John Paulson Doubles Down (WSJ) Hedge-fund manager John Paulson famously made nearly $4 billion in 2007 correctly betting that the housing bubble, fueled by the subprime mortgage market, would pop. Then the billionaire investor somewhat reversed course, arguing that the housing cycle had hit a low point. "If you don't own a home, buy one," he said in a 2010 speech at the University Club in New York. "If you own one home, buy another one, and if you own two homes, buy a third and lend your relatives the money to buy a home." So far, that bet has been a loser: The Wall Street tycoon lost about $3 billion personally in 2011, according to people close to the hedge-fund manager, speculating that the economy would recover faster than it did.
Bailout, Delphi take center stage in Romney charge in 'Nation' (Vindy) A left-wing magazine contends Mitt Romney, the Republican presidential nominee, and his wife, Ann, made at least $15.3 mil- lion from the auto bailout and federal loans given to Delphi. The Nation, a liberal magazine, published a lengthy online article Thursday outlining what it contends are benefits Romney collected from a hedge-fund company that received bailout money. Democrats were quick to pounce on Romney. Chris Redfern said the report shows Romney and deep-pocket campaign donors reaped profits through a series of investments and business moves involving Delphi, the auto-parts supplier for General Motors.
Morningstar Reports Hedge Fund Performance for September, Asset Flows Through August (Webwire) Morningstar, Inc. (NASDAQ:MORN), a leading provider of independent investment research, today reported preliminary hedge fund performance for September 2012 as well as estimated asset flows through August. The Morningstar MSCI Composite Hedge Fund Index, an asset-weighted composite of nearly 1,000 hedge funds in the Morningstar Hedge Fund database, rose 0.7% in September, ending the third quarter up 3.0%. “Global equity markets rallied on the back of monetary easing steps taken by central banks" said Terry Tian, alternative investments analyst with Morningstar. "Equity-focused hedge funds were the biggest winners in September.”
Coming to Asia to work in a hedge fund? Stay at home! (IPE) There’s enough supply of staff to keep Asian hedge fund rosters full, and even in Asia, the street has no shortage of senior professionals out of work and keen to get back in. It’s fair to say there are fewer hedge fund jobs this year than there were last year., or at any time since 2008. While some high performing funds have increased in size, they keep a close eye on headcount and don’t make hiring decisions lightly. Relocating to Asia is especially attractive for Europeans, because unlike for Americans, there isn’t global taxation and so Asia’s low tax rates are very attractive. However, it won’t be easy if you haven’t worked in Asia, or have friends who can put in a good word for you to be hired as their new colleague.
Indian iron ore mining mess - TCI converts legal case with Coal India akin (CoalGuru) Business Standard reported that about 650,000 shareholders of state owned miner Coal India will now have a stake in The Children's Investment Fund’s legal battle against the central government, Coal India’s largest shareholder and directors of the company. The Calcutta High Court has approved a request by the British hedge fund to make the case representative of all shareholders. The court has also directed The Children's Investment Fund to issue newspaper advertisements explaining the nature and details of the lawsuit to the shareholders. Institutional investors including TCI, hold some 7.3 % in Coal India, while companies and retail investors hold 2.7%. The Centre holds the 90%.
Investors still putting money into emerging markets despite tepid performance (Opalesque) Middle East and Africa focused funds have been one of the best performing sub-sectors of the hedge fund industry in 2012, according to new data from eVestment. Emerging markets strategies outperformed in Q3 2012 with those investing in the Middle East & Africa posting the second largest gains among the group, +8.22% (India +23.28%). By comparison global EM strategies were up +3.42% and the hedge fund aggregate was up +2.78%. For the year, Middle East and Africa focused funds are up 15%, putting the group well ahead of many other hedge fund strategies this year. The regions are also consistently gathering assets, which make them a standout relative to other emerging markets which have seen more tepid inflows. South Africa focused funds have been a standout among EM in 2011 & 2012 producing relatively good aggregate performance in periods when their country’s equity markets were negative and when rising; +9.0% in 2011 & +13.8% in 2012.
Axiom Mining's A$1.75m placement attracts New York fund Drake Private Investments (ProactiveInvestors) Axiom Mining Limited (ASX:AVQ) has used a private placement to secure A$1.75 million at A$0.03 per share from sophisticated and professional investors, which will be used for key development work on Isabel Island. The placement includes an additional commitment of $1 million from New York hedge fund Drake Private Investments LLC. Highlighting the support for Axiom in the placement, the new shares were issued at a premium to yesterday’s closing price. There is also a one for four attaching option with a $0.03 strike price expiring on 30 October 2014.
