Editor’s Note: Related tickers: Herbalife Ltd. (NYSE:HLF), Apple Inc. (NASDAQ:AAPL), Tuesday Morning Corporation (NASDAQ:TUES), Bank of America Corp (NYSE:BAC)
SEC is looking at Soros (NYPost)
The Securities and Exchange Commission is taking Bill Ackman seriously. Days after the hedge-fund mogul wrote the regulator and complained about alleged insider-trading violations by George Soros’ family fund regarding its trading in Herbalife Ltd. (NYSE:HLF), the SEC took action. An SEC lawyer has contacted at least one person who spoke with Soros Fund Management portfolio manager Paul Sohn, who was driving the firm’s Herbalife Ltd. (NYSE:HLF) investment, The Post has learned. Bill Keep, the dean of the College of New Jersey, who is an expert on pyramid schemes, was recently questioned by Liora Sukhatme, a lawyer in the SEC’s enforcement area.
Man Shuts Vision Fund in Overhaul of Guaranteed Products (Bloomberg)
Man Group Plc (EMG), the world’s biggest publicly traded hedge-fund manager, is shutting a range of products that aimed to protect clients from losses after they failed to meet performance targets. The company decided this month to shut Man Vision Ltd., a $40 million pool that sought to generate returns of more than 10 percent annually, according to an Aug. 12 letter sent to clients and obtained by Bloomberg News. Man Group is also closing similar offerings that, like Vision, were tied to the performance of AHL Diversified, the firm’s biggest hedge fund, said a person with knowledge of the moves who asked not to be identified because they aren’t public.
German Chancellor Angela Merkel to ask G20 for stiffer hedge fund regulation (Opalesque)
German Chancellor Angela Merkel has pledged to ask G20 members to impose stiffer regulation against hedge funds during its upcoming meeting on Sept. 5-7, reported Oanda.com. Speaking at a rally in Rhine City at Bonn, Merkell said she would urge members of G20 during their meeting to be held at St. Petersburg to “speak with one voice” as she laments on the slow progress in implementing tighter rules on hedge funds and shadow banking.
Bay Street disruptor Som Seif returns with a purpose (FinancialPost)
Long–time Bay Street disruptor Som Seif is finally making his full return to the investment community. After a quiet launch earlier this year, the pioneer of Canada’s exchange-traded fund industry is rolling out a series of investment products aimed at taking hedge fund and other less-accessible strategies and making them available to the self-directed masses. Starting next Tuesday, Mr. Seif’s encore endeavour, Toronto-based Purpose Investments, will be rolling out five new investment strategies — all managed by Toronto-based hedge fund firm Breton Hill.
Hedge Funders Are All a Little Nuts (WSJ)
Hedge funders are in the news. Carl Icahn tweets about his dinner with Apple Inc. (NASDAQ:AAPL) -2.94% Tim Cook. Dan Loeb tussles with George Clooney. Bill Ackman says Herbalife Ltd. (NYSE:HLF) is a pyramid and shorts the stock; George Soros goes long. If you want to understand the guys who run hedge funds, you first have to realize that they—we—are a little nuts. The trick to running a hedge fund is to drink from the fire hose of information, take it all in, figure out what everyone else knows and then position your portfolio to benefit when everyone else is inevitably wrong. This is no simple feat. Sleepless nights, second guessing, minds racing, almost a split personality working out both sides of all arguments.
Dallas hedge fund takes some profits on its investment in retailer Tuesday Morning (DallasNews)
The Dallas-based hedge fund that made a major investment in Tuesday Morning Corporation (NASDAQ:TUES) last year said in a filing Tuesday that it sold about 1 million shares. Becker Drapkin Management LP took some profits on Aug. 23 by selling about 25 percent of its 9 percent stake in Tuesday Morning. Becker Drapkin sold 955,000 shares at $14.10 a share. It now owns 6.7 percent of the company. Shares were acquired in several transactions at an average price of between $3.76 and $5.97 a share. The stock more than tripled since Becker Drapkin made its initial investment in June 2012.
Mad Money, August 27, 2013 (CNBC)
Marc Faber: investors were too optimistic about Asia (Opalesque)
Last week was a turbulent week in some Asian countries as the sell-off intensified. And this turbulence is set to continue, says Marc Faber. Indeed, investors have been exiting the Indian and Indonesian currencies following months of decline and a sharp drop last Thursday. The currencies of Malaysia, the Philippines and Thailand also declined, although by less than 1%, says the New York Times. Stock markets across most of the region fell on Thursday, but share prices rebounded slightly in India. However, China and Japan’s were unaffected by this general waning.
New Reasons to Fear Leverage (InstitutionalInvestorsAlpha)
Steven Cohen’s SAC Capital Advisors has nearly $51 billion in leverage—more than 3.5 times its current assets of $14 billion. Even so, no one expects a lasting market crisis if at some point Cohen has to unwind the firm, which the U.S. government has accused of insider trading. Markets might panic for a few days or even a few weeks, but SAC’s assets, even with the leverage, pale beside the estimated $2.4 trillion in global hedge fund assets. At the present size of the hedge fund industry, no one fund has the power to shatter the markets if its portfolio managers suddenly have to pay back borrowed assets…
Eric Rosenfeld’s Activism Comes with Lyrics (InstitutionalInvestorsAlpha)
It’s a cold morning in Boston, and another dry hedge fund conference panel is wrapping up. Suddenly Eric S. Rosenfeld, founder and CEO of New York–based Crescendo Partners, steps down from the speaker’s platform and strolls out front to face the audience. Music that sounds vaguely like a Broadway show tune starts blaring from the room’s speakers. Rosenfeld’s voice begins to fill the room. In a big, earnest tenor, he sings what could be the Barbra Streisand number “Don’t Rain on My Parade” from Funny Girl, except Rosenfeld has substituted his own lyrics, titled “Don’t Mess with My Charade,” about CEOs trying to hide their company’s problems…
Hedge Funds Down 0.57% MTD (Finalternatives)
The Bank of America Corp (NYSE:BAC) Merrill Lynch investable hedge fund composite index was down 0.57% for the month, as of August 21, bettering the S&P 500 which was down 3.6%. Convertible arbitrage was the best performing strategy, adding 0.16% in the monitored period while equity long/short performed the worst, falling 0.93%. BofAML analyst MacNeil Curry said their models indicated that market neutral funds had decreased market exposure to 9% net long from 15% net long as of August 21 and equity long/short funds had reduced market exposure to 34% from 42% net long, slightly below the 35-40% benchmark level.
Simon Lack Releases ‘Bonds Are Not Forever’ (BroadwayWorld)
In his international bestseller “The Hedge Fund Mirage,” Simon Lack blew the lid off of the hedge fund industry, revealing why, despite their grandiose claims of record-breaking returns, the industry’s chief beneficiaries have been hedge fund managers themselves. Now, in his second book, Lack shifts his focus to the fixed income markets to explain why investing in bonds is hazardous to your financial health.
Hedge Fund Association Forms New Academic Advisory Board (BusinessWire)
The Hedge Fund Association (“HFA”) today announced that it has formed a new academic advisory board to empower and educate students and others about the hedge fund industry. The board will hold HFA symposiums on campuses nationwide featuring well-known hedge fund managers and investors as guest speakers, along with hosting online webinars to teach the next generation of professionals not only about the industry, but also finance and ethics.
