Hedge Fund Falls Short in Bid for New York Bill (WSJ)
Hedge-fund manager Paul Singer appears to have fallen short in his effort to pass a state law aimed at bolstering his firm’s long-running effort to collect on Argentina’s unpaid debt. The Elliott Management founder has been pushing for passage of a bill that would ensure that his firm can pursue postcourt judgment claims against Argentina and other foreign states, increasing pressure on the country to settle.
Hedge Fund Industry Assets to More than Double in 5 Years: Citi Prime Finance Survey (Marketwatch)
Hedge Fund Firms Set to Compete Head to Head with Traditional Asset Managers in Regulated Alternative & Long-Only Products. Assets invested with hedge fund firms could more than double by 2016, according to a just-released survey from Citi C +4.31% Prime Finance. The study finds that pension funds, endowments, foundations and other institutional investors are increasingly embracing the risk management and diversification that hedge funds offer, and that hedge funds are developing new products that compete with traditional, long-only managers. These trends could contribute to a sharp rise in hedge fund assets over the next few years.
SEI Selected by Estlander & Partners to Provide Hedge Fund Outsourcing (Marketwatch)
SEI SEIC +2.05% today announced that it has been selected by Estlander & Partners to provide operational outsourcing services for the firm’s hedge fund business. With a strong institutional investor base, Estlander sought an outsourcing partner with a proven institutional-quality infrastructure as well as the ability to provide daily reconciliation to support the firm’s systematic trading strategies. This is the latest in a series of wins for SEI as more investment managers seek premier outsourcing providers that can provide them with the transparency, insight and support to make better decisions, eliminate risk, and provide valuable, accurate and timely information. SEI will provide Estlander with a comprehensive suite of back-office services including fund accounting, fund administration, and investor servicing.
Breeden Activist Fund Says Research Director Fenton Resigned (Bloomberg)
Breeden Capital Management LLC, the activist hedge fund founded by a former head of the U.S. Securities and Exchange Commission, said Joshua Fenton resigned as director of research and trading. Breeden Capital, based in Greenwich, Connecticut, said in an update to its annual registration with the SEC that Michael Keating will serve as interim research director. At the end of February, Breeden Capital had $645.7 million in assets under management, according to its SEC registration.
Law Firm WilmerHale Adds Hedge Fund Expert To Team (Finalternatives)
Law firm WilmerHale has added Drew Chapman to the firm’s New York office as a partner in the securities department and investment management group and head of the alternative investment practice. Chapman joins WilmerHale from Cadwalader, Wickersham & Taft, where he served as the head of the alternative investment group.
100 WHF/CAIA Scholars Earn Charter (Hedgefund)
The Chartered Alternative Investment Analyst Foundation has acknowledged the first two recipients of the “100 Women in Hedge Funds/CAIA Scholars” initiative who have earned the CAIA Charter. The organization said Tuesday that Kaoutar Sbiyaa from the French bank Rothschild & Cie and Indre Dargyte of hedge fund consultancy Laven Partners received the alternative investment sector’s top professional certification, awarded to individuals after they have completed required CAIA exams.
Hedge Funds Shed 1.24% In May (Finalternatives)
The Eurekahedge Hedge Fund Index lost 1.24% in May, outperforming underlying markets (as measured by the MSCI World Index) by 8.08%. The May totals bring the hedge fund index’s year-to-date returns to 2.23%. CTA/managed futures funds provided a ray of light in an otherwise gloomy month, gaining 2.60%. Arbitrage funds also ended the month in the black, adding 0.26%.
Hedge Funds Get Large Outflows, Fund Managers Growing More Bearish (247WallST)
TrimTabs and BarclayHedge report each month about hedge fund inflows and outflows, and if you have been watching the tape you shouldn’t be surprised that the trend is toward ‘outflows’ of late. What is interesting is that there is a one-month lag and that means that the current report covers the month of April. If stocks were still holding up in April and the outflows were large then, imagine how bad the outflows were in May. Today’s data from TrimTabs showed that hedge funds redeemed some $5.1 billion in April 2012, and that would make a net outflow of $12.7 billion that flowed out of hedge funds over the 12 prior 12-month period.
REPORT: Hedge Fund Researchers Looking Into Chinese Companies Are Being Arrested By The Chinese Government (Businessinsider)
The Chinese government is allegedly harassing and arresting researchers sent by U.S. investment firms to look into Chinese companies that are traded on American exchanges, according to a report from the Pittsburgh Tribune-Review. At least two hedge funds have reported their researchers may have been threatened or arrested in China.
Fundamental, Goldman Muni. Head Launch Hedge Fund (Finalternatives)
Private equity firm Fundamental Advisors has snagged Goldman Sachs’ top municipal bond trader to manage a new hedge fund. Hector Negroni will co-head the Fundamental Credit Opportunities Fund. Unlike Fundamental’s existing two funds, Credit Opportunities will not seek controlling stakes. New York-based Fundamental said the fund would seek to profit from “lasting, recurring” inefficiencies in the muni market.
