Each business day HedgeCo.Net keeps you informed with the top hedge fund industry news, opinion and insight from around the globe. From the latest hedge fund launches, to the impact of regulation, competition, and investor activism - we track the topics and people that make a difference to you.
New York (HedgeCo.net) – The UCITS Hedge Fund Strategy Index gained 0,93% within the first two weeks in March 2010, every strategy except fixed income and market neutral were positive, Global macro not only being the most successful strategy in 2010 but also in March with gains of 2,85% so far.
The other most successful strategies in March are convertible (+1,75%), CTA (+1,70%) and L/S equity (+1,54%), the latter turning positive ytd for the first time.
The UCITS HFS Index Series is the first index family that tracks all UCITS funds using hedge fund strategies. The UCITS HFS Index Series includes all UCITS III funds that apply absolute return strategies, have more than 10 Million Euros of assets under management, offer at least weekly liquidity and have reported numbers for more than one month. Index tracking funds, long-only and 130/30 strategies are excluded.
The indices are calculated on every 5th, 10th and 15th business day and at the end of each month by the index calculator Structured Solutions AG.
New York (HedgeCo.net) – When hedge fund founder and manager John Horseman stepped down from his position as CEO of Horseman Capital, his clients pulled out with more than half of the hedge fund’s assets, Reuters reported.
Horseman’s flagship fund fell to just $535 million in size from $2.8 billion in November. The clients withdrew aproximately $2.5 billion at the first possible opportunity, after hearing of Horsman’s resignation, Reuters said.
“We had redemptions on the back of the announcement made last year,” a spokesman said in an interview with Reuters. “Investors were allowed to redeem on January 4, and that’s when the bulk of the redemptions took place.”
New York (HedgeCo.net) – Hedge fund managers can use the brokered CD market for cash management according to attorney Stephen M. Goodman, a partner with New York law firm Pryor Cashman.
“Brokered CDs are used in cash management to provide returns which are slightly better than money market funds, but with the added benefit of FDIC insurance,” Goodman said. “As long as the individual’s total deposits with any institution are less than the mandated limit, the funds at that institution will be insured. The deposits can be spread among multiple institutions if there is more cash than can be kept at a single one.”
Interest payments and maturities can be structured according to a client’s needs, Goodman explained. “Longer maturities may be possible than the usual CD,” he said. “They can be ‘laddered’ to ensure specific cash flows, and yields can be increased by acquiring ‘callable’ or ’step-up’ CDs.
However, there are various risks, particularly if there is a need to liquidate a CD prior to maturity.
“On the date it is sold, intervening changes in interest rates may affect its value, as with any other debt security,” Goodman said. “Early redemption from the issuing institution can result in penalties. And of course there is generally a broker’s fee for acquiring the CD, which would in turn lower the overall return, depending on the number of CDs bought and sold and their size.”
Stephen M. Goodman acts as outside general counsel to a variety of public and private companies, particularly those involved in the development, exploitation, purchase and sale of intellectual property and technology assets, such as publishing and media companies, computer software and Internet companies, and pharmaceutical and biotechnology companies.
You can skip to the end and leave a response. Pinging is currently not allowed.
New York (HedgeCo.net) – Perilune Pictures, a startup film company based in Savannah, Georgia, is scheduled to release the film “L.E.W.,” a documentary based on the life of America’s first corporate raider Louis Wolfson. Wolfson is credited with creating the leveraged buyout and creating a new era on Wall Street.
“We felt a film about Lou Wolfson would be well-received in this era of high finance on Wall Street,” said Perilune Pictures founder Sidney Doran, who started the company with his brother in law, Sy Wolf. “We have shown early versions of the film to some of today’s legendary hedge fund managers and they are all intrigued and inspired by his life,” said Wolf, who also directed the film.
The film covers the launch of Wolfson’s business career in the 1940s, when he borrowed $10,000 to expand his father’s Jacksonville, Florida-based scrap metal business into controlling stakes in commercial and industrial companies throughout the United States.
