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.
The Ledger – The financial crisis may have turned much of Wall Street’s wealth into dross, but a select group of hedge fund managers has managed to maintain a golden touch that might make King Midas blush.
As major markets and economies careened downward last year, 25 top managers reaped a total of $11.6 billion in pay by trading above the pain in the markets, according to an annual ranking of top hedge fund earners by Institutional Investor’s Alpha magazine, which comes out Wednesday.
James H. Simons, a former math professor who has made billions year after year for the hedge fund Renaissance Technologies, earned $2.5 billion running computer-driven trading strategies. John A. Paulson, who rode to riches by betting against the housing market, came in second with reported gains of $2 billion. And George Soros, also a perennial name on the rich list of secretive moneymakers, pulled in $1.1 billion.
New York (HedgeCo.Net) – Activist investor Carl Icahn purchased another 6.8 million shares of Yahoo stock last week at a price tag of about $67 million, further boosting his already vast stake in the company to almost 5.5 percent.
According to a filing with the Securities and Exchange Commission, that stake is equal to 75.6 million shares in the Internet giant, or about $870 million.
The Corporate Raider has been outspoken about his beliefs that Yahoo should strike a deal with Microsoft Corp. in hopes of better competing with Google. Although no merger talks are currently in the works, some believe Icahn is still pushing for the deal.
Icahn was also vocal about his desire to dump Jerry Yang, saying that the former Yahoo CEO did everything he could to discourage a deal with Microsoft. Yahoo is currently seeking a replacement for Yang after he stepped down on November 17. Yang had previously rejected a $31-a-share offer by Microsoft earlier this year, prompted Icahn and other board members to question his leadership.
After news circulated on Friday that Icahn had increased his stake in the struggling company, Yahoo shares rallied almost 9%, up to $11.51 in the shortened trading session. Icahn may be trying to reverse the massive losses he incurred this year, after shares of Yahoo plummeted almost 60 percent.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
Globe and Mail – Since many hedge fund managers like to drive Porsche roadsters, it’s somehow appropriate that the German auto maker just ran them down.
The European hedge fund community took a pounding Monday covering short positions in Volkswagen. Shares in the auto company doubled Monday on a short squeeze that came after Porsche announced it had used derivatives to build a 74 per cent stake in VW. That move brought a long-running takeover near the finish line, and also meant portfolio managers betting on a drop in Volkswagen shares had to cover positions.
In their rush to cover shorts, often at massive losses, hedge funds pushed up the value of Volkswagen by 123 per cent on Monday, briefly making the auto maker the largest company on earth. Shares subsequently slipped, but ended the day up 25 per cent.
Business24-7 – With the UAE stock markets in turmoil it is vital investors re-examine their portfolios.
This week the Abu Dhabi and Dubai stock exchanges suffered their worst trading sessions for almost seven months while Dh65 billion has been wiped off their value in August alone.
Now a number of financial advisors are urging investors to diversify their portfolios more than ever in a bid to ride out these dips rather than face massive losses.
Those in the United States, for instance, who invested all their money in property are now reeling as a result of the credit crunch.
Even hedge funds, which are specifically designed to minimise investor risk, have attracted criticism and piled up some big losses.
Financial Times- Private equity and hedge funds risk suffering massive losses from a binge of investments in the troubled North American automotive industry.
Many of the funds saw turnround opportunities in the sector in 2005 and 2006 when suppliers were squeezed between rising commodity prices, cutbacks by the three Detroit carmakers, and customers’ demands for lower prices.
