Stanford Sentenced To 110 Years (Finalternatives)
Convicted hedge fund fraudster R. Allen Stanford said yesterday that he’s no Bernard Madoff, but a federal judge sentenced him to a Madoff-like 110 years in prison, anyway. The former Stanford Financial Group chief received the century-and-change for the two-decade long Ponzi scheme that he was convicted of running in March. All told, Stanford swindled some 30,000 investors out of $7 billion.
Chicago hedge fund manager switches from 2008 Obama fan to Romney backer (Suntimes)
Four years ago, hedge fund manager Ken Griffin was impressed enough with Barack Obama that he invited him to speak to his employees and helped raise $50,000 to $100,000 for his presidential run. Griffin also hedged his bets by raising a similar amount for Republican John McCain. But this year, Griffin — ranked by Forbes as Chicago’s fifth-richest man — and his wife Anne, a French-born hedge fund manager herself, are all in with Republican presidential candidate Mitt Romney, telling friends and interviewers they think Romney will better manage the economy.
Hedge fund giant makes a killing with airline stocks (MSN)
Warren Buffett has an antipathy toward airlines. He has said that “the net wealth creation in airlines since Orville Wright has been next to zero” and called his own investment in US Airways in the early 1990s one of his biggest mistakes. David Tepper, the master of distressed investing who made billions during the financial crisis, typically enters a scenario when there is a bankruptcy involved and an opportunity to gain after others have lost. This was the case with his two big airline purchases of the first quarter: US Airways Group (LCC 0.00%) and Delta Airlines (DAL 0.00%). His uncanny timing led to an average gain of 82% on them to date this year.
Presto chango! Pimco turns hedge fund into mutual fund (Investmentnews)
Pacific Investment Management Co. LLC took another step toward expanding its equity mutual fund lineup on Thursday with the introduction of its first long/short fund. The number of long/short mutual funds has jumped over recent years, with 17 new funds launched in 2011 alone. The bond giant, however, took an unusual path to launch the Pimco Eqs Long/Short Fund (PMHAX). Rather than simply hire a portfolio manager with experience running a long/short hedge fund, Pimco went out and acquired that sort of hedge fund from Catamount Capital Management, along with its manager, Geoffrey Johnson. It then persuaded the Securities and Exchange Commission to allow it to convert the hedge fund into a 1940 Act mutual fund.
Centaurus Alumni Start Hedge Fund Under Whalley, Reuters Says (Bloomberg)
Lawrence “Greg” Whalley is starting a new hedge fund called Copperwood with personnel from Centaurus Energy, a natural gas hedge fund shuttered in May, Reuters said today without saying where it got the information. Whalley, former president and chief operating officer of Enron Corp., will take with him staff from Centaurus’s London, New York and Houston offices, including Conrad Goerl and Jeff Brattain, Centaurus’s chief financial officer, Reuters said. The fund will begin trading Aug. 1.
Hedge Fund Researchers Arrested In China (Finalternatives)
Researchers for at least two American hedge funds have been arrested or harassed by Chinese authorities. Both Absaroka Capital Management and EOS Holdings have had employees persecuted, the Pittsburgh Tribune-Review reports. The treatment has included death threats from both thugs and police as well as arrests: Three EOS employees were detained for five days, and two remain under travel restrictions. The fate of the Absaroka employees is unclear.
Oaktree-led lenders, Greenwich hedge fund battle over Klockner (CTPost)
Klockner Pentaplast Group’s senior creditors led by Oaktree Capital Management LP plan to cut its debt to about 250 million euros from 1.25 billion euros if they take control of the plastic packaging producer through a restructuring, according to three with knowledge of the situation. The senior lenders aim to take ownership of the company through a debt-for-equity swap after Klockner breached loan terms at the end of last year, unless the creditors are repaid at par by June 22, said the people, who declined to be identified because the talks are private. Klockner Pentaplast, founded in 1965 in Montabaur, Germany, was bought by New York- based Blackstone Group LP in 2007.
Ex-Citi, M.Stanley, Highbridge execs plan Asia hedge funds (Reuters)
Former Citigroup portfolio manager Yang Yeo and Janice Dunnett, who earlier ran Morgan Stanley’s convertible bond franchise in the Asia Pacific, are preparing to launch a hedge fund in the third quarter of 2012, a fund marketing document obtained by Reuters showed. Naga Capital Master Fund, which the two executives are setting up in Hong Kong, will target an annual return of 15 percent through investments in credit, equity and convertible bonds in the region, according to the document.
