Hamptons Scene, Bruce Richards, $40,000 Colicchio Dinner (Bloomberg)
Bruce Richards stood under a party tent anchored by multiple stakes in the lawn of his Southampton home. He was hosting the United Way of New York City “What’s on the Table?” benefit Saturday night. “They promised it will all be back to normal tomorrow,” said the chief executive of Marathon Asset Management LP, who clearly didn’t mind supporting programs that fight hunger and boost nutrition in New York City.
Dollar Loses Hedge Fund Bulls As Risk Drops Among G-10 Nations (Bloomberg)
Hedge funds and large speculators are abandoning bets on a stronger dollar at the fastest pace ever amid growing confidence in the global economy. Futures contracts favoring gains in the U.S. currency surged to the most on record in June as growth faltered and investors retreated from risky assets. Now, hedge funds are reversing those bets as central banks from China to the U.S. vow to stimulate their economies, prompting money managers to seek higher returns from Sweden to Australia.
Hedge Fund Bets Jump To 15-Month High On Bull Rally: Commodities (Bloomberg)
Hedge funds boosted bets on rising commodities to the highest in 15 months, driving prices into a bull market as the U.S. drought worsened and the Federal Reserve signaled it may take more steps to spur economic growth. Money managers’ net-long position across 18 U.S. raw materials rose 10 percent to 1.32 million futures and options in the week ended Aug. 21, U.S. Commodity Futures Trading Commission data show. Holdings doubled in two months to the highest since May 2011. Bets on corn are the most bullish in 15 months amid the worst U.S. drought in 56 years, while wagers on gold rebounded and platinum more than doubled.
Aquantum in Ucits fund debut (FT)
Aquantum, a specialist index provider and commodity hedge fund house, is to launch a fully-fledged asset management business with the creation of its first Ucits-compliant fund in the fourth quarter of the year. The fund will invest in almost 50 futures markets covering all major asset classes except commodities, and will use multiple trading strategies including long term trend following, countertrend trading and pattern recognition.
Hedge funds have failed their clients (ToledoFreePress)
Hedge funds have been an attractive investment over the last decade for high net-worth investors and institutions. Their structure allows for managers to engage in riskier investment strategies and justifies a “2 and 20” fee structure, a 2 percent management fee and a 20 percent performance fee. For example, if you were to invest $5 million in a hedge fund, you would pay $100,000 up front. If that fund makes 10 percent after that fee has been taken, the investor would pay an additional $98,000 in performance fees. Managers have promised these qualified investors unique investment strategies and shown returns that have surpassed the Dow Jones Industrial Average and S&P500 year after year, but what happens when those funds do not perform?
Former hedge fund head seeks deal (WindsorStar)
Boaz Manor, the man at the centre of collapsed hedge fund Portus Alternative Asset Management, is seeking to settle allegations brought against him by the Ontario Securities Commission. A hearing will be held on Aug. 27 to consider whether it is in the public interest for the commission to approve the settlement. Details of the proposed settlement will remain under wraps until Monday, and will be released only if the settlement is approved.
Hedge Fund Ownership: Q2 2012’s Top-down Trends in Equity Assets (inAudit)
The fifty largest hedge funds increased their equity exposure by 3% and forty-five of the fifty managers showed an increase in equity assets in Q2 2012. This is contrary to the quarterly trend of equity outflows among the largest institutional investors. It can be noted that a change in the equity asset value indicates an increased allocation to equities with existing assets, inflows of new assets under management, or a combination of the two. While Apple was present in the majority of fund portfolios and was the top holding of 24% of the 50 hedge fund companies, the hedge fund companies were most active in increasing their allocations to Procter & Gamble and BP PLC in Q2 2012.
The Big Picture: Russia is misunderstood, says Emerging European hedge fund manager (Opalesque)
SG Alpha, an investment management boutique specialising in Emerging European equities, has written a paper in response to a Financial Times article, which advocates dropping Russia from the BRIC nations block (which also includes Brazil, India and China). According to this article, the Russians are corrupt, rude, autocratic, drunk, and difficult to do business with, and the country’s population and political relevance are decreasing (Time to blackball Russia’s autocratic state – By Ian Bremmer and Nouriel Roubini, May 29th, 2012).
Bullish on America (Barrons)
After making much of its fortune by predicting that the U.S. subprime mortgage market would fall apart in 2007 or 2008, the Whitebox Multi-Strategy fund has gotten to like the country more and more. First, it bought distressed corporate debt, betting correctly that prices would recover along with the country’s economy. More recently, the hedge fund has purchased dividend-paying U.S. companies, even including some banks. “Investors are too pessimistic about American politics, its economy, and the ‘fiscal cliff,’ ” says Jason Cross, a portfolio manager who also serves as the parent firm’s (also called Whitebox) head of global equity.
Hedge Funds Trade More Bonds, Do Badly in Stocks (Barrons)
Efforts at regulating the financial industry can seem like a game of whack-a-mole. This past week, for instance, it became clear where all those proprietary trading desks went—into hedge funds. Regulators are putting the final touches on the Volcker Rule, which prohibits banks from trading their own, proprietary money in an effort to boost profit. Even though that change won’t take effect until January, banks have been disbanding these trading desks, many of which have found a home in the hedge-fund world, as evidenced by a pickup in the funds’ activity.
