Hedge Fund Secrets Lie in Short Term Over Luck: Cutting Research (SFGate)
The best hedge fund managers tend to find profits in short-term, contrarian bets. That’s the finding of a study published this year by Russell Jame of the University of Kentucky and set to be presented next month at the American Economic Association’s annual meeting in Philadelphia. Investigating an industry that has grown to over $2 trillion from $38 billion in 1990, Jame found the top 30 percent of hedge funds outperform rivals by a statistically significant 0.25 percent per month over the subsequent year, indicating their superior performance persists.
Congers hedge fund manager pleads guilty in $2.7M investor swindle (Lohud)
A Congers hedge fund manager who was accused of defrauding investors out of more than $2.7 million pleaded guilty to four criminal counts Thursday. Stephen Colangelo Jr., who prosecutors said ran a scam that involved misleading investors by issuing fraudulent performance statements and other business documents, was arrested at his home last year. On Thursday, in U.S. District Court in Manhattan, Colangelo, 46, pleaded guilty to two counts each of securities fraud and wire fraud; he faces up to 80 years in federal prison at sentencing. A lawyer for Colangelo could not be reached for comment.
Michael Steinberg Wasn’t The Only Hedge Fund Manager Having A Bad Day Yesterday (DealBreaker)
Maybe the heat or the air-conditioning made the first jury lethargic. Or maybe the second wasn’t interested in debating the finer points of the various fraud statutes both before and after Christmas. Either way, it took the latter less than four hours to do what the former couldn’t accomplish in four days: find hedge-fund manager Michael Balboa guilty on all counts. A U.S. jury on Wednesday found former London-based portfolio manager Michael Balboa guilty of fraud over a scheme to inflate his hedge fund’s assets and management fees by manipulating the value of Nigerian debt.
Phillip Goldstein files for JOBS Act exemption to allow his Hedge Fund to “Publicly Solicit” (Hedgeco)
Phillip Goldstein, activist hedge fund manager and long time vocal champion for hedge fund’s right to advertise, has just filed with the SEC to allow his fund “Opportunity Income Plus LP” to make public solicitations in compliance with the JOBS Act. Phillip Goldstein stepped into the hedge fund spotlight in 2006 when he sued the SEC for their implementation of the “The Hedge Fund Rule” which if fully implemented would have required all hedge fund managers to register as Registered Investment Advisors. In Goldstein v. SEC the court sided with Goldstein and found that the SEC had overstepped its authority, and that hedge funds are not subject to SEC regulation under the Investment Company Act of 1940.
BlackRock Said to Seek $3 Billion for New Credit Hedge Fund (Bloomberg)
BlackRock, Inc. (NYSE:BLK), the world’s biggest money manager, is raising as much as $3 billion for a hedge fund to invest in credit globally, according to two people with knowledge of the pool. The firm began marketing BlackRock Credit Alpha Fund in October, with an initial target of $500 million and the potential to increase it, said one of the people, who asked not to be identified because the process isn’t completed. The long-short fund seeks to capture valuation anomalies and mispricings, the person said. Tara McDonnell, a spokeswoman for BlackRock, declined to comment on the new fund.
Neuberger Berman Introduces Long Short Multi-Manager Hedge Fund (HedgeCo)
One of the world’s leading employee-owned money managers, announced today the launch of Neuberger Berman Long Short Multi-Manager Fund “Unlike traditional hedge funds, the Fund provides daily liquidity, lower investment minimums ($1,000 for Class A and C shares), and 1099s for shareholders, while offering full transparency of portfolio holdings without a performance-based management fee.” Neuberger Berman said. “It employs the risk management and monitoring, mix of managers and long short strategies, and operational due diligence traditionally available only to institutional and high-net-worth investors through traditional hedge funds.”
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