Editor’s Note: Related tickers: Credit Suisse Group AG (NYSE:CS), The Blackstone Group L.P. (NYSE:BX), J.C. Penney Company, Inc. (NYSE:JCP), Goldman Sachs Group, Inc. (NYSE:GS), JPMorgan Chase & Co. (NYSE:JPM), Dell Inc. (NASDAQ:DELL), Apple Inc. (NASDAQ:AAPL), Google Inc (NASDAQ:GOOG), International Business Machines Corp. (NYSE:IBM)
Hedge fund manager William Ackman led the Ron Johnson revolution at J.C. Penney Company, Inc. (NYSE:JCP). And when Johnson was ousted in early April, his fund’s J.C. Penney Company, Inc. (NYSE:JCP) stake was down about half a billion dollars. Not to worry. Just a few months earlier, the giant Texas Teacher Retirement System reported that it had invested $200 million with Ackman’s Pershing Square Capital Management. Another Texas pension for county workers also has $40 million invested with him. Throw in public pensions from New Jersey, Missouri, Arkansas, Colorado, New Mexico, Massachusetts and West Virginia, and Pershing Square manages more than $1 billion on behalf of government workers.
Goldman Sachs Alumnus Sze’s Hedge Fund Is Said to Return 8% (BusinessWeek)
Azentus Capital Management Ltd., led by former Goldman Sachs Group, Inc. (NYSE:GS) proprietary trader Morgan Sze, returned 8 percent before fees this year through yesterday, according to a person with knowledge of the matter. Azentus’s assets stand at $1.6 billion, said the person, who declined to be identified because the information is private. Hong Kong-based Azentus manages a global multistrategy hedge fund focused on Asia. Roger Denby-Jones, Azentus’s chief operating officer, declined to comment. The Eurekahedge Multistrategy Hedge Fund Index, tracking the performances of 254 pools globally, returned 2.3 percent in the first three months.
Hedge Fund Association Teams up with The Appointment Group for Exclusive Travel Partnership (WSJ)
The Hedge Fund Association (“HFA”) today announced that it has teamed up with global travel management company The Appointment Group (“TAG”) as its exclusive travel partner. In this partnership, the HFA’s members will be able to take advantage of TAG’s quality service offerings geared specifically for the hedge fund traveler, which include specially negotiated hotel rates and international airfares, along with in-house 24-hour customer service to meet their complex and ever changing schedules. “Given the constant travel required by hedge fund executives, we are looking forward to offering the HFA’s members a hassle-free and cost-effective way to book their trips, with the highest possible service and other attractive amenities for their business excursions,” said Daniel Price, Managing Director, TAG.
Scotiabank Canadian Hedge Fund Index up 1.26 per cent in March (HedgeWeek)
The Scotiabank Canadian Hedge Fund Index ended March 2013 up 1.26 per cent on an asset weighted basis and gained 0.39 per cent on an equal weighted basis. The aim of the Scotiabank Canadian Hedge Fund Index is to provide a comprehensive overview of the Canadian Hedge Fund universe. To achieve this, index returns are calculated using both an equal weighting and an asset-based weighting of the funds. The index includes both open and closed funds with a minimum AUM of CAD15m and at least a 12 month track record of returns, managed by Canadian-domiciled hedge fund managers.
Agecroft Partners hires head of European Marketing (InvestmentEurope)
Agecroft Partners, a global hedge fund consulting and third party marketing firm, has hired Jim Sauls as managing director and head of European Marketing. Sauls previously worked at Calatrava Securities, where he was director of Marketing and CEO of their affiliated commodity pool operator. Previously he held roles at Fimat USA and Sanwa Futures. Sauls’ responsibilities at Agecroft include heading its marketing in Europe, and assisting on due diligence on potential managers it may represent.
Apex appoints Elliott Brown as managing director – Americas (HedgeWeek)
Apex Fund Services has appointed Elliott Brown to the newly created position of managing director – Americas. Brown will have responsibility for overseeing the growth of all of Apex’s offices in North and South America. Brown was formerly with JPMorgan Chase & Co. (NYSE:JPM) for 18 years, most recently as the managing director responsible for leading the bank’s global hedge fund administration business. Prior to that role, Brown was in strategy and business development and was instrumental in the formation of the hedge fund and private equity fund administration businesses at JPMorgan Chase & Co. (NYSE:JPM). Brown also worked for JPMorgan Chase & Co. (NYSE:JPM) in Australia in relationship management and operations.
