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.
Stamford Advocate – Debra Ryan, the girlfriend of Samuel Israel, convicted for his role in a $400 million fraud involving the collapse of Stamford-based hedge-fund firm Bayou Group LLC, was sentenced to three years probation for aiding his escape.
Ryan, a decorator who once rented a house on Highland Avenue in Greenwich, also was ordered to be confined at home for four months and not to have any contact with Israel.
Israel, 49, pleaded guilty in March to faking his suicide by abandoning his car on the Bear Mountain bridge with the words "suicide is painless" written on the windshield and fleeing the day he was to begin a 20-year sentence. He pleaded guilty to fraud in 2005 after admitting he hid $400 million in losses at Bayou.
Reuters – Some of the country’s biggest and best-known hedge fund managers on Wednesday shared their best investment and short-selling ideas with an audience of some 1,200 hedge fund executives.
The annual Ira Sohn Investment Research Conference raises millions of dollars for pediatric cancer research, but its high wattage speaker list also moves stocks. Last year Greenlight Capital’s David Einhorn predicted that Lehman Brothers had more troubles than they had let on, four months before the investment bank filed for bankruptcy
Bloomberg – At last year’s Ira W. Sohn Investment Research Conference, Greenlight Capital Inc.’s David Einhorn told an audience of hedge-fund managers that Lehman Brothers Holdings Inc. wasn’t disclosing the whole truth about its finances.
Four months later, Lehman filed the largest bankruptcy in U.S. history. The conference attendees who followed his advice got a jump on the rest of the industry. They also got a tax write-off since all the registration fees go to cancer research and an art-therapy program for seriously ill children.
Bloomberg – Daniel Och had about 35 percent of his $20 billion of hedge-fund assets in cash during the first quarter because he suspects global stock markets will start falling again.
“The world will not just bounce back to where it was,” Och, the 48-year-old chief executive officer of New York-based Och-Ziff Capital Management Group LLC, wrote last month in a letter to investors, referring to the gain of almost 35 percent in the Standard & Poor’s 500 Index since March 9. “We continue to believe that economic recovery will be a long process.”
OZ Master, Och-Ziff’s biggest hedge fund, rose 6.3 percent this year through April after losing 15.5 percent last year. The S&P 500 fell 3.4 percent in the first four months of 2009 after dropping 38 percent in 2008.
Bloomberg – BlueGold Capital Management LLP and Galena Asset Management Ltd. extended their winning streak in the first four months, outpacing competing hedge funds and commodities.
Pierre Andurand’s $1.1 billion BlueGold energy fund rose 35 percent through April, two people with direct knowledge of the returns said, declining to be named because the data are confidential. Galena’s $430 million metals fund added 8.6 percent, according to David Mimra, London-based head of sales and marketing.
Bloomberg – Gold, little changed in London, may drop on lower demand for an inflation hedge after U.S. consumer prices posted their first annual decline since 1955.
The consumer price index fell 0.4 percent in March from a year earlier, the Labor Department said yesterday. That helped to ease concern that Federal Reserve actions to stimulate the economy will cause inflation to soar. Investors often buy gold as a hedge against accelerating prices. Rhodium climbed to the highest in more than four months on improved car sales.
Reuters – Hedge funds are set to return to their roots as niche products for the happy few as they have been unable to deliver the gleaming returns they were promising ever since the start of the credit crisis.
Hedge fund managers have long been flaunting alpha — returns down to their skills to beat markets by using advanced investment techniques — but many were caught short just as any other investor in this year’s protracted downturn.
The industry now faces rapid shrinkage driven by losses of more than 20 percent, as measured by Hedge Fund Research’s daily HFRX index, and redemptions that are predicted at somewhere between "large" and "catastrophic."
"Eighty percent of the hedge fund sector will not be here in three to four months," Robert McAdie, a credit strategist at Barclays Capital, said at a recent briefing. "Levered strategies are dead in this environment."
Funds have delivered worst-ever losses of 17.70 percent in the 11 months to November, according to Hedge Fund Research, as stocks have slumped and volatility has surged.