Emanagers Total Index gains 2.50% in July (+4.13% YTD) (Opalesque)
July was another strong month for emerging manager hedge funds and managed futures funds, according to a first estimation based on the data of 298 funds listed in Opalesque Solutions’ Emanagers database. The Emanagers Total Index advanced 2.50% last month and is up 4.13% in 2012. Estimates for June and May were corrected to -0.11% and -0.63% respectively. Since inception in January 2009, the index posted compounded returns of 63.3% and outperformed both the global stock market and hedge fund indexes.
NY’s good ‘fortune’ in Congress (NYPost)
Rep. Nita Lowey’s worth fell by more than $1 million last year, but she was still on the list of the richest members of Congress, financial-disclosure reports show. A hedge fund that Lowey (D-Westchester) listed as worth at least $1 million in 2010 had no value last year. Lowey was one of four New York congressional representatives among the 50 richest members of Congress, according to a list compiled by The Hill, a Washington news service. Lowey ranked 23rd, worth $14.3 million — mostly in hedge funds, private equity holdings and property.
How Many Times Can The Fed Play This Hand? (iStockAnalyst)
On Wednesday afternoon the Fed released the minutes from its latest meeting. Commodities rallied, the dollar got hammered, but surprisingly stocks didn’t do much. Maybe the stock market’s action is telling us something … that those who are hoping another round of quantitative easing will levitate the market yet again could be very disappointed. The key question for me is: How many times can the Fed decide to do the same thing and expect a different outcome? Fool me once, shame on you. Fool me twice, shame on me. Fool me a third time … shame on gullible hedge fund managers!
Procter & Gamble Chief Robert McDonald Takes a Pay Cut (ABCNews)
Procter & Gamble’s chief executive officer had a pay cut of 6.1% for the fiscal year ended June 30, according to a government filing available Friday. Robert McDonald’s pay fell $989,000 to $15.2 million as the consumer products giant missed growth targets amid a worldwide economic slowdown. McDonald’s pay, tied to performance goals set in 2011, declined before hedge fund manager Bill Ackman bought a nearly 1% stake in P&G, which increased scrutiny of the company and its CEO this summer.
Suits Mount in Rate Scandal (WSJ)
Banks being probed for interest-rate manipulation face potentially tens of billions of dollars in claims from dozens of lawsuits in the U.S. from cities, insurers, investors and lenders who say they were hurt by the allegedly fudged rates. The allegations come from parties as varied as individual investors and institutions like Charles Schwab Corp. SCHW +2.08% that say they were cheated out of returns on bonds with artificially low rates, to cities and hedge funds with financial contracts squeezed by traders who allegedly colluded with each other.
Samsung shares drop $12 bln after Apple’s court victory (Business-Standard)
Samsung Electronics <005930.KS> shares slumped 7.5 percent on Monday, wiping more than $12 billion off the South Korean giant’s market value, as a sweeping victory for Apple Inc in a U.S. patent lawsuit raised concerns about its smartphone business – its biggest cash cow. Samsung, which says it will contest the verdict, was ordered to pay $1.05 billion in damages after a California jury found it had copied critical features of the hugely popular iPhone and iPad and could face an outright sales ban on key products.
Murky dangers in dark pools (SMH)
Imagine you’re doing the grocery shopping. A glance at your Woolies iPhone app suggests you’re out of Weet-Bix, priced at $5.49 a box. So you wander over to the cereal aisle to grab one. …Every market trade is now subject to being clipped by a ”speed of light” computer (owned by a hedge fund or investment bank) hooked into the ASX system that can see your trade coming and get in beforehand, knowing your price. In the old days, it was called front-running.
CFP opens up to external investors (FT)
CF Partners, a London-based energy trading house, is to open its asset management arm to external investors for the first time. It plans to launch CFP Equity, a long/short equity fund with an energy, infrastructure and commodities focus, probably in the fourth quarter of the year. Although aimed largely at its existing clients, such as the utility companies and banks it trades on behalf of, the fund will also be opened up to purely financial investors, with a minimum investment of $1m.
DVK Group Launches Malawi Office (AllGhanaNews)
The international commodity trading and finance boutique company DVK Group, has announced its launch in Malawi as part of its exciting expansion plans in the Africa region. …Activities will dove tail with the Group’s structured trade and commodity financing services in sectors such as energy, automotive and agriculture including through the company’s Africa focused Agricultural Hedge Fund, which on average advises on assets of $150m USD. DVK Malawi’s development of the aviation projects in Africa follows its plans to launch in China, Hong Kong, India and the CIS region and the attainment of an AOC license for operating rights in Nairobi, Kenya to establish a footprint in East Africa.
Jim Rogers returns to Port (NewBuryportNews)
A restaurant that has been “dark” since the beginning of the year will soon open under the direction of a well known local restaurateur, Jim Rogers. Rogers and a construction team have been renovating the eatery formerly known as Joseph’s Winter Street Cafe at 24 Winter St. The new establishment will be known as Andiamo, which Rogers says is Italian for “Let’s go.”
