October Hedge Fund Redemptions Triple To $9B (FINalternatives)
Investors pulled $9 billion from hedge funds in October, more than triple September’s $2.59 billion total, according to the latest research from Barclay Hedge and TrimTabs Investment Research. Total industry assets declined for the third straight month, falling to $1.66 trillion in October from $1.73 trillion in September. “Investors seem to have lost patience with lackluster hedge fund returns,” says Sol Waksman, founder and president of Barclay Hedge. The Barclay Hedge Fund Index did rise 3.5% in October, bouncing back from five straight monthly declines. Assets are at their lowest since January 2010.
Zvi Goffer Settles SEC Insider Trading Case (Thomson Reuters)
Zvi Goffer, a former securities trader known as “Octopussy” because of his many sources of information, has agreed to pay $1.6 million to settle Securities and Exchange Commission civil charges of insider trading. In one of two civil cases, Goffer will forfeit $1,014,758 in illegal profits plus $231,304 in interest, according to a court filing. U.S. District Judge Richard Sullivan approved that settlement on Wednesday, the filing shows. Prosecutors said Zvi Goffer, who once worked at Raj Rajaratnam‘s Galleon Group hedge fund firm, was the ringleader who paid tens of thousands of dollars in bribes to two Ropes & Gray lawyers to learn what corporate deals the firm was working on. The lawyers, Arthur Cutillo and Brien Santarlas, have pleaded guilty to criminal charges.
Ex-Halcyon Hedge Fund Manager Turns Activist (Reuters)
Whipsawing markets driven by the euro zone debt crisis and uncertainty over global economic growth have made it more challenging for hedge fund managers to deliver the returns they have promised investors, spurring them to try new strategies. Richard Hurowitz, who has been running a $1 billion hedge fund since leaving Halcyon Asset Management, made his foray into shareholder activism on Monday by taking on the boards of a Canadian and a German company. Hurowitz’s Octavian Advisors LP said on Monday it would challenge the boards of Toronto-based water heater rental and submetering firm EnerCare Inc. and Germany’s Balda AG.
With More Than 150 Hedge Funds, Connecticut Region Tops U.S. Wealth Gap (Bloomberg)
Stretching from Greenwich on the west to Bridgeport on the east, this 625- square-mile swath, where subsidized housing complexes sit blocks from multimillion-dollar mansions, is home to the widest income gap of any metro area in the U.S., according to Census Bureau data compiled by Bloomberg. Exacerbating the gap are the ranks of wealthy residents who have grown richer as the region became a hub for investment firms and hedge funds, she said. Median household income hovers 60 percent above the national figure at about $80,000. Greenwich, home to at least 50 of the state’s more than 150 hedge funds and with a median annual household income of $125,000, has earned a reputation as a place of stone-gated neighborhood associations with custom-landscaped vegetable gardens. Residents paid more income taxes to the state in 2009 than any other municipality, even though the town is only the 10th-largest in Connecticut.
WaMu Fights Against Four Hedge Funds, Plans $7 Billion For Creditors. (Bloomberg)
Washington Mutual Inc. (WAMUQ), the former owner of the biggest bank to fail, plans to distribute more than $7 billion to creditors if it wins court approval for a settlement against 4 hedge funds that hold billions of dollars in WaMu notes, and the company. The settlement follows more than a year of battles among shareholders Twice WaMu failed to win approval from a bankruptcy judge for previous versions of its reorganization plan, partly because of opposition from shareholders.
Convicted Insider-Trader Began His Prison Life (FINalternatives)
Michael Kimelman began to serve the time he could have avoided yesterday. The former hedge fund trader rejected a no-jail plea deal in the Galleon Group case only to be convicted and sentenced to two-and-a-half years in prison. Kimelman, a former trader at Incremental Capital, reported to the U.S. Penitentiary in Lewisburg, Pa., a week after Galleon Group founder Raj Rajaratnam began his own 11-year sentence at another federal facility. Kimelman was convicted in June of conspiracy and securities fraud alongside Zvi Goffer.
Dyal Capital Partners Buys Stake In Capital Fund Management (WSJ)
A private equity fund managed by Neuberger Berman Group LLC has agreed to buy a passive minority interest in Paris-based quantitative hedge fund Capital Fund Management SA. Dyal Capital Partners, launched last year and led by former Lehman Brothers Holdings Inc. (LEHMQ) executives, focuses on taking minority equity interests in institutional hedge fund companies worldwide. CFM is a quantitative alternative investment management hedge fund which manages $5.1 billion on behalf of pension funds, endowments, funds of funds, private banks, insurance companies and family offices.
Barclays Offers Global Bond Fund (FINalternatives)
Barclays Wealth last month rolled out a new hedge fund, investing in global bonds. The fund began accepting money from outside investors on Nov. 1, Barclays said in a regulatory filing. It has already raised more than $10 million from 25 clients. Barclays Wealth plans to keep the fund open to investors for more than a year. The minimum investment requirement is $100,000.
MFA Third Quarter Lobbying Costs $1.02M (FINalternatives)
The U.S.’s main hedge fund lobby kept its spending steady in the third quarter, according to a new filing. The Managed Funds Association spent $1.02 million lobbying federal officials between July and September, it said in its quarterly filing with the House of Representatives clerk’s office. The group discussed the implementation of the financial regulation overhaul, a registration exemption for private equity firms and required financial disclosures by private companies, as well as on proposals to limit speculative oil trading and to offer mortgage relief.
Hedge Fund Launches Proxy Contests (HFN)
Special situations hedge fund firm Octavian Advisors is seeking to add board directors to two different companies. Octavian issued an announcement Monday that its proxy contests are against Canadian-based EnerCare Inc. and German company Balda AG, which the firm said is the first time they have carried out such actions in its five-year existence.