Third Point’s Loeb boosts Yahoo stake (Reuters)
Hedge fund manager Daniel Loeb has upped his stake in Yahoo Inc (YHOO.O) by about 2.5 million shares, according to a regulatory filing with the Securities and Exchange Commission on Tuesday. Yahoo was already the largest holding of Loeb’s hedge fund firm Third Point and the new investment takes its stake to over 73 million shares or about 6 percent of the Internet company’s outstanding stock.
Major hedge fund dumps Best Buy (StarTribune)
Hedge fund manager extraordinaire David Einhorn bet big on Best Buy stock. Then he lost big on Best Buy stock. In a letter to investors Monday, Einhorn’s Greenlight Capital said it sold off its 2.27 percent stake, or 7.7 million shares, in the Richfield-based consumer electronics giant. Greenlight didn’t disclose its exact loss, but a Star Tribune analysis of Greenlight’s stock purchases indicate the firm’s losses could approach $100 million.
Hedge Fund technology and Software providers move to Address Form PF Compliance Requirements (HedgeCo)
Advent Software, Inc. a leading provider of software and services for the global investment management industry, today announced a collaboration with Data Agent, LLC to provide tools to help hedge funds and hedge fund administrators meet Form PF reporting requirements. The tools offer a flexible and affordable platform designed to address highly specialized Form PF filing requirements. By working together, Advent and Data Agent bring together high quality and reliable data, modern dashboards and easy-to-use management and sharing functionality to help reduce complexity, cost and the time required to meet new regulatory mandates.
White Mountains manager unit buys stake in hedge fund firm (PIOnline)
White Mountains Advisors, the investment management arm of White Mountains Insurance Group overseeing about $34 billion in assets, has taken a 7.5% stake in emerging hedge fund manager Oakum Bay Capital, confirmed Brooke S. Parish, Oakum Bay’s president and CEO, in an interview. White Mountains Advisors also will invest $10 million in Oakum Bay’s long/short hedge fund bringing assets of the fund to $70 million, Mr. Parish said. About 40% of the fund’s assets are from institutional investors.
4 fertilizer stocks hedge funds are reaping (MarketWatch)
Severe drought and record heat is wreaking havoc on the Midwest food harvest. Lower farm yields and dwindling inventories have resulted in a 50% surge in corn prices over the past month with little relief in sight. But record food prices have created a boom for agricultural chemical companies. The sector is up 13% in the past month, with traders betting that higher food prices will boost demand for fertilizers.
Stop Fiddling With Your Hedge Fund Strategy Allocation (ai-CIO)
“Don’t just do something, sit there” may be precisely the advice that hedge fund investors need to hear, according to an article published by the CFA Institute. Hedge fund investors should actively rebalance their portfolio within certain bounds and avoid focusing on categories that outperform, contends the article, authored by Ted Seides, CFA. By doing so, investors can gain a leg up over their “performance-chasing” competitors. “Although the determination of a policy portfolio for hedge funds is an imprecise art, active rebalancing is a useful science that adds value and keeps behavioral biases in check,” advises Seides. “In absence of active rebalancing, allocations to hedge fund strategies inevitably drift away from espoused targets.” Consequently, investors should maintain clearly demarcated policy targets and not allow their portfolio to veer outside them.
US: Hedge fund managers back marriage equality in four states (PinkNews)
Pro-Republican hedge fund managers are backing marriage equality efforts in four US states. Marriage equality campaigns in Maine, Maryland, Minnesota and Washington have received financial support from hedge fund billionaire Paul Singer and Cliff Asness, the founder of AQR Capital Management, the Financial Times reports. Investors Dan Loeb and Seth Klarman are also supporting the campaigns and the newspaper reports that all four have donated to marriage equality group Freedom To Marry.
Phoenix Fund Secures $40M Seed (HedgeFund)
New York-based hedge fund Phoenix Investment Adviser has obtained a $40M seed investment for its institutional credit fund. The firm announced Monday that the investment came from an unnamed “large European institution.” The recent inflow of money now brings the fund’s total assets to approximately $55 million.
