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Phony Hedge Fund, BlackRock Up on Asia, Bacon Moore, Currency

BlackRock’s Richard Areny Says Asia Long-Short Macro Thrive (Bloomberg)

Richard Arney, head of hedge funds at BlackRock Alternative Investors, spoke to Bloomberg Television’s Susan Li in Hong Kong today about recent market swings and its implications. The BlackRock Inc. (BLK) division manages $114 billion of hedge funds, funds of hedge funds, private equity, real-estate investments. On what are the promising strategies at the moment: “Right now we have done very well in long/short Asia equities. We see a lot of opportunities there. I also see more recently we’ve done very well in the global macro space.”


Phony Hedge Fund in Florida (HedgeFund)

A Florida resident allegedly operating a phony hedge fund was arrested Wednesday morning. Scott Kupersmith, 46, of Boca Raton and formerly of Alpine, N.J., was charged with one count each of securities and wire fraud, according to New Jersey U.S. Attorney Paul Fishman. According to a Securities and Exchange Commission complaint filed in U.S. District Court in New Jersey, Kupersmith and his associate Frederick Chelly engaged in a scheme known as “free-riding,” where they allegedly bought and sold securities in a brokerage account without the cash or securities to cover the trades.

Louis Bacon, Greg Coffey and Others at Moore Capital Success (eFinancialNews)

Greg Coffey, Louis Bacon and the five other partners of hedge fund manager Moore Capital’s European arm have shared more than £60m of profits between them over the last two financial years, after making money for investors – but profitability has been falling. Profit for the financial year available for discretionary division among members of the partnership was £21.8m last year and £40m in 2009, according to the 2010 financial statements of Moore Europe Capital Management, which have just been published at Companies House.

Man Group Rises in Early FTSE Trading (StockMarketWire)

Headline shares added to strong early gains by midday, following news the EU reached headline agreement on Eurozone support measures. Financials led the charge but gains were broad-based. At midday, the FTSE100 was up 138.5 points at 5,691.74 with the FTSE250 ahead 292.3 points at 10,714.7 and the FTSE Smallcaps 33.13 points better at 2,856.73.

Hedge Funds Dump Currency Trades (WSJ)

Hedge funds are dumping their currency trades across-the-board as they brace for unprecedented market-moving developments on both sides of the Atlantic. While global investors have recently turned cautiously optimistic about economic troubles in the U.S., China and Europe, hedge funds are reducing their exposure to currencies to the lowest level in more than two years, according to Parker Global Investors, a firm that invests in currencies-focused hedge funds.

Currency Trades in Worst Year Since 1991 (Bloomberg)

Currency-trading strategies are losing the most in two decades as the volatility that’s boosted volume and profits for investment banks erodes the ability of investors to make money. Three out of four Royal Bank of Scotland Group Plc indexes of foreign-exchange trading strategies are down this year, including a 2.7 percent drop through September for its carry trade index. Deutsche Bank AG’s dollar-denominated Currency Returns Index has fallen 3.4 percent, the biggest drop since a 4 percent slide in 1991. The Stark Currency Traders Index and a Barclays Plc index have declined by 8.6 percent and 0.4 percent.

Fed Blocks MetLife from Increasing Dividends (FT)

The Federal Reserve has blocked MetLife’s plans to increase its dividend for the first time in four years and repurchase stock from shareholders, AP reports. The insurance company needs Fed approval due to its ownership of Metlife Bank, which takes deposits and makes home loans. The Fed concluded that the company’s plans should be tested under the next round of stress tests, scheduled for next year. However, Bloomberg reports that the insurer may now be pressed to speed its exit from banking. The Fed’s stance on Metlife’s plan comes as the regulator told JP Morgan it would not permit the bank to buy back from the Fed more of its shares, the WSJ reports.

SEC Scales Back Hedge Fund Rules (WSJ)

Large hedge funds and other private-fund advisers will have to file periodic reports with regulators seeking to assess threats to the financial system, according to a new rule approved by the Securities and Exchange Commission on Wednesday.

Hedge Fund Insurer HCC Fell on Increased Claims (Businessweek)

HCC Insurance Holdings Inc., the Houston-based insurer, fell in New York trading after saying costs were higher than forecast on policies protecting private- equity and hedge fund managers from liability claims. The insurer will probably have to increase reserves by about $27.5 million for losses this year, HCC said late yesterday in a statement. The costs relate mostly to the financial products segment, which insures investment managers.

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