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Hedge Fund News: Bill Ackman, James Chanos, Samuel Israel

PERSHING SQUAREAckman exits Citi to raise cash for P&G (Reuters)
Hedge fund Pershing Square Capital Management told investors this week that it recently sold its position in Citigroup and used that money to buy shares of Procter & Gamble. Bill Ackman, who runs the roughly $10 billion New York hedge fund, wrote in his quarterly letter to investors that he decided to pull the “rip cord” after “one bad night’s sleep thinking about Citi.”

Blackstone-Backed Senrigan Hedge Fund Said To Lose 15% In 1H (Bloomberg)
Senrigan Capital Group Ltd., an Asia-focused event-driven fund backed by Blackstone Group LP (BX), lost almost 15 percent in the first six months of this year, according to a performance estimate sent to investors. Senrigan Master Fund’s net-asset value fell 6.7 percent in June, according to the update earlier this month that didn’t give a reason for the decline, and which was obtained by Bloomberg News. Its assets dropped to about $754 million at the end of June, according to the document, after topping $1 billion at the start of the year.

It’s Time to Buy Dollar, Hedge Fund Says (WSJ)
Investors should ignore growing expectations of a third round of quantitative easing by the Federal Reserve and pile into the dollar because the U.S. economy is slowing and big trouble is brewing in the euro zone, the head of one of the world’s biggest currency hedge funds said Thursday. John Taylor, chairman of FX Concepts LLC, said fears that so-called QE3 would translate into a weaker dollar, as it did in previous rounds, are misplaced, because the extra liquidity generated by the Fed is unlikely to be turned into loans.

Ex-Mizuho Asia top exec joins Expedition hedge fund (Reuters)
Former chief executive of Mizuho Securities Asia Ltd, John Paul Armenio, has joined Hong Kong-based hedge fund start-up Expedition Advisors as a managing partner. Craig James, Expedition’s founder and former head of Asian trading at New York-based hedge fund AM Investment Partners, confirmed the appointment to Reuters.

Hedge Fund Titan Bill Ackman’s Essential Financial Reading List (Forbes)
In the latest issue of Forbes, I wrote a story about Oliver White, a fishing guide whom hedge fund titan met at a lodge, then subsequently hired to become one of the analysts at his firm, Pershing Square Capital Management. It is an unlikely story, one of serendipity and one of how good luck really is only what you make of it. Within the story, White mentions a box of books that Ackman sent him to read before he took the job at Pershing Square. The books, Ackman believed, would have White–who had never before worked in finance–well-prepared for his new gig.

Hedge Fund Research: A Practical Guide to Capital Markets (HedgeCo)
Experts at hedge fund service provider Rothstein Kass, have co-authored “A Practical Guide to Capital Markets: Participants, Instruments and Compliance,” published by Thomson Reuters Westlaw. Joe Pacello, a Financial Services Tax Principal, and Richard Bloom, National Leader of Trusts and Estates at Rothstein Kass, have teamed with lead author Abe Mastbaum, Tax and Capital Markets Counsel at Barton LLP. The book is intended as an introductory-level guide for students, new employees at asset management companies and other financial institutions, and anyone interested in financial markets and instruments.

US Hedge Fund Awards: Agecroft Partners Wins Best Hedge Fund Third Party Marketing Firm (HedgeCo)
Agecroft Partners, the hedge fund consulting and third party marketing firm, was recognized by Hedgeweek as the winner of the “2012 Best Third Party Marketing Firm” at their US Hedge Fund Awards ceremony held in New York City on June 28th. In addition, Agecroft Partners recently received the most votes among North American third party marketers in a survey of Hedge Fund Review Magazine’s reader base and was also selected as the top third party marketing firm by HFMweek.

Brevan Howard Starts U.S. Investment Firm With $300 Million (Bloomberg)
Brevan Howard Asset Management LLP, Europe’s second-largest hedge fund, has opened a U.S. investment firm that will start trading in August with an estimated $300 million. Brevan Howard U.S. Investment Management LP was set up in New York last month and is registered with the Securities and Exchange Commission, the hedge fund said in a statement today. It will start investing money provided by Brevan Howard’s Master Fund in August, the company said.

