Apple has quietly created the world’s largest hedge fund worth $117 billion (Sys-Con)
Apple is not only the most profitable company in the world, but it also now owns the world’s largest hedge fund as well. Zero Hedge reports that Braeburn Capital, a Nevada-based asset management corporation that Apple founded specifically to manage its cash, now has more than $117 billion in assets under management, making it even larger than hedge fund giant Bridgewater that currently has around $100 billion in AUM. As Zero Hedge notes, Apple Inc. (NASDAQ:AAPL) has been very secretive about Braeburn’s investments and activities and has kept the company’s profile decidedly low.
InfraHedge launch boosts managed accounts platform industry assets under management (HedgeFundsReview)
Assets invested in hedge funds via the leading managed account platforms rose 15.9% to $72.8 billion over the year June 2011-June 2012, though a single company accounted for much of this growth. InfraHedge, a State Street-owned hedge fund managed account platform (MAP) launched in early 2011, has raised $7.6 billion from investors despite relatively flat asset growth at many of its rivals, a survey of the leading MAPs conducted by Hedge Funds Review reveals. Total assets invested in the 15 largest MAPs grew to $72.8 billion at the end of June, an increase of 15.9% from $62.8 billion the previous year.
Jana probes for weakness in Agrium’s armour (TheGlobeAndMail)
Jana Partners has a long way to go before persuading Agrium Inc. shareholders that the fertilizer maker needs to be broken up, but the hedge fund may turn a few heads with its analysis that there is about 50-per-cent upside in the stock. Jana has been working behind the scenes pitching its plan to investors and management for months. On Monday, it unveiled its analysis publicly for the first time. Jana founder Barry Rosenstein laid out his argument at the Value Investing Congress in New York City, a marquee event for value investors to present their best ideas. His 41-page presentation built up to one big number in the finale: $50 a share.
Cantor Fitzgerald Continues Its Expansion In Asset Management (HereIsTheCity)
Bender will be responsible for building an acceleration, incubation and seeding platform that leverages Cantor’s established infrastructure, global distribution and strong capital base. Shawn P. Matthews, Chief Executive Officer of Cantor Fitzgerald said, ‘Marc’s position reflects Cantor’s strategy to expand our footprint in asset management and build-out our service offering for emerging hedge fund managers. We are excited to have Marc on board and expect him to have an immediate and positive impact on the business. With Marc’s substantial experience and diversified network, we will leverage our resources to provide our portfolio managers with comprehensive and world-class capital raising and advisory services’.
BofA Merrill Lynch analysis shows hedge funds are underperforming (Opalesque)
Bank of America Merrill Lynch’s latest market analysis finds that hedge funds are underperforming by 10.9% year-to-date. “We estimate that the global diversified hedge fund index was up 3.04% year-to-date as of September 26, underperforming the S&P 500’s 13.97%” the firm writes. Based on investable hedge fund indices, Convertible Arbitrage and Event Driven were the best performers, up 5.58% and 4.99%, respectively; Market Neutral performed the worst and were down 5.31%.
Telus claims ISS as ally against Mason (VancouverSun)
Telus Inc. says it has again received the backing of a leading independent proxy advisory firm in its fight with U.S. hedge fund Mason Capital Management over the company’s dual share structure. In a statement issued Monday, Telus quotes Institutional Shareholder Ser-vices Inc. as backing management’s proposal that non-voting shares be exchanged for common shares on a one-for-one basis.
Amid soft returns, hedge funds return to roots (eFinancialNews)
The industry looks set to lag behind stock markets for the fourth consecutive year. Over the three years to the end of August, the average hedge fund has gained 3.21% a year, according to Hedge Fund Research. Behind the diminished returns? The kind of staid institutions that hedgies once tried to be an alternative to. Two-thirds of assets in the $2.1 trillion hedge-fund industry are now owned by institutional investors, compared with less than a fifth 10 years ago, according to Deutsche Bank prime brokerage.
Hedge fund returns worsen: Is enormous unraveling near? (MoneyControl)
The more stocks rise, the further behind hedge funds fall-with the industry now lagging market returns by double-digit percentage points. Though hedges actually have attracted more investor cash this year, the bulk has gone to bond funds and away from equities, even though the Standard and Poor`s 500 is up a robust 14 percent so far in 2012. As a result, hedge funds have returned just 3 percent year to date, though assets under management have swelled to USD 2.56 trillion, according to eVestment, a data firm that tracks the industry.
