Falcone Reaches Deal With SEC; Would Be Banned From Managing Funds (WSJ)
Philip Falcone and his firm Harbinger Capital agreed to a settlement with the Securities and Exchange Commission that could end Mr. Falcone’s career as a hedge-fund manager. Harbinger agreed to pay $18 million without admitting or denying allegations of fraud, according to a regulatory filing. The agreement bars Mr. Falcone from serving as an investment adviser for two years, meaning he also cannot raise new capital or make new investments through the fund. Terms of the deal allow Mr. Falcone to remain chief executive of Harbinger, although the firm said it wasn’t clear how much time he would devote to the job.
Citigroup Fund Bestowed on Managers Offers Volcker Rule Payday (BusinessWeek)
For a pair of former Citigroup Inc (NYSE:C) hedge-fund managers, Napier Park Global Capital may turn into a multimillion-dollar payday thanks to the Volcker rule. Jonathan Dorfman and James O’Brien are among executives who got 75 percent of the investment firm for free when it broke off from Citigroup Inc (NYSE:C) earlier this year. The business may be worth $360 million, according to hedge-fund consultant Ezra Zask. The estimate is based on the $143.4 million in fees the firm may collect this year, according to internal projections obtained by Bloomberg News. Any windfall Napier Park executives get stems from former Chief Executive Officer Vikram Pandit’s response to the Volcker rule, a Dodd-Frank Act provision designed to force U.S. banks to reduce investments in hedge funds. While Citigroup Inc (NYSE:C) says the decision to give away most of the business served shareholders’ interests, the New York-based lender never publicly disclosed how much it’s paying Napier Park executives.
7th Hedge Fund Fight Nite to feature Asian contenders for first time (TheAsset)
Hong Kong’s annual charity white collar boxing event, the Hedge Fund Fight Nite, returns for the seventh year in 2013. Typically held in October, this year’s event will be held on May 30. To date, an initial number of 48 participants have been narrowed down to a shortlist of 18 contenders. The final list of fighters will be announced on May 15. Contenders of previous Hedge Fund Fight Nite events have comprised a majority of expatriate and Western fighters. This year however, Asian participants Jimmy Heng, a consultant of Michael Page International (Hong Kong) and Ronald Ho, a consultant of Robert Walters International, are on the shortlist. If both successfully proceed to the finals, this will mark the first bout with two Asian fighters.
April confirmed positive for hedge funds (InvestmentEurope)
The Lyxor hedge fund Index was up +0.8% in April, bringing year-to-date performance to +3.2%. Twelve Lyxor Strategy Indices out of 14 ended the month in positive territory, led by the Lyxor L/S Equity Market Neutral Index (+3.9%), the Lyxor CTA Long Term Index (+3.0%) and the Lyxor Merger Arbitrage Index (+1.5%). Risk assets mostly rallied in April after a modest sell off in the beginning of the month and most hedge fund strategies generated positive returns for the month.
Gottex, Astmax to offer hedge fund, multi-asset strategies to Japanese institutional investors (PIOnline)
Gottex Fund Management and Tokyo-based Astmax Asset Management Thursday announced an agreement to work together to provide institutional investors in Japan with absolute-return focused investment strategies, including hedge funds and multi-asset solutions. In a telephone interview, Andre Keijsers, a London-based spokesman for Gottex, said the two companies may develop new products or customize existing ones for Japanese investors looking for absolute return alternatives to current investments in low-yielding bonds.
FRM’s Early View reports broad returns across hedge fund strategies in April (Opalesque)
The latest “Early View” from FRM, Man Group’s $16.7bn fund of hedge funds and managed accounts business, finds that investors entered April on the back of a strong first quarter for risk assets, supported by capital inflows into equities and a more benign economic landscape. For FRM there was concern that markets would follow the pattern of the previous three years, with a setback in the second quarter due to the re-emergence of economic issues. “Our view has been that a possible catalyst for a Q2 correction would be a slowdown in the US growth story. Two core US economic indicators missed expectations in April – the change in non-farm payrolls at the beginning of the month (88k vs. expected 190k) and Q1 GDP towards the end of the month (annualised 2.5% vs. expected 3%), but equity markets finished in positive territory, as the S&P 500 Index returned 1.8% during the month.”
Why is the man who bet against U.S. housing so worried about Canada? (TheGlobeAndMail)
A hedge fund manager who made a killing betting against the U.S. housing market is now publicly fretting about Canadian real estate. Steven Eisman’s comments on Canada are arguably more important than those of other observers given that he put his money where his mouth was in the run-up to the U.S. meltdown, gaining renown and, eventually, becoming one of the players noted in The Big Short, the book by Michael Lewis. Most observers believe that Canada’s housing market, while cooling rapidly, is in a soft landing, with the exception of Vancouver. Canada’s finance minister has moved several times to prevent a burst bubble and tame the mortgage market amid record levels of consumer debt.