Hedge Fund News: George Soros, Thomas Steyer, Paul Singer

SOROS FUND MANAGEMENTObama Wins; Dollar Falls; George Soros Happy (Gather)
President Obama wins his re-election bid. The dollar fell and the Euro rose upon the news, as concerns about the fiscal cliff loom. As reported by Reuters, “the dollar was down 0.3 percent against a basket of currencies,” and while the clear victory was a relief, the fiscal cliff, “a $600 billion package of automatic tax increases and spending cuts,” will take effect at the end of 2012, which will strain economic growth. …George Soros said the re-election will open “the door for more sensible politics.” Soros and that he hoped “the Republicans in office will make better partners in the coming years.” What can Americans expect with the Obama presidency? The best predictor of future behavior is past behavior, so the hyper-partisan atmosphere will no doubt continue, unless the tendency to marginalize and vilify political opponents ceases.

California Backs Hedge Fund Chief’s Corporate Tax Measure (BusinessWeek)
California voters passed a ballot initiative financed by hedge fund executive Thomas Steyer that strips out-of-state corporations of an option for lowering their state income taxes. The measure was winning 59.5 percent to 40.5 percent, with 58 percent of the precincts counted, according to the Associated Press. The initiative requires corporations to base their tax solely on in-state sales, rather than a formula that let some pay less by factoring in their property and workforce in California. It will raise about $1 billion annually, with half set aside for the state’s general fund and half for energy- efficiency programs.

Hedge funds puncture Christmas cheer with predictions of further meltdown (TheDrum)
A recent spate of closures, retrenchment and profit falls on the High Street may be no mere aberration but could be symptomatic of a longer term downward trend in the industry, according to the latest hedge fund predictions. Famous for betting not on winners, but on losers, these financial alchemists are betting hundreds of millions of pounds on a retail Armageddon this Christmas, with familiar names such as WH Smith, Tesco and Dixons all expected to see the valuation of their stock fall. The list of firms was published following the introduction of new rules buy the Financial Services Authority with one of the biggest players, Lansdowne Partners, betting £163m that Tesco’s share price will decline and £159.8m that Wm Morrisons will do likewise.

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Hedge fund strategies face continued political risks and market uncertainties (HedgeFundsReview)
The world is entering a dangerous phase. The financial crisis, far from abating, is stronger than ever. More positive news from the US economy may be short-lived if political parties cannot work together to avoid plunging off the fiscal cliff and into total pandemonium. No matter who becomes the next US president there will be no easy solutions, no quick fixes. Moreover, that applies for politicians around the world facing similar or different challenges. In the US there is a need to get the economy back into full production and sustainable growth. Many suggestions on how to do it but no certainty as to what will actually work. Perhaps, as in the past, the world, and the US government to some extent, should trust to the indomitable spirit and determination of entrepreneurs that are fundamental to the country’s past success and one would hope future, too.

Hedge Fund Founder Faces Jury as FBI Raids Yield Trial (BusinessWeek)
Almost two years ago, Level Global Investors LP and Diamondback Capital Management LLC were among four hedge funds raided by the Federal Bureau of Investigation as part of a nationwide crackdown on insider trading. This week, the first two defendants from those firms are set to face trial in Manhattan federal court, as the U.S. continues its unprecedented five-year-old investigation of market corruption at hedge funds, technology companies and consulting firms. Level Global co-founder Anthony Chiasson and Todd Newman, a former portfolio manager for Stamford, Connecticut-based Diamondback, are accused of making more than $67 million in illicit profits by trading on inside information in Dell Inc. (NASDAQ:DELL) and NVIDIA Corporation (NASDAQ:NVDA) U.S. District Judge Richard Sullivan will preside over the trial of both men, who have pleaded not guilty.

iCapital.biz founder Tan to quit over Laxey takeover bid (FreeMalaysiaToday)
Tan Teng Boo (picture), founder of iCapital. biz Bhd, has announced his intention to retire as fund manager of the closed-end fund in response to a takeover bid by Laxey Partners Ltd, a European hedge fund and iCapital substantial shareholder. In a statement to the media yesterday, Tan urged all share owners of iCapital.biz to remember why they invested in the fund in the first place and to vote wisely to protect their long-term interests. Tan claimed that Laxey’s track record is extremely disappointing. He said the share price for Laxey’s The Value Catalyst Fund, launched in 2005, plunged by 58% when it was suspended in June 2011.