Fund Rating: Flawed metrics (MoneyLife)
It was discovered recently that Morningstar, a top fund rating agency, had given a 5-star rating to a hedge fund involved in a fraudulent Ponzi scheme. Life’s Good STABL Mortgage Fund, run by Robert Stinson, promised to generate double-digit returns for investors—as much as 16% annually—but Stinson is now absconding. Morningstar clearly took the data provided by the fund at face value and came up with its rosy conclusions. Mutual funds are mandated to disclose everything but hedge funds aren’t; therefore, complete information was lacking. India does not have a hedge fund but how reliable are mutual fund ratings? There are three fund-rating agencies. One is Morningstar while the two others are CRISIL and Value Research. Their work suffers from a serious flaw.
AIMA appoints chief operating officer for US office (HedgeWeek)
The Alternative Investment Management Association (AIMA), the global hedge fund association, has appointed Michelle Noyes as the chief operating officer of its New York office. Noyes was most recently the head of international sales and investor relations for BRZ Investimentos, one of the largest independent asset managers in Brazil. While in Sao Paulo, she also served as the Brazil representative for AIMA and established the AIMA Brazil network.
Teen retailer Wet Seal harpoons hedge fund (NYPost)
Hey, Clinton Group, either be a shareholder activist or a day-trader — but not both. Teen apparel retailer Wet Seal yesterday blasted George Hall’s hedge fund for simultaneously attempting to take over its board while day-trading its shares. In a pointed letter to shareholders, Wet Seal slammed the $2.7 billion hedge fund for recent trades, including the sale of more than 127,000 Wet Seal shares in September. “To trade like this during a consent solicitation process in which you are advocating for ‘long-term change’ is strange behavior to say the least, and it shows Clinton Group’s true colors as short-term investors with no long-term commitment to Wet Seal or its shareholders,” Wet Seal said in the letter.
Heat goes up at SAC, manager put on ice (NYPost)
Sac Capital, the hedge fund giant run by Steven Cohen, put portfolio manager Michael Steinberg on paid leave after his former analyst, Jon Horvath, pleaded guilty for his role in an insider-trading scheme, The Post has learned. Steinberg, 40, had been named as an unindicted co-conspirator shortly before Horvath pleaded guilty on Friday and agreed to cooperate with authorities. Steinberg, who works at SAC unit Sigma Capital, didn’t return a request for comment. His lawyer, Barry Berke, declined to comment.
SEI Extends Relationship With Graham Capital Management to Provide Outsourcing Services for Hedge Fund Complex (Sys-Con)
SEI Investments Company (NASDAQ:SEIC) today announced that it has extended its relationship with Graham Capital Management, L.P. to provide operations outsourcing services for the firm’s multi-billion dollar, multi-strategy hedge fund and managed accounts complex. The announcement highlights SEI’s leadership position among managers seeking to deliver a premium investor experience in a complex daily reporting environment.
Hedge Funds Taking on More Risk (InstitutionalInvestor)
Hedge funds have been taking on more risk in their portfolios for more than two months, a good sign that they are buying into the summer market rally, says a new report from JPMorgan Chase. So don’t be surprised if a number of hedge funds report strong gains for the third quarter. Hedge fund performance had been lagging the overall markets for the past two years or so. One of the main reasons: They sharply reduced their risk exposure, afraid to get out in front of price movements given the many macro uncertainties out there, whether they be the European recession, possible break-up of the euro, the U.S. presidential elections, the looming so-called fiscal cliff, possible oil interruption if Israel bombs Iran — pick your favorite fear.
