Singer’s Hedge Fund Fights Mexico Elite In U.S. Legal Showdown (Bloomberg) On a scorching April morning in Monterrey, Mexico, Enrique Garcia, Vitro SAB’s local plant manager, crosses under a mural that commemorates the 100th anniversary of the company’s first glass factory. He points to brick structures from the original plant. Then, with visitors in tow, Garcia heads toward a steel and tin building where machines the size of minivans churn out 3 million bottles a day for Avon Products Inc., Coca-Cola Co. and Francis Ford Coppola Winery. Vitro is Mexico’s biggest glassmaker and among the nation’s top employers, with 17,000 workers.
Segantii soft closes Asia hedge fund at $620 mln, hires 8 (Reuters) Segantii Capital has soft closed its Asian hedge fund, one of the best performers in the region, and hired at least eight staff in 2012 to help manage expanding assets. The Hong Kong-based firm is turning away new investors, a practice known as soft close in the industry, after tripling assets to $620 million in the last one year, Chief Executive Kurt Ersoy confirmed to Reuters on Tuesday.
Marin hedge fund manager in hot water over 'luxurious' spending while failing to pay settlement (Marinij) A Marin hedge fund manager faces seizure of his assets and criminal prosecution after he failed to pay most of a $14.2 million fraud settlement while continuing to finance what a federal judge called a "luxurious lifestyle." Lawrence Goldfarb, 53, of San Anselmo agreed to the settlement with federal regulators and prosecutors in March 2011 after he was accused of concealing more than $12 million in profits from investors and diverting the cash into other investments.
Is Your Hedge Fund Style "Drifting"? Quick, Catch It! (Forbes) Hedge fund style “drift” is said to occur when a hedge fund manager strays from their stated investment strategy. The term used to be an esoteric one, used only by professional hedge fund analysts. However, “drifting” is a problem that is lately coming into view more by regulators and in litigation by disgruntled investors. Managers that are asked about drifting will usually confidently pull out their offering memo and point to an “investment strategy” section which indicates in extensive legalese that the fund can invest in basically every known security instrument known to the financial world. This language of over-inclusiveness precludes any claim of drifting they will say.
EU Summit To Fail As Capital Flight Accelerates On Hedge Fund Bund Shorting (Forbes) Despite being talked up as Europe’s “do or die” moment, the EU summit scheduled for June 28 and 29 won’t provide any closure and will once again disappoint. The smart money is already betting against the euro, with heavyweights like John Paulson and Bill Gross placing bearish bets against German bunds. Unless European policymakers unveil reforms that show they are moving toward financial integration and some sort of political union, as billionaire investor George Soros noted on Monday, capital flight and financial disintegration will only accelerate.
BlackRock hedge fund opens short in 'overbought' Schroder (CityWire) BlackRock’s Global Ascent hedge fund has opened a short position in fund manager and private banking group Schroder. The fund took a 0.27% short in the company. Global Ascent employs a relative value strategy, trying to identify relative mispricing between similar securities or other financial instruments.
Russia-focused emerging hedge fund enjoys strong first half of 2012 (Opalesque) Russian hedge fund Verno Capital was launched in 2010 by Moscow-based founder and CIO Dimitri Kryukov, who previously co-founded Kazimir Partners in 2002. During that incarnation, Kryukov as portfolio manager of the Kazimir Russian Fund saw it return over 450% net of fees (over 30% annualised) against the RTS index returns of 92% since its inception in August 2002 until the end of 2008. Verno Capital has about $200m under management and offers a hedge fund running the same strategy as the Kazimir fund and a long only fund invested in Russia and the Former Soviet Union (FSU).
Luxury Brands Merge to Celebrate Launch of Hedge Fund Consultants (MarketWatch) Manhattan Motorcars Rooftop was the place to be on Tuesday, June 19 as hedge fund consultants Baker Currie Global, LLC hosted their launch, welcoming over 400 attendees and luxury lifestyle brands including Vidalco Wine, Billionaires Row, and Rolls Royce. Hedge fund managers, chief investment officers and other financial professionals enjoyed the night of networking while celebrating with Chateau Sainte Roseline's Cuvee Lampe de Meduse Rose and Champagne Billionaires Row "Cuvee Billionaires Row" Brut Rose Grand Cru. Manhattan Motorcars also introduced the new Rolls Royce Ghost EWB, which retails for $450,000.
