Hedge Fund Billionaire Steve Cohen Is Selling Two Warhols And A Richter, Is He Short On Cash? (Forbes)
Billionaire Steve Cohen is one of Wall Street’s most mysterious characters, making unexpected moves and constantly throwing people off. The head of SAC Capital decided to sell some art, and has put two major pieces by Andy Warhol and one by abstract master Gerhard Richter on the selling block, reportedly to raise capital to face rising legal bills and record penalties related to a continuing government investigation into insider trading at his hedge fund. Yet Cohen, who is an active player in the art market, has also recently acquired a major Picasso and a huge property in the Hamptons.
Carl Icahn and Daniel Loeb can’t be shut out (FT)
If “staying active” is the key to a long life, Carl Icahn will probably live for years. At 77, the US investor is on a concerted activist campaign. He has tried (unsuccessfully) to disrupt Michael Dell’s buyout of the computer maker he founded, dined with Apple Inc. (NASDAQ:AAPL)’s chief executive and pressed him to return cash to shareholders, and last week planted board members – including his son Brett – at Nuance Communications Inc. (NASDAQ:NUAN), the Boston technology company that gives Apple’s Siri his/her voice. But despite proclaiming in Forbes magazine in June that “What I Do Is Good for America”, Mr Icahn will struggle to lose his “corporate raider” label. When he revealed his activist stance at Nuance, analysts wrote: “Let the fireworks begin.” Board members and senior managers’ first reaction to an approach from Mr Icahn – or any hedge fund – is to take cover.
Hedge Fund Bears at Year High as Equities Focus on Budget (Bloomberg)
Hedge funds, whose bearish bets on stocks have held their returns to half the Standard & Poor’s 500 Index in 2013, pushed short sales close to the highest level of the year just as the U.S. budget impasse spurred a doubling in volatility. Rising bets against equities sent a gauge of manager bullishness compiled by ISI Group LLC within 0.2 point of its lowest reading in 2013 last week. Short sales have backfired as the S&P 500, up 19 percent this year, posts one of its broadest rallies on record. The index gained 0.4 percent to 1,710.14, extending the biggest two-day rally since January as lawmakers struggled for an accord to raise the debt ceiling. It has swung an average of 0.82 percent a day in October, compared with 0.45 percent in the third quarter.
MARC FABER: There Are No Safe Havens For Investors (InvestorPlace)
With the October 17 debt ceiling deadline fast approaching and uncertainty about when the Fed will begin tapering its monthly $85 billion asset purchase program, some investors are looking for safe haven to protect their wealth from rapid depreciation. But Marc Faber, author of “The Gloom Boom And Doom Report,” thinks there is no safe haven. In an interview with Bloomberg TV he says investors are better off with a diversified portfolio: “There is no safe haven. Bank deposits are not safe, which used to be safe. Money in treasury bills is not 100% safe because there is inflation in the system and you hardly get any interest.
Hedge fund firm opens EU fund to keep insurance client (Reuters)
Hedge fund firm Finisterre Capital has launched an EU-regulated fund after one of its insurance clients threatened to pull out its money from an existing fund because new industry rules will make it more expensive to invest in unregulated products. The European Union’s proposed Solvency II capital rules for insurers, due to come into force in 2016, are expected to require companies to set aside more capital when investing in hedge funds that are registered offshore in places like the Cayman Islands and not regulated by the EU, the structure used by most hedge fund firms.
The Asian hedge fund industry continues to evolve, mature (Opalesque)
Stephane Pizzo, the founder of Lotus Peak Capital in Singapore is a veteran of the Asian hedge fund industry. He has worked at banks, family offices, and launched his own fund based on his research skill. To do that, he works with his clients to find managers that will meet their specific needs. “Our job includes on-site visits, research, and in the end monitoring investments on behalf of the client,” he explains in a recent Opalesque TV interview. According to Pizzo, the Asian hedge fund landscape is continuing to evolve and mature. “It is now possible to short equities across the region, it’s not always liquid but at least it’s possible,” he says. However, there is still more to do.
Hedge Fund Managers to poor: We feel your pain (CNBC)
People Moves: Hedge Fund Veteran Lionel Erdely Joins Investcorp (HedgeCo)
Industry veteran Lionel Erdely has joined Investcorp’s New York-based hedge fund group as Head of Hedge Funds and Chief Investment Officer. Erdely joins Investcorp from Lyxor Asset Management, a subsidiary of Societe Generale Group with approximately $100 billion of assets under management, where he has served as Chief Investment Officer since 2004 and CEO of Lyxor Inc since 2009.
Former Hedge Fund Consultant Readies Quantitative Launch (Finalternatives)
New hedge fund Orso Capital Management is set to launch its maiden offering, a quantitative stock fund. Quadrant Plus Partners will aim for long-term growth investing exclusively in Standard & Poors’ 500 and Russell 2000 index constituents, Orso founder Andrew Lydon said. Lydon established Orso—which he notes means “bear” in Latin, “because of the strategy’s ability to succeed even in bear markets”—earlier this year after running an eponymous hedge fund analysis, modeling and due-diligence company.
Roubini’s rubicon: No DC deal could mean recession (MoneyControl)
A failure of Congress and the White House to strike a debt ceiling agreement could have profound consequences for the US economy, economist Nouriel Roubini told CNBC on Monday. Amid an ongoing debate about the impact of the US even temporarily breaching its statutory borrowing limit, the economist known as “Doctor Doom” warned that breaching the USD 17 trillion debt limit could tip the economy into a new down curve.
Herbalife Director Dunn Predicts ‘Clean’ New Audits (Bloomberg)
Herbalife Ltd. (NYSE:HLF) Director Jeff Dunn said he expects a “clean read” when PricewaterhouseCoopers LP finishes new audits of the company’s books amid allegations by hedge fund manager Bill Ackman that it’s a pyramid scheme. The nutrition company hired PricewaterhouseCoopers in May after its previous accounting firm, KPMG LLP, resigned because of alleged insider trading by an auditor. PricewaterhouseCoopers is re-auditing statements for 2010 through 2012. In August, Ackman sent a 52-page letter urging the auditor to pay attention to “serious accounting and disclosure issues.”
Hedge funds target Puerto Rico debt (FT)
Hedge funds and managers of distressed assets have been buying debt sold by Puerto Rico, as traditional municipal bond investors shun the securities amid worries about the island’s finances. “Crossover” investors were betting that prices have fallen enough for them to benefit whether the Caribbean island recovered from a multiyear recession or had to restructure its massive debt pile, hedge fund managers in the US and Europe said. An S&P index of the value of Puerto Rican municipal debt has fallen almost 25 per cent since the end of May. Borrowing costs have risen to record levels in spite of measures by Governor Alejandro Padilla aimed at balancing the budget.
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