Funds Hub
Money managers under the microscope
Morning Line-Up: Hedge funds, sterling shorting, rights issue consultation
Hedge funds see ‘trying’ year in 2010-survey – Reuters
Big fall in short selling of sterling since budget- Daily Telegraph
Fund managers throw down the gauntlet to banks on rights issue fees – Times
Money flows to bonds, emerging market stocks in first half - Reuters
From Reuters TV: Shorts target financials
Citi is among the players facing pressure as the stock threatens to breach key support levels, while CIT Group has seen some 22 percent of its float in the hands of shortsellers, according to Reuters Specialist Editor Dan Burns.
Morning line-up
Hedge fund stories from the past 24 hours from Reuters and elsewhere:
Chanos shorting AstraZeneca, Siemens – CNBC
Hedge funds seek closure of Venus Remedies - Economic Times
New Merk funds offer currency for all – Reuters
Hedgies profit from bank rally – MarketWatch
Tudor’s Hillery joins Brevan Howard - FT Alphaville
This season’s trendy shorts
2008 may have been the year of shorting imperilled financials, but 2009 could be the year of shorting companies with too much debt or those bearing the brunt of the recession.
Numbers from Dataexplorers show Consumer Discretionary and Industrials are among the sectors with the most stock out on loan in the UK– a good indicator of short-selling activity.
Not so good old Yellow Pages
Hedge Hub readers shouldn’t have been too surprised by yesterday’s 15 percent slump in Yell’s share price.
The directories firm — the one behind the UK’s Yellow Pages — faces months of talks with banks and shareholders after yesterday saying it plans to restructure its roughly 4 billion-pound debt burden for the second time in nine months.
Sungard sees bright spot in convertible arb
Convertible arbitrage is the hedge fund trade of the moment, with top-ranking returns of 12.58 percent so far this year, but there could be more to come.
The strategy, in which managers usually buy a convertible bond and short the underlying stock, is proving particularly profitable because the bonds are rebounding from the battering they took last year. The strategy lost 31.59 percent, the second-worst performing strategy, in 2008 as funds scrambled to sell their positions in what had become a crowded trade.
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.
Short selling – remember that one?
Plenty has happened since the UK brought in its temporary ban on short-selling financial stocks last year — Madoff, Weavering, hedge fund outflows, the EC’s controversial plans for hedge fund rules, and even a few hedge funds making money.
However, behind the scenes, the debate on how to handle this controversial practice rumbles on, and today the Investment Management Association published its response to the FSA’s discussion paper, now that the period for responses has closed.
