Billionaire Hedge Fund Manager David Tepper Is Having A Huge Year (Forbes)
Billionaire David Tepper’s hedge fund firm, Appaloosa Management, celebrated its 20th anniversary in 2013 and it’s turning into a year to remember for the former Goldman Sachs Group, Inc. (NYSE:GS) trader. Tepper’s big Palomino hedge fund posted net returns of 37.86% this year through the end of November. The Palomino fund had a strong month in November, when it returned 4.86%. With $20 billion under management, Tepper has been a loud and consistent stock market bull, saying equities were the place for investors to be. The Standard & Poor’s 500 index returned 29.1% this year through November. In a recent interview with Bloomberg Television, Tepper said his fund had made a successful bet on airline stocks that had helped its returns.
British hedge fund GLG settles SEC charges over inflated assets, fees (Reuters)
British hedge fund adviser GLG Partners LP and a former holding company agreed to pay about $9 million to settle U.S. regulatory charges that internal control failures had caused them to inflate a fund’s assets and collect excessive fees. The U.S. Securities and Exchange Commission alleged that GLG Partners LP had, between November 2008 and November 2010, overvalued by about $160 million, or 60 percent, a stake that one of its funds held in an emerging markets coal mining company. Thursday’s settlement arose from the SEC’s Aberrational Performance Inquiry, a program that began in 2009 to analyze the performance data of thousands of hedge fund advisers and identify funds with suspiciously high returns.
Bank of America’s Pays $131m Settlement for Merrill Lynch Mortgage Probe (IBTimes)
Bank of America Corp (NYSE:BAC) has stumped up $131m in settlement payments after the US regulator found that its Merrill Lynch unit misled investors about its mortgage securities. According to an US Securities and Exchange Commission statement, the ML unit misled investors about mortgage securities it structured and sold, by having the interest of maximising profit for its hedge fund partners rather than its retail buyers. The SEC added that ML failed to tell investors that hedge fund firm Magnetar Capital exercised significant influence in choosing collateral underlying two $1.5bn (£917,650, €1bn) collateralised debt obligations (CDO).
Hedge Fund Lions’ Den: Emerging managers struggle to understand investor motivation (Risk)
The double meaning of what investors say and what they really mean is explored in episode five of Hedge Fund Lions’ Den. Luke Ellis, president of Man Group, enlightens Charles-John (CJ) Donley and Robert Toffel from Strategis Capital Management on the hidden meaning of investor responses. Neil Meadows of Laurentia Funds talks with Andrew McCaffery of Aberdeen Asset Management about returns and risk management while Stanley Fink, CEO of ISAM, quizzes Donley and Toffel about the BNP Paribas SA (EPA:BNP) note on offer.
U.S. hedge fund Golden Tree increases stake in Postmedia (FinancialPost)
U.S. hedge fund Golden Tree Asset Management LP increased its stake in Postmedia Network Canada Corp. last month and now owns 39% of the newspaper chain’s shares. The New York City-based fund is Postmedia’s largest shareholder and in November it purchased a further 4% of the company’s Class B shares, according to a Dec. 4 regulatory filing. Golden Tree, which has a representative on Postmedia’s board of directors, said in the filing it increased its holdings of Postmedia shares by 1.6 million.
Hedge funds see opportunity in commercial real estate (CNBC)
Pension and hedge fund capital pushing down premiums (InsuranceBusinessOnline)
An influx of capital from non-traditional sources is contributing to increased market capacity, lower premiums, and greater competition in the global insurance industry, according an Aon boss. Commenting on insurance markets in 2013, Jason Disborough, managing director, global, for Aon Risk Solutions said that the market conditions that increased competition between insurers and lowered premiums across the board this year was likely to continue into 2014. Disborough said that increased capital flows into the industry from non-traditional sources has resulted in a convergence of traditional and non-traditional capital, translating into excess capacity which insurers have been unable to absorb through organic growth.
Hedge fund manager conned La. retirement systems out of $100 million, report says (TheAdvocate)
A New York hedge fund manager apparently conned three Louisiana retirement systems out of $100 million in an investment scheme that promised high returns with low risk, a court-appointed bankruptcy trustee says in a recent report. In 2008, trustees of the pension plans — the New Orleans Firefighters’ Pension and Relief Fund and two statewide funds, the Firefighters’ Retirement System and the Municipal Employees’ Retirement System — invested the money in the flagship fund of Fletcher Asset Management, which offered a guaranteed 12 percent rate of return. If returns fell below that mark, they were told, the gap would be covered by $50 million put up by a subsidiary of the financial services firm Citco Group Ltd.
A Hedge Fund Strategy Without The High Fees (TheStreet)
Merger arbitrage strategies are used by some investors to get alternative exposure to the stock market with diversification benefits and potentially less volatility. Atlas Capital manages a merger arbitrage portfolio on Covestor with a twist. MergerArb portfolio is designed to identify companies that could be acquired, and profit from the deal premium. “We think of this portfolio as ‘alternative beta’ at a lower cost than what hedge funds are typically charging,” said Jonathan Tunney, founder and chief investment officer of Atlas Capital. In financial jargon, beta is typically referred to as index-based, passive exposure to the market.
Heating subsidy by Soros charity turned down by parents association in northern Greece (Ekathimerini)
A school parents association in Naoussa, in northern Greece, has turned down a donation of heating oil by the Open Society Foundations, a charity network funded by billionaire George Soros, reports said on Thursday. The fund recently announced it would donate an unspecified amount of oil to the local municipality to keep the classrooms warm. Following a decision by local authorities, schools were recently closed in Florina, Naoussa, Drama, Kozani and Kastoria in protest at the lack of heating subsidies. In a statement, the parents association reportedly said that covering the schools’ heating needs was an obligation of the state. A representative for the parents also questioned the motives behind the move.
Asian Hedge Funds as Much as 42% Cheaper to Run, Survey Says (Bloomberg)
Running a hedge fund in the Asia-Pacific region can be as much as 42 percent cheaper than in the U.S. and Europe, helped by lower-than-average compensation, according to a survey by Citigroup Inc (NYSE:C) Small funds started in the region struggle to achieve profitability and expand assets, the fourth-largest U.S. bank cautioned. Ninety-five, or 57 percent, of the 167 regional equity long-short hedge funds which began trading with less than $50 million still manage less than that amount after an average of 5.3 years in existence, it added, citing data from Singapore-based Eurekahedge Pte.
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