Khosla’s SVP Raises Close to $270M for Latest Euro Fund (Pehub)
Strategic Value Partners LLC, the $4 billion hedge fund and private equity house started by distressed investing guru Victor Khosla, has secured close to $270 million in approvals and commitments for a distress-for-control European opportunities buyout fund, according to a source close to the firm. The target for the fund, Strategic Value European Opportunities (USD) Offshore Fund II LP, is $750 million, according to the source. The firm is already putting the fund to work, having made one investment in the United Kingdom and one in Germany, the source said.
Telecoms fund Digital World receives $75m seed investment (HFMWeek)
Digital World Capital, a new London-based hedge fund focused on the tech and telecoms sectors, has been trading for three months after receiving $75m seeding from an investment vehicle attached to Egyptian billionaire Naguib Sawiris, HFMWeek can exclusively reveal. Karim-Michel Nasr, who until last year was corporate finance officer at Wind Telecoms, the telecommunications giant formed by Sawiris in 2005, has been appointed CEO at the fund, which is waiting to test its strategy and appoint more staff before targeting fresh investment.
BlackRock Hires Industry Vet to Head Australia Office (Hedgefund)
BlackRock has named a hedge fund industry veteran to oversee its alternatives division in Australia. Andrew Landman will further strengthen BlackRock’s alternative investment capability in that region to meet clients’ investment needs, according to a company statement.
Willie Nelson Headlining Dalio’s Son’s Charity Event (Hedgefund)
Country music stars Willie Nelson and the Dixie Chicks are slated to perform at a fundraiser this month for a charity founded by Ray Dalio’s son. The Greenwich Time reported that the invitation-only concert being held in Greenwich on June 23 will benefit Matt Dalio’s China Care Foundation, a charity that helps special-needs children in China.
Trading the Wrong Playbook Bubble (Minyanville)
When Alan Greenspan launched the era of easy money in 1998 with the bailout of hedge fund Long Term Capital Management, no one could have predicted the litany of asset bubbles that would ensue. The Federal Reserve has been actively trying to manage the cost of money ever since in an attempt to calibrate aggregate demand as it sees fit. However, since it is monitoring lagging economic data in order to adjust monetary policy, which also works with a lag, market participants are not discounting future fundamentals. Investors are merely positioning for what they think Fed policy will be based on past fundamentals. As a result, the market has experienced massive distortions in pricing leading to 14 years of boom-bust sequences.
Rajat Gupta Lawyers Submit Wiretaps Of Goldman’s Loeb (Bloomberg)
Lawyers for Rajat Gupta, the former Goldman Sachs Group Inc. (GS) director accused at trial of passing inside tips, said they have “compelling” evidence that bank executive David Loeb shared inside information with Galleon Group LLC co-founder Raj Rajaratnam. Loeb passed information about Intel Corp. (INTC) and Apple Inc. to Rajaratnam, according to excerpts of two phone calls tapped by the Federal Bureau of Investigation and submitted by Gupta’s lawyers. The defense obtained the documents after Rakoff ordered the government to turn over all evidence of other Goldman Sachs tippers relied on by Rajaratnam.
Greek Hedge Manager Says Drachma Is Back As Wages Plunge (Bloomberg)
Jason Manolopoulos, the hedge-fund manager who wrote “Greece’s ‘Odious’ Debt,” has news for anyone wondering whether the country will exit the euro: The drachma has already returned. In the run-up to national elections on June 17, New Democracy leader Antonis Samaras has painted a bleak picture of what will happen if Greece leaves: Incomes, bank deposits and property would lose at least half their value within days, he says; food prices would soar. Is that an accurate assessment?
Hedge Funder Cohen, Basel VIPs Eye $78 Million Rothko (Bloomberg)
U.S. billionaires Steven Cohen and Jerry Speyer were among the VIPs browsing at the world’s biggest fair of modern and contemporary art, where a 1954 Mark Rothko abstract is for sale priced $78 million. The New York-based collector Alberto Mugrabi and U.K. artist Tracey Emin joined other well-known faces at the UBS- sponsored Art Basel in Switzerland, now in its 43rd edition, with 300 galleries from 36 countries.
Bill Ackman Has Added A New Short Position To Pershing Square’s Portfolio (Businessinsider)
Hedge fund titan Bill Ackman, the founder of Pershing Square Capital Management, just sent out his Q1 letter to investors dated June 12, 2012. In the letter, the activist investor said they have added new investments, one of which is a short position.
How One Guy Blew His Chances At A High-Profile Hedge Fund Job Seconds Before He Got The Offer (Businessinsider)
This story should teach hedge fund hopefuls how NOT to go through with an interview. A hedge fund headhunter told Clusterstock about how a potential recruit for a top U.S. hedge fund (an over $10 billion AUM, multi-strategy global fund) completely ruined his chances of getting an offer despite being the perfect candidate.
