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?
Hedge fund managers become bullish on global economy (Telegraph)
However, the “bulls” versus “bears” data, compiled by industry research firm Aksia, also showed increasing fears that a credit bubble is emerging. Almost 32pc of managers warned that debt was the next bubble risk. Askia surveyed 168 separate hedge fund managers with assets of $900bn (£560bn) between them. Although many still predict a Greek exit from the euro or a Spanish or Italian bond default, overall attitudes are more positive, with managers “bullish on financial assets, comfortable with the stability of the markets… and less sensitive to the impact of macro/political risks”.
A Frontier Market Hedge Fund Is Killing It, In Part Thanks To Nigerian Banks (BusinessInsider)
In a year when hedge funds are getting crushed, emerging and frontier market-focused firm Caravel Management is up over 30%. Business Insider heard Caglar Somek, a partner and portfolio manager at Caravel, talk about the firm’s strategy at Bloomberg’s Hedge Fund Summit last week. He piqued our interest when he said that the the $225 million AUM fund was “heavily invested in banks in Nigeria.” It’s what he considers one of the firm’s best investments of 2012.
Danish pension fund ATP to restructure its hedge fund-of-funds division (PIOnline)
ATP, Hilleroed, Denmark, will restructure the 789 billion Danish kroner ($137 billion) pension fund’s hedge fund-of-funds division, ATP Alpha, according to a news release by the fund. Plans will include cutting ATP Alpha’s 35-person staff by about half. “The aim is to strengthen ATP’s position in a challenging investment environment — with prospects of a prolonged period of low economic growth, low returns, considerable risk and tight financial regulation,” according to the news release.
Three ‘Hedge Fund Guys’ In Singapore Are Buying One Of The World’s Most Famous Wine Publications (BusinessInsider)
Robert M. Parker, Jr., who is one of the world’s most prominent wine critics, is selling a “substantial interest” in his bi-monthly publication, The Wine Advocate, to three Singapore-based investors, The Wall Street Journal’s Lettie Teague reported. These three Singapore investors, who were described in another Journal article as three “hedge fund guys”, remain a mystery. …Parker told the newspaper that The Wine Advocate’s headquarters will also move from Maryland to Singapore. He also plans to get rid of the 34-year-old newsletter’s print version.
Hedge fund firm CQS loses head of $2 billion ABS unit (Reuters)
Hedge fund firm CQS has lost the head of its more than $2 billion asset-backed securities unit, according to a letter sent to investors on Tuesday. London-based CQS, which is one of Europe’s biggest hedge fund firms with $11.9 billion in assets, said in a note that Alistair Lumsden, chief investment officer of ABS, had left the firm. CQS has handed responsbility for the unit, which comprises an ABS fund with more than $2 billion in assets and a smaller ABS Alpha fund, to Simon Finch, the firm’s chief investment officer for credit.
George Soros Funded Human Rights Watch Turns Their Back On Genocide (Inquisitr)
It is truly hard to fathom how any human rights organization could engage in an internal debate about whether or not the behavior of Iran toward the nation of Israel constitutes a human rights violation. Yet unbelievably, this is exactly what is going on behind the scenes at George Soros funded Human Rights Watch. According to a scathing article by David Feith in the respected Wall Street Journal, Mr. Sid Sheinberg, Vice Chairman of Human Rights Watch, sent a stunning email recently to colleagues. In the email, Mr. Sheinberg makes a powerful observation about the conduct of his organization: “Sitting still while Iran claims a ‘justification to kill all Jews and annihilate Israel’ . . . is a position unworthy of our great organization.”
Does H-P need an investor like Icahn? (MarketWatch)
As unconfirmed rumors swirled on Monday that investor Carl Icahn was buying up shares of Hewlett-Packard Company (NYSE:HPQ), its shares rallied, mostly on the prevailing theory that any activism at this point would be good to put pressure the embattled tech giant. But it’s still worth asking if indeed Icahn would even be interested in amassing enough of H-P’s HPQ +2.55% stock to get any kind of a voice or seat on the board. If he did, would he help or hinder Chief Executive Meg Whitman’s effort at a turnaround? Read about H-P and Icahn rumors.
Apple Selloff Prompts Debate Over Tax Impact Versus Fundamentals (WSJ)
Apple shar Apple Inc. (NASDAQ:AAPL) -0.65%es returned to their downward December trajectory Monday, rekindling the debate over whether the stock’s sharp selloff owes to end-of-year profit-taking or more serious concerns about its long-term profitability. The answer is key to determining whether the world’s most valuable publicly traded company can recover much of the $167 billion in market value that it has lost in less than three months. …“If you look at the top holdings by leading hedge funds, Apple is at the top or near the top of most lists,” he said. “As 2012 closes, it’s not surprising to see a lot of the fast money crowd getting out to lock in gains.”
Poland Keeps Options Open for Blue-Chip Portfolio (WSJ)
Poland’s Treasury Ministry has developed a bit of a reputation for timing the market with its share sales through the Warsaw Stock Exchange, much like a good hedge fund does, so it’s unlikely to show its cards about planned accelerated book building transactions of blue-chip shares in its portfolio. But Warsaw-based investment bankers and stock brokers say it wouldn’t be outside the realm of possibility for the Treasury to push through one last deal by the end of the year or in early 2013, most likely involving shares in PKO Bank Polski PKO.WA +0.85%, insurer PZU, gas firmPGNiG PGN.WA +0.43% or oil refiner Grupa Lotos LTS.WA 0.00%.
SEC Charges Eight Mutual Fund Directors for Failure to Properly Oversee Asset Valuation (SEC)
The Securities and Exchange Commission today announced charges against eight former members of the boards of directors overseeing five Memphis, Tenn.-based mutual funds for violating their asset pricing responsibilities under the federal securities laws. The funds, which were invested in some securities backed by subprime mortgages, fraudulently overstated the value of their securities as the housing market was on the brink of financial crisis in 2007. The SEC and other regulators previously charged the funds’ managers with fraud, and the firms later agreed to pay $200 million to settle the charges.
SS&C Appoints New General Counsel (Finalternatives)
Hedge fund administrator SS&C Technologies has a new top lawyer. The Windsor, Conn.-based firm, which also provides financial-services software, named Paul Igoe its general counsel. Igoe succeeds outgoing general counsel Stephen Whitman on Jan. 7. “Paul’s proven track record in merger and acquisitions will add valuable intellectual wealth to our growing team. I am delighted to appoint him to this critical role at SS&C,” SS&C CEO Bill Stone said. “We also wish Steve Whitman all the best as he enters retirement.”
Chart of the Day: Hedgies fear bond bubble (eFinancialNews)
Hedge fund managers think that the next bubble is in the the credit markets, according to a new report, mirroring recent warnings from asset managers that liquidity in the European corporate bond market is drying up. A third of managers said that the next bubble is in credit, making it the largest concern (see chart), according to a report published yesterday from US hedge fund advisory firm Aksia, which collected responses from 168 managers representing about $900bn in assets. Other concerns were developed market rates/US treasuries, 26%, and the Asia/China region, 6%.
Who’s been naughty in the fund industry? (MarketWatch)
In the best of years — and 2012 will go down as a pretty good one for the mutual fund industry — most investors are willing to overlook misbehavior and overt bumbling so long as it doesn’t directly show up in their account statement. They shouldn’t be so nice to the naughty. With that in mind, I bring you the 17th annual Lump of Coal Awards, my two-part holiday tradition of easing Santa’s burden by singling out the bad boys and girls of the fund industry — those who deserve nothing more than a lousy lump of lignite in their Christmas stockings this year.