Stonegate Capital Partner announces a new recent white paper, “Hedge Fund Capital Raising – The Fee Drag Impact on Hedge Fund Performance”- for startup hedge funds (SFGate)
Hedge fund formation specialists, Stonegate Capital Partners, LLC announces the release of its most recent white paper, “Hedge Fund Capital Raising – The Fee Drag Impact on Hedge Fund Performance”, which highlights a number of important aspects of starting a hedge fund. A spokesperson for Stonegate Capital Partners stated, “Raising assets is one of the most critical elements of building a hedge fund business. This white paper highlights a number of important steps that emerging and start up hedge fund managers can take in order to maximize their opportunities for success.”
Hedge fund flows advance 1.60% in June, says GlobeOp (Hedgeweek)
Hedge fund flows as measured by the GlobeOp Capital Movement Index advanced 1.60% in June. “Solid net flows into hedge funds continued in June,” says Hans Hufschmid, chief executive officer, GlobeOp Financial Services. The GlobeOp Capital Movement Index represents the monthly net of hedge fund subscriptions and redemptions administered by GlobeOp. This monthly net is divided by the total assets under administration (AuA) for GlobeOp’s fund administration clients.
Sitting Down With ‘Wall Street Maneet,’ CNBC’s Hedge Fund Specialist in the Crosshairs (NYMag)
Peering out from under a set of false eyelashes at a pink-encased BlackBerry, Maneet Ahuja, a 27-year-old CNBC producer and hedge fund specialist, looked every bit the harried Manhattan media underling as she sat down at Ground Support in Soho last week. Ahuja was smiling but deflated. She had just learned that despite a monthlong media push and a star-studded book party whose guest list included such Wall Street notables as David Tepper, Leon Cooperman, and John Paulson, her new book, The Alpha Masters: Unlocking the Genius of the World’s Top Hedge Funds, had missed the week’s New York Times best-seller list.
Hedge funds in China: opportunities abound (Hedgeweek)
Despite (or perhaps because of) global market volatility, the appetite of fund managers for all things Chinese, from investing in offshore RMB to trading on the domestic capital markets, continues apace. Recently, however, there appears to have been a shift in opportunities for both Chinese investors and global fund managers. Over the past decades, the focus for both foreign investors and Chinese regulators has been entirely inbound in nature. However, with the proliferation of domestic Chinese investors, the rapid accumulation of large pools of RMB capital, along with inadequate global liquidity, a subtle shift of focus to opportunities outbound has emerged. A number of our Cayman hedge fund clients have sought to provide their investors with RMB exposure by investing directly or indirectly into companies which are domiciled in China with shares denominated in RMB and traded on the “A” Share markets. “A” Shares are issued by companies incorporated in China that are listed on the Shanghai and Shenzhen Exchanges.
Global regulation drives fund managers to strengthen operational controls and improve corporate governance (Hedgeweek)
A recent industry survey that ranked Asian prime brokerages based on hedge fund AUM was both predictable and unexpected. Predictable in the sense that Goldman Sachs remains the leading broker in Asia. Unexpected in the sense that Morgan Stanley, ranked Number 2 in the survey, was only some USD420million ahead of Credit Suisse (with approximately USD19.2billion in AUM), with Deutsche Bank and UBS each gaining 10 per cent market share. Since 2008, Goldmans and Morgan Stanley have seen their market share in the region halved as European players and the likes of Bank of America Merrill Lynch and Citi have moved aggressively to win clients. The ‘duopoly’ has become a stable of six or seven quality primes all battling for market share, illustrating that Hong Kong’s prime brokerage industry has become more competitive than ever.
Former Winton duo launches maiden hedge fund (HFMWeek)
Bruce MacDonald and Dr. Patrick McSharry, who worked together at Winton Capital Management, have set up a hedge fund firm and launched their maiden launch, HFMWeek has learned. The duo has formed UK-based investment advisor Capitis Capital and rolled out flagship fund the Rudolf Wolff Global Portfolio, a long/short strategy branded after the firm appointed as its marketer.
Ray Dalio’s Bridgewater Hedge Fund Has A Brand New iPad App (Businessinsider)
Billionaire hedge fund king Ray Dalio, the founder global macro fund behemoth Bridgewater Associates, encourages all of his employees to live by his famous set of Principles. Dalio’s Principles include hundreds of nuggets of wisdom, which are available for all of his employees on a custom iPad app.