Bridgewater Sees ‘Dangerous Dynamic’ As Largest Economies Slow (Bloomberg)
Bridgewater Associates LP, the hedge fund founded by Ray Dalio that manages about $120 billion in assets, said the global economy is facing the threat of a self- reinforcing decline after the world’s largest economies slowed in recent months. Global growth has slowed to about 1.9 percent “in the past few months” from around 3.3 percent as Europe deleverages and China’s economic is cooling, the Westport, Connecticut-based firm estimated in its second-quarter report, a copy of which was obtained by Bloomberg News. Bridgewater also said the European debt crisis has been poorly managed, bringing Europe closer to a “debt implosion” or a currency collapse.
Analysis: State Street predicts growing AUA as hedge fund industry continues institutionalisation (HedgeFundsReview)
Fund administrator State Street expects most growth in its assets under administration over the next two to three years from the hedge fund sector as institutionalisation of the industry continues. Asset servicing of the alternatives sector is already a core feature for State Street and, with the purchase of Goldman Sachs Administration Services (Gsas), that focus enters new territory. Scott Carpenter, senior vice president and head of State Street’s Alternative Investment Solutions client relationship management and strategy group, confirms the servicing of hedge funds is a “strategic growth area” and that the purchase of Gsas extends State Street’s “reach into the hedge fund community”.
Octopus: Read This Book to Understand Wall Street (RollingStone)
First things first: someone is going to make Octopus into a movie. By this time next year, the books author, fellow Rolling Stone contributor Guy Lawson, will have a fat deal (he may already have one as far as I know) and will be hobnobbing with John Cusack or Ed Norton or whoever else gets to play the incredible role of Sam Israel, the Madoff-esque Ponzi artist who headed the infamous Bayou hedge fund. When I try to get Guy on the phone for whatever reason, I’m going to get fobbed off instead on a personal assistant with a name like Minka or Yue-Yue. That’s just a fact.
Maples Fund Services adds to San Bernardino pension fund (AssetServicingTimes)
Maples Fund Services will provide extra services for San Bernardino County Employees Retirement Association (SBCERA), the public pension fund, which include customised and consolidated risk reporting. Maples Fund Services, a division of MaplesFS, and SBCERA, which has more than $6 billion in investment assets, have been working together on the operation of an $800 million bespoke hedge fund managed accounts program.
Tiger Consumer Fund Shorting Strategy Revealed (ValueWalk)
Tiger Consumer Management was started by Patrick McCormack, a former analyst at Tiger Management. McCormack’s hedge fund, is a ‘Tiger Fund, and was seeded by Julian Robertson, CEO of Tiger Management. The hedge fund currently has approximately $2 billion in assets under management. According to our sources with direct knowledge of the matter, the fund was down around 2% as of Q2 2012 against 2.8% of S&P 500. For the year, the fund has a positive return on 7% compared to 9.5% for S&P 500. Since inception in 2000, Tiger Consumer has returned 8.4% annually, versus the S&P500 return of 1.3% CAGR. The contribution of various components to the fund’s year to date gross return of around 8 percent are 3 percent from alpha, 2 percent from beta and around 4 percent from leverage.
BofA Prime Brokerage Head Quits for HF Job (HedgeFund)
The head of Bank of America Merrill Lynch’s U.S. brokerage service that introduces hedge funds to new investors is reportedly leaving the bank for a position at a hedge fund. An internal memo obtained by Reuters said that Justin Fredericks was leaving “to pursue other opportunities” but did not disclose what they were. However, a source close to the situation told Reuters that Fredericks will be working for an unnamed hedge fund.
Phil Falcone’s Harbinger Group Is One Of The Hottest Stocks Of The Year (Forbes)
These are tough times for Philip Falcone. His Harbinger Capital Partners hedge funds have been decimated, his most important investment, LightSquared, filed for bankruptcy protection in May, and the Securities & Exchange Commission in June accused him of committing securities fraud. But there is one thing that is going right for Falcone. He is behind one of the hottest stocks of the year. His Harbinger Group, which trades on the New York Stock Exchange, is up 113% this year.
Hall Resigns as Duet Commodities Fund Manager After Losses (SFGate)
Tony Hall, chief investment officer at Duet Commodities Fund Ltd., and portfolio manager Arno Pilz resigned after losing money in nine of the past 10 months. The fund remains open and the portfolio managers are in the process of being replaced, Henry Gabay, co-chairman and co- founder of Duet Asset Management Ltd., said today in a telephone interview from London. Hall and Pilz are still managing the fund while Duet seeks replacements, he said. Hall declined to comment when reached by phone today.
