Monthly Archives: August 2012

Hedge Funds Load Up on Apple Stock

Apple’s stock, widely held by hedge funds, is now even more popular.

Investment managers including Viking Global Investors, Renaissance Technologies, Third Point and others increased their positions in the iPhone, iPad and Mac maker during the second quarter. Shares of Apple fell during the period, losing 2.6% of its value, compared with a 5.1% decline in the Nasdaq.

Here is a list of some of the more notable hedge fund investors and what they did with their Apple holdings during the second quarter, according to releases today:

Viking Global Investors — The $12 billion long-only fund run by Andreas Halvorsen and David C. Ott added 807,300 shares to bring their stake to just over 980,000 shares.



Hedge Funds Bet France Is More Peripheral Than Core

Hedge funds are going against market consensus and betting that ultra-low French government bond yields are unsustainable, believing a sluggish economy and the new government’s policies will eventually force up borrowing costs.

Investors have generally given France the benefit of the doubt this year, treating it as a core euro zone economy despite its debt. Its bond yields have, as a result, generally tracked Germany’s rather than struggling Italy’s or Spain’s.

But many macro funds now think the yields, which have collapsed this year, cannot remain around the lowest levels seen for more than 20 years. France’s economy, after all, is teetering on the brink of recession.

These include raising taxes on the rich and cutting the pension age to 60 for some workers, risking a reduction in tax revenues, increasing pressure on France’s welfare system and hitting its credit rating.


Hedge Funds Among Plaintiffs Suing Over Libor

Investors are racing to U.S. courthouses to sue banks implicated in the Libor rate-fixing scandal, and hedge funds aren’t about the be left out of the potential for billions in payouts.

Hedge funds are among the plaintiffs in the growing number of lawsuits over the scandal. Austrian hedge fund FTC Capital is seeking class-action status for a complaint that seeks damages against banks on the U.S. dollar Libor rate-setting panel, The Wall Street Journal reports. That suit deals with the futures market, with a notional value of more than $560 trillion.

Other investors, including BlackRock and the California Public Employees’ Retirement System, are mulling their options.


Chart of the Day: Hedge funds’ changing investor base

The half-yearly report on possible systemic risk created by hedge funds was published last week, and identifies the sources of investment in the industry. It found that pension funds have increased their share, representing 23% of the investor base in March 2012, up from 17% a year earlier [see chart].

As reported by Harriet Agnew, High-net-worth individuals and family offices, meanwhile, decreased their share of the investor base to 12% from 15% over the same period. The regulator collected data on funds with a total of more than $380bn under management, which represents just under a fifth of industry assets.

The results chime with other surveys, and reflect an increasing institutionalisation of the hedge fund industry over the past decade which has gathered pace since the financial crisis. According to Deutsche Bank, institutions – including pension funds, sovereign wealth funds, insurance companies and endowments – now account for approximately two thirds of hedge fund assets, compared with less than one fifth in 2003.


Paulson to Talk With BofA

Bank of America Corp.’s wealth-management arm will host a conference call Tuesday with Paulson & Co.’s John Paulson, offering some of its financial advisers and their clients a chance to grill the struggling hedge-fund manager, people familiar with the matter said.

According to David Benoit and gregory Zuckerman of the Wall Street Journal, the call comes within days of the decision by a major Paulson client, Citigroup Inc.’s private bank, to stop investing with Mr. Paulson’s firm. That move is expected to lead to withdrawals of about $410 million.

Bank of America’s wealth arm, which includes its Merrill Lynch retail brokerage and U.S. Trust private-client business, had arranged …


Hawaiian Fund Manager Reaches Settlement with SEC

ImageThe Securities and Exchange Commission has settled with a hedge fund manager from Hawaii over charges that he falsely represented his funds to investors.

Reported by Ricardo Kaulessar, editor of HFB, according to the SEC, Gary Marks has agreed to pay disgorgement of $321,702, a penalty of $100,000, and prejudgment interest without admitting or denying the allegations brought against him.

