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New York (HedgeCo.Net ) – After a disappointing 2008, hedge funds seem to be on the up and up, advancing 1.10% in January according to the latest research by the New York-based Hennessee Group.
According to the research, convertible arbitrage funds are leading the pack, advancing 5.79% in January with the Arbitrage/Event Driven Index advancing 2.36% as a whole. Following suit was the long/short equity strategy, which was up .90% for the month. Experts analyzed this was due to profits made from shorting earnings, since only 55% of companies had met earnings expectations in January. In addition, the Global/Macro fund index rose .44% for the month.
Mutual funds also seem to be showing signs of revival. “We are encouraged by the $6.5 billion that poured into mutual funds during the last week of January,” said Lee Hennessee, Managing Principal of Hennessee Group. “We continue to monitor fund flows and believe that if this trend continues, it could be basing and a bullish sign for equity markets.”
Hedge funds outperformed the markets last month across the board. The S & P 500 dropped 8.57%, the NASDAQ Composite Index declined 6.38% and the Dow Jones Industrial Average dropped 8.84%.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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New York (HedgeCo.Net ) – After a disappointing 2008, hedge funds seem to be on the up and up, advancing 1.10% in January according to the latest research by the New York-based Hennessee Group.
According to the research, convertible arbitrage funds are leading the pack, advancing 5.79% in January with the Arbitrage/Event Driven Index advancing 2.36% as a whole. Following suit was the long/short equity strategy, which was up .90% for the month. Experts analyzed this was due to profits made from shorting earnings, since only 55% of companies had met earnings expectations in January. In addition, the Global/Macro fund index rose .44% for the month.
Mutual funds also seem to be showing signs of revival. “We are encouraged by the $6.5 billion that poured into mutual funds during the last week of January,” said Lee Hennessee, Managing Principal of Hennessee Group. “We continue to monitor fund flows and believe that if this trend continues, it could be basing and a bullish sign for equity markets.”
Hedge funds outperformed the markets last month across the board. The S & P 500 dropped 8.57%, the NASDAQ Composite Index declined 6.38% and the Dow Jones Industrial Average dropped 8.84%.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com
New York (HedgeCo.Net) – Missing hedge fund manager Arthur Nadel, who disappeared last week along with an estimated $350 million of investor’s money, turned himself in to the FBI yesterday.
The Sarasota resident, 76, turned himself in at a Tampa office, accompanied by his legal team and his partner, Todd Foster. In the courtroom later that day, his lawyer Barry Cohen told the judge that Nadel has been “visiting with the psychiatrist the past week” after “suffering some emotional problems.” The judge postponed the bail hearing for three days.
Nadel faces a federal charge of securities and wire fraud after using “manipulative and deceptive devices” to bilk investors out of hundreds of millions. Shortly after the infamous arrest of Bernard Madoff, Nadel’s family reported him missing on January 14.
Nadel reportedly wrote a letter to his wife before he missing. According to reports, he allegedly told her to withdraw as much cash as she could before their accounts were frozen.
According to the criminal complaint, Nadel’s fraud dates back to at least 2003 and has affected over 100 victims nationwide. There is also a civil complaint filed against Nadel by the U.S. Securities and Exchange Commission, who alleges that he transferred $1.25 million into secret bank accounts.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
New York (HedgeCo.Net) – SEC Commissioner Luis Aguilar said his agency should be given the authority to regulate hedge funds after urging Congress “to close the glaring loopholes in securities regulation.”
Aguilar, one of the agency’s five commissioners, is among many who are calling for greater oversight in an industry that has been ravaged by turmoil and most recently, fraud.
The SEC has been accused of lax regulation after a tumultuous year where many financial institutions imploded. That belief was further fueled after the string of recent fraud cases involving intricate Ponzi schemes, incling the Bernard Madoff scandal that swindled billions out of investors. Even since his infamous arrest, there have been a handful of cases that have surfaced, leaving a wake of angry investors with their fingers pointed to the SEC.
Mary Schapiro, who Barack Obama appointed as head of the SEC, has come out in favor of a mandatory registration by hedge funds, although she has not vocalized any wrong doing by the agency in recent months.
