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.
CNBC – Cramer sees both of these as good companies in a great growth industry, but using a trick out of his old hedge fund playbook, he suggests the strategy of a paired trade: buying the best stock in the business while at the same time betting against a second stock in the same industry. By betting against another company in the industry, Cramer says, you’re hedging out the risk that home entertainment will turn out to be a flop, and because you’re buying the best company in the industry, the two trades shouldn’t cancel each other out.
CNBC – Another of the once giant hedge funds is all but closing its doors. Atticus Capital founder Timothy Barakett, 44 years of age, is shuttering his flagship fund and returning $3 billion in capital to his investors. The roughly $1 billion left, Barakett’s personal fortune, will be managed by him in a so-called “family office”. Atticus will keep its European fund (not managed by Barakett), with roughly $1.5 billion under management, open.
Barakett says the decision was a personal one, driven by his desire to spend more time with his family. I don’t doubt it. But, I can’t help wondering whether Barakett’s exit is also due to the fact that most of the $3 billion he’s returning to investors is below its high water mark.
CNBC Stocks – The hedge fund says that with a “doomsday scenario off the table” in the second quarter, it put capital to work in distressed debt and significantly undervalued turn-around situations.
In terms of asset allocation, the fund reports that by June 30, net exposure in its long/short strategy was 37 percent, up from -3.4 percent on April 1. Allocation to credit grew to over 40 percent and risk arbitrage, 20 percent of the portfolio.
CNBC – The Commodities Futures Trading Commission will seriously consider imposing strict position limits on traders placing bets on energy contracts, and that’s just fine with hedge fund manager Mike Masters.
The head of Masters Capital Management blew the whistle on oil speculators last year when he testified before Congress regarding the rapid run-up in oil prices as it reached its record high of $145 a barrel. He is scheduled to testify at the CFTC hearings Aug. 5.
Masters, whose long/short equity fund manages approximately $1.06 billion according to data provider IPREO, believes stringent limits on commodities trading would work.
CNBC – Fortress Investment Group LLC has named former Fannie Mae CEO Daniel H. Mudd as its new CEO, effective Aug. 11.
Mudd, a Fortress board member, takes over for co-founder and majority shareholder Wesley Edens. Edens will remain with the alternative asset manager as co-chairman, a title he will share with Peter L. Briger.
Fortress said late Sunday that the personnel change will allow Edens, along with Briger, Michael Novogratz, Robert Kauffman and Randal Nardone, to concentrate on managing existing investments and finding new investment opportunities. The four executives will continue to own about 70 percent of the company.
CNBC – The Obama administration has sent legislation to Congress that would bring hedge funds and other private pools of capital under government supervision.
The proposal calls for the Securities and Exchange Commission to oversee hedge, private equity and venture capital funds. By registering with the SEC, their books would be open to federal inspection and they would be subject to disclosure requirements to investors and creditors.
CNBC – Attorneys for a hedge fund are asking for the appointment of an examiner in horse track owner Magna Entertainment’s Chapter 11 bankruptcy case.
A hearing was scheduled Tuesday on the request by Greenlight Capital Offshore Partners, which wants an investigation of ties between Magna and its parent company, known as MID.
MID has played a dual role as both a potential bidder for MEC assets and one of its primary lenders.
Greenlight, an unsecured creditor of Magna as well as a large shareholder in MID, is concerned about the fairness of any asset sale.
CNBC – Li Lianzhong, who heads the economic department of the Party’s policy research office, said China should use more of its $1.95 trillion in foreign exchange reserves to buy energy and natural resource assets.
Speaking at a foreign exchange and gold forum, Li also said that buying land in the United States was a better option for China than buying U.S. Treasury securities.
AP – CNBC’s Jim Cramer has another feud on his hands.
Just weeks after "The Daily Show" host Jon Stewart took Cramer to task for trying to turn finance reporting into a "game," famous bear economist Nouriel Roubini criticized Cramer on Tuesday for predicting bull markets.
"Cramer is a buffoon," said Roubini, a New York University economics professor often called Dr. Doom. "He was one of those who called six times in a row for this bear market rally to be a bull market rally and he got it wrong. And after all this mess and Jon Stewart he should just shut up because he has no shame."
Reuters – For years, U.S. hedge fund managers have worried that their loosely regulated and secretive industry would one day face tougher regulations.
"It was inevitable that this would happen," said Brad Alford, founder of Alpha Capital Management, an advisory firm that invests in hedge funds. "From the time Congress had the industry’s top hedge fund managers testify late last year, we knew something was coming."
CNBC – Man Group , the world’s largest listed hedge fund firm, said funds under management are $47.7 billion, down 11 percent from end-December, as clients pulled out assets in the face of falling markets.
The firm said net client outflows for the three months to March are estimated at $3.2 billion, with both private investors and institutions pulling out assets.
