Editor’s Note: Related tickers: Deutsche Bank AG (USA) (NYSE:DB), Goldman Sachs Group, Inc. (NYSE:GS), Credit Suisse Group AG (NYSE:CS), Bank of America Corp (NYSE:BAC), JPMorgan Chase & Co. (NYSE:JPM), Radian Group Inc (NYSE:RDN), Caterpillar Inc. (NYSE:CAT)
Wall Street banks are debating whether to suspend doing business with SAC Capital Advisors LP if the hedge fund is charged by U.S. prosecutors, according to two people briefed on the matter. Deutsche Bank AG (USA) (NYSE:DB) and Goldman Sachs Group, Inc. (NYSE:GS) are among firms weighing the reputational and financial consequences of continuing to provide trading, lending and prime brokerage services to SAC, one of Wall Street’s largest trading clients, said the people, who asked for anonymity because the talks aren’t public. Prosecutors plan to charge SAC, the hedge fund founded by Steven A. Cohen, as soon as today as part of a probe of insider trading, a person familiar with the matter said.
Paulson Thriving as Radian Proves Second Chances Work (Bloomberg)
When Radian Group Inc (NYSE:RDN) sold shares in 2010 to bolster capital, the buyers lost more than a third of their investment in just two months. The mortgage insurer’s offering in February, backed by money managers including John Paulson, is proving second chances can work. Radian Group Inc (NYSE:RDN) has rallied 73 percent to $13.87 since selling shares for $8 apiece as well as debt in February. Rival MGIC Investment Corp. (MTG) has followed a similar pattern, slumping after a 2010 offering and surging 45 percent since this year’s $1.15 billion capital raise. …Milwaukee-based MGIC reported its first profit since 2010 this week as claims and delinquent loans declined, and Radian Group Inc (NYSE:RDN) said yesterday its mortgage insurance operations were profitable as well. That’s putting Paulson’s prediction that Radian Group Inc (NYSE:RDN) can reach $20 by 2015 within reach.
Caterpillar’s disappointing earnings good for Jim Chanos (CNN)
It’s looking like a good day for at least one famous short seller. Just a week after hedge fund investor Jim Chanos announced he was betting against Caterpillar Inc. (NYSE:CAT), the industrial equipment maker reported disappointing earnings and cut its outlook for the year. The bad news sent shares of Caterpillar Inc. (NYSE:CAT) nearly 3% lower Wednesday. The stock trimmed some of the losses as they day went on, but remained down 1.7% in the afternoon. …Chanos, founder of Kynikos Associates, is best known for his bet against Enron.
Reconciliation Specialist Watson Wheatley Adds Hedge Fund Clients (BobsGuide)
Watson Wheatley Financial Systems (WWFS) have announced the addition of two hedge fund clients in the last quarter. The London based firms will be using the i-Recs reconciliation system and Importer data aggregation software to efficiently reconcile daily trades and cash as well as P&L between internal systems and prime brokers or administrators. The installations use the latest i-Recs 2 application announced earlier this year, allowing users access to dashboards, user defined reporting and faster processing all of which are driving increased productivity in the reconciliation process.
Fund managers are more open to managed account solution (Opalesque)
Hedge fund managers who attended the latest Opalesque 2013 France Roundtable were one in saying that managed account platforms offer one of the best alternative solutions to investors who want to invest in hedge funds. The Roundtable was sponsored by Lyxor and Eurex and took place on June 6th, 2013 in Paris. Xavier Lattaignant, Head of Alternative Multi-Management at SCOR Global Investments (SGI) stated, “Managed accounts are a very compelling alternative to direct offshore investment. It is an efficient way to get transparency, control over assets by a third party and improved liquidity in some cases.
Institutional investors to make addition hedge fund allocations in H2 2013, says survey (HedgeWeek)
Institutional investors intend to remain active in hedge funds, with 88 per cent indicating that they plan to make additional allocations during the second half of this year, according to Credit Suisse Group AG (NYSE:CS)’s mid-year Hedge Fund Investor Survey. This indicates that the industry may see continued significant levels of allocation activity in the second half of 2013. In addition, respondents were asked to share their insights into whether they are planning to allocate, maintain or decrease allocations to various hedge fund strategies in the second half of this year.
