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Hedge Fund News: Carl Icahn, John Paulson, Julian Williams

ICAHN CAPITAL LPIcahn Keeps CVR After Failing To Find Buyer In 60 Days (Bloomberg)
Billionaire investor Carl Icahn, who took over CVR Energy Inc. (CVI) after saying the refiner would reap better returns for shareholders by selling itself, failed to find a buyer for the company after a 60-day process. After contacting more than 30 potential bidders, “CVR received one indication of interest, which CVR and Jefferies did not believe to be credible,” according to a company statement released today. Jefferies & Co. was hired by CVR to conduct the sale process, which ended on July 23.

Report Says Paulson Loses Millions in Gold Venture (HedgeFund)
John Paulson’s hedge fund reportedly may have lost as much as $64 million from its stake in a gold company. Bloomberg reported that NovaGold declined by at least 33% on Thursday after metal producer Barrick Gold Corp. said its Donlin Gold joint venture with NovaGold doesn’t meet Barrick’s investment criteria.

Hedge Fund Grandmaster Capital: ‘China’s Economic Goose Is Cooked’ (WSJ)
Hedge-fund manager Patrick Wolff isn’t only skeptical about China’s slowing economic growth, he expects the nation’s expansion to lag the developed world’s for “an indefinite period once the cyclical correction hits.” “We think it will become apparent over the next several years that China’s economic goose is cooked,” he said in an investor letter detailing his Grandmaster Capital Fund’s second-quarter performance. The fund posted a 0.3% decline during the quarter but was still up 13.8% for the first half, beating the Standard & Poor’s 500 index for both periods, according to the letter. The index was down 3.3% for the second quarter but up 8.3% in the first six months.

Former Nomura Trader Plans Hedge Fund With Backing From ISAM (Bloomberg)
Patrick Boyle, a former trader at Nomura Holdings Inc. (8604) and Royal Bank of Scotland Group Plc (RBS), is starting a hedge fund with backing from Stanley Fink’s International Standard Asset Management Ltd. Boyle plans to begin trading at London-based Palomar Capital LLP in August with $50 million, he said in an interview this month. Fink’s ISAM, which manages about $1 billion, has agreed to be an initial investor, according to a person with direct knowledge of the situation who declined to be identified because the matter is private.

New Century Hedge Fund’s Onsa Sentenced For Ponzi Scheme (Bloomberg)
Former hedge-fund manager Ward Onsa was sentenced to 6 1/2 years in prison for using his firm, New Century Investment Management LLC, to run a Ponzi scheme. Onsa pleaded guilty in Brooklyn, New York, federal court in December to one count of securities fraud in connection with the scheme. Investors, primarily retirees, lost more than $3 million, according to the government.

Hedge fund guru says Canadian banks are overrated (TheGlobeAndMail)
Albert Friedberg is one of Canada’s most successful hedge fund operators. He didn’t get that way by sticking to conventional thinking. …Now, Canada’s banks have received many well deserved plaudits for not lining up to feed at the taxpayer trough during the panic, unlike many banks in the U.S. or the U.K. Canadian banks are profitable, pay decent dividends, and seldom behave recklessly in an industry that’s well known for its dice-shaking behaviour.

Church of England pension board puts faith in hedge funds (Reuters)
The Church of England’s pension fund has given its blessing to some of the world’s biggest hedge fund managers, putting its faith in an industry much maligned for poor returns in recent years, its annual report showed. The 1.1 billion pound ($1.7 billion) Church of England (CoE) Pensions Board has backed Winton Capital, Bridgewater Associates and BlackRock Advisors to help boost the retirement income for over 32,000 of its clergy and lay workers.

This Respected Hedge-Fund Manager is WRONG About this Stock (StreetAuthority)
Going against the herd is a great way to score big gains in the stock market. And right now, with investors fleeing from shares of one of my favorite companies, a huge opportunity is at hand. The mass exodus from this high-growth mid-cap stock was triggered in early May after hedge-fund titan David Einhorn pulled a cameo at the company’s first-quarter earnings call and asked questions that led Wall Street to believe he was in the process of accumulating a short position. The famed short-seller simply asked questions about the company’s distribution channels and business model, and about some metrics it had stopped disclosing. Keep in mind, though, this is a textbook play from Einhorn, the same manager who released a scathing report on Green Mountain Coffee Roasters Inc. (Nasdaq: GMCR) last fall and began shorting shares before they crumbled from more than $111 to a recent low of $17.11 in July. These are the kind of trades that get the Street watching your every move.