Navistar’s US woes won’t affect its JV with Mahindra & Mahindra: Pawan Goenka (IndiaTimes)
Even as the US truck major Navistar Corp is facing regulatory and takeover threats from investors and global car makers like Volkswagen and Fiat, its Indian joint venture partner Mahindra & Mahindra says its Indian arm, Mahindra Navistar, is largely insulated from the US developments. Pawan Goenka, president, automotive, Mahindra & Mahindra, told ET that the US repercussions aren’t going to affect Mahindra Navistar Automotive Ltd (MNAL) since it doesn’t depend heavily on the US partner.
Worst Month For Treasuries Since 2010 Lures Buyers (Bloomberg)
Investors from London to Tokyo to Pittsburgh are plowing money back into Treasuries after the biggest decline in 19 months, betting that even an improving global economy won’t ignite a bear market in bonds. Hedge funds and large speculators raised bullish positions in 10-year Treasury note contracts this month to the highest since March 2008. Yields, which surged to 1.86 percent Aug. 21, sparking the worst investor losses for a four-week period since December 2010, will be little changed by year-end, according to the median forecast of 81 strategists surveyed by Bloomberg.
Romney Tax Returns Show Strategy For Moving Money To Kids (Bloomberg)
Republican presidential candidate Mitt Romney and his wife, Ann, have used sophisticated estate- planning techniques for more than a decade to minimize taxes and amass at least $100 million for their family outside of their estate. The couple created trusts as early as 1995, when Romney was building wealth as chief executive officer of Bain Capital LLC. They packed one for their children with investments that stood to appreciate and set up another for charity that provides a tax deduction and income. The candidate’s retirement account, valued at as much as $87.4 million, also may benefit his heirs for decades.
Blackstone grooms six executives for Schwarzman’s job (Reuters)
When Blackstone Group LP named a new global head of private equity last month, Chief Executive Stephen Schwarzman was looking for more than just a business unit chief. Even though the buyout king has no plans to retire, the appointment of Joe Baratta, a 41-year-old dealmaker credited with building up the firm’s European buyouts practice, was the latest step in a wider succession plan, Blackstone insiders said.
Commodity trader Noble in base metals push with new team (Reuters)
Commodity merchant Noble Group Ltd is gearing up for its biggest push in decades into the base metals markets, hiring two senior traders to build out beyond its home base in Asia. The Hong Kong-based company, run by its third chief executive in two years after posting its first quarterly loss in a decade last year, is putting renewed focus on markets such as copper and zinc after breakneck growth in energy, which now delivers two-thirds of its revenues.
Will Fed Act Again? Sizing Up Potential Costs (WSJ)
Federal Reserve Chairman Ben Bernanke delivers what could be his closing argument in deliberations about launching a new bond-buying program when he speaks Friday at the central bank’s Jackson Hole, Wyo., conference. The argument comes down to weighing costs and benefits. The Fed already has bought more than $2 trillion of Treasury and mortgage bonds to stimulate the economy. The Fed believes this drives down long-term interest rates, elevates stock and real-estate values and softens the dollar. This, Mr. Bernanke has argued, lowers financing costs, increases U.S. companies’ global competitiveness and bolsters household wealth.
The Incredibly Rare Paul Tudor Jones Documentary, ‘Trader,’ Has Resurfaced (BusinessInsider)
This is like spotting Haley’s comet, or a white stag, or a giant squid. ‘Trader’, the legendary 1987 documentary on hedge fund manager Paul Tudor Jones has resurfaced on the internet (h/t Value Walk). The last time this happened, it was only a matter of hours before it was taken down.
Blending convergent and divergent strategies to hedge tail risk (Opalesque)
Paul Lucek wasn’t always a financial industry leader, he originally got involved in trading as a hobby, then, as he explains in a recent Opalesque TV interview, that hobby turned into a part-time job and eventually a full time job. Now he is Director of Research and a Senior Portfolio Manager at State Street Absolute Return Investment Strategies (SSARIS). He was recently interviewed by Matthias Knab for Opalesque TV. SSARIS has $2.5 billion under management and Lucek manages $530m of that within internal proprietary strategies that are directly invested in. He takes an approach that involves blending two types of return streams – convergence and divergence – in order to provide investors with a more normalized return distribution.
M&T Bank to Buy Hudson City Bancorp for $3.7 Billion (NYTimes)
The M&T Bank Corporation has agreed to buy Hudson City Bancorp, expanding M&T’s reach on the East Coast. Under the terms of the deal, M&T will pay roughly $3.7 billion in cash and stock. The price represents a premium of about 16 percent to Hudson City’s market value on Friday.
Thoma Bravo Agrees to Take Deltek Private for $1.1 Billion (NYTimes)
Thoma Bravo, a private equity firm based in Chicago, has agreed to buy Deltek, an enterprise software company, for $1.1 billion in cash. The deal, valued at $13 a share, is slightly below Friday’s closing price of $14.01, but more than 22 percent above Deltek’s price in mid-June, when the company first began to market the business to potential buyers.