Hedge-Fund Liquidity Turned Corner, Says Gayeski (Bloomberg)
Troy Gayeski, senior portfolio manager at SkyBridge Capital LLC, discusses liquidity conditions for hedge funds and high-yield bonds, and efforts by the U.S. government to boost the housing market. He speaks with Scarlet Fu and Stephanie Ruhle on Bloomberg Television’s “InsideTrack.”
Oil Falls a Second Day on Speculation EU Talks May Fail to Resolve Crisis (Bloomberg)
Oil dropped for a second day in New York on speculation that European Union leaders meeting today may fail to resolve the region’s debt crisis, while OPEC’s secretary-general said the market is well-supplied. Futures slipped as much as 0.9 percent as stocks dropped and the dollar strengthened. EU chiefs will gather in Brussels today to complete a German-led deficit-control treaty and endorse a 500 billion-euro ($660 billion) rescue fund. Hedge funds and other large speculators increased wagers on rising crude prices, the Commodity Futures Trading Commission’s Commitment of Traders report on Jan. 27 showed.
Bluecrest Eyes $235 Mln for New Bluetrend Fund-Source (Reuters)
BlueCrest Capital Management, one of Europe’s biggest hedge fund firms, is looking to raise more than 150 million pounds ($235 million) for a new listed feeder fund into its computer-driven BlueTrend fund, a source familiar with the matter said. The closed-end fund, BlueCrest BlueTrend, will feed into the firm’s main BlueTrend fund, the company said in a statement. BlueTrend manages $13.6 billion in assets and was one of the hedge fund industry’s top performers during the financial crisis in 2008.
FSA Unveils More Fines in Greenlight Case (WSJ)
One of the U.K.’s biggest insider-trading investigations continued to reverberate on Friday, as the Financial Services Authority announced fines for two London-based traders who were involved in a share sale by U.S. hedge fund Greenlight Capital Inc. that the regulator has called improper. The fines follow a £7.2 million ($11.3 million) levy the FSA imposed on Greenlight and its founder, David Einhorn, for allegedly selling shares of Punch Taverns PLC in 2009 based on material, nonpublic information.
Hedge Fund Gottex To Cut Costs As Assets Shrink (Reuters)
Swiss fund of hedge funds manager Gottex said it would slash running costs by 15 percent in 2012 after assets fell by some $1 billion from a year earlier as some large clients pulled money in order to invest directly in hedge funds. The fund’s assets under management have fallen to $7.34 billion, less than half the $15.6 billion the company had in June 2008 before the worst effects of the financial crisis hit. “Getting money into hedge funds is not an easy task for the moment,” Gottex Chief Executive Joachim Gottschalk said, referring to fund of hedge funds. “Asset raising is difficult, though outflows are within normal parameters,” he told Reuters.
Bankers Resist Regulatory Restraint on Bonuses (Reuters)
Budding bankers expecting the bumper bonuses of years gone by will have to think again, with only the top performers likely to be paid top dollar. For one hedge fund manager, the answer is for bankers’ bonuses to be deferred for three years. This would allow the effects of the individual’s actions to be measured properly over the course of an economic cycle.
Hedge-Fund Bulls Add to Bets as Rally Heats Up (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. Money managers raised combined bullish positions across 18 U.S. futures and options by 13 percent to 742,902 contracts in the week ended Jan. 24, Commodity Futures Trading Commission data show. The so-called net-long position in copper jumped 53 percent to the highest since August and in silver by 22 percent to the most since September. Speculators also expanded bullish bets in sugar, soybeans, cotton, gold, gasoline and crude oil.
German Banks Decline as Greek Talks Drag on: Frankfurt Mover (Bloomberg)
Deutsche Bank AG (DBK) and Commerzbank AG (CBK), Germany’s two-biggest lenders, led declines in Germany’s benchmark DAX Index as talks on a Greek debt swap drag on. Separately, the U.S. Securities and Exchange Commission is investigating a collateralized debt obligation transaction, in which Deutsche Bank allowed U.S. hedge fund Paulson & Co. to select mortgage-backed securities, Der Spiegel reported yesterday. This may also be slightly weighing on the bank’s stock today, Plaesier said.
