Hedge Fund News: Jim Simons, Deutsche Bank AG (DB), Sony Corporation (ADR) (SNE)

Editor’s Note: Related tickers: Deutsche Bank AG (NYSE:DB), Sony Corporation (ADR) (NYSE:SNE), UBS AG (ADR) (NYSE:UBS)

RENAISSANCE TECHNOLOGIESSimons 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.

Hedge Funds: How They Invest Their $2.4 Trillion War Chest (Forbes)
A well-balanced investment portfolio might contain a mix of stocks, bonds, cash, real estate and what are known in financial circles as “alternative investments.” This last mysterious category includes (among other exotica) 10,000 hedge funds now wielding nearly $2.4 trillion in assets worldwide. Hedge funds have littered the financial pages and gossip rags for years. But how exactly do they put that massive mountain of capital to work? Those answers involve complex calculations larded with Greek letters, but you don’t need a Ph.D. from Harvard to grasp the basics.

James Ind joins GLG’s macro and relative value hedge fund team (Opalesque)
GLG, the discretionary investment manager business of Man Group plc (“Man”), announced the appointment of James Ind to its Macro and Relative Value team. James, who joins from Russell Investments, will assist in the management of a total return strategy which GLG will launch later in the summer. The new strategy will be managed by the Macro and Relative Value (MARV) team headed up by Jamil Baz and Sudi Mariappa and will leverage GLG’s dedicated expertise in fundamental, quantitative and market analysis. James joins GLG after five years with Russell and eight years with Merrill Lynch and Mercury Asset Management. At Russell, James was a managing director and portfolio manager heading the team responsible for the structuring and management of multi asset portfolios with AUM of $6bn, including the flagship Multi Asset Growth Strategy.

Convicted hedge fund manager losing $2M tax refund (Wtnh)
Federal prosecutors want to make sure a former hedge fund manager convicted of fraud and other charges does not receive a $2 million tax refund. A federal judge has been asked to hold the money in escrow pending the September sentencing of Venezuelan financier Francisco Illarramendi (ee-yah-rah-MEHN’-dee). The Hearst Connecticut Media Group reports that prosecutors say It would be prudent for the court to make sure there is no repeat of Illarramendi’s misuse of funds. They asked a federal judge to order Illarramendi and his wife to deposit the check with the court clerk’s office.

Mutual funds: Lessons from the hedge-fund greats (TheDay)
Entrepreneur Mark Cuban once noted that “the number-one job of the hedge-fund manager is not to make sure that you can retire with a smile on your face, it’s for him to retire with a smile on his face.” So you can imagine that everyone who made the Hedge Fund Hall of Fame when it opened in 2008 was all smiles, fabulously wealthy money managers who, in some cases, had become household names. But the funny thing about the Hedge Fun Hall of Fame – which was not an actual place but an online collection put together by Institutional Investor’s Alpha – is that once the smiles faded, so did the idea. After the original 14 members of the Hall, no one else was inducted.

This Is The Hedge Fund Manager That Knocked David Einhorn Out Of The World Series Of Poker (Chron)
Yesterday David Einhorn was bounced from the World Series of Poker when another hedge fund manager produced two aces to beat his ace jack combo (Einhorn finished in 72 place). So the all-important question there, obviously is — who was that guy? Einhorn was bested by Bill Perkins, founder of Houston-based energy hedge fund, Skylar Capital. Perkins was a protege of legendary (and now retired) oil trader, John Arnold. Originally from New Jersey, he graduated from the University of Iowa with a degree in electrical engineering.

How To Start Your Own Hedge Fund (BusinessInsider)
Sometimes, my interviews on this site don’t turn out quite as expected. I went into this one expecting to title the series of articles “How to Start Your Own Hedge Fund”… By the time we finished our 2-hour long conversation, though, I realized that an alternate title might be more appropriate: “Why You Probably Shouldn’t Start Your Own Hedge Fund” But I’m a “glass half full” kind of guy, so the first title stuck. This will be another multi-part series, and today we’re speaking with Hetty MacIntyre (see her bio on this page), who contributed those first 2 articles on what it’s like to start and run your own fund.

Cohen Won’t Testify Before Grand Jury (Finalternatives)
SAC Capital Advisors ended its “unconditional” cooperation with an insider-trading investigation when federal prosecutors subpoenaed founder Steven Cohen and other executives, and Cohen has made good on the threat. Cohen has declined to testify before a grand jury considering charges against the hedge fund, The New York Times reports. The billionaire’s lawyers have told prosecutors that Cohen would assert his Fifth Amendment right against self-incrimination if called; it is not clear whether Cohen appeared in person to do so.