Investor tapes meeting with hedge fund manager (DailyPress)
A retired small businessman who invested in a hedge fund managed by a man now facing federal fraud charges told the courtroom he taped a meeting in case of future litigation. The trial of former MICG Investment Management head Jeffrey A. Martinovich, who is facing federal fraud charges, continues this week. Martinvovich ran the company’s Venture Strategies hedge fund, which owned a substantial stake in a struggling solar company in New Jersey. Prosecutors are accusing Martinovich of seeking inflated estimates of the solar company’s value that would translate into gains for the hedge fund and larger performance fees for MICG.
Headhunter to the Stars Expands New York City Recruitment Firm (Virtual-Strategy)
Founder of The Celebrity Personal Assistant Network, Brian Daniel, has expanded his recruitment firm to cater to Greater New York City’s upper echelon hedge fund managers, fashion designers and high net worth families. The areas served include but are not limited to Manhattan (Wall Street/Financial district, Upper East Side/West Side); Staten Island; Long Island (Brooklyn, Queens and the Hamptons); as well as the neighboring communities in Connecticut. As a former personal assistant to Hollywood A-list, billionaires and royalty, Daniel is the world’s only headhunter with such first-hand experience. Daniel’s network of top-tier executive assistants, estate mangers and personal assistants represent the best of the best in New York City and have worked for high profile families, Wall Street finance gurus and fashion icons of industry – among others.
8 reasons why the hedge fund industry deserves a second look in 2013 and why RIAs are so well positioned to capitalize (RiaBiz)
Earlier this month, I attended some sessions of the Consultants Conference held in San Francisco by the Investment Management Institute. The IMI is a research and educational organization for institutional investors and wealthy families worldwide. Speakers included hedge fund industry pioneer, Michael Collins, president of Collins Capital, which manages multi-strategy, multi-manager hedge fund portfolios. Collins thinks that RIAs may soon come to embrace hedge funds more closely—now that alternative investments are becoming intrinsic to current portfolio allocation strategies.
Good Luck Trying To Start A Hedge Fund Right Now (BusinessInsider)
IF SETTING up a hedge fund were easy, more people would do it: bar inheritance or winning the lottery, there are few swifter paths to immense riches. Sadly for aspiring plutocrats, it is getting ever harder to launch a fund. Swaggering financiers once joked that launching with less than $1 billion of outside money to invest was hardly worth their time. Debuts that splashy are now notable only for their scarcity. A new fund typically opens with $50m-100m in assets under management. Even so, and despite buoyant stockmarkets, the number of launches is declining (see chart). Punier funds make for a less attractive business model. A $50m pile might once have been enough to sustain a small firm. Creaming off 2% of assets and 20% of profits–the standard hedge-fund fee formula–could generate around $2m a year given decent performance. No longer. Declining fees and low industry-wide returns have halved that amount.
A Hedge Fund Manager Explains Why He’s Cutting Back On Twitter (BusinessInsider)
A US based hedgie sent out a note to its clients over the weekend, saying they cut back on their use of Twitter. Add comment below if you got any. The note: 4/ Going off Twitter………………..Both me and Javad cut back out Twitter feeds by 95% last week. Is there any read-across from this? We have always seen “quantity” and not “quality” as our edge. Is there too much noise in the market now so that even noise traders like ourselves need to take a small step back? Or is it just Twitter that has peaked and become too mainstream? Don’t misread this believing that we trade based on Twitter, because we hardly ever do, but rather as a change of how we treat an information source.
Three Strategies That Could Shape Hedge Fund Growth (WSJ)
Although the hedge fund industry faced a number of challenges last year, from market volatility to increased regulatory scrutiny, it also reached an important milestone, surpassing records set in 2007 for assets under management (AuM) and absolute number of funds.¹ Those hedge funds around during the last peak have settled into a more measured and sustainable pace of growth, with money flowing mainly to hedge funds that adjusted to regulators’ and investors’ demands for more transparency while looking for new ways to streamline back-office operations. There are challenges ahead for the industry, however. With SEC registration now behind them, hedge funds will be subject to Form PF reporting on an ongoing basis and, for the first time, risk-based examinations. Many are also facing growing demands from institutional investors, which are making their mark as an increasingly vocal client base.
SEC Charges Former Executive with Insider Trading On Nonpublic Information Obtained as Part of Professional Group (SEC)
The Securities and Exchange Commission today charged a former corporate executive living in South Florida with insider trading based on confidential information that he learned as part of a professional organization. The SEC alleges that Mark D. Begelman purchased stock in Bluegreen Corporation in advance of a public announcement by BFC Financial Corporation that it was acquiring the company. Begelman was a member of the World Presidents’ Organization (WPO), which is a global professional group of business leaders who are current or former executives at major companies. The WPO has a specific written policy that discussions of a confidential nature are to be kept confidential. Nonetheless, Begelman took advantage of confidential information he learned from another WPO member and illegally traded ahead of the merger announcement for nearly $15,000 in illicit profits.