Private Hedge Fund “Alpha” Surveys Allow Wealthy Clients to Profit From “Insider” Views (CorpWatch)
BlackRock, Marshall Wace, and Two Sigma Investments – three major hedge funds – have been conducting regular private surveys of brokers for wealthy clients. The practice – often called “alpha capture” – has raised red flags because of recent insider trading scandals at Goldman Sachs as well as information allegedly handed out by Morgan Stanley analysts during the Facebook stock market flotation. Hedge funds are part of the $2.13 trillion global “alternative investment industry” which invests the assets of wealthy individuals and institutional investors, outside the scrutiny of normal regulation, in the hope of generating outsize profits.

Hell Hath No Fury Like a RICO Action: Racketeering Charges Filed in Hedge Fund Divorce (Observer)
How angry an ex would you have to be to file racketeering charges against your spouse? That’s a question Elizabeth Bingham-Perry could answer. The Scarsdale resident filed a civil RICO action against her husband Jeffrey Perry in the U.S. Southern District’s Westchester courthouse last week. Mr. Perry, it so happens, is an executive at Third Point LLC, the hedge fund founded by Dan Loeb. In the complaint, Ms. Bingham-Perry alleges that Mr. Perry lied on net worth statements submitted by mail in the divorce proceedings, concealing assets in excess of $1 million in offshore and other acounts. That’s just the start. Mr. Perry’s entire career, his wife alleges, “has been marked by repeated criminal activity in his quest to amass his fortune,” a claim she rests on Mr. Perry’s alleged participation in a scheme to drive down the share price of a Canadian company called Fairfax Financial.

Should Speculators Be Paying More Attention To Big Insider And Hedge Fund Buys At Amyris? (SeekingAlpha)
Our followers here at Seeking Alpha know that one of our favorite trade plays, and one that we have had great success with, is the “bottom bouncer.” We like to scan for stocks that appear to have interesting fundamental and technical reasons to bounce higher from current bottom level prices. The volume and trading activity at biofuel biotech Amyris, Inc. (NASDAQ:AMRS) have been on the rise and the stock showed up on one of our scans. It appears that speculators are looking towards the firm’s July 31st earnings call as a possible trading catalyst that may continue to send shares bouncing hard off the 50-day moving average.

Investing 101: 4 Golden Cross Stocks With Hedge Fund Buying (Kapitall)
The technical analysis of a stock is said to show the psychology of the group of traders of the stock in question. You can compare volume and order execution prices and sizes with the trends the stock has experienced to get an idea of where the stock might be going next. It’s not a fail proof method, but it can provide a unique insight. One technical signal is called the Golden Cross. That means that a stock’s 50-day moving average crosses above its 200-day moving average. This is typically seen as a bullish signal. It is thought to be a significantly favorable turning point, especially if the trend is coupled by higher trading volume.

Q2 Filings: Top High Conviction Picks Of Energy-Focused Hedge Fund Oslo Asset Management (SeekingAlpha)
Oslo-based Oslo Asset Management is a part of Norwegian investment management company Aker ASA that has over $3.5 billion in total assets, including $369 million in 13-F assets (in U.S.-exchange traded equity securities). Overall, the fund has returned 72.3% since start-up in 2005 to year-end in 2010, at a respectable long-term compounded annual return rate of 10.4% compared to returns on the S&P in the range of 2.5% over the same period. The fund holds a very concentrated portfolio deployed in only twelve companies at the time of its Q2 2012 filing. Also, within the oil & gas group, about 28% of its assets are deployed in oil & gas operations companies, another 29% is deployed in integrated oil & gas companies, and the remaining 43% is deployed in the oil well services & equipment group.

