Outspoken hedge fund boss who made the journey from city to city (Telegraph)
Andrew Law was on the losing side earlier this month when his beloved Manchester City lost the FA Cup Final. But the hedge fund millionaire has been a winner on recent bets on the financial markets. Mr Law, chairman and chief executive of Caxton Associates, has used the firm’s $7bn (£4.6bn) macro hedge fund to focus on the yen, which has fallen by about 25pc since November due to the Japanese government’s massive monetary stimulus. This month, the yen fell to a four-and-a-half-year low against the dollar, with Kyle Bass, founder of US hedge fund Hayman Capital, warning that Japan is careering towards a major debt crisis and likening the nation’s measures to boost growth to “adding a Ponzi scheme to a Ponzi scheme”.
UPS gets best of both worlds with fund-of-funds platform (PIOnline)
United Parcel Service, Inc. (NYSE:UPS) combined investment insourcing with operational outsourcing in building its fledgling opportunistic hedge fund of funds for its U.S. defined benefit plans. Built to pump up returns for the four U.S. plans, which total $27 billion, the new fund matches the expertise of Leo R. Svoboda, portfolio manager-absolute return at United Parcel Service, Inc. (NYSE:UPS), and HedgeMark International LLC, which provided the operational infrastructure, hedge fund risk monitoring and performance, and managed account know-how. The 1907 Partners Fund is named for the year of United Parcel Service, Inc. (NYSE:UPS)’ founding as a bike and foot messenger service. But its investment premise is thoroughly rooted in the 21st century.
Business book review: ‘Hedge Hogs’: The sad saga, and juvenile culture, of Amaranth Advisors (DenverPost)
In September 2006, hedge fund Amaranth Advisors collapsed after losing more than $6 billion in the natural-gas futures market. In “Hedge Hogs,” Barbara T. Dreyfuss tells the story of the math-whiz traders whose risky dance with deregulation led to the collapse. The star of Dreyfuss’s distressing tale is Brian Hunter, the Amaranth celebrity described by sycophants at the now-defunct Trader Monthly magazine as a top dog among a crop of “red-hot traders.”
Hedge funds face $20bn a year UK tax clampdown (FT)
A proposed clampdown on tax avoidance by UK-based hedge funds, private equity firms and other investment management partnerships could raise tax bills by as much $20bn a year, industry figures believe. HM Revenue & Customs last week launched a consultation document designed to tackle the disguising of employment relationships through limited liability partnership structures and the manipulation of profit and loss allocations to achieve tax advantages. Joe Seet, senior partner at Sigma Partnership, a London-based hedge fund consultancy, said the latter tactic was commonly used by hedge funds to shield performance fees from tax, a loophole he estimated at $20bn a year.
How to Build a Hedge Fund (Barrons)
Launching a new hedge fund has always been difficult, and even more so since the financial crisis. More funds are closing down than starting up these days, and most of the failures are small operations with short histories, says Daniel Celeghin, a partner at Casey, Quirk and Associates, which advises asset managers. Because investors have become “more educated and more paranoid” since the 2008 crash, he notes, they gravitate toward “the perception of safety” in large hedge funds that boast long track records. Of the $15.3 billion that investors poured into hedge funds during the first three months of this year, firms that managed more than $5 billion soaked up $10.1 billion; firms managing less than $100 million got just $1.14 billion, according to analysts at Hedge Fund Research.
