Tag Archives: hedge fund managers

Hedge Fund Founder Says Bonds Are ‘Quite Close to Cash Under the Bed’

What’s a better investment — U.S. bonds or the underside of your mattress? Ray Dalio wonders if it’s the latter.

Dalio founded the hedge fund Bridgewater Associates. He tells the Council on Foreign Relations: “You are quite close to cash under the bed being better than Treasurys. Because essentially you know you’re going to get it back if it’s under the bed.”

The rate on the 10-year Treasury note is about 1.7 percent. Earlier this summer, it scraped to its lowest on record, under 1.4 percent.

Dalio says the risk of super-low returns is that buyers of Treasurys, including foreign governments that finance U.S. government deficits, will go elsewhere as soon as a reasonable alternative emerges.


Hedge Fund Makes Quick Work Of Barnes & Noble Stake

Activist hedge fund Jana Partners in August sold the remainder of its stake in Barnes & Noble, after amassing a 12% position in the stock, new SEC filings show.

The investment by the fund, which is led by one-time billionaire Barry Rosenstein, proved well-timed. Less than two weeks after Jana disclosed its stake—some 7 million shares—Barnes & Noble stock jumped 52% in one day, driven by news that Microsoft would invest in the company’s e-book division and Nook tablet. The stock ended April 30 at $20.75, far above the time period earlier this year when Jana built its position.

Reported by Abram Brown, Rosenstein was gleeful that day, appearing on television networks and touting his investing thesis: “The question is: Why was any body short that stock?” he said. “We got the Nook business for nothing.” The firm did not enter the position as an activist, a person familiar with the firm’s thinking says. So, as the shares appreciated, Jana reevaluated the investment thesis and ultimately exited the position—the result of ordinary portfolio management, the person says.

Jana began to sell the day that the Microsoft news broke. It sold 1 million shares, $24 million transaction. From there, the stake dwindled: Jana sold nearly 2 million shares from April to June, and by August 31, it had sold the remaining four million shares.



World’s Most Powerful Hedge Fund Manager Tells Investors How They Should Set Up Their Portfolios

Hedge fund god Ray Dalio, who runs Bridgewater Associates, is widely considered to be the most successful hedge fund manager in the world.  He recently sat down with CNBC’s Maria Bartiromo to discuss a variety of topics at the Council on Foreign Relations and he had some advice for the average investor.

During the hour-long discussion, Bartiromo asked Dalio about portfolio allocation in terms of gold versus equity versus real estate and other asset classes.

Reported by Julia La Roche, here’s his advice that we’ve transcribed: (emphasis ours)

First, Dalio explains what you need to think about when setting up a portfolio.  The key here is asset allocation.

“So I think I’m going to answer it in the following way that I think that is the right way for people to look at it. It’s the way I look at it. I think that the first thing is you should have a strategic asset allocation mix that assumes that you don’t know what the future is going to hold.  And I think most people should…”


New Jersey Court Clears Exis Capital in Fairfax Financial Hedge Fund Lawsuit


New Jersey Superior Court Judge Donald Coburn of Morristown today dismissed a multibillion-dollar lawsuit filed against New York-based hedge fund Exis Capital Management Inc., fund manager Adam Sender and other defendants after ruling that the damages claim filed by Canada’s Fairfax Financial Holdings Ltd. was not supported by law.


The court’s decision brings an end to the long-running lawsuit, which originally was filed by Toronto-based Fairfax in 2006 against a large group of hedge funds that were accused of conspiring with financial analysts and researchers to organize a “bear raid” by allegedly spreading false rumors and driving down Fairfax’ stock price.


Fairfax had sought as much as $8 billion in damages, with the company’s remaining claims totaling approximately $3.2 billion against Exis Capital, Mr. Sender, Exis Capital Chief Operating Officer Andrew Heller and Memphis, Tennessee-based Morgan Keegan & Co. (now known as Raymond James Morgan Keegan). The expected six-week trial was scheduled to begin today.


Hedge Fund to Appeal Telus Court Victory

A New York-based hedge fund says it will appeal a court decision blocking it from holding a shareholders meeting for investors with voting stock in Telus Corp., a move that rivals the company’s own plans for a meeting.

Telus Corp. said earlier that it will go ahead with its plans for a meeting of all voting and non-voting shareholders on Oct. 17, following a B.C. court ruling that said Mason Capital Management LLC isn’t entitled to call a separate meeting.

Telus and Mason are in a bitter, public battle over converting the Canadian telecom company’s dual-class share structure of common shares, which have voting rights, and non-voting stock.

Reported by The Vancouver Sun, Telus wants just one class of common shares but Mason argues the Vancouver-based company’s approach doesn’t properly compensate holders of voting shares, including Mason. “While we are disappointed by the court’s decision, on a review of the reasons, we have concluded that there are strong grounds of appeal,” the hedge fund said Wednesday.

“Mason will be pursuing an appeal on an expedited basis to ensure that this important matter is decided before the Oct. 17 meeting of Telus shareholders.”


South African Hedge Fund Rules Proposed by National Treasury

South Africa’s treasury and the Financial Services Board have proposed hedge fund regulations aimed at protecting investors and promoting financial stability.

So-called restricted hedge funds, which are limited to qualified investors, and retail hedge funds “will be subject to some common regulatory standards, like registering and reporting, to ensure transparency and the effective monitoring of any systemic risk build-up,” the Pretoria-based regulators said in an e-mailed statement today. “To manage risks, funds will need to have a risk-management program which sets out the types of derivatives the fund will use, the risks associated with the derivatives and how those will be managed.”

The South African hedge fund industry is estimated at 31 billion rand ($3.7 billion), compared with $2 trillion globally, according to the regulators. While the conduct of hedge fund managers in South Africa is already regulated through the Financial Advisory and Intermediary Services Act, hedge funds aren’t yet regulated.


Hedge Funds Ask SEC to Limit Liability in Solicitation Rule

The Hedge Fund Association—which represents investors, hedge funds and service providers— has asked the Securities and Exchange Commission to specifically tell private fund managers what they will need to do to safely verify whether investors are accredited once a new rule allowing solicitation and advertising of private funds is finalized.

Last month, the SEC approved a proposed rule to eliminate the current prohibition against general solicitation and advertising for private securities offerings. The proposed exemptions, mandated by the JOBS Act, focus on offerings conducted under Rule 506 of Regulation D. The elimination of the prohibition, as well as a similar one contained in Rule 144A of the Securities Act, permits general solicitation as long as issuers “take reasonable steps to verify” that all of the purchasers are accredited investors.

Concerns have been voiced that the guidance thus far for screening accredited investors is overly broad. In a comment letter to the SEC on Thursday, the HFA lauded its “good intent” regarding proposed standards for verifying investor accreditation,but proposed that the end result might go against the original intent of the JOBS Act, “to increase employment by making it simpler for private companies to raise money from investors.”