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 – Hedge fund manager John Paulson told investors that he made money again in November, leaving his biggest funds with double-digit gains for the year at a time many prominent rivals are nursing heavy losses.
Paulson’s roughly $5 billion Advantage Ltd fund gained 2.04 percent in November and is now up roughly 21 percent since January, according to an investor.
His roughly $10 billion Advantage Plus Ltd fund rose 3.19 percent in November and is now up 33.52 percent year-to-date.
Reuters – Anxiety is sweeping the hedge fund industry before a crucial deadline on Saturday, when investors angered by recent heavy losses are expected to demand the return of billions of dollars.
"Managers have a pretty good feeling for what is coming, and there are significant redemption requests out there," said Stewart Massey, founding partner of Massey, Quick & Co., an investment consultant that puts money into hedge funds.
Saturday is the last day for thousands of investors to notify hundreds of hedge funds if they want their money back by year’s end.
Hedge funds that require three months notice from investors who wanted to exit by year’s end had a similar deadline on September 30 — also known in the industry as "D-Day."
New York (HedgeCo.Net) – Two hedge funds run by famed portfolio manager Jeffrey Gendell are being closed because of heavy losses suffered this year. Both Tontine Partners LP and Tontine Capital Partners LP are liquidating assets, although no time table has been given.
The Greenwich-based Tontine Associates, which manages over $11 billion through their four hedge funds, reached their decision after the two funds lost more than two-thirds of their value this year. Tontine Partners was down 65 percent for the year through September September 30th, while Tontine Capital Partners plunged over 75 percent.
“The combination of falling commodity prices, massive anticipated hedge-fund redemptions and the seizing up of the credit markets caused an enormous dislocation in our portfolios,” Gendell told clients last month.
The hedge funds will be liquidated in an orderly fashion, in order to maximize shareholder returns.
Tontine Associates will continue to offer two other hedge funds; the Tontine Financial Partners LP and the Tontine-25 Fund, both run by Gendell. Before the recent credit crisis, all of the firm’s hedge funds were posting admirable returns of almost 40 percent annually since inception.
Hedge funds as a whole have not been faring too well as of late, with research by Hedge Fund Index showing losses of over 15 percent overall this year. The Tontine hedge funds are just the latest in a string of closures stemming from massive hits. Big names like Drake Management, Highland Capital and Ospraie have all closed funds this year.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
Hedge fund manager David Einhorn’s Greenlight Capital suffered heavy losses in his portfolio when German carmaker Volkswagen’s shares spiked 82 percent on Tuesday, people familiar with his portfolio said.
The German carmaker briefly zoomed past Exxon Mobil to become the world’s biggest company by market value as hedge funds who bet Volkswagen’s price would drop further were forced to cover their positions.
Carmaker Porsche Automobil Holding SE surprised the market by announcing it had effectively gained control of 74 percent of Volkswagen’s voting shares.
Street.Com – Zoe Cruz, the Morgan Stanley co-president pushed out by the firm late last year, is eyeing a role at an asset management firm, or possibly raising money to start a hedge fund, according to a person familiar with her thinking.
Cruz would prefer to join an existing business, as she enjoyed being a high-level manager at a large prestigious firm, the person says.
The Greek native was seen as a possible successor to CEO John Mack after spending her entire 25-year career at Morgan Stanley, starting as a foreign exchange trader, until her exile last year. She was shown the door following heavy losses in Morgan Stanley’s fixed income division, which she oversaw.
Reuters- One year after Jeffrey Larson lost about $1.5 billion in one of the hedge fund industry’s most spectacular collapses, he is trying to raise fresh capital for a new fund, people familiar with his plans said.
"Larson is back and he has been calling virtually everyone in town, leaving no stone unturned," said a Boston-based investor who was contacted by Larson but declined to be identified so he could speak candidly about the new fund.
Larson’s $3 billion hedge fund firm, Sowood Capital Management, lost half of its capital a year ago following heavy losses on his bond market investments.
Times Online- Hedge funds are continuing to feel the full force of the credit crunch, with 170 funds forced into liquidation during the first quarter, a Chicago research firm reported yesterday.
The bleak figures published by Hedge Fund Research (HFR) also showed that fewer funds were launched over the three-month period than at any time since 2000.
Publication of the report came as speculation was mounting that several London hedge funds are sitting on heavy losses after being caught on the wrong side of a sharp change in sentiment about future interest rates in the past fortnight.
