Soros Lays Off Managers, Hedge Funds’ Tough Year, SEC Charges Fortress Executive

Layoffs Hit Soros Investment Company (Reuters)

Soros Fund Management, the investment company of billionaire George Soros, has laid off a handful of analysts and portfolio managers in recent months. The moves came after the New York-based fund hired a new chief investment officer, Scott Bessent, in September, and after it closed its doors to outsiders in July by reorganizing into a so-called family office to exclusively oversee the Soros family’s personal fortune. Still, the fund continues to rank as one of the world’s biggest and most powerful investors with some $25 billion in assets and some 300 employees putting that money to work.

hedge fund research

For Kingdon Capital, 2011 Is A Very Bad Year (WSJ)

Three years ago, during the worst of the financial crisis, Mark Kingdon’s hedge fund firm reported a loss of 22.8%. Hedge fund managers in any year would cringe at those kinds of losses, but in context, they weren’t all that bad considering they performed in line with peers and much better than the broad stock market, which lost nearly twice as much. This year, Mr. Kingdon — who has a 28-year track record that includes producing double-digit returns for investors in most years – has seen his portfolio fall by 18.15% through November, according to a letter he sent to investors on Tuesday. Kingdon, which mostly bets that stocks will rise or fall, has seen a steady diet of losses throughout 2011, and then “lagged the sharp month-end rally” in November, Mr. Kingdon said in the letter.

Prologue Feeder Fund Up 8.02% This Year Through November (WSJ)

Hedge-fund manager Prologue Capital’s Feeder Fund posted an 8.02% gain this year through November, beating the returns of peers and benchmark indices. The $1.3 billion Prologue Feeder Fund rose 1.92% last month, according to an investors letter viewed by Dow Jones Newswires.

S.E.C. Fraud Case Casts Dark Cloud Over Fortress (NYTimes)

On Friday, clouds darkened after the Securities and Exchange Commission charged Mr. Mudd with securities fraud for allegedly understating Fannie’s exposure to subprime mortgages. The commission also sued two other Fannie executives and three former officials at Freddie Mac. “This morning, the S.E.C. filed a civil complaint against Dan Mudd, related to matters associated with his previous employment at Fannie Mae,” said Gordon Runte, a Fortress spokesman. “The complaint does not relate to Fortress, and this matter has not impacted our company or our business operations. We are undertaking a thorough review of the matters addressed in the complaint.” Mr. Mudd denied the charge in a statement issued through his lawyer, Jamie Wareham.

Buffett Buys 49% Stake in $1.8 Billion NRG Solar Power Plant (Bloomberg)

Warren Buffett’s MidAmerican Energy Holdings agreed to buy a 49 percent stake in NRG Energy Inc. (NRG)’s $1.8 billion Agua Caliente solar project, the billionaire’s second investment in solar this month. Buffett’s foray into solar shows that utility-scale power plants offer good returns with little downside risk, said Paul Clegg, an analyst at Mizuho Securities USA in New York. Power from the plant, which won a $967 million loan guarantee from the U.S. Energy Department this year, will be sold to a PG&E Corp. utility under a 25-year contract at undisclosed prices.

Three London Hedge Funds Set to Pay Partners $3 Billion, FT Says (Bloomberg)

Three of London’s biggest hedge funds are likely to pay their top partners a total of more than $3 billion this year, the Financial Times reported, without saying where it got the information. The expected payouts by Brevan Howard Asset Management LLP, BlueCrest Capital Management Services Ltd. and Winton Capital Management Ltd. follow investment successes at the firms even as the industry as a whole lost an average of 4.3 percent of investor money, the newspaper said today, citing Hedge Fund Research.

Gold To Drop In Q1, Far From Retesting Record High: Reuters Poll (Reuters)

Gold prices will fall below $1,500 an ounce over the next three months and are unlikely to retest September’s all-time highs until later 2012 at the earliest, according to a Reuters poll of 20 hedge fund managers, economists and traders. Selling was fuelled by a scramble by hedge funds for cash to meet client redemptions at the end of a difficult year and a run for cash by European banks seeking to raise capital. “What is surprising is that in an environment where headline risk news is bigger than ever, gold has actually fallen from its highs,” said Christoph Eibl, CEO and founding partner of the Swiss commodity hedge fund Tiberius.

ICE Brent Money Manager Long Positions At 124,576 Last Week (Bloomberg)

Speculative bets by hedge funds and other money managers that the price of Brent crude will raise totally 124,576 lots, in futures only, in the week ended Dec. 13, the London-based ICE Futures Europe exchange said today in its weekly Commitment of Traders report.

Funds Edge Back Into Euro Zone Peripheral Debt (Reuters)

Fund managers are finding the eye-catching returns on euro zone peripheral bonds too good to resist, and have begun to buy back into the crisis-hit countries’ bond markets despite worries the region is still far from resolving its debt crisis. “If you are going to take a risk, then arguably one could focus the ‘risk on’ portion of a portfolio on Italian bonds at the expense of other lower yielding ‘risk on’ securities, with the remainder in the very safest assets,” Tim Haywood, who runs hedge fund strategies at Swiss asset manager GAM, said.

Americans Losing Addiction To “Crackberrys” (Reuters)

“It’s frustrating because I haven’t heard anything good from them in a long time,” said long-time BlackBerry user Kevin Nichols, the head of KLN Consulting Group, who was looking at Android and Windows phones at a Sprint Nextel Corp store in downtown San Francisco on Friday. Even on Wall Street, where users once joked about their addiction to their “crackberries,” loyalty is waning. “The QNX delay is a concern,” said Rob Romero, head of hedge fund firm Connective Capital. “Consumers like new products and vendors want something new to sell in their stores.” The chief technology officer of a Connecticut-based hedge fund said that when a top hedge fund manager wants to use an iPhone instead of a BlackBerry they can now switch, even though he prefers RIM security. “When they say I want an iPhone or an iPad configured, they get it,” said the CTO, who declined to be identified.

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