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.
Bloomberg – Moscow-based art dealer Gary Tatintsian has sued New York’s Luhring Augustine Gallery alleging breach of agreements on $3 million of art by artists George Condo and Richard Prince, according to a complaint filed Aug. 11.
In April 2008, Tatintsian, one of the first promoters of contemporary Western art in Russia, agreed to pay $2.7 million for 12 new Condo paintings at $225,000 each, according to the complaint filed in New York State Supreme Court in Manhattan. The price reflected a 30 percent discount from Condo’s “minimum retail price” of $325,000, according to the filing.
Bloomberg – Abax Global Capital Ltd., a Hong Kong-based hedge fund manager backed by Morgan Stanley, plans to start a private equity fund in China that invests in companies making environmentally friendly products such as clean energy.
The yuan-denominated fund aims to raise about 500 million yuan ($73 million) from Chinese investors by its first close in two months, Donald Yang, Abax’s Hong Kong-based president, said in a phone interview Aug. 21. It will be sponsored by a large Chinese financial institution, whose name he declined to reveal because of pending regulatory reviews of the plan.
Bloomberg – Dennis Gartman, an economist and the editor of the Gartman Letter, said he is creating his first hedge fund to speculate on assets including global equities and commodities.
The River Crescent Fund, created Aug. 17, seeks to raise $200 million over the first year, Gartman said today in an interview from Suffolk, Virginia. The fund already includes some “well-known hedge-fund managers,” he said, without identifying them. Gartman has managed guaranteed notes since 2007 and an exchange-traded fund since April in Canada.
Bloomberg – Volkswagen AG has seen a doubling of short interest in its stock by hedge funds since the middle of last month, with 2 percent of the company’s shares, and almost a third of the common stock available for borrowing, out on loan, the Wall Street Journal reported, citing Dataexplorers, a firm of analysts.
Bloomberg – Edward Filippi, previously with Lehman Brothers Holdings Inc., raised $35 million for a hedge fund investing in energy, metals and agricultural derivatives.
The Ground Zero Strategic Commodities Fund may begin trading in the first quarter of next year, according to Filippi, who spent a year selling commodity investment products for Lehman. The fund wants to hire a portfolio manager and an operations officer.
Bloomberg – John Paulson, the hedge-fund manager whose wagers against the U.S. housing market helped him earn an estimated $2.5 billion last year, bought Bank of America Corp. and Goldman Sachs Group Inc. stock in the second quarter, while adding to stakes in gold companies.
His firm, Paulson and Co., bought 168 million shares of Charlotte, North Carolina-based Bank of America valued at $2.2 billion as of June 30, according to a filing yesterday with the U.S. Securities and Exchange Commission. It was the biggest new purchase in the second quarter for Paulson, 53, and made him the bank’s fourth-largest owner.
Bloomberg – President Barack Obama sent Congress his plan to rein in the $592 trillion over-the-counter derivatives industry, a measure that would cut into a profitable market for banks led by Goldman Sachs Group Inc. and JPMorgan Chase & Co.
The proposal issued yesterday would pressure derivatives users such as banks and hedge funds to move away from opaque customized contracts by imposing higher capital and margin requirements on the instruments. Standardized derivatives would be moved to regulated exchanges or trading platforms and sent through official clearinghouses, according to the draft measure.
Bloomberg – Atticus Capital LP, the New York- based hedge-fund firm run by Timothy Barakett, reversed course in the second quarter, investing more than $3.5 billion in U.S.- listed stocks as equity markets recovered.
Atticus bought $355 million in shares of Charlotte, North Carolina-based Bank of America Corp., a new position, according to a filing yesterday with the U.S. Securities and Exchange Commission. The fund’s holdings in U.S. stocks rose to $3.71 billion as of June 30 from $118 million on March 31.
Bloomberg – Pequot Capital Management Inc., once the world’s biggest hedge-fund manager, was cited in at least 44 private reports from exchange watchdogs in the past four years alerting U.S. regulators to potential insider trading, market manipulation or other misconduct, government documents show.
Trades linked to Google Inc., Cox Communications Inc., International Securities Holdings Inc., Premcor Inc. and dozens of other companies prompted surveillance units policing U.S. exchanges to make the referrals to the Securities and Exchange Commission, according to agency records obtained by Bloomberg News. Thirty-six reports flagged possible insider trading. Four indicated possible manipulation and four were labeled “other.”
Bloomberg – American International Group Inc., the insurer bailed out by the U.S., benefited from hedge funds for the first time in a year as the company returned to profitability in the second quarter.
AIG earned $121 million from hedge funds in the period after the holdings cost the New York-based insurer $2 billion in the nine months ended March 31, the company said last week. Hedge fund at MetLife Inc., the biggest U.S. life insurer, also improved, beating the company’s forecast.
Bloomberg – John Hyland, chief investment officer for the world’s largest exchange-traded fund in natural gas, said assertions that his company helped drive up energy prices were ”self-serving statistical gibberish.”
”Any time someone tells you that common sense tells you something, that just means they don’t have the data to support it,” Hyland said in testimony today before the Commodity Futures Trading Commission.
Bloomberg – Massachusetts will cut investments in hedge funds after its public pension plan lost a record 24 percent on all assets in the fiscal year ended June 30.
The state pension plan’s board of trustees voted today to lower the amount of money invested in hedge funds to 8 percent, or about $3 billion of the $37.7 billion it oversaw at the end of June, from 12 percent, which is about $4.5 billion. The vote reversed a five-year effort by the pension system to boost returns by expanding such alternative investments.
”We all have to understand we’re making a bet on what assets will do well,” said state Treasurer Timothy Cahill, chairman of Massachusetts’s pension reserve investment management board. “Ultimately, we don’t make decisions based on the short-term, but we get measured on the short-term.”
