How Pursuit of Billionaire Hit One Dead End (NYTimes)
When Jonathan Hollander left his high-flying job at SAC Capital Advisors in late 2008, he departed one of Wall Street’s premier hedge funds. …The agents took Mr. Hollander into a nearby cafe and questioned him about his trading in the stock of a supermarket chain. They showed him a sheet of paper with headshots of several of his former colleagues. At the center was a photograph of Steven A. Cohen, the billionaire owner of SAC, according to two lawyers briefed on the meeting who requested anonymity because they were not authorized to discuss it publicly. The agents compared Mr. Cohen to a Mafia boss who sat atop a criminal enterprise, the lawyers said.
Palisade Capital Management has launched a long/short equity fund managed by hedge fund veteran Paul Flather. The move follows Palisade’s acquisition of Hermes Advisors, the hedge fund management company Flather founded in 1994. The Palisade Long/Short Alpha Fund will employ the same fundamental, bottom-up stock-picking strategy Flather used for 18 years at Hermes. Flather will work closely with Palisade’s US small and mid-cap equity teams, which manage around $2.3 billion in long-only strategies.
Could Twitter Predict The Quality Of Stock Purchases? (FastCompany)
A new trading product launched by Paul Hawtin of DCM Dealer will make it easier for investors and traders to monitor real-time sentiment about companies on social media networks like Twitter and Facebook. Hatwin launched a hedge fund based on similar data in July of 2011, but shut it down after only a month. He told the Wall Street Journal this week that it failed because his investor base was too risk averse when it came to social media. His latest product targets the average investor, whom he believes will be more likely to embrace social predictors. He might be on to something — researchers at HP Labs found that Twitter was more likely to predict box office sales than the prediction markets, as well as presidential elections.
CalSTRS adds 3rd global macro hedge fund manager (PIOnline)
California State Teachers’ Retirement System, West Sacramento, invested $50 million in hedge fund manager MKP Capital Management’s global macro strategy in the quarter ended Dec. 31. MKP Capital is the third hedge fund manager hired to manage one-quarter of the $154.3 billion system’s $200 million global macro hedge fund portfolio, said Ricardo Duran, a spokesman for the fund, in an interview. Earlier global macro investments were $50 million each to Bridgewater Associates and Alphadyne Asset Management made in December 2011 and June 2012, respectively.
Hedge funds’ Manhattan migration (eFinancialNews)
When Chris Hentemann left Bank of America Corp (NYSE:BAC) in the summer of 2008 with an eye toward starting his own fund, he hung his shingle in Stamford, Conn. By the time the fund launched that fall, he had moved his firm to Midtown Manhattan. The relocation quadrupled Hentemann’s morning commute from Connecticut, but made it easier on visiting pension-fund managers and other investors who flock to New York to shop for hedge funds. “There were enough roadblocks to establishing a new fund that I didn’t want to create another” by being outside Manhattan, Hentemann says. “I can capture that investor that may not have made that trip up to Greenwich, but they had an opening in their schedule an hour before they had to go to JFK to go back to Europe.”
Herbalife Rises to Highest Since Ackman Revealed Short Position (SFGate)
Herbalife Ltd. (NYSE:HLF) rose to the highest price yesterday since before hedge-fund manager Bill Ackman called the nutrition company a pyramid scheme and announced he had taken a short position in the shares. The stock advanced 10 percent to $44.08 yesterday at the close in New York. The stock closed at $42.50 on Dec. 18, the day before Ackman revealed that he had shorted the shares after researching the company for a year.
Myriad, Azentus Post Gains as Asian Hedge Funds Beat Peers (SFGate)
Myriad Asset Management Ltd. and Azentus Capital Management Ltd. posted gains in 2012 as a market rebound in the last four months of the year helped Asian hedge funds outperform global peers. The Myriad Opportunities Master Fund, a $1.4 billion multistrategy fund led by Carl Huttenlocher, former Asia head of Highbridge Capital Management LLC, returned about 7 percent last year, said two people with knowledge of the performance. Azentus’s $1.7 billion multistrategy fund reversed earlier losses to post a gain of about 1 percent for the year, said two others with knowledge of the returns. The people declined to be identified because the information is private.
Hedge fund insurance becomes more prevalent as uncertainty reigns (Opalesque)
Hedge fund manager insurance is not something that may immediately spring to mind as a consideration either on the part of managers or investors during a due diligence process, however, it can be a way of mitigating key man risk. According to Paul Grassi, head of the Hedge Fund Insurance group, at Wells Fargo hedge fund insurance has evolved since its earliest iterations in response to the financial crisis and investor demand. Grassi recently spoke to Matthias Knab about hedge fund insurance for Opalesque TV.
Finra’s suitability rules on private funds create conflicts (InvestmentNews)
Over the last several years the entry costs for marketing alternative investments has been pushed ever higher. Now a series of somewhat conflicting regulations has pushed those costs to new heights and threatens the traditional way in which many of these investments are marketed. The regulations at issue here are the SEC/CFTC’s Rule that has been implemented pursuant to Section 404 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, commonly known as Rule PF (and Form PF); FINRA’s enhanced Rule 2111 concerning suitability; and most recently FINRA Rule 5123. Rule PF is generally viewed as demanding confidential information with the understanding by the industry that the information will be guarded by the SEC/CFTC and kept in confidence. The other rules listed above now would take the confidential information in Form PF and disclose it to the world. The clash of these regulatory mandates will noticeably change the way that hedge funds and private equity funds are marketed by broker-dealers and financial advisers. Needless to say, the interaction of these rules will also have the potential to change the landscape of regulatory investigations and arbitrations.
