Editor’s Note: Related tickers: Sony Corporation (ADR) (NYSE:SNE), Linn Energy LLC (NASDAQ:LINE), Berry Petroleum Company (NYSE:BRY), Goldman Sachs Group, Inc. (NYSE:GS), Comcast Corporation (NASDAQ:CMCSA), SandRidge Energy Inc. (NYSE:SD), Dell Inc. (NASDAQ:DELL)
Cooperman: ‘We Have Done Our Homework’ on Linn Energy (TheStreet)
Leon Cooperman of Omega Advisors said on CNBC the $8.4 billion hedge fund has done its homework on Linn Energy LLC (NASDAQ:LINE) and remains an investor in the embattled oil and gas driller. In a midday Wednesday CNBC interview, the hedge fund investor also referenced a positive conversation with management of Berry Petroleum Company (NYSE:BRY) about the firm’s proposed stock merger with Linn Energy LLC (NASDAQ:LINE). Cooperman said he spoke with Berry Petroleum Company (NYSE:BRY)’s chief executive Martin H. Young and that the company remains committed to its merger with Linn Energy LLC (NASDAQ:LINE). Omega Advisors isn’t concerned with how Linn Energy LLC (NASDAQ:LINE) accounts for a hedging program the firm has in place to reduce its exposure to volatile energy prices, Cooperman said. The former Goldman Sachs Group, Inc. (NYSE:GS) Asset Management head estimates Linn Energy LLC (NASDAQ:LINE)’s net asset value (NAV) at about $40 a share, well in excess of the company’s current price.
Loeb Must Deliver More Sony Details (WSJ)
Dan Loeb‘s story on Sony Corporation (ADR) (NYSE:SNE)‘s 6758.TO -0.10% entertainment business suffers from some serious plot holes, at least as he’s told it so far. Mr. Loeb, a U.S. hedge-fund investor, has argued in two letters to the company that a separate listing for the music and movies unit will improve efficiency—in other words, reduce costs and raise margins. That’s a worthwhile goal. Sony Corporation (ADR) (NYSE:SNE)’s film unit had a 6.5% operating-profit margin in its last fiscal year, compared with 12% at Walt Disney’s DIS -1.49% film studio and NBC Universal, a unit of Comcast Corporation (NASDAQ:CMCSA) -0.45% . …Beyond those high-level changes, though, Mr. Loeb has offered little detail on how to bring costs down. Meanwhile, Jefferies notes that structural issues constrain Sony Corporation (ADR) (NYSE:SNE)’s margins compared with those of its peers.
Smaller funds-of-hedge-funds beat larger peers on growth (eFinancialNews)
More than half of the fund-of-hedge-fund firms surveyed by Casey, Quirk & Associates and BNY Mellon, or 53%, increased both revenue and assets under management in the three years between 2010 and 2012, compared with 47% that did so from 2009 to 2011. Smaller firms, defined as those with less than $5bn in assets, have grown the fastest since the global financial crisis of 2008, according to the report, followed by midsize firms – those with assets between $5bn and $12.5bn. Large firms have not fully recovered – their assets and revenue are still below the 2008 level, the report said. In aggregate small firms were 40% larger in 2012 versus 2008, while large firms were 20% smaller.
Hedge fund technology develops across the value chain (HedgeWeek)
Getting the right technology solutions in place for today’s hedge fund manager is a pressing concern. Tighter trade margins and growing regulatory/compliance costs are hardly conducive to ramping up a hedge fund’s annual IT budget. Where possible, they need cost-efficient solutions for their technology infrastructure, yet at the same ensuring the highest standards are being upheld. One significant push in recent times has been a concerted focus on developing truly integrated front-to-back platform solutions for the buy-side. From portfolio construction and analytics, pre-trade risk assessment, through to order and execution management, reconciliation and reporting, getting a single consolidated version of the truth, based on the same consistent data set, is fast becoming a top priority.
Brevan Howard hedge fund hit by emerging market slide (Reuters)
Brevan Howard‘s emerging market hedge fund, one of the world’s largest, is nursing big losses after the recent sell-off in developing market stocks, bonds and currencies, two sources who have seen the numbers said. The $2.7 billion (1.7 billion pound) Emerging Market Strategies Fund, run by Geraldine Sundstrom, is down 11.6 percent to June 14, the sources said. This includes a 4.8 percent drop this month. The losses are big for Brevan, a $40 billion firm that prides itself on stringent risk controls. Its flagship Master Fund, for example, has never had a losing year since launching in 2003.
Hedge fund technology becomes mainstream (HedgeWeek)
Hedge funds are well known for developing advanced technology solutions that meet exacting standards and demanding requirements. Now, as their sophisticated investment strategies enter the mainstream, there is also a need for technology solutions to become more mainstream. Two decades ago, when derivatives trading was still rare, hedge funds needed accounting systems that could help them understand their notional exposures, monitor leverage and liquidity, manage collateral and counterparty risks, and value complex instruments.