Editor’s Note: Related tickers: J.C. Penney Company, Inc. (NYSE:JCP), Goldman Sachs Group, Inc. (NYSE:GS), Barclays PLC (LON:BARC)
SAC has been under fire in recent years, as the Justice Department and the Securities and Exchange Commission have investigated numerous current and former employees suspected of engaging in insider trading. Late last year, a case against former SAC trader Mathew Martoma-who has so far pleaded not guilty to insider trading charges-drew the firm’s founder, Steve Cohen, into the mix based on an allegation that he authorized a sale of two pharmaceutical holdings motivated by insider knowledge. Cohen has insisted he behaved properly, and SAC informed investigators that it had opposing positions in the two pharmaceutical stocks that offset any economic gains from the Martoma sales.
Hedge Funds Cut ICE Brent Crude Net-Longs to Four-Month Low (Bloomberg)
Hedge funds and other money managers cut bullish bets on Brent crude to their lowest level in four months for a third consecutive week, according to data from ICE Futures Europe. Speculative bets that prices will rise, in futures and options combined, outnumbered short positions by 99,127 lots in the week ended April 23, the London-based exchange said today in its weekly Commitment of Traders report. The reduction of 8,973 contracts, or 8.3 percent leaves so-called net-longs at their lowest since Dec. 11.
Lyxor expects hedge funds to generate positive returns for the rest of the year (Opalesque)
Lyxor Research predicted that risk assets were set to generate positive returns for the rest of 2013, driven by a slowly expanding global economy and ultra accommodative monetary policy. Stenham A.M. reportedly launched two new funds of hedge funds, one focusing on credit, the other on healthcare; former UBS credit trading head Yassir Benjelloun-Touimi started a new hedge fund called Arcade Capital, said Reuters; ex Millennium portfolio manager Eduardo Abush was said to be preparing to launch a real estate equity hedge fund; BlueCrest Capital is moving back into equities and prepping what could be one of the biggest new fund launches in Europe, HFI reported; and KeyQuant announced the launch of the swap-free Key Trends UCITS Fund.
Hedge fund managers feeling the heat over fees (Opalesque)
Maturing industry, changing investor base, financial crisis and regulations are adding pressures to hedge fund managers to rethink their “2 and 20” fee structure, according to a report by the Financial Times. The traditional hedge fund investors, the wealthy individuals and private banks, have now been replaced by institutions which are more sophisticated and are questioning the fee structure due to regulatory and investment structure, Eric Schlaikjer, co-founder of $5bn quant fund Cantab Capital Partners, told the FT. He was quoted as further saying, “Australian superannuation funds, as an example, are unable to pay the industry standard fees of two and 20. Investors are also used to paying less for scalable strategies; for example those investing in large-cap equities.”
Annual £10,000-a-ticket hedge-fund gala which has raised £100million for charity and hosted Madonna is put on ice (DailyMail)
With the Krug champagne flowing freely, it was the ultimate lavish party for hedge fund managers. But the £10,000-a-head Ark gala dinner which attracted an enviable celebrity crowd and leading figures from the financial services industry has been cancelled. As the economy struggles to grow its way out of recession the charity event – which was one of the ultimate symbols of the age of excess – has been cancelled. Over the last decade, the event which Madonna once sang at, has raised more than £100million for charity. The Duke and Duchess of Cambridge attended the party last year as the event, held in a marquee in Kensington Palace Gardens, raised £14.5million. Other guests at last year’s party included Holly Valance, Jemima Khan, former athlete Denise Lewis and model Eva Herzigova.
U.K. Bank Shortfalls, Hedge Fund Ads, SEC ‘Shift’ (BusinessWeek)
Britain’s new banking regulator has rattled lenders by holding off disclosing how much capital each firm will have to raise after ordering the industry to plug a 25 billion-pound ($38 billion) shortfall by the end of the year, three people with knowledge of the discussions said. The Prudential Regulation Authority, the unit of the Bank of England that took over supervision of the industry from the Financial Services Authority this month, isn’t expected to detail the steps all banks need to take to bolster their balance sheets until mid-May at the earliest, said two of the people who asked not to be identified because the talks are private. Banks had expected to be told in March, one of the people said.
India’s regulations for hedge fund licence applicants (Business-Standard)
The Securities Exchange Board of India imposed rules on alternative investment funds in May 2012. The capital markets regulator organises alternative investment funds – such as venture capital, social venture funds, small and medium enterprise funds and hedge funds – under three categories. Hedge funds fall under a category that allows them to undertake leverage and employ complex trading strategies. Below are some of the rules set for this category: …Such a fund must manage assets with a total value of at least 200 million rupees.
