Hedge Fund Exchange

Odey Optimistic About Europe

Anita Raghavan, DealBook, December 21, 2010

During the depth of the financial crisis two years ago, the hedge fund manager Crispin Odey of Odey Asset Management made a contrarian call: he started snapping up bank stocks like Barclays. It paid off. His flagship Odey European Fund posted three-year gains of 48.3 percent, compared with a 30 percent loss for the MSCI Europe index.

Now, weeks after a bailout of Ireland and amid growing concerns about heavily indebted countries such as Spain, Mr. Odey says he is more optimistic about European stocks than he’s been in awhile.

“Why?” he asked in his latest Nov. 30 letter to investors. “Because the markets are too cautious about the strength of the economic cycle.”

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Putting a Price on Side Pockets

Azam Ahmed, DealBook, December 21, 2010

Hedge fund investors stuck in side pockets, those opaque segregated accounts, may be able to buy some clarity.

A new service started by Hedgebay, an outfit that makes secondary markets for hedge fund stakes, is trying to put a price tag on those hard-to-value side pockets. By creating a system, the financial firm hopes to bolster trading in these types of assets.

“There’s a lack of information and transparency for this type of illiquid asset,” says Elias Tueta, a co-founder at Hedgebay. “More informed investors will be more willing to trade.”

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Hedge Fund Will Track Twitter to Predict Stock Moves

Jack Jordan, Bloomberg, December 22, 2010

Derwent Capital Markets, a family- owned hedge fund, will offer investors the chance to use Twitter Inc. posts to gauge the mood of the stockmarket, said co-owner Paul Hawtin.

The Derwent Absolute Return Fund Ltd., set to start trading in February with an initial 25 million pounds ($39 million) under management, will follow posts on the social-networking website. A trading model will highlight when the number of times words on Twitter such as “calm” rise above or below average.

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Hedge fund manager Falcone sued over stock swap

Philip Falcone

Svea Herbst-Bayliss, Reuters, December 22, 2010

A lawsuit filed against Philip Falcone charges that the investor took advantage of his position in engineering a stock swap between his hedge fund and a small publicly traded company that he also controls.

Harbinger Group Inc , a holding company with little more than $100 million in cash on its balance sheet, is paying too much for the assets of Spectrum Brands Holdings Inc, which sells pet care products and small appliances like the George Foreman grill, the lawsuit charges.

Falcone already owns the majority of Harbinger Group.

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Hedge fund cases point to a maze of alleged insider trading

Joseph Contorinis

Nathaniel Popper, Los Angeles Times, December 17, 2010

Joseph Contorinis was in a mood to celebrate his big score, so he made reservations for dinner at one of Manhattan's most expensive restaurants.

The tab for sushi and sake at Masa came to $1,150, but Contorinis could afford it. The hedge fund manager had just turned a $7-million stock-trading profit, court filings show, thanks to inside information about secret plans for a multibillion-dollar takeover of grocery giant Albertson's.

His guest at dinner: Nicos Stephanou, the investment banker who illegally leaked the information.

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New Insider-Trading Arrests Point Federal Prosecutors Toward Hedge Funds

James Fleishman

Patricia Hurtado and Bob Van Voris, Bloomberg, December 17, 2010

The arrests of three technology company workers who allegedly sold secrets about Apple Inc., Dell Inc. and Advanced Micro Devices Inc. signal the U.S. may be closing in on the hedge funds that paid for their expertise.

The men, who worked at AMD, Flextronics International Ltd. and Taiwan Semiconductor Manufacturing Co., were arrested yesterday on securities fraud and conspiracy charges for a scheme that Manhattan U.S. Attorney Preet Bharara said operated from 2008 to early 2010.

Also arrested was James Fleishman, a sales manager at Primary Global Research LLC, the expert-networking firm where the three worked as consultants. If convicted, all four face as long as 20 years in prison.

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Level Global: We'll Pay Our Fees

Amanda White, CompliancEX News, December 17, 2010

In a memo released by Dealbreaker on Thursday, beleaguered hedge fund Level Global assured investors that the firm will pay the massive legal fees incurred as a result of the FBI and U.S. Attorney’s Office investigations, and emphasizes again that they’re cooperating with officials.

"We are cooperating completely with that investigation and...have engaged experienced external legal counsel to oversee our response to, and in cooperation with, the Government’s inquiry," according to the memo, “the Investment Manager and the Level Funds have professional liability insurance which we expect will cover our legal costs and expenses...the Investment Manager will pay, in full, the Policy’s deductible. In the event the Investment Manager incurs other related expenses, it will absorb them in full.”

 

Former Icahn Lieutenant Plans Fund

Keith Meister

Anita Raghavan, DealBook, December 16, 2010

Keith Meister, who was widely described as the billionaire activist investor Carl C. Icahn’s right-hand man, is starting an event-driven hedge fund that will be seeded by Soros Fund Management, people who have been briefed on the matter say.

Soros Fund Management, founded by the Hungarian-American hedge fund titan George Soros, is putting in $250 million into Mr. Meister’s new fund, these people say.

Much like his old boss, Mr. Meister plans to adopt an activist investing style, pushing companies to improve their share price through restructuring or sales.

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Hedge Funds Are High on European Equities

Anita Raghavan, DealBook, December 16, 2010

Hedge funds bought European stocks during the last month at the most frenzied pace in five years, according to a new report from the Swiss investment bank UBS, in what could be a bullish sign for equities.

UBS, which based its findings on the trading patterns of its clients, saw the highest rate of buying in energy stocks, as oil prices soared above $90 a barrel.

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Chanos Starts a New Fund

James Chanos

Azam Ahmed, DealBook, December 14, 2010

James Chanos, the short-seller known for his call on Enron and who of late has been a vocal critic of investing in China, has raised $20 million for a new hedge fund called Kriticos International, according to regulatory filings.

The United States vehicle for the fund, Kriticos Partners, has yet to raise money, according to the filings, but both funds require a minimum $1 million in investment.

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