Hedge Fund News: Crispin Odey, George Soros, David Einhorn

Hedge fund star Odey snaps up more Barclays shares (Reuters)
Crispin Odey, one of Europe’s best-known hedge fund managers, has spotted an opportunity in shares in UK bank Barclays amidst the growing scandal over interest rate rigging. Odey, who is founding partner at Odey Asset Management and who already owns 60 million pounds’ worth of shares in the bank, told Reuters on Wednesday that he had bought another 10 million pounds’ worth of shares in Barclays at around 160 pence on Tuesday.

setting up a hedge fund

Can South Korea Nurture a Home-Grown Hedge Fund Industry? (CFAInstitute)
Korea-style hedge funds and prime brokers had been a popular topic within Korean financial circles long before their launch in December 2011. In mid-June, the subject become the talk of the town as two conferences that focused on Korean hedge funds took place in Seoul: the Korean Hedge Fund Conference, hosted by Korea’s Financial Services Commission (FSC), the Financial Supervisory Service (FSS), the Korea Capital Market Institute (KCMI), and the New York Hedge Fund Roundtable (NYHFR); and the Korea Investment Conference, hosted by CFA Korea and CFA Institute. (The Korea Financial Investment Association, an industry group, was also involved in both events.) The regulatory regime governing hedge funds in Korea has changed dramatically. Building on the liberalization and consumer protection initiatives relating to the Capital Markets Consolidation Act (2009), a number of key changes were approved in 2011 to pave the way for the introduction of Korea-style hedge funds in order to meet the growing demand for alternative investment vehicles that provide more effective portfolio diversification for Korean investors.

Former hedge fund boss in dividend dispute (MoneyWeb)
Argument over unlisted pref shares failing to pay their 15% coupon. A war of words has erupted over the failure of unlisted public company SA Superalloys to pay dividends on its preference shares. The shares were sold to various investors by Herman Pretorius, who recently featured on Moneyweb for his unorthodox investment vehicle, the Relative Value Arbitrage Fund (RVAF). In the article, Moneyweb noted that the RVAF had reported consistent returns of about 20% a year for the past five years, but that there is no obvious way to verify this performance. The RVAF does not appear to have an auditor or third party administrator, and Pretorius is not licenced with the FSB.

Hedge Funds Love These 6 Outperforming Drugmakers (SeekingAlpha)
Do you like to follow the buying trends of smart money investors? We ran a screen to find drugmaker stocks currently in favor by hedge fund managers. We began by screening the drugmaker industry for stocks that have outperformed the market over the last quarter, with quarterly performance above 10%.

Hedge funds come out strong in June after the EU summit (Opalesque)
The hedge fund industry came out strong towards the end of June as the industry, particularly risk assets, rallied strongly on the positive news from the EU summit, according to GAMs “Insight Hedge Fund Performance in Q2.” According to the independent, active investment management firm, risk assets generally ended the quarter down, despite the powerful rally in late June.

Europe’s funds of hedge fund M&A doubles in speed (InvestmentEurope)
As much M&A occurred among funds of hedge funds by July as happened in all of last year, according to ratings agency Fitch, which singled out Switzerland’s Gottex and London’s EIM as among a shrinking number of mid- to large-scale European players not yet acquired. Fitch noted there were just “a handful of candidates [left] for large scale acquisitions” and the alternative multi-management industry must “now focus on organic growth”.

Saving john’s assets (NYPost)
An auto bailout of sorts is saving the bacon of one of New York City’s wealthiest investors. John Paulson, the billionaire hedge-fund mogul, has been dumping his stake in Delphi Automotive, where he had been the largest shareholder, as he faces more red ink — not to mention irate investors who have demanded their money back. This year through June 13, the 56-year old’s Paulson & Co. sold close to 19 million Delphi shares, raising more than $500 million.

FE Adviser Fund Index (MoneyMarketing)
Since the onset of the financial crisis, conviction has been a rare commodity in the investment community. In such an uncertain environment the appeal of convertible bonds could see a resurgence. …Traditionally, large institutions such as pension funds, wealth managers and hedge funds have dominated the convertibles market. However, after the forced selling in 2008, hedge funds play a much smaller role and, with some of the leveraged players gone, many view the market as more stable.

PGC says no decision made to shift to ASX, ditch Perpetual (Scoop)
Pyne Gould Corp, which is being investigated by the markets regulator over related-party loans, says no decision has been made on whether to relocate to the ASX and divest its Perpetual Trust. The wealth manager halted trading in the 23 percent of its stock that isn’t owned by managing director George Kerr and US hedge fund Baker Street Capital after Fairfax Media reported the plans. Pyne Gould said the report was based on a leaded email.

