Funds Hub

Money managers under the microscope

Einhorn: Moody’s broadside lacks usual punch



David Einhorn again sent markets scurrying last week when he told investors he was shorting Moody’s Corp, but the Greenlight Capital manager’s latest thumbs down packed a weaker punch than his past, celebrated broadsides.

To be fair, Einhorn had a tough act to follow. A year ago, he boldly said Lehman Brothers was in much worse shape than its management would admit. Four months later — the bank went bankrupt and the shares were wiped out. It took more than six years, but his warnings about business lender Allied Capital also proved accurate and ultimately very profitable.

Last week, the soft-spoken Einhorn turned his sights on the parent of credit rating agency Moody’s Investors Service. Investors dutifully followed Einhorn’s lead and sent Moody’s shares down as much as 8 percent before they closed at $26.89.

Yet in the three trading days since, Moody’s stock has recovered its Einhorn losses and more. The shares traded at $28.66 a share Tuesday.

Barc-ing up the right tree?


As the credit crisis has unfolded, many banks have trimmed their prime brokerage units’ lists of hedge funds clients in an effort to reduce lending and risk as fast as possible.

rtr23h6lHowever, as often happens, caution by some becomes a business opportunity for others — many smaller hedge funds, for instance, complain about the difficulty in getting a prime broker these days.

Quality control


After last year’s record poor performance, investors may view a warning that the quality of hedge funds could get worse with a certain degree of irony.

rtxa3mqHowever, according to the Hedge Fund Standards Board’s chairman Antonio Borges, this is one of the negative effects on the industry that proposed EU laws could have.

from Global Investing:

Permabears are coming out of hibernation


After a 40-percent gain, the rally in world stocks might be losing momentum.

For permabears who live on doom and gloom to make money this is just a blip which is going to end in tears.

David Tice, a 20-year veteran short seller who manages Federated Investors' $1 billion short fund, says we are in for a secular bear market which is going to last for 10 years.

Fraud – a booming business


Fraud is booming as financial pressures rise during the recession, according to PricewaterhouseCoopers, which last night hosted a meeting of its ‘Fraud Academy’, which aims to help companies share tips on spotting those up to no good.

rtr232sh“I think fraud is booming in the current downturn,” said Andrew Gordon, a partner in the forensic accounting practice.

Petite hedge fund WLTM larger partner…


Finding the right partner can be difficult, which is why matchmaking can be helpful.

rtr1w6ckThat’s precisely what recruitment firm Alpha Search Advisory Partners is attempting to do with its Hedge Fund Consolidation practice, launched today.

Child’s play


Getting information out of secretive hedge fund firm TCI (The Children’s Investment fund) can be a difficult task — just ask the Treasury Select Committee, whose tough questioning of founder Chris Hohn in January was met with short responses.

rtr1q7zeHowever, it appears the activist firm has been on the move, hiring Masroor Siddiqui, head of the European business at Canyon Capital.

No tragic ending at Toscafund


Puccini’s tragic opera Tosca ends with the heroine, realising she has been tricked by the evil Baron Scarpia and that her lover has been executed, hurling herself to her death from a castle parapet in despair.

rtr20bsmHowever, despite last year’s tragic performance — an approximately 60 percent plunge in the flagship fund after holdings such as Redrow and Taylor Wimpey fell sharply — it would seem Martin Hughes has sidestepped such an unhappy ending at Toscafund, where redemptions have tailed off and fund performance is strong once again.