Dimon ‘Sucker Punches’ Analyst Mayo, Hedge Riches Beckon: Books (Bloomberg)
Some Wall Street memoirs have more sizzle than bacon: They’re written by insiders who tell less than they know. Felix Rohatyn comes to mind. Others have more bacon than sizzle, as Mike Mayo’s “Exile on Wall Street” illustrates.
Gupta Seeks Identity of Possible Tipper ‘X’ at Goldman, P&G (Bloomberg)
Lawyers for Rajat Gupta, the former Goldman Sachs Group Inc. (GS) and Procter & Gamble Co. director who has denied U.S. charges he leaked stock tips to Raj Rajaratnam, are investigating whether the hedge fund manager had a different inside source at the companies. At a Manhattan court conference Jan. 20, defense attorney Gary Naftalis complained federal prosecutors hadn’t turned over documents he wanted on whether Rajaratnam or others at his hedge fund, Galleon Group LLC, had a source inside Goldman Sachs or P&G other than Gupta, a transcript of the proceeding stated. Gupta is accused of leaking information about both companies.
Goldman’s Dahlback, Berkshire’s Jain May Be Gupta Witnesses (Bloomberg)
Goldman Sachs Group Inc. (GS) director Claes Dahlback and Berkshire Hathaway Inc. (BRK/A) reinsurance chief Ajit Jain may be called as potential defense witnesses at the insider-trading trial of ex-Goldman director Rajat Gupta, a prosecutor said.
FCC Seeks Comments on LightSquared GPS Declaration Request (Bloomberg)
U.S. regulators asked for public comments on LightSquared Inc.’s request for a finding that global-positioning system gear doesn’t merit legal protection from interference caused by the proposed wireless service. LightSquared is “extremely pleased” with the U.S. Federal Communications Commission’s move today, Jeff Carlisle, executive vice president, said in an e-mailed statement.
Citigroup Exits Proprietary Trading, Says Most of Unit’s Workers to Leave (Bloomberg)
Citigroup Inc. (C), the third-biggest U.S. lender, will close a proprietary-trading desk that makes bets with the firm’s own money and most of the unit’s staff will leave before rules banning the practice take effect. “Pursuant to various regulatory initiatives and changes, we have made the strategic decision to exit the Principal Strategies business,” Bandeen said in the memo. “The team, led by Sutesh Sharma, have been aware of this for some time and have worked diligently to wind down the positions over the last few months.” Sharma intends to form a hedge fund, two people familiar with the matter said in August. His Citigroup team managed about $2 billion, one of the people said.
Trichet, Turner Question Real Value of Bigger, Faster Trading (Bloomberg)
“I’m comfortable if a hedge fund takes risk on behalf of his own investors and if they do well they do well, if they fail they fail,” said Nouriel Roubini, the New York University professor who predicted the financial crisis. “I’m less comfortable with using taxpayers’ money.”
Analysis: Corporate cash hoard screams “buy” for investors (Reuters)
Apple’s blowout quarter this week increased its cash holdings to almost $100 billion, a staggering hoard that casts a spotlight on what may prove a big catalyst for the U.S. equity market in coming years. “In the coming decade, rather than U.S. companies being absorbers of capital we expect them to be sources of capital,” said Richard Vigilante, director of selected research at hedge fund Whitebox Advisors in Minneapolis.
UPDATE 1-S.Korean Firm Among Bidders For L.A. Dodgers-Report (Reuters)
A consortium led by South Korean retailer E-Land is among the short-listed bidders vying to buy the U.S. Major League Los Angeles Dodgers baseball franchise, Yonhap News Agency reported on Monday, estimating the price tag at between $1.2 billion and $1.5 billion for the storied team. Sources familiar with the matter told Reuters earlier that billionaire hedge fund manager Steve Cohen and ex-Yankees and Dodgers manager Joe Torre had received the green light, while basketball great Magic Johnson was also in the running.
Exclusive: Dodgers Bidders List Narrowed (Reuters)
The dazzling line-up of entrepreneurs and sporting figures vying to buy the Los Angeles Dodgers has been whittled down, with some of the bidding groups already notified that they had made the cut, according to sources familiar with the matter. An estimated 12 parties submitted non-binding first-round bids for the storied baseball team, the stadium and related assets on Monday.
