Harbinger Group Plans $650 Million Refinancing (HedgeFund)
Phil Falcone’s Harbinger Group is looking to issue $650 million worth of bonds to refinance existing debt. New York-based Harbinger announced in a statement Monday that it will use the net proceeds from the sale of the notes to refinance its $500 million in holdings of 10.625% securities due November 15, 2015. Deutsche Bank AG (NYSE:DB) is one of several firms managing the upcoming sale for Harbinger.
Hedge fund manager claims Japanese debt worse than that in Greece (Opalesque)
Hedge fund manager, Chris Rigg, from Audley Capital believes that the debt levels in Japan are worse by some measures than those in Greece. Rigg has issued a stark message about investment in Japanese bonds. “The level of debt Japan is running, which by some measures is far worse than in Greece, is unsustainable,” said Rigg. “With net debt at 140% even if Japan were to run a budget where revenue and expenditure were balanced before interest costs, the economy would have to grow by 1.8% in nominal terms just to stabilize the debt/GDP ratio. The reality is that the Japanese government spends twice as much as tax revenue and debt servicing costs consume half of tax revenue.”
Hedge funds post November gains as fiscal cliff looms (HedgeWeek)
The HFRI Fund Weighted Composite Index gained 0.35 per cent for the month, posting its fifth gain in the last six months, according to data released by HFR. Relative value arbitrage (RVA) and event driven (ED) strategies were top contributors in November, with both the HFRI Relative Value Arbitrage Index and HFRI Event Driven Index gaining 0.7 per cent. RVA strategies remain the top area of hedge fund strategy performance YTD, with the HFRI RVA Index up 9.5 per cent through November.
Quick Defense in Insider Trading Trial of 2 Hedge Fund Managers (NYTimes)
Defense lawyers for two former hedge fund managers called one witness before resting their case, a surprise decision that will send the insider trading trial to the jury as soon as Tuesday. In one of the largest prosecutions by the government in its broad insider trading investigation, Anthony Chiasson, a co-founder of the now-defunct Level Global Investors, and Todd Newman, a former portfolio manager at Diamondback Capital Management, are on trial in Federal District Court in Manhattan on charges that they were part of a conspiracy that made about $68 million illegally trading technology stocks.
Hedge Funds May Profit Most From Japan’s Election (Bloomberg)
This may be the election that Japan bears such as J. Kyle Bass have been waiting for. Hedge-fund managers betting against Japan in recent years, including Bass of Hayman Capital Management LP, are counting on a doomsday scenario: a widening trade deficit, a plunge in the yen and a devastating surge in yields in Japan’s $12 trillion bond market. Bass made $500 million from the U.S. housing market meltdown. Will his team be right about Japan?
Do Hedge Funds Manipulate Stock Prices? (WSJ)
It certainly looks like it, at least according to a quartet of professors who studied hedge fund data from 2000 to 2010 in order to produce a recent paper on the subject. The funds’ motivation? Some fund managers apparently want to make themselves look more succcessful than they are. And some can boost their compensation while they’re at it. …The paper, slated for publication in the Journal of Finance, is by Itzhak Ben-David, Francesco Franzoni, Augustin Landier and Rabih Moussawi. Chime in, dear readers. Anybody out there shocked by this?