Hedge Fund News: Chris Hansen, Ray Dalio, Lookers

New arena heads for Seattle City Council approval Monday (SeattleTimes)
Seattle City Council members this summer said they wouldn’t approve a $490 million basketball and hockey arena without knowing more about Chris Hansen’s business plan, his investors and how he would minimize the risk to taxpayers for up to $200 million in public bonds. Monday, the council is expected to approve an agreement with Hansen, though many of their questions remain unanswered.


Hedge fund swindler Mobley of Stadium Naples era could be returned to prison (MarcoNews)
Thirteen months after convicted hedge fund swindler David Mobley Sr. was released from federal prison, he’s facing a possible return for not paying a dime of his $77.3 million restitution to investors. The 56-year-old Naples man was arrested last month on charges he violated terms of his three-year supervised release, which require him to pay back hundreds of investors he duped through his Maricopa International Investment offices in North Naples.

Benchmark Plus offers index fund with novel fee structure (HedgeFundsReview)
The Benchmark Plus HFRI Equity Hedge TRAX fund seeks to replicate the performance of the HFRI Equity Hedge (Total) index, which tracks the returns of around 1,400 long/short equity managers. Launched by fund of hedge funds (FoHF) manager Benchmark Plus, the long/short equity tracker has an unusual ‘fee reserve’ and clawback structure. The Hedge TRAX fund invests in the Benchmark Plus Long/Short Equity Partners FoHF, which has exposure to around 25 underlying long/short equity managers.

South African hedge fund group Peregrine Holdings to close consulting arm (Opalesque)
Sandton, South Africa-based global provider of wealth and alternative asset management solutions Peregrine Holdings Ltd announced it would close Peregrine Portfolio Innovation Ltd., because of a series of macro drivers that led its board members to reconsider the group strategy. In her letter to investors, Peregrine’s Managing Director Leila Lederman said that as from 31st October this year, Peregrine will no longer circulate performance updates for the various funds that Innovation represents. Instead, the underlying fund managers will be updating investors directly.

Swiss hedge funds welcome changes to fund rules in line with EU legislation (HedgeFundsReview)
The Swiss hedge funds industry has welcomed an update to rules on collective schemes that are less restrictive than originally feared. Revisions to the Collective Investment Schemes Act (Cisa) were passed by the Swiss parliament on September 18. The idea behind the changes is to bring Swiss law in line with the EU’s alternative investment fund managers (AIFM) directive, which is due to be implemented in July 2013. Switzerland has also used the update to make amendments to its private placement rules. The Swiss Funds Assocation (SFA) originally voiced concerns about the proposed amendments. However, it has welcomed the final revisions.

Hedge fund manager feels like a New Man (ShareCast)
Hedge fund manager Man Group is planning to create a new group holding company, Man Strategic Holdings, which it believes will reduce the group’s capital base and improve its access to distributable reserves, thus enabling it to continue with its dividend policy. In essence, shareholders will see their shares in “old Man” replaced on a one-for-one basis in the holding company, dubbed “New Man” in the announcement. Man Strategic Holdings will then be renamed Man Group.

Japan’s Teachers to allocate to hedge funds, REITs (Opalesque)
The 529,800-member strong Japan’s Teachers Mutual Aid Co-operative Society, which manages an estimated $8.4bn in assets said it would allocate as much as 60bn yen ($719m) to hedge funds as early as this month, various media reported. Toru Higuchi, general manager of the mutual fund’s asset management department, said that it would be the first time in the fund’s 47-year history that it would invest in real estate and hedge funds with the aim of diversifying risks, reported JapanInvestor.net.

Joel S Torrance joins Gabelli Securities’ alternative investment group (HedgeWeek)
Gabelli Securities which began managing its first fund, the Gabelli Associates Fund, in February 1985, is approaching USD1bn in assets under management. Michael Gabelli says: “As we enter a major growth phase in our Alternatives business, we are pleased to have the benefit of Joel’s significant knowledge and experience in the hedge fund space. He will be an important addition to our compliance team and will add depth to our risk framework.”

Why Hedge Fund ETFs Make Sense (Morningstar)
Over the last two decades, the mainstream emergence of passive strategies for running stock and bond portfolios has shaken up the fund universe, affecting investor behaviour and the way traditional fund managers are perceived, evaluated, and compensated. In the same way, there is still much more room for passive management to have an impact on hedge funds. Hedge funds have always done their own thing, cosseted from the broader world of wealth management by rules around who can and can’t invest in them, and chasing profits in ways and places that traditional investment vehicles are unwilling or unable to pursue. Being un-benchmarked and uncorrelated has historically let them charge a premium for their work: the typical hedge fund comes with a 2% annual management fee, and an incentive fee of 20% of the fund’s profits.

Hedge Funds Play Long Game for Profits (CNBC)
Profit-starved hedge fund managers, best known as masters of the financial universe, are turning to an unlikely place for their next windfall: the unglamorous world of long-only asset ­management. Amid volatile markets, constraints on the capacity of their main trading strategies and an ever more conservative investor base, some of the industry’s biggest names are focusing on raising money for pared-back versions of their main portfolios, eschewing leverage and short selling in pursuit of assets and stability. Hedge fund managers see big opportunities in bringing their skills – and the higher fees they charge – to an increasingly passive long-only investment world.

