Fidelity Investments and some other U.S. asset managers with big money market funds can breathe a sigh of relief.

Boston-based data provider Financial Research Corp. (FRC)  has decided to stop providing fund flows data to the media that identifies companies by name — figures that while closely watched were a source of constant irritation to some firms.

News reports based on the monthly data by FRC, part of Citigroup, had rankled Fidelity and some other fund companies because the figures excluded money market fund flows and only included flows of stock and bond funds.

Over the past few years, Fidelity and other asset managers reported robust inflows into money market funds but received bad press because the FRC data excluded those figures.

For example, FRC numbers showed that Fidelity saw outflows of $9.9 billion in January.
But the world’s biggest mutual fund company reported inflows of $14.4 billion that month, driven by money market fund inflows of $20.3 billion.

That nuance was often lost in headlines focusing on FRC’s bond and stock fund flow data — figures that had become industry benchmarks.

Putnam Investments, the Boston-based unit of Canada’s Power Financial Corp, has regularly topped FRC’s list of companies seeing the biggest outflows.

FRC may provide the firmwise data to companies as a paid service.

Other companies which track fund flows include Strategic Insight, Emerging Portfolio Fund Research and Lipper Inc, a unit of Thomson Reuters.

Photo credit: Reuters

Brimming with confidence about prospects in the newspaper business, the Dolan empire of Cablevision and Madison Square Garden (home of the ever-entertaining New York Knicks, which CEO James Dolan is pictured showing a bit less confidence over in the photo to the left) has struck a deal to buy Long Island newspaper Newsday. Sam Zell accepted a raised $650 million bid for the paper after Rupert Murdoch’s News Corp dropped its $580 million offer.

Add radio broadcaster Cumulus Media to the pile of ditched deals. The $1.3 billion management buyout of the company ended after the investor group failed to agree on the transaction terms. The deal was announced in July last year. It called for Cumulus’ Chief Executive Lewis Dickey, other Dickey family members and an affiliate of Merrill Lynch Global Private Equity to buy Cumulus for $11.75 in cash per share, a 40 percent premium at the time. The investor group has agreed to pay Cumulus $15 million in termination fees.

International Lease Finance Corp, a unit of American International Group, is worried by the insurer’s financial troubles and mulling a split from it, according to the Wall Street Journal. Citing people familiar with the matter, the Journal said ILFC, a giant buyer of commercial aircraft that leases planes to air carriers, is worried that AIG’s financial issues could make it tougher for ILFC to compete in the airplane leasing industry. Last week, AIG posted a $7.8 billion quarterly loss after writing down assets linked to subprime mortgages.

Australia’s Westpac is bidding $14 billion to buy smaller rival St George Bank. The deal would create the country’s biggest bank by market value. The proposal by Westpac’s new Chief Executive Gail Kelly, who joined the bank less than four months ago after heading up St George for nearly six years, is seen possibly igniting a wave of consolidation in the country’s financial sector.

Other deals of the day:

* British-based electricity firm International Power has agreed to buy four U.S. power generation plants for $856.4 million to expand its presence in the country, it said.

* State-owned Philippine National Oil approved the sale of Saudi Aramco’s 40 percent stake in oil refiner Petron at a board meeting, officials said. Aramco has said it would sell the Petron stake to London-based investment fund Ashmore Group for $550 million.

* Singapore Telecommunications is actively involved in potential takeover talks between India’s top mobile firm, Bharti Airtel, and South African operator MTN Group, a source familiar with the situation told Reuters.

* Vodafone Group, the world’s largest mobile phone group by revenue, has no intention of pursuing a bid for South African company MTN, a spokesman said.

* India’s No. 2 mobile operator, Reliance Communications, may announce a network management joint venture with French-American telecoms equipment provider Alcatel-Lucent, a source familiar with the situation said.

* Khan Resources offered to buy Western Prospector in a move to consolidate operations and jointly develop uranium deposits in the Saddle Hills district of Mongolia.

* Britain’s largest care-home operator, Southern Cross Healthcare, is looking at buying Britain’s fifth-largest provider Craegmoor Healthcare, its CEO said.

* Britain’s Chloride Group, whose products protect against power shortages, said it had rejected a bid approach that it said materially undervalued the company.

Hedge fund managers can make astronomical salaries far beyond the hopes and dreams of the average American. But as they say, you can’t take all those piles of money with you when you die.

Still, in case anyone had doubts, one hedge fund apparently felt compelled to clarify exactly what employees can expect if they happen to die, an event that might affect their ability to show up for work and contribute to the essential work of making partners stratospherically wealthy.

In their latest 10-Q regulatory filing hot off the presses today, hedge fund giant GLG Partners disclosed that it included the following stipulation in an employment contract for its CFO Jeffrey Rojek:

“The Employee’s employment with GLG will automatically terminate upon his death.”

Well that settles that. Don’t die or you’ll get fired. At least they warned him.

The U.S. mutual fund industry is doing little to increase diversity and hire more minority workers, a senior executive at boutique investment firm Ariel Investments said this week.

