Hedge Fund News: John Paulson, Julian Robertson, Blackstone

PAULSON & COJohn Paulson gives $100m to New York’s Central Park (BBC)
The gift from John Paulson, of Paulson & Co, is thought to be the largest ever given to a public park. The endowment was announced with New York Mayor Michael Bloomberg at Bethesda Fountain, in Central Park. Mr Paulson, 56, said the park was the “most democratic” of the city’s great cultural institutions, and his gift would benefit all New Yorkers. “John is a man who knows a good investment when he sees one,” said Doug Blonsky, the chief executive of the private conservancy that maintains Central Park, the Associated Press reported. “Central Park is fundamental to the economic and cultural health of New York City and the quality of life of its residents.”

Blackstone targets stakes in hedge fund managers (Reuters)
The Blackstone Group L.P. (NYSE:BX) is preparing to launch a multibillion-dollar fund that will buy stakes in hedge fund managers in the secondary market, as traditional buyers such as banks pull back amid disappointing fund performance and regulation. Blackstone, whose hedge-fund solutions business has $46.2 billion in assets under management, sees an opportunity to provide an exit for banks, insurers and other financial institutions that need buyers willing to take on what are particularly illiquid investments, a source familiar with the firm’s plans said.

Mintz Levin Appoints Fund Formation Expert (PEHub)
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. announced that Adam Gale, the former head of Chadbourne & Parke’s hedge fund practice group, has joined the firm as a member in the Corporate & Securities Section. Based in the New York office, Mr. Gale brings deep experience in the structuring, formation and fund raising efforts of hedge funds and private equity funds as well as providing regulatory and compliance advice to these funds, their sponsors and broker-dealers, banks, and registered investment companies. Additionally, he represents numerous institutional investors in their investments into all fund types.

Hong Kong Rallies to 2012 High (LiveTradingNews)
Economist and Hedge Fund Manager Shayne Heffernan takes a look at Hong Kong trading live from Asia. Hong Kong shares ended 0.31 percent higher after Chinese data indicating the slowdown in manufacturing activity in the world’s number two economy was easing. The Hong Kong Monetary Authority intervened to weaken the value of the Hong Kong dollar Tuesday. The agency sold $1.25 billion in the foreign-exchange market during separate operations during the east-Asia trading day and later during regular New York trading hours, according to an HKMA spokesman.

Omni Hires Ex-Barclays Euro. Equities Head (Finalternatives)
Hedge fund Omni Partners has added Barclays’ former European stock-trading chief to launch a new strategy. Howard Spooner joined the London-based hedge fund last week. He’ll launch a European equities portfolio at the firm, seeded with a small amount from Omni, and will later begin fundraising, Financial News reports. Spooner left Barclays in August after stops at Goldman Sachs, Deutsche Bank and SG Warburg. At several of those firms, including Barclays, he focused on technology, media and telecommunications.

Clifford Chance says it’s time for international hedge fund firms to build a presence in China (Opalesque)
Clifford Chance has published an overview of the law and regulations regarding hedge funds in China. The firm writes that there is no comprehensive legal or universally accepted definition of ‘hedge funds’ in China. “In China, strictly speaking, hedge funds as usually described are not recognised by law”. However, various regulated hedge fund-like financial products have been thriving in the Chinese market for 10 years and, the firm writes, growth has been tremendous. “Generally, they share certain common characteristics, including: being privately offered; requiring investors to have a certain minimum net worth and/or level of financial sophistication; investing in equity securities, fixed income securities, derivatives, futures and other financial instruments; having a perpetual term.”

Concept Capital Markets, LLC honored at HFM Week Awards (Virtual-Strategy)
Concept Capital Markets, LLC earned the “Highly Commended” honor in the Best Boutique Prime Broker – Overall category at the HFM Week US Hedge Fund Services Awards last week in New York. The firm was also a finalist in the following categories: Best Prime Broker –Technology, Best Prime Broker – Capital Introduction, and Best Prime Broker – Consulting Services. …Michael Rosen, co-founder and Managing Member, added, “With a diverse range of experiences and skill sets that include prime brokerage, launching hedge funds, portfolio management, research, sales and trading, clearance and settlement, financial operations, compliance, technology, and customer support, we believe the Concept Capital team is uniquely equipped to understand and anticipate our clients’ needs and preferences.

