Hedge Fund News: Mitt Romney, Ricky Sandler, Louis Bacon

Secret Footage of Romney Was Filmed at Estate of Sex Party-Throwing Hedge Fund Manager (GAWKER)
You know that really damaging hidden camera footage of Mitt Romney that’s making the rounds today? Mother Jones’ David Corn has revealed that the tapes come from a fundraiser held at the estate of hedge fund manager Mark Leder in Boca Raton. And while this particular fundraiser may not have been debaucherous, Leder is notorious for his Caligula-esque parties. …The fundraiser at Leder’s estate was a $50,000-a-plate dinner. And Romney’s remarks — heavily derided today — were well received, according to campaign chairwoman Bonnie Re.

Ricky Sandler

Brent crude dips under $114, focus shifts to China (Yahoo)
Brent crude slipped under $114 a barrel in choppy trade on Tuesday, adding to steep losses in the previous session, with some traders saying a hedge fund may be liquidating positions. The losses follow last week’s gains which were fuelled by the Federal Reserve’s open-ended stimulus program, but that rally, which also spurred gains in other commodities, appeared to be losing steam as investors shifted their focus to what China would do next to boost its economy. “In the current environment, China’s economy is likely to be a key focus for investors who have been unsettled by indications that its economy may be weaker than anticipated,” said Ric Spooner, chief market analyst at CMC Markets.

Ex-Nomura Traders Focus on Inflation, Rates at New Hedge Fund (SFGate)
Former Nomura Holdings Inc. traders Borut Miklavcic and Gianluca Squassi will focus on inflation products, interest rates, credit and foreign exchange when they start a hedge fund this year. “The two strategies where we differentiate ourselves most from peers are inflation and macro credit,” Miklavcic, chief investment officer at London-based LindenGrove Capital LLP, said in an e-mailed response to questions. “We trade both directional and relative-value strategies.”

Cayman Islands initiates e-registration for new fund launches (Opalesque)
Cayman Islands’ regulator has introduced an innovative rule that will make new hedge fund launches more efficient and faster. Alric Lindsay, a corporate lawyer, an independent fund director and a director of Lindsay Fiduciary Services, said in a report on Sunday that the Cayman Islands Monetary Authority (CIMA) had introduced e-registration to enable fund managers hassle-free and paperless transaction when launching a new fund. CIMA made the announcement last week and boasted that the new rule would allow fund managers and other service providers to handle less hard copies of documents.

‘Green’ hedge fund Sustainable Resources looking at up to $100m of opportunities in the Philippines (Opalesque)
Newly-launched agro forestry and sustainable resources investment hedge fund Sustainable Resources Fund is looking at possible investment opportunities of up to $100m in agriculture and forestry in the Philippines. Managed by Sustainable Capital Luxembourg S.A. the fund’s advisor, Michael Young was exclusively interviewed by Opalesque. Young, who visited the Philippines recently as part of his Asian tour to do due diligence on prospected projects, revealed he had seen many potential opportunities. He had visited several islands in the country and met with farmers and local businessmen about potential partnership agreements.

Here’s What This Big Hedge Fund Has Been Buying (DailyFinance)
Every quarter, many money managers have to disclose what they’ve bought and sold on “13-F” filings. Their latest moves can shine a bright light on smart stock picks. Today let’s look at the Eminence Capital hedge fund company, with a reportable stock portfolio valued at about $2.9 billion as of June 30. The company is run by Ricky Sandler, who seeks growing companies in growing industries and out-of-favor companies and industries. He also likes to short stocks, when he finds ones he expects will decline. The portfolio’s top holdings, representing nearly 16% of its value, are Google, CME Group, and Abbott Laboratories (NYSE:ABT).

A Mighty Wind: Sizing Up Fund Manager’s Sway (WSJ)
“I’ve got a couple questions for you,” hedge-fund manager David Einhorn told Herbalife Ltd. HLF -2.21% executives in a May conference call for analysts and investors, before prodding them for five minutes about sales practices at the nutritional-supplement company. By the time Mr. Einhorn said, “Thanks so much, guys,” Herbalife’s highflying shares were down 8.8%—and on their way to a one-day slide of 20% that erased $1.6 billion of the stock-market value in the Los Angeles company. Since then, the shares have fallen another 8.7%.

