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Hedge Fund Lawsuits, Gottex Cuts Costs, Buffett, Soros, Citadel…

Hedge Fund Gottex to Cut Costs As Assets Shrink (Reuters)

Swiss fund of hedge funds manager Gottex GFMS.S said it would slash running costs by 15 percent in 2012 after assets fell by some $1 billion (637 million pounds) from a year earlier as some large clients pulled money in order to invest directly in hedge funds.

Stanford Sought To Influence Regulator (Reuters)

Allen Stanford, charged with a $7 billion Ponzi scheme, sought to have a Antiguan regulator with oversight of his offshore bank dismissed after she rejected a number of the Texas financier’s overtures to work together, she testified on Monday.

Hedge Fund Manager Wins Lawsuit Against Perelman (FINalternatives)

New York hedge fund manager Donald Drapkin will get his last $16 million from former mentor and friend Ronald Perelman, a jury has ruled.

McGraw-Hill Fourth-Quarter Profit Rises on Media Business (Bloomberg)

McGraw-Hill Cos. (MHP), the finance and publishing company that’s splitting in two, said fourth-quarter profit rose 39 percent, boosted by stock buybacks and increased revenue from its information and financial services divisions. McGraw-Hill began a strategic review in 2010 of the company’s businesses. Last August, Jana Partners, a New York- based hedge fund and investor in the company, proposed a plan to break up McGraw-Hill after education revenue fell for three straight quarters.

Ken Griffin’s Citadel Raised Stake In Basic Energy Services Inc. (Insider Monkey)

Ken Griffin’s Citadel Investment Group disclosed today for its 6.5% passive stake in Basic Energy Services Inc. (BAS). According to a regulatory filing, Citadel Investment Group now has 2.75 million shares of BAS in its portfolio, giving a 6.5% passive stake ownership of the company. Citadel had 805 thousand shares of BAS as of the end of September, and passed the 5% threshold on January 25. So it’s possible that Citadel saw BAS’s recent price decline as a buying opportunity and bought the shares at about $17 per share. Currently BAS is hovering at around $17.70.

Gingrich casts Romney as George Soros favorite (Washington Post)

Former House speaker Newt Gingrich (R-Ga.) has long been working to portray Mitt Romney as a “Massachusetts moderate.” Now, he’s seizing on remarks made by liberal financier George Soros to further make his case.

Soros May Benefit From White House’s Natural Gas Proposal (Hawaii Reporter)

George Soros, a billionaire investor and major backer of President Obama, stands to reap a windfall from legislation promoting natural gas-powered vehicles. The White House unveiled a proposal on Thursday that would do just that.

hedge fund research

Hedge Funds Lift Bets to Two-Month High as Rally Accelerates: Commodities (Bloomberg)

Hedge funds increased wagers on rising commodity prices to the most in two months and the rally in raw materials accelerated as the Federal Reserve pledged to keep borrowing costs low for three more years.

Silver Powering 20 Million Homes as Glut Subsides: Commodities (Bloomberg)

For now, speculators are getting more bullish. Hedge funds and other money managers more than doubled wagers on higher prices this year, Commodity Futures Trading Commission data show. They held 16,034 futures and options in the week ended Jan. 24, the most since mid-September. The most widely held option gives the owners the right to buy silver at $40 by June, data from the Comex in New York show. The three biggest holdings are all call options at 18 percent or more above prices today.

How to Start, And Run, A Hedge Fund (Forbes)

“A lot of employees who worked at prop desks are now at hedge funds or starting their own,” said Mark Coriaty, director of strategic partnerships at Eze Castle Integration, a Boston-based provider of technology services and even full service office space for hedge funds. “Hedge funds can be very lucrative depending on how you staff them and how you find the right partners for operational efficiency and reducing overall costs like trading and research.”

Did Hedge Funds Trigger the Financial Crisis? (CNBC)

Hedge funds have mostly been exonerated in the typical narrative of the financial crisis, which concentrates blame on some combination of mortgage lenders, investment banks and government agencies. A new paper by Yale professors Gary Gorton and Guillermo Ordonez, however, may indicate that hedge funds and other well-informed, aggressive traders played a much more important role in triggering the crises than is widely understood.

