Editor’s Note: Related tickers: JPMorgan Chase & Co. (NYSE:JPM), Las Vegas Sands Corp. (NYSE:LVS), Herbalife Ltd. (NYSE:HLF)
If Steven Cohen, the founder of embattled Stamford, Connecticut–based hedge fund firm SAC Capital Advisors, does in fact lose all or most of his outside investors, this will not only be a blow to his ego and his prestige. It will also cut drastically into the fee revenue his firm produces like clockwork year after year. Because of his strong performance record and unusually high performance fees, Cohen rakes in $1 billion in fees during mediocre years and earns more than $1.5 billion in fees during years he posts gains of 30 percent — his average annual return. The firm is facing up to $4 billion in redemptions this year, after already receiving $1.7 billion in the first quarter, as federal investigators seem determined to bring a criminal case against Cohen in their ever-expanding insider trading investigation…
After JPMorgan, Staley Sizes Up Banks for Hedge Funds (NYTimes)
As the head of JPMorgan Chase & Co. (NYSE:JPM)‘s investment bank, James E. Staley helped the company navigate the thicket of new regulations that emerged after the financial crisis. Now, he is betting that those regulations present an investment opportunity. Mr. Staley, who left JPMorgan Chase & Co. (NYSE:JPM) this year to join the hedge fund BlueMountain Capital Management as a managing partner, said on Tuesday that European banks would have to adapt as regulators remained concerned about the problem of too-big-to-fail lenders. …BlueMountain, a firm that has done business with JPMorgan Chase & Co. (NYSE:JPM) over the years, was one of the hedge funds on the other side of the so-called London Whale trade, in which the bank lost billions of dollars. The chief executive of BlueMountain, Andrew Feldstein, previously worked at JPMorgan Chase & Co. (NYSE:JPM).
BILL ACKMAN: Shutting Down Herbalife Would Be ‘The Greatest Achievement Of My Life’ (Businessinsider)
Activist investor Bill Ackman, who runs $12 billion Pershing Square Capital, did a Q&A with the Financial Times about his philanthropic work with the Pershing Square Foundation. When asked about the criticism he has recieved over his short selling, Ackman said if he can bring down Herbalife Ltd. (NYSE:HLF) it will be the “greatest achievement of his life.” …Ackman’s long-time rival Carl Icahn snapped up a massive stake in Herbalife Ltd. (NYSE:HLF). Icahn owns more than 16 million shares of Herbalife Ltd. (NYSE:HLF) and said he thinks Ackman will be the victim of “the mother of all short squeezes.”
Hedge fund Man Group’s shares tumble after flagship fund loss (Reuters)
Man Group’s shares fell more than 11 percent on Wednesday after it said its flagship hedge fund AHL had suffered one of its biggest weekly losses, wiping out its profits so far this year. The $14.1 billion computer-driven fund, which has been running since 1987 but whose performance has lagged in recent years, fell 8.9 percent over the week to June 3. At 0832 GMT Man’s shares were down 11.4 percent at 103.2 pence. Coupled with a 3.1 percent loss the previous week, it means that AHL has made an overall loss since Jan. 1, having previously enjoyed bumper gains this year on the back of rising financial markets.
‘Hedge-fund lads’ don’t help culture, says former Arts Council chairman (Telegraph)
The former Arts Council chairman, Dame Liz Forgan, has criticised Britain’s wealthy elite, accusing them of failing to contribute sufficiently to the arts. In an interview with Rupert Christiansen for The Daily Telegraph today, Forgan, who was replaced last year by Sir Peter Bazalgette, suggests that there is a lack of respect for culture among Britain’s elite. “What troubles me is that despite helpful changes in the tax laws, so little of the huge new individual wealth created in the City is finding its way to the arts. That’s not the case in Russia, where the oligarchs respect and value their culture,” she said.
3 Louisiana pension funds file suit over hedge fund investment (Nola)
Five years after three Louisiana retirement systems invested $100 million in a hedge fund promising high returns with low risk, a pact that has since soured, pension trustees are now suing the financial services firm that administered the ill-fated deal. In 2008, trustees of the pension plans — the Firefighters’ Retirement System, the Municipal Employees Retirement System, and the New Orleans Firefighters’ Pension and Relief Fund — invested the money, between 4 percent and 9 percent of their assets, in the flagship fund of the New York-based Fletcher Asset Management.
