Simons Strategy to Shield Profit From Taxes Draws IRS Ire (BusinessWeek)
A former Cold War code breaker may have cracked the tax code for hedge funds. James H. Simons, who became a billionaire when he turned his extraordinary mathematical ability from defense work to investing, has deployed an unusual strategy at Renaissance Technologies LLC to skirt hundreds of millions of dollars in taxes for himself and other investors, said people with knowledge of the matter. The Internal Revenue Service is challenging the technique, which it called “particularly aggressive,” without identifying the hedge fund in the dispute. It is demanding more tax payments from investors in Renaissance’s $10 billion Medallion fund, the people said.
Sony suffers second box office letdown as it eyes partial spinoff (Reuters)
Sony Corporation (ADR) (NYSE:SNE), which is studying a partial spinoff of its studio at the urging of major shareholder Daniel Loeb, suffered its second box office misfire of the summer season when its action movie “White House Down” opened with ticket sales below industry forecasts. …Sony Corporation (ADR) (NYSE:SNE) Chief Executive Kazuo Hirai told Sony Corporation (ADR) (NYSE:SNE) shareholders at the Japanese electronics company’s June 20 annual meeting that the board was studying a proposal by billionaire Loeb, whose Third Point hedge fund owns 6.9 percent of the company. Loeb has proposed spinning off as much as 20 percent of the studio.
Bear Market In Gold Pummels Einhorn’s Greenlight Fund (BusinessInsider)
Investors in David Einhorn’s Greenlight Capital Management’s offshore gold fund were down 11.8 per cent in June, bringing their year-to-date losses in the fund to 20 per cent, two sources close to the matter said on Sunday. Einhorn, one of the most widely followed hedge fund managers and known for warning about Lehman Brothers’ precarious finances before it collapsed, has also seen his flagship $8 billion Greenlight Capital fund under recent pressure though it is still up for the year. In June, Greenlight’s flagship portfolio was down 1.1 per cent but still up net 7.4 per cent year to date, according to one of the sources. Einhorn, largely known for going both long and short on stocks, formed the Greenlight gold fund to include the same investment strategy as the main fund but offers a share class backed by physical gold.
Deutsche Bank planning 1,000 new Irish jobs (Independent)
Deutsche Bank AG (NYSE:DB) is planning to create up to 1,000 new jobs in Dublin when it sets up a new global centre for hedge fund administration here. That is two-and-a-half times the number of jobs the German banking giant has been previously reported to be planning to bring to Dublin in what will be a major boost to the capital. Deutsche Bank AG (NYSE:DB) already employs 310 people here. It has had a smaller hedge fund administration office in Dublin since 1998 but this expanded significantly in 2011 when the German company set up a “centre of excellence” in hedge funds here. …Deutsche Bank AG (NYSE:DB) is thought to be eyeing various locations in the vicinity of Ireland’s new Central Bank in Dublin’s docklands.
New York hedge fund buys up Billabong debt (BRW)
New York hedge fund Centerbridge Partners is amassing a stake in Billabong International from two of the troubled surfwear company’s lenders amid growing signs Billabong’s loans are being taken over by opportunistic investors. …The latest sale by Westpac over the weekend comes as private equity suitor Altamont Capital Partners arrived on Friday to conduct further talks with Billabong management about its proposal to refinance the balance sheet and buy one or two brands. Westpac is the third bank to cut its losses, with Centerbridge believed to be a buyer at around 90¢ on the dollar for a parcel of debt worth $60 million, as revealed by the Financial Review on Saturday.
Ex-UBS Trader’s MST Turns to Wealthy Investors for Hedge Fund (BusinessWeek)
MST Capital Pty, run by Sydney-based former UBS AG (ADR) (NYSE:UBS) trader Gerard Satur, raised A$10 million ($9.1 million) from wealthy investors for a global macro strategy that will start today. The strategy, Baruch Global Macro Fund, will shadow the strategy used for its existing fund that invests in foreign exchange, equities, credit markets, interest rates and commodities, with a focus on the Asia-Pacific region, said Mark Levinson, a partner at the fund manager. MST expects to add as much as an additional A$10 million from Aug. 1, he said, declining to name the investors. MST, which manages A$175 million with most of their clients being institutional investors, is widening their client base as Australian investors search for higher-yielding assets with the central bank lowering its benchmark interest rate to a record-low 2.75 percent and a slowing economy hurting equity valuations.