“Beasts,” “The Surrogate” Aim For Post-Sundance Success (Reuters)
Dramas “Beasts of the Southern Wild” and “The Surrogate” won big at the Sundance Film Festival over the weekend, giving the event a burst of energy after early movies with grim sagas and star names failed to impress critics. Others, such as “Arbitrage,” starring Richard Gere as billionaire hedge fund magnate whose world falls apart, and “Red Lights,” with Robert De Niro playing a blind psychic, received mixed reviews but still found buyers thanks to their star appeal.
French Hedge Fund Aims To Boost Japan Assets under Management (Reuters)
French hedge fund Capital Fund Management said on Friday it aims to boost Japanese assets under management 10-fold over the long term to bring them more in line with its investments in Japan which account for 10 percent of its overall portfolio.
Hedging Against Disaster Even As Markets Grow Calm (Reuters)
Don’t be deceived by the U.S. stock market’s rousing start this year or the new-found stability of the euro. After months of seizing on every incremental development in Europe as a reason to buy or sell, markets have started 2012 on a firm footing. The S&P stock index is up 4.8 percent so far this year and the euro has rebounded from recent declines on hopes the euro zone will survive a likely default by Greece.
Crisis Live Blog: Brussels Summit (WSJ)
An initial agreement on a new bailout loan for debt-ridden Greece could be reached as early as this week and then discussed at a special summit of euro-zone leaders next month, officials from the euro zone and International Monetary Fund said Monday. A deal between Greece and its private-sector creditors, largely banks and hedge funds, would open the way for the IMF and the European Union to discuss their share of Greece’s second rescue package.
Weaning Off ‘Alternative’ Investments (WSJ)
Just five years ago, it was illegal for South Carolina’s public pension plan to invest in hedge funds, private equity and other complicated bets. Now, nearly half its assets are in such investments. That is way too much for the state treasurer, who is charged with squeezing the most out of the $26 billion pension fund. Curtis Loftis, a 53-year-old pest-control company owner who was elected South Carolina’s treasurer in 2010, is one of the few public-pension officials in the U.S. trying to trim back “alternative” investments. Most public pension funds are struggling to hit annual return targets of about 8%, an especially daunting goal given the slim returns lately on stocks and bonds.
Concerns Are Rising on Japan’s Debt (WSJ)
Jitters from Europe’s sovereign-debt crisis are now touching Japan, a country with a long-calm bond market despite fiscal deficits far larger than those of Greece or Italy. In recent weeks, the cost of insuring against default on Japanese government bonds—a measure of perceived credit risk—has increased sharply, nearing the historic peak at the height of the Greek debt crisis in October. The price for default insurance, through derivatives known as credit-default swaps, exceeds levels seen last March, immediately after natural disasters and a nuclear crisis darkened Japan’s outlook.
New on the Travel Scene (WSJ)
No, not that Tiger. Julian Robertson, retired owner of the Tiger Fund, also created three luxurious golf resorts in different corners of New Zealand, which are ranked among the finest in the world. A new nine-day tour loops through them all, with stays at the Lodge at Kauri Cliffs overlooking the Pacific Ocean; the Farm at Cape Kidnappers in Hawke’s Bay wine country; and Matakauri Lodge on adventure-friendly Lake Wakatipu. The mighty steep price doesn’t include international airfare, but it does cover everything else: meals, helicopter trips, sailing excursions, horseback rides, winery tours and, of course, golf. From about $26,600 per couple;
6 Stocks to Buy, 2 To Sell By Goldman Sachs (Market Watch)
Goldman Sachs published a report titled “Americas Morning Summary” on January 17. The report isn’t publicly available but we will discuss Goldman Sachs’ comments about eight stocks addressed in the report followed by our comments.
A Hedge Fund Manager’s Bizarre, Lengthy Response to a Declined Second Date (Insider Monkey)
I got this from a hedge fund manager/former law student I met through an online dating website after deflecting a second date and rejecting him via email. He sent the email back within an hour of my rejection, which made me wonder if he had a form email on hand to send to women who rejected him. Oh, I never mentioned his attractiveness, much less that he was a toad!
