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.
Hedge funds show banks how to recoup loans to Gulf 19 Mar 2012 Bahraini investment house Arcapita has been forced to file for U.S. bankruptcy protection after pressure from non-bank creditors – a first in the region. That won’t end “extend and pretend” debt deals, but it may deliver one of the Gulf’s first effective restructurings.
TCI’s Indian activism looks low risk, high reward 14 Mar 2012 The hedge fund is threatening to sue directors of state-backed Coal India, saying they are supine to government meddling. It’s a long shot. But TCI has little to lose and even partial success could pay off. New Delhi won’t like it – although it could be the biggest beneficiary.
Top hedgies show Wall Street how it’s done 1 Mar 2012 The $3 bln paycheck for Bridgewater’s Ray Dalio, as calculated by Forbes, hasn’t generated the outrage directed at investment bankers. The message seems pretty clear: Create your own business, reward investors, too, and don’t go public. Oh, and skip the government bailout.
Man’s new dividend policy leaves plenty of flex 1 Mar 2012 The hedge fund group’s modified payout policy gives shareholders some of the assurances of a traditional progressive dividend policy. If the good times roll, investors may get extra cash too. But Man is also reducing the risk of being cornered by its own generosity.
Crisis fiction doesn’t measure up to strange truth 24 Feb 2012 “The Darlings,” by a former Goldman analyst and corporate lawyer, is one of the first novels set amid the upheaval of 2008. The glossy thriller delves beyond the greed engulfing a rich Wall Street family in scandal. But it fails to top the era’s many real tales of sorrow.
LightSquared darkens skies for Falcone’s Harbinger 15 Feb 2012 The U.S. FCC has dealt a huge blow to the wireless business on which formerly high-flying hedgie Philip Falcone bet his firm’s future. Harbinger’s main fund lost nearly half its value last year and the SEC is circling, too. The firm’s time looks to be running out.
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.