SAC pulls plug on Chi. shop (NYpost) Hedge fund SAC Capital said yesterday it is closing down its Chicago office and laying off staff from the four portfolio teams that work there. The Stamford, Conn.-based firm has $14 billion in assets with offices worldwide, including in New York, Hong Kong, London and Boston. The government told SAC and its founder Steven A. Cohen late last year that it may bring civil fraud charges in relation to a case in which a former SAC fund manager has been charged with having traded in pharmaceutical companies Elan and Wyeth, now owned by Pfizer Inc. (NYSE:PFE), with illegally obtained information about drug-trial results.
Ahead of the Bell: Herbalife (BusinessWeek) The battle between Herbalife Ltd. (NYSE:HLF) and hedge fund manager William Ackman over the company's business practices is likely to continue for a while, with ongoing stock volatility, an analyst said Friday. On Thursday Herbalife Ltd., which uses a network of distributors to sell its offers nutrition and weight loss products, fought back against Ackman's claims that the business amounts to a pyramid scheme. A series of Herbalife's executives attempted to refute Ackman's allegations during an analyst and investor meeting, laying out everything from how the business operates to who its customers are.
Lyxor Hedge Fund Index up 1.1% in December (+3.1% in 2012) (Opalesque) The Lyxor Hedge Fund Index was up +3.1% in 2012 (+1.1% in December). Twelve Lyxor Strategy Indices out of 14 ended the month in positive territory, led by the Merger Arbitrage Index (+3%) and the Long/Short Credit Arbitrage Index (+2.6%). Over the year, eleven Lyxor Strategy Indices out of 14 posted positive performances, three of them being up double digits: Long/Short Credit Arbitrage Index (+12.1%), Long/Short Equity Long Bias (+11.2%) and Fixed Income Arbitrage (+10.5%). Hedge funds benefited from comforting macro news flow and the Lyxor Hedge Fund index gained 1.1% over December, bringing year-to-date performance to 3.1%. The headline numbers hide an even more positive picture. A growing number of funds have participated in rising markets and 20% of the funds in the Lyxor investment universe are up double digits in 2012.
WOMEN HEDGE FUND MANAGERS BEAT INDUSTRY (Advisor) Women hedge fund managers beat the industry through the third quarter of 2012, according to the Rothstein Kass Institute’s second annual Women in Alternative Investments survey. “The Rothstein Kass Women in Alternative Investments Hedge Index produced a year-to-date net return of 8.95%, in comparison to the HFRX Global Hedge Fund Index, which generated a 2.69% net return through September,” the report explains.
New York-based hedge fund manager and firm fined USD5m (HedgeWeek) The Securities and Exchange Commission has secured final judgments against hedge fund manager Chetan Kapur and his firm, ThinkStrategy Capital Management, ordering them to jointly and severally pay disgorgement and prejudgment interest of USD3,988,196.59 and civil penalties in the amount of USD1m. The final judgments stem from a civil injunctive action filed by the Commission on 10 November 2011. The SEC’s complaint alleged that over nearly seven years, Kapur and ThinkStrategy engaged in a pattern of deceptive conduct designed to bolster their track record, size, and credentials.
Clive Hedge Fund Assets Said to Fall by $1.7 Billion After Loss (SFGate) Clive Capital LLP’s assets plunged 46 percent in 2012 after the commodity hedge fund lost money for a second year running and investors withdrew their cash, said two people with knowledge of the matter. Clive ended the year managing $1.95 billion, down from $3.6 billion at the end of 2011, said the people, who declined to be identified because the London-based hedge fund is private. The fund declined 8.8 percent in 2012 after falling 11 percent a year earlier, causing some clients to lose patience with its investment performance, the people said.
Active management’s slow bleed (IFRAsia) Punished by another year of bad performance from active investment managers, there is some encouraging evidence that investors are finally wising up. ...And don’t kid yourself that only “dumb” retail money goes into mutual funds, and the big boys and girls find their alpha in hedge funds. As of the last week in December, 88% of hedge funds were lagging the S&P 500. The average hedge fund logged a return for the year of just 3.5%, according to the HFRX Global Hedge Fund Index, a good sight better than their nearly 9% loss in 2011 but hardly the kind of reward you want for paying the standard hedge fund charge of 2% in fees and 20% of the profits.