Hedge Fund Pershing Square’s 1st Quarter 2012 Letter (Bill Ackman) (BusinessInsider) Bill Ackman, legendary activist investor recently published its 1st quarter investment letter. The fund has performed strongly to date, with 9.3% returns and has large holdings in Canadian Pacific, General Growth Properties, Citigroup, and J.C. Penney. If he still owns them, the latter two companies may create some trouble for his firm in the future.
A Con Man Who Lives Between Truth and Fiction (NYTimes) That was what Samuel Israel III told me last week. He is the hedge fund manager convicted of running a $450 million Ponzi scheme who faked his own suicide in the summer of 2008 to avoid his prison sentence before turning himself in after a worldwide manhunt. He was sitting across from me in the visiting center of the Butner prison complex, about 45 minutes north of Raleigh in eastern North Carolina. (Bernard L. Madoff is in the same complex.)
Dart Fund Denied Supreme Court Review On Argentine Bonds (Bloomberg) Two funds, one controlled by billionaire Kenneth Dart, lost a U.S. Supreme Court bid to collect at least $2 billion owed by the government of Argentina. The justices today refused to hear an appeal by Dart’s EM Ltd. and NML Capital Ltd., an affiliate of the New York-based hedge fund Elliott Associates LP, in a multi-pronged dispute stemming from Argentina’s 2001 default on $95 billion of bonds.
Key Man Life Insurance Policies Part Of Due Diligence At Hedge Funds (HedgeCo) Institutional investors are pressuring hedge funds to buy key man life insurance to protect against the risk of a manager’s sudden demise, hedge fund risk management and insurance advisor SKCG Group reports. “Hedge funds are unique. Their ‘product’ is achieving positive returns and that product is often completely dependent on the intelligence and skill of one or more individuals within the firm,” says David Parker, President of the Employee Benefits Division at White Plains, New York-based SKCG Group. “If a fund loses one of those individuals, the next step is often the dissolution of the company. Key man insurance can make the difference between an orderly wind down and a chaotic one.”
Mutual Fund Managers Have The Wrong Skills (DealBreaker) We’ve talked a bit before about how there’s a booming academic business in papers finding that investment managers do or do not add value versus non-managed alternatives like passive indexing or keeping your money under your pillow and just burning a constant percentage of it every month. Part of why that’s a thing is that the data can be prodded, smooshed, or cherry-picked to say many different things, and so they are. I enjoyed this paper about mutual funds by Stanford GSB profs Jonathan Berk and Jules Van Binsbergen (NBER today here, SSRN in April here) in part for its discussion of data problems, which starts with the fact that they used the industry-standard (in the academic-papers-about-mutual-funds industry) CRSP database and compared it to Morningstar data because “even a casual perusal of the returns on CRSP is enough to reveal that some of the reported returns are suspect.”
Concept Capital Markets, LLC earns Top Prime Broker in North America rating from Global Custodian (PrnewsWire) Concept Capital Markets, LLC was named "Top Prime Broker in North America" in the 2012 Prime Brokerage Survey by Global Custodian Magazine. The 19th annual edition of the survey included nearly 3,500 hedge fund responses on behalf of 40 prime brokers and covered 12 different categories pertaining to the prime brokerage industry. Concept Capital earned the "Top Prime Broker North America" honor as a result of scoring "Best in Class" in every category by the survey's respondents with Assets Under Management under $100 million, with particularly strong ratings in Client Service, Operations, Financing and Margining, OTC Derivative Clearing, Prime Custodial Services, Hedge Fund Consulting, Capital Introduction, Value, and Reputation. The full survey results may be viewed at Global Custodian's website.
Elliott takes 10% stake in Schuler (TheDeal) New York hedge fund Elliott Associates LP late Friday, June 22, said it had collected just over 10% of Schuler AG just weeks after Austrian plant engineering group Andritz AG secured 63.5% of the German hydraulic press maker. Elliott, Paul Singer's $20 billion activist fund, said in a regulatory filing it was interested in gaining representation on the target's board and influencing Schuler's financing and dividend policies.
Multifonds launches single platform solution for traditional and hedge fund servicing (InvestmentEurope) Multifonds, the Luxembourg based technology firm, has launched Global Investor, a single platform that can be used for both traditional long only and hedge fund administration. The new product has been developed off its existing Transfer Agency platform, but will provide full support to alternatives. The product brand has been altered in the process.