Hedge Funds Have Grown Too Big And Need Pruning (Financial Times)

Is there any such thing in the world of finance as a good idea that does not in time get taken too far, and flogged to destruction? I am beginning to doubt it. If the financial world had any relative “winner” from the disaster of 2008, it was hedge funds. The long-feared collapse of a big hedge fund never took place. Banks turned out to create far more systemic risk. Some smart hedge fund managers actually saw the crisis coming and made money from it.

Warren Buffett Is Not the Oracle Of Public Finance (Forbes)

It is being reported today that Senator Sheldon Whitehouse (D-R.I.) is introducing a bill that would impose a minimum 30% tax on individuals earning more than $1 million per year.  This type of tax policy – which is essentially a new version of Alternative Minimum Tax – has been dubbed the “Buffett Rule” due to the news last year that Warren Buffet had a lower tax rate than his secretary.

Lucidus’s Sherry Says Europe Buys Itself Time With ECB Loans (Bloomberg)

Geoffrey Sherry, co-founder of Lucidus Capital Partners LLP, a London-based hedge fund, said the European Central Bank’s injection of 489 billion euros ($644 billion) of cash into the financial system hasn’t made banks solvent. “They have not fixed the problem of bank insolvency,” Sherry said in an interview on Bloomberg Television’s “InsideTrack” today. “They haven’t fixed anything, but they have bought themselves some time.”

South Korea Appareal Retailer E-Land Joins Group to Bid for L.A. Dodgers (Bloomberg)

South Korean apparel retailer E-Land is part of a group that has made a bid for Major League Baseball’s Los Angeles Dodgers, a company spokesman said. Other potential bidders for the team include Rick Caruso, the Los Angeles real estate developer who is working with former Dodgers and New York Yankees manager Joe Torre; hedge-fund manager Steve Cohen of SAC Capital Advisors LLC in Stamford, Connecticut; and Mark Walter, chief executive officer of Guggenheim Partners LLC in New York, who counts Magic Johnson, the former Los Angeles Lakers player and a basketball Hall of Famer, among his partners.

Wells Fargo Investment Bankers Bring Buffett-Assisted Revenue Once Shunned (Bloomberg)

It was about a year after Wells Fargo & Co. and Kovacevich, the bank’s chairman at the time, had announced a plan to purchase Wachovia Corp., and now he was reaching out to Warren Buffett for help, Bloomberg Markets magazine reports in its March issue. Just days before, Buffett had heralded his own acquisition of railroad Burlington Northern Santa Fe Corp. for $26 billion.

Is Modern Finance Ruining Modern Art? (Part 2): Mark C. Taylor (Bloomberg)

…This investment strategy treats art like any other commodity purchased for speculative purposes. The investment game changes significantly when art is regarded as a financial asset, rather than as a consumer good. Speculators in the art market have recently established hedge funds and private equity funds for the purchase and sale of art…

Coal-Carrier Rates Seen Dropping to Decade-Low on Capacity Glut: Freight (Bloomberg)

We don’t have a problem with demand,” said Philippe van den Abeele, the managing director of Castalia Fund Management (U.K.) Ltd., a London-based adviser to a hedge fund trading shipping derivatives. “Supply is what is putting a huge lid on the potential for freight to rise in 2012.”

Hong Kong’s Tiger Court Fight Tests Securities Regulator’s Offshore Reach (Bloomberg)

Hong Kong’s securities watchdog is fighting to defend the way it tackles offshore targets after losing the first round of its insider trading case against hedge fund firm Tiger Asia Management LLC. Hong Kong Court of First Instance Judge Jonathan Harris agreed with the hedge fund firm, ruling in June that the commission must first seek criminal prosecution or ask the Financial Secretary to start a civil inquiry in a tribunal.

ICE to Begin Portfolio Margining for Bank Credit Swap Trades (Bloomberg)

Intercontinental Exchange Inc. (ICE), owner of the world’s largest credit-default swaps clearinghouse, said it received approval to lower its bank members’ cost to guarantee their proprietary positions. Intercontinental, which owns ICE Clear Credit in New York and ICE Clear Europe in London, is petitioning regulators to allow the same change for customers of its bank members, such as hedge funds or money managers that use clearing services, the company said. The margining change only applies to ICE Clear Credit, the company said.

