Government Shutdown Impact on Hedge Funds (Forbes)
The impact of the October 1 shutdown of the federal government on hedge funds is now playing out in slow motion. While the SEC remains open due to its ability to self-fund for a few weeks, its sister agency, the CFTC has shut down. These are the agencies that provide oversight to the securities and commodities markets that hedge funds trade in. Additionally, these agencies support the rule-making, registration and examination systems that are backbone to the integrity of the hedge fund industry.
Hedge Funds Used Obscure Bond Bet to Win in GM Bankruptcy (Bloomberg)
General Motors Company (NYSE:GM)’s bankruptcy, which wiped out shareholders and left taxpayers on the hook for billions of dollars, is generating a new wave of profit for hedge funds that supersized their claim by betting on an obscure pool of GM debt issued in the Canadian province of Nova Scotia. A settlement reached last week proposes giving Fortress Investment Group LLC (NYSE:FIG), Elliott Management Corp. and other holders of GM Nova Scotia notes a $1.55 billion bankruptcy claim on $1.07 billion in debt. Holders of that same pool of debt had earlier received $367 million in cash.
Citigroup fined US$30m for tip-off to big clients (ChannelNewsAsia)
Massachusetts on Thursday fined Citigroup $30 million for improperly releasing market-sensitive information on an Apple supplier to large clients including hedge fund SAC Capital Advisors. In December 2012 Taiwan-based Citigroup Global Markets analyst Kevin Chang divulged to a handful of clients a lowered production forecast for Apple iPhones and iPads made by supplier Hon Hai a day before the research was published, the state said. The publication of the revised forecast suggesting lower demand for Apple products helped to propel a 5.2 percent drop in Apple’s share price over a two-day period.
SS&C buys Prime Management hedge fund administration business (PIOnline)
SS&C Technologies Holdings acquired Prime Management Ltd., a hedge fund administrator focusing on the insurance-linked securities market with $6 billion in assets under administration, confirmed Bill Stone, SS&C’s CEO. Terms were not disclosed. The deal closed on Wednesday; it was not preannounced, Mr. Stone said. Prime will become part of the SS&C GlobeOp fund administration business, which will have $550 billion in AUA, Mr. Stone said.
HFRX Global Hedge Fund Index up 0.96 per cent in September (HedgeWeek)
Hedge funds posted gains in September with the HFRX Global Hedge Fund Index up 0.96 per cent and the HFRX Market Directional Index up 2.23 per cent. The HFRX Event Driven Index posted a gain of 2.10 per cent for September, led by gains in special situations and activist exposures. The index leads all strategy indices with a YTD gain of 10.87 per cent.
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