8 UBS Stock Picks for 2012 (Insider Monkey)
UBS Investment Research’s report, “US Morning Meeting Highlights”, from January 13th discusses how stocks will be affected from the elections. The analysts are of the opinion that Obama’s victory would have a positive impact on “tech and industrial companies”, whereas the “healthcare, financial, energy and consumer” companies will be negatively influenced due to tougher regulations. A republican victory, on the other hand, could prove to be beneficial for “universal banks, managed care, coal, defense, and high-end consumer stocks”.
5 Dividend Stocks Rated 5-Star By Standard & Poor’s (Insider Monkey)
During the recent market turmoil, the financial markets have been hit by one crisis after another. Most people are pessimistic about the economy. Central banks all around the world have been trying to stimulate the economy by applying inflationary monetary policies. One result of the Fed’s monetary policy is ultra-low yielding long-term Treasuries. It doesn’t make sense to invest in 10-year Treasuries for the long-term. With the low interest rates, investors are better off by investing in high-dividend stocks.
10 Most Profitable Healthcare Stocks (Insider Monkey)
In the United States, healthcare is a fast-growing industry. Healthcare spending is rising at about 8% per year. A typical American Family of four spent about $18,000 on medical costs in 2010, compared with $16,771 in 2009. Between 2006 and 2010, the annual medical costs have increased by almost 35%. The rising healthcare costs are not good for the patients, but those who invest in healthcare stocks will benefit from such growth. As healthcare spending and costs are rising, we believe healthcare stocks will continue to be in the portfolios of most smart investors in the future. Below we compiled a list of top 10 most profitable healthcare companies based in US. All companies have at least $10 billion market cap, operating margin of over 20%, and EPS growth rate of more than 10% over the past five years.
Winning Over Institutional Investors With Your Hedge Fund Marketing (FINalternatives)
In January, SEI released part one of its results from its fifth annual survey of institutional hedge fund investors, The Shifting Hedge Fund Landscape, which was conducted in collaboration with Greenwich Associates. Three of the recommendations the report offers hedge fund firm owners give a glimpse into where surveyed investors are asking hedge funds to “provide more windows into investment processes and decision-making,” as SEI put it.
Partner At New Jersey Hedge Fund Disappears With Investor Cash (FINalternatives)
A Jersey City, N.J.-based hedge fund firm has allegedly been bilked by one of its own. According to sources familiar with the Osiris Fund, partner Peter Zuck has fled with investors’ money and the fund is now defunct.
AnaCap Names Sulger and Cesario Partners (FINalternatives)
AnaCap Financial Partners, a specialist European financial services private equity firm, has promoted Justin Sulger and Fabrizio Cesario to partner.
GlobeOp Opens Fourth Mumbai Office (FINalternatives)
Hedge fund administrator GlobeOp Financial Services has opened a fourth office in Mumbai, and plans to increase its headcount in the city to 2,000. The firm has launched a 46,700 sq. ft. hedge fund administration and data center in Airoli, on the eastern side of Mumbai. It is located in the same business complex as the firm’s third Mumbai office. Two additional offices are located in Malad.
Man Signs UN’s Responsible Investment Principals (FINalternatives)
Man, the world’s largest hedge fund group, has signed the United Nations-backed Principles for Responsible Investment. Man says the PRI framework is meant to encourage sustainable investing by incorporating “environmental, social and governance issues into investment decision-making and ownership practices.”
Ex-Skandia Chief Joins New PE Firm Lime Tree (FINalternatives)
Brett Williams, the former CEO of Skandia UK and Cofunds, has joined the newly established private equity firm Lime Tree Investment Partners as a founding partner. Williams founded the investment platform Selestia in 2001 before going on to become CEO of Skandia UK and then CEO of Cofunds.
Laven Partners Teams With GFIA in Asia (FINalternatives)
Laven Partners and GFIA have joined forces in Asia to provide an operational, due diligence and compliance service based in Singapore. According to a statement from Laven Partners, a London-based consultant to the alternatives sector, the move is in response to increased demand for such services, particularly from developed markets for greater expertise in Asian funds.