His reach was so vast and diverse that he even launched the film career of comedian Mel Brooks after Wolfson financed his first film, “The Producers.” Wolfson went on to invest in bridge and dam construction, major shipyards, American Motors Corp. and Capital Transit Company, the precursor to the Washington, D.C. Metro. By the mid-50s, Wolfson’s net worth was estimated at over $250 million, making him one of the wealthiest and most feared men in corporate America.
The filmmakers discovered new archival material about Wolfson, including his role as the major financier behind John F. Kennedy’s bid for the presidency, as well as his involvement with US Supreme Court Justice Abe Fortas, who was forced to resign from the court after receiving payments from Wolfson. After a controversial investigation by the S.E.C., Wolfson was convicted of insider trading in 1967. In 1971, talk show host Larry King was arrested for embezzling money from Wolfson in Miami. “We discovered some evidence that he may have been using King in an attempt to bribe President Nixon to secure a presidential pardon,” said Doran.
After serving nine months in a federal minimum security prison in Florida, Wolfson left Wall Street to devote the rest of his life to horse racing. In 1977, his horse, Affirmed, won the Triple Crown. Many considered the victory a redemption for a man who was once considered one of the greatest businessmen in the country. Wolfson passed away at the age of 95 in 2008. To date, no horse has won the Triple Crown since Affirmed.
The film was written by Max Bachus, a screenwriter based in New York City who actually knew one of Wolfson’s first accountants. “Anyone who met Wolfson was aware they were in the presence of greatness,” said Bachus. “The film explores the life of the first true corporate raider on Wall Street, someone largely forgotten by modern-day Wall Street financiers. They all owe Wolfson a debt of gratitude for the legacy he created.”
The documentary is being released in mid-March. Perilune Pictures has set up a website for the film “L.E.W.” including a trailer and background information of Wolfson’s life at http://lewthemovie.blogspot.com/
New York (HedgeCo.net) – Former hedge fund manager Arthur G. Nadel has pled guilty to 15 counts of securities fraud, mail fraud, and wire fraud, the US attorney for the southern district of New York said.
The indictment claims that from 1999 through January 2009, Nadel perpetrated a Ponzi scheme to defraud investors in six different investment funds, consistently loosing money and using his investor money to fund his lifestyle and several businesses, including a real estate project in North Carolina, his wife’s flower shop, and his purchase of several private planes.
From 1999 through January 2009, nearly 250 people invested more than $397 million with his funds. Nadel received tens of millions of dollars in management fees and performance incentive fees. As a result of Nadels’s Ponzi scheme, investors suffered losses of approximately $162 million, the Govenment said.
The hedge fund manager pleaded guilty to six counts of securities fraud, one count of mail fraud, and eight counts of wire fraud, and faces a maximum penalty of 20 years in prison on each of the counts.
Nadel faces a maximum fine of $5 million or twice the gain from the offense, whichever is larger. For the mail fraud and wire fraud charges, he faces a maximum fine of $250,000. Nadel is scheduled to be sentenced by Judge Koeltl on June 11, 2010.
New York (HedgeCo.net) – In the case of U.S. v. Hariri, former Atheros Communications Inc. Vice President Ali Hariri has waived his right to a grand jury indictment, according to a Reuters report.
If Hariri pleads guilty, it will become the 10th such plea in the Galleon Group LLC insider-trading and hedge fund fraud case.
Hariri is alleged to have leaked information to hedge fund manager Ali Far, according to the prosecution. The government says that Ali Far and partner C.B. Lee are linked to an insider-trading ring led by Rajaratnam, Reuters said. Rajaratnam is being accused of insider trading and securities fraud, generating as much as $49 million in profit. Far and Lee have pleaded guilty and are cooperating with prosecutors.
The Galleon insider trading case also involves the employees of some of America’s best-known companies, including International Business Machines Corp, McKinsey & Co and Intel Capital, an arm of Intel Corp. Reuters also reported that a former Wall Street hedge fund manager, David Slaine, pleaded guilty last December to charges of insider trading that reaped profits of $3 million. Hariri is among 21 people who’ve been charged in two overlapping insider trading cases.