NY sentence looms for ex-Goldman, P&G board member convicted of insider trading charges (DailyJournal)
A former Goldman Sachs and Procter & Gamble Co. board member convicted of insider trading will serve up to 10 years in prison if the government has its way but will face no more than community service if a judge is persuaded by defense arguments. Rajat Gupta awaits his fate Wednesday for his role in a mammoth insider trading case that prosecutors say was the largest in history. Already, former billionaire hedge fund owner Raj Rajaratnam — a onetime close friend of Gupta originally from Sri Lanka — is serving 11 years in prison for earning up to $75 million illegally. Gupta is among 25 people convicted in the insider trading case that has relied heavily on wiretaps and cooperation from many of the accused.

Double Haven acquires DragonBack Capital (HedgeWeek)
Prior to the acquisition, Double Haven had outsourced its operations, risk and other back office functions to the team at DragonBack. These functions will now all be in-house with the same team joining Double Haven. As a result of the acquisition, the Double Haven group will benefit from the new synergies and efficiencies of having a dedicated operations, risk and back-office team in-house as well as being independently licensed by the Hong Kong Securities and Futures Commission. Darryl Flint, CEO and CIO of Double Haven, and his team intend to continue focusing on Asia credit strategies. The Double Haven Asia Absolute Bond Fund has returned 16.8% as at the end of September and the team intend to launch additional products in the coming months.

MLC adds three managers to new strategy (FinancialStandard)
MLC has added three managers and introduced a new low-correlation strategy to its Horizon Series of portfolios and Long-Term Absolute Return Portfolio (MLC LTAR.) The strategy is a fund of hedge funds and will be managed by the firm’s alternative strategies team. The new managers in the strategy include Bridgewater Associates, which runs a global macro hedge fund, Nephila Capital, which manages a portfolio of insurance-related investments and Balestra Capital, which also runs a global macro hedge fund. Susan Gosling, head of investments for MLC Investment Management said the low correlation strategy will bring greater diversification to the hedge fund strategy in MLC LTAR and take the Horizon Series to the next level.

Where Is Julian Robertson Investing? (CNBC)
With so much uncertainty in the markets, there are plenty of good companies trading at attractive valuations, legendary hedge fund manager Julian Robertson, told CNBC’s “Closing Bell” on Tuesday. “I think our economy and some of the things overseas are having a big effect on investors,” Robertson said. “I think right now a lot of very good investors have become so frightened about what’s going on in Europe and Asia and with QE1, QE2 and QE3, they’ve kind of lost their way and are not realizing that there are an awful lot of marvelous companies available at very reasonable prices.”

Leeb alleges manipulation of gold by major hedge funds (Mining)
Storied investor and financial author Stephen Leeb alleges that major hedge funds have engaged in concerted efforts to manipulate precious metals markets. Speaking to King World News Leeb reported an incident in which a friend witnessed the head of a leading hedge fund issuing orders to staff to engage in willful manipulation of the market: …the instructions the head of the hedge fund was giving to one of his traders was, “Sell it, and sell it stupid. And make sure people just don’t know where the selling is coming from and why it’s coming.”

Picton Mahoney gets into closed-end funds (FinancialPost)
The name Picton Mahoney Asset Management can now be added to the list of money managers who have ventured into the world of closed-end funds, a sector of the market that is trying to recapture the interest of retail, income-oriented investors in a low interest rate world. The firm, which has offices in Vancouver and Toronto and which manages about $6.5-billion worth of assets mostly in hedge funds, has just closed its first such fund, the Picton Mahoney Tactical Income Fund.

Hedge Funds Get the QEIII Blues (ValueWalk)
The implementation of latest dose of Quantitative Easing has benefited some hedge funds, whereas others were hurt by the new monetary policy. While the dollar gained on its position in the first eight months of 2012, the Fed’s new plan brought detraction because of investor fear of even lower interest rates in future. In the hedge fund world, a medium sized fund that was affected by these measures was Pennant Capital Management’s Winward fund, as reported by us a few days ago. Pennant blames the less-than- anticipated growth on the Fed’s policy that assists companies that were already in shambles, instead of those that were previously strong. The fund was up moderately by a +1.32 percent in the third quarter of 2012. The fund lost on its longs in Tripadvisor Inc (NASDAQ:TRIP), Fidelity National Information Services (NYSE:FIS), and WellPoint, Inc. (NYSE:WLP). The short portfolio losers were Whirlpool Corporation (NYSE:WHR), Fusion-IO, Inc. (NYSE:FIO), and Neustar Inc (NYSE:NSR). The Pennant Capital Management’ fund’s total AUM exceeded $4.2 billion by the end of the June quarter.

