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.
NYT – The Securities and Exchange Commission has reached a settlement with two former Bear Stearns hedge fund managers that will avert a second trial over accusations that they had misled investors as the mortgage market was crumbling.
The deal, which is subject to court approval, could be announced on Monday, said two people with direct knowledge of the matter, who requested anonymity because they were not authorized to discuss it publicly.
Reuters – Hedge funds are buzzing around Glencore’s (GLEN.L) bumper $41 billion (26 billion pounds) takeover of miner Xstrata (XTA.L) after a lean year for European M&A, but are finding their usual bets tricky in the face of the eye-watering cost of shorting Glencore’s shares.
After a lull in European M&A deals in 2011, merger arbitrage managers are licking their lips at the prospect of a tie-up, which will see Glencore pay 2.8 shares for each Xstrata share and which has already met some shareholder opposition.
Business Wire – A.M. Best Co. has released a briefing on the renewed interest of hedge funds in the non-life reinsurance industry.
Hedge funds are showing renewed interest in the reinsurance business as they seek to diversify their investment strategies and deploy accumulated capital. The catastrophic losses experienced by the reinsurance industry in 2011 have piqued the hedge funds’ interest. Given the importance of Best Credit Ratings in the reinsurance community, some of these hedge fund backed reinsurers are rated, and others have inquired about initial ratings. A.M. Best’s analysis employs standard rating criteria with special attention to the risks of both the investment strategies and business/underwriting profiles of these companies.
TheStreet - Hedge funds, coming off their second-worst year in two decades, are on the rebound this year, but they’re still trailing the broader market.
Hennessee Group, a hedge fund adviser, said its composite index of hedge fund performance gained 2.5% in January, versus a gain of 4.4% for the S&P 500 Index of the largest U.S. companies.
Reuters – Client exits from hedge funds fell to a record low after performance bounced back in January, industry data showed on Thursday, as investors were encouraged to stick with their portfolios despite a disappointing and volatile 2011.
The GlobeOp (GO.L) Capital Movement Index, which tracks monthly net subscriptions to and redemptions from hedge funds managing around $173 billion (110 billion pounds), advanced to 142.6 points, the highest since October 2008.
FIN – A $12.7 billion Louisiana pension is set to take the next step towards its first hedge fund investment.
The state’s Teachers’ Retirement System will begin a search for a hedge fund consultant next month, Pensions & Investments reports. The move follows the system’s decision to allocate 2% to hedge funds last year.
Bloomberg – Moore Capital Management LLC, the New York firm founded by Louis Moore Bacon, invested $800 million in a hedge fund begun last year by two of its former traders, according to two people with knowledge of the matter.
The investment allowed Stone Milliner Asset Management AG founders Jens-Peter Stein and Kornelius Klobucar to start trading last month with more than $1 billion, said the people, who asked not to be named because the firms are private. Moore’s assets are in a managed account, the people said.
Fox – Hedge fund manager Steve Cohen continued his wooing of national Republican leaders with a dinner Tuesday night with one of the party’s rising stars: New Jersey Governor Chris Christie, the FOX Business Network has learned.
The dinner, held at the high-end midtown Manhattan steak house, Quality Meats, included a discussion that largely focused on the current national political environment, including the 2012 president campaign, while the two dined on expensive steaks served with a $355 Sassicaia “Super Tuscan” red wine, people with knowledge of the matter told FOX Business.
WSJ – Stock correlation within sectors has dropped significantly this year as markets have rallied, providing a boon for long/short equities managers who buy and sell companies based on fundamental analysis of their individual merits.
Giles Worthington, a portfolio manager at RiverCrest Capital, said: “Correlations are falling with quite a powerful force and diversity in stock returns is rising. This is good news for stock-pickers as once again investors are considering the difference between a high-quality and a low-quality company.”
Bloomberg – Wealthy Chinese investors are turning to “sunshine” private trusts, the prototypes of hedge funds in the communist nation, as the property market cools, stocks slump and bank-deposit rates fail to match inflation.
China’s private trust-fund assets tripled to 138.3 billion yuan ($22 billion) in the 18 months to Sept. 30, according to the most recent data from the China Trustee Association, while global hedge-fund assets have stalled at around $2 trillion. The sunshine funds are exempt from some rules placed on Chinese mutual funds, even as limitations such as a ban on short selling means they can’t operate as hedge funds in the same way managers in Hong Kong, London and New York can.
Minneapolis Star Tribune – The role of the Minneapolis law firm Fredrikson & Byron in the business affairs of convicted businessman Tom Petters is under scrutiny.
A lawsuit filed in U.S. District Court in Minneapolis alleges that the firm “materially aided” Petters criminal enterprise over a 10-year period by providing him with legal assistance.
Bloomberg – Hedge funds gained 0.2 percent in January as equities around the world had the best start in 18 years after U.S. economic growth showed signs of accelerating and European leaders moved closer to a solution for the region’s debt crisis.
The Bloomberg aggregate hedge fund index increased to 114.63 from 114.36 in December as long-short equity, global macro and multistrategy funds all climbed. Hedge funds fell 4.9 percent last year as concerns grew that Europe’s debt crisis couldn’t be contained and stocks experienced sharp price swings.
