Swiss Franc Ceiling, Anthony Scaramucci, Replication Funds, Obama Tax Reforms, Saba Capital

Hedge Funds Plot Assault on Swiss Franc Ceiling (WSJ)

Hedge funds are considering ways to mount a counterattack against the Swiss National Bank, whose attempt to wrest control of the surging franc caught investors off-guard. The Swiss franc has dropped about 10% against the euro since the SNB introduced a ceiling on Tuesday to protect Swiss exporters, as a strong currency makes it harder to sell goods overseas. However, the franc was just slightly weaker than its 1.20 francs-to-euro ceiling at 1.2157 francs to the euro in recent trade, a sign the SNB is having to offset demand for the Swiss currency, traders said.


Fired by Goldman Scaramucci Now Schmoozes (Bloomberg)

Anthony Scaramucci fist bumps investors as he makes his way through a poolside party at the Bellagio Hotel in Las Vegas on a May evening. “It’s the Mooch!” someone shouts. Scaramucci, a Harvard Law School graduate who flunked the New York bar exam twice and was fired from Goldman Sachs Group Inc. (GS) in 1991, is exactly where he wants to be: playing host to the hedge-fund industry as it surges past $2 trillion in global assets. Scaramucci is the creator and ringmaster of the SkyBridge Alternatives Conference, known as SALT, the largest annual symposium and schmoozefest for hedge-fund managers and investors in the U.S. For three days in May, more than 1,750 investment professionals soaked up market insights from industry stars Steven A. Cohen, Leon Cooperman and Kenneth Griffin; geopolitical observations from Colin Powell and Gordon Brown; and sports talk from New York Jets head coach Rex Ryan, Bloomberg Markets magazine reports in its October issue.

Extreme Market Volatility in August Highlights Track-Record of Hedge Fund Replication Funds(Market Watch)

As the global markets experienced one of their most volatile months in recent memory in August, several funds from IndexIQ, a leader in developing index-based liquid alternative investment products designed to “democratize” the alternative investment landscape, including absolute return, commodity and international investment solutions, outperformed the broad equity markets and the global hedge fund universe with less volatility, according to data released today.

Hedge funds hit by Obama tax reforms (GFS)

Large corporations and hedge funds in the US face an end to lucrative tax loopholes after President Barack Obama unveiled a new $450bn (€326bn) package aimed at boosting employment. The American Jobs Act, if passed by Congress, could recoup as much as $20bn (€14.5bn) over the next decade from closing down tax saving routes for hedge fund managers. Big corporations will also be hit by changes to the tax code, which seeks to end hedge fund managers paying just 15 per cent on income tax through a carried interest capital gains loophole. The President insisted however that by eliminating deductions and loopholes for some companies he would be able to lower the country’s overall corporate tax rate.

Saba Capital: A hedge fund bright spot (CNN Money)

While some of the largest and most prominent hedge funds reeled in August, Boaz Weinstein’s Saba Capital was up 2.5% for the month, pushing the flagship fund up 7.3% for the year, according to an investor in the fund. By comparison, a broad index of hedge funds was down 2.3% in August, its largest monthly decline since May 2010. The HFRI Fund Weighted Composite Index is down 1.2% so far this year. HFRI’s index of relative Value Arbitrage funds – – which includes funds similar in strategy to Saba — posted a decline of 1.2% in August, only the third monthly decline for the strategy since December 2008. The index is up 1.9% in 2011.