Chanos takes on Buffett, calls Exxon and fellow oil majors a ‘value trap’ (MarketWatch)
When the “Oracle of Omaha” talks, people listen, which is why the oil sector and Exxon Mobil Corporation (NYSE:XOM) -0.02% got lots of attention after regulatory filings revealed Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK.A) had taken a major stake in the company. While Buffett’s move on Exxon looked to some like a contrarian call, legendary short seller Jim Chanos was positively growling over the oil sector Tuesday, telling the Reuters Global Investment Outlook Summit that his Kynikos Associates fund is bearish on national oil companies and the integrated majors, in New York on Tuesday. …Commenting directly on that Berkshire BRK.A -0.08% BRK.B +0.06% stake, Chanos said Buffett likely has “his reasons, but, unmistakably the returns are dropping”:
Hedge fund expert: Bermuda gets regulation balance right (RoyalGazette)
The head of a hedge funds watchdog yesterday said Bermuda had hit the right balance on business regulation. Dame Amelia Fawcett, chairman of the London-based Hedge Fund, Standards Board (HFSB), said a global move towards tough regulations might not always be the best way of policing high finance — and that too many rules could end up damaging the sector and slowing the recovery from the global recession. But Dame Amelia added: “Bermuda is getting it right. It’s not that it’s a light-touch environment — it’s sensible.” And she added: “If people don’t think you’re doing a good job, you hear about it.”
U.S. Bancorp Fund Services, LLC Acquires Quintillion Limited (HeraldOnline)
U.S. Bancorp Fund Services, LLC, a subsidiary of U.S. Bancorp (NYSE:USB), announced it has agreed to acquire Quintillion Limited (Quintillion), an Ireland domiciled full-service hedge fund administrator. The announcement supports U.S. Bancorp Fund Services’ strategic initiative to expand its alternative investment servicing network supporting the European investment community. “This acquisition continues to showcase the long-term commitment of U.S. Bancorp to grow our securities services business,” said Terrance Dolan, vice chairman of U.S. Bancorp Wealth Management & Securities Services.
From Hedge Fund to Family Office (Forbes)
Some hedge fund managers have transformed their hedge funds into family offices. This year Melissa Ko’s Covepoint Capital and William Collins’ Brencourt Advisors have made the transition. Some more notable names such as George Soros, Carl Icahn and Stanley Druckenmiller have also converted their hedge funds into family offices. And, Steve Cohen may very well be doing the same with SAC. There are a number of reasons for this and one that’s at the top of the list is the increasing regulatory environment. According to Richard Flynn, principal, the Rothstein Kass Family Office Group, “Unlike hedge funds, family offices don’t need to register as investment advisers with the US Securities and Exchange Commission.
Anthony Hilton: Now’s a good time to embrace hedgies (Standard)
The past five years have been dire for hedge funds and particularly those which make big bets on market directions — be it in commodities or currencies. The HFRI macro hedge-fund index has dropped 15.5%. Over the same period global stock markets as measured by the MSCI World Index have gained 57.2%. Yet this month Goldman Sachs Group, Inc. (NYSE:GS) announced the launch of Petershill II. This is — or will be — a fund which invests in hedge-fund managers as distinct from the funds they manage.
Eton Park partners set to depart hedge fund (eFinancialNews)
The departing partners, who are expected to leave by early 2014, are Isaac Corré, an original partner who has been at the firm since it launched in 2004, and Josh Astrof who joined in 2005, the people said. Corré was responsible for event-driven investing, while Astrof focused on investing in stocks. It was unclear on Tuesday why they plan to leave and what they intend to do next. A spokesman for New York-based Eton Park declined to comment. Mindich launched Eton Park in 2004 with more than $3 billion, making it one of the largest-ever launches in the hedge fund industry, despite stringent terms for investors.
Dell CEO: Icahn ‘had no long-term intentions’ (CNBC)
Political Agenda Added Risk To the Hedge Fund Market In October (HedgeCo)
New research from Eurekahedge shows that hedge funds delivered healthy gains in October as global markets trended upwards during the month. “US related news dominated global markets for most of the month starting with the 16 day partial shutdown of the government.” The company said, “Political wrangling in the US Congress over the debt limit added risk to the markets, with equities declining at the start of the month. The shutdown was ended mid-month, which saw equities gain traction. Positive macroeconomic data throughout the month as well as the expectation that the US Federal Reserve will postpone tapering added further impetus to global markets.”
Man Group employees feel the squeeze at Riverbank House in London (FT)
Man Group employees are feeling the squeeze at the struggling hedge fund, with staff at its London headquarters being shunted into just one-and-a-half floors of the nine-story building it opened to great fanfare in 2011. One senior executive based at the HQ on the banks of the Thames said: “We are being shoved into a much smaller area, which people aren’t really happy about it. Our fund assets are shrinking and so it seems is our floor space.” The world’s second-largest hedge fund company has seen its assets under management fall from a peak of almost $80bn in 2008 to $52.5bn, while some 700 employees have left since Man Group merged with rival GLG Partners in 2010.
Jewish Tycoons William Ackman and Dan Loeb in Vicious Feud Over Herbalife (Forward)
It’s a financial dogfight for the ages. When billionaire investor and CEO of Pershing Square Capital hedge fund William Ackman short-sold $1 billion in stock of Herbalife Ltd. (NYSE:HLF), the Los Angeles-based nutrition company, he drew the ire not just of the company, but of other fellow hedge funders who saw Ackman as taking his legendary arrogance too far. In a speech at the Oxford University Saïd Business School at the end of October, Ackman said the company was nothing more than a Ponzi schemeand that his target share price for Herbalife stock was $0. He predicted the business would collapse “within 12 months,” Business Insider reported.
Jim Rogers: I‘m Buying Chinese Stocks Including HollySys And Fab Universal (Forbes)
The first time I talked with famed investor Jim Rogers face-to-face, it was on the high-speed train from Tianjin to Beijing. It was almost mid-night. After a full day of ceremonies and events, he was thoroughly exhausted, yet still managed to stand for the duration of our on-camera interview traveling at 350km per hour during perhaps his only chance for rest that day. This time around, circumstances are much better. We’re sitting in a hotel suite close to Central Park in New York. With the help of an iced coke, he was bright-eyed. And, he’s only done three over-night flights during the past couple of days. Not bad at all.
Economist Marc Faber sees bubbles throughout financial landscape (IFA)
Well-known Swiss economist Marc Faber, also known as Dr. Doom, sees bubbles everywhere. ‘I see a bubble in everything that relates to the financial sector,’ Faber told CNBC on Tuesday. ‘If you look at the financial sector as a percentage of the global economy, it’s very large. We have a huge debt bubble, and it’s only getting bigger. It’s not getting any smaller.’ Faber argued that the bubble is being fed by central banks and could even worsen if Janet Yellen takes over as the Federal Reserve’s next Chairman. Faber believes she is part of a ‘collection of dovish professors at the Fed’ and that she could push for more bond buying instead of tapering. Faber also sees a big bubble in high-end sectors, like diamonds, art, and luxury goods where costs and competition have risen.
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