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New York Times – The billionaire financier Carl C. Icahn put another $250 million into his hedge fund at the beginning of the year after suffering further losses in the fourth quarter on investments in Motorola and Yahoo, according to a letter he sent to investors.
The Icahn Fund Ltd. was down about 33 percent through the end of January after plummeting 22 percent in the fourth quarter, according to the letter. After receiving more than $1 billion in redemption requests from investors, Mr. Icahn put $250 million of his own cash into the fund in November to avoid selling shares to meet the redemptions.
Trying to instill confidence in his investors, Mr. Icahn decided to make another $250 million cash injection into the fund on Jan. 1. Still, over the last five months, Icahn Capital’s funds under management have shrunk by about $2.5 billion.
The losses are likely to affect the publicly traded Icahn Enterprises fund, which reports earnings on Thursday.
The New York-based hedge fund manager reportedly made a record $3.7 billion in 2007. In 2008, his $7 billion Advantage Plus fund returned an incredible 37.6 percent. Another smaller fund he manages returned nearly 590 percent last year, thought to be the largest one-year hedge fund return in history.
How he did it: In early 2008, Paulson began short-selling shares of financial stocks, including the doomed Fannie Mae and Freddie Mac. He also bet big on Anheuser-Busch’s sale to Belgium’s InBev at a time when the deal looked to be falling apart.
ninemsn – The corporations watchdog has extended a ban on covered short selling in the local equities market by at least another month because market conditions continue to be difficult.
But a group representing hedge funds, which are high volume users of the short selling trading technique, has condemned the move, saying it could lead to job losses.
The Australian Securities and Investments Commission (ASIC) imposed the ban on September 21, as financial markets were racked by volatility and regulators began to look for ways to reduce wild swing in certain shares and the wider market.
ASIC chairman Tony D’Aloisio said on Tuesday that various actions and packages adopted by the Australian and other world governments to address the global financial crisis were yet to work through the system.
Financial Standard – The hedge fund industry has condemned the Australian Securities and Investments Commission’s (ASIC) decision to extend the ban on short selling on non-financial stocks, declaring it will have "severe and immutable long-term effects".
ASIC extended the ban on short selling for non-financial stocks by another 28 days to November 18. Although the ban has been extended, ASIC expects to lift the ban as of the next day’s trading but it would largely depend on the "state of the markets".
The short selling ban on financial stocks will continue until January 27, 2009.
ASIC maintained that while the US had lifted its bans, UK and others are sustaining the ban.