UBS Global Allocation Trust Announces Third Quarter Distribution (DigitalJournal)
UBS Global Allocation Trust (TSE:GAT.UN), an investment trust trading on The Toronto Stock Exchange, today announced that it will make a quarterly distribution of CDN$0.125 per unit, payable on September 30, 2012 to all unitholders of record as of September 30, 2012. It is in accordance with the annual 5% stated distribution as indicated in the prospectus dated February 26, 2004. The investment strategies of UBS Global Allocation Trust are: (i) active global asset allocation across seven asset classes of global stocks and bonds; (ii) active security selection, based on a price/intrinsic value methodology; and (iii) an active global currency overlay.

Bank of America Merrill Lynch: classic market squeeze for EUR and USD underway (Opalesque)
Macro hedge funds have sold the US Dollar to a net short for the first time since June, according to the latest data from lead hedge fund analyst at Bank of America Merrill Lynch Global Research, Mary Ann Bartels. They continue to buy the S&P 500 and NASDAQ 100, while selling commodities, 10 year treasuries and reducing emerging markets exposure. The Euro appears to be in place for a short squeeze, according to the report – “a significant short squeeze could be under way that can take the euro higher than most think possible. The euro held key support at €1.31 and formed a double bottom. It is not impossible for the euro to reach into the low €1.40’s on a squeeze. First level of resistance to challenge is €1.35. Support is €1.25. Amazingly, if our upside projection is reached the long-term trend for the euro would still remain down,” Bartels writes.

Preet Bharara on Busting Insider Traders (HedgeFund)
What do Raj Rajaratnam, Zvi Goffer, and Rajat Gupta have in common? A certain U.S. Attorney named Preet Bharara. The New York federal prosecutor, who played a key role in them going to prison as a result of the most extensive insider trading probe in U.S. history, spoke at the Bloomberg Markets 50 Summit on Thursday. Bharara, one of the honorees on Bloomberg Markets magazine’s 50 Most Influential list this year, was interviewed by Bloomberg News editor-in-chief Matthew Winkler on everything from the use of wiretaps for white collar crime enforcement to cyber crime.

Greenwich Global Hedge Fund Index gains 0.81% in August (+3.7% YTD) (Opalesque)
Hedge fund managers posted positive results in August on average as the Greenwich Global Hedge Fund Index rose +0.81% for the month. Most strategies reported positive returns for August, with the exception of Managed Futures (-0.16%) and Macro (-0.25%) funds. The GGHFI’s gain of +0.81% lagged global equity returns in the S&P 500 Total Return (2.25%), and MSCI World Equity (+2.29%) equity indices. 67% of constituent funds in the GGHFI ended the month with gains.

Polygon Launches Mining Hedge Fund (Finalternatives)
Polygon Investment Partners aims to tap into the recent commodities turbulence with a new hedge fund focused on the mining sector. The London-based firm rolled the fund without fanfare this summer, seeded with internal capital, Reuters reports. The long/short vehicle is led by Mike Humphries and Peter Bell, the latter formerly a mining analyst at MKM Longboat.

Healthcare Hedge Fund Palo Alto Up 26% In Q2 (Finalternatives)
A healthcare hedge fund had a second quarter it won’t soon forget, jumping more than a quarter on the period. Palo Alto Investors rose 26.2% between April and June, Insider Monkey reports. The surge is thanks in no small part to Palo Alto’s largest holding, Onyx Pharmaceuticals, which makes up almost 17% of the hedge fund’s portfolio and which is up 74.5% this year.

BofAML: Hedge Funds Up 0.35% MTD (Finalternatives)
Hedge funds were up 0.35% month to date as of September 12, according to the Bank of America Merrill Lynch investable hedge fund composite index. Month-to-date, five of the seven strategies followed by BofAML were in the red, the worst performers being convertible arbitrage funds (down 0.68%) and CTAs (down 0.57%). The best performers were event-driven funds (up 0.64% MTD) and equity long/short (up 0.62%).

Form 13F: The Easy Way to Track Hedge Funds’ Favorite U.S. Stocks With One ETF (GURU) (ETFDailyNews)
According to a recent study from U.S. audit, tax and advisory services firm KPMG, over the past 17 years, hedge funds have actually outperformed equities, bonds and even commodities. What’s more, The Wall Street Journal reports, the hedge fund industry is expected to more than double in size over the next five years to over $5 trillion in assets. I don’t know about you, but if hedge funds have earned investors more profits than bonds, stocks and commodities, and are only expected to continue growing, wouldn’t it be beneficial to know what these funds are buying and why? Of course it would.

