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from Unstructured Finance:
Stevie Cohen: the pop star edition
Hard to believe, there was a time when Steven A. Cohen was not all that well-known on Wall Street outside of the hedge fund industry. Some even used to confuse the then-paunchy hedge fund trader with a popular magician with the same name.
But it’s true. In fact, a decade ago, BusinessWeek (pre-Bloomberg takeover) did a cover story about Cohen and his then-$4 billion SAC Capital Advisors, calling the once super secretive investor, “The most powerful trader on Wall Street you’ve never heard of.”
Today, however, it’s almost a rarity when a major business publication or website (that’s you Dealbreaker) doesn’t have a story about Cohen and his currently $15 billion hedge fund (subject to change depending on how much in outside investor money gets returned at the end of this month). Whether it be the long-running inside trading investigation, his failed attempt to buy the Los Angeles Dodgers, his impressive growing art collection or his sizeable charitable donations, Cohen and his firm are always making news. A few years back, we even did a story on SAC Capital's resident golf pro and how he would line up golf outings for SAC traders with corporate executives.
But Cohen, for better or worse, has moved beyond the business pages to the popular press. And while he’s not yet fodder for People magazine or TMZ, consider just how mainstream Cohen and his embattled hedge fund empire have gone.
from Breakingviews:
Leave it to a hedgie to take on Einstein
By Kevin Allison
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Eric Weinstein, a New York hedge fund manager, thinks he has cracked one of the biggest mysteries in physics. The science establishment is rightly sceptical, but intrigued enough to admit Weinstein’s theory deserves further study. Even if he is wrong, it’s nice to see for once a Wall Street boffin applying his intellectual firepower to questions of beauty and truth.
from Global Investing:
Hedge fund boss Baha sees gold at $3,000-$5,000
Christian Baha, the head of Austrian fund firm Superfund and representative of the hedge fund industry in Oliver Stone movie Wall Street 2: Money Never Sleeps, is predicting that the gold price could rise to between $3,000 and $5,000 over the next five to 10 years.
Baha, who says he has more than half his personal wealth in gold and silver, either physically or in units in Superfund funds denominated in the precious metals, believes that an unprecedented phase of quantitative easing by central banks is driving a bubble in government bonds, but that gold offers real value.
from Unstructured Finance:
The sultans of swing
Although most investors have been pleased with the steadily rising U.S stock market over the past six months, funds that profit when markets are convulsing are licking their wounds.
With market stress at multi-year lows, volatility hedge funds returned just 1.16 percent in the first quarter, compared with 3.7 percent for the broader hedge fund group.
from Global Investing:
Weekly Radar: Second-guessing Japan flows as global growth slows
Figuring out what was driving pretty violent market moves this week was trickier than usual – and that says something about how much the herd has scattered this year, with ‘risk on-risk off’ correlations having weakened sharply. Just as everyone puzzled over a potential "wall of money" from Japan after the BOJ’s aggressive reflation efforts, the bottom seemed to fall out of gold, energy and broader commodity markets – dragging both equity markets and, unusually, peripheral euro zone bond yields lower in the process. As dangerous as it may be to seek an overriding narrative these days, you could possibly tie all up these moves under the BOJ banner – something along these lines: the threat of a further yen losses pushes an already pumped-up US dollar ever higher across the board and undermines dollar-denominated commodities, which have already been hampered by what looks like yet another lull in global demand. Developed market equities, whose Q1 surge had been reined in by several weeks of disappointing economic data and an iffy start to the Q1 earnings season, were then hit further by a lunge in heavy cap mining and energy stocks. The commodities hit may also help explain the persistent underperformance of emerging markets this year. What's more the lift to Italian and Spanish government bonds comes partly from an assumption any Japanese money exit will seek U.S. and European government bonds and relatively higher-yielding euro government paper may be favoured by some over the paltry returns in the core ‘safe havens’ of Treasuries or bunds. The confidence to reach for yield has clearly risen over the past six months as wider systemic fears have receded – something underlined in dramatic style this week by a huge lunge in gold, now lost almost 20 percent in the year to date.
While all that logic may be plausible, there have been dozens of other reasons floating around for the seemingly erratic twists and turns of the week.
from The Great Debate:
The dark side of shareholder activism
Shareholder activism sounds so respectable, even noble. The phrase conjures images of good-corporate-governance folk fighting greedy or dysfunctional management in the company’s best interest. While shareholders can be disciplinarians who right the wrongs of abusive directors, many boardroom activists advance some of the most destructive short-term thinking in business today.
Sparring with management is popular sport for short-termists seeking to maximize the value of their assets. The game ranges from venal to honorable. “Don’t let the Elliott Hedge Fund pursue its self-serving short-term agenda and destroy the long term [sic] value of your investment,” Hess Chief Executive Officer John Hess wrote in a letter to shareholders last week. T-Mobile CEO John Legere blamed “greedy hedge funds” after proxy advisors to MetroPCS investors advised shareholders to block a merger with the wireless giant. In February 2012, Apple’s board agreed to majority voting, a once-fringe officer election process that can have unintended consequences and has become more common at large-cap firms. Coincidentally or not, since the resolution was adopted, Apple announced that it will distribute $45 billion in dividends from its $137-plus billion in cash reserves.
from Unstructured Finance:
Insider trading—it’s not just hedge funds
Sometimes it seems that insider trading cases are all about hedge funds. After all, the overwhelming majority of the federal government's multi-year crackdown on insider trading has netted dozens of traders and analysts working in the $2.25 trillion hedge fund industry.
But this week's escapades involving a former top audit partner at KPMG and his golfing buddy are reminder that the temptation to profit from inside information exists in many industries and professions.
from Breakingviews:
J.C. Penney exposes inefficiency valuing CEOs
By Richard Beales
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
The debacle at J.C. Penney exposes a glaring inefficiency in how the market values corporate chieftains. When the struggling U.S. retailer hired Apple whiz Ron Johnson in 2012, the company’s equity value spiked by more than $1 billion. On Monday evening, news of his departure added $350 million. The return of ex-Chief Executive Mike Ullman - the man Johnson replaced - swiftly erased some $700 million. Such big swings make no sense.
from Unstructured Finance:
Pacino, Papandreou, Panetta, Paulson: Welcome to SALT 2013
The SkyBridge Alternatives Conference – the annual hedge fund blowout better known as SALT, is a month away. And the official agenda for the three-day bacchanal, which sees thousands of hedge fund investors, allocators and hedge fund hangers-on descend on Las Vegas in the second week of May, has been released.
Many regular SALT-goers will tell you, of course, that as the event has grown in popularity its official agenda has become but one part of the conference. A sideshow to goings-on inside the Bellagio are the unofficial meetings going on outside, in the hotel’s poolside cabanas.
from Global Investing:
Rich investors betting on emerging equities
By Philip Baillie
Emerging equities may have significantly underperformed their richer peers so far this year (they are about 4 percent in the red compared with gains of more than 6 percent for their MSCI's index of developed stocks) , but almost a third of high net-worth individuals are betting on a rebound in coming months.
A survey of more than 1,000 high net-worth investors by J.P. Morgan Private Bank reveals that 28 percent of respondents expect emerging market equities to perform best in the next 12 months, outstripping the 24 per cent that bet their money on U.S. stocks.