SunTx launches new hedge fund company in Dallas (BizJournals)
SunTx Capital Partners launched a new hedge fund this week with veteran portfolio manager Ron Dodson at the helm. IXTHYS Capital Management will be headquartered at SunTx’s Dallas office at II Lincoln Center, 5420 LBJ Fwy. The hedge fund will be managed separately from SunTx’s private equity funds. Dodson has 20 years experience working as a derivatives instrument trader, most recently as a portfolio manager at NorCap Investment Management. He will manage IXTHYS. “Ron brings a skill set that’s terrific for us to be able to add to the team,” said Ned Fleming, founder and managing partner of SunTx.
Five Soros hedge fund execs donate to N.J. Gov. Chris Christie (WashingtonTimes)
New Jersey Gov. Chris Christie is cashing checks from all sorts of unlikely places, from George Soros‘ hedge fund executives to professors at the University of California at Berkeley, a Newark Star-Ledger review of state and federal records found. Five executives at Soros Fund Management — including the liberal billionaire’s protege and chief investment officer, Scott Bessent — have donated a combined $19,000 to the governor’s re-election campaign, The Star-Ledger reports. Recent polls show Mr. Christie, a Republican, gaining popularity among Democrats and independents as experts and donors speculate on a potential run for the White House in 2016.
Dyal buys 20% of hedge fund Capstone (PIOnline)
Capstone Investment Advisors, a hedge fund firm with $2.4 billion in assets, sold a minority stake to a private equity fund run by Neuberger Berman Group, according to a letter sent to Capstone’s clients on Monday. Dyal Capital Partners paid $60 million for 20% of Capstone, according to two people with knowledge of the transaction, who asked not to be identified because the deal is private. Dyal will be a passive investor and will have no day-to-day control of the fund, according to the letter from Paul Britton, Capstone’s CEO.
One Hedge Fund Manager’s Crazy Story Of His First Time In Macao Back In The 90s (BusinessInsider)
Bloomberg via YouTubeBefore Macao was a glamorous gambling centre, it was the “Wild Wild West” according to Jason Ader, the CEO of hedge fund Ader Investments. He started off on Wall Street as a gaming analyst, so checking out Macao before it was opened up to gaming companies in the early 2000s was part of the job. He also currently serves as Director of Las Vegas Sands Corp. (NYSE:LVS) In short — Ader made it Macao in the 90s to prepare the way for the insane boom we’ve seen over the past decade. Today, at Bloomberg’s Hedge Funds Summit, he told the story of his first time.
South Carolina To Shrink, Restructure Hedge Fund Portfolio (Finalternatives)
South Carolina’s public pension manager plans to cut its hedge fund portfolio while increasing its direct hedge-fund investments. The South Carolina Retirement System Investment Commission has cut its hedge fund target to 15%, from 20%, Pensions & Investments reports. The commission, which runs the $27.3 billion South Carolina Retirement Systems, will also restructure the hedge fund portfolio, re-categorizing the hedge funds included in it. South Carolina currently invests $5.5 billion in hedge funds and $3.9 billion in a separate portable alpha program, which has a 15% target…
Gold: Is Nouriel Roubini right the ‘barbarous relic’ will sink to $1,000 by 2015? (TheGlobeAndMail)
Is Roubini right? Nouriel Roubini is, of course, famous for having forecast the meltdown. Will he now be right on gold prices? Over the weekend, Mr. Roubini penned a piece that warns the bubble has popped and gold is headed for $1,000 (U.S.) an ounce by 2015. “Gold remains John Maynard Keynes’s ‘barbarous relic,’ with no intrinsic value and used mainly as a hedge against mostly irrational fear and panic,” writes Mr. Roubini, a New York University professor and head of Roubini Global Economics.
Hedge Funds in Japan Ride Small-Cap Rally on Abenomics Boost (Bloomberg)
Japanese hedge funds investing in smaller companies are outperforming as trading in small-cap stocks more than doubled this year amid Prime Minister Shinzo Abe’s efforts to revive the world’s third-largest economy. Monterey Japan Equity Fund, which manages about $100 million, returned 39 percent this year through April as it shifted to small caps, such as property company Raysum Co., from larger stocks. Hayate Japan Equity Long-Short Fund gained 71 percent by focusing on companies that aren’t followed by analysts, while J-Flag Investment Co.’s long-short hedge fund surged 51 percent. The Eurekahedge Japan Hedge Fund Index (EHFI133) gained 18 percent in the period.