Institutional Canadian fund manager Aurion dip its toes in alternative waters (Opalesque)
Founded in 1996, Toronto based Aurion Capital Management Inc is principally known for its activities as a pension fund manager, activities that started at its launch as a spin out from Shell Canada Pension Fund. However, recent years have seen it dipping its toe in hedge fund waters with the launch of two alternative funds. In addition to managing total firm-wide assets under management of C$6bn ($5.84bn), Aurion also oversees C$3.6bn ($3.49bn) of third-party managed assets under administration totalling C$9.6bn ($9.bn) in overall assets. Since 2011 it has been 60% owned by Scotia Bank.
Consultancy supports alternative firms through wall of regulatory change (Opalesque)
Shane Brett’s Global Perspectives consultancy squares up to a wall of regulatory change for the hedge fund industry, consulting from its Dublin headquarters on product design, management and operational due diligence for the alternative asset management industry. Brett had been working operationally in hedge funds for 15 years in Dublin, London, Australia and New Zealand for a number of large institutions. He started on the administration side before moving over to the hedge fund management side of the business. “I always wanted to start my own consultancy and felt I had all the piece of the puzzles in place so I was in a good position to advise across the board” Brett says. He also felt that with the wealth of new regulations coming in which will affect the hedge fund industry his services could be essential.
Looking back on Steve Eisman’s departure from FrontPoint (Absolutereturn-Alpha)
Steve Eisman left FrontPoint Partners. The multistrategy hedge fund firm announced it was liquidating many of its single manager vehicles in the wake of heavy redemptions following the Chip Skowron insider trading scandal, including Eisman’s Financial Horizons and Financial Services funds. Eisman gained minor celebrity after being featured in Michael Lewis’ book The Big Short for his successful subprime bet while at FrontPoint. He has since re-emerged with the founding of Emrys Partners, which began trading in March with $22.9 million from friends and family and which is now fundraising with institutional investors. An updated asset figure was not available and a spokesperson for Eisman declined to comment.
EVENT: Throgmorton Cricket Challenge charity event due 27 June (HFMWeek)
Throgmorton, the financial and administrative outsourcing specialists for hedge fund and private equity managers, has announced details of its upcoming Cricket Challenge and Garden Party, the proceeds of which will go to youth sports charity The Lord’s Taverners. The event, which will take place on Wednesday 27 June at the Royal Hospital Ground in Chelsea, London, will see four teams of alternative industry professionals compete in a mini cricket tournament, with each team captained by a cricketing legend.
Hedge Fund Establishes U.S. Location (Hedgefund)
Finnish macro hedge fund Estlander & Partners has opened its new U.S. office. The firm also announced Tuesday that it has hired Dan Rizzuto to lead its business development and growth efforts in America out of the Stamford, Conn. location.
Fast growing MBS trader Axonic hires three (Absolutereturn-Alpha)
Clay DeGiacinto’s Axonic Capital continues its quick rise at the center of perhaps the hottest strategy in hedge fund investing: mortgages. Launched in January 2011 with $150 million by the former Goldman Sachs mortgage trader and Army Captain , 18-person Axonic now manages $645 million and is hiring senior staff to keep up with the inflows.
D.E. Shaw Finance Director to Retire (Institutionalinvestor)
One of the six managing directors who have comprised the executive committee of D.E. Shaw since 2002 is retiring. Stuart Steckler, a managing director of D. E. Shaw & Co. who oversees the group’s finance and operations activities as chief administrative officer, will leave the firm at the end of June, according to a spokesperson at the firm. The firm has no plans to replace the 54 year-old. Rather, the other five managing directors will divide up his functions.
Buffett’s Berkshire Hathaway offering to buy mortgage division of Residential Capital (Washingtonpost)
Warren Buffett’s Berkshire Hathaway Inc. is offering to buy the mortgage division and loan portfolio of Residential Capital LLC, which filed for bankruptcy protection in May. Residential Capital, also known as ResCap, is a subsidiary of Ally Financial Inc., the former auto lending arm of General Motors. ResCap was hobbled by payments on debt taken out to finance soured home mortgages. Berkshire didn’t spell out why it is interested in ResCap’s assets in the court filing in which it outlined why its offer is better than competing bids.
Ex-Fund Manager Sues Saying RBS Ignored Fraud Warnings (Bloomberg)
A former hedge-fund manager sued Royal Bank of Scotland Group Plc (RBS)’s NatWest unit claiming the bank ignored evidence its accounts were used to conduct what may be one of Britain’s biggest Ponzi schemes, in which he lost about 19.3 million pounds ($30 million). He and the firm he founded, Jeremy D. Stone Consultants Ltd., sued NatWest and one of its managers, Paul Aplin, for negligence, dishonest assistance, deceit and conspiracy, seeking about 24 million pounds. The complaint was filed in London in April and made available by the court last week.