Karsch Capital Up 6% YTD, Launches UTIC, Closes Credit Fund (Valuewalk)
Karsch Capital Management, is an alternative asset manager, founded by Michael Karsch. The firm’s 2.3 billion in assets is mostly invested in the fund’s flagship offshore hedge fund. People with direct knowledge of the matter, have informed us that a new UTIC willl be formed, which will start with $230 million assets. The firm closed a credit fund, despite the good returns, due to the difficulty in raising assets. The credit fund was launched in Q2 2010, with a focus on senior distressed bank debt. The firm’s flagship hedge fund has returned 6.4% year net of fees. Since inception in 2006, the fund’s return of 130% has beaten the S&P 500’s return of 22%.
University of California opens door to smaller hedge funds (HFMWeek)
The University of California (UC), which manages about $40bn, is to remove a constraint preventing it investing in smaller hedge fund managers and funds of hedge funds (FoHF), as it all but approves wider changes in its absolute return plan including an increase in exposure of over $200m, HFMWeek can exclusively confirm. Marie Bergreen, UC’s CIO, with the concurrence of Albourne Partners, has recommended to the university’s investment advisory group that the Absolute Return (AR) guidelines be revised and modified to serve “less of a risk-reducing role and more of a return-enhancing role,” an internal memo stated. The changes are scheduled to be approved at a meeting on Tuesday.
HF investors focusing on Euro crisis but turn in US data the key, says DB (HFMWeek)
Hedge fund investors in Asia and Europe are currently focused on market volatility and the ongoing EU crisis, but a sustainable rally does not seem possible until US economic data begins to turn, according to Deutsche Bank’s latest monthly hedge fund report. The Deutsche Bank prime finance team’s analysis of the S&P500 in 2012 broke down the 140 peak-to-trough sell-off in order to determine the contributing factors, assigning 80 points (57%) to disappointing US data and the remaining 60 points to the euro crisis. A third factor, emerging markets, was deemed to be too closely linked to US data to warrant its own breakdown.
Ex-Och-Ziff duo’s Asia hedge fund boosts start-up pipeline (Reuters)
Two former managing directors of Och-Ziff Capital Management, Manoj Jain and Sohit Khurana, are starting their own hedge fund in Hong Kong by the end of the year, sources said, boosting a strong pipeline of start-ups in the region for 2012. Jain, 33, and Khurana, 39, are setting up their Asia-focused hedge fund firm Maso Capital, two sources with direct knowledge of the matter told Reuters.
Credit hedge funds profit despite rocky markets (Reuters)
In a year of uneven returns for many U.S. hedge funds, managers who invest mainly in bonds have outshone stockpickers. Over the first five months of the year, credit-focused hedge fund portfolios were up 4.11 percent compared with a 2.4 percent gain for stock-focused ones, according to hedge fund tracking service eVestment|HFN.
Black box funds profit in May from markets’ slide (Reuters)
A clutch of computer-driven hedge funds have profited from steep market losses in May, outperforming other hedge funds in a welcome turnaround for the black box sector that has struggled recently amid volatile markets. Many of the outperformers were small and mid-sized funds that were more nimble and able to switch direction easier than the big established ones, investors said.
Kozlowski’s $6,000 shower curtain to find new home (Reuters)
Dennis Kozlowski’s infamous $6,000 shower curtain will soon have a new home. The custom gold-and-burgundy curtain, which helped turn Kozlowski into a poster boy for corporate greed, has been held in storage by prosecutors since before his conviction in 2005. On Thursday, a New York judge ruled it should be released to Tyco International Ltd, the firm Kozlowski, as chief executive, looted of more than $100 million.
Elliott Files Proxy to Take BMC Fight to Shareholders (WSJ)
Elliott Management has taken its fight with BMC to shareholders. The hedge fund, and owner of 6.5% of BMC, filed a proxy fight today, pushing four nominees for the board of directors. Elliott has already blasted BMC management and proposed selling the company to one of several potential strategic buyers. BMC has fought back, initiating a poison pill and said it believes its management is sounds and its future is bright.
Esprit CEO Says Retailer Remains on Track (WSJ)
Esprit Holdings Ltd. 0330.HK +9.86% Chief Executive Ronald van der Vis sought to fend off speculation that the fashion retailer is facing a crisis following news this week that he and Chairman Hans-Joachim Körber resigned. On a Thursday conference call with reporters, Mr. van der Vis stressed that he and Mr. Körber resigned purely for personal reasons. The CEO said he would remain in his position for another year and that, while he is passionate about his role, the requisite 150 days of travel a year had become too much of a burden on his family.
