Editor’s Note: Related tickers: Chipotle Mexican Grill, Inc. (NYSE:CMG), Herbalife Ltd. (NYSE:HLF), Hess Corp. (NYSE:HES), Citigroup Inc (NYSE:C), Goldman Sachs Group, Inc. (NYSE:GS), Berkshire Hathaway Inc. (NYSE:BRK.A), Morgan Stanley (NYSE:MS), Elan Corporation, plc (ADR) (NYSE:ELN), Dell Inc. (NASDAQ:DELL)
Hedge fund mogul Paul Singer is looking to raise another $2 billion for his $22 billion Elliott Management, The Post has learned. Singer told investors this week that he wants to build up a sizable war chest to put to work in anticipation of another “abrupt shift” in the markets, like what happened in 2008. At that time, his fund moved quickly to buy such assets as the bankrupt debt of Lehman Brothers. Elliott made a bundle off its efforts, gaining more than 30 percent in 2009. …Although Singer’s Elliott has made waves recently for activist plays in names like Hess Corp. (NYSE:HES), distressed debt still made up 75 percent of its profits at the end of June, according to an investor.
David Einhorn Is Getting Smoked By Chipotle (BusinessInsider)
Fast-casual restaurant chain Chipotle Mexican Grill, Inc. (NYSE:CMG) beat Wall Street analysts’ earnings and revenue estimates this afternoon. The stock is trading up more than 5.6% in the after-hours trading session. This isn’t good news for David Einhorn, who is short Chipotle Mexican Grill, Inc. (NYSE:CMG). The stock is up more than 24% since October 2, 2012 when he recommended shorting the company at the Value Investing Congress. At the VIC, he said the biggest challenge Chipotle Mexican Grill, Inc. (NYSE:CMG) faces is competition from Taco Bell, which has a much lower price point and has been successful with its Doritos Locos Tacos. We’ve haven’t heard him speak about the Chipotle Mexican Grill, Inc. (NYSE:CMG) short lately. It’s possible he could have covered.
Shares Of Herbalife Are Surging (BusinessInsider)
Shares of nutritional supplement-seller Herbalife Ltd. (NYSE:HLF) are ripping today. The stock was last trading up more than 5.8%. Mid-day yesterday, the New York Post’s Michelle Celarier reported that the Federal Trade Commission told consumer groups that it found some of Herbalife Ltd. (NYSE:HLF)’s practices “disturbing.” …Herbalife Ltd. (NYSE:HLF) is the company that Ackman is famously shorting. Ackman, who runs Pershing Square Capital Management, is shorting a billion dollars worth of the stock. He believes the company is a “pyramid scheme” that targets lower-income people and that regulators will be induced to investigate it.
Investors sow seeds for hedge funds (eFinancialNews)
In the return of a practice that was popular before the financial crisis, investment groups are raising billions of dollars to buy minority stakes in hedge-fund firms. The goal: to share not only in strong investment performance from proven managers but also in the hefty fees those firms can charge. The latest suitor is Foundation Capital Partners, a Greenwich, Conn., private-equity firm that has raised more than $2 billion—including $1 billion from a sovereign-wealth fund—to potentially buy pieces of some of the biggest firms in the industry, according to people familiar with Foundation’s efforts. The little-known firm, headed by a former Citigroup Inc (NYSE:C) executive, hopes to raise another $2 billion by summer’s end and use the cash to buy 10 to 12 minority stakes, eventually taking the fund public, one of the people said.
Hedge fund asset flows turn negative in the second quarter (Opalesque)
June redemptions turned Q2 flows negative and flows for the first half of 2013 are the second slowest in the last ten years lagging only 2009 in the aftermath of the financial crisis, according to new data from eVestment. Macro funds outflows were the key to June’s redemptions. Mediocre performance resulted in persistent outflows for managed futures funds through the second half of 2012 and most of 2013, the same fate appears to have caught up to macro strategies. Investors withdrew approximately $10.1bn during the month. Asset weighted performance was the lowest in 21 months, and overall industry AUM dropped by 2.5% to $2.656tn. Overall for the quarter, investors have removed $4.3bn.
Commodity hedge funds suffer longest losing streak on record (Reuters)
Funds betting on commodity price moves have lost money every month since January, their joint longest losing streak on record, raising more doubts about their ability to make money at a time when the commodity “supercycle” may be over. The average fund slid 3.58 percent in the first six months of the year, according to a widely watched Newedge commodity index. Funds have only suffered five consecutive losing months once before, in 2002-2003, the index shows. Hedge funds market themselves as capable of making money in all markets, yet funds trading commodities as varied as gold, grains and gas, have failed to turn an annual profit in the last three years.