UBP and GFS power advanced hedge fund platform that meets requirements of global investors (AMEInfo)
Union Bancaire Privée, UBP SA Union Bancaire Privée, UBP SA (UBP), one of Switzerland’s leading and best-capitalised private banks and a leader in the hedge fund industry with Middle East offices in Dubai and Beirut, has launched an alternatives division that offers its worldwide clients broad alternative investment expertise, as well as innovative solutions. As part of this strategy, it has selected Guggenheim Fund Solutions (GFS) as its partner to provide clients with an innovative platform that combines carefully selected hedge fund managers with a modern solution that delivers the transparency, governance, and structural risk mitigation required by investors. UBP will utilize its extensive hedge fund investing experience to identify, select and monitor performing managers that operate on the GFS managed account platform.
J.C. Penney close to securing $1.75B loan (UPI)
J.C. Penney Company, Inc. (NYSE:JCP) is close to securing a $1.75 billion loan that would be secured by the U.S. department store chain’s property, The Wall Street Journal reported. Persons familiar with the deal said the company would pledge a “significant” portion of its property to secure the loan, which is being handled by Goldman Sachs Group, Inc. (NYSE:GS) The loan would be due in five years, the Journal said. J.C. Penney Company, Inc. (NYSE:JCP) is attempting a comeback with recently rehired Chief Executive Officer Myron Ullman after firing CEO Ron Johnson. Johnson blundered by stopping the retailer’s discount program in favor of everyday low prices, which did not resonate well with customers. This week, investor George Soros said his investment company, Soros Fund Management LLC, had bought 7.91 percent of the retail company. That vote of confidence helped the stores’ stock value, which rose 11.5 percent on Friday to $17 per share, the Journal said.
Teachers Turn Out to Be Tough Markers (Barrons)
The American Federation of Teachers has a message for hedge-fund managers: You don’t like the notion of public pensions? Fine. You don’t get to manage ours. The AFT has published a list of 33 hedge-fund managers that are tied to organizations actively advocating elimination of defined-benefit pension plans in favor of defined-contribution plans such as 401(k)s. Accordingly, the AFT is actively advocating that pensions eliminate these managers from their plans. (Or refuse to hire them in the first place.) The AFT represents 1.5 million members and more than $800 billion in pension assets. “Pension-fund managers have a duty of loyalty and prudence” to their members, says Dan Pedrotty, one of the authors of the AFT’s list. “Is it loyal or prudent to fund your own destruction?”
Jim Rogers: Unplugged! (WallStreetDaily)
A few moments of billionaire Jim Rogers’ time has been a hot commodity lately. Especially on the heels of his prescient call about gold prices. His recent appearances include Bloomberg TV, CNBC, BusinessWeek, Business Insider and, of course, today in Wall Street Daily’s Keynote Speaker Series. But we’re not upset that our exclusive interview wasn’t so… well, exclusive. Because our recent chat with the commodities-investing legend unearthed a collection of one-of-a-kind observations…To hear for yourself, all you have to do is click on the image below, which includes the first part of our interview with Jim Rogers.
Hedge fund firm Odey ups bet on Man Group recovery (Reuters)
Odey Asset Management has upped its stake in Man Group, having already profited in recent months as investors bet on a recovery at the hedge fund firm. London-based Odey, founded by veteran fund manager Crispin Odey and which is known for its lucrative bet in 2009 on a recovery in Barclays PLC (LON:BARC) shares, raised its stake in Man to 6.07 percent on Thursday. Former FTSE-100 firm Man (EMG.L), which reports fund flows next month, has suffered in recent years from poor returns from its flagship fund and client withdrawals, although some investors and analysts have been encouraged by the appointment of Manny Roman as CEO earlier this year.
Galleon’s Co-Founder Is A Cowboy ‘Cutting Horse’ Champion In Texas (BusinessInsider)
Galleon Group’s co-founder Gary Rosenbach has been spending his time riding horses on a ranch in Weatherford, Texas since leaving the now-defunct hedge fund firm, Dealbook’s Peter Lattman reports. Rosenbach left Galleon citing family health reasons months before its chief Raj Rajaratnam was arrested in 2009 for insider trading, the report said. Rajaratnam was sentenced to 11 years in prison. Rosenbach was never accused of any wrongdoing, but he disappeared from the finance world.
CalSTRS takes bold step in governance (PIOnline)
A shareholder proposal by the California State Teachers’ Retirement System, aimed at breaking Timken Co. into two separate companies, is taking activism by pension funds to a new level. CalSTRS is sponsoring an advisory shareholder resolution to break up Timken, one of the first such actions by a pension plan. In August 2011, the $129.5 billion Ontario Teachers’ Pension Plan, Toronto, disclosed that the pension fund and its partner, hedge fund Jana Partners, had accumulated more than 5% of McGraw-Hill Cos. and was calling for the company to break up to unlock shareholder value. (Ultimately, the company’s education unit was sold to Apollo Global Management LLC to satisfy Ontario Teachers and Jana.)