“The fund industry has to make a real commitment, not lip service, to diversity. And really go out of our way to find people of color to work in our organizations,” Ariel president Mellody Hobson told Reuters in an interview on Thursday.

Ariel has long championed the cause of spreading financial literacy in the African-American community. Founder John Rogers is helping raise support and funds for Barack Obama.

“Name any well-known black portfolio manager besides John Rogers,” Hobson said on the sidelines of the annual Investment Company Institute (ICI) conference. “And, to our knowledge, I am the only black woman chair of a mutual fund board. That’s not progress,” she said. Hobson chairs the board of trustees of Ariel’s mutual funds.

Rogers is chairman, CEO and chief investment officer of Chicago-based Ariel, which had $11 billion in assets under management at the end of March.

“We, as an industry, have a very very very long way to go. And I think it’s more disconcerting when you look at private equity, when you look at hedge funds, there’s no diversity at all,” Hobson added.

Some senior executives of the $11.7 trillion U.S. funds industry agreed with Hobson’s view on the lack of diversity.

“I think it varies by the types of roles. I think among the investment management professionals, there is less diversity than all of us would like,” said Edward Bernard, vice chairman of T. Rowe Price Group

Dan Primack of Thomson Reuters’ PE Hub takes a look at the implications of the $240 million that Microsoft invested in Facebook last year:

The WSJ recently reported that Microsoft is sniffing around Facebook, less than seven months after investing $240 million in the social network at a $15 billion valuation. It was largely discounted as the hopeful fumblings of Steve Ballmer, in his search for a rebound acquisition after being dumped by Yahoo. But it got me to thinking: Microsoft’s initial investment may be one of the worst venture capital deals of all time.

Click here to read the full article.

On a related note, check out this uncomfortably literal depiction of Facebook from BBC’s “The Wall.”

Online humor site McSweeney’s has compiled a tongue-in-cheek list of math and logic problems:

Your middle-class parents have a combined household income of $115,000. You receive an allowance of $20 per week. If you save all your allowance for two years, how much debt will you have to finance to hostilely take over your family? How will you structure the debt?

Citigroup chief Vikram Pandit has sold off assets here and there in the months since taking over the top job, including stakes in CitiStreet, CitiCapital and Diners Club. But with sources saying some $400 billion of extraneous assets are going on the block, it’s fair to ask whether the head of the country’s biggest bank is being boldly aggressive or slamming the panic button.

“The only reason you’d sell off that many assets is you have a lot more losses coming than you originally thought,” said Jim Huguet, co-chief executive at fund manager Great Companies LLC, which does not own Citi shares. Since late last year, Citi has recorded more than $45 billion of writedowns and credit losses, raised more than $40 billion of new capital including $2 billion of preferred shares this week, and slashed its dividend 41 percent. The Financial Times, which first reported the story on Thursday, said the moves would take place over several years.

Global economic instability has created huge investment opportunities for China Investment Corp, but the sovereign wealth fund’s head said he will be careful not to destabilize countries where it operates. CIC paid $5 billion in December for a stake in U.S. investment bank Morgan Stanley but has otherwise kept its powder dry as Western financial institutions have sought to replenish capital depleted by big subprime credit losses. “The current international market turbulence has produced unprecedented investment opportunities,” said Lou Jiwei, head of the $200 billion sovereign wealth fund. “In the 1990s, some hedge funds exploited defects in the macroeconomic policies of some emerging economies and attacked them, which damaged their economies and caused hardship for people,” he said. “CIC will certainly never do a similar thing.”

Sovereign Bancorp, the second-largest U.S. savings and loan, plans to raise just over $1 billion in an equity offering to help it navigate a difficult economic environment, according to a person close to the transaction. The offering will be broadly distributed to institutional investors and will likely be conducted over the weekend. Sovereign is determining how much Banco Santander, which has a 24.99 percent stake in the thrift, might participate in the offering, while keeping any transaction with the Spanish bank at arms-length, the person said.

Google expects to launch new products for its YouTube Web video service in the next few months and sees reason for closer cooperation with Yahoo, Google Chief Executive Eric Schmidt said. Schmidt has said getting the video sharing site to make money is the Web search company’s top priority for the year. He did not give details of the products, however, and they are not even in beta testing. The Web search leader played a large role in the takeover battle between Microsoft and Yahoo. During a two-week test, it sold search advertisements on rival Yahoo last month as part of Yahoo’s attempt to find an alternative option to Microsoft’s offer. Schmidt said the trial run provided good reason for the companies to discuss cooperation, but there was no deal yet.

Other deals of the day:

* U.S. private equity firm The Carlyle Group will lead a 58.1 billion yen ($560 million) management buyout of an LCD glass venture jointly owned by Japan’s Hoya Corp and Nippon Sheet Glass, Hoya said.

* Norwegian aluminum group Norsk Hydro said it has agreed to buy privately owned Spanish aluminum building systems group Alumafel for 77 million euros ($118 million).

