Einhorn Says Hard to Find Investments Amid Market’s Climb (BusinessWeek)
Hedge-fund manager David Einhorn is struggling to find value amid a five-year stock market rally. “We had a difficult time finding new investments this quarter,” he said today on a conference call discussing results at Greenlight Capital Re, Ltd. (NASDAQ:GLRE), the Cayman Islands-based reinsurer where he is chairman. “As the market continues to rise in the face of conflicting economic data, global unrest, and looming overdue Fed exit from quantitative easing we remain cautiously positioned.”
Och-Ziff reports record assets that help boost earnings (Reuters)
Hedge fund company Och-Ziff Capital Management Group LLC reported higher quarterly earnings on Tuesday as assets rose to record levels amid fresh demand for portfolios that invest in real estate, stocks and credit. The New York-based company, one of only a handful of publicly listed hedge fund firms, reported second-quarter distributable earnings of $90.4 million, or 18 cents a share, as assets under management hit $45.9 billion on June 30. Distributable earnings exclude costs from Och-Ziff’s November 2007 initial public offering.
SEC Doles Out Record WhistleBlower Award (HedgeCo)
The SEC has awarded over $400,000 to an un-named whistleblower who reported a fraud to the SEC after the company failed to address the issue internally. “The whistleblower did everything feasible to correct the issue internally. When it became apparent that the company would not address the issue, the whistleblower came to the SEC in a final effort to correct the fraud and prevent investors from being harmed,” said Sean McKessy, chief of the SEC’s Office of the Whistleblower. “This award recognizes the significance of the information that the whistleblower provided us and the balanced efforts made by the whistleblower to protect investors and report the violation internally.”
Ex-Bridgewater Analyst Wang Starts No-Fee Hedge Fund (Bloomberg)
Howard Wang, a former analyst at Ray Dalio’s Bridgewater Associates LP, says most hedge fund performance mirrors the broader market, failing to justify the high fees collected. That’s why Convoy Investments LLC, the global macro fund he started in November with former Bridgewater software engineer Robert Wu, isn’t charging a performance fee to investors and only a 1.25 percent management fee, he said. The New York-based firm will even manage money pro bono for foundations and underfunded pensions for up to 25 percent of the firm’s assets.
Hedge funds amass short positions in private equity-backed IPOs (FT)
Hedge funds are building up multimillion pound bets against companies recently listed by private equity after a number of high-profile flotations this year have fallen sharply in value, leaving institutional investors nursing large losses. Hedge funds have built up short positions – essentially wagering that a share price will fall in value – in a number of recent private equity-backed listings including Pets at Home, Saga and Just Eat in the UK, according to regulatory filings. Private equity groups have attracted criticism from investors this year after a number of companies that have publicly listed across Europe have fallen sharply from their original price.