Hedge-fund liquidations rose to a three-year high in 2012 as the European debt crisis and concerns about global economic growth hurt performance for the $2.3 trillion industry, according to Hedge Fund Research. The number of firms shut jumped to 873, the most since 2009, the Chicago-based data provider said in a statement Thursday. Still, the net number of hedge funds increased after money managers started 1,108 firms last year, it said. Smaller hedge funds have been hardest hit by the global financial turmoil that has made it more difficult to raise money from investors since the collapse of Lehman Brothers Holdings in 2008.
Highland fears Daugherty may poach clients (NYPost)
Highland Capital, the $20 billion Texas hedge-fund giant, fears a former top executive is plotting to steal clients, intensifying an already bitter legal battle. Patrick Daugherty, who resigned as the firm’s head of private-equity and distressed investing in 2011, said last week he is planning to partner with another former Highland exec to launch his own investment firm. His comments have hit a sore spot with Highland, which blasted Daugherty as a “megalomaniacal” manager who is “abusive” to employees in a lawsuit last year.
JPMorgan’s Highbridge raises $5 billion credit fund (Reuters)
Highbridge Capital Management LLC, a hedge fund manager owned by JPMorgan Chase & Co. (NYSE:JPM), has raised a $5 billion mezzanine debt fund, a spokesman said on Sunday, the latest alternative asset firm seeking to seize on corporate credit opportunities. Dave Millar, a spokesman for New York-based Highbridge, confirmed the completion of the fundraising in an email following a report by the Financial Times, which said the fund, Highbridge Mezzanine Partners Fund II, was the largest mezzanine corporate debt fund raised since the financial crisis.
Hedge fund newcomer’s assets double (Financial Times)
One of the most successful new hedge funds of 2012 has closed to new investors after doubling its assets and bucking the difficult markets that have afflicted most newcomers to the industry in recent years. Hengistbury Investment Partners, the hedge fund set up by ex-TCI founding partner Stuart Powers, has increased the size of his flagship fund since its launch last year to $750m.
SAC’S Plotkin Said to Have Been Tipped by Analyst (Bloomberg)
A convicted SAC Capital Advisors LP analyst at the center of a federal criminal probe of insider trading passed inside information to SAC fund manager Gabriel Plotkin, according to internal e-mails and two people familiar with the matter. The U.S. Securities and Exchange Commission said last week in a court filing that the analyst, Jon Horvath, funneled nonpublic information on technology stocks to two unidentified portfolio managers at Steven Cohen’s $15 billion hedge fund. The men then traded on the information, reaping more than $6 million for SAC Capital. Previously, only one had been identified in a separate court case: SAC fund manager Michael Steinberg.
SEC charges hedge fund firm Sigma Capital with insider trading (Hedge Week)
New York-based hedge fund advisory firm Sigma Capital Management has agreed to pay nearly USD14m to settle the Securities and Exchange Commission (SEC) charges that the firm engaged in insider trading based on non-public information obtained through one of its analysts about the quarterly earnings of Dell and Nvidia Corporation. The SEC’s case, borne out of its ongoing investigation into expert networks and the trading activities of hedge funds, began last year with charges against several hedge fund managers and analysts including Jon Horvath, a former analyst at Sigma Capital. Horvath agreed to a settlement earlier this month in which he admitted liability.
Hedge Fund Legend Does Not Intend To Permanently Quit US Over Tax – Report (Wealth Briefing)
Renowned hedge fund manager John Paulson has said he does not intend to permanently reside in Puerto Rico, Bloomberg reported, following suggestions he was looking to quit the US for tax purposes. “In light of the media attention surrounding a relocation to Puerto Rico, he has no plans to move to Puerto Rico,” Paulson & Co, the investor’s hedge fund, was reported saying in a statement. “While Mr Paulson has considered real estate investments and has vacationed on the island, he has no plans to establish a permanent residence there.”
