Hedge Funds

Apple’s halo loses shine in investor fight

25 Feb 2013

Greenlight Capital founder David Einhorn won a legal point, but better governance wasn’t his main objective. Apple and its lawyers come off amateurish. Calpers, despite worthy aims, looks careless. The SEC also missed a trick. The result is a distraction for shareholders.

Activist exposes Hess as latest governance villain

29 Jan 2013

Hedge fund Elliott reckons the U.S. oil company could be worth more than double its current $20 bln-plus value. But as at other energy groups, like Chesapeake and SandRidge, a too-cozy board has brought waste and strategic blunders. New broom directors would help change that.

Ackman vs Icahn is an epic but pointless battle

25 Jan 2013

A personal feud between the two New York billionaires has erupted anew. Though it’s emblematic of their approach to investing and escapist fun for financiers, the two men play important roles in the markets. Their aggressions are better directed at supine boards than each other.

Big-shot banker class of 2012 gets back to work

8 Jan 2013

Though it’s not the top job at Barclays, JPMorgan’s Jes Staley is joining hedge fund BlueMountain for what could be a less stressful but lucrative role. He’s not the only Wall Streeter seeking a gig. Diamond, Taubman, Pandit & Co may find power and glory similarly elusive.

Draft obit for 2020: 2-and-20 fee structures

28 Dec 2012

The archetypal hedge fund fee deal survived the 2008 crunch and the euro zone meltdown, but not the industry’s growth. Asset gathering, tight controls and cautious bets by a new generation of fund bosses brought a decade of low returns. Fee gravity was irresistible in the end.

Good timing favours rise of Roman’s empire of Man

10 Dec 2012

Ex-Goldmanite Emmanuel Roman is replacing Peter Clarke as head of the world’s largest listed hedge fund manager. Clarke is paying the price for a disastrous share price collapse. Markets will need to behave, but the timing may suit Roman nicely. Not for the first time.

Hedgies’ star quality is in the eye of investor

21 Nov 2012

Hedge-fund managers can get rich and attract new clients by performing exceptionally well for a small number of early investors. But if they disappoint later, many clients lose money. The real stars are those that leave most investors better off. Sadly, they are hard to spot.

Coffey to go

18 Oct 2012

Greg Coffey can afford to retire from Moore Capital at 41. He made a fortune from his drive, personality and talent, along with luck - plus leverage and high fees. It’s a good time for him to leave. Characters are less welcome in the new era of institutionalised hedge funds.

Since when does a huge hedge fund need subsidies?

16 Aug 2012

Ray Dalio’s Bridgewater, the biggest of them all, may get up to $115 mln in help from Connecticut to build a new $750 mln HQ in Stamford. It’s hard to see how Dalio’s firm, which made him nearly $4 bln last year, is a needy recipient. Yet there are benefits for the U.S. state.

What hedge funds share with rock’n’roll festivals

3 Aug 2012

Not a lot, at first sight. But both are subject to the law of large numbers. Festivals like this weekend’s Pickathon are limiting entry to make the experience less mundane. And the likes of Moore Capital are seeking better-than-average returns by shrinking, too.

Man Group’s new resolve is welcome

24 Jul 2012

Market weakness and own goals have hurt the listed hedge-fund manager. Long-suffering shareholders should greet $100 mln of new cost cuts as evidence that Man really is dealing with its problems. But the future remains murky - hence the huge spread in earnings forecasts.

Congress’ all-star hedgie panel proves own point

9 Jul 2012

Legislators in 2008 hauled in top fund managers to testify on their roles in the meltdown. Today, Falcone is being chased by the SEC, Paulson is bleeding and Griffin only recently clawed back his losses. Such mixed fortunes, without systemic consequences, underline their case.

SEC finally puts squeeze on Wall Street deadbeats

26 Jun 2012

The U.S. watchdog has won a court order forcing a hedgie to cough up $12 mln in overdue fines. That’s a welcome start, but a drop in the bucket for an agency with a collection rate below 50 pct. More arm-twisting would bring in extra cash and might even deter would-be fraudsters.

Funds of funds must reinvent to survive

30 May 2012

Arpad Busson’s fund of hedge funds group EIM is reportedly looking for a suitor. Man Group recently acquired another fund of funds for no upfront costs. Investors are tired of paying double fees for underperformance. But consolidation and lower charges might just save the sector.

Analysts fiddle while CEO burns Chesapeake

2 May 2012

Wall Street’s finest barely acknowledged the stunning governance lapses surrounding the U.S. energy firm’s boss, Aubrey McClendon - or his contradictory answers. With shares falling, debt and costs rising and oil production forecasts dropping, investors should cut their losses.

Man Group shareholders face a long hard slog

30 Apr 2012

The hedge fund manager’s share price dive has unsettled investors and prompted takeover speculation. Man’s recovery depends on turning around its flagship AHL fund. But that shouldn’t prevent chief executive Peter Clarke from dealing with some of its other shortcomings.

Fund managers are losing patience with India

24 Apr 2012

Foreign investment in the country’s equity market has slowed to a trickle. Ambiguity over tax changes is a major reason investors are holding back. India’s fragile economy can’t risk an exodus. But the rules haven’t yet come into law. The government still has time for a re-think.

Ackman gets closer to permanent capital grail

19 Apr 2012

The activist hedgie’s planned $4 bln London-listed vehicle would dwarf other public funds, which often trade at a big discount to net asset value. The scale plus fee sweeteners may give Ackman an edge. And his focus on easily priced bets could shrink the NAV problem.

EU fine print could give hedgies a new fright

2 Apr 2012

The latest version of Brussels’ alternative investment directive may lift the bar for regulating managers hoping to raise funds in Europe. That could limit investors’ choice, hurt managers based outside the EU and revive a transatlantic row that was buried two years ago.

With TCI’s help, Coal India could top the Sensex

28 Mar 2012

Chris Hohn’s investment fund is raising the stakes in its tussle with New Delhi over the pricing of coal. The challenge is to win the policy argument as well as the legal one. Since reform could make Coal India the biggest company quoted in Mumbai, the outcome could be win-win.