New York (HedgeCo.net) – The date has been set for hedge fund founder Raj Rajaratnam’s criminal suit. New York Judge Richard Holwell has delayed it till Oct. 25, 2010. “Ensuring a full opportunity for both sides to litigate all the issues,” the court document read.
Prosecutors said the hedge fund manager would have an unfair advantage if a civil trial by market regulators went ahead before a criminal trial, Reuters reported. However, the Galleon team won the right to postpone the trial. The civil lawsuit is scheduled for August 2, 2010.
Rajaratnam is being accused of insider trading and securities fraud, generating as much as $49 million in profit.
Reuters says the majority of the stocks are in technology, including, IBM, Intel, Akamai Technologies Inc, Polycom Inc, Hilton Hotels Corp, Google Inc, Sun Microsystems Inc SUNW.TI, Clearwire Corp, Advanced Micro Devices, ATI Technologies Inc and eBay Inc.
Rajaratnam could face a sentence of up to 185 years, if convicted.
Alex Akesson
Editor for HedgeCo.net
You can skip to the end and leave a response. Pinging is currently not allowed.
New York (HedgeCo.net) – Investors are positioning themselves for halts in both Europe and China’s economic recovery, according to the BofA Merrill Lynch Survey of Fund Managers for February.
Investors have scaled back their growth expectations, retreated into cash and are increasingly skeptical that the European Central Bank (ECB) will increase interest rates in 2010. The panel was responding to questions against a backdrop of economic crisis in peripheral eurozone countries and concerns over monetary tightening in China. World equity markets fell by 8.9 percent during the survey period.
The proportion of European investors expecting the region’s economy to grow in the coming 12 months has fallen to 51 percent from 74 percent in January, and the proportion expecting no rate rise by the ECB in 2010 has soared to 45 percent from 19 percent. Globally, 42 percent of respondents now see no rate hike by the U.S. Federal Reserve before 2011, up from 27 percent.
Risk aversion returned with average global cash balances rising to 4.0 percent from 3.4 percent in January. Hedge funds have scaled back leveraged to less than one times from 1.33 times. Europeans poured out of financial stocks amid fears of exposure to troubled economies. Global investors now say Europe is the region they would most like to underweight.
“Investors are questioning whether this is a pause in growth or a trend reversal. We believe it’s the former,” said Gary Baker, head of European Equities strategy at BofA Merrill Lynch Global Research. “Concern over European sovereign debt and Chinese tightening means the level of U.S. dollar bulls is at a 10-year high, and banks are once again the least loved global sector,” said Michael Hartnett, chief Global Equities strategist at BofA Merrill Lynch Global Research.
Concerns prompt asset re-allocation
The starkest monthly change has been a shift back into cash. A net 12 percent of global asset allocators are overweight cash, the highest since June 2009 and in contrast to a net 8 percent underweight in January.
Equity positions are sharply down. A net 33 percent say they are overweight equities, down from a net 52 percent in January. There’s been a moderate move back towards bonds. A net 39 percent of asset allocators are underweight bonds, down from a net 52 percent a month earlier. Nonetheless investors still prefer growth sectors such as tech, energy and industrials.
Commodities, dependent on Chinese demand, have fallen in popularity with a net 10 percent of global investors overweight the asset class, down from a net 23 percent. However, following a 9 percent fall in the oil price, during the survey period, a net 18 percent now see crude as undervalued.
Fears surface over Chinese growth
Belief in China’s continued economic growth has fallen at the fastest rate ever recorded by the survey. Just 7 percent (net) of the global panel expect China’s economy to strengthen in the coming 12 months – down from a net 51 percent of respondents a month earlier and the lowest reading since March 2009. This turnaround followed the decision to increase Chinese banks’ reserve ratio requirements.
“At least in terms of investor growth expectations, China has experienced a ‘double-dip’,” said Michael Hartnett.
Banks take brunt of equity sell-off in Europe
European investors responding to the BofA Merrill Lynch Survey of Fund Managers have dramatically reduced exposure to banks in the past month.