Asian investors warming to volatility trading (FinanceAsia)
In the US and Europe, an increasing number of investors, and some corporations, have woken up to the potential of volatility as an investable asset class that provides effective hedging and, hopefully, profits in difficult market conditions. A strategy that is particularly appealing in times of extreme market turbulence, volatility displays inverse correlation with traditional asset classes and has been making Western hedge funds money throughout the financial crisis. The view from Asia is different. “Volatility as an asset class, and volatility hedge funds, are of limited interest for non-Japan Asian investors,” said Michael Wexler, founder and chief investment officer at Maple Leaf Capital, a volatility arbitrage hedge fund based in London, with a trading office in Hong Kong.

Alt funds can offset risks in market — or add it (USAToday)
If you look at the rankings for the year — or the past five years — you may see funds whose names sound like spare parts for the space station. What are these, and what do they do? Welcome to the world of alts, short for alternative investments. In theory, they’re designed to help you offset some of the risks in the market, using techniques pioneered by the hedge-fund industry. Whether the funds are worth the trouble is another story.

Soros-Backed MediaV Sees Sales Jump As Chinese Cut Costs (Bloomberg)
MediaV Holding Co., a Chinese online advertising company backed by billionaire George Soros, expects sales to jump as much as 80 percent this year as a slowing economy prompts more customers to use its services to cut costs. Revenue may rise to about 900 million yuan ($142 million) this year, Willy Yang, chief executive officer at Shanghai-based MediaV, said in a phone interview yesterday. Slowing industry growth this year is favoring the part of MediaV’s business that helps smaller advertisers with limited budgets, he said.

BlackRock Prepares For New Chapter As Acquisitions End (Bloomberg)
Laurence D. Fink used at least half a dozen acquisitions to expand BlackRock Inc. (BLK) from a boutique bond shop to the world’s biggest money manager. Now the firm, which invests $3.7 trillion for clients around the world, faces a new challenge: Growing on its own. Susan L. Wagner, who led BlackRock’s growth by overseeing purchases including the fund units of Merrill Lynch & Co. and Barclays Plc, retired last month, signaling an end to the acquisition spree and underscoring that future expansion will have to come from attracting investor deposits. With performance at actively managed stock and bond funds trailing peers, BlackRock has restructured its fixed-income unit and replaced equity chief investment strategist Robert Doll, 57, who said last month he was leaving.

Temasek Assets Rise To Record S$198 Billion On New Holdings (Bloomberg)
Temasek Holdings Pte, Singapore’s state-owned investment company, said assets rose 2.6 percent to a record last fiscal year while profit declined 16 percent as contributions from its units fell amid a global slowdown. The company’s assets increased to S$198 billion ($156 billion) in the year to March 31, surpassing last year’s S$193 billion, the firm said in its annual report today. Net income dropped to S$10.7 billion from S$12.7 billion a year earlier. Total shareholder return, which includes changes in the value of assets and dividends, narrowed to 1.5 percent.

Emerging debt fund brings lengthy track record to new firm (Opalesque)
Specialist emerging market manager Adelante Asset Management has a story to tell that reflects the experience of many in the specialist investment management world over the last decade or so. Chief Investment Officer Julian Adams launched their flagship Emerging Debt fund in 1999 and the fund has a 12 year track record with a return since inception of 565.4%. Over that period, the fund has enjoyed positive years for every year except for 2008, with two years, 2003 and 2009 showing returns of 47.4% each, while 2008 saw a loss of 17.9%.

Centro Fund Services introduces middle office solutions in Cape Town, South Africa (Opalesque)
Centro Fund Services, a joint venture between IDS Group and Point Nine, announced the launch of its independent middle office services to the South African investment manager market with the opening of an office in Cape Town. In a statement, Centro, which means middle in Italian, said that its independent middle office services provide day to day portfolio administration covering trade capture, counterparty trade reconciliations, settlements, reconciliations with other third parties such as fund administrators, prime brokers and custodians, administering corporate actions and delivering related reports. The new service will use Point Nines proprietary web-based platform, Circle. Traditionally South African investment managers use in-house teams to carry out their middle office services.

The UCITS Hedge Fund Index Global down in June (HedgeCo)
The UCITS hedge fund Index Global is down -0.23% in June bringing its year to date performance to -0.33%. The UCITS Alternative Index Fund of Funds is down -0.77% bringing its yearly performance to -2.39%. 10 out of 11 strategies indices return negative performances this month. The UAI CTA is down -1.69%, while the UAI Commodities and UAI FX are down respectively -0.84% and -0.69%. The only positive strategy this month is Fixed Income, up 0.30%. So far this year, the UAI Fixed Income (up 2.00%) and the UAI Volatility (up 1.32%) are the best performers. The other positive strategies on YTD are Multi-Strategy ( 0.46%) and Emerging Markets ( 0.19%). The UAI Blue Chip is up 0.01% in June and up 2.07% on YTD. The main positive contributors to the Index performance this month are Multi-Strategy (up 0.58%) and Fixed Income (up 0.49%), while the main detractors are Event-Driven (-1.58%) and CTA (-0.82%).