Solana Partnership Sues Partner (LoanSafe) The limited partnership that developed the Solana Business Park in Southlake and Westlake is involved in a lawsuit with a partner. Meantime, CLG Hedge Fund in Plano has threatened foreclosure on 307.8 acres at Texas 114 and Dove Road in Solana.
Argonaut Capital: No Solution For Euro Crisis (ValueWalk) Argonaut Capital Management is a hedge fund manager based in New York. The firm manages has over $6 billion under management. Argonaut’s flagship hedge fund, Argonaut Macro Fund, was down 2% in April and over 1% in May. David Gerstenhaber, the CEO of the hedge fund, has become increasingly bearish on Europe. While analyzing unemployment trends in the United States and monetary policy in Japan, the report’s most pessimistic assertions regard Europe’s ability to recover from its current economic malaise. According to Argonaut, there looks to be no realistic hope of a European solution in the near future.
Bramshott Capital: German Stocks Present Good short Opportunities (ValueWalk) Bramshott Capital is a hedge fund started by Paul Findley, a former Moore Capital Management portfolio manager. The flagship, Bramshott European fund has returned, net of fees, of 2.64% through May. Last year the fund lost 5.41%. The fund currently has around $260 million assets under management. The firm manages close to $700 million. In recent weeks and months the growth in equity prices has been stymied since the powerful rally in the assets that was experienced in the first quarter of 2012. The slow down, and sometimes full stop, equity values has contributed to a growing dissatisfaction with the market and a more pessimistic outlook for many investors.
Swiss G9X selects the first 5 funds to be presented to UHNW families (InvestmentEurope) Swiss G9X hedge platform has selected the first five fund start ups that will be presented to the private network of ultra high net worth (UHNW) families which support the platform. The platform was launched in April and according to Stephen Fern, chairman of the G9 UHNW network which set up G9X, wealthy families have so far allocated over $500m to provide seed capital to emerging managers identified by industry experts.
George Soros: Germany Has Three Days To Avert Worldwide Disaster (Inquisitr) George Soros, the billionaire investor who made the majority of his money investing in foreign currency, had some dire warnings for Germany on Monday. Soros told the Germans that if they didn’t come up with some kind of plan for a European fiscal union within the next three days than the Eurozone may just go down the road to disaster...Soros is afraid that the members of the Eurozone that are not in the news, the so called peripheral Eurozone countries, will be stuck in a permanent recession because the instability of the Eurozone will cause them to pay sky high interest rates on their debt.
Jim Rogers appointed director of Canadian gold junior (StockHouse) Investment funds Liberty Asset Management, Royce and Associates, and Brick Capital have all recently taken positions in the company. On April 17, 2012, a press release was issued by advanced junior gold exploration company, Spanish Mountain Gold (TSX: V.SPA, Stock Forum). It indicated the appointment of a new director to the company, namely, famed commodities investor, Jim Rogers. Up until that date, it was this author's understanding that Rogers carried a disinterest toward mining company concerns, instead opting to invest in physical commodities themselves.
Is this 1931 all over again? Paul Krugman, Nouriel Roubini, Niall Ferguson and more think so (FinancialPost) Is the world about to repeat the economic catastrophe of 1931? A growing chorus of economists of all stripes thinks so. “Suddenly normally calm economists are talking about 1931, the year everything fell apart,” writes Nobel prize winning economist Paul Krugman in the New York Times. “The parallels between Europe in the 1930s and Europe today are stark, striking, and increasingly frightening, write Bradford DeLong and Barry Eichengreen in the new preface to Charles Kindleberger, The World in Depression 1929-1939.
Forex Flash: 'EU leaders will not solve EZ crisis' this week - Roubini (FxStreet) The Euro is trading under pressure this week on the back of concerns over the situation in the Eurozone and especulations on the next euro leaders meeting to be held this week. Market doesn't have confidence on a posible solution or a big news coming from leaders in their 19th summit in 2 years. It is a "critical week for the Eurozone," says Nouriel Roubini, Chairman of Roubini Global Economics, "either agreement on full integration (fiscal,banking,political, growth) or acceleration of process of dis-integration."