Roundtable delegate says managed futures are fastest growing strategy in hedge fund space (Opalesque)
During the inaugural Opalesque Monaco Roundtable that took place in Monaco last month, Efficient Capital Management partner Jim Cone described managed futures as “the true alpha, opportunistic, they can be directional long or short, and can trade across all asset classes.” The Roundtable and was sponsored by Salus Alpha and Eurex. Cone clarified that he made the assessment “with the greatest respect to the hedge fund industry but added, “we all know a large amount of that return is beta, and on top you may end up with a lot of counterparty, credit, liquidity, valuation, or transparency risk.”

Investing, via a hedge fund does not make you a business man, whatever that means… (DemocraticUnderground)
It means you are an investor and investors only want one thing out of their portfolio; the largest return on capital they can”create”. To me, a business man is a person who is interested in all aspect of the firm they are running. There are many aspect, of course, but here are the ones I think are pretty universal. First, producing good products to build up your firm in the publics eye, second, looking for the best way to sell your product, third, how to best keep the people in your employ by treating them fairly and equatable. And finally, turning a sustainable profit which means looking far beyond the next few quarters.

Hovde Puts In $4M for Senate Bid (HedgeFund)
Eric Hovde has reportedly contributed $4 million of his own money in a bid for a U.S. Senate seat in his native Wisconsin. The Associated Press reported that the Republican candidate put $3.75 million into his campaign and loaned an additional $250,000 to it.

Its Official: Whitney Tilson Leaves T2, Sorta…. (ValueWalk)
Whitney Tilson, the co-founder of the T2 hedge fund company and the Tilson Focus Fund (MUTF:TILFX) has parted ways with long time partner, Glenn Tongue. Earlier in the day, ZeroHedge, the most popular financial blog reported: …Right now, Whitney Tilson is in Italy running a value investing seminar, which donates all the proceeds to charity. Tilson has frequently been sending emails to colleagues, but the practice has slowed down in the past few months. The T2 hedge fund fund is up for the year 8.5%, however, May was a brutal month. The hedge fund fell close to 14%. Performance for June has not been disclosed to investors, according to our sources. Additionally, Whitney Tilson is no longer listed as being part of the Tilson Focus Fund on their website. We have no idea if performance has anything to do with changes.

The Sam Israel saga veers into global conspiracy mode (StamfordAdvocate)
The tale of Samuel Israel III, the money manager convicted of a $400 million Ponzi scheme seven years ago that originated at his Stamford hedge fund, was always sordid and sad. The son of an elite family of New Orleans commodities traders, Israel could never live up to his name and began losing money almost as a soon as he opened a trading floor in a waterfront home on Signal Road in Stamford in 1996. Nine years later, a federal judge handed down a 20-year prison sentence for the massive fraud, in which Israel cheated investors and colleagues out of retirement funds and savings. To make things just a bit more pathetic, Israel suffered from painkiller and cocaine addiction and severe back pain, according to court records.

Bill Ackman Hosted A Singles Party At His Apartment Last Night (BusinessInsider)
At the Delivering Alpha conference we went up to Bill Ackman, the CEO and founder of Pershing Square Capital Management, and asked him where he was last night. That’s because the hedge fund manager had purchased a table at the REACH “Take ‘Em To School Poker Tournament,” but he didn’t show up.

KKR to Launch Two Funds for Individual Investors (WSJ)
The barbarians are letting down their gates. KKR & Co. is rolling out two funds for individual investors, a departure for the buyout giant that built its business catering to pensions funds and other institutions. On Thursday morning, KKR filed registration documents to introduce two funds, each investing in various types of debt, a fitting focus for a firm that has relied on junk bonds for many of its most lucrative leveraged buyouts.

James Chanos Says He’s Shorting Hewlett-Packard (WSJ)
James Chanos, the short seller who runs hedge fund Kynikos Associates, said he’s betting against computer maker Hewlett-Packard. The stock is “the ultimate value trap for investors…they’re destroying value,” he said at the Delivering Alpha conference in New York conference.