Technology providers push funds to build consensus on compliance issues (Opalesque)
Form PF presents hedge funds with a time consuming, high stakes, compliance challenge. The amount of data required by the form also requires funds to come together around a consensus message on fund information and fund data. For technology providers to the hedge fund industry, crafting solutions to help funds comply with regulations like Form PF, internal consensus at a fund is critical to creating a successful technology solution. “The burden of interpretation within complex funds in filing Form PF is pretty big, the guidelines are sketchy as best,” says Gurvinder Singh, CEO, Indus Valley Partners, in an interview with Opalesque.
Hedge funds help raise nearly $1 million at Autism Speaks golf tournament (Absolutereturn-Alpha)
Hedge funds figured prominently at a golf fundraiser on Monday to benefit research and advocacy group Autism Speaks, raising nearly $1 million. Employees of MKP Capital Management, Carlson Capital, Avenue Capital Group and Marathon Asset Management were among the about 300 people who sponsored and attended the event at Winged Foot Golf Club in New York City suburb Mamaroneck. Attendees mixed with celebrity actors like Emmanuelle Chriqui, who plays Sloan on HBO’s Entourage, and Matthew Settle, who plays Rufus on The CW’s Gossip Girl. There were also sports stars like New York Giants linebacker Michael Boley and former New Jersey Nets player Cliff Robinson.
Hedge funds smoke the competition at 3.5 mile road race (Absolutereturn-Alpha)
If only hedge funds could race as far ahead of the markets. While the average manager is underperforming key financial indexes this year, runners from D.E. Shaw, Blue Ridge Capital, Saba Capital Management and Highbridge Capital Management sped past nearly all 15,000 entrants at the 36th annual JPMorgan Chase Corporate Challenge road race in New York City last night. David Sorensen, an operations staffer at quant firm D.E. Shaw and two-time NCAA Division III All-American in steeplechase, placed fifth overall by finishing the hilly 3.5 mile Central Park course in 17 minutes and 48 seconds. That wasn’t far behind winner Gian-Paul Caccia of Wolverine Execution Services, who finished in a blazing 17:13, according to the posted race results.
HFR and UBS launch Ucits-compliant HF ETFs (HFMWeek)
Swiss bank UBS and Chicago-based research house Hedge Fund Research (HFR) launched four Exchange Traded Funds (ETFs) powered by HFR’s individual strategy indices, according to a company announcement. The HFRX Equity Index, HFRX Event Driven Index, HFRX Relative Value Arbitrage Index and HFRX Macro CTA Index will be listed on the Deutsche Boerse Exchange Friday and are Ucits-compliant.
Former Man Exec’s Hedge Fund Reaches $1B (Hedgefund)
The onetime chief executive of London-based firm Man Group has seen his own hedge fund’s assets double in the past year. The Financial Times reported that Stanley Fink’s London-based ISAM saw its assets soar to $1 billion, despite initially struggling to raise capital and dealing with a volatile market in the past 12 months.
Litespeed Management denies lawsuit alleging discrimination against HIV-positive ex-employee (Absolutereturn-Alpha)
Litespeed Management, the $1.2 billion event-driven firm founded by Jamie Zimmerman, has strongly denied a recent lawsuit alleging disability discrimination and the unlawful termination of an employee who is HIV-positive. Joey Grant Luther, a five-year Litespeed employee, alleged last week in New York State Superior Court that his tenure at Litespeed came to an abrupt end this year when he refused to disclose HIV-positive status to the firm’s new life insurance provider beginning in January. The lawsuit alleged that as Luther began to have more doctors’ visits, Zimmerman determined that her employee must have been HIV-positive, and began aggressively questioning him in February about medical appointments during the work day.
Wisconsin Investment Board makes allocations totaling $175 million (Pionline)
State of Wisconsin Investment Board, Madison, committed $125 million to Scopia Capital, a low-volatility global equity long/short hedge fund, according to Vicki Hearing, spokeswoman, in an e-mail. The $83 billion board also hired AQR Capital Management to run $50 million in a multistrategy fund “intended to capture efficient and cost-effective exposure to nine different hedge fund strategies,” according to board meeting materials.