Facebook Adds COO Sandberg To Board, Naming First Woman Director (Bloomberg) Facebook Inc. (FB), facing criticism for a lack of diversity on its board, appointed Chief Operating Officer Sheryl Sandberg as its first female director. “Sheryl has been my partner in running Facebook,” Chief Executive Officer Mark Zuckerberg said in a statement yesterday. “Her understanding of our mission and long-term opportunity, and her experience both at Facebook and on public company boards makes her a natural fit for our board.”
National education reform group's spending shown (Reuters) The national education reform group StudentsFirst, which has set out to transform U.S. schools by introducing more free-market principles to public education, raised $7.6 million in its first nine months - and spent nearly a quarter of it on advertising - according to partial tax records released on Monday. Michelle Rhee, the former chancellor of the Washington, D.C. public schools, launched StudentsFirst in the fall of 2010 with the stated goal of raising $1 billion over five years. Among the reforms it advocates: abolishing teacher tenure; permitting more teachers without formal education training to take charge of classrooms; evaluating teachers in large measure by their students' growth on standardized tests; and expanding charter schools, which are publicly funded but typically run by private corporations, including for-profit management firms.
Japanese pension funds to raise alternatives allocations from weighting 0-3% to 5-7% (Opalesque) Japanese pension funds are expected to increase its current asset allocations from weighting between zero and 3% to between 5% and 7% into alternative investments, a move that would benefit hedge funds, said Ed Rogers head of research and investment firms Rogers Investment Advisors, Wolver Hill Asset Management, and Wolver Hill Advisors in the latest Opalesque Japan Roundtable.
Funds should move beyond latency plays, take more from market data (Opalesque) Hedge funds can no longer continue to rely on latency plays alone as a means of maintaining their edge, according to Steve Woodyatt, CEO, Object Trading. Object Trading provides real time market data for both buy-side and sell-side clients, and according to him, as funds feel their way through volatile markets, they will need to get more out of market data than a few millisecond speed edge. Woodyatt, founded Object Trading ten years ago after spending the early part of his career working as a CTA, pioneering the fully automated closed loop CTA fund. It was during his work as a CTA that he saw a multitude of problems with trade execution - problems that he sought to correct when he founded Object Trading. The company offers a horizontal deployment approach that enables customers to access global markets via a single API.
SEC Halts $100 Million Real-Estate Based Ponzi Scheme (SEC) The Securities and Exchange Commission today obtained a temporary restraining order and asset freeze against a Utah man and company charged with operating a real estate-based Ponzi scheme that bilked $100 million from investors nationwide. The SEC’s complaint filed in U.S. District Court for the District of Utah, names Wayne L. Palmer and his firm, National Note of Utah, LC, both of West Jordan, Utah. According to the complaint, Palmer told investors that their money would be used to buy mortgage notes and real estate assets, or to make real estate loans. More than 600 individuals invested, lured by promises of annual returns of 12 percent, the SEC alleged.
Gottex to buyback shares and appoint two co-CIOs (HFMWeek) Gottex, the Swiss fund of hedge funds (FoHF) manager, has proposed a share buyback by the company and is to appoint two co-chief investment officers to the board, an announcement made Monday confirmed. The company will buy back ordinary shares in the open market, initially to cover the number of shares contemplated under last month’s acquisition of Penjing Asset Management.
Permal and Nomura launch Japan-focused market neutral Ucits fund (HFMWeek) Permal Group, a top-five fund of hedge funds (FoHF) manager by assets globally, has teamed up with Nomura to launch a Ucits-compliant market neutral fund focusing on Japanese equities, according to a statement released today. The Nomura Permal Alpha Japan Neutral Fund, which will be managed by Seven Seas, a separate equity manager, launched earlier in June and is expected to reach a size of between $35m and $50m by the end of July.
Todd Edgar’s Atreaus Capital, with Goldman seed deal, starts trading with $300M+ (Absolutereturn-Alpha) Atreaus Capital, the liquid global macro and commodities fund helmed by former star Barclays trader Todd Edgar, has officially begun trading with $307 million, according to investor documents obtained by AR. The strategy achieved liftoff last month after nearly 12 months of ramping up. It has been more than a year since the first leaks of Edgar’s plan to leave Barclays in London, where he reportedly had a two-year £30 million contract. Before Barclays,...