US Stocks Could Fall 20%: Marc Faber (CNBC)
The S&P 500 and Dow Jones Industrial Average could plummet 20 percent from their recent highs, veteran investor and author of the Gloom, Boom and Doom report, Marc Faber, told CNBC. “I believe globally we are faced with slowing economies and disappointing corporate profits, and I will not be surprised to see the Dow Jones [.DJI 13102.53 --- UNCH ], the S&P [.SPX 1413.11 --- UNCH ], the major indices, down from the recent highs by say, 20 percent,” Faber said on Tuesday. “That is not a big decline. If you can’t take a 20 percent decline, don’t get out of your bed in the morning,” he added.

Lasky among Icahn nominees (Vertikal)
Carl Icahn has said that ex JLG chief executive Bill Lasky will be among the list of directors he is trying to get onto the Oshkosh board as part of his attempt to take over the business and break it up. Icahn’s so far informal offer is conditional on shareholders first agreeing to elect his list of directors in order to give him control of the board. He is the largest single shareholder, but only owns 9.45 percent of the outstanding shares. He says that he will offer to buy the business at $32.5 per share in cash. See Icahn bids for Oshkosh…

BNY Mellon Names Head Of Sales For Asset Servicing In The Americas (HereIsTheCity)
Lewin will report to Samir Pandiri, CEO of Americas Asset Servicing & Alternative Investment Services. She will be based in New York, managing teams in several U.S. cities, as well as Dublin, London and Hong Kong. In addition to her new role, Lewin will continue to lead global sales for the company’s Alternative Investment Services (AIS) group. BNY Mellon brought together its two investment services businesses – global custody and hedge fund administration – earlier this year.

Hedge Funds Belt Few Home Runs (WSJ)
They are the few. The proud. The hedge-fund managers making a killing this year. David Tepper’s firm was up about 25% through Friday, partly from a bet Europe will avoid a meltdown. Steve Mandel’s firm gained nearly as much from soaring consumer and technology stocks. Pine River Capital Management rose 30% thanks in part to subprime mortgages, as did Josh Birnbaum’s Tilden Park. And the Barnegat Fund has climbed over 39% with a debt strategy that the manager concedes isn’t for the faint of heart. The big gains, as reported by fund investors and people familiar with the firms, come …

New York Hedge Fund Rocktoberfest a Success (HedgeCo)
The Ninth Annual Hedge Fund Rocktoberfest in New York City had approximately 1,200 guests in attendance, making the event was the charity’s most successful to date. Hedge fund managers and hedge fund industry professionals performed music to raise money for ALTSO, which provides prosthetic limbs and corrective, life-altering surgeries to children with limb disabilities in developing market countries. Special guests included former Knicks player John Starks, actors Federico Castelluccio, James McCaffrey, Ice-T and his wife Coco, and David Hudson, the musician and ambassador for Wall Street Rocks.

Regulatory concerns in private equity fund valuation (PIOnline)
Investment adviser registration, as mandated by the Dodd-Frank Act, has led to increased scrutiny of hedge fund and private equity investment managers. By most accounts, the Securities and Exchange Commission has given greater concern to hedge funds over the past several years, but it increasingly appears that private equity will receive more regulatory attention going forward. In March 2012, Robert Kaplan, former co-chief of the asset management unit of the SEC’s Division of Enforcement, asserted that “private equity law enforcement today is where hedge fund law enforcement was five or six years ago.” The number of SEC enforcement actions against private equity managers has been a fraction of its actions against hedge fund managers. This discrepancy is due in part to the SEC and Department of Justice’s focus on insider-trading cases, which, because of their nature, are less of an issue for private equity managers. In its efforts to expand private equity law enforcement, the SEC has provided an indication of where it is directing its scrutiny.

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