Editor’s Note: Related tickers: Deutsche Bank AG (USA) (NYSE:DB), Goldman Sachs Group, Inc. (NYSE:GS), Credit Suisse Group AG (NYSE:CS), Bank of America Corp (NYSE:BAC), JPMorgan Chase & Co. (NYSE:JPM), Radian Group Inc (NYSE:RDN), Caterpillar Inc. (NYSE:CAT)
Banks Said to Weigh Suspending Dealings With SAC as Charges Loom (Bloomberg)
Wall Street banks are debating whether to suspend doing business with SAC Capital Advisors LP if the hedge fund is charged by U.S. prosecutors, according to two people briefed on the matter. Deutsche Bank AG (USA) (NYSE:DB) and Goldman Sachs Group, Inc. (NYSE:GS) are among firms weighing the reputational and financial consequences of continuing to provide trading, lending and prime brokerage services to SAC, one of Wall Street’s largest trading clients, said the people, who asked for anonymity because the talks aren’t public. Prosecutors plan to charge SAC, the hedge fund founded by Steven A. Cohen, as soon as today as part of a probe of insider trading, a person familiar with the matter said.
Paulson Thriving as Radian Proves Second Chances Work (Bloomberg)
When Radian Group Inc (NYSE:RDN) sold shares in 2010 to bolster capital, the buyers lost more than a third of their investment in just two months. The mortgage insurer’s offering in February, backed by money managers including John Paulson, is proving second chances can work. Radian Group Inc (NYSE:RDN) has rallied 73 percent to $13.87 since selling shares for $8 apiece as well as debt in February. Rival MGIC Investment Corp. (MTG) has followed a similar pattern, slumping after a 2010 offering and surging 45 percent since this year’s $1.15 billion capital raise. …Milwaukee-based MGIC reported its first profit since 2010 this week as claims and delinquent loans declined, and Radian Group Inc (NYSE:RDN) said yesterday its mortgage insurance operations were profitable as well. That’s putting Paulson’s prediction that Radian Group Inc (NYSE:RDN) can reach $20 by 2015 within reach.
Caterpillar’s disappointing earnings good for Jim Chanos (CNN)
It’s looking like a good day for at least one famous short seller. Just a week after hedge fund investor Jim Chanos announced he was betting against Caterpillar Inc. (NYSE:CAT), the industrial equipment maker reported disappointing earnings and cut its outlook for the year. The bad news sent shares of Caterpillar Inc. (NYSE:CAT) nearly 3% lower Wednesday. The stock trimmed some of the losses as they day went on, but remained down 1.7% in the afternoon. …Chanos, founder of Kynikos Associates, is best known for his bet against Enron.
Reconciliation Specialist Watson Wheatley Adds Hedge Fund Clients (BobsGuide)
Watson Wheatley Financial Systems (WWFS) have announced the addition of two hedge fund clients in the last quarter. The London based firms will be using the i-Recs reconciliation system and Importer data aggregation software to efficiently reconcile daily trades and cash as well as P&L between internal systems and prime brokers or administrators. The installations use the latest i-Recs 2 application announced earlier this year, allowing users access to dashboards, user defined reporting and faster processing all of which are driving increased productivity in the reconciliation process.
Fund managers are more open to managed account solution (Opalesque)
Hedge fund managers who attended the latest Opalesque 2013 France Roundtable were one in saying that managed account platforms offer one of the best alternative solutions to investors who want to invest in hedge funds. The Roundtable was sponsored by Lyxor and Eurex and took place on June 6th, 2013 in Paris. Xavier Lattaignant, Head of Alternative Multi-Management at SCOR Global Investments (SGI) stated, “Managed accounts are a very compelling alternative to direct offshore investment. It is an efficient way to get transparency, control over assets by a third party and improved liquidity in some cases.
Institutional investors to make addition hedge fund allocations in H2 2013, says survey (HedgeWeek)
Institutional investors intend to remain active in hedge funds, with 88 per cent indicating that they plan to make additional allocations during the second half of this year, according to Credit Suisse Group AG (NYSE:CS)’s mid-year Hedge Fund Investor Survey. This indicates that the industry may see continued significant levels of allocation activity in the second half of 2013. In addition, respondents were asked to share their insights into whether they are planning to allocate, maintain or decrease allocations to various hedge fund strategies in the second half of this year.