New hedge funds need $300 million in assets just to break even (Reuters)
Traders launching a hedge fund need to raise at least $300 million in assets to pay for rising regulatory costs and to offset lower fees, a survey showed, a far cry from the pre-crisis days when managers could start with tens of millions. According to the survey by Citigroup Inc (NYSE:C), hedge funds now charge annual management fees of as low as 1.58 percent of assets, down from the traditional 2 percent that larger funds still command. Added to this, compliance and regulatory costs have risen because of new rules such as the Alternative Investment Fund Managers Directive in Europe and Dodd-Frank legislation in the United States.
Towry hires hedge fund expert (CityWire)
Wealth firm Towry has recruited a hedge fund specialist for its investment team. Mehdi Douali has joined Towry’s London office from BlueMountain Capital, where he worked with investors on the firm’s range of hedge funds. BlueMountain was one of the hedge funds to make a fortune on the other side of JPMorgan Chase & Co (NYSE:JPM)’s London Whale trade. Before BlueMountain, Douali worked as a senior investment analyst at Atlas Capital and as an exotic equities derivatives trader at Barclays Capital. Andrew Wilson (pictured), head of investment at Towry, described Douali as ‘an excellent investment specialist who I have been hoping to bring into my team for some time’.
A Time for Change: Activist Investor Plans to Increase Pressure on Bob Evans (TheLedger)
Last week, Bob Evans Farms announced that it had declined to make strategic changes recommended by one of its biggest investors. Now that investor, the hedge fund Sandell Asset Management, plans to turn up the heat on the restaurant operator. Sandell intended to announce Monday that it will move for change at Bob Evans, potentially including replacing its directors, according to people briefed on the matter who spoke on condition of anonymity because they were not authorized to speak publicly about the fund’s plans. The hedge fund will begin a so-called consent solicitation, which will let investors vote on changes at Bob Evans outside an annual meeting, the people said. The fund could also seek to amend the restaurateur’s bylaws.
Carl Icahn’s growing sphere of influence (BostonGlobe)
It’s hard to say no to Carl Icahn. Just the latest example: Hologic, Inc. (NASDAQ:HOLX) of Bedford welcomed two of the activist investor’s lieutenants onto the medical product company’s board of directors Monday. At the same time, Hologic also named Stephen MacMillan as its new chief executive and made a point of telling everyone that MacMillan arrived with Icahn’s blessing. This is the way it often goes at companies in which Icahn takes a substantial interest (he bought more than 12 percent of Hologic’s stock two months ago). Companies usually react first by drawing up a “poison pill” shareholder’s rights plan to block the possibility of a hostile takeover and then negotiate a deal to put Icahn people on their boards. After that, things can get really interesting.
Hedge fund managers seek to set themselves apart through branding (PIOnline)
Hedge fund branding is increasing as institutional investors’ presence within hedge funds’ client bases is forcefully nudging even the most tight-lipped firms to open up and explain what they do. The Jumpstart Our Business Startups Act of 2012 might have lifted the ban on advertising private funds, but sources said the most important impact so far is the reassurance it provides to hedge fund managers about establishing a brand identity for their firm and investment strategies. To date, only a few very institutionally focused hedge fund and hedge funds-of-funds companies have deliberately set out to develop a brand presence aimed at clients, prospects and to some extent, the general public.
MARC FABER: Stocks Could Surge Another 20% From Here (BusinessInsider)
Marc Faber, author of “The Gloom Boom And Doom Report,” maintains as bearish a tone as ever. He warns that increased risks means that equity investors may not benefit from high future returns. Still, he believes that U.S. stocks may go up another 10-20% in 2014. Though he warns it’s too late to invest. …Faber joins fellow bears like John Hussman, Bob Janjuah, Richard Russell, and Jeremy Grantham who all warn that stocks may book another double-digit’s worth of gains before collapsing.
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