Hedge funds Kleinheinz Capital Partners Inc., and Corriente Advisors have respectively sent letters to their investors to inform them of their decision to close shop and return their money, media reports indicated. In a report by Bloomberg, the Fort Worth, Texas-based Kleinheiniz Capital which was founded by John Kleinheinz, said the hedge fund was about 65% “through the process” of liquidating its position and will return investors’ money because of declining profits. Kleinheiz told investors in his letter, “I am not enjoying running the fund as much as I used to. Managing a fund like ours requires me to do a lot of things that make me a less effective investor.”
After making billions, one of America’s richest lands at the centre of insider trading probe (Macleans)
Whether it’s making investments, collecting art or bidding for sports franchises, Steven A. Cohen has few rivals. Cohen’s hedge fund manages $14 billion in assets. His own net worth is more than $8 billion. He’s bought Picassos, Monets and Pollocks. And he recently picked up a piece of the New York Mets baseball team. But the good fortune of one of the country’s wealthiest men has come at a price: an epic legal battle with his ex-wife that offered an unwelcome look behind the scenes of his lavish lifestyle and, most recently, a brewing insider trading scandal capable of toppling his empire.
SunGard Launches Apex Prime for Single View of Hedge Fund Activity (WatersTechnology)
SunGard has released Apex Prime to help prime services providers with day-to-day processing and client services. Apex Prime is a new platform that presents prime services providers with a single view of hedge fund client activity by combining data held in fragmented systems and spreadsheets. The platform enables firms to manage trade exceptions, view security and cash positions, support flexible margining rules, calculate financing costs and generate consolidated billing and automated client reporting, says Craig Costigan, executive vice president and general manager of SunGard’s capital markets business.
Crunch time for alternative fund administrators (AsianInvestor)
Asia’s alternative fund services industry is in a state of flux, with newcomers catering to small, indigenous funds while consolidation and cost-cutting is taking place at larger providers. Administrators focusing on hedge funds are particularly vulnerable, as their income is directly tied to the AUM of their clientele. Total Asian hedge fund assets are at about $145 billion and have not yet recovered to the high of $192 billion recorded at the end of 2007. Underlining the issue are the recent departures of Andrew Gordon from BNY Mellon, where he was head of alternative and broker-dealer services for Asia-Pacific, and Stewart Bent from Credit Suisse’s prime fund services business unit in the region.
Hedge Fund Profile: Tiger Global Management (Benzinga)
In early 2012, Bloomberg profiled one of the newest, and youngest, members of the hedge fund gilded set. At just 37 years-of-age, Tiger Global Management’s Chase Coleman III finds himself among an elite set of billionaire Wall Street money-managers. Even in this rarefied company, his pedigree and track record stand out. Bloomberg confidently described Coleman as being “as close as one gets to American aristocracy.” The New York native’s privileged background provided Coleman with plenty of opportunity, but it doesn’t fully account for his staggering success. Since launching his fund at the age of 25, he has proven to be a preternaturally talented investor.
Owning hedge funds (IPE)
Pension fund investors like to complain about hedge funds. Sometimes they complain about transparency, sometimes about performance. But pretty much all the time they are complaining about fees. Progress is being made, but even so, some investors decided long ago that if they can’t beat the hedge fund industry they should join it – not by setting up in Mayfair themselves, but by buying equity stakes in hedge fund businesses and sharing the revenues. This has long been the model of several ‘seeding platforms’, which offer seed capital and operational infrastructure to start-up funds, often in exchange for a stake.
For Argentina holdout fund, a decade’s pursuit may pay off (Reuters)
Investing in distressed debt isn’t supposed to be a smooth ride. Until earlier this week, U.S. hedge fund Elliott Management had seemed close to victory in its near decade-long legal battle with Argentina over the country’s defaulted debt. Then, the latest courtroom twist on Wednesday pushed the case into 2013, giving Argentina precious breathing space to rethink its strategy. Elliott – founded by publicity-shy billionaire Paul Singer – remains confident its strategy of blocking Argentina’s every escape route with lawsuit after lawsuit will pay off. “The momentum slowed but it doesn’t change the court’s ruling in Elliott’s favor,” said a source close to the fund who requested anonymity.
Quant fund launches at record high (FT)
Trend-following quantitative “black-box” hedge funds are accounting for their highest-ever proportion of hedge fund start-ups, despite weak returns since the financial crisis. A record 187 quant, or algorithmic funds, launched last year and account for 12 per cent of all hedge fund start-ups, another record, according to Preqin, a data provider whose figures go back to 2000. Preqin said it expected this year’s tally to be higher still; launches in the first quarter of 2012 were up 40 per cent from last year and it has recorded 95 quant fund start-ups in total so far this year, even though its data typically lags by six to nine months.
Hedge fund action halves foreign ownership in Telus (Canada)
TELUS Corporation (NYSE:TU) said Friday that its level of foreign ownership has been halved, largely due to the U.S. hedge fund it has been battling for months selling off its stake in the telecom company. Telus said its non-Canadian ownership is roughly 15 per cent as of Nov. 16, down from almost 33 per cent last summer. Large Canadian telecom companies can’t have foreign ownership levels that exceed 33.3 per cent. Telus has been embroiled in a fight with New York-based Mason Capital Management over its plan to convert the telecom company’s non-voting shares into voting shares on a one-for-one basis without a special premium. Mason had owned almost 20 per cent of Telus.