Gravitas Named “Best Overall Technology Firm” by HFM Week (Virtual-Strategy) Gravitas, a co-sourcing platform providing technology, risk support and business consulting to the alternative investment industry has been named Best Overall Technology Firm in HFMWeek’s prestigious annual US Hedge Fund Services Awards. “Being recognized by HFMWeek is a great honor and a testimony to the unfailing commitment and dedication of everyone at Gravitas to providing clients with a level of service that continually exceeds expectations,” said Jayesh Punater, CEO of Gravitas. “In an investment world that’s increasingly reliant on technology as being integral to the efficient operation of a business, it’s rewarding to see our efforts publicly acknowledged.” HFMWeek's US Hedge Fund Services Awards are designed to recognize companies that have outperformed their peer group over the course of the year.
Newton native trades hedge funds for muffins (Wickedlocal) Newton native Ben Gifford used to work for a hedge fund that manages billions of dollars for foreign governments, universities, pension funds and central banks. Now, he is managing muffin orders for his on-the-go bakery, Double or Muffin, and loving the change. After a year and a half working at the hedge fund Bridgewater Associates, Gifford decided macroeconomics wasn’t for him. A 2006 Newton South graduate, Gifford thought back to a conversation he had during the summer of 2010 with his friend Sean Pears while waiting in line for coffee at Lincoln Street Coffee in Newton Highlands.
Hedge-Fund Manager Efrosman Pleads Guilty to Currency Fraud (SFGate) Aleksander Efrosman, the fund manager who fled the U.S. after being accused of swindling clients, admitted to running a scheme to cheat investors out of $5 million, including $3 million he spent at a casino. Efrosman, 50, pleaded guilty today to wire fraud before U.S. District Judge Nicholas Garaufis in Brooklyn, New York, prosecutors said in an e-mailed statement. Efrosman, who controlled foreign-currency hedge funds Century Maxim Fund Inc. and AJR Capital Inc., had faced mail-fraud, wire-fraud and money-laundering charges.
Pennant’s Winward Fund up 13% Assisted by Shorts in AMD, SWY & CIEN (ValueWalk) Pennant Capital Management LLC’s Winward hedge fund has returned 1.32 percent in July. The hedge fund reported a positive return of 0.62 percent and a negative return of 0.42 in August. By September, the firm managed to recoup the losses during the previous month and posted a positive return of 1.12 percent. Winward’s return this year was 12.59 percent, higher than the 5.42 percent of the S&P 500. Since 2001, the Fund grew by 158.28 percent. Pennant Capital Management LLC explained that the return during the quarter was impacted by their conservative net exposure. In addition, the markets experienced sudden growth as investors’ confidence rose in response to the actions of the ECB and Federal Reserve, in stimulating the global economy.
BlueCrest overhauls $620 million "black box" hedge fund (Gnom) BlueCrest Capital, one of the world’s biggest hedge fund firms, has overhauled the way it trades in one of its computer funds, a source said, sending a powerful signal that some ‘black box’ programs controlling billions of assets may be broken. BlueCrest, which manages $33 billion, has designed five new programs from scratch for its BlueMatrix fund, said the source familiar with the matter, after poor returns. The aim is to better play markets that have recently delivered losses to many hedge funds that use computer algorithms to automatically trade assets – a sector that has flourished in the last five years but whose fortunes have waned.
Blackstone Smiles on Q3 Results, But Turns Sour on KKR Issue (ValueWalk) The Blackstone Group L.P. (NYSE:BX) reported its third quarter earnings today. It returned into profit zone, with $621.8 million in profits during the quarter, from a loss in the same period a year earlier. Hedge Fund Solutions, the hedge fund unit of Blackstone, saw a 17 percent increase in the total assets under management, primarily because of the better performance and growth. The hedge fund unit’s composite returns rose 3.3 percent during the quarter and 6.2 percent year to date. During the third quarter, net inflows were $1.7 billion. Blackstone’s private equity unit also showed strong results, with a substantial increase in investment income and performance fees. The value of assets in the private equity unit jumped 7.1 percent in the third quarter. The performance fee increases came from BCP IV, BCP VI, and Blackstone Energy Partners.
