum Advisors to run $40 million in its Elementum NatCat Offshore Fund, according to the $13.2 billion board’s May financial statement. It is the first hedge fund allocation of 2013, according to financial statements. The hedge fund pool as of May 31 had $1.34 billion in assets. The subscription date for the fund, which specializes in catastrophe-based reinsurance investments, was May 1. According to the board’s fiscal report as of Sept. 30, 2012, total investments returned 1.1% in the previous 12 months, with a three-year annualized return of 12.3%.
Relax foreign ownership policy: American investor (DailyExpress)
Malaysia needs to relax its foreign ownership policy in order to maintain the country’s position as an attractive investment destination in Asean, says American investor Jim Rogers. He said Malaysia can emerge as an international financial centre if its foreign ownership policies were to be eased. “When people think of Malaysia, they think the government owns or controls a major portion of the economy.” he said, adding that the government should grant incentives to Malaysians who invest in companies that are privatised to speed up demand from investors. “Assets disposed are sometimes better off in the hands of the private sector rather than with the government. “International investors can go anywhere, and they don’t go to places where there are restrictions and problems, they prefer the open, exciting and dynamics places.
Hedge Fund Tax Attack, 13 Banks Accused, KPMG: Compliance (Bloomberg)
James H. Simons, a former Cold War code breaker, later in his life deployed an unusual tax strategy at Renaissance Technologies LLC, saving hundreds of millions of dollars in taxes for himself and other investors, said people with knowledge of the matter. The U.S. Internal Revenue Service is challenging the technique, which it called “particularly aggressive,” without identifying the hedge fund that is the subject of the dispute. The agency is demanding more tax payments from investors in Renaissance’s $10 billion Medallion fund, the people said.