Hedge Funds Lost 1.9% in October as Global Stocks Dropped (BusinessWeek)
Hedge funds lost 1.9 percent in October as global stocks slumped after companies reported earnings that spurred concern the economy was weakening. Multistrategy, global macro (BBHFMCRO) and long-short equity managers all fell, according to data compiled by Bloomberg. “There were plenty of headwinds out there — the S&P was down, that weighed on equities in total and most of the long- short equity players,” said Charles Mires, director of fixed income and alternative strategies at Franklin Street Partners Inc., the $2 billion Chapel Hill, North Carolina-based wealth manager and fund of funds.

Romney’s hedge-fund backers plan to party on election night (News)
There is one group of voters Mitt Romney should win in a landslide in Tuesday’s U.S. presidential election: hedge fund managers. Most of the best-known hedge fund managers threw their support and, more importantly, their dollars behind the Republican presidential hopeful long ago. Now, some heavyweights of the $2 trillion industry plan to break out the champagne and party in style Tuesday night as they cheer on their man at events in Boston, New York and even Las Vegas, according to people familiar with the Romney campaign and some of the big contributors.

You can check out but not leave (BusinessTimes)
THE sales pitch for the fund was simple: A chance for individual investors to get in on the same high-octane private equity and hedge funds that have fuelled successful returns for large university endowments for years. But now investors in the fund, the nine-year-old, US$3.3 billion Endowment Fund, are finding that it was much easier to get in than it is to get out. The fund, run by Mark Yusko, the charismatic former chief of the endowment for the University of North Carolina at Chapel Hill, sent letters last Friday to investors saying that it was limiting the amount of money that could be taken out each quarter. Investors withdrew more than US$1 billion, or about a quarter of the fund’s assets, this year till September, according to a filing with the Securities and Exchange Commission (SEC).

Hedge funds forced to reveal most shorted stocks by FSA (CityAM)
HEDGE funds have had their short selling activities made public for the first time, as regulations enacted this week expose some of the massive bets made by firms involved in the secretive industry. The Financial Services Authority will now force all funds to declare any short position that represents more than 0.5 per cent of a target company’s total share capital. The data is collected every 24 hours and published on a daily basis. In a short sale, traders borrow shares in the hope that share prices will fall, enabling them to buy them back at a lower price and profit from the difference.

Matrix to Liquidate Hedge Fund and Investment-Banking Divisions (BusinessWeek)
Matrix Group Ltd., a U.K. financial firm seeking protection from creditors, said it will liquidate its hedge fund and investment-banking operations. Matrix Alternative Asset Management LLP will be wound down “shortly” and Matrix Corporate Capital LLP, which advises energy and clean-technology firms on mergers and share sales, will also liquidate, the London-based firm said a statement today. Matrix Property Fund Management LLP, the real-estate unit that manages $600 million of assets, will be spun off and be run by its current managers, the company said.

Karvy to launch equity and currency based hedge fund soon (Business-Standard)
Karvy said today that they will be launching their hedge fund soon. Hrishikesh Parandekar, CEO & Group Head (Broking, Wealth Management and Asset Management), Karvy Group said that thanks to the new norms for Alternative Investment Funds (AIF) issued by Sebi, earlier on in the year, will see many hedge funds being launched. The AIF guidelines will regulate all private equity players, venture funds, real estate funds, and even hedge funds. Parandekar said that the fund will constitute both equity and currency. It will follow quantitative algorithm method of investing, he said. Karvy is still in early stages of getting approvals for the the same.

Giving His Way to Success (HuffingtonPost)
Salman Khan is a classic outlier who has given the world what many consider to be a great gift. It all started out with a YouTube upload. This hedge fund manager decided to use YouTube as a way of sending his cousins a little instructional video on math. The cousins were pleased. So was the rest of the world, apparently. His little homework aid became an Internet meme and exploded into a global sensation. And it was all pretty much by accident. It succeeded partly because of the intelligence and good will and generosity it embodied.