Why you shouldn’t blame ETFs for wild markets (CNN Money)
Are exchange-traded funds a prime culprit in one of the signature afflictions of the markets today — the tendency of huge swaths of stocks or other assets to swing dramatically up or down at the same time? Critics are pointing their fingers at ETFs. But evidence for their nefarious role is lacking. Others are particularly worried by leveraged ETFs, which use derivatives to amplify bets. These instruments “corrupt the markets by exacerbating price trends” both up and down, wrote hedge fund manager Doug Kass of Seabreeze Partners in an article on the Real Money Pro website this fall. The issue has caught the attention of a U.S. Senate subcommittee, which held a hearing in October to investigate ETFs and their role in stock volatility; the SEC is also investigating.
New Book Reveals ‘The Hedge Fund Mirage’ (HFN)
Is the hedge fund industry as profitable to investors as it seems? After decades, the secret is finally out. Simon Lack, a hedge fund veteran exposes some unforeseen and uncomfortable truths about the industry in his new book, “The Hedge Fund Mirage” (Wiley; January 2012).
Connecticut Firm To Improve HF Industry Image (HFN)
The constant bad press that hedge funds have gotten recently has led two Connecticut men to work on improving its public image. Christopher Hunt and Scott Scanlon recently launched Aeris Media Group, a public relations and marketing firm in their hometown of Greenwich to build up the industry’s image, according to Connecticut newspaper The News Times.
Texas School Fund Looks To Eliminate Fees (HFN)
The Texas Permanent School Fund may hire in-house managers to oversee its $25 billion in assets. The in-house managers would eliminate the enormous fees associated with investments in hedge funds, according to a Bloomberg report.
BNP Expands Hedge Fund Administration Services (HFN)
Paris-based global bank BNP Paribas has expanded its hedge fund and fund of funds administration services.
SEC Hones In On Social Media As It Issues Alert Over Investment Advisers’ Usage (HFM Week)
The US Securities and Exchange Council’s office of compliance has issued an alert to registered investors over their use of social media, citing its increasing usage and urging firms to adopt and regularly review their procedures for dealing with its growing prevalence. Social media giants Facebook and Twitter were name-checked in a review of the alert by legal major Dechert, however this was by no means an exhaustive list and is widely understood to cover other outlets and blogs.
On The Money? (Financial Times)
Once upon a time, the only thing film fans knew about the bond market regarded a chap called James. This Bond regularly dominated the news, encouraged mass investment and caused worldwide excitement. Whenever there was a new Bond issue – of Connery, Moore or Brosnan – it stirred up the newspapers as well as the cash registers.
Hedgies, Managed Futures Funds Raise Stakes In Gold & Silver (Barrons)
Large managed futures funds, including hedge funds, in the past week increased their bullish bets in Comex gold and silver futures, according to data released this afternoon by the Commodity Futures Trading Commission. Managers bought 8,238 long contracts in the week ended Tuesday, while selling 1,721 short contracts, or bets on lower prices. As a result, managed futures funds and other large speculators raised their net long position 8.5% to 126,937 contracts, from 116,978 a week earlier. The managed fund net long position represents around 12.6 million ounces of gold.
Legg Mason Falls 6% On EPS Miss; How Bad Was It Really? (Barrons)
Shares of Legg Mason (LM) are falling 6% Friday after the asset manager reported fiscal third-quarter earnings fell 54% from a year earlier to $28.1 million, or 20 cents a share. Operating revenue dropped 13% to $627 million. Analysts polled by Thomson Reuters had most recently forecast earnings of 25 cents on revenue of $656 million. Legg Mason, which hasn’t posted a quarter of net inflows since 2007, said net outflows in its most recently completed quarter totaled $1.3 billion. But that was a big improvement from negative flows of $16.7 billion a year earlier and $17.6 billion in the prior quarter.
Rethinking the Fund of Hedge Funds Model – Opalesque Geneva Roundtable (Opalesque)
Funds of funds’ image has suffered since late-2008, as many who had underlying funds offering different liquidity terms, found themselves unable to return money to investors while overall performance was diving. The Madoff scandal was also a blow, particularly for many who are based in Geneva, a center for the fund of funds industry.
