Einhorn Reinsurer Rallies as UBS Upgrades to Buy: New York Mover (SFGate)
Greenlight Capital Re Ltd., the reinsurer that counts hedge-fund manager David Einhorn as its chairman, rose the most since August as UBS AG raised its rating on the firm to buy and said the stock will rebound from a slump. Greenlight Re jumped 3.6 percent to 23.21 at 4 p.m. in New York. Analysts led by Brian Meredith increased their price target on the Cayman Islands-based insurer to $27 from $25.50. The stock had dropped 5.4 percent this year through yesterday. Einhorn established the reinsurer in 2004 and invests premiums through an affiliate of his hedge fund Greenlight Capital Re, Ltd. (NASDAQ:GLRE). The firm is trading below book value, a measure of assets minus liabilities, compared with a historical average of about 22 percent higher than that metric, the analysts said.
Edgebell Becomes First to Expand Hedge Fund Under New Japan Rule (BusinessWeek)
Edgebell Capital Co., run by former bankers at Goldman Sachs Group Inc. and Mizuho Corporate Bank Ltd., will start raising money for its global macro hedge fund from institutional and overseas investors after approval from Japan’s regulator under a new fund rule. The fund, set up in April 2011 to wager on trends in stocks, bonds and currencies, has only been available to domestic individuals, said Chief Operating Officer Kazuho Suzuki, who set up Edgebell with Masaru Koibuchi. The company obtained approval from the financial regulator on Nov. 20 to act as a discretionary investment manager. It plans to set up a new Cayman Island-based fund as early as February, he said.
Man Group rises on report of fund experiment (ShareCast)
The world’s largest hedge fund, Man Group, rose strongly on reports it is experimenting with a new way of improving results at its flagship computerised fund. AHL, which manages assets of $16.3bn, has been hit hard by quantititave easing and chaos in the Eurozone, in turn hitting Man’s share price and causing it to tumble out of the FTSE 100. The Financial Times reported the firm had moved $1.5bn of the fund into a new vehicle dubbed ‘Evolution’. The newspaper quoted an unnamed source who said Evolution had made 18% so far this year, and made 16% last year. However, Man Group declined to comment on the story.
Citi Ends Its Decade-Long Ill-Fated Love Affair With Hedge Funds (ForexPros)
Some years ago Citigroup Inc. (NYSE:C) built a massive internal hedge fund platform called Tribeca. It was managed by Tanya Beder who became famous in advising Orange County on its derivatives fiasco in the 90s. She tried to turn Tribeca into an $20bn institutional hedge fund supermarket. This was a massively expensive undertaking that lasted for about 3-4 years and met with limited success. Citi later bought Old Lane (Pandit’s fund – that wasn’t too successful on its own in terms of performance) for $800mm. As is typical of these large banks, it decided to build up Old Lane and shut down/replace Tribeca. Out with the old and in with the new. Then in 2008, when Pandit got promoted, Old Lane triggered the so-called key-man clause. This allowed Old Lane investors to withdraw their money immediately – as they promptly did. Citi followed by shutting down Old Lane as well. The firm later tried to rebuild the business once again under the name of Citi Capital Advisors.
Revere launches REM Marketing Solutions for early-stage hedge funds (HedgeWeek)
Revere Capital Advisors, the London and New York-based emerging hedge fund manager, has launched a marketing and business development consultancy for early-stage hedge funds. The REM Marketing Solutions team is based in London and has marketing, sales, product management and business management knowledge.
Prison in future for Stamford hedge fund manager (StamfordAdvocate)
In a life full of uncertainties, Francisco Illarramendi can be assured of one thing — federal prison is looming in his future. And it will come Jan. 25, either in the form of a sentence or a bond revocation. Illaramendi, a multi-millionaire Stamford hedge fund manager, pleaded guilty March 7, 2011, to wire, securities and investment adviser fraud, as well as a conspiracy charge in connection with a massive Ponzi scheme that cost investors, particularly Venezuelan pension fund investors, more than $500 million. U.S. District Judge Stefan R. Underhill made it clear Wednesday that Illarramendi is going to prison, even though the judge granted his request to change lawyers.
Questioning smart beta’s ability to set the pace (InvestmentEurope)
Robust debate is swirling around so-called smart beta – the indexation strategy – and poses the question whether this could be seen as truly transforming the investment scene, or whether it is just another marketing gimmick. The passive investment sector has seen a surge of inflows since the onset of the global economic crisis, which has left active managers and even hedge fund mangers struggling to perform according to expectation.