Northern Trust Named Best Offshore Fund Administrator in Second Annual Hedgeweek USA Awards (MarketWatch)
Northern Trust NTRS +1.95% announced today that its hedge fund administration unit, Northern Trust Hedge Fund Services LLC, has been named Best Offshore Fund Administrator in the second annual Hedgeweek USA Awards. The Hedgeweek USA Awards recognize excellence among hedge fund managers and service providers around the world, based on the votes of Hedgeweek’s subscribers. Hedgeweek has nearly 20,000 subscribers in the United States, including institutional and high net worth investors as well as managers and other industry professionals at firms including fund administrators, prime brokers, custodians and advisers.

Former hedge fund boss dies in shooting incident (MoneyWeb)
Julian Williams, CEO of private-equity group Basileus Capital, was shot dead in his Cape Town offices on Thursday afternoon. The alleged shooter was his former business partner, Herman Pretorius. Pretorius allegedly shot Williams dead, then turned the gun on himself. eNews Channel journalist Lester Kiewit reports on Twitter (see tweets below) that the suspect [Pretorius] had a gunshot wound to the head and was taken to hospital where he was declared dead on arrival.

Où est Monsieur Paulson? (Economist)
MARKET turmoil usually spells good news for someone. When America’s housing market collapsed, the beneficiaries were hedge-fund managers such as John Paulson of Paulson & Co, who made $15 billion shorting subprime mortgages in 2007. Why, then, has the euro-zone crisis not produced a Monsieur Paulson of its own? Despite more than two years of disarray, funds with double-digit returns are rare; those with triple-digit returns are unheard of. Dejected hedge-fund managers blame political meddling for their flagging performance.

Major Hedge Fund Sells Best Buy Shares, Takes a Loss (TCBMag)
Greenlight Capital told investors that Best Buy is “trying to come up with a strategy” following the departures of CEO Brian Dunn and Chairman Richard Schulze, which could lead to additional “business disruption.” Hedge fund mogul David Einhorn’s Greenlight Capital has sold its minority stake in Best Buy Company, Inc.—and analysts are reportedly speculating that the move could spell good news for the electronics retailer’s founder and former Chairman Richard Schulze.

Romney Fund-Raisers in London Draw Banking Crowd (NYTimes)
After a day made long by his remarks about London’s readiness for the Olympic Games, Mitt Romney found a friendlier audience here on Thursday night at fund-raisers heavily populated with American financiers, donors representing an industry that has had troubles of its own. Mr. Romney held a fund-raising reception and a more exclusive dinner here on Thursday that included some of the top American financiers working in London. The firms they represent run the gamut from private equity funds, hedge funds and big investment banks like Goldman Sachs and J. P. Morgan — all of which have substantial business hubs in London’s financial district.

Individual investors get first time access to hedge fund data (HedgeWeek)
HedgeChatter.com, an online service that allows everyday investors to make investment decisions based on the latest social media data, has been launched by Atlanta-based Soktino Dynamics. James Ross, co-founder of HedgeChatter.com, says: “Hedge funds and wealth management brokerage firms have begun implementing social media stock data into their overall trading strategies to capitalise on this lucrative insight.

Greenwich to study economic impact of hedge funds (StamfordAdvocate)
Does a certain hedge fund capital have a going problem? Greenwich officials have commissioned a study on the role that the sophisticated investment pools, private equity firms and the financial services industry in general has on the local economy. The town’s hedge fund universe lost a major star last month when ESL Investments, the $9 billion private investment fund of Edward Lampert, packed its bags for Miami, a destination with no state income tax and a lower corporate tax than Connecticut.

Salus Alpha thinks outside of the box when running strategies – Monaco Roundtable (Opalesque)
Salus Alpha Capital’s CIO Oliver Prock revealed that he started the first UCITS hedge fund, during the recent Opalesque Monaco Roundtable. The Roundtable was sponsored by Salus Alpha and Eurex. Salus Alpha, a wealth and asset manager based in Zug, Switzerland, started out as fund of hedge funds 10 years ago. “But we always had quant experience in house,” Prock added. Salus Alpha runs Multi Manager and Single Manager Products. The firm recognized the potential of UCITS hedge funds in 2002 and despite the complicated regulations, it was able to offer the first regulated hedge funds under UCITS I in 2003.

