Editor’s Note: Related Ticker: Textron Inc. (NYSE:TXT)
“Those who can’t, do research,” goes the adage, a twist on George Bernard Shaw’s famous quip on the failures of academia. The partners at AQR Capital Management beg to differ. Three of the founders of the $80 billion hedge fund – Cliff Asness, John Liew and Robert Krail – toiled away in the ivory towers of academia before putting their theories into practice with phenomenal results in the trenches of Goldman Sachs’ proprietary trading division. Even now AQR sees the academic world as a hotbed for ideas that can be turned into real-world investment strategies and products.
Loeb’s Reinsurer With No U.S. Staff Gains From Jobs Act (Bloomberg)
Billionaire hedge-fund manager Daniel Loeb’s Third Point Reinsurance Ltd., which has no staff in the U.S., said it can limit financial disclosure after a public offering because of rules promoting domestic job creation. Third Point Re is an “emerging growth company” under the Jumpstart Our Business Startups — or JOBS — Act, according to filings for the planned initial public offering. Under the act, companies with less than $1 billion in annual revenue can qualify, allowing reduced disclosure about executive pay and waiving requirements for auditors to attest to a company’s financial controls.
HFRI: Hedge Funds Rise 1.36% To Open Second Half (FINalternatives)
Hedge funds enjoyed broadly positive returns in July, according to a report from Hedge Fund Research. The HFRI Fund Weighted Composite Index rose 1.36% last month and is up 4.73% on the year. Most strategies tracked by the index suite were in the black in July. “In sharp contrast to the volatile, risk-off sentiment of the prior month, hedge fund performance in July was driven by a positive tone to earnings season and a dynamic environment for M&A including strategic transactions, shareholder activist and special situations exposures, contributing to a favorable operating environment for long/short strategies,” HFR President Kenneth Heinz said.
Textron Value in Breakup Seen Tempting Activist Investor (Bloomberg)
Activist hedge-fund managers in search of their next prey may look to Textron Inc. (NYSE:TXT). The $7.9 billion maker of Cessna planes and Bell helicopters has a valuation that lags behind 83 percent of industrial stocks in the Standard & Poor’s 500 Index, according to data compiled by Bloomberg. Credit Suisse Group AG said Providence, Rhode Island-based Textron may become susceptible to pressure from activists wanting to break up the conglomerate. While Textron Inc. (NYSE:TXT)’s earnings are forecast by analysts to surge next year to the highest level since the financial crisis, the stock is being hampered by lackluster growth at its defense unit, which could be spun off, according to industry consultant Silverline Group.
HFC donates UD$250,000 to child abuse charities (Cayman News Service)
Hedge Funds Care (HFC) Cayman, a charity for the prevention and treatment of child abuse, has allocated a total of US$250,000 in local grants this year to seven local charites that work to raise awareness in order to prevent abuse or to support abused children in the Cayman Islands. Programmes that will benefit include those that educate the public, young parents, teachers and health workers, as well as child abuse prevention education for young children at school. Hedge Funds Care Cayman was founded in 2005 as the second international affiliate of HFC. Since then, the Cayman affiliate has distributed over US$1.8 million in 47 grants to agencies and organisations in the Caymans Islands that work to prevent and treat child abuse and neglect, Hedge Funds Care’s sole mission.
Hedge Fund Madam, Comptroller Candidate Arrested In Drug Case (FINalternatives)
Kristin Davis, the former hedge fund administrator who spent four months in prison for running a prostitution ring, may be heading back to jail—and not to the high political office she seeks. Davis was arrested this week and charged with illegally selling prescription pills. Davis was released on $100,000 bond and plans to plead guilty to the four counts, each of which carries a maximum 20-year sentence. It is unclear how her arrest will impact her campaign for New York City comptroller. Davis, who ran for governor three years ago and had been mulling a run for mayor, leapt into the comptroller’s race when former Gov. Eliot Spitzer entered it.
SEC must cut fine against British fund over abusive trades – US court (Yahoo!7 News)
A British hedge fund firm and its chief executive must give up $38.4 million (£24.6 million) of profit tied to abusive mutual fund trading, but a civil fine in that amount must be reduced, in a case brought by the U.S. Securities and Exchange Commission, a federal appeals court said on Thursday. The decision by the 2nd U.S. Circuit Court of Appeals involving Pentagon Capital Management Plc and its chief Lewis Chester is among the last tied to an industrywide probe into market timing and “late trading” in funds, unveiled a decade ago by then-New York Attorney General Eliot Spitzer. Market timing involves rapid trading in violation of funds’ rules and at ordinary investors’ expense, and is considered improper. Late trading involves the trading of fund shares after the market closes but at old prices, and is considered illegal.
Open-government groups challenge Raimondo on hedge-fund information (The Providence Journal)
In a letter released Thursday, four open-government groups have voiced concerns to Rhode Island treasurer Gina M. Raimondo for withholding hedge-fund records from The Providence Journal. The groups – Common Cause Rhode Island, the state’s chapter of the American Civil Liberties Union, the Rhode Island Press Association and the League of Women Voters of Rhode Island – were reacting to a Journal story Sunday about the state’s $1 billion investment in hedge funds. The story discussed the secrecy surrounding hedge funds, and the treasurer’s decision to release heavily censored copies of reports detailing hedge-fund operations and, in some cases, fees.
