Hedge Funds

Einhorn case strikes mild blow against cronyism

25 Jan 2012

The UK’s FSA has fined Greenlight hedge fund boss David Einhorn, though the rationale is fuzzy. He declined to hear inside information - but still spoke with Punch Taverns and its broker, then sold the stock. If nothing else, the case exposes cozy practices in financial circles.

Lack of bad news is good news for Man

18 Jan 2012

The world’s largest listed hedge fund has ended a dire year of outflows and poor returns with something nearing stability. A cost-cutting drive has boosted the shares. But like the rest of the industry, Man needs to show improved performance before counting on renewed growth.

Carlyle’s big payday does private equity no favors

11 Jan 2012

David Rubenstein and two partners pocketed $400 mln of profits last year. The 99 pct - pensioners investing in Carlyle funds - did well alongside them. But the lower tax rate paid by the buyout barons cost Uncle Sam some $80 mln. The timing of Carlyle’s disclosure is impeccable.

Canuck railroad could gain from dose of Ackman

11 Jan 2012

A key measure of productivity puts Canadian Pacific dead last among North America’s big six railways. Even if a proxy fight being waged by Ackman’s Pershing Square fund isn’t successful, it could inject some healthy ambition in the company’s turnaround plan.

The poorly performing, must-have 2012 investment

22 Dec 2011

It’s hedge funds. The typical one has lost 4 pct so far in 2011, lagging stocks and bonds. Investors aren’t deterred, though. They want 8 pct annual returns but face low debt yields and dim prospects for stocks. If fundamentals again guide markets, hedgies could bridge the gap.

Gupta arrest puts Corporate America on notice

26 Oct 2011

Prosecutors have nailed dozens of insider traders, including Galleon founder Rajaratnam. Those now look to be mere prologue to the case against former McKinsey boss and Goldman director Gupta. The charges will be tough to prove, but a conviction would be the ultimate deterrent.

Insider traders pay too much for choosing court

30 Sep 2011

Uncle Sam rewards cooperation with milder sentences. But Galleon-related cases show that prosecutors’ targets are heavily penalized just for asserting basic trial rights. Judges should be wary of too big a difference - trials like Raj Rajaratnam’s bring needed clarity to the law.

Sell-off tests hedge funds’ post-crisis resilience

16 Aug 2011

Hedgies have doubtless suffered in the market rout. But painful lessons learned in 2008 have made them more robust in turbulent conditions. Their funding is more secure, and they’ve borrowed less. Still, it’s far from clear their performance merits the high fees.