Citadel’s Ken Griffin says derivatives trading safer and more efficient (Opalesque)
Derivatives trading has improved dramatically, becoming safer and more efficient through post-crisis reforms that have shifted power from bank “dealers” to investors, according to Ken Griffin, founder of one of the world’s biggest hedge funds. “The dealers spoke about fire and brimstone, that markets would cease to work, products would become illiquid, costs would go up dramatically, clients would endure adverse consequences,” Mr Griffin, head of Citadel, the Chicago-based hedge fund, told the Financial Times.
Druckenmiller Says Fed Exit Would Be ‘Big Deal’ for Markets (San Francisco Chronicle)
Stanley Druckenmiller, who boasts one of the hedge-fund industry’s best long-term track records of the past three decades, said it would be a “big deal” for financial markets if the Federal Reserve were to completely end its asset purchases as outlined over the next 12 months. “How in the world does anyone think when the actual exit happens that prices are not going to respond?” Druckenmiller said today on Bloomberg Television’s “Market Makers” with Erik Schatzker and Stephanie Ruhle, given the selloff in bonds and emerging markets in the past few months on the mere hint that the Fed might taper its purchases.
Ackman Attempts to Frighten Herbalife (HLF) Auditor (StreetInsider.com)
Shares of Herbalife Ltd. (NYSE:HLF) decline Wednesday, dropping 2% intraday as Bill Ackman stepped up his attacks on the so-called pyramid scheme. A 52-page letter from Ackman to Herbalife’s new auditor, PricewaterhouseCooper, was obtained by the New York Post. The letter appears to be an attempt by the hedge fund manager to raise alarm bells ahead of potential audit approval. Herbalife Ltd. (NYSE:HLF) hired PricewaterhouseCooper after its previous accountant, KPMG, resign due to an unrelated insider trading scandal.
Tiger Global Readies $1 Billion Long-Only Fund (FINalternatives)
Tiger Global Management, one of the most successful hedge funds in recent years, is doing away with the hedge for its latest fund. The New York-based firm is planning a long-only vehicle to be helmed by founder Chase Coleman and two other portfolio managers, Feroz Dewan and Scott Shleifer. The fund is expected to debut on Oct. 1 with between $1 billion and $1.5 billion in initial assets. Tiger Global has more than $11 billion in assets, even after returning $2 billion to investors late last year.
Mastic Hedge Fund Appoints James O’Brien as Chief Executive (Bloomberg)
Mastic Investment Advisory AG, the Zug, Switzerland-based commodities hedge fund, appointed James O’Brien as chief executive officer and chief risk officer. O’Brien is a former colleague of Mastic Chief Investment Officer Kieran McKenna from Goldman Sachs Group, Inc. (NYSE:GS), according to a letter to investors obtained by Bloomberg News. O’Brien has since held senior trading roles at Cargill Inc., Lehman Brothers Holdings Inc. and Fortis Bank SA, the letter showed. The appointment was confirmed today by a Mastic official who asked not to be identified in line with company policy. McKenna worked as a trader at Goldman from 1997 to 2004 before spells at Deutsche Bank AG, Citadel LLC, JPMorgan Chase & Co. and Credit Suisse Group AG.
Stanley Druckenmiller: Fed Choice Totally Matters to Market (Bloomberg)
Two of the biggest and most successful hedge fund managers hugely bearish on India (Moneylife)
Two of the world’s biggest and most successful hedge fund managers are very pessimistic on India and have cautioned investors that investing in India will be fraught with big risks. Jeff Gundlach, who manages a hedge fund DoubleLine Capital LP, believes that India’s currency is weak because of reliance on foreign capital and that he would rather not own Indian stocks. He also said that India’s stock markets look “very scary” because of high oil prices and rupee depreciation. He is short India amongst emerging market countries. Ray Dalio, another hedge fund who manages $150 billion in assets at Bridgewater Associates was quoted as saying that India should “prepare for the worst” since it has been one too vulnerable to foreign capital inflows which may now avoid emerging markets.
Top hedge fund in bid to shape up Sotheby’s (Reuters)
Hedge fund manager Mick McGuire is not an art collector and has never felt the thrill of bidding in a Sotheby’s auction, where adrenaline spikes with each multimillion-dollar sale of a Cezanne, Rothko or Picasso. Still, he has ideas on how the 269-year-old auction house might do better for shareholders, and since June has built up a 7 percent stake to allow him to take some of his proposals to management. A former partner at William Ackman’s Pershing Square Capital Management, McGuire is now running Marcato Capital Management, one of the country’s hottest hedge funds.
London hedge funds secure victory over pay (Financial Times)
Hedge funds are set to benefit from more lenient rules governing pay than originally expected under new draft proposals from the UK regulator. The Financial Conduct Authority published guidelines detailing how it plans to implement the Alternative Investment Fund Managers Directive, which aims to curb the buccaneering habits of the alternative fund industry in Europe. The hedge fund industry was particularly concerned by the potential impact of new pay measures, which will force managers to receive half of their pay in units of their funds and to defer payment over longer time periods.
Investment fund boosts stake in YRC Worldwide to nearly 12 percent (Kansas City Star)
Solus Alternative Asset Management LP, a hedge fund operated by Christopher Pucillo, disclosed in a regulatory filing that it now owns 1.34 million shares, or 11.78 percent, of the Overland Park-based trucking company. The fund previously held about 336,372 shares, or 3.1 percent, of YRC Worldwide, Inc. (NASDAQ:YRCW), based on June 30 records. Shares in YRC climbed nearly 18 percent Tuesday and closed at $20.95, probably in response to the Solus investment. YRC shares slipped back 65 cents Wednesday and closed at $20.30.
Partners Group To Sell Hedge Fund Unit (FINalternatives)
Swiss private-equity firm Partners Group plans to exit the hedge-fund and wealth-management businesses after posting weak first-half numbers. The Zug-based firm said yesterday that it would sell its remaining interests in Asset Management Partners and an undisclosed hedge fund business to the firms’ management. The moves will cut about €800 million from Partners’ €30 billion in assets under management. The sales are expected to be completed in the second half. Terms were not disclosed.