“Currently, the SEC is prohibited from exerting jurisdiction over particular financial instruments that seem to fall squarely within the agency’s mission,” Aguilar said, while stating his belief that the merging of the SEC with the Commodity Futures Trading Commission would remedy the situation of who regulates what.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
New York (HedgeCo.Net) – Billionaire and hedge fund manager extraordinaire John Paulson has reportedly pocketed $139 million by betting against the Royal Bank of Scotland, further fueling cynicism that shorting aids in driving down share prices.
Paulson is no stranger at predicting trends and shorting companies that he feels fit. Late last year, his New York-based Paulson & Co. disclosed short positions in the British mortgage lender HBOS, Barclays and Lloyds TSB.
Investors turn to Paulson because he seems to have a knack for placing bets that he feels will turn out in his favor. Paulson infamously bet against the U.S. housing market in 2007, which garnered himself a $3 billion paycheck while returns on his hedge funds continued to rise. In 2008, when most hedge funds lost an average of 15 percent on the year, Paulson’s funds kept steady, with his Advantage Plus fund up 20 percent.
While some argue that the practice of shorting is responsible for driving down share prices, many feel that is an unfair assumption. The ban on short selling that was enacted last September in the UK was finally lifted earlier this month, although short positions are still required to be disclosed. The Financial Services authority has said they would reinstate the ban if it proved to be needed.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
New York (HedgeCo.Net) – Mary Schapiro, who most recently was the CEO for the Financial Industry Regulatory Authority, is now the head of the Securities and Exchange Commission. The Senate approved Schapiro yesterday, a month after being nominated President Barack Obama.
Schapiro takes over the SEC at a crucial time, when the agency along with former head Christopher Cox received an abundance of bad press over lax regulation in a faltering economy.
In a year where hedge funds have taken a beating and some of the world’s most reputable financial institutions have come crumbling down, all eyes are on the SEC as to how and why they could not prevent or foresee disaster.
Even as more light is shed on the Bernard Madoff debacle after losses amounting to over $50 billion, questions still arise as to how the agency could have missed the pink elephant in the room. Schapiro, who has taken flak for clearing Madoff from fraud, says that the broker dealer watchdog did not have the jurisdiction to investigate his investment advisory business.
Many are suprised at the appointment of Schapiro simply because she has been a staple in government regulation agencies since the Reagan era. Some argue that this will not provide the "change" we need, especially since Schapiro was at the center of an agency that many feel is corrupt, or at the least, too forgiving.
Schapiro is the first woman to chair the SEC.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
New York (HedgeCo.Net) – Investors in South Florida are fearing the worst, with all eyes turned to Michael Riolo, a Boca Raton resident who may have bilked over $50 million out of investors.
Riolo regularly distributed performance reports to his investors showing admirable returns. Now, three investors are claiming that it was all a sham. Donald Gory, Anthony Leonardo and Nicholas Gory of Broward County have filed a suit against Riolo, claiming he stole more than $1 million from them.
According to the suit, Riolo allegedly conducted a “Madoff-like Ponzi scheme” through his two companies, LaSalle International Clearing Corp. and Sterling Wentworth Currency Group. The investors said they were recently informed that the firms had become insolvent. They are asking the judge to freeze his assets and ban him from transferring any funds.
It seems that wealthy Florida residents have been hit hard by financial scams in recent months. Bernard Madoff, the infamous Ponzi-schemer who lost $50 billion of investor’s money, was a part-time Palm Beach resident who garnered the trust and money of many elite Floridians.
Money manager Arthur Nadel of Sarasota is still missing, along with $350 million, after being exposed as a fraud in what authorities are now dubbing the “mini-Madoff.”
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
New York (HedgeCo.Net) – Italian automaker Fiat S.p.A. may be interested in acquiring a stake in Chrysler that could help lift the U.S. automaker out of financial distress.
According to an article published on autonews.com, Fiat may invest in a 30-35% stake in Chrysler, while helping the company to design vehicles that create fewer emissions.
While the website didn’t cite specific sources, Chrysler is maintaining ambiguity by stating they do not “confirm or disclose the nature of its private business meetings.” They also downplayed the situation by saying that, “In today’s economic environment, talks are going on between companies in all industries – ours is no different.”
Chrysler, who has already received $4 billion in rescue funds from Uncle Sam, shut down production in all of their U.S. plans in December until inventory is moved. Many fear that Chrysler cannot weather the storm unless they align themselves with a partner.
Fiat would provide new engine and transmission technology that would help Chrysler to produce more fuel-efficient vehicles that pollute less, said people familiar with the matter.
