Hedge Fund Exchange

Falcone: $22.5 Million Mortgage is ‘Normal’

Philip and Lisa Marie Falcone

Robert Frank, Wall Street Journal, December 14, 2010

Hedge-funder Philip Falcone’s personal debts have attracted widespread attention this month.

First came news that the Securities and Exchange Commission and U.S. Attorney’s office in Manhattan are looking into a $113 million loan that Harbinger Capital Partners — Mr. Falcone’s hedge fund — gave to Mr. Falcone to cover a tax bill.

Then came news that he and his wife, Lisa, had used their art collection as collateral for a five-year loan from Bank of America.

Now, The Wealth Report has news of another loan. According to documents filed with the New York City Department of Finance, Mr. Falcone and his wife took out a $22.5 million mortgage on their upper-east side townhouse this summer.

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Once-Burned, Highland Is Bullish on Debt

Azam Ahmed, DealBook, December 10, 2010

After getting burned in the credit crisis, Highland Capital Management is optimistic again about high-yield debt.

“Macro volatility will continue,” said Mark Okada, chief investment officer of Highland Capital. “That will create opportunities for people with a grasp of the fundamentals.”

Like many money managers, Highland got roiled by the problems in the debt market. In 2008, the firm shut down two of its largest hedge funds, including its flagship Crusader fund. Since then, Highland has watched its assets inder management fall to $22 billion from $40 billion two years ago.

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Hedge Funds, Facing Increased Oversight, Say Industry Creates 300,000 Jobs

Jesse Westbrook, Bloomberg, December 10, 2010

Hedge funds are touting their record of creating jobs after politicians demanded increased regulation of the industry and restrictions on bonus payments.

Hedge funds have 100,000 staff globally and lead to the employment of an additional 200,000 people at companies such as law and accounting firms, the London-based Alternative Investment Management Association said in a statement today. About 240,000 of the workers are based in North America, AIMA said.

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Citi launches new hedge fund advisory business

Emily Chasan, Reuters, December 9, 2010

Citigroup Inc launched a new hedge fund advisory service on Thursday, aimed at providing business consulting and advisory services to hedge funds as investors are forcing the funds to build themselves into more sophisticated businesses.

Much of the new capital allocated to the $1.7 trillion hedge fund industry this year has gone into the largest, most established funds which investors see as safer places for capital after the financial crisis.

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Mark D’Andrea to Join Highbridge

Azam Ahmed, DealBook, December 9, 2010

Mark D’Andrea, who departed BlackRock as a managing director last month, will join Highbridge Capital Management on Jan. 3 as the head of global institutional business development.

He is trading a job at the world’s largest asset manager for one at the world’s largest hedge fund manager. JPMorgan Chase — whose alternatives business includes Highbridge Capital and J.P. Morgan Asset Management — oversaw $53.5 billion in hedge fund money at the end of last year, according to Pension and Investment’s annual survey.

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Hedge funds aim to cash in on insider trading probe

Jim Kim, Fierce Finance, December 6, 2010

The "expert network" insider trading probe has ensnared some big-name hedge funds and mutual funds--the likes of SAC Capital, Citadel, Janus and Wellington Management. This is something competitors see as an opportunity.

Quantitative funds in particular think a marketing opportunity has been handed to them, Fortune reports. They have an interesting product story to tell as the investigation unfolds. These guys, after all, do not use new-age independent research or traditional research. They rely on their computer-driven models, so they are virtually immune to these sorts of scandals--or so they say.

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Email of analyst visited by FBI went to big players

Matthew Goldstein and Svea Herbst-Bayliss, Reuters, December 2, 2010

Money manager Ameriprise Financial would seem to have little in common with closely held investment advisory firms like Friess Associates and Sonar Capital Management or a giant hedge fund like Citadel Group.

Yet a Portland, Oregon-based technology analyst under scrutiny in a U.S. insider trading probe included employees of all three firms in an unusual email he sent in late October, according to information reviewed by Reuters.

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Hedge Funds Got Fed Help, Too

Ben Protess, DealBook, December 1, 2010

Wall Street banks weren’t the only ones approaching the Federal Reserve for help.

When the credit markets nearly froze up in the fall of 2008, the Federal Reserve Bank of New York helped hedge funds, mutual funds and other big investors buy highly rated securities backed by car loans and student debt, among other assets.

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Don’t Call Ackman a Hedge Fund

Azam Ahmed, DealBook, December 3, 2010

Bill Ackman doesn’t want his fund to be considered a hedge fund.

Never one to be shy, Mr. Ackman, the head of Pershing Square Capital Management, addressed an increasingly common question at a packed audience at Bloomberg’s 2010 Hedge Fund Conference: What is a hedge fund?

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Ready for 'hedge fund mutual funds'?

Jim Kim, Fierce Finance, November 30, 2010

We've been talking about the cross-pollination between the hedge fund industry and the mutual fund industry for a while now--in the context of retail-oriented funds of hedge funds, the rise of 130/30 funds and the recent move of hedge funds into the traditional mutual fund category.

Diamond Oak Capital Advisors is laying the ground for the rise of what it calls "hedge fund mutual funds." It basically puts a hedge fund strategy into a "transparent, publicly available mutual fund structure," notes Business Insider. "We predict that within the next 3-5 years, the world will see hedge funds abundantly offering public vehicles housing their strategies, a Hedge Fund Version 2.0," said the firm.

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