Mixed 2012 For Asian Hedge Funds (Finalternatives)
Two of 2011’s highest-profile Asian hedge fund losses posted middling returns last year. Myriad Asset Management’s US$1.7 billion flagship returned about 7% last year, while Azentus Capital Management’s US$1.7 billion multistrategy hedge fund was up about 1%, Bloomberg News reports. The average Asia-focused hedge fund returned almost 10% last year, according to Eurekahedge, thanks to a rally in the last four months of last year.
Houston hedge fund manager to retire, close fund (BizJournals)
The top executive of Houston commodity hedge fund SandRidge Capital LP told Reuters he is retiring and closing the fund after its institutional clients saw 11 percent gains last year on trading natural gas futures. SandRidge had $320 million in assets under management, and Andrew Rowe, who also founded the hedge fund, told Reuters most of his investors’ money would be returned by the end of the first quarter. Three SandRidge traders — Matthew Titus, Matthew Parker and Rick Thielke — may join Houston hedge fund Goldfinch Capital Advisors LLC, Reuters reports, citing sources familiar with the matter.
Billionaire James Dinan’s Most Promising Stock Picks Include United Rentals (InsiderMonkey)
Small-cap and mid-cap stocks are the source of much of a hedge fund’s alpha, as these stocks are less covered by the media and other large investors and therefore are more likely to be inefficiently priced. As a result a hedge fund’s research team is more likely to uncover value when evaluating companies with market caps under $5 billion, and so it’s not surprising that on average stocks in this valuation range that hedge funds buy tend to perform particularly well. We’ve estimated that the most popular small cap picks among hedge funds have an alpha of about 120 basis points per month (read more about our hedge fund small cap strategy).
AMP adds hedge fund specialists to alts team (FinancialStandard)
AMP Capital has appointed Dr Alistair Rew and Celine Nguyen as portfolio managers to its alternatives investment team. Prior to joining AMP last week, Rew worked for more than eight years at XL Group in New York, London and Sydney reaching the position of managing director. He developed and managed the company’s internal hedge fund program. Nguyen has over six years’ experience working as a research analyst at EIM Management in the US where she conducted investment hedge fund due diligence on a range of strategies including long/short equity, convertible arbitrage, global macro, credit and event-driven.
GAM taking 30% stake in QFS (PIOnline)
GAM Group will acquire a 30% ownership stake in systematic hedge fund manager QFS Asset Management, confirmed Stacey Coglan, a GAM spokeswoman, in an interview. Terms and the likely timing of the deal’s closure are not being disclosed, Ms. Coglan said. GAM, a hedge funds-of-funds manager with principal investment operations located in Zurich, Switzerland, and London, is acquiring the minority stake in QFS to provide distribution of the hedge fund manager’s investment strategies. For example, GAM will introduce a UCITS fund based on QFS’ flagship currency strategy in the U.K. soon after the deal is closed, according to a GAM news release.
Roubini: No Need to Panic Over Debt Ceiling, Yet (CNBC)
Gloomy economic diktats and predicting the financial crisis have earned economist Nouriel Roubini the title Dr. Doom, but in his latest interview the economics professor said the United States had little to fear, despite ongoing fiscal negotiations and the looming debt ceiling. “In absolute terms, the United States has significant fiscal, growth and unemployment problems,” he said at a Reuters conference in New York on Monday. “[But] paradoxically, if we don’t reach an agreement in March on the fiscal debt ceiling and we get another downgrade, yields are going to fall, they’re not going to go up. Everywhere else, if a country gets a downgrade, the yields go up, in the U.S. it is the opposite.”
Soros talks policy reform with Thein Sein, Suu Kyi (MMTimes)
American billionaire George Soros could provide technical support to assist the government with policy reform in a number of areas, a government spokesman said last week. Mr Soros, whose Open Society Institute (OSI) is active in promoting democracy, arrived in Myanmar this month for his second visit since the current government came to power.
Why Marc Faber Will Never Stop Buying Gold (ETFDailyNews)
Marc Faber, author of the famed “Gloom, Boom & Doom Report,” is a respected name in the investing world. If ever there was a perma-bear, it would be Faber. He tends to focus on areas of the world that he sees problems in and allow that information to influence his investing decisions. But no matter what segment Faber has an eye on, his focus always circles back to one asset: gold. The precious metal has long been an important part of his holdings, and he has not been shy about vocalizing his love for the commodity.
Hedge funds nurse heavy losses after UPS-TNT deal collapses (Reuters)
United Parcel Service, Inc. (NYSE:UPS)‘s decision to abandon its 5.2 billion euro bid for TNT Express has left hedge funds nursing potential losses of more than $700 million, as the Dutch delivery firm’s shares slid. So-called merger arbitrage funds – which make money betting on the outcomes of corporate events including takeovers – are estimated to have owned around 30 percent of TNT shares before Monday’s news European anti-trust regulators would veto it, several sources familiar with the sector said.
Alibaba’s Jack Ma to stand down as CEO, move to chairman role (Reuters)
One of China’s best known corporate leaders, billionaire Jack Ma, will step down as CEO of Alibaba Group, the e-commerce empire he founded to tap the nation’s enormous online shopping potential, passing the reins to “a younger, better equipped” generation. Ma, a former tour guide and English teacher and self-styled “China’s Forrest Gump”, said he would name a successor by May 10, when he switches to the role of executive chairman. He said most of Alibaba’s leaders “born in the 1960s” would also pass their leadership responsibilities to younger colleagues.
U.S. SEC settlements reach highest level since 2007 (Reuters)
U.S. securities regulators reached 714 settlements with defendants in civil cases in the 2012 fiscal year – the highest number since 2007, a report released on Monday showed. The biannual report by NERA Economic Consulting found that the overall number of Securities and Exchange Commission settlements increased by 6.6 percent in fiscal 2012 over fiscal 2011.