Irwin Menken, Founder of C3 Compliance Software, Joins Avalon Lake Partners (SacBee)
Irwin Menken, founder of software company C3, has joined Avalon Lake Partners. C3, a trusted, proprietary, web-based regulatory infrastructure tool, assists hedge funds and broker dealers with document aggregation, document audit trails and calendaring as these tasks relate to SEC and FINRA compliance. Irwin will support Avalon Lake’s sales operations and technology implementation, expanding its product base, and integrating C3 with the firm’s existing compliance offerings. “Irwin is a compliance maven in the hedge fund space, and his C3 software will enhance Avalon Lake’s already robust offering, positioning our firm as a top compliance resource for financial institutions,” says Lou Sala, Managing Partner and CEO of Avalon Lake Partners.

You Don’t Have to Move to New York to Start a Hedge Fund (HedgeCo)
When investors think of hedge funds, they picture the bustling streets of New York City. They may also think of London, Chicago, or the growing community in Florida. But while many hedge funds have thrived in those locations, you don’t have to move to one of those cities in order to make it big. “Obviously the vast majority are located in New York, London, or Chicago,” said Nathan Anderson, co-founder and CEO of ClaritySpring, a company that aims to bring efficiency and transparency to the hedge fund industry. “But I don’t think people need to pack up and move to New York to start a hedge fund. It’s a business that you can run from just about anywhere.” Anderson said that the location ultimately comes down to strategy.

NY Hedge Fund Makes Several Hires (HedgeFund)
Hedge fund 400 Capital Management has announced several additions to the firm. The firm said in a statement Tuesday that Dan Krup, Michael Zang and Steve Hemmes has joined New York-based 400 Capital. As the new director of asset-backed credit and special situations portfolio management, Krup will be responsible for leading the firm’s efforts in “researching, sourcing and analyzing opportunities within consumer and commercial ABS portfolios and financings for the firm’s various mandates.” Prior to 400 Capital, Krup spent three years at investment firm Western Asset Management Company.

Jim Rogers offers to chair Dacha board as it launches lawsuit against dissident takeover (MetalBulletin)
Dacha Strategic Metals has nominated commodities investor Jim Rogers to chair the company ahead of a vote proposed by dissident shareholders to disband the existing board and appoint its own nominees. Dacha, which offers price exposure to a physical stockpile of rare earths, has also launched proceedings against Goodwood Inc, Salida Capital, Takota Asset Management and Longford Energy, claiming that they acted jointly or in concert to acquire an aggregate stake in the company of more than 31.5% of issued equity, in breach of Canadian disclosure requirements. “This is a group of people who haven’t been terribly successful in the past who are trying to grab hold of the company, and we all believe we can do a…

Nouriel Roubini praises Obama victory (GazzettaDelSud)
Renowned American economist Nouriel Roubini haled the re-election of President Barack Obama as “positive for the United States and the rest of the world”. Speaking at the World Business Forum Milan, Roubini said Obama would be able to strike a balance between the public and private sectors, something that is fundamental for “a successful economy, which must anchor itself to private businesses, but having the guarantee of public services from the State is fundamental”. Roubini, an Iranian Jew born in Turkey and raised in Italy, is known for accurately predicting the collapse of the American housing market in 2008 and the subsequent global economic slowdown.

Singer’s Elliott Sells Home Loan Bonds in Latest Quarter (BusinessWeek)
Elliott Management Corp., the $21 billion New York-based hedge fund founded by billionaire investor Paul Singer, sold residential mortgage-backed securities last quarter. “While we acknowledge that the yield profile of many RMBS bonds compares favorably to other credit products, the absolute yields are very low,” Elliott said in a third-quarter letter to clients, a copy of which was obtained by Bloomberg News. “Even considering a likely continuation of good news in housing, we do not find most RMBS bonds compelling. As a result, we have continued to sell into this rally.”