Wife in divorce let out of jail after taking off with millions (Lohud)
The wife of a multimillionaire former hedge-fund analyst who absconded with millions of dollars from her husband in the midst of their divorce was to be released from jail Wednesday after spending eight days behind bars. It’s the latest chapter in their extraordinary divorce. State Supreme Court Justice Alan Scheinkman ordered Elizabeth Bingham Perry released after she agreed to return much of the money, and after a settlement between her and her husband was brokered by lawyers. Scheinkman issued a warrant for Bingham Perry’s arrest on July 10, and she was picked up by police at a Port Chester deli five days later.
Hedge funds most bearish on treasurys in 16 months (CNBC)
Hedge fund managers are the most bearish on 10-year U.S. Treasurys in 16 months, according to a new survey, as they position for a winding down of the Federal Reserve’s bond buying program. Of the managers polled, 48.3 percent were negative in their outlook for 10-year debt in July, up 6 percentage points from the previous month, according to a monthly survey by TrimTabs/BarclayHedge published late Wednesday. The survey, which was conducted July 16 and July 19, polled 95 fund managers. …The survey findings, however, contradict a recent Bank of America Corp (NYSE:BAC) Merrill Lynch report that said hedge funds have been “aggressively” buying 10-year U.S. Treasurys in the week to July 22.
Hedge fund in £400m deal for Northern Rock’s bad assets (CityAM)
NORTHERN Rock’s so-called bad bank has sold £400m of unsecured personal loans, government agency UK Asset Resolution (UKAR) announced yesterday. The better performing loans are going to OneSavings Bank, a lender that is backed by US hedge fund JC Flowers. And the lower quality loans are going to Marlin Financial Group. The combined deals cover loans to 140,000 customers. “The continued fair treatment of customers was a key consideration for UKAR in the choice of buyers,” the agency said in a statement.
Hedge-fund firm gets N.S. payroll rebate to create 150 jobs (TheChronicleHerald)
An international hedge-fund administrator is planning a major expansion of its Halifax operation with the help of a sizable provincial payroll rebate. Butterfield Fulcrum will receive a $1.26 million over the next three years from Nova Scotia Business Inc., the province’s business development agency. The company must create 150 jobs to receive the full amount. Butterfield Fulcrum will get $315,000 once it creates 25 jobs. Graham Steele, minister of economic and rural development and tourism, announced the funding Wednesday.
JP Morgan Liquidating Pension Hedge Fund Investments (HedgeCo)
JPMorgan Chase & Co. (NYSE:JPM) has decided to liquidate all of the hedge fund investments held by its overfunded $13 billion pension fund, industry website Hedge Fund Alert reported today. JPMorgan Chase & Co. (NYSE:JPM) Retirement plans to withdraw approximately $2.3 billion that it has invested in funds. ”JPMorgan Chase & Co. (NYSE:JPM) units including Highbridge Capital manage $26.5 billion of regulatory assets, including leverage,” Hedge Fund Alert’s Manager Database shows. “JPMorgan Chase & Co. (NYSE:JPM) wants to ‘immunize’ its pension plan by pulling back from hedge funds and traditional equity investments.”
Inside Last Night’s Poker Tournament With Hedge Funders, Poker Pros, And Legendary NYC Athletes (BusinessInsider)
Hundreds of hedge fund professionals filled Gotham Hall in Midtown Manhattan last night for the 4th annual “Take ‘Em To School” charity poker tournament. This year’s event raised funds for Education Reform Now, an advocacy organization that’s committed to making sure all kids can access high-quality public education. The event was co-chaired by Michael Sabat, who works in equity derivatives sales and trading at Sanford Bernstein, and Whitney Tilson, who runs Kase Capital. Tilson is a leader in the education reform space.
Hedge Fund Glade Brook Says Alibaba Will IPO Within 12 Months (InstitutionalInvestorsAlpha)
A hedge fund that has an investment in privately held Alibaba Group is telling investors it expects the largest e-commerce company in China to go public within a year. Paul Hudson, chief investment officer of Glade Brook Private Investors, a private fund formed in August 2012 to invest exclusively in the equity of Alibaba, told clients in a letter dated July 23 that following a planned management succession and organizational restructuring, he expects Alibaba to launch an IPO of the majority of its assets, including Taobao Marketplace, Tmall.com and Alibaba.com Limited businesses, “in late 2013 or the first half of 2014.”