Family Offices HF Investment Span 20+ Years (HedgeFund)
Information service provider Infovest 21 has found in a new survey that family offices/foundations allocate an average of 21% of their portfolios to hedge funds. The results of the new study were released Wednesday, with participation by primarily US-based respondents holding assets averaging $1.6 billion. The survey was conducted in July and August.

ETF Hedges Extreme Market Behavior (TheStreet)
First Trust recently launched the CBOE S&P 500 Tail Hedge Fund (VIXH) where the word tail refers to some sort of outlying event that would take the equity market lower. The fund is interesting conceptually but is complicated under the hood. The nuts and bolts are that the fund will always own the S&P 500 and will usually own call options that expire next month on the CBOE Volatility Index, commonly referred to by its symbol; VIX. The amount of VIX call option exposure will depend on the level of the VIX futures due to expire next month. If next month’s VIX futures are 15 or less the fund will own no VIX calls. If VIX futures are between 15 and 30 the fund will allocate 1% of the portfolio into VIX calls. If VIX futures are between 30 and 50 the fund will allocate 0.50% to VIX calls and above 50 no calls will be purchased.

ASIC beefs up rules for hedge funds (TheAustralian)
The Australian Securities and Investments Commission’s (ASIC) will force hedge fund managers from next June to be more up front about how and where they invest money, and the risks involved. The new rules come three years after the $176 million collapse of Trio Capital, in what was the largest superannuation fraud in Australian history. Trio invested money in two hedge funds, Astarra Strategic and ARP Growth, which then siphoned the cash to Caribbean tax havens.

Lenders Go After Harbinger (WSJ)
A group of LightSquared’s lenders want permission to go after Philip Falcone’s Harbinger Capital Partners for a loan the hedge-fund manager made to LightSquared last year. In a filing with the U.S. Bankruptcy Court in Manhattan, the lenders said that a $263.8 million loan LightSquared received in July 2011 from Harbinger was actually an “equity infusion” that was “incorrectly styled” as a loan. The lenders, owed more than $1 billion, have said since LightSquared’s May bankruptcy filing that they thought the loan was “preferential” to Harbinger, which owns 96% of LightSquared’s voting stock.

What Sovereign Wealth Funds Want (GlobalCustodian)
Sovereign wealth funds are ramping up their hedge fund allocations, but successfully navigating the manager selection process requires more than good investment performance, says Sameer Shalaby, president of Paladyne Systems, a Broadridge Company. Sovereign wealth fund allocations to alternative investments continue to rise. For hedge funds and investment managers with the right profile, the trend brings enormous opportunities, as well as significant challenges.

India doesn’t like foreign investors, says Jim Rogers (Rediff)
India doesn’t like foreign investors and keeps them away, says Jim Rogers, an American author, financial commentator and a successful international investor. Rogers, co-founder of the Quantum Fund with Hungarian-American business magnate George Soros and is the creator of the Rogers International Commodities Index, says India will find it difficult to grow in a dynamic way because it has a high debt-to-GDP ratio. The most promising country at the moment is Myanmar, he tells Faisal Kidwai in a phone interview.

Marc Faber, Fashion A-Lister Find Common Ground (CNBC)
What do famed investor Marc Faber and fashion industry stalwart John Rocha have in common? Kazakhstan. Both have noted the nation as an upcoming area of strength. Speaking to CNBC after his show at London Fashion Week, John Rocha said: “We see ourselves expanding into new territory, for example Kazakstan, Ukraine and Moscow. In the Asian market, we’re going into even small economies like Macau.” Faber said in a recent media interview that he has bought government bonds from Kazakhstan, arguing that economically it is “a much sounder country than the United States or any European country”.

Shareholder Activism In Canada And Equal Energy (SeekingAlpha)
Shareholder activism has long been the privy of American investors. Legendary activists such as Carl Icahn or Daniel Loeb at Third Point, among others, have had a noticeable impact on American corporations; and a new breed of activists such as Bill Ackman at Pershing Square continue to carry the activist torch. Canadian investors, on the other hand, are more docile and Canadian boards are not that accustomed to the abrasive or often aggressive style of activist investors. Having lived in Canada for many years, I believe the difference is largely cultural. Canadian investors are no less motivated to unlock value; they, however prefer a softer approach. Canada does suffer from a level of elitism that is possibly the product of Canada’s attachment to the British empire and thus the European heritage of a certain class division between the noble wealthy elite and the common citizens.

