Hedge Fund News: Buffett, Lampert, Klarman, Soros…

ESL INVESTMENTSBuffett Reveals Warts as He Prepares Annual Letter (Bloomberg)

Warren Buffett bought oil stocks near the peak of an energy boom, declined to spend $35 million on a growing television station and swapped a Berkshire Hathaway Inc. (BRK/A) stake for a shoe company he later said was worthless. In each case, shareholders of Omaha, Nebraska-based Berkshire were charged or deprived of at least $1 billion. And in each case, Buffett apologized in writing.

Lampert Gains $160 Million on Sears Shares (Bloomberg)

Edward Lampert, the hedge fund manager who controls Sears Holdings Corp. (SHLD), has more than $160 million in paper profits on shares of the retailer acquired last month from a long-standing client, the Ziff family.

Eddie Lampert To Spin Off More Than 1,200 Sears Stores And Sell 11 In Bid To Raise Up To $770 Million (NY Post)

Eddie Lampert finally opened the kimono yesterday — and revealed some shrinking assets. The number-crunching hedge-fund tycoon — who took control of Sears in 2005 by merging it with Kmart — said yesterday he will spin off more than 1,200 stores to investors and sell 11 department stores in a bid to raise up to $770 million in cash.

Gross Rebuts Cooperman on Treasuries Citing Risk for Stocks (Bloomberg)

Pacific Investment Management Co.’s Bill Gross said investors should be cautious about substituting dividend-paying stocks for Treasuries as there’s a “huge gap of risk” between the two types of assets. Leon Cooperman, founder of hedge fund Omega Advisors Inc., said yesterday that buying Treasuries is the least attractive investment in a world of “financial repression.”

Hedge Fund 3 Degrees Said to Lose Challenge to Singapore Regulator’s Order (Bloomberg)

3 Degrees Asset Management, asked by Singapore’s central bank to shutter its operations following allegations that founder Moe Ibrahim diverted assets, lost a legal bid to challenge the regulator’s order, according to two people familiar with the decision. 3 Degrees’s application to overturn the decision by the Monetary Authority of Singapore and the finance minister to withdraw its exempt fund manager status was rejected by the Singapore High Court, said the people, who weren’t authorized to speak publicly about the decision. Justice Belinda Ang’s minutes from the Feb. 23 closed hearing aren’t publicly available.

My Favorite Quote from Baupost’s 2011 Annual Letter (Distressed Debt Investing)

Readers know in the past we have covered Seth Klarman‘s letter to investors numerous times (here is one such post: Wisdom from Seth Klarman).  This week, we received Baupost’s 2011 Letter to Investor where Seth Klarman, along with heads of the public investing, private investing, and operations group talk about everything from the investment climate, the government policy, and Europe among many topics.  A special emphasis, like we’ve seen in past years, was on the process, culture, and modus operandi of Baupost.  It is a fantastic letter.

Hedge Funds Eye Windfall From Commerzbank Bond Swap (Reuters)

Commerzbank AG’s (CBKG.DE) plan to swap debt into shares could be about to hand hedge funds one of their biggest windfalls of the year, after the German bank offered to buy back a slew of bonds at a far higher price than some managers paid for them.

George Soros Is Buying Tech Stocks – And Gold (Money Week)

George Soros may have been preoccupied lately with promoting his solution to the eurozone debt crisis at Davos and his new book, but he has also been busy on the investment front. The 81-year old stock market guru, who famously bet against sterling during the Black Wednesday crisis in the 1990s, pocketing a $1bn profit, has been building up stakes in a handful of technology stocks.

A New Rule Book for Hedge Funds: The Football Field Test (WSJ)

Greenlight Capital’s David Einhorn learned firsthand the numerous pitfalls that even the most successful hedge fund managers face.

PIMCO Can’t Move Annual Meeting To Block Brigade Board Nominee (Thomson Reuters)

The shareholder meeting shuffle was nonetheless apparently not forgotten as a defensive device. Last September, the hedge fund Brigade Capital informed PIMCO that it intended to nominate a Brigade partner to serve on the board of trustees of two PIMCO funds, Income Strategy and Income Strategy II.

Emerging Market Assets See Small Gain In 2011, Says HFR (HFM Week)

Assets in emerging market hedge funds saw modest growth of $3.5bn in 2011, buoyed by fourth-quarter performance gains at some of the largest managers, data provider Hedge Fund Research (HFR) revealed Friday. Emerging market assets increased by more than $2bn in 4Q11, despite net outflows for the quarter of over $2.2bn. Growth was “as a result of a strong performance-based contributions, concentrated in several of the largest EM managers,” the Chicago-based firm said.