On Aviva, Six Years Later (Alephblog)
I note this article about Aviva plc. I took grief from Amerus Group’s IR department during the merger six years ago for my commentary at RealMoney. Here is an example of my writing that theStreet,com made public. Thanks, TSCM. Like many foreign acquirers of US life insurers, the bids were too aggressive, and Aviva paid far too much for Amerus Group. Overpaying for US life companies, particularly for newcomers to the US is not uncommon; Old Mutual did even worse with F&G Life back in 2001. (And if you like, look at the amount of capital they pumped in, before selling it to Harbinger Group for a 90% loss. Ouch, Ouch, OUCH!!!)

Einhorn Finishes Third in Poker Tournament, With $4.35 Million (NYTimes)
It’s a return that would make any hedge fund manager envious. David Einhorn, the president of Greenlight Capital, won more than four times his money in a three-day tournament at the World Series of Poker in Las Vegas, finishing in third place with a $4.35 million reward. He plans to donate the winnings to a charitable organization.

Credit agency puts Duke Energy ‘on watch’ after CEO change (WRAL)
The fallout from the sudden departure of Bill Johnson as CEO of the newly combined Duke Energy and Progress Energy could lead to a financial penalty. Wall Street doesn’t like uncertainty, and the “mutual agreement” leading to Johnson’s exit has sparked concern at Standard & Poor’s. Analysts, meanwhile, speculate about why the change was made and what the move means for the company’s future.

Soros-Backed Prokhorov Launches New Political Party (DallasBlog)
Billionaire Russian investor Mikhail Prokhorov claims that he would distance himself from the protest movement in Russia as he launches a new political party. But questions have arisen about how far he will distance himself from demonstrators, since his business partner is billionaire alternative energy tycoon, George Soros. According to the Digital Journal, “the U.S. powerful billionaire George Soros supported Prokhorov’s bid to become Russian President. Russian billionaire Mikhail Prokhorov, recently has joined forces with billionaire George Soros and Albanian billionaire Sahit Muja in New York to invest in the gold and mining industry. It is a friendship with, Soros and Sahit Muja that flourished in the years that has made billions of dollars for the Russian billionaire.”

Falling Oil Prices Present a Great Opportunity – An Interview with Jim Rogers (OilPrice)
World markets appear to be hovering over a precipice as Europe’s sovereign debt crisis, slowdowns in India and China and further bank downgrades threaten to send stocks and commodities down even further. Falling oil and gas prices may offer some respite to consumers but are they enough to help the economy or are they a symptom of deeper problems? To help us look at these issues and more we are joined by the well known investor, adventurer and author Jim Rogers.

Hedge Fund Files for Bankruptcy (WSJ)
A hedge fund managed by the investment firm of Alphonse “Buddy” Fletcher Jr. has filed for bankruptcy protection in Manhattan, as the firm faces a mounting legal challenge. The Chapter 11 filing comes after a Cayman Islands judge in April appointed liquidators from Ernst & Young to wind up another fund run by New York-based Fletcher Asset Management. The litigation represents a reversal of fortune for the Fletcher firm. In the early 1990s, Mr. Fletcher made a splash on Wall Street, reporting 300%-a-year returns at his firm. In 2003, he was profiled in the book “Stock Market Wizards.”

Hume Brophy competes in The Hedge Fund Journal Indoor Triathlon 2012 (openPR)
Hume Brophy recently took part in The Hedge Fund Journal Indoor Triathlon 2012 – A Corporate Challenge – in support of Hedge Funds Care UK. Kevin Sammon, Simren Priestley and Belinda Marks each ran 4km, rowed 4km, and cycled 10km, completing each stage within 20 minutes. The team raised £325 which goes to Hedge Funds Care, an international charity, supported largely by the hedge fund industry, whose sole mission is preventing and treating child abuse. The team finished in 23rd place out of a group of 30.

Colorado Fire & Police doles out $106 million to 6 managers (Pionline)
Colorado Fire & Police Pension Association, Greenwood Village, committed and invested $106 million with six different managers, confirmed CEO Dan Slack. The $3.3 billion pension fund invested $36 million in a long/short equity hedge fund managed by AKO Capital. The hire is part of the pension fund’s continuing program to allocate 20%, or about $300 million, of the global equity portfolio to hedge fund strategies. The AKO investment is the first with a solely European focus, Mr. Slack said in a telephone interview.