Billionaire Ken Fisher’s Top Stock Picks (DailyFinance)
Ken Fisher runs the $34 billion hedge fund Fisher Asset Management, an independent money management firm. Fisher’s picks have outperformed the S&P 500 by more than 5% on average annually for the past 15 years. In addition to his day job, Fisher’s been a Forbes columnist for nearly three decades. He’s literally written the book — several New York Times best-selling ones, in fact — on investing. Bottom line: This guy knows his stuff. And we investors should sit up and take notes. …Last year, Pfizer announced plans to refocus the company’s strategy on its core pharma business and sell or spin off some non-pharma businesses. Many investors, Fisher probably included, believe this strategy will allow Pfizer’s drug pipeline to have a greater effect on the company’s growth. Pfizer’s most promising drugs target the treatment of rheumatoid arthritis and cancer. Fisher added more shares of Pfizer in the third quarter.
Here’s What This $27 Billion Hedge Fund Company Has Been Buying (DailyFinance)
Every quarter, many money managers have to disclose what they’ve bought and sold, via “13F” filings. Their latest moves can shine a bright light on smart stock picks. Today let’s look at investing giant Adage Capital Partners, which is one of the biggest hedge fund companies around, with a reportable stock portfolio totaling more than $27.4 billion as of Sept. 30, 2012. It was founded by Phillip Gross and Robert Atchinson, and invests money for university endowments and charitable foundations, among others. As of last year, the team had outperformed the S&P 500 by three percentage points annually, on average, since inception in 2001. …The biggest new holdings are Dollar Thrifty Automotive Group and Illinois Tool Works Inc. (NYSE:ITW) . Other new holdings of interest include rural telecom specialist Windstream Corporation (NASDAQ:WIN) , which has recently hit a 52-week low. The company has lowered its projections, and with its free cash flow less than its payout, its massive 12% dividend yield seems threatened. Meanwhile, revenue has been growing while net income has been shrinking.
FRM’s Luke Ellis puts performance and transparency top of list for investors! (HedgeFundsReview)
The biggest risk facing the fund of hedge funds (FoHF) business is finding performance. “We are all going to have to eke out performance a basis point at a time,” says Luke Ellis, CEO and chief investment officer of FRM, part of Man Group. “It’s not like there are going to be easy home runs. There is an 80% likelihood that we get another year of churning, grinding markets. We all have to be smart in the way we make money out of that environment.” The way Ellis and FRM make money is by providing a variety of services to investors. His motto in this endeavour is performance, transparency and service. “If you do those three things, everything else takes care of itself,” he says.
JPMorgan Turned CIO Into Secret Hedge Fund, Pensions Claim (SFGate)
JPMorgan Chase & Co. turned its chief investment office into a “secret hedge fund” that caused more than $6.2 billion in losses, pension funds said in a revised complaint in their lawsuit against the bank. JPMorgan represented that the office’s primary role was managing risk when in fact it was engaging in trades to generate profit for the New York-based bank, the funds said in an amended complaint filed yesterday in Manhattan federal court. JPMorgan Chief Executive Officer Jamie Dimon “secretly transformed the CIO from a risk management unit into a proprietary trading desk whose principal purpose was to engage in speculative, high-risk bets designed to generate profits,” the plaintiffs said.
Ohio PERS puts $440 million into 3 hedge funds (PIOnline)
Ohio Public Employees Retirement System, Columbus, made three new direct hedge fund investments totaling $440 million, confirmed spokesman Michael Pramik. The $76.4 billion pension fund committed $160 million each to credit-oriented Brigade Leveraged Capital Structures Fund, run by Brigade Capital Management, and Saba Capital Partners, a credit relative value strategy; and $120 million to KLS Diversified Fund, managed by KLS Diversified Asset Management. The commitments bring the pension fund’s total direct hedge fund investments to $3.12 billion. Hedge fund consultant Cliffwater assisted.
Argentina loses court battle in Ghana against US hedge fund (PressTV)
Argentina has lost its international court battle against a US hedge fund over an impounded navy ship in Accra after a judge blocked an attempt to challenge the authority of Ghanaian courts. Accra’s Commercial Court denied requests from Buenos Aires’ lawyers on Wednesday who were seeking to rule out Ghana’s jurisdiction in their dispute with global equity investment company NML Capital, AFP reported. On October 2, NML Capital requested Ghanaian courts to detain the warship, the Libertad, and demanded USD 20 million for its release as a partial claim to Argentina’s USD 370 million of unpaid debt.