Energy Hedge Fund Springs From Bank Alumni (ELP)
Three natural gas and power traders who had worked for JPMorgan Chase & Co. (NYSE:JPM) and Barclays PLC (NYSE:BCS) have teamed up to start a fund trading in gas and power markets starting in January. Stamford, Conn.-based Cogent Energy Investment Management LLC has three principals: Fletcher Sturm, Robert Benson and Frank Ermis – all Enron alumni, according to a report in the online publication SparkSpread.com. Mr. Sturm is listed as a principal in the fund, according to documents filed with the Connecticut Secretary of State, and had previously worked at Barclays trading gas.
Sprightly Young Hedge Funds: Older Isn’t Always Wiser (Barrons)
Investors are more impressed by a hedge fund’s size and age than its returns, judging by a recent study. Researchers at PerTrac first compared cumulative returns of funds with less than $100 million in assets and those running $500 million or more from 1996 and 2011. The smaller funds had a cumulative return of 558% in that time, versus 307% for the bigger ones. Despite the disparity, investors continue to throw money at bigger funds: Just 7.5% of hedge-fund managers controlled nearly three-quarters of the estimated $1.9 trillion in industry assets as of June.
Georgian President adopted the founder of Soros Foundation (Trend)
Georgian President Mikheil Saakashvili adopted on Sunday the founder of network of charitable organizations Soros Foundation, world-famous financier and philanthropist George Soros in House of Justice in Tbilisi. Soros acquainted with Georgian know-how and has expressed interest in this innovation. During his visit to Georgia on Saturday Soros met with Prime Minister of Georgia Bidzina Ivanishvili.
Investment whiz Rogers on Geo Energy’s board (BusinessTimes)
GEO Energy Resources appointed commodities-investment guru Jim Rogers as a non-executive director with effect from Monday. Mr Rogers, who has resided in Singapore since mid-2007, made his name as the research head of Quantum Fund, which he co-founded with George Soros in the 1970s. He also designed the Rogers International Commodity Index, a broad composite of commodity futures.
Falcone, Harbinger seek dismissal of SEC charges (Reuters)
Hedge fund manager Philip Falcone on Friday asked a federal judge to dismiss U.S. Securities and Exchange Commission charges accusing him of market manipulation, giving preferential treatment to certain investors and borrowing cash from his own fund to pay his personal taxes. The billionaire, who was sued in U.S. District Court in Manhattan in June, said government regulators had no evidence that he had deceived investors or acted outside of the law.
Brazilian Ex-Banker to Pay $5.1 Million for Insider Trading in Burger King Stock (SEC)
The Securities and Exchange Commission today announced insider trading charges against a Brazilian ex-banker for his role in a scheme to illegally trade Burger King securities. The SEC previously charged a Brazilian citizen working in the Miami office of Wells Fargo with tipping him the inside information. The SEC alleges that Igor Cornelsen and his firm through which he made trades – Bainbridge Group – reaped illicit profits of more than $1.68 million by trading Burger King options based on confidential information ahead of the company’s September 2010 announcement that it was being acquired by a New York private equity firm.
Caxton Vet. Launches $240 Million Hedge Fund (Finalternatives)
A former Caxton Associates trader has launched a hedge fund of his own with $240 million in initial capital. Daniel Lascano’s Lomas Capital Management launched its maiden hedge fund last month. The fund is a U.S.-focused long/short equity vehicle.
SEC Charges Connecticut-Based Business Executive with Insider Trading During Bidding Process (SEC)
The Securities and Exchange Commission today charged a Connecticut-based business executive with insider trading ahead of the sale of Patriot Capital Funding Group based on nonpublic information he learned at the helm of a firm involved in the bidding process. The SEC alleges that I. Joseph Massoud, who founded investment advisory firm Compass Group Management, gained access to nonpublic information contained in an online “dataroom” where bidding companies could learn more about Patriot Capital’s financial condition.
What has gone wrong with hedge funds? (CBSNews)
The $2 trillion hedge fund industry has taken quite a battering of late. According to HedgeFundResearch.com, the average hedge fund is up only 4.5 percent year to date through October. This is less than half of the 10 percent return of the balanced traditional 60 percent stock/40 percent bond in low-cost index funds. The funds have shown the same dismal performance over last five years compared with the same indexed portfolio. …Hedge funds come in a variety of flavors, but I explain the concept to my students as follows. I take a student’s book and pretend he is willing to sell it to me for $20 while the student next to him is willing to buy it for $21. As the hedge fund manager, I take advantage of this arbitrage opportunity and pocket the buck without taking any risk.
Einhorn’s Greenlight Cranks Up Market Exposure, Posts 10 Percent Gain YTD (InstitutionalInvestorsAlpha)
Who’s afraid of the stock market? Not David Einhorn, the widely watched and frequently imitated hedge fund manager, who has dialed up his exposure to the equity markets over the past few months. The position hasn’t hurt Einhorn’s flagship long-short equity fund at Greenlight Capital, which was essentially flat in November, losing a mere 0.5 percent for the month; it is still up 10 percent for the year. While many managers have taken down their exposure to the markets, Einhorn is getting more bullish. As of the end of November, Greenlight’s investment portfolio was roughly 118 percent long and 72 percent short, compared with being 100 percent long and 73 percent short at the end of October and 96 percent long and 70 percent short at the end of September…
Advisers Bullish on Energy Sector in 2013 (WSJ)
Breakthrough technologies are making the U.S. dramatically more energy competitive, an advancement expected to bring tremendous investment opportunities in the sector. Betting on expanding U.S. oil and natural-gas industries also can offer a hedge against inflation and substantial tax benefits. Many investors paralyzed by the looming fiscal cliff may now be overlooking opportunities that will potentially drive U.S. growth into 2013, the energy sector among them, said Hank Herrmann, chief executive of Ivy Funds.