Roubini: Govts Kick Increasingly Heavy Can Down the Road (MoneyNews)
While central banks around the world have loosened monetary policies to prop up their economies, a lack of political will to tackle underlying fiscal and other structural imbalances will prevent the global economy from recovery, said New York University economist Nouriel Roubini. The Federal Reserve recently announced plans to buy $40 billion a month in mortgage-backed securities from banks, a monetary policy tool known as quantitative easing that floods the economy with liquidity in a way that drives down interest rates to spur recovery.

The Exclusive Finance Social Network Site Where Bankers Aren’t Allowed (BusinessInsider)
SumZero is a members-only social networking site for buyside professionals that recently received an investment from Cameron and Tyler Winklevoss, The Wall Street Journal’s John Jannarone reports. Back in June, VC firm Winklevoss Capital made its first investment of $1 million in SumZero–a site founded by their former Harvard classmate/ConnectU co-founder/ally in the Facebook fight, Divya Narendra, the report said.

SEC Charges Former Systemax Director in Compensation Scheme (SEC)
The Securities and Exchange Commission today charged a former director at Port Washington, N.Y.-based consumer electronics retailer Systemax Inc. (NYSE:SYX) for fraudulently reaping hundreds of thousands of dollars in undisclosed compensation over a five-year period. The SEC alleges that Gilbert Fiorentino, who in addition to serving on the board was the former chief executive of Systemax’s Technology Products Group in Miami, obtained more than $400,000 in extra compensation directly from firms that conducted business with Systemax. Fiorentino also stole several hundred thousand dollars worth of company merchandise that was used to market Systemax’s products.

New on the web: Hedge Funds 101 (Absolutereturn-Alpha)
Are you a congressional staff member wondering how much leverage hedge funds use? A confused journalist on deadline wondering how many funds exist? Or a public pension trustee wondering what a “relative value” strategy means? Well, help is now just a click away. Well-heeled trade group Managed Funds Association launched hedgefundfundamentals.com Friday to create a one-stop web primer on the land of long and short. “Hedge funds are a vital part of the economy, but are…

RWC recruits $800 million Hermes Focus activist investing team (HedgeFundIntelligence)
RWC, the London-based active investment manager led by Peter Harrison, has unveiled a major expansion of its fund management range with the addition of the highly-regarded Hermes Focus activist investment team. The entire 12-strong investment and support team will join RWC from Hermes at the start of October, along with the three Focus funds that the team manage – which run combined assets of $800 million for a range of institutional clients, including the BT Pension Scheme of which Hermes Fund Managers is a subsidiary. The Focus Funds – which use a ‘constructive activist’ approach to investing, working with companies to catalyse change and unlock value – will continue to be managed by the investment…

White paper dismisses myths on European ETFs (MyCOOConnect)
A new white paper has sought to upend many of the myths held about European ETFs and urges market participants to lend ETF shares more readily – something which could ultimately benefit hedge funds. “ETF Liquidity, Securities Finance and Collateral Management; Maximising the role of European Exchange Traded Funds”, published by Roy Zimmerhansl of FinTuition, a training and consultancy firm, and Andrew Howieson of Howieson Consulting, argues lending ETF shares is no different to lending equity instruments. Despite this, Sungard Astec Analytics reveals US ETF shares on loan equivalent stands at 3.67% of US listed ETF AuM while European ETF shares on loan equivalent is 0.34% of European listed ETF AuM (at May 2012).

Hedge Fund Giant Louis Bacon’s Bold Mission To Save The American West (Forbes)
In the main lodge of his Trinchera Blanca ranch in Colorado, Louis Bacon, the founder of the giant hedge fund firm Moore Capital Management, takes in his pristine and wild 172,000-acre tract from a plush leather chair. A ghost herd of animals–the heads of elk, mule deer, bison and bighorn sheep, a few of which he killed himself with a bow and arrow–silently watches over him from the surrounding walls. The 54-year-old Bacon, who is compact, blue-eyed and handsome in the manner of an Eddie Bauer catalog model, is doing something he almost never does and generally despises: sitting down with a member of the media. Right away he begins shifting uneasily in his seat, unable, it seems, to get comfortable. He parries away the first few questions, answering in short declarative bursts. “How did Annie get me into this?” he wonders aloud, referring to Ann Colley, the head of his charity, the Moore Charitable Foundation, and the person who had pushed him to do this rare interview.

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