Ferrous Sells Five Iron-Ore Cargoes to Noble Group, CEO Says

Ferrous Resources Ltd., the miner backed by billionaire Philip Falcone’s Harbinger Capital Partners LLC hedge fund, sold five iron-ore shipments to Noble Group Ltd. (NOBL) as it expands production.

High Frequency’s Weinberg Says Europe Should Focus on Shoring Up Its Banks (Bloomberg)

European Union leaders meeting in Brussels today should shore up the region’s banks and focus on Greece’s debt crisis instead of longer-term regional accords, according to economist Carl Weinberg. Weinberg said he believes that hedge funds had acquired a “blocking position” in the negotiations and were “holding out to get a better deal for themselves to improve their own profits.”

South Carolina: Enough with Private Equity (WSJ)

WSJ’s Michael Corkery stops by Mean Street to discuss South Carolina’s efforts to wean its public pension funds off of ‘alternative’ investments, such as private equity and hedge funds.

FSA Bans, Fines Former U.K. J.C. Flowers CEO for Fraud (WSJ)

The FSA last week said it had fined David Einhorn, owner of the U.S. hedge fund Greenlight Capital Inc., and his fund GBP7.2 million for engaging in market abuse in relation to an anticipated significant equity fundraising by Punch Taverns PLC (PUB.LN) in June 2009.

European Regulator Continues To Review Complex UCITS Products (Hedge Fund Intelligence)

The ‘retailisation’ of hedge fund strategies within the UCITS wrapper remains a concern for regulators, according to a new report published by the European Securities and Markets Authority.

ML Gears Up To Add Systematic Emerging Market Vehicle (Hedge Fund Intelligence)

ML Capital has unveiled one of its newest funds to be launched onto its UCITS platform. The RP Systematic Emerging Market UCITS Fund will launch with $15…

Monsoon Selects SEI For Fund Services (Hedge Fund Intelligence)

SEI has been selected by Monsoon Capital to provide fund administration, trustee and custodial services for the firm’s…

6 Large-Cap Undervalued Stocks with High Dividend Yields (Insider Monkey)

We have been urging investors to focus on high dividend stocks for the past year. The problem is, most people don’t know how to time the market. Dividend-yielding stocks are valued like any other stocks, and, like other investments, when they are undervalued is the best time to buy. We used price-to-book and price-to-earnings ratios to pick the most undervalued stocks.

Deutsche Bank Faces Probe Over CDO Paulson Shorted (FINalternatives)

The Securities and Exchange Commission is investigating the START CDO, the German magazine Der Speigel reports. The allegations are similar to those that Goldman Sachs paid $550 million to settle a year-and-a-half ago: that the bank allowed the hedge fund to pick the securities that went into the CDO and then failed to tell other investors that Paulson was shorting the CDO.

RAB CEO Out at Smaller Firm (FINalternatives)

Charles Kirwan-Taylor has left the hedge fund after leading its downsizing and delisting from London’s Alternative Investment Market last year. Co-founder and chairman Micheal Alen-Buckley has now added Kirwan-Taylor’s former responsibilities to his own.

London Prime Brokerage To Add Cap. Intro. Services (FINalternatives)

As its clients begin to look to raise more money, prime brokerage Global Prime Partners is planning to help. “Right now, it’s a wide-ranging mandate,” Kevin LoPrimo, global head of hedge fund services and equity finance, told HFMWeek. “We will look to define the role more closely once the hire is in place.”

MF Global Funds May Never Be Fully Recovered (HFN)

Three months after the collapse of broker-dealer MF Global, federal investigators fear that a portion of the $1.2 billion in missing customer funds will never be recovered.

The Cash Is Coming! Here’s How To Play It. (CNN Money)

Apple shareholders don’t really have much to complain about these days — the stock is up 424% over the past five years, compared to a 7.4% decline in the S&P500. But come on, Cupertino. If you can’t think of ways to use the money, give it back to its rightful owners. You’re not a hedge fund.