Private equity firm Cerberus Capital Management currently holds an 80.1 percent stake in Chrysler, while Daimler holds the remaining 19.9 percent.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
New York (HedgeCo.Net) – Marcus Schrenker, the pilot turned money manager accused of faking his own death to avoid fraud charges, was transferred from a Tallahassee hospital to a Pensacola jail on Monday.
Schrenker, 38, purposely crashed his single-engine Piper in Florida last week, hoping authorities would confirm his death upon finding the wreckage. Meanwhile, he parachuted over Alabama before the plane started to go down. He was later found at a camp site after reportedly trying to commit suicide.
Schrenker was charged with fraud in Indiana where he allegedly bilked trusting investors out of hundreds of thousands of dollars through his company, Heritage Wealth Management. He also faces federal charges of purposely crashing his plane and placing a false distress call.
Authorities were tipped off when they realized that his distress call did not match up with the scenario. Schrenker had radioed that his plane had suffered a cracked windshield before imploding and causing him severe injury. However, when two rescue helicopters were dispatched along with two fighter jets, they saw that the windshield was not only intact, but the door was open with the pilot clearly missing.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
New York (HedgeCo.Net) – Authorities are still searching for missing hedge fund manager and philanthropist Arthur Nadel after he vanished from his Sarasota home last week, while investors are searching for their $350 million they had tied up with him.
According to the Sarasota Herald-Tribune, Arthur’s wife Peg filed a missing person’s report after finding a suicide-like note. Nadel, who managed the funds called “Viking,” is already being dubbed a “mini-Madoff,” as more and more disdained investors are coming forward.
Neil Moody, President of Viking Management, issued a statement to investors on Thursday communicating that the funds appear to be gone, while maintaining that he knew nothing about it.
"Unfortunately, just yesterday afternoon we became aware of an extremely serious situation suggesting that the funds may have virtually no remaining value," Moody said.
Peg Nadel, who was very active on the charity scene with her husband, issued a statement that said she is cooperating fully with officials including the Securities and Exchange Commission. The Nadels served on several not-for-profit boards in the Southwest Florida area and donated generously to organizations such as Habitat for Humanity and the Jewish Family & Children’s Services.
Despite 2008 being one of the worst years for hedge funds to date, investors in the Viking fund were told that the fund returned 8 percent through the end of November.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
New York (HedgeCo.Net) – Hedge Fund Davidson Kempner Capital Management has declared a proxy victory after replacing all but one of the board members of the Sun-Times Media Group.
Davidson Kempner, who owns a 6% share in the parent company of the Chicago Sun-Times, expressed its discontent with the current board, blaming them for the financial woes of the company.
Hedge funds are no strangers to shaking up boards of companies in which they invest, many times in order to gain a strategic position where they can be involved in management and the decision making process in hopes of garnering higher returns for shareholders.
"Through the provision of these consents, the stockholders have made clear their desire and support for a board of directors that is made up of professionals experienced in publishing and restructuring," said Davidson Kempner. "Given the operating and financial challenges before Sun-Times, we believe that the reconstituted board has the better potential to guide and lead Sun-Times."
The new slate includes Jeremy Halbreich, former General Manager for the Dallas Morning News and executives Michael Katzenstein and Robert Schmitz. Robert Poole, who holds an 11% stake in the company, will remain on the board. The hedge fund has also vocalized their desire to dump current CEO Cyrus Freidheim.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
New York (HedgeCo.Net) – A Blackstone Group executive has been sued by the U.S. Securities and Exchange Commission after allegedly fronting an insider trading scam that involved supermarket chain Albertsons.
According to the complaint, Managing Director Ramesh Chakrapani tipped off a friend with private information regarding the acquisition of Albertsons in 2006 by private equity firm Cerberus, before it was announced to the public. The SEC alleges Chakrapani’s actions raked in about $3.6 million in illegal profits.
“We are shocked by this alleged breach of the law and violation of our own compliance policies and ethical standards,” said Peter Rose, spokesman for Blackstone.
The original acquisition, valued at $17.4 billion, included splitting up the Albertsons stores between a consortium of buyers, including Supervalu, drugstore chain CVS and the New York-based Cerberus.
At that time, Albertson’s Inc. was the nation’s second-largest supermarket chain. The SEC is alleging that the Blackstone team, led by Chakrapani, advised Albertson’s on the deal.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