Following Hedge Honchos (AdvisorOne)
If you’re having trouble tracking all of the handpicked investments from top hedge fund managers, a pair of ETFs will do it for you. Global X Funds, a New York, NY-based ETF manager, unveiled the Global X Top Guru Holdings Index ETF (GURU). GURU attempts to mimic the holdings of hedge funds with the “highest conviction ideas.” The fund follows a proprietary index called the “Top Guru Holdings Index,” which combs through investment holdings from a select pool of hedge funds where the 13F information is most valuable. Hedge funds with high turnover and non-concentrated positions are eliminated from the pool.

Homebuilder NVR sees big insider buy (MarketWatch)
Dwight Schar, a director at NVR NVR +3.76% , is quite bullish on his $3.8 billion market-cap company; he bought 10,000 shares of stock earlier this week at an average price of $733.22 per share. NVR, which focuses on homebuilding in the Mid-Atlantic and eastern half of the Midwest and also has a mortgage banking unit, was actually performing very well this year. The stock was up over 20% in mid-July but has fallen around 15% since July 16 as the company missed analysts’ revenue estimates for the second quarter.

From $171M, Raleigh fund crashes at zero (BizJournals)
Belltower Advisors, a home-grown hedge fund that borrows its name from the iconic clock structure on the UNC-Chapel Hill campus, has shuttered its doors. Co-founder Mark Corigliano, who now teaches graduate courses at UNC-CH’s Kenan-Flagler Business School, confirmed the closure. “We had one large client that decided to reallocate,” says Corigliano, declining to identify the client.

Whitman Trial To Turn On Whether He Knew Of Illicit Tips (Bloomberg)
Whitman Capital LLC founder Doug Whitman, facing an insider-trading trial next week in New York, is accused of using illicit information from a network of sources to make $900,000 for his hedge fund. The insiders included two employees of chipmaker Marvell Technology Group Ltd. (MRVL) who supplied tips to a consultant whose firm Whitman paid, according to prosecutors in the office of Manhattan U.S. Attorney Preet Bharara. Whitman is also accused of getting inside tips from a former Intel Corp. (INTC) executive who twice pleaded guilty to insider-trading charges, including passing tips to Galleon Group LLC co-founder Raj Rajaratnam.

SAC Re starts up with a different reinsurance model (RoyalGazette)
SAC Re plans to be a reinsurance company with a difference. The hedge fund-backed firm, which opened its doors for business earlier this month, will employ a non-traditional business model that, according to chief executive officer Simon Burton, will better serve investors. Steven Cohen’s US hedge fund SAC Capital Advisors will manage the firm’s assets, while the underwriting team in Bermuda writes reinsurance business.

Germany Offers Private Investor Protection from Hedge Funds (HedgeFund)
Germany’s Finance Ministry has proposed barring private investors from hedge funds to protect them from risky investments. Investment Europe reported that a bill has been drafted by German officials to limit hedge fund investments only to professional investors to “ensure a coherent treatment in the EU of the risks [of alternative investment funds] and their consequences for investors and markets.”

Soros Open Society Now a Tourist Destination? (CanadaFreePress)
How did the George Soros Open Society logo get prominently displayed in the US Travel & Tourism ‘Land of Dreams’ video, televised in the United Kingdom, Japan and Canada for the past three months? The $12.3 million ad campaign presents a display of photographs of beautiful scenic places in all 50 states that link to destination content pulled from ‘1,000 Places to See in the United States & Canada Before You Die’. (Forbes Magazine).

Marc Faber Says Hold Up Investing for 10 Days (ResourceInvestor)
With the euro-zone sovereign debt crisis coming to a head the man voted the fifth wisest investor in the world by a Bloomberg poll was advising caution over any investment in the next 10 days when he addressed the Agora Financial conference in Vancouver on Wednesday. Dr. Marc Faber said he favored equities over bonds for the long term after that and if forced to choose a 10-year investment would prefer equities, preferably in Asia. He remains as bullish as ever on gold that he promises never to sell.

Wall of Fame for SAS’ Goodnight, Blue Cross’ Wilson and Duke’s Rogers in good company too (BizJournals)
These are the kind of Friday tidbits Morning Call absolutely loves. Let me just ask you: What does SAS’ Jim Goodnight and Google have in common? Well, Google Inc. (Nasdaq: GOOG) has him on the company’s “Wall of Fame” that has portraits of world personalities, business tycoons and thought leaders. Goodnight overlaps many of those categories.