Stealthy New Year Rally Built On QE Hopes (Financial Times)

Stealthily does it. A new year rally on Wall Street has propelled US stocks to their best January performance in 15 years. But can it last? The strong run for financials, semiconductor stocks and small companies, all of which were battered in the turmoil of 2011, point to a bull run powered by hopes for economic recovery in America.

Euro Foxes Bearish Hedge Fund Managers (Financial Times)

For hedge fund managers looking to profit from a fall in the euro, history is repeating itself. Speculators have put on record bets this month that the euro will fall against the dollar as concerns over the eurozone’s debt burden rumble on. Yet, so far this year, the single currency has risen by more than 1 per cent.

BREAKING NEWS: Former Dahlman President To Head Up New Direct Access Asset Management Unit (HFM Week)

Direct Access Partners, the institutional-focused, multi-asset agency-only trading partner has launched a new asset management unit and hired former Dahlman Rose & Co president Donald Motschwiller to head it, HFMWeek can exclusively reveal.

Baupost Might Lose Money on Mega-Quarry Investment (Value Walk)

The economics of The Baupost Group’s Ontario mega-quarry investment continue to unfold strangely, with new statements made in a January 12th Town Hall Meeting between Highland Companies executives and local parties adding clarification.

Hedge Fund Investors Seek Safety in Long-Short Equity (Institutional Investor)

We saw the first hint of this growing trend back in late fall when a Preqin survey of institutional investors found that 38 percent of responders were seeking long-short equity investments, making it the most popular strategy. “The strategy’s continued popularity is due to its ability to provide a level of protection in falling markets while capturing the majority of the upside in rising markets,” the London-based expert on alternative investments noted in its report at the time.

British Pension Funds Double Their Hedge Fund Holdings (Institutional Investor)

Hedge funds had a poor year in 2011, but this did not deter Britain’s cautious pension fund sector from continuing to ramp up its investment in this adventurous asset class.

GLG Distressed Hedge Fund Manager says Profits Lie in Getting Distressed in Times of Stress (Opalesque)

Galia Velimukhametova, Portfolio Manager at GLG, managing distressed strategies has written a paper entitled ‘In times of stress, get distressed; the asymmetric return profile of distressed securities.’

Kinetic Partners Advises Hedge Funds to Tread Cautiously Either Side of the Atlantic with Expert Networks (Opalesque)

Greg Worsfold, a consultant specialising in regulation emerging from the US’s SEC at compliance consultants, Kinetic Partners, is warning hedge funds, among others, that while expert networks can provide a competitive edge in making investment decisions, hedge funds must still implement strong internal controls to ensure they do not fall on the wrong side of the regulator.

L/S Equity Should Not Be Ignored, Warns Goldman Sachs (COO Connect)

Investors should not write off long/short equity hedge fund strategies, the co-head of cap intro at Goldman Sachs has warned. According to Chicago-based Hedge Fund Research, equity hedge funds suffered $8.6 billion in net outflows in the fourth quarter of 2011 reducing full year inflows to $2.2 billion. The HFRI Equity hedge Index finished 2011 down 8.25%.

Centaur Galileo, Sports Betting Hedge Fund Inspired By Mark Cuban, Collapses (Huff Post Business)

Mark Cuban is an undeniable idea machine. But one of his boldest ideas yet may have proven too hot to handle. Centaur, a London-based investment company, launched its Galileo fund in 2010 based in part because of an idea Cuban proposed in a 2004 blog post — creating a hedge fund that invested in sports bets. It didn’t last very long, however, as the fund appears to have collapsed on Monday, according to Wager Minds.

Hedge Funds Access Securities Lending Data on The Move With Data Explorers App (Hedge Funds Review)

US most likely to lead equity rally in 2012, say hedge fund managers and institutional investors (Hedge Funds Review)

Hedge funds and investors show wide differences over future of Eurozone (Hedge Funds Review)

Recent Tweets (Aleph Blog)

10 Tuesday AM Reads (The Big Picture)

Morning News: January 31, 2012 (Crossing Wall Street)

Frontrunning: January 31 (Zero Hedge)

HFMWeek Daily Snapshot – 31 January (HFM Week)

Tuesday Links: Option Attributes (Abnormal Returns)

U.S. Debt Market Could Be In For Major ‘Accident’, Analyst Says (Reuters Hedge World)

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