Loeb, Cooperman Stand Out in Horrid Year for Hedge Funds (CNBC) Dan Loeb's Third Point was the clear hedge fund standout in a horrible year for the industry as almost nine out of 10 managers underperformed the S&P 500. Omega Advisors' Leon Cooperman also scored big. Loeb — once better known for his acerbic letters to CEOs — used an activist position in Yahoo and the contrarian buying of Greek bonds to drive the firm's flagship fund to a 21 percent gain in 2012. The firm's more-leveraged Ultra fund posted an even bigger 34 percent return. "Among his many talents, the one that I appreciate in Dan is his adaptability and ability to learn and evolve," said SkyBridge Capital's Anthony Scaramucci, who holds one of the largest gathering of hedge fund investors every year in Las Vegas. (Loeb is a speaker.) "This is the main reason in my mind why he has become one of the world's greatest investors."
Dow Jones Credit Suisse Core Hedge Fund Index up 0.99 per cent in December (HedgeWeek) The Dow Jones Credit Suisse Core Hedge Fund Index closed up 0.99 per cent in December as each of the seven index component strategies reported positive results for the month. Event driven (2.14 per cent) and emerging markets (1.34 per cent) led the way, while the worst performers were managed futures (0.15 per cent) and convertible arbitrage (0.49 per cent).
China to license foreign shops to expand hedge fund industry (Opalesque) The Chinese government continues to embrace the expansion of its local hedge fund industry. Hubert Tse, a partner at the Shanghai-based law firm Boss & Young, announced that the Shanghai Municipal Financial Service Office is expected to launch the qualified domestic limited partner (QDLP) pilot program in the next few months and issue its first license. This is good news for hedge fund managers as China’s regulators are soon to allow foreign hedge funds to set up shop in Shanghai, China’s second largest city.
Pundits predict brighter prospects for hedge funds in 2013 (Opalesque) After a disappointing year in 2012, hedge fund managers are hoping for brighter prospects this year with many of them forecasting better returns for most strategies, reported Pensions & Investments. The report quoted Kenneth J. Heinz, president of the Chicago-based Hedge Fund Research Inc., "Because of all the uncertainty in the world right now, investor risk tolerance is very low, including hedge fund portfolio managers, but even if all the uncertainties aren't resolved early this year, there will be more clarity about what is going to happen globally. That will encourage many hedge fund managers to be less risk averse than they have been."
Odey Raising Chicken Coop Bets on Banks as Hedge Fund Yields 24% (SFGate) Crispin Odey is fumbling around a storage room in a Georgian town house in London’s Mayfair district, home to Odey Asset Management LLP, his $7 billion hedge-fund firm. Clattering through old computers, boxes of books and forgotten oil paintings that lent a genteel air to his offices, he’s fishing for the book that shows he was one of the earliest investors to spot the financial crisis, Bloomberg Markets will report in its February issue. Odey emerges from the room brandishing “Crunch Time for Credit?,” a 250-page report he commissioned and had published in 2005 charting the emergence of a credit bubble and predicting a market collapse.
SEC staff preview top hedge fund enforcement trends for 2013 (HedgeWeek) In a recent speech before the Regulatory Compliance Association, Bruce Karpati, chief of the Securities and Exchange Commission’s enforcement division’s asset management unit, suggested where the SEC may be heading regarding hedge fund oversight in the months to come. Karpati both highlighted the SEC’s past enforcement activity concerning hedge funds (including several cases where the SEC alleged funds fraudulently overvalued their holdings) and signalled that the SEC’s emphasis on such activity will continue.
Amid the Latest Criticism, Herbalifers Stay Resolute (WSJ) When hedge-fund manager William Ackman unveiled his 334-slide presentation alleging that Herbalife Ltd. (NYSE:HLF) HLF +1.76% is a pyramid scheme, it did nothing to shake Joanne Clare. The 38-year-old Staten Island mother of three has been selling the company's weight-loss products and supplements since 2004, when she says they helped her drop from 210 to 160 pounds in four months. She now sells as much as $3,500 a month of Herbalife products to her 30 clients and the two distributors in her "down line."
Compuware bid becomes high-stakes chess match (CrainsDetroit) Will Compuware Corporation (NASDAQ:CPWR)'s measured approach to the takeover bid launched last month work against a hedge fund company used to playing hardball and getting its way? Compuware engaged two New York City investment banks and a New York law firm to advise its board of directors on how to react to the $2.3 billion offer by New York-based Elliott Management Corp. A formal response is unlikely before Jan. 22, when Compuware releases its next earnings report.
Don’t rule out hedge funds in portfolio (RecordNet) Do hedge funds belong in your portfolio? I have long preached that investors buy no-load, low-cost index funds. So why write about hedge funds? For one thing, "hedge fund" is one of those terms one comes across constantly in the media. If you've never been sure what one is, this column should help. And if you're somebody who has pondered adding a hedge fund to your portfolio - and there are a lot of people who have the appropriate net worth to do so - what follows might help you determine whether to do so.