Ireland wants bailout fund to take bank stakes (Reuters)
Ireland’s finance minister said on Thursday that if Europe’s new rescue fund takes over stakes in the country’s banks, it would need to do so at significantly above the stakes’ current valuation. …”We wouldn’t think we were being assisted or treated fairly if we were only offered the terms we could get from a willing hedge fund who wanted to purchase the stake the Irish government has in the banks,” Michael Noonan told a news conference.

SEC Announces Deferred Prosecution Agreement with Amish Fund (SEC)
The Securities and Exchange Commission today announced that a non-profit corporation that offers securities to fund mortgage and construction loans to young Amish families in Ohio will ensure that its investors receive more timely and accurate information under an agreement reached with the SEC. The SEC investigated the Amish Helping Fund (AHF), which was formed in 1995 by a group of Amish elders interested in furthering the Amish way of life. AHF funds its loans by selling securities in the form of investment contracts. The SEC alleges that AHF’s offering memorandum, drafted in 1995, was not updated for 15 years and thus contained material misrepresentations about the fund and the securities being offered.

Making Good on the Family Name (NYTimes)
Four years ago, Alexander Soros, the son of the billionaire financier and philanthropist George Soros, made an unwitting public debut when Cityfile, a digital who’s who of New York society, dredged up party photos from his Facebook page. They showed the 22-year-old heir “chilling at dad’s house in Southampton, drinking 40s while cruising on the family boat, and making out with the babes.” It was an embarrassment within the family, but also a lesson. “My mom was like, ‘Welcome to being a Soros,’ ” he recalled.

China’s Great Wall Of Worry (SeekingAlpha)
Last Friday, China released their Q2 GDP print and sparked a rally in world markets. Economist Marc Faber appearing here on CNBC, casts doubts over the headline 7.6% YOY growth figure, and even goes as far as to say that the rally was due to how weak the report was, and the expectation of further monetary stimulus. He goes on to mention that his view of GDP in China is much lower based on trade data of Asian partners who are very reliant on exports to China. Are his views corroborated with the data? What else could he be looking at that would lend itself to this skeptical view?

The Devil We Know: Visionary Jim Rogers Meets Southeastern Skepticism (CleanEnergy)
In his book The Climate War, Eric Pooley described Duke Energy CEO Jim Rogers as a “silver-tongued devil.” Today, we may find out if former Progress Energy CEO Bill Johnson agrees. After being ousted as the CEO of the newly merged Duke Energy, Johnson will testify before the North Carolina Utilities Commission which has been the leading voice of skepticism around the sudden shift in utility leadership. Covering Duke Energy’s decision to give Rogers full control of the merged utility, reporters John Murawski and David Ranii explained that, “Some detest Rogers as a double-dealing self-promoter, but others defend him as a daring innovator in a risk-averse industry.” Indeed, many agree strongly with both perspectives.

Applying Jim Rogers’ Thought To Implant Sciences And The Defense Industry (SeekingAlpha)
In his latest book A Gift to My Children, former Quantum Fund manager Jim Rogers gives his readers a little hint as to how he was able to return 4,200% in a 10 year span while the S&P returned little over 47% (1973-1983). He recounts a story of how, when he was experiencing his first successes on Wall Street, he was invited to a dinner of investment managers. Each of them had to give one stock recommendation over dinner. He recommended Lockheed (LMT), then Lockheed Corp.

Bright Spot in the Small Business Credit Sector (BusinessInsider)
Yes, I’ve read them. The stories are everywhere. The economy is struggling and so are small businesses. Perhaps The Great Recession is over but the economy is soft to say the least. Bank loans are tough to come by. Non-bank finance lending is way down – actually they are at their lowest levels since 1998 as Scott Shane reported here. In fact, right now there is a lot of talk about Dr. Doom’s “perfect storm scenario” that Nouriel Roubini says is beginning to play out. Months ago, Roubini talked about the combination of stalling U.S. growth, debt troubles in Europe, the slowdown in several emerging markets (led by China), and military conflict in Iran causing a “perfect storm” that would impact the global economy.

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