Gupta Ordered to Pay $13.9 Million in Inside-Trading Case (Bloomberg)
Rajat Gupta, the former Goldman Sachs Group, Inc. (NYSE:GS) director found guilty of passing confidential tips to billionaire hedge-fund manager Raj Rajaratnam, was ordered to pay $13.9 million in a related U.S. regulatory case. …Gupta was found guilty in June 2012 of divulging inside information to the Galleon Group LLC co-founder about Berkshire Hathaway Inc. (NYSE:BRK.A)’s $5 billion investment in Goldman Sachs Group, Inc. (NYSE:GS) as well as nonpublic details about the bank’s financial results for the second and fourth quarters of 2008.
Hedge-Fund Ads May Lure Performance Chasers (WSJ)
If performance-chasing has been a problem in mutual-fund investing, Andrew Altfest warns, just wait until hedge funds start flashing ads. Mr. Altfest, executive vice president at Altfest Personal Wealth Management in New York, is one of many financial advisers worried that a recent regulatory change allowing hedge funds to advertise will sway clients and other investors. That’s likely to make advisers’ jobs harder. “Performance chasing could be worse for investors in hedge funds than in mutual funds,” he says. “For example, in certain hedge-fund strategies, like global macro, past performance could have been driven by a few good calls which…
Fund Ties Hidden In Goldman Marketing, Tourre Jury Hears (Law360)
Marketing materials for Goldman Sachs Group, Inc. (NYSE:GS)’s Abacus product made no mention of a hedge fund’s involvement in structuring it, a senior Goldman Sachs Group, Inc. (NYSE:GS) director told jurors Thursday as the trial of trader Fabrice Tourre continued on allegations he helped the fund build Abacus to fail. Jonathan Egol, a Goldman Sachs Group, Inc. (NYSE:GS) managing director, said he saw no mention of Paulson & Co. Inc.’s role in picking the residential mortgage backed securities that went into Abacus 2007-AC1, a synthetic collateralized debt obligation that closed in 2007. The U.S. Securities…
Hedge fund assets hit $2.4 trillion — Hedge Fund Research (PIOnline)
Hedge funds toppled another record high point when industry assets totaled $2.4 trillion as of June 30. …Aggregate hedge fund assets were up 1.2% from March 31, 7.2% from Dec. 31 and 20.3% from Dec. 31, 2011, according to Hedge Fund Research’s second-quarter 2013 asset flows report. Hedge fund industrywide assets have been climbing every year after hitting a nadir of $1.4 trillion at the end of 2008, HFR reported. Net inflows in the second quarter were $14.5 billion and $15.2 billion in the second quarter. Midyear total net inflows of $29.7 billion were higher than first-half net inflows in 2012 of $20.4 billion.
Hedge funds sitting on record amount of capital (InvestmentNews)
Roaring stock markets and rising concerns over the Federal Reserve’s five-year quantitative-easing program is playing right into the hands of the hedge fund industry, which now sits on a record $2.4 trillion. “It’s not at all surprising that as the markets move to new highs, more investors are realizing it’s time to diversify beyond long-only,” said John Sundt, president and chief executive of Altegris Investments Inc. “Right now, investors are faced with equities at all-time highs and growing fears of rising interest rates, and they’re looking for places where they can find some value and diversification.”
Morgan Stanley stock traders rebuild burned bridges (Reuters)
As Morgan Stanley (NYSE:MS)‘s share price went on a headlong descent during the financial crisis in 2008, then-Chief Executive John Mack personally lobbied regulators to stop short-selling temporarily. …Many, such as the famed short-seller Jim Chanos, were also big clients of Morgan Stanley (NYSE:MS)’s prime brokerage and stock trading businesses, and expressed their displeasure by taking their money elsewhere. Over the past few years, Mack’s successor James Gorman has been trying to repair those frayed relationships, win back clients and make new ones across its equities trading franchise. Ted Pick, Morgan Stanley (NYSE:MS)’s global head of equities and research, has been the point man on that mission.
Is the Government About to Move the Goal Posts on Steve Cohen? (BusinessWeek)
Government investigators have been scrambling through the heat wave to make decisions about whether to bring securities fraud charges against a certain billionaire hedge fund owner based in Greenwich, Conn. The assumption had been that prosecutors had five years to charge said hedge fund owner, SAC Capital founder Steven Cohen, for trades that took place in July 2008 in Elan Corporation, plc (ADR) (NYSE:ELN) and Wyeth (WYE), which form the basis of an insider trading case that was filed last November against former SAC portfolio manager Mathew Martoma, or for August 2008 trades in Dell Inc. (NASDAQ:DELL) that the government alleges were based on inside information.