On Hedge Funds And Why I Prefer To Be A Long-Only Player (ForexPros)
I don’t think hedge funds are an optimal way to manage assets. Here are some of my reasons: The fees are too high. Why pay 2% of assets, and give up 20% of the profits? Hedge funds, aside from Commodity Trading Advisers and Global Macro funds, tend to be correlated, yield-seeking, and volatility-averse. Why pay up for correlated performance? The statistics behind hedge fund marketing suffer from backfill bias, survivor bias, and a few other biases. Actual returns from hedge funds trail buy-and-hold returns by a significant margin. Investors in hedge funds are poor timers of investment. Though past results do not indicate future returns, investors act like that. No one will add money to a losing fund, even if that is the point where it might start to do better.
Duke Energy CEO Jim Rogers to Speak at Duke Conference Nov. 28 (Duke)
Duke Energy CEO Jim Rogers will give the first of two keynote addresses at the Duke University Energy Conference on Wednesday, Nov. 28. Rogers’ talk, “The Future of Energy: How Will Today’s Challenges Shape the Future of the Industry?” begins at 9 a.m. and is open to the Duke community and the media. Because of space restrictions, the event is not open to the public. …The annual conference runs from 8:15 a.m. to 5 p.m. in Geneen Auditorium at The Fuqua School of Business, on Duke ‘s West Campus. Kateri Callahan, president of the Alliance to Save Energy, will give the closing keynote address at 4 p.m.
Olam Sues Muddy Waters, Block After Accounting Questions (Bloomberg)
Olam International Ltd. (OLAM), the world’s second-largest rice trader, sued investment firm Muddy Waters LLC and its founder Carson Block for defamation after they questioned the commodity supplier’s accounting methods. Block’s comments in London at a hedge fund conference on Nov. 19 were malicious falsehoods, Olam said in a lawsuit filed in the Singapore High Court yesterday. The company sought unspecified damages, costs, and an injunction against republication of the comments.
OMG! Hedge Fund Succumbs to ‘Brave New World’ (WSJ)
OMG Capital, which was set up in 2004 and grew to run $930 million at its peak in 2009, is closing down and returning all money to investors. Assets had fallen to $230m at the end of October. …Over the past couple of years, global markets have been characterized by a “risk-on/risk-off” mentality, where investors moved in and out of risky assets together depending on the prevailing economic sentiment and risk appetite. Mr. Gaze said that this has made it difficult for OMG’s fund as it often gets stuck out of positions when the market is falling and then misses the stock move on the way back up.
Madoff’s Former Daughter-In-Law Says Trustee Can’t Have Homes (Finalternatives)
Nearly two years after her husband ended his life, the widow of Bernard Madoff’s eldest son is fighting to hold on to what he left behind. Stephanie Mack has asked a federal judge to dismiss a $27.5 million lawsuit against her filed by Madoff trustee Irving Picard. And her lawyers are trotting out some novel legal theories in their bid to let her keep the money and properties she inherited from Mark Madoff, who committed suicide on the second anniversary of his father’s arrest for running a $65 billion Ponzi scheme.
Hedge fund manager CQS (U.K.) appoints chairman (PIOnline)
Marc Hotimsky joined hedge fund manager CQS (U.K.) as chairman. The position is new, said Jonathan Gasthalter, a company spokesman. Mr. Hotimsky will “broaden our management bench … and help us to identify opportunities to strengthen our footprint and trading talent,” said Michael Hintze, CQS’ founder, CEO and senior investment officer, in a company news release. Mr. Hotimsky was chairman and chief investment officer of NewFinance Capital, a firm he co-founded and sold to Schroders in 2006. He retained those titles when the firm moved into the Schroders organization until he left the firm at the end of 2011.
Hedge Fund Manager Sells Chicago Apt. For $15M (Finalternatives)
An Illinois hedge fund manager has earned a tidy 355% return on Chicago’s richest condominium sale ever. General Welfare Group’s Richard Cooper has sold his penthouse in the Park Tower for $15 million. The hedge fund bought the then-unfinished space for just $3.3 million in 2000. The 66th-floor apartment is nearly 8,000 square feet and has a 660-square-foot terrace, wraparound views and 16-foot ceilings. The new owners also inherit Cooper’s high-profile neighbor: Citadel Investment Group founder Kenneth Griffin and his wife, Aragon Global Management founder Anne Griffin, live one floor above the Cooper apartment, on the building’s top floor.