Gottex’s Funds of Hedge Funds Did Well in 2011, but AuM Down 10% Since Last Quarter (Opalesque)
Gottex Fund Management Holdings Ltd, a Swiss-listed independent global alternative asset management group that offers funds of hedge funds, single hedge funds and multi-asset endowment style portfolios, has just issued its trading statement for Q4-2011. Its flagship market neutral strategies returned “nearly flat results”, 2% to 3% ahead of their benchmarks; the HFRI FoF Conservative Index (-3.67% for 2011) and the HFRI FoF Composite Index (-5.56% in 2011) respectively. These strategies now manage $3.28bn, 13% less than Q3’s $3.77bn.
Jury: Perelman Must Pay Ex-Pal $16M (NY Post)
After just 90 minutes of deliberations yesterday, a federal court jury ruled against billionaire financier Ron Perelman and ordered him to fork over the $16 million owed to his former business partner. Donald Drapkin had sued Perelman and his MacAndrews & Forbes investment firm, claiming he was stiffed out of the cash when he left M&F in 2007 to form a hedge fund. Perelman, worth $12 billion, returned fire, suing Drapkin, claiming he shouldn’t have to pay him one thin dime because his one-time friend broke his contract by, in part, attempting to woo an M&F executive to the fund.
Guggenheim Designs A New Art of The Deal (NY Post)
Guggenheim Partners, the closely held investment bank and asset manager that was founded by the family that built the museum, launched its first multistrategy hedge fund this month, The Post has learned. The fund, Guggenheim Global Trading, dipped into a $2 billion multiyear commitment by the parent company for the first time a few weeks ago, drawing down $250 million, or one-eighth of its overall bank, sources said.
Hedge Fund Managers Set For £54.8m Pay Day (Daily Mail)
The hedge fund set up Liberal Democrat donor Paul Marshall is set to pay out £54.8m in bonuses. Marshall Wace, which is one of Europe’s largest hedge fund groups, reported a strong year with profits up from £50m to £89m, latest accounts to February show.
Elliott Management Corp Mops Up Patni Computer Systems’s Floating Stock Ahead Of Delisting (The Economic Times)
New York-based hedge fund Elliott Management Corp has picked up a 9.4% stake in Patni Computer Systems, possibly scuppering iGate Corporation’s efforts to delist the Indian IT firm. Elliott has been buying small chunks of Indian technology outsourcer Patni Computer Systems since October. It is, however, not clear why a company headed for de-listing is attractive for Elliot Management, a hedge fund known in the Wall Street for its tenacity and gall to take on deep-rooted management head-on and win despite holding minority stakes.
Jim Rogers: I Would Not Buy Facebook (CNBC)
Jim Rogers, CEO and chairman of Rogers Holdings, said he would not buy Facebook as a stock because it would be too expensive. “No, that kind of stock I don’t buy. They are usually very, very expensive. A lot of people like to buy expensive stocks like that, but I do not,” said Rogers, a widely followed investor who has published several books on investing, co-founded the Quantum Fund with George Soros, and more recently is the creator of the Rogers Global Resources Equity Index.
Ron Paul Super PAC to Host Florida Primary Webcast (PR Web)
Jim Rogers, Peter Schiff, Tom Woods and Robin Koerner headline Revolution PAC’s second live election results program.
Post 1700 (Aleph Blog)
10 Monday AM Reads (The Big Picture)
Morning News: January 30, 2012 (Crossing Wall Street)
Hot Links: Easier Said Than Done (The Reformed Broker)
Markets Live transcript 30 Jan 2012 (Financial Times)
Daily US Opening News and Market Re-Cap: January 30 (Zero Hedge)
HFMWeek Daily Snapshot – 30 January (HFM Week)
Davos 2012: European Union Commissioner Ollie Rehn on The Greek Debt Crisis (Reuters Hedge World)
Hedge Funds Saving Face, Romney’s Hedge Fund Investments, Ackman Steps Up Pressure on CP And More (Reuters Hedge World)