What the world's largest hedge fund is buying (USAToday) Bridgewater Associates is the largest hedge fund in the world when it comes to assets under management. Founded by Ray Dalio in 1975, the fund's status as world's largest tells us two things: First, it has done enough to win the confidence of money managers. Second, any trades made by this behemoth are likely to move a given stock's price. Over the course of the third quarter of this year, the fund sold or reduced positions in 234 stocks while adding only 87 different companies' shares to their portfolio. Of all those trades, three stood out as worthy of attention.
Australian Dollar Slide Extends on Hedge Fund Selling (WSJ) The week-long retreat of the Australian dollar, which has reaffirmed its status as one of the worst-performing currencies globally in 2013, returned anew Wednesday as global hedge funds sold the unit heavily in response to recent warnings from the central bank it is still too high. The Aussie slumped to its lowest level since Sept. 4 in New York on Tuesday and then failed to bounce in the Asia session Wednesday, leaving traders to speculate a second wave of selling may be in the offing when European and U.S. investors rejoin the market in coming hours. "Hedge fund and model fund selling was tipped amid heavy losses during the European morning," said Sean Callow, senior currency strategist at Westpac.
Facebook becomes hedge fund favorite (Chronicle) Facebook Inc (NASDAQ:FB) has become a hedge fund favorite. The social network broke into the top-10 stocks that appear most frequently among the largest holdings of hedge funds, according to a Goldman Sachs Group, Inc. (NYSE:GS) survey of their third-quarter holdings. Facebook ranked sixth, after not placing in the top-50 stocks in Goldman’s second-quarter survey. Facebook stock closed above its May 2012 initial offering price of $38 in August, which helped attract hedge fund managers.
Agreement paves way for marketing Cayman funds (CompassCayman) The Cayman Islands Monetary Authority last week signed a memorandum of understanding with the German financial services regulator Bundesanstalt für Finanzdienstleistungsaufsicht, providing for mutual assistance in the supervision of alternative investment fund managers who operate in both jurisdictions. Without the agreement, new hedge funds that are subject to the recently implemented EU Alternative Investment Fund Managers Directive could not have been marketed to German investors. Although German institutional investors are not the main hedge fund investors in Europe, they place approximately half of their hedge fund allocations with funds based in the Cayman Islands, according to data service provider Prequin.
Study finds new hedge fund managers offer potential for greater returns (Opalesque) The latest Hedge Fund Spotlight from Preqin examines emerging hedge fund managers and finds that hedge funds launched by new managers offer the potential for greater returns. The firm says that first-time funds on average post better returns than funds launched by established firms, but institutional investor interest in emerging managers continues to decline. Preqin’s figures reveal that the average emerging manager long/short fund launched since 2007 delivered annualized net returns of 8.80% in its first three years of trading, compared with an annual rate of 5.38% from newly-launched funds managed by established firms.
Ships and Diana Shipping, but Should You? (DailyFinance) George Soros' investment firm recently purchased 590,278 shares of DryShips Inc. (NASDAQ:DRYS) and 77,942 shares of Diana Shipping Inc. (NYSE:DSX). That comes out to a $1.8 million stake in DryShips and an $841,000 stake in Diana Shipping. Soros' firm currently manages right around $6.8 billion spread across 2,333 holdings, so these additions are a very small portion of the total portfolio. The firm also owns small positions in Navios Maritime Holdings and Navios Partners. Whether it's Soros himself or his fund managers, it appears his company is making a small bet on the dry bulk shipping sector, with DryShips and Diana Shipping leading the pack. So just what would motivate Soros to invest in this sector?