Securities Lawsuits Decreased In First Half Of 2012 (Bloomberg)
HSBC Holdings Plc (HSBA), Europe’s biggest bank, said its Mexican unit paid a $27.5 million fine to the nation’s regulators for non-compliance with money-laundering systems and controls. The infringements relate to the late reporting of 1,729 unusual transactions and the failure to report 39 others, the London-based bank said in a statement yesterday.

Karl Rove Is Back In $1 Billion Spending Drive To Oust Obama (Bloomberg)
On the evening of June 29, Amedeo Scognamiglio, a jewelry designer on the Isle of Capri, met friends for drinks at the elegant Grand Hotel Quisisana. Around midnight, Scognamiglio says, “I noticed some familiar American faces.” He took to Twitter. “What,” he wanted to know, “is Karl Rove doing at the Quisisana with Steve Wynn?!” The answer came zinging right back from @KarlRove: “Part of a group enjoying really good Bellinis on a beautiful Capri night!” Bloomberg Businessweek reports in its July 30 issue.

McGraw-Hill Profit Rises On Demand For Market Data, News (Bloomberg)
McGraw-Hill Cos. (MHP), the finance and publishing company that’s splitting in two, said second-quarter profit rose 2.4 percent on increased demand for market data and news. Net income rose to $216 million, or 76 cents a share, from $211 million, or 68 cents, a year earlier, the New York-based company said today in a statement. Earnings excluding some items related to its breakup and cost-cutting plan were 85 cents a share, beating the 76-cent average of analysts’ estimates compiled by Bloomberg.

Investors demand hedge funds show clean hands on Libor (Reuters)
Investors are pushing some of the world’s biggest hedge funds to show that their traders played no part in the interest rate rigging scandal plaguing major banks. These hedge funds have responded with in-depth internal probes which they hope will assure investors that they did not collude with the banks, are completely clean and will not become embroiled in the affair, people familiar with the funds said.

Telefonica dividend a victim of wider Spanish crisis (Reuters)
Telefonica’s decision to scrap its dividend for the first time since the Spanish Civil War in the 1930s reflects wider concern across companies that Spain’s deepening economic crisis may render heavy company debt unsustainable. Telefonica, a corporate stronghold both in Spain and abroad, shocked investors late on Wednesday with the surprise move intended to slash its debt pile and protect its prized investment-grade rating, now under threat from two agencies.

Lehman Watchdog Disputes Wall Street’s Bill for Fees (WSJ)
Some Wall Street banks and hedge funds asking Lehman Brothers Holdings Inc. to chip in for their legal fees aren’t entitled to make such claims in the biggest Chapter 11 case of all time, a government bankruptcy watchdog is arguing. U.S. trustee Tracy Hope Davis, who helps enforce federal bankruptcy laws, is asking a judge to knock out, reduce or scrutinize more than $33 million in attorneys’ and advisers’ fees that Lehman creditors such as Goldman Sachs Group Inc., Bank of America Corp. and D.E. Shaw & Co. want to put on Lehman’s tab.

Is Panama the Next Switzerland? (WSJ)
On Tuesday, the Alliance of Alternative Asset Professionals hosted an event where Noel Thompson, the young CEO and chief investment officer of a recently launched global-macro hedge fund, Thompson Global Partners, talked about the U.S. presidential election and countries around the world. Thompson has an interesting backstory. A former high-school and college wrestler and one-time trader at J.P. Morgan and Goldman Sachs, Thompson set up the fund last year to trade commodities, equities, currencies and interest-rate futures.

10 Hedge Funds That Could Be Getting Creamed On Zynga (BusinessInsider)
Social gaming giant Zynga, the creator of FarmVille, missed earnings expectations big time and cut forecasts yesterday causing the company’s stock price to nose dive. Shares of Zynga were last down more than 39% in pre-market trading on Thursday. Now here’s a rundown of ten hedge funds with the biggest stake in Zynga, according to data compiled by Bloomberg citing 13F regulatory filings from 3/31/2012.