More than half of respondents (53 percent) are underweight bank stocks compared with 16 percent in January, a monthly swing of 37 percent and the highest underweight since March 2009. Even after the sell-off a net 14 percent of the regional panel believes banks are overvalued.
“What’s happened in Greece has prompted questions about banks’ lending positions and exposure to other peripheral economies. There’s also a fear that banks’ cost of capital will rise,” said Gary Baker. The banking sell off was concentrated in Europe, however. U.S. investors actually reduced their underweight positions. A net 24 percent are underweight banks, down from a net 38 percent in January.
Survey of Fund Managers
A total of 200 fund managers, managing a total of US$502 billion, participated in the global survey from 5 February to 11 February. A total of 165 managers, managing US$355 billion, participated in the regional surveys. The survey was conducted by BofA Merrill Lynch Research with the help of market research company TNS. Through its international network in more than 50 countries, TNS provides market information services in over 80 countries to national and multi-national organizations. It is ranked as the fourth-largest market information group in the world.
You can skip to the end and leave a response. Pinging is currently not allowed.
New York (HedgeCo.net) – Premier Red Fine Wines are showcasing their latest wine investment performance figures to alternative investors. The leading wine consultancy company says their investment performance figures indicate that wine has staying power as one of the leading alternative asset classes.
With a high return and long term reward on investments, the market for fine wines has been around for centuries. The rise of the internet and the introduction of on-line trading platforms have ensured sustained growth which has resulted in the market outperforming many of the most popular and traditional areas of investment.
“Depending on needs and price point, the difference in wines can translate into not only varying growth but also, and just as importantly for many of their clients the hold term.” Premier Red Fine Wines said. The consultancy company also provides their clients with a personalised strategy.
“Premier Red’s duality in the UK and Asia means that communication and information flow is accurate and up to date.” the company said, “The unique benefit of Premier Red’s strategy is a platform in which investors are buying Fine Wine at an advantageous price within an area that has the best supply, and offering these wines at a later date once they are scarce to an area that lacks sufficient supply but pays the highest premium.”
The New World wines Premier Red recommend are made up of ‘small cap’ vineyards that produce wines of outstanding quality in extremely low volumes and often palatable starting prices. This coupled with rave reviews and fanatical buyers is the basis for the emerging market.
New York (HedgeCo.net) – Hedge fund founder Raj Rajaratnam and his co-defendant, Danielle Chiesi, won an emergency order relieving him from having to turn over wiretap recordings in the SEC v Galleon case, according to a Reuters report.
Because of legal hurdles in obtaining the 14,000 wiretap intercepts, the SEC was seeking it from Rajaratnam and Chiesi.
Rajaratnam’s lawyer last month attacked the U.S. government’s wiretap evidence saying he would file a motion to suppress the telephone recordings which were used to arrest Rajaratnam and more than a dozen other people in the Galleon raid.
The temporary stay was granted late yesterday by U.S. Court of Appeals, Reuters said. The reprieve came just two days after a U.S. District Court Judge ordered the deadline of Feb. 15 for Rajaratnam and Chiesi to surrender the recordings to the SEC.
Rajaratnam and Chiesi are being accused of insider trading and securities fraud, enabling the pair to generate $49 million in profit.
Reuters says the majority of the stocks are in technology, including, IBM, Intel, Akamai Technologies Inc, Polycom Inc, Hilton Hotels Corp, Google Inc, Sun Microsystems Inc SUNW.TI, Clearwire Corp, Advanced Micro Devices, ATI Technologies Inc and eBay Inc.
A civil lawsuit is scheduled for August 2, 2010. The prosecution has also indicted Rajaratnam on criminal charges.
New York (HedgeCo.net) – In an update to a previous HedgeCo news article, a U.S. Bankruptcy Court in Los Angeles has agreed to uphold the hedge fund Pacificor’s purchase of the ‘Terminator’ franchise rights from Halcyon Holding Group LLC.
