No letup on risk for hedge funds this December (CNBC)
A long-held perception is that hedge funds, especially those up big for the year, like to take it easy in December. Why keep risk on, the thinking goes, when you can guarantee a fat, marketing-friendly return for the year? “Do I hope they are locking in their profits? I sure the hell hope so,” said financial advisor Ed Butowsky of Chapwood Investment Management. But anecdotal evidence, data and conversations with investors in hedge funds show most are standing by their bets this year and keeping risk on. Take Philippe Laffont‘s Coatue Management. The technology and Internet-focused hedge fund manager with $7.51 billion in assets could sit on his 16.64 percent gain through November by lowering risk levels or shifting to cash.
Fox News Neutralized, Soros-Backed Group Declares Victory (NewsMax)
The liberal media-watchdog group backed by billionaire George Soros says its “war” on Fox News is over, claiming it has neutralized the right-leaning network and no longer sees it as a threat. “It’s not just that it’s over, but it was very successful,” Media Matters Executive Vice President Angelo Carusone bragged late this week to The Huffington Post. “To a large extent, we won,” he said. This week Media Matters gave the Huffington Post a look at its internal strategic plan for the next three years. Fox, which became the single focus of the activist group founded by bestselling author and journalist David Brock, has made key changes in programming that makes it no longer a worry to the left and the Obama administration.
Millionaire Playboy Arpad Busson to sell EIM Group to Gottex (Independent)
Arpad “Arki” Busson, one of the world’s best-known hedge-fund managers, is set to merge his $3 billion (£1.83 billion) EIM Group with Switzerland’s listed Gottex Fund Management to create a business managing $10 billion by mid-2014. Busson is best-known for founding the ARK charity ball held annually by hedge-fund managers which attracted the rich and famous until it was postponed this year. He is engaged to actress Uma Thurman and counts Farrah Fawcett and Australian supermodel Elle Macpherson among former partners.
Hedge Fund Lions’ Den: Emerging managers learn their fate (Risk)
The dramatic conclusion of Hedge Fund Lions’ Den starts with a frank and honest exchange of views by the three industry experts. Stanley Fink, the godfather of the hedge fund industry, leads a discussion with fellow lions Aberdeen Asset Management’s Andrew McCaffery and Luke Ellis from Man. The three examine the proposition of the emerging managers taking part: Charles-John (CJ) Donley and Robert Toffel from Strategis Capital Management; Neil Meadows of Laurentia Funds; and Christina McGuire and Gordon Eichhorst from Aperios Partners Investment.
Calpers boosts Asia hedge fund Double Haven’s assets to $710 mln (Reuters)
The California Public Employees’ Retirement System (Calpers), the biggest U.S. public pension fund, has invested about $100 million in Asian credit hedge fund Double Haven, a fresh sign that investor interest in Asia-based managers is rekindling. Although the hedge fund industry in Asia suffered net outflows of more than $4 billion in 2012, an average 15 percent return through the end of November this year has drawn investors, helping the industry raise more than $10 billion this year, according to data from Eurekahedge. Calpers will invest in Double Haven’s long/short credit hedge fund and the investment will boost the firm’s total assets under management to more than $710 million, the hedge fund’s chief executive, Greg Donohugh, told Reuters.
Credit Suisse to fund software marketplace (FT)
Credit Suisse Group AG (NYSE:CS) will finance an online marketplace for investment banking and hedge fund software, in the latest attempt by a bank to reduce the sector’s rapidly spiralling technology costs. The launch of Eco Financial Technology next month highlights how investment banks are under enormous pressure to cut fast-rising costs as moves towards electronic trading and severely tighter regulations push up IT expenses. “The costs for platforms and IT are one of the biggest headaches for top bankers,” said Chris Wheeler, analyst at Mediobanca.
The smartest hedge funds are buying Groupon: Trader (CNBC)
Darden Shares Could Jump 40% On Hedge Fund Plan (Barrons)
Activist hedge fund Barington Capital is close to releasing a report that will push for a restructuring of the struggling Darden Restaurants, Inc. (NYSE:DRI) chain. Barington believes the owner of Red Lobster and Olive Garden would unlock shareholder value by splitting into two companies and possibly creating a REIT to hold the company’s sprawling real estate portfolio. The 80-page report, compiled with investment bank Houlihan Lokey, expands upon the broad outlines of a plan Barington made public in October. By splitting, cutting costs, and monetizing real estate, Barington argues, Darden could send the shares from the current $51 to a range of $71 to $80.
Canadian “Gold Bug” Sidelined By Gold’s Dive (LiveTradingNews)
Canadian “Gold Bug” Sidelined By Gold’s Dive Gold’s 36% fall from its September 2011 record high made a casualty out of Canadian hedge fund manager Eric Sprott, one of the precious Yellow metal’s strongest advocates. Mr. Sprott’s flagship fund has fallen by more than 50% in Y 2013 in what will likely be the 3rd year running of double-digit percentage losses for his firm’s fund, according to documents sent to investors, the WS-J reports. Mr. Sprott once managed almost $3-B of hedge fund assets in Y 2008, in 2013 it down to about $350-M. His strong faith in Gold and other precious metals has cost him. Spot Gold finished at 1,238 Friday afternoon, down 25.3% YTD. Mr. Sprott has been sidelined within his own investment company,Sprott Inc. The firm announced last month that he will no longer be part of investment decisions.
George Soros Donates Funds to Help Heat Schools in Greece (GreekReporter)
Greek students have had a rough winter in extremely cold classrooms due to the lack of heating resources, resulting from local authorities who are simply unable to cover the unbearable cost of heating oil. The organization Open Society Foundation, founded by the great American investor George Soros, offers donations worth millions of euros in oil so that children can sit in a warm classroom. Schools in the 2 biggest municipalities of Greece have been lucky enough to have their oil tanks filled thanks to Mr. Soros’ donations.
Water shortages a crucial issue in China: Jim Rogers (WantChinaTimes)
American investor and author Jim Rogers says water shortage is the biggest problem in China. The country’s water resources are limited but reuse of water is still insufficient and groundwater is being overexploited, reports ifeng, the financial news site run by Phoenix New Media in Hong Kong. War, famine, civil war or recession can be overcome but drought cannot; people cannot build a society or a country without water, the investor said during an interview with the media. China is one of 13 countries with the poorest water resources per capita in the world. Its freshwater resources per capita are only one fourth of the global average. As of the second half of 2005, the country had a water shortage of six billion cubic meters.
Hedge Funds’ Natural Gas Bets Jump as Thermometer Drops: Energy (Bloomberg)
Hedge funds got more bullish on natural gas, betting the most on rising prices in 11 weeks as cold weather in the U.S. diminished fuel inventories. Money managers boosted net-long positions by 44 percent in the seven days ended Dec. 10, U.S. Commodity Futures Trading Commission data show. The total was the most since Sept. 24. Bullish wagers increased for a third week. Gas surged 6.6 percent during the report week as forecasts showed widespread below-normal temperatures. MDA Weather Services in Gaithersburg, Maryland, predicted it would be colder than average in most of the contiguous U.S. from Dec. 23 through Dec. 27. A government report on Dec. 5 showed a weekly drop in gas supply that surpassed analysts’ estimates.
The Other Reason Long-Short Managers Are Down This Year (InstitutionalInvestorsAlpha)
Pity the poor long-short manager. While most equity indexes are up 30 percent or more this year, the average hedge fund manager that simultaneously bets on stocks that go up and down is up a mere 9 percent or so through the third quarter. Many of these managers are beating or coming close to matching the stock indexes in their long portfolios but are understandably suffering sizable losses in their short books.
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