Can a $100bn hedge fund beat the market? 4 Nov 2005 The dismal recent performance of Fidelity s Magellan Fund suggests that size damages investment returns. However, quantitative hedge fund manager Jim Simons believes his new computerdriven fund can handle $100bn and still beat the index.
Sovereign’s board failed shareholders 2 Nov 2005 The US bank s directors shamefully neglected their fiduciary obligations to shareholders when they voted in favour of the Santander deal. Could it be they had interests to protect other than those of investors? That looks to be the case for at least two longstanding directors.
Janus should sell itself 2 Nov 2005 The US growth fund manager is struggling to be more than a onetrick pony. But given the problems it faces in diversifying the better option for shareholders would be a takeover.
Hedge funds succumb to the cult of the salesman 31 Oct 2005 The creation of a new central exchange for equity salesmen s tips is the latest evidence of hedge funds appetite for trading ideas. Investors should ask whether managers are adding value to the information or just cribbing it.
Jumbo buyout funds offer poor prospects for investors 29 Oct 2005 Buyout funds are getting larger despite the fact that there is an inverse relationship between fund size and investment returns. With interest rates rising and investor appetite for junk bonds waning, Blackstone s record new fund signals the turning for the LBO market.
Hedge funds need conclusion to trading probe 27 Oct 2005 Regulators have spent over a year examining whether hedge funds wrongly used information provided in the premarketing of convertibles. The market needs guidance on this issue. Regulators need to pursue these investigations faster.
Italy should open its bond markets 27 Oct 2005 Icap, the UK broker, is moving closer to establishing a market for Italian sovereign debt to rival local exchange MTS. After the Antonveneta debacle, Italy has a second chance to show it will treat foreign entrants into its financial services markets fairly.
Judge Drain right to sink Flowers’ Refco bid 25 Oct 2005 Flowers may have thought he could snap the bust firm's assets up on the cheap by moving fast and using his connections. But with other bidders ready to act swiftly and seemingly pay more, the bankruptcy court was right to strike down Flowers' sweetheart deal.
Red October for hedge funds 24 Oct 2005 The recent collapse in energyrelated assets has caught out many equity and macro funds with geared exposure to the sector. It would be a good thing if this deterred fresh inflows into hedge funds. Less capacity would make it easier to achieve positive returns.
Rival challenges Flowers’ bid for Refco 22 Oct 2005 Interactive Brokers bid for Refco s futures business may set up a bidding war, which could give creditors a bit of extra cash. But only if a sale happens soon. Clients have withdrawn lots of money. The buyer must be confident Refco can keep what is left.
Bloomberg may sell after NY election 21 Oct 2005 With Mayor Bloomberg heading for a second term, the likelihood of a sale of the eponymous business will increase. While there are many potential trade buyers, a leveraged buyout for the $16bn business may also make sense.
Goldman alumni come to Refco’s rescue 18 Oct 2005 Former Goldman partner Christopher Flowers offer of $768m for Refco s futures unit may leave nothing for shareholders. Given Goldman s numerous conflicts of interest, outsiders will want to know whether Flowers got too good a deal.
Hennessee dragged to court over Bayou 18 Oct 2005 A university claims the hedge fund advisor failed in its duty to vet the credentials of the defunct Bayou. Hennessee paid by both Bayou and the investor was conflicted. But this was made clear in the fine print. It should have been read.
Bawag must answer questions on Refco loan 17 Oct 2005 How did the small Austrian bank come to have a E425m exposure to the brokerage? And to whom precisely did it lend the money? These are questions Bawag has yet satisfactorily to answer. It needs to do so soon.
Goldman gets controversial Refco role 14 Oct 2005 Wall Street is abuzz with talk of Goldman s conflicts again: it s advising Refco on averting a meltdown two months after handling its IPO. Goldman can point to many past instances where it has managed conflicts of interest, but that may not comfort investors.
Scandals show hedge funds are too keen on risk 14 Oct 2005 Wood River and Durus Capital both got into trouble for taking big bets on illiquid smallcap stocks. Why were they prepared to take such risky punts? Because of the bizarre incentives in the hedge fund industry.
Man Group unfairly hit by Refco fallout 13 Oct 2005 The hedge fund group owns a broker that competes with the disgraced US futures firm. It also faces questions over a collapsed hedge fund. But its shares have overreacted. Man has become a trading stock driven by sentiment. Unfortunately, there s no quick fix for that.
Refco glares harsh light on hedge funds 12 Oct 2005 There are many unanswered questions stemming from the hidden loan the US futures broker extended to its nowarrested boss Phillip Bennett. For those trying to deflect further hedge fund regulation, most troubling is the apparent role of a hedge fund in helping with the coverup.
Not everyone did poorly in Wood River affair 12 Oct 2005 The fund itself appears to have imploded. Lehman has taken a $9m bath. Even famed Millennium Partners barely escaped. But Northrop Grumman made out handsomely. It sold Endwave as the hedge fund loaded up. Not bad for a stodgy manufacturer.
Cevian should stick to its guns on Skandia 12 Oct 2005 The Swedish investment fund thinks the insurer should sell up to Old Mutual. But one of its investors, a state pension fund, disagrees. Cevian shouldn t buckle. It has a duty to all its investors to put value before nationalism.