Hedge Fund Group Backs Lehman Trustee’s Appeal Over Sale (Law360)
A hedge fund advocacy group filed an amicus curiae brief Saturday telling the Second Circuit that a New York federal court’s ruling in Lehman Brothers Inc.’s bankruptcy will cause a “substantial loss of confidence” in the capital markets and must be overturned. The Managed Fund Association, which says it represents the global alternative investment industry, takes issue with U.S. District Judge Katherine B. Forrest’s June 5 ruling largely siding with Barclays PLC in its multibillion-dollar dispute with the liquidation trustee for LBI, Lehman Brothers Holdings Inc.’s…
Pershing Square’s Ackman pushes change at P&G (Marketwatch)
Ackman blamed P&G’s senior management for the company’s current troubles, telling an audience at the Value Investing Congress in New York late Monday that the company’s leadership has made mistakes but is motivated to make necessary improvements. Ackman singled out P&G PG +0.13% Chief Executive Bob McDonald, saying he believes the CEO “wants to keep his job” and will move to implement changes to streamline the company’s business. “They are keeping the CEO on a tight leash,” Ackman said.
When Wall Street and Obama Trade Barbs, Does Anyone Actually Mean It? (Observer)
Wall Street, wounded by President Barack Obama’s anti-Wall Street rhetoric, responded with anti-Obama rhetoric: It’s not a new story, but Chrystia Freeland’s story on Leon Cooperman in The New Yorker today does a nice job of bringing it into focus. Mr. Cooperman, child of the Bronx, alumnus of Goldman Sachs founder of the hedge fund Omega Advisors, voted for John McCain in 2008 but didn’t become an impassioned critic of the president until viewing an Obama ad chiding millionaires and billionaires to pay their fair share of taxes.
Splunk shares dive as hedge fund manager calls S.F. offering an ‘undifferentiated product’ (InsideBayArea)
Hedge fund manager Zack Buckley made the case against San Francisco data analytics company Splunk, sending the recently public company’s shares falling on Monday. Buckley, who said he is shorting Splunk shares, told the 8th Annual Value Investing Congress that Splunk has an “undifferentiated product,” faces a potential pricing war and is seeing heavy selling from insiders. Splunk, which listed its shares in April, faces the expiry of a lockup on insider sales in two weeks. Buckley said this could add downward pressure on the stock price, citing similar selling when other recently listed companies faced the same deadline. Buckley said the stock price could be trading at between $6 and $12 a share in the future, far lower than its current price around $35.
Marcato’s McGuire bets on housing recovery by investing in land (Reuters)
Hedge fund manager Mick McGuire is betting on an eventual housing recovery by owning stakes in an aerospace and defense company, a sugar farming conglomerate and a land developer. While investments in GenCorp, Alexander & Baldwin and Brookfield Residential Properties have little in common with one another, they each sit on a mountain of land.
Do Hedge Fund Managers really Love Mitt Romney and Hate Obama? (HedgeCo)
In her piece in The New Yorker, Chrystia Freeland asks why do Bilionaires feel victimized by Barack Obama. Weighing in on the topic over the weekend, bloggers have been speculating on whether Hedge Fundies are rooting for Barack Obama, or prefer that the former Hedge Fund Manager, Mitt Romney is elected as the next President of the United States. Felix Solomon, writing for Reuters, brings some balance into the discussion and suggests that Financiers are the most “alpha of all billionaires” and that “from a purely tactical perspective it makes all the sense in the world for them to go on the offensive against Obama. After all, they might have it good now, but they’d have it even better under Romney.”
George Soros Urges Philanthropists To ‘Invest In Efforts To Improve Achievement By African-American Boys And Men’ (HuffingtonPost)
Billionaire investor and philanthropist George Soros urged charitable foundations on Monday to do more to tackle the crisis facing African American males. A new report released on Monday by Soros’ Open Society Foundations and the New York-based Foundation Center said that black men and boys in the United States do not have access to the structural supports and opportunities needed to thrive.
Carl Icahn’s CVR Energy to Form Refining Partnership (BusinessWeek)
CVR Energy, Inc. (NYSE:CVI), the U.S. oil refiner controlled by billionaire investor Carl Icahn, intends to raise $300 million creating a master-limited partnership for its two plants and related assets after failing to find a buyer. CVR Refining LP would own the 115,000 barrel-a-day refinery in Coffeyville, Kansas, and the 70,000 barrel-a-day refinery in Wynnewood, Oklahoma, as well as oil pipelines, tanks and a fuel- sales business, according to a filing with the Securities and Exchange Commission today. The $300 million amount is a placeholder used to calculate fees and is subject to change.