Strong Q3 Propels Hedge Funds To Record $2.2 Trillion (Barrons) Hedge fund industry assets reached a new record size, totaling more than $2.2 trillion. That’s according to data from Hedge Fund Research, out today. Hedge funds have expanded to their largest size ever thanks to a strong third-quarter, which helped to overcome tepid demand for the products among investors. Assets grew by $80 billion in the three-month period ending in September, but the lion’s share of asset growth ($70 billion) came from better performance, which dwarfed new investment, which stood at $10.6 billion. The $2.2 trillion in total assets is up from $2 trillion at the end of last year, and more than double the assets invested for wealthy clients in 2005.
Romney’s Hedge Fund: The Bain Bane & Binders Of Women (HedgeCo) President hopeful Mitt Romney came close to admitting to a form of affirmative action when he referred to women he had scanned for placement under his governorship in Massachusetts. During the debates with President Obama, Mitt Romney referred to “binders of women” that he had been evaluating for positions within his internal office. The term has since become an internet joke, missing the deeper sentiment somewhat. However the “binder of women” was provided to Romney and his company by a nonprofit group called the Massachusetts Government Appointments Project, or “MassGAP” for short. MassGAP is a nonpartisan coalition of 25 women’s groups dedicated to what it sees as the underrepresentation of women in top appointed jobs.
Copper Bears Cede to Bulls as Economy Seen Gaining: Commodities (Bloomberg) Copper traders who a week ago were the most bearish in four months are now the most bullish in a year after economic reports signaled accelerating growth from China to the U.S. Seventeen analysts surveyed by Bloomberg said they expect prices to gain next week and four were bearish. A further three were neutral, making the proportion of bulls the highest since October 2011. They were the most negative since June 1 last week. Hedge funds’ bets on a rally are near the biggest in 14 months, U.S. Commodity Futures Trading Commission data show.
Adviser Keeps Nonprofit Funded, Bankers Happy (WSJ) It was fall 2008, and the nonprofit organization got bad news from its bankers: In the wake of the financial crisis, the banks would no longer accept the nonprofit's concentrated position in a portfolio of funds of hedge funds as collateral on an approximately $20 million credit facility. The stakes were high for the nonprofit. More than half of its $50 million in investment assets were tied up in the funds, and it needed the line of credit to maintain daily operations. So the nonprofit's leaders reached out for help from Tim Skelly, the institutional consulting director at Graystone Consulting, a unit of Morgan Stanley (NYSE:MS), in Santa Rosa, Calif.
SEC Charges Trio in ".44 MAGNUM" Investment Scheme (SEC) The Securities and Exchange Commission today charged a purported money manager and two of his chief marketers with defrauding investors in a fake company he created that bore a similar name to what was formerly one of Germany's largest banks. The SEC alleges that Geoffrey H. Lunn of Sheridan, Colo., operated the $5.77 million investment scheme with assistance from Darlene A. Bishop of Odessa, Texas, and Vincent G. Curry of Las Vegas. Lunn portrayed himself as the vice president of Dresdner Financial, a firm whose executives he claimed had connections to Dresdner Bank and was purportedly planning to purchase several other banks to expand its operations.
Hong Kong Firm to Pay $14 Million to Settle Insider Trading Charges (SEC) The Securities and Exchange Commission today announced that a Hong Kong-based firm charged with insider trading in July has agreed to settle the case by paying more than $14 million, which is double the amount of its alleged illicit profits. The proposed settlement is subject to the approval of Judge Richard J. Sullivan of the U.S. District Court for the Southern District of New York. The SEC filed an emergency action against Well Advantage to freeze its assets less than 24 hours after the firm placed an order to liquidate its entire position in Nexen Inc. The SEC alleged that Well Advantage had stockpiled shares of Nexen stock based on confidential information that China-based CNOOC Ltd. was about to announce an acquisition of Nexen.
Andrew Calamari Named Director of New York Regional Office (SEC) The Securities and Exchange Commission today announced that Andrew M. Calamari has been named Director of the agency’s New York Regional Office. Mr. Calamari joined the SEC staff in 2000 and has been serving as Acting Director of the New York office since the promotion of George Canellos to Deputy Director of the Division of Enforcement earlier this year. Mr. Calamari will lead a staff of 400 that includes enforcement attorneys, accountants, investigators, and compliance examiners involved in the investigation and prosecution of enforcement actions and the performance of compliance inspections in the New York region.