Two Hedge Fund Employees Said In Custody In Insider Probe (Bloomberg)
Level Global Investors LP co-founder Anthony Chiasson and two other people were taken into custody as part of the five-year U.S. probe of insider trading at hedge funds, according to two people familiar with the matter. Todd Newman, formerly of Diamondback Capital Management LLC, was arrested in the Boston area today by the Federal Bureau of Investigation, and Jon Horvath was taken into custody in New York, according to one of the people familiar with the matter, who asked not to be identified because the arrests haven’t been made public. Chiasson turned himself in, the second person said.
U.K. Stocks Are Little Changed As Essar, Man Group Shares Rally (Bloomberg)
U.K. stocks were little changed, paring losses, after the International Monetary Fund was said to propose expanding its lending resources to protect against any worsening of the euro area’s debt crisis. Essar Energy Plc (ESSR) paced advancing shares, rebounding from yesterday’s 26 percent slump. Man Group Plc (EMG) gained 6.6 percent as the hedge fund manager announced cost cuts. Tullow Oil Plc (TLW) fell 4.9 percent after delaying full production at its oil field in Ghana by at least a year.
Federal Reserve As A Hedge Fund: Higher Profits, Lower Pay (Deal Book)
The year 2011 is over, and soon we’ll be hearing again about billion-dollar paydays for select hedge fund wizards. If it makes you feel any better, not everyone is sharing in these riches. The people who operate the most successful hedge fund around are receiving a relative pittance. That hedge fund is the Federal Reserve. Last year, the central bank turned over $76.9 billion in profit to the federal government, slightly down from $79.3 billion it provided in 2010. The Fed made this money in interest on a nearly $3 trillion portfolio of securities. This enormous holding was built up largely in the wake of the financial crisis as the Fed bought these securities through two rounds of quantitative easing.
Will Hedge Fund Holdouts Scuttle Greek Swap Deal? (Reuters)
Hedge funds holding Greek bonds that mature in March may have the strongest hand in the critical negotiations to restructure the cash-strapped country’s debt. The Greek government wants to swap out that maturing debt for new, lower-yielding bonds and a small cash payment. But some hedge funds in London and New York that have snapped up chunks of Greece’s next big maturing bond, the March 20, for around 40 cents on the euro, are balking.
Founder Severs Ties To Yahoo (WSJ)
Jerry Yang rode Yahoo Inc.‘s swift rise and subsequent decline over 17 years. Now the co-founder of the onetime dominant Internet company has decided to stop hanging on. Mr. Yang, 43 years old, said Tuesday he was resigning from Yahoo’s board, severing ties to the company he co-founded with David Filo in 1995 while both were Stanford University graduate students. Mr. Yang also said he would leave the boards of Yahoo Japan Corp. and Alibaba Group Holding Ltd., in which Yahoo owns significant stakes. Some Yahoo investors expressed concerns because one of the proposals discussed by Yahoo’s bankers involved Mr. Yang aligning himself with a private-equity firm or other buyers and becoming part of a new Yahoo ownership group, people familiar with the matter have said. The activist hedge fund Third Point said Mr. Yang must “declare whether he is a buyer or a seller—he cannot be both.”
Stock Market Legends Were Hammered In China; Buffett Lost $ 1.7 billion In Asia-Pacific (Insider Monkey)
The stock market performance in China can be described as “tragic” in 2011. Shanghai Composite Index was down 21.68, while Shenzhen Component Index declined 28.41% last year. The vast majority of Chinese investors suffered heavy losses. However, what appeases Chinese investors’ unhappiness is that several international stock market legends that invested in Chinese stock market, including Anthony Bolton and Warren Buffett, were also hammered last year.
Man Group To Step Up Cost Reductions As Funds Under Management Shrink 9.5% (Bloomberg)
Man Group Plc (EMG), the world’s largest publicly traded hedge fund, will reduce pay and eliminate jobs in a plan to reduce costs by about 10 percent as market turmoil prompted clients to withdraw money. Man Group is trying to make savings as turmoil in Europe hurt its investment returns. Clients withdrew a net $2.5 billion from the company’s investment funds during the fourth quarter amid concern that Europe’s sovereign debt crisis would make it difficult for money managers to find profitable wagers. Assets under management fell to $58.4 billion at the end of December from $64.5 billion three months earlier, the firm said.
Vinashin Said To Miss Third Payment On $600 Million Facility (Bloomberg)
Vietnam Shipbuilding Industry Group is being sued in the U.K. High Court by hedge fund Elliott Advisors LP, one of about 20 creditors with a stake in the $600 million loan. Credit Suisse, Depfa Bank Plc and Malayan Banking Bhd. are also among holders of the debt, the people said, declining to be identified as details are private.
Gild Arbitrage Says Liabilities Exceed Assets, BNS Reports (Bloomberg)
Estonian hedge fund Gild Arbitrage said its liabilities exceed assets after a writedown on its Armenian assets, Baltic News Service reported, citing a note to investors by fund manager Tonu Pekk. Liabilities of the Tallinn-based fund, which froze withdrawals in November 2008, exceeded assets by about 800,000 euros ($1 million) at the end of last year after assets were revalued to 18.3 million euros from 25.1 million euros six months earlier, BNS said. The fund wrote down the value of its Armenian assets by more than 9 million euros, it added.
U.K. Stocks Are Little Changed As Essar, Man Group Shares Rally (Bloomberg)
U.K. stocks were little changed, paring losses, after the International Monetary Fund was said to propose expanding its lending resources to protect against any worsening of the euro area’s debt crisis. Essar Energy Plc (ESSR) paced advancing shares, rebounding from yesterday’s 26 percent slump. Man Group Plc (EMG) gained 6.6 percent as the hedge fund manager announced cost cuts. Tullow Oil Plc (TLW) fell 4.9 percent after delaying full production at its oil field in Ghana by at least a year.
Graham Capital Is Set To Move Into London (HFM Week)
Graham Capital, a $7.3bn macro hedge fund, is set to move into a new London base later this year and will be significantly increasing headcount following its relocation to the Baker Street site, in a major boost for the city’s hedge fund industry, says HFMWeek. Ken Tropin, who founded the Connecticut-based fund manager in 1994, said a larger London base was a “strategic decision” which would allow Graham to take on more managers as it builds out its discretionary management business.
Somerset Capital Names Donabedian Partner (FINalternatives)
London-based Somerset Capital has appointed Michelle M. Donabedian as a partner. Donabedian is a hedge fund marketer who has worked at BlueBay, CQS, Tremont, Man Investments and Credit Suisse, where, in 2007, Somerset partner Jill Hodges was one of her clients. Hodges said: “I am delighted that Michelle has joined us. Michelle is well-known as a bright and professional marketer and her relationships with investors will further strengthen our offer, both in the U.S. and in Europe.”
Accountant Pleads Guilty To Lying To SEC In Hedge Fund Investigation (FINalternatives)
A former accountant has admitted he lied to investigators during a probe of his hedge fund clients. Bryan Polozola, a former audit partner at BDO USA, denied knowing that a former employer he was accused of stealing almost $50,000 from had been repaid during testimony to the Securities and Exchange Commission. But, according to the criminal information against him, Polozola knew perfectly well that his lawyer had made the payment—and that the lawyer had done so on Polozola’s orders and with Polozola’s money.
Macro Bets Pick Up, Avesta Capital Closing, MF Global Meeting Frustrations Abound And More (Reuters Hedge World)