Hedge fund definition presents a catch-all concern (MoneyManagement)
With the release of Regulatory Guide 240 ‘Hedge funds: improving disclosure’, some fund managers may be shocked to find they are, by the Australian Securities and Investments Commission’s (ASIC’s) definition, operating as a hedge fund, Zenith Investment Partners head of alternatives research Daniel Liptak said. Some infrastructure, property, real estate and agricultural managed funds currently meet at least two of the five criteria that constitute a hedge fund, which includes any managed fund that uses leverage, derivatives and short-selling. According to Liptak, funds that are flagged by ASIC may be treated differently by platforms.

Farmer’s daughter reaps riches on drought-struck corn (DelawareOnline)
For three excruciating weeks in May, Renee Haugerud, the founder of New York hedge fund Galtere Ltd., agonized that her wager on corn was a massive mistake. She had started buying in March, when futures contracts averaged about $5.59 a bushel, expecting steady to rising demand from ethanol refiners and feedlots to boost prices. Instead, on May 10, the U.S. Department of Agriculture reported record planting and forecast a bumper crop. Prices began a 12 percent slide for the month. Other hedge funds bailed.

France says adieu to its financial talent (eFinancialNews)
The drain of financial talent out of France is intensifying. London now has the fifth largest number of French nationals in the world and as many French hedge fund managers are clustered around the small area of Mayfair as along the length of Paris’s Avenue George V. France has less than 5% of the total number of hedge funds operating in London and two-thirds less than Switzerland. The hedge fund stampede out of Paris started with an industry bashing from former president Nicolas Sarkozy and then current French leader François Hollande; the country’s politicians have persistently deemed les fonds speculatifs as the root of all ills.

The high price of havens for tax avoidance (Guardian)
Hedge fund chief and Conservative party treasurer Lord Fink is completely out of step with public sensibilities (Make UK more like a tax haven –Tory treasurer, 21 September). Tax havens offer more than a low tax rate – the secrecy that is often their chief attraction allows unethical business practices, corruption, money laundering and a host of other nefarious practices to thrive. The UK must already bear a large share of responsibility for this. Roughly half the world’s tax havens today are in Crown dependencies, British overseas territories, or Commonwealth countries. London itself was 13th in a recent financial secrecy index drawn up by Christian Aid and the Tax Justice Network, which ranked 72 jurisdictions offering financial services according to the amount of international business they handle and the secrecy their clients enjoy.

Hedge fund manager warns of 2nd hitler (PressTV)
Ray Dalio, one of the world’s richest hedge fund managers, fears that the weak economy could have disastrous social consequences. Specifically, he’s worried about the possibility of a tyrant like Adolf Hitler rising to power. “When people get at each other’s throat, the rich and the poor and the left and the right and so on, and you have a basic breakdown, that becomes very threatening,” Dalio, who founded Bridgewater Associates, where he remains co-chief investment officer, told CNBC anchor Andrew Ross Sorkin in an interview aired on Friday.

Butterfield Fulcrum, a leading independent hedge fund administrator and service provider to the alternative investment industry, announced that A.R. Caputo II has been named Director of Business Development for its U.S. operations. The move comes as fund administration clients are seeking to interface with seasoned executives who can meet investor demands for increased transparency, frequency of reporting and broadening of services being provided by independent third party providers. “We are pleased to have A.R. joining our team. Our clients are highly sophisticated specialized businesses in a very competitive environment. The addition of A.R. to our team strengthens our commitment to provide our clients with ideas and solutions that enhance their ability to provide relevant and timely information to their investor community,” said the firm’s CEO Glenn Henderson.

Why is Romney trying to lose? (RenewAmerica)
Billionaire hedge fund operator George Soros said that, if Mitt Romney wins the presidency, there will be “little difference” between him and Barack Obama in the White House. As if to prove the point, Romney on Tuesday will speak to the Clinton Global Initiative sponsored by the disgraced and impeached former president. You may recall that Clinton is married to Obama’s Secretary of State and that he nominated Obama for a second term at the Democratic Party convention.

U.S. billionaire George Soros takes stakes in car dealership Looker (ThisIsMoney)
George Soros has become the latest US-based billionaire to buy British, after snapping up a 4.5 per cent stake in Manchester-based car dealership Lookers. The move comes after Lookers shares suffered their biggest two-day drop for almost a year when its second biggest shareholder investment company Trefick sold its 17.3 per cent stake last week. The 82-year-old appears to have developed a particular affiliation with Manchester, having paid £25.8million for a stake of almost 8 per cent in Manchester United last month.

Clorox: Fairly Valued At Its Centennial (SeekingAlpha)
The Clorox Company (NYSE:CLX) was started when five men decided to start a liquid bleach factory in 1913. For 56 years, it was a one-trick pony. That all changed after Procter and Gamble acquired the company in 1957, only to divest the company due to antitrust concerns in 1969. Since then, Clorox has successfully acquired some of the best consumer product brands, while internally developing others. With its 100-year anniversary just around the bend, it appears to be a good time to give Clorox’s common stock, and its heterogeneous but dominant consumer product portfolio (see below), a once over. …This brand diversity is partially why Carl Icahn had said that his bid for the company last year was meant to draw in other buyers who could achieve synergies. That is, he figured (for example) The Procter & Gamble Company (NYSE:PG) could be interested, given that there might be manufacturing duplications which, once removed, would make Clorox’s portfolio more profitable.

Armajaro appoints Richard Gower interim CEO, Ryan leaves (Reuters)
Commodities trade house Armajaro Trading has appointed Richard Gower acting chief executive after the departure of Richard Ryan, the company said in a statement on Monday. Gower will assume the role with immediate effect while a successor is identified, the company said. Richard Ryan, chief executive of Armajaro since 2007 and an original member of the team that was part of the formation of the company in 1998, was not immediately available for comment.