Hedge Fund News: David Harding, Dan Loeb & Bill Ackman’s Smarter Bet

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Winton’s Profit Fell 64% in 2012 After Losses at Biggest Fund (BusinessWeek)
Winton Capital Management Ltd., the $24.5 billion hedge-fund firm founded by David Harding, said profit plunged 64 percent last year after its main fund posted just its second annual decline since starting in 1997. Earnings after taxes fell to 58.6 million pounds ($95.1 million) in 2012, compared with 162 million pounds in 2011, London-based Winton said in a U.K. Companies House filing published today. Winton, which earns its most lucrative fees from investment gains made at the firm’s hedge funds, said revenue declined 45 percent to 193 million pounds.

David Harding

Investors turn their backs on “robot” hedge funds (Reuters)
Investors in the $330 billion computer-driven hedge fund sector are pulling out money for the first time since 2008, data showed on Wednesday, signalling the possible start of a bigger exit from the industry. These so-called CTAs (commodity trading advisors), which employ mathematicians and physicists to build programmes betting on market trends, have been in demand since they racked up large profits during the credit crisis.

Ackman Still Short Herbalife (HLF), But Now Has Different Approach (StreetInsider)
Bill Ackman is making a smarter bet on Herbalife Ltd. (NYSE:HLF). According to a third-quarter 2013 performance letter issued by hedge fund Pershing Square, Ackman has converted about 40 percent of his short on Herbalife into long-term put options. On the position, Ackman commented, The restructuring of the position preserves our opportunity for profit – if the Company fails within a reasonable time frame we will make a similar amount of profit as if we had maintained the entire initial short position – while mitigating the risk of further substantial mark-to-market losses – because our exposure on the put options is limited to the total premium paid.

Highfields Capital joins hedge fund chorus seeking to slim down (BizJournals)
Count Highfields Capital of Boston among the growing list of hedge funds returning money to clients. According to Reuters.com, which reviewed a letter sent by the local money manager to its investors, Highfields plans to return as much as $2 billion of its $13 billion under management due to an overall lack in attractive investment opportunities. “While we are quite comfortable with our ability to generate good returns at our current size, we would rather be slightly smaller and generate better ones,” wrote Highfields co-founder Jonathan Jacobson, according to the Reuters report.

Billionaire Dan Loeb Blasts Sotheby’s CEO For Spending ‘Hundreds Of Thousands’ On Luxury Lunches (Forbes)
Billionaire hedge fund manager Dan Loeb doesn’t care that Sothebys (NYSE:BID) recently replaced its CFO for a former Goldman Sachs Group, Inc. (NYSE:GS) partner and managing director, and that the auction house is reviewing its books to increase shareholder value. On Wednesday, the head of Third Point sent a scathing letter to management, announcing he had become the company’s largest shareholder and is calling for William Ruprecht, chairman, president and CEO of Sotheby’s, to step down given his lack of leadership, excessive pay and perks, and how rival Christie’s has eaten their lunch since the financial crisis;

Chief operating officer of $780 mln Segantii hedge fund leaving (Reuters)
Segantii Capital’s Chief Operating Officer Nigel Hellewell is leaving the company a year after joining one of the most successful home-grown hedge funds in Asia. Hellewell joined Segantii from London-based BlueCrest Capital Management last year. Segantii CEO Kurt Ersoy confirmed Hellewell was leaving but did not give any details about his departure. Segantii’s fund, launched in 2007 by the former head of Asian equity trading for HSBC Securities Simon Sadler, managed $780 million at the end of August and is up about 4 percent this year, according to data seen by Reuters.

Keiser on shutdown: America one giant hedge fund & world’s greatest soap opera (YouTube)

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