Billionaire Icahn Says No Respect for Ackman After Herbalife Bet (SFGate)
Carl Icahn, reviving a decade-old feud with hedge-fund manager William Ackman, said the founder of Pershing Square Capital Management LP acted inappropriately when publicly announcing his wager against Herbalife Ltd. (NYSE:HLF) late last year at an investor conference. Icahn, who spent more than seven years wrangling with Ackman in court over $4.5 million, said Ackman’s assertion that he was shining a spotlight on Herbalife, the marketer of weight- loss and nutritional supplements, was “disingenuous.” In an interview yesterday with Trish Regan on Bloomberg Television, Icahn said he doesn’t “like” or “respect” Ackman and questioned his motives for publicizing the trade, a short-sale of more than 20 million Herbalife shares.
Apex opens Uruguay office (AutomatedTrader)
Apex Fund Services, the independent fund administration company, has announced its continued expansion into the LatAm markets with the opening of its new office in Montevideo, Uruguay. The opening re-affirms Apex’s commitment to LatAm where the hedge fund sector is expanding rapidly in line with the growth of the region’s economies. Investors are seeking fund managers to provide them with entry to the region and to enable them to take advantage of the trade free zones for foreign direct investment.
FSA bans fund manager and two traders for market abuse (FundWeb)
The FSA has banned a Swiss fund manager and two traders for market abuse and hit them with fines totalling more than £1.5m. Stefan Chaligné, a Swiss-based hedge fund manager, has been fined £900,000 plus £308,005 of extra financial benefit he gained. Patrick Sejean, a former senior salesman on Cantor Fitzgerald Europe’s London-based French desk, has been fined £650,000. Both individuals have also been banned. The third man, Cheickh Tidiane Diallo, a junior trader, has been also banned from performing any role in regulated financial services.
The great hedge fund con (MoneyWeek)
According to The Economist, the average hedge fund recorded a gain of 3% last year – miles below the 13% rise in the global equity market. Not very impressive! But the long-term statistics gathered by Hedge Fund Research are even worse. They show that the total return delivered by hedge funds over the past decade is a feeble 17%, equivalent to barely 1.5% per year. As the Economist points out, this compares to the 90% return that a ‘simple-minded investment portfolio’ of 60% shares and 40% sovereign bonds would have produced. For that matter it is also less than would have been produced by simply plonking the money in the bank and forgetting about it.
Whitman Capital Founder Gets 2 Years for Insider Trading (BusinessWeek)
Whitman Capital LLC hedge fund founder Doug Whitman was given two years in prison for trading on illegal tips about Polycom Inc (NASDAQ:PLCM), Google Inc (NASDAQ:GOOG) and Marvell Technology Group Ltd. (NASDAQ:MRVL) U.S. District Judge Jed Rakoff pronounced sentence yesterday in Manhattan federal court, also imposing one year of supervised release and a $250,000 fine. Whitman was convicted in August after a jury trial in which he spent more than two days on the witness stand proclaiming his innocence.
Hertfordshire Pension Makes First Allocation to Hedge Funds (BusinessWeek)
The public pension for employees of the Hertfordshire County Council, in the commuter belt north of London, is making its first hedge-fund investments to reduce its weighting in equities and boost returns. The 2.5 billion-pound ($3.9 billion) fund hired LGT Capital Partners Ltd. to manage 280 million pounds across several alternative asset classes, including placing as much as 70 million pounds in hedge funds, said David Lloyd, chairman of its pensions committee and the investment subcommittee.
Citigroup’s private bank pulling money from SAC Capital: WSJ (BayouBuzz)
Citigroup Inc. (NYSE:C)‘s private bank is withdrawing its $187 million investment from SAC Capital Advisors LP, the latest of several client redemptions at the hedge fund firm, the Wall Street Journal reported on Thursday, citing people familiar with the matter. The question of investor redemptions from Steven A. Cohen ‘s SAC Capital has come up in the wake of charges brought last month by U.S. authorities against a former SAC Capital portfolio manager , Mathew Martoma. He is accused of using inside information to generate profits and avoid losses totaling $276 million in shares of two drug stocks, Elan Corp PLC and Wyeth. The deadline for submitting redemptions to Cohen’s $14 billion hedge fund is February 15.