The Commission alleged in a complaint filed in U.S. District Court in San Francisco that Marks “negligently misrepresented the level of correlation and diversification” among some fund of funds hedge funds that he ran through his firm Sky Bell Asset Management from 2005 to 2007. The firm has not been registered with the SEC since 2008.


How to Raise Venture Capital Money (Without Losing your Soul) at VC Happy Hour

How to Raise Venture Capital Money (Without Losing your Soul) at VC Happy Hour

R. Adam Smith, Chief Executive Officer, Circle Peak Capital

The venture capital ecosystem is a hall of secrets. The rise of the venture capital blogger, notably Union Square Venture’s Fred Wilson, entrepreneur-turned-VC Mark Suster and Foundry Group’s Brad Feld, is a welcome first step in providing budding entrepreneurs a view into the venture world. But they are the exception to the rule. For the most part, VCs prefer to keep their entrepreneurs in the dark about how the process really works for one simple reason: it benefits them greatly.

To speak about this topic, R. Adam Smith, Chief Executive Officer of Circle Peak Capital, will participate of Venture Capital Happy Hour (, on Tuesday September 4. R. Adam Smith is an experienced investor and advisor to small and middle market private companies, with approximately 20 years of experience in private equity and mergers & acquisitions at leading private investment and advisory institutions, including Caxton-Iseman Capital, Castle Harlan, Inc., Salomon Brothers and Lehman Brothers.

Prior to forming Circle Peak, Mr. Smith served in principal capacities at two leading private equity firms based in New York City, Caxton-Iseman Capital LLC and Castle Harlan, Inc., each with over $2 billion in managed equity capital. At these firms, he worked directly with senior management teams and institutional limited partners, co-investors, and lenders in the acquisition and growth of $25 million to $1 billion companies in food, beverage, restaurant, distribution, industrial, and asset management sectors.

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Hedge-Fund Marketing Could Begin New Era as SEC Set for Proposal

Hedge funds may go from soliciting individual investors behind closed doors to conducting wide advertising campaigns under a rule set for proposal today by the U.S. Securities and Exchange Commission.

As reported by Jesse Hamilton and Margaret Collins of Bloomberg News, SEC commissioners will decide whether to invite public comment on a proposal for how to end decades of restrictions on how private funds and startups can pursue investors. The proposal is driven by a law that repealed a ban on pitching such investments to all but a select few investors, such as those accustomed to pumping cash into hedge funds.

The Jumpstart Our Business Startups Act, signed into law by President Barack Obama in April ended the ban as part of a wider effort to ease funding options for fledgling companies. The shift drew criticism from investor-protection groups and the mutual-fund industry, including the Washington-based Investment Company Institute, which have said that lifting the ban without restrictions may expose investors to misleading advertisements by some private funds.


Morgan Stanley Hedge-Fund Capital Raiser Barrett Said To Depart

Morgan  Stanley (MS)’s David Barrett oversaw a unit that raised money for hedge funds and private companies, is leaving after 22 years to look for a job outside banking, two people with knowledge of the matter said.

Barrett ran the New York-based firm’s private capital markets business, where he reported to client-solutions head Wylie Collins and equity capital markets co-heads John Moore and Paul Donahue. Barrett is considering positions at several hedge funds, said one of the people, who asked not to be identified because the information hasn’t been made public.

Since 2008, Barrett developed and led a new business at Morgan Stanley raising money for hedge funds in exchange for fees, the people said.


Ray Dalio Buys More Emerging Markets and Other New Stocks

Ray Dalio was the hedge fund world’s most successful investor in 2010 and 2011, with his $120 billion Bridgewater Associates LP. His firm invests based on his understanding of macroeconomic principles. 

In his second-quarter letter , Dalio said he believed global equity markets were pricing in “fairly pessimistic” long-term earnings growth rates and the worst real earnings growth rate in 100 years, while companies still “retain plenty of ability to protect their operating margins and profitability by keeping labor costs down,” despite global financial conditions posing a headwind to top-line revenue growth. He also noted that the dividend yield of U.S. non-financial corporation is higher than U.S. government note yields for only the second time in the past 50 years, and companies had ample liquidity to cover their dividends.

Analyzed by GuruForce, these are Dalio’s biggest new stock purchases in the second quarter…