London Roundtable delegate reports on capital opportunities coming from China (Opalesque)
Speaking at the Opalesque London Roundtable, sponsored by Eurex, Bingham and Taussig Capital, Laurie Pinto, CEO, North Square Blue Oak spoke of the dramatic change in climate in hedge funds since 2008. “It was quite obvious for anyone watching after 2008 that the existing model, the old structure of the markets, is in a serious challenge. I am not sure if anybody in 2008 would have predicted the issues would carry on that long and that painful for many. One clear outcome from the crisis is that a situation has been established where the world is falling into a divide between the haves and have-nots. There are countries that have got cash and have got a banking system and there are areas that have not” he said.

Money manager hurt by MF Global offers investors a recovery strategy (Opalesque)
TYL Trading LLC, a Louisiana-based managed futures firm is offering clients affected by the MF Global scandal access to a new pricing approach designed to help them recover their losses more quickly. The firm is offering access to its TYL Trading Blend Diversified Program, which launched in 2005, with a variety of fee discounts. The program is a multi-strategy, systematic managed futures strategy. “Our proprietary money and all of our client assets were with MF Global. When regulators discovered what was going on, the damage had already been done to investor portfolios as well as ours,” explains Conway P. Geoffroy, TYL Principal and Portfolio Manager.

Resilience Capital Partners closes $223m private equity fund (Opalesque)
Resilience Capital Partners, a Cleveland, OH-based private equity firm, closed a new $223m fund, exceeding its target of $200m, highlighting continued investor interest in special situations and lower to mid-market private equity. The fund, The Resilience Fund III, L.P., was the third fund put forward by Resilience and came to a final close in May. Fund III exceeded its target of $200 million through the participation of a global institutional investor base that includes pension funds, insurance companies, foundations and endowments, fund of funds, wealth managers and investment consultants. The firm invests in niche-oriented manufacturing companies and business services companies located in the Midwestern and Mid-Atlantic United States with sustainable market positions and a clear path to cash flow improvement to guide them through a cyclical downturn, an adverse credit situation or ownership transition. Resilience specializes in helping businesses emerge from fatigued ownership or lending relationships, over-leveraged balance sheets and a variety of special situations such as turnarounds, restructurings or corporate divestitures.

Apple to Acquire AuthenTec for $356 Million (NYTimes)
Apple has found one way to shrink its huge pile of cash. The iPhone maker has agreed to acquire AuthenTec, a mobile security company, for $356 million in cash, according to a filing. Apple will pay AuthenTec’s shareholders $8 per share, a 60 percent premium above Thursday’s closing price. The deal will put a small dent in Apple’s cash supply, which stood at more than $117 billion at last count. But AuthenTec, which which designs fingerprint sensors and other security products for mobile devices, could help Apple bolster the security of its products, which have been major targets for criminals and malicious software attacks.

British Court Sentences Six Men for Insider Trading (NYTimes)
A British court has sentenced six men for their role in a multi-year insider trading scheme. The case, which involved trades made between 2006 and 2008, was described by the Financial Services Authority on Friday as the “longest and most complex prosecution” the regulator has ever brought. In order to untangle this insider trading scheme, the F.S.A. said it spent thousands of hours pursuing the case, parsing through hundreds of trades and telephone records. …A British court has sentenced six men for their role in a multi-year insider trading scheme. The case, which involved trades made between 2006 and 2008, was described by the Financial Services Authority on Friday as the “longest and most complex prosecution” the regulator has ever brought. In order to untangle this insider trading scheme, the F.S.A. said it spent thousands of hours pursuing the case, parsing through hundreds of trades and telephone records. Mr. Mustafa, along with two traders, Pardip Saini and Paresh Shah were sentenced to 3 years and 6 months. The rest of the traders, Bijal Shah, Truptesh Patel and Neten Shah, received two years or less.

Sloane Robinson Continues to Get It Mostly Wrong (InstitutionalInvestor)
All five of London hedge fund giant Sloane Robinson’s portfolios within its Global Fund lost between 5.5 percent and 10.1 percent in the second quarter. This put four of the five in the red for the entire first half, according to the firm’s June client letter. Only the Japan (U.S. dollar) portfolio was in the black for the first half, up 7.6 percent. The losses came on the heels of poor performance last year, when five of the hedge fund’s six major portfolios within its Global Fund at the time lost between 17.3 percent and 24.3 percent while the sixth declined by a single-digit rate. Four of the portfolios within the Global Fund also lost money in 2010.

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