Greenlight’s Einhorn says fund exited Best Buy, Dell in 2nd qtr (Reuters)
David Einhorn told investors his Greenlight Capital hedge fund sold out of computer maker Dell Inc in the second quarter as the stock “proved to be a disappointment,” with non-PC business growth smaller than expected. Einhorn, in a letter to investors obtained by Reuters, said the fund also exited retailer Best Buy Co “with a loss” as “unexpected problems emerged” that challenged its business. He cited the depletion of cash resources due to a $1.3 billion acquisition, a decline in profits from Best Buy’s international business, and the dismissal of its CEO “over his personal conduct.”
Technology Analyst Expected to Plead Guilty in Insider Case (NYTimes)
A technology research analyst who gained notoriety for taunting the federal government over its pursuit of insider trading is expected to plead guilty in United States District Court in Manhattan on Wednesday, according to people briefed on the matter. John Kinnucan, founder of Broadband Research, based in Portland, Ore., is expected to plead guilty to sharing secret information about technology companies with money managers in exchange for cash.
Hedge Fund Appeals Approval Of Tribune Ch. 11 Plan (Law360)
Bondholder Aurelius Capital Management LP on Monday appealed a Delaware bankruptcy judge’s approval of Tribune Co.’s reorganization plan, targeting the critical settlement that let bank lenders off the hook for the ill-fated 2007 leveraged buyout of the media giant. In court documents supporting an appeal to the Delaware district court, the hedge fund asked the bankruptcy court to prevent Tribune from moving forward with the plan until the appeal is resolved.
Soros-Backed Group Urges ECB Action, Bank Union To End Crisis (Bloomberg)
Ending the euro-zone debt crisis requires greater political union and European-level banking insurance as well as more aggressive action by the European Central Bank, a band of economists said. The report by the Institute for New Economic Thinking, a research institute founded by billionaire investor George Soros, rejected calls for permanent joint debt issuance, nor did it endorse fiscal transfers between the 17 members of the currency zone.
German govt wants to limit hedge funds to professionals (Reuters)
German Finance Minister Wolfgang Schaeuble wants to limit direct investment in hedge funds to professionals in order to protect private investors from risky assets, via a new bill regulating alternative investment funds, his ministry said on Wednesday. “Interests in single hedge funds will in future only be able to be held by professional investors,” reads a draft of the bill on investments, which was published on the finance ministry’s website and is being discussed with the investment industry.
Islamic index products struggle in Gulf investment culture (Reuters)
Islamic exchange-traded funds (ETFs) are struggling to attract fresh investors, in contrast to a move by Western investors into conventional ETFs – a difference due to the Gulf’s plain-vanilla investment culture and the way in which institutions choose financial products. ETFs are funds which track indexes of shares, bonds or commodities and are traded like stocks. Their sharia-compliant versions follow religious principles such as bans on interest and gambling.
David Einhorn Says He Left His Wife A Note On The Fridge To Keep Her From Poaching His Employees (BusinessInsider)
We found this part of hedge fund titan David Einhorn’s Greenlight Capital’s Q2 investor letter particularly amusing… Landon Lee, our Research Associate in Dallas, has decided to pursue an MBA at Columbia Business School. As Cheryl Einhorn is an Adjunct Professor there, one can’t help but feel that Landon is choosing Cheryl over David. And who wouldn’t? To discourage further poaching, David has taped a “Do Not Solicit Greenlight Employees” notice to the home fridge. We will miss Landon, and we wish him good luck!
Barclays’ head of remuneration committee quits (MarketWatch)
Alison Carnwath, the head of Barclays PLC BCS +1.71% remuneration committee, Wednesday quit the bank’s board with immediate effect for personal reasons, capping a tumultuous two years at the company. Ms. Carnwath, who in recent months acted as a lightening rod for shareholder anger over group’s decision to pay out large bonuses to top executives, said in a statement that she is no longer “able to devote sufficient time” to her role as director because of other commitments. A spokeswoman for Barclays said the bank’s board has started looking for a replacement for Ms. Carnwath.