Investors Predict $250 Billion Growth For Hedge Funds (FINalternatives)

For the second year in a row, hedge fund investors expect the industry’s assets under management to reach record levels. Respondents to Deutsche Bank’s annual survey said that global hedge fund assets may rise to $2.26 trillion this year, a 12% increase from last year. The investors expect up to $250 billion in new assets; with net inflows of as much as $140 million and the rest coming from investment returns.

D.E. Shaw Fined For Shorting Corn, Soy Beans (FINalternatives)

D.E. Shaw Group has been hit with a small fine for violating position limits in corn and soy bean futures. The hedge fund settled the allegations leveled by the Commodity Futures Trading Commission, the regulator said. D.E. Shaw will pay $140,000 for the violations, which occurred in April and June of 2010.

Terra Firma Chief Takes Shots At Hedge Funds (FINalternatives)

Private equity honcho Guy Hands doesn’t think much of the other side of the alternative investments industry. The Terra Firma chairman told the Harvard Business School Venture Capital and Private Equity Conference that unless students “love making businesses better,” they should join a hedge fund and leave “the creation of long-term value” to p.e.

Four Charged In Black Diamond Hedge Fund Fraud (FINalternatives)

Four more people have been indicted in the Black Diamond Capital Solutions hedge fund case.

Satellite Co. Says LightSquared Failed To Pay Up (FINalternatives)

Harbinger Capital Management‘s embattled—and reportedly cash-strapped—wireless Internet venture has a new headache.

Atrato Hires Quant. Analyst (FINalternatives)

Hedge fund consultancy Atrato Advisors continues to grow in the wake of its third anniversary—and its first set of institutional mandates.

These 10 Hedge Fund Are Probably Really, Really Happy They Invested In Vivus (Business Insider)

Shares of drugmaker Vivus skyrocketed today after an FDA panel gave a favorable review for the company’s weight loss pill. The stock was last up more than 88% in late morning trading.

When Interviewing With Bridgewater, Be Prepared To Spend A Third Of The Time Discussing This Particular Topic (Business Insider)

Dalio’s Bridgewater, arguably the most successful and largest hedge fund in the world, is known for its cult-like office environment and its emphasis on preserving its inner culture. Now, we have a small glimpse into how the hedge fund find the employees to continue that philosophy.

Passport Global Fund Down 18% for 2011 (Value Walk)

John Burbank’s Passport Capital had a disappointing 2011 performance. The fund’s flagship fund was down 18.4% for 2011. Burbank attributed much of the under-performance in 2011 to the fund’s investments in private, illiquid assets.

Hedge Fund Job Seekers Choose Stability Over Pay (Opalesque)

A new hiring trend in hedge funds is emerging in the wake of the ongoing economic crisis – job seekers are choosing stability over pay. Many are also looking for work at hedge funds for the first time. Beaten down by layoffs and collapses, financial job seekers are more willing now to take lateral moves or less money if it means a steady career trajectory according to my interview with Robert Olman, managing director, Alpha Search Advisory Partners, a US-based hedge fund recruiting and advisory firm.

AQR’s Aaron Brown on Red-Blooded Risk (Institutional Investors)

Aaron Brown learned how to drive behind the wheel of a 1962 Volkswagen microbus decades before he became risk manager at hedge fund AQR Capital Management.

Where Bridgewater Goes, So Go Texas Teachers’ Pensions (Barrons)

Readers may recall news last week that the Teacher Retirement System of Texas took a $250 million non-voting equity stake in Bridgewater Associates LP, one of the world’s largest hedge funds. The Texans described the move as a chance to get “attractive risk-adjusted returns” with a company it called a “strategic partner.”

Five Years at the Aleph Blog! (Aleph Blog)

When Jim Cramer asked me to write for RealMoney, it was a dream come true, and I didn’t ask for it.  After year of writing him on bond issues, he told me I wrote better than most he knew.  Trouble was, in 2003, I had a new job at a hedge fund, and was doing well at it.  It took some doing, but eventually my boss (a good guy, generally) agreed that I could do it, and my public writing on investing began.

The 5 Dividend Stocks the Most Gurus Own (Forbes)

4 ‘Battleground’ Stocks Fought Over by the Biggest Investors (Forbes)

HFMWeek Daily Snapshot – 24 February (HFM Week)

Regulators Plan Post-MF Global Safeguards, High-Frequency Trading Concerns, Lake Front Partners Closes And More (Reuters Hedge World)

Friday 7atSeven: new year, new returns (Abnormal Returns)

Daily US Opening News And Market Re-Cap: February 24 (Zero Hedge)

Today’s Events: Consumer Confidence in Manipulated Markets, New Home Sales, Fed Speeches (Zero Hedge)

Morning Read: LTRO Is All She Wrote (Barrons)

CWS Market Review – February 24, 2012 (Crossing Wall Street)

Morning News: February 24, 2012 (Crossing Wall Street)

10 Friday AM Reads (The Big Picture)