“Small-Cap Value Investment Is Our Core Business” Says Chuck Royce. (Market Watch)
Royce & Associates, founded by Chuck Royce in 1972, employs a value-based approach to invest in companies with small market capitalizations. The company looks for small-cap companies that are underpriced relative to their enterprise values. Most stocks in its portfolio are companies with less than $5 billion in market capitalizations. On December 31, 2011, Chuck Royce’s Royce & Associates developed several positions according to a series of 13Gs filed this week. Royce controls between 5.4% and 7.3% of the outstanding shares of the companies listed below. These companies run a range of industries, but they each have low P/E ratios and solid hedge fund investment.
Economists’ ‘Inside Job’ Conflicts Beg For More Than Pay Disclosure: View (Bloomberg)
Disclosure, though, won’t eliminate the actual conflicts. Even the best-intentioned economists — and particularly those in the area of finance — face a litany of influences pushing them toward a rosier view of the industries they study. In a yet-to-be-published paper, Luigi Zingales, a finance professor at the University of Chicago’s Booth School of Business, likens the pressure to regulatory capture. A pro-business attitude, he notes, can increase an economist’s chances of landing lucrative consulting, expert-witness and research contracts, and can facilitate publication in academic journals whose editors are themselves captured. (Zingales is a contributor to Bloomberg View’s Business Class blog and has accepted money for speeches to Dimensional Fund Advisors, a hedge fund, and Banca Intermobiliare, an Italian private bank, among others.)
AP Interview: Feds In Conn. Target Insider Trading (WSJ)
Federal prosecutors in Connecticut are targeting insider trading and similar financial crimes for the first time as part of a new focus on white-collar criminals, according to the state’s U.S. attorney. In an interview with The Associated Press, U.S. Attorney David Fein said his staff is investigating several cases of insider trading in Connecticut, a global financial hub that is said to have the largest concentration of hedge funds outside New York and London. He said charges are expected to be filed, but he could not provide further details on the investigations. “You’ll read more about those,” Fein said. Cases involving manipulation of markets in southwestern Fairfield County traditionally have been handled by the neighboring U.S. Southern District of New York, but Fein said his district is working to take over that responsibility.
Mesirow Raises Cash Level For European Credit Investment Opportunities (Bloomberg)
Mesirow Advanced Strategies Inc., which allocates $14 billion to hedge funds, has been increasing the amount of cash it holds in the last couple of months in preparation for potential opportunities including those in the European credit markets. “What we want to have is the flexibility that if particular things do deteriorate, we can play offense relatively quickly, being able to put capital to work in interesting opportunities,” Marty Kaplan, chief executive officer of the Chicago-based fund of hedge funds manager, said in an interview.
Greece Short On Time As Debt Talks Stumble (Bloomberg)
Greece is running out of time to avoid becoming the first euro nation to default after talks with lenders stalled ahead of a March 20 bond payment that will cost 14.5 billion euros ($18 billion) the country doesn’t have. Hedge funds holding Greek bonds may resist a deal, seeking to reap greater profit by getting paid in full, either by the Greek government or by triggering payouts from default-swap insurance contracts.
Hanley Wood Completes Recapitalization, Reduces Debt By $330 Million (Business Wire)
Hanley Wood LLC, the leading business-to-business media company serving the housing and commercial design and construction industries, announced today that it has completed a recapitalization that will reduce its long-term debt from approximately $410 million to $80 million. Also as part of this transaction, Hanley Wood’s new ownership group – led by certain funds managed by Oaktree Capital Management, L.P., Strategic Value Partners, LLC, and Tennenbaum Capital Partners, LLC – has invested $35 million in new capital into the company.
Star Dims For Goldman’s Youngest Partner (CNN Money)
After a year of losses, the exodus of investors from hedge funds hasn’t been as great as many expected. In the case of Eric Mindich‘s $12 billion Eton Park Capital Management — which fell about 11% last year — that’s because try as they might, investors still have a hard time taking their money out. Hedge funds loosened their terms after the carnage of 2008 alerted investors to the fact that funds weren’t required to return the investors’ cash just because they wanted it back. But Eton Park’s terms remain among the most onerous in the hedge fund world. And since its investors have hardly made a dime over the past three years, some are starting to bail. Net redemptions last year reached about 5% of fund assets, or around $700 million.
SAC Cap’s Cohen Joins LA Museum Board (HFN)
The billionaire founder of hedge fund firm SAC Capital Advisors loves Los Angeles even more. Steven Cohen, while bidding for the ownership of the L.A. Dodgers, is joining the Museum of Contemporary Arts as one of its trustees, the Los Angeles Times reported. Cohen’s addition to the MOCA board brings its number of trustees to 46.
Macro bets pick up, Avesta Capital closing, MF Global meeting frustrations abound and more (Hedgeworld)