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.
Reuters – Traditional works of fine art are fetching good prices despite the recession as buyers seek security and quality, industry insiders said this week at the Art Basel show.
Film star Brad Pitt grabbed the headlines by splashing out $1 million on a painting by German artist Neo Rauch at the show, the world’s largest, which is celebrating its 40th year.
"The sudden change of the market in October affects not so much the prices but the overall volume of what is being offered," said Simon de Pury, chairman of auction house Phillips de Pury & Company.
"The catalogues are getting thinner but the prices are not necessarily getting lower. Indeed, some have held up very, very well," said de Pury, a leading art world figure known for his ability to whip up excitement in the sales room.
New York Times Blogs – John Paulson, the hedge fund manager who reaped a windfall betting against the U.S. housing market before the credit crunch, is now hoping to ride to riches on the property industry’s recovery, The Telegraph reported.
Mr. Paulson’s firm, Paulson & Company, is in the early stages of raising money for a new private equity fund, Paulson Real Estate Recovery Fund, the newspaper said.
West Palm Beach (HedgeCo.net) – Dow Jones & Company has added London based hedge fund manager Paul Sharma as telecommunications, media and technology columnist, and NY’s award winning Donna Childs, as a financial services columnist.
"The appointments of Paul and Donna are part of our overarching strategy to enhance our editorial teams with top industry talent. We are drawing on the hedge fund and banking communities to deepen Dow Jones’s reporting and commentary on companies, industries and events for investment bankers and corporate advisors," said Adam Smallman, global managing editor for investment banking coverage at Dow Jones Newswires. "During this time of great change in markets, our editorial focus is firmly on delivering to investment bankers the intelligence that powers deals and transactions. With their industry experience, Paul and Donna will offer a unique perspective on firms, sectors and events for our investment banker readership."
Sharma was a partner at a London-based hedge fund, Cheyne Capital Management, where he managed a telecommunications value fund. Prior to that, he was the director of telecommunications sales at HSBC and spent four years as vice president and lead telecommunications analyst at J.P. Morgan in London.
Before joining Dow Jones, Ms. Childs led the microfinance firm Childs Capital LLC, which she founded in 1998. Prior to this, she was president and chief operating officer of ERC Financial Market Products in New York, an investment banker in the financial institutions group of Goldman Sachs and a director at Swiss Reinsurance Company in Zurich. Ms. Childs has won multiple awards throughout her career, including the National Association of Women Business Owners’ ’2007 Woman Business Owner of the Year’. She was named one of the ’40 under 40′ rising stars of New York in 2005 by Crain’s New York Business.
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West Palm Beach (HedgeCo.net) – In co-operation with the City Bar Center for Continuing Legal Education, Karl A. D’Cunha, a Senior Managing Director of Houlihan Smith & Company, Inc., will participate in a panel discussion involving industry experts and City Bar Center Faculty titled: "Hedge Funds in Distress" during the City Bar Center for CLE’s program titled: "Hedge Funds in The Current Environment" moderated by Nora M. Jordan of Davis Polk & Wardwell.
The educational overview of "Hedge Funds in the Current Environment" will take place today at the Association House of the City Bar Center for Continuing Legal Education at 42 West 44th Street in New York.
Houlihan Smith & Company, Inc. is an investment banking firm that works with 20 of Alpha Magazine’s "Top 100 Hedge Funds."
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New York (HedgeCo.Net) – The SEC charged seven Wall Street professionals yesterday, alleging an insider trading ring that reaped over $11.6 million in illegal profits.
British residents Nicos Achilleas Stephanou of UBS and Ramesh Chakrapani of Blackstone Advisory Services are being accused of disclosing nonpublic information about pending corporate acquisitions to five other finance professionals, including hedge fund manager Joseph Contorinis of Jefferies & Company.
“It is unconscionable when these highly paid individuals abuse their access to sensitive information and enrich themselves at the expense of others," said Scott W. Friestad, Deputy Director of the SEC’s Division of Enforcement.
According to the complaint, the illegal trading took place from at least November 2005 until December 2006. Companies in which private information was dispersed include Albertson’s, ElkCorp and National Health Investors.
Achilleas Stephanou, George Paparrizos, Konstantinos Paparrizos and Michael G. Koulouroudis were also named in the complaint.
With public outcry against the SEC at an all-time high in lieu of the handful of recent fraud cases, the agency is vamping up its efforts to investigate and expose corrupt practices.
“Market professionals who may have engaged in insider trading, or may be tempted to, cannot rest comfortably in the belief that their wrongdoing will go undetected,” said Daniel M. Hawke, Director of the SEC’s Philadelphia Regional Office.
In addition to the charges brought on by the SEC, Sephanou, Contorinis, Koulouroudis and George Paparrizos will face criminal charges in New York state.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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New York Times – While his counterparts at other big hedge funds are trying to figure out whether they can stay in business, the fund manager John Paulson continues to rack up enormous profits. DealBook has obtained Mr. Paulson’s confidential year-end letter to his undoubtedly gleeful investors.
The 20-page report details how Mr. Paulson’s firm, Paulson & Company, which manages nearly $29 billion in assets, avoided the huge losses plaguing other funds, and it gives his firm’s outlook for this year.
Paulson Advantage Plus, the firm’s largest fund with roughly $7 billion in assets, returned a whopping 37.6 percent net of fees for 2008. Another version of the fund, which does not use borrowed money to amplify its return, recorded gains of about 24 percent, according to the letter.
EasyBourse.com – Global securities regulators have formed three task forces targeting short selling, hedge funds and unregulated financial trading, in an effort to take "urgent action" to coordinate responses to current market turmoil, Securities and Exchange Commission Chairman Christopher Cox announced Monday.
The newly formed short-selling task force, chaired by the Securities and Futures Commission of Hong Kong, will work to eliminate different approaches to "naked" short sales, including delivery requirements and disclosure of short positions, while minimizing any harm to legitimate securities lending, hedging and other transactions. Read Complete Article
Bloomberg – Some hedge fund managers provided inaccurate information to investors in newsletters and monthly fact sheets, Hong Kong’s Securities and Futures Commission said.
In one instance, the hedge fund manager excluded the fund’s largest stock holding from its top five investments because of “oversight,” the regulator said in a statement issued late yesterday to all licensed hedge fund companies in the city. In other cases, the managers misstated the funds’ debt ratios and net asset values “to a limited extent.”
The findings were results of a recent SFC inspection of eight small locally established hedge fund managers overseeing $5 million to $800 million and employing three to 30 people. The regulator didn’t identify the managers involved. Ernest Kong, a SFC spokesman, declined to provide further comments.
Regulators worldwide have been increasing oversight over the $1.7 trillion hedge fund industry amid a crisis that has laden the world’s largest banks and securities firms with more than $670 billion of losses and led to the failure of Lehman Brothers Holdings Inc. Hedge funds are bracing for the industry’s worst year in almost 20 years and trying to stem investor withdrawals.
