Hedge Funds Liquidations Up, Taylor Losses, Highbridge Makes Arjun Asia Head

Hedge Funds Liquidations Increase In Third Quarter (Bloomberg)

Hurt by the market volatility triggered by the European sovereign debt crisis, hedge funds went out of business at the fastest pace in more than a year in the third quarter, according to a report. The number of funds liquidating rose to 213, the worst three-month period for the industry since the first quarter of 2010, Chicago-based Hedge Fund Research Inc. said in the report released today. In the second quarter, 191 hedge funds shut. Hedge funds posted investment losses of 6.2 percent on average in the three months through September. The MSCI World Index (MXWO) plunged 17 percent in the third quarter of 2011 as investors became increasingly concerned Europe. The number of hedge funds started in the period declined to 265 from 280 in the second quarter.

Hedge Fund Indices Down in November (Hedge Fund Intelligence)

The Hedge Fund Intelligence Global Composite Index dropped 0.37% in November against a 2.44% loss in the MSCI World Index (net). The Emerging Market Debt and Macro Indices are the only positive indices in November. Emerging market debt funds increased 0.33%; macro funds increased 0.20%. Emerging Market Equity is down by 13.04%.

McGraw-Hill Anticipates Additional Realignment (Bloomberg)

The company said it “anticipates additional realignment” in 2012 before the split, which may include outsourcing. A year- long company review and pressure to increase shareholder value from New York-based hedge fund Jana Partners LLC led McGraw-Hill on Sept. 12 to announce it’s dividing into one company that focuses on financial data and another for textbook publishing.

Barry Rosenstein JANA PARTNERS

LightSquared Proposes High-speed Wireless Network (Bloomberg)

Tests show that global-positioning devices from three makers won’t be disrupted by the wireless network proposed by Philip Falcone’s LightSquared, Chief Executive Officer Sanjiv Ahuja said. LightSquared, backed by $3 billion from Falcone’s Harbinger Capital Partners hedge fund, plans to offer high-speed wireless Internet service to as many as 260 million people on airwaves formerly reserved mainly for satellites.

Aquila Readies Asia Hedge Fund, $150 Min Agri Fund For 2012 (Reuters)

Germany’s Aquila Capital plans to launch an Asia-focused hedge fund and a $150 million agricultural fund in the first half of 2012, as part of a plan to expand in Asia and broaden the range of offerings for its largely European clientele. Aquila manages about 3 billion euros ($4.02 billion). The firm opened its first Asian office in Singapore in October. Aquila’s close-ended agriculture fund will invest in farmland in New Zealand and Australia, and will only target Asian investors.

Global Macro Hedge Fund Returns Fail To Impress (Reuters)

Several of the largest funds look unlikely to finish the year with anything close to the returns investors hoped for, although some have pared year-to-date losses with bearish plays struck just as the euro zone debt crisis deepened. Louis Bacon’s Moore Global Investments fund has fallen 2.6 percent in the year to November 18, while Fortress Investment Group‘s flagship macro fund was down around 10 percent by late November, one investor said. The market segment made famous by billionaire investor George Soros — who made a reported $1 billion (636 million pounds) profit from a speculative attack on the pound in the “Black Wednesday” crisis of September 1992 — was down 3.09 percent in the 10 months to October 31, the HFRI Macro (Total) Index showed.

Taylor Calls 2011 “Difficult Year” (Reuters)

John Taylor was famous for his prescient doom-and-gloom views on global economic growth, but he suffered big losses in 2011. “One of my funds is down 17-18 percent,” said Taylor. “It’s been a difficult year. I’ve been trading the market poorly.” Taylor, who manages $4.3 billion, said his analysis of the macro economy has been exactly the same as Ray Dalio, who runs the $100 billion-plus Bridgewater Associates. But while Bridgewater’s hedge funds are reportedly up double-digits this year, Taylor’s returns have been very different. Yet Shawn Kravetz, president of hedge fund Esplanade Capital, said he has never been so excited about the stock market, noting he has been buying stocks over the past nine months.

Highbridge Makes Arjun Menon Sole Asia Head (WSJ)

Highbridge Capital Management has laid off “a few” members of its equities strategy team, including Asia joint head Shyan Wen Lim, as the U.S. hedge fund refocuses its investment strategy, people familiar with the situation said Wednesday. The changes leave co-chief Arjun Menon as the sole regional boss. Highbridge wound down its Asia fund after Carl Huttenlocher, its former Asia head, said he was leaving in March of this year. That fund focused on trading equities and convertible bonds. The firm is now focusing on investing in high-yield credit, convertible bonds and ways to benefit from market volatility.

Leon Cooperman Cried For The 1% Rich (WSJ)

Leon Cooperman, a hedge-fund titan who founded Omega Advisors after a 25-year career at Goldman Sachs Group Inc. Mr. Cooperman is a member of the 14% of the 1%, the number of wealthiest Americans who made their fortune on Wall Street. Leon Cooperman shook off the shackles of oppression and, in an open letter to President Barack Obama, cried the 1%’s version of “Let my people go.” He called on the president to “eschew the polarizing vernacular of political militancy. He also noted rich also provide their employees with health-care coverage. Agreed, and people only seem to appreciate it after they’ve been laid off. Mr. Cooperman also has some pointers on how to handle Wall Street: reinstate the up-tick rule for short sellers and get rid of high frequency traders. And though he didn’t say so, it’s unlikely those proposals have anything to do with his hedge fund and its competitive interests.


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