NFA launches education initiative in wake of CFTC rule amendments rescinding exemptions (HedgeCo)
National Futures Association (NFA) today announced an education initiative to assist commodity pool operators and commodity trading advisors that will be affected by the Commodity Futures Trading Commission’s (CFTC) recent rule amendments rescinding exemptions from registration. The initiative will include published guidance, webinars, workshops and tutorial videos. On February 24, 2012, the CFTC issued final rules amending CFTC Part 4 Regulations to rescind the exemption from registration available to CPOs offering certain qualifying pools under CFTC Regulation 4.13(a)(4). CPOs who previously qualified for this exemption have until December 31, 2012 to register.
Dash Financial announces management buy-out from I. A. Englander & Co LLC, purchase of EBS and private equity placement (HedgeCo)
Dash Financial Holdings, LLC, (Dash) announced, this morning, the completion of three transactions – the management buy-out of the Dash Financial division and all of its assets from Israel A. Englander & Co., the acquisition, of Electronic Brokerage Systems (“EBS”) from Frontline Technologies, Inc. (TSXV – FLC), subject to FINRA approval, and the placement of a significant private equity investment in the new firm. These three transactions mark the formal independence of Dash and the introduction of three additional product lines – the Dash High Frequency Trading platform (“Dash HFT”), their Ultra-Low Latency environment for colocation (“Dash ULL”) and Dash Clearing (self-clearing) for both equities and options.
Hong Kong Tycoon to Pay $1 Billion for British Gas Firm (NYTimes)
A consortium of companies owned by Li Ka-shing, the richest person in Asia, agreed on Wednesday to buy MGN Gas Networks of Britain for £645 million ($1 billion), as Mr. Li’s corporate empire continued to broaden its already large global footprint in the energy sector. Three Hong Kong-listed companies controlled by Mr. Li and his family — Cheung Kong Holdings, Cheung Kong Infrastructure and Power Assets Holdings — each have a 30 percent stake in the bidding consortium, while the charitable Li Ka-shing Foundation will hold the remaining 10 percent stake, according to a joint stock exchange announcement on Wednesday.
New Enterprise Associates Raises $2.6 Billion Fund (NYTimes)
New Enterprise Associates has refilled its coffers. The venture capital firm, which has backed Groupon and Diapers.com, has raised $2.6 billion for its latest fund. The fund, NEA’s 14th, is one of the largest in venture capital history, but the firm is not a stranger to giant funds. The last fund it raised in 2009, in the wake of the financial crisis, was $2.5 billion. That one, however, required about 7 months of fundraising efforts. NEA’s new fund only needed two months, according to Scott Sandell, a general partner at NEA.
Million-dollar donors account for nearly half of GOP super PAC fundraising (WashingtonPost)
If super PACs are indeed saving Mitt Romney early in the 2012 election (as we posited Tuesday morning), he’s got a lot of very wealthy people to thank for it. About four dozen donors and families have given at least $1 million to super PACs this election cycle, with three-quarters of them giving to the GOP. Combined, these four dozen donors have provided $130 million of the $308 million super PACs have raised this cycle (more than 40 percent) — a reflection of how much these outside groups are funded by extremely wealthy donors.
Apple (AAPL) Reports Q3 Earnings: Huge Miss as 228 Hedge Funds Cry (ValueWalk)
Apple Inc. (NASDAQ:AAPL) released its earnings report for the third quarter of 2012 this afternoon after the market close. The report put Apple’s earnings for the quarter at $9.32 per share on revenue of $35 billion. The numbers fall below what analysts had predicted at the company, and will surely shake investors. In the run up to the report analysts were estimating relatively lower numbers at the company than is usually the case. A Thompson Reuters poll of analysts revealed that the consensus earnings estimate was $10.36 per share, while revenue was expected to be $37.2 billion.
Hedge Funds Care to host golf day (MyCOOConnect)
Hedge Funds Care UK will hold its annual London Golf Day at the Grove Golf Course in Hertfordshire on Wednesday, October 3 in what is likely to be a record fundraising year for the charity. The charity, established by Robert Mirsky, head of the hedge funds group at KPMG, has raised north of £1 million for various children’s charities since inception in 2006. Beneficiaries include Barnardo’s, BeatBullying, Family Matters, Imara and Eaves for Women, all of which work closely with vulnerable or abused children.