Halcyon Holdings had accepted a deal from hedge fund Pacificor on Tuesday after a five-hour auction, according to a reports.
The Terminator rights were sold for $29.5 million, following a legal battle in which Halcyon Holding was forced to file for bankruptcy, the case was started by the hedge fund which won the bidding wars, Pacificor.
Columbia Pictures Industries Inc. and Lions Gate Films Inc.’s final offer was $28.5 million, plus $5 million for each of the first three sequels, but eventually the team lost out to the frenetic bidding of the hedge fund.
“We’re very pleased,” hedge fund attorney David B. Shemano said in an interview with The Wall Street Journal. “Not only did Halcyon receive the green light to sell the ‘Terminator’ rights to Pacificor but the production company was finally able to resolve a dispute it had with the hedge fund during the sale process.” The Wall Street Journal reports.
New York (HedgeCo.net) – Halcyon Holdings has accepted a deal from hedge fund Pacificor yesterday after a five-hour auction, according to a report by IndieMoviesOnline.com.
The Terminator rights were sold for $29.5 million, following a legal battle in which Halcyon Holding was forced to file for bankruptcy, the case was started by the hedge fund which won the bidding wars, Pacificor.
Lionsgate and Sony were strong bidders, even teaming up at one point, but eventually loosing to the frenetic will of the hedge fund, which has an interesting backstory in the case.
For the full story of hedge fund Pacificor vs. Halcyon, we turn to MTV News, which reports:
“When Halcyon purchased the “Terminator” rights in 2007, Pacificor lent them some amount of money to cover the $30 million price tag. Pacificor also pushed the former rights-holder into bankruptcy and was the target of a $30 million filed by Halcyon which included allegations of extortion, bribery and fraud.” MTV reports.
“The word is that the hedge fund’s winning bid comes with a tantalizing string attached to it for Halcyon: in addition to the $5 million they’ll receive for future “Terminator” movies and any royalties from the third and fourth movies, they are also officially off the hook on debts to Pacificor and other creditors, pending the approval of a bankruptcy court.” MTV said.
“Have Pacificor got a good deal? Have Terminator fans got a good deal? Are there any Terminator fans left out there after Salvation?” Paul Martin, writer for IndieMoviesOnline.com asked, “Personally, this writer thinks those hedge fund whizzes at Pacificor could have saved themselves a few quid and just come up with their own, completely original, relentless, robotic movie monster. Something like… the Exterminator. Or the Killinator. Or the Deadenator.”
The other most successful strategies in March are convertible (+1,75%), CTA (+1,70%) and L/S equity (+1,54%), the latter turning positive ytd for the first time.
“Brokered CDs are used in cash management to provide returns which are slightly better than money market funds, but with the added benefit of FDIC insurance,” Goodman said. “As long as the individual’s total deposits with any institution are less than the mandated limit, the funds at that institution will be insured. The deposits can be spread among multiple institutions if there is more cash than can be kept at a single one.”
New York (HedgeCo.net) – Perilune Pictures, a startup film company based in Savannah, Georgia, is scheduled to release the film “L.E.W.,” a documentary based on the life of America’s first corporate raider Louis Wolfson. Wolfson is credited with creating the leveraged buyout and creating a new era on Wall Street.
New York (HedgeCo.net) – Former hedge fund manager Arthur G. Nadel has pled guilty to 15 counts of securities fraud, mail fraud, and wire fraud, the US attorney for the southern district of New York said.
New York (HedgeCo.net) – Investors are positioning themselves for halts in both Europe and China’s economic recovery, according to the BofA Merrill Lynch Survey of Fund Managers for February.
edgeCo.net) – Premier Red Fine Wines are showcasing their latest wine investment performance figures to alternative investors. The leading wine consultancy company says their investment performance figures indicate that wine has staying power as one of the leading alternative asset classes.
New York (HedgeCo.net) – Hedge fund founder Raj Rajaratnam and his co-defendant, Danielle Chiesi, won an emergency order relieving him from having to turn over wiretap recordings in the SEC v Galleon case, according to a Reuters report.