The Dell mirage (MarketWatch)
If so, you’ve probably come to the conclusion that Dell Inc. (NASDAQ:DELL) -1.19% has a lot going for it. It’s been trading at 10 times earnings. Michael Dell, the company’s founder and chief executive, says Dell is poised to make hay in the tablet- and cloud-computing markets. Then, of course, there’s the demand for the company. CEO Dell, along with Silver Lake Partners, wants to take the company private at $13.65 a share, The Blackstone Group L.P. (NYSE:BX) was offering $14.25. And Carl Icahn is suggesting he might offer close to $15 a share for the PC maker. Southeastern Asset Management says even at those prices, it could be argued Dell Inc. (NASDAQ:DELL) is still undervalued. As a stock, Dell’s six-month performance — it’s up 38% — has trumped some of the industry’s bellwethers including Apple Inc. (NASDAQ:AAPL) +0.84% (down 37.5%), Google Inc (NASDAQ:GOOG) +0.03% (up 17.5%) and International Business Machines Corp. (NYSE:IBM) -1.14% (down 3%).
The Rich List Gets Richer: Alpha to Rank the Next 25 Highest-Earning Managers (InstitutionalInvestorsAlpha)
Louis Bacon, Michael Platt, Seth Klarman and Alan Howard — these are some of the singular names in the hedge fund firmament who have made their fortunes as billionaires. Every single one of them has been featured on the Institutional Investor’s Alpha Rich List, the publication’s annual ranking of the 25 highest earning hedge fund managers globally. There’s one more thing they have in common: None of them are on the 2013 Rich List. The reason? Our proprietary survey calculates earnings of managers from performance fees and management fees, and last year a manager had to have earned at least $200 million, double the threshold in the preceding year. Fear not. They’re in good company.
Credit Suisse sells private equity unit to Blackstone (MoneyControl)
Credit Suisse Group AG (NYSE:CS) has agreed to sell a private equity business to The Blackstone Group L.P. (NYSE:BX), the latest move by an investment bank to sell a business with illiquid assets in order to appease regulators and bolster its balance sheet. The Volcker rule – named after former Federal Reserve Chairman Paul Volcker and part of the Dodd-Frank financial reform law – is expected to limit bank investments in private equity funds and was cited by Switzerland’s Credit Suisse Group AG (NYSE:CS) last summer as a reason for exploring a sale. …With USD 218 billion of capital under management, The Blackstone Group L.P. (NYSE:BX) is the world’s largest alternative asset manager, active in real estate, private equity, corporate credit and hedge funds. Like its peers, it has been seeking to expand its investment platform to manage more investor money.
MF Global Trustee Sues Corzine Over Firm’s Collapse (NYTimes)
A bankruptcy trustee has sued Jon S. Corzine and other former MF Global executives, claiming they were “grossly negligent” in the lead up to the brokerage firm’s collapse. The action by the trustee, Louis J. Freeh, comes just weeks after he agreed to postpone the lawsuit and enter mediation with Mr. Corzine. It is unclear when those talks broke down. In the complaint filed in United States Bankruptcy Court late on Monday, Mr. Freeh took aim at Mr. Corzine, a former Democratic senator and New Jersey governor who became MF Global’s chief executive in 2010. Mr. Freeh, the trustee for MF Global’s parent company and a former director of the F.B.I., also sued two of Mr. Corzine’s top deputies: Bradley I. Abelow, the chief operating officer, and Henri J. Steenkamp, the chief financial officer.
Physicist hedge fund guru posts lukewarm returns (CBSNews)
Having recently read James Weatherall’s book “The Physics of Wall Street” I was interested in the article “Against the Current,” about Andrew Tsai, a physicist turned hedge fund manager which appears in the April 2013 issue of Institutional Investor. Tsai is the chief investment officer of the Chalkstream Capital Group, a fund of hedge funds that was founded in 2003. The article discusses how Tsai needs to be exceptional as his clients are almost entirely partners and executives at hedge funds and major banks as well as asset managers who have entrusted Tsai with their personal capital. These are obviously people with high expectations. The fund’s strategy is to “traffic in areas where there is not a lot of capital chasing for returns.” Tsai added: “We think traditional asset allocation is very dangerous. We are not in the business of filing buckets: we are in the business of finding opportunities.”
