A Billionaire Retrenches In A Tough Year For Hedge Funds (The Wall Street Journal)
Hedge-fund manager Jamie Dinan is ending 2016 the way he started it: eating humble pie. The main fund at his York Capital Management, which fell 14% last year, lost another 1% this year through early December. That performance in back-to-back years has pushed Mr. Dinan to crisscross the globe in his most intense client interactions in years, people familiar with the matter say. He took his private jet to Seoul in January to meet with South Korea’s sovereign-wealth fund. In March and April, he met with investors in Switzerland, Sweden and Norway. More recently, the Abu Dhabi Investment Authority and large investors throughout the U.S. have landed on his itinerary.
Trump Administration ‘Hell-Bent’ On Making Big Changes, Dalio Says (Bloombeg)
Economic changes under the Donald Trump administration may be more significant than shifts from “the socialists to the capitalists” in the U.K., U.S. and Germany from 1979 to 1982, according to Bridgewater Associates founder Ray Dalio. Comparing Trump to Margaret Thatcher, Ronald Reagan and Helmut Kohl, Dalio said the incoming administration may have a much bigger impact on the U.S. economy than can be measured by tax changes and fiscal spending. The Trump era could “ignite animal spirits” and attract productive capital, the billionaire fund manager wrote in a LinkedIn post on Monday. “By and large, deal-maker businessmen will be running the government,” said Dalio, whose Westport, Connecticut-based firm is the hedge fund industry’s largest money manager.
Citadel’s Adam Cooper To Retire In 2017, Fagan Promoted (Reuters)
Investment firm Citadel LLC said on Tuesday that its chief legal officer, Adam Cooper, plans to retire in 2017 and that Shawn Fagan has been promoted to general counsel for its hedge fund business. Cooper, 54, worked at Citadel for 18 years and plans to spend more time on philanthropic pursuits and with his family after he leaves the firm at the end of February 2017, Zia Ahmed, a spokesman for the firm said. Citadel, which invests $26 billion, split Cooper’s job in two. It promoted Fagan, who had been senior deputy general counsel, to his new position effective immediately. It is planning to hire a general counsel for Citadel Securities in early 2017, Ahmed said. Fagan joined Citadel in 2005 after working for a law firm and serving as a clerk to Chief Justice William Rehnquist of the U.S. Supreme Court. Cooper has been working closely with Citadel‘s founder, Ken Griffin, for nearly two decades.
5 Investment Strategies To Win Like Soros And Icahn (Forbes)
George Soros. Carl Icahn. Dan Loeb. Steve Cohen. Stan Druckenmiller. Titans of the hedge fund investment world. Soros brought down the Bank of England. Icahn won big on Herbalife. Dan Loeb forced change at Yahoo. The secret to their success? Here are five investment lessons from these legendary hedge fund investors that you can apply to your investment portfolio today: 1. Develop an investment thesis: An investment thesis is the underlying reason why you are investing in a stock. With the exception of momentum traders and quants, most hedge fund investors develop an investment thesis before they deploy capital. For example, the investment thesis can mean the stock is undervalued and underappreciated by investors or there may be a catalyst such as a potential take-out acquisition on the horizon.
Hedge Fund Winners And Losers Emerge As Year Ends On Better Note (Bloomberg)
This was the year to ridicule hedge funds. Pension funds, politicians, Warren Buffett, even hedge fund managers themselves — they all had something to say about the disappointing performance, high fees and market saturation. Well-known managers from Ray Dalio to John Paulson saw performance on their main funds range from flat to double-digit losses, while some distressed-debt investors like Jason Mudrick benefited from the rally in commodities prices. Strategies focused on macro trends and equity hedges — which have seen returns crimped by swollen stock-market valuations and ultra-low interest rates — produced the worst returns.
The Latest: NY Hedge Founder Pleads Not Guilty (Fox News)
NEW YORK – The Latest on a hedge fund founder and six others charged with fraud (all times local): 4:15 p.m. A hedge fund executive has pleaded not guilty to securities fraud conspiracy in New York following charges in a $1 billion fraud case linked to an oil rig explosion in the Gulf of Mexico that killed three workers. Mark Nordlicht, a founder and chief investment officer of Platinum Partners, and six other defendants were named in an indictment Monday. They’re accused of lying to investors about the performance of a fund that ran into trouble when one of its largest assets, the Black Elk oil exploration company, had a rig explode in 2012 off Louisiana. Nordlicht entered his plea in federal court in Brooklyn. The 48-year-old from New Rochelle, New York, is being released on $5 million bond.
John Roque On The Language Of Wall Street (BloombergView)
This week on Masters in Business, we speak with John Roque, a highly regarded technical analyst at Key Square Capital, a George Soros-seeded hedge fund. He spent the first part of his career on the sell side, working as a technical analyst for Lehman Brothers and Natexis. He later moved to the sell side, joining Soros Fund Management. Roque explains the importance of objectivity when considering individual stocks or analyzing the market. He explains why the technical side is different yet complementary to fundamentals. He notes that “charts are the language of Wall Street” — and regardless of the differences between sell-side and buy-side research, everyone looks at a chart before making an investment decision.
Platinum Fund’s Outsized Returns ‘Tarnished’ After Charges (Bloomberg)
For more than a decade, Platinum Partners reported some of the biggest gains in the hedge-fund industry, even as many of its investments seemed to go horribly wrong. Now, federal prosecutors in Brooklyn say the $1.7 billion hedge fund’s industry-beating returns were based on lies. On Monday, co-founder Mark Nordlicht and six associates were charged with fraud. They’re accused of inflating the book value of unprofitable oil projects to make the fund’s performance look better in what the government called a $1 billion fraud and a “Ponzi-esque” scheme. “In the end, Platinum held no more value than a tarnished piece of cheap metal,” Brooklyn U.S. Attorney Robert Capers said at a news conference. “Nordlicht and his cohorts engaged in one of the largest and most brazen investment frauds perpetrated on the investing public, earning Platinum more than $100 million in fees during the charged conspiracy.”