* Shares in British engineering software firm Flomerics Group surged after rejecting a buyout offer from larger U.S. rival Mentor Graphics, saying it would explore interest from several other parties.

* A local fund managed by U.S-based Lombard Investments plans to buy 10 percent of Asiasoft Corp, Thailand’s top online gaming firm, for up to $11.3 million, partly via an IPO this month, an IPO underwriter said.

* Australia’s Macquarie Group is interested in buying a key part of German power giant E.ON as it prowls for investment opportunities, one of its top managers said.

Shareholder activist and “Queen of the Corporate Jungle” Evelyn Davis is not happy about Ford Motor’s planned sale of British brands Jaguar and Land Rover to Indian automaker Tata Motors. And when Evelyn Davis is not happy about something, she makes sure people know it.

At the annual Ford shareholders meeting on Thursday, Davis, who grills CEOs at hundreds of annual shareholder meetings, called the sale “outrageous” and urged shareholders to vote against the entire board except Executive Chairman Bill Ford Jr.

 ”Tata sells cars that are $2,500 to the lowest of the low outcasts of India,” Davis said, adding that Jaguar represented elegance and exclusivity. “How could the board sell us out to an outfit like that who sell to people like that.”

Ford has agreed to sell Jaguar and Land Rover to Tata in $2.3 billion deal that gives Tata a line-up ranging from the world’s cheapest car to some of its more expensive.

Davis also urged Ford to dump Chief Executive Alan Mulally, hired from Boeing in 2006, because he was “not a car guy.” She urged Bill Ford Jr, who had stepped down from that position to hire Mulally, to retake the CEO position.    

“I think you should go back to Boeing,” she told Mulally.

Bill Ford defended Mulally’s record as CEO, saying that his management has moved the turnaround quicker “than anyone thought he could.”         

After a repeated exchange with Bill Ford Jr., and requests for details on the company’s hedging practices for currency rates and commodity costs, and questions on the amount of legal fees it has to pay each year, Davis said: “Remember one more thing, a prime minister only serves at the pleasure of the king, and I want the king back,” she said.      

“If you are referring to me, thank you, but …,” Ford said. (The rest of his response was drowned out by Davis)     

“I want to dump all of the directors except you because you are my king, and you delivered me my Jaguar personally.”

“I paid a regular price by the way, for those who didn’t know that.”

Well, who knew Prime Minister Davis owned a Jaguar? Stay tuned for another set of interesting Davis comments — sure to come at GM’s annual meeting scheduled for June.

By Dane Hamilton

Who’s afraid of the big bad SEC? Not Phil Goldstein.

“The SEC is not there to protect investors,” scoffed Goldstein, an outspoken hedge fund manager in an industry shrouded in secrecy. “The SEC is so tied up in red tape and garbage that they are useless.”

Goldstein, who runs the $500 million activist hedge fund Bulldog Investors, was just getting going as he delivered an off-the-cuff address to investors yesterday in New York.

The former civil engineer, who started his hedge fund in 1992 at age 47 - an age when many successful fund managers are looking to retire - is now gearing up for a new campaign against what he says is useless and counterproductive hedge fund regulation.

Among his pet peeves “general solicitation” rules, which bar fund managers from pitching their strategies to “unsophisticated investors,” or people without money.

Most hedge fund managers interpret this as a gag order to varying degrees, forcing most to speak only “off the record” to the media and others for fear of arousing a reputation-damaging regulatory investigation or fundraising block.

Goldstein has a darker view, equating the fear to pre-World War II Germany, when no one challenged Nazis as they shipped Jews and gypsies off to death camps.

“This culture of silence and fear reminds me of how people acted when the Nazis started rounding people up,” Goldstein told an audience of hundreds of investors at an Argyle Executive conference, only half-jokingly.

And why not abolish “accredited investor” rules too? The rules - which basically bar anyone but millionaires from putting money into hedge funds - smacks of a Nanny State in which investors are protected from themselves, he said.

Anyone can invest and lose money in commodity futures, stock markets, mutual funds or gamble in Atlantic City - but not hedge funds. “Who the hell is the SEC to tell me what I can invest in?” Goldstein asked.

Goldstein has reasons to stick his finger into regulatory eyeballs. He won a lawsuit in 2006 that forced the SEC to drop rules requiring hedge funds to register as investment advisors. Now he’s being sued by William Galvin, the Massachusetts Commonwealth Secretary, for not properly barring his Web site from giving access to “non-accredited investors.”

“Galvin, up until recently, was an Eliot Spitzer wannabe,” sneered Goldstein. “He hates hedge funds. It’s like a modern day Salem witch trial. Anything that goes wrong must be due to hedge funds.”

Goldstein, who said he’s looking for legal support in an industry that is terrified of regulators, has some ideas on how history will view him. He compared his campaign to that of Rosa Parks, the 1960s black civil rights figure who refused to move to the back of the bus.

“A hundred years from now, no one will know who Steven Cohen is or John Paulson is,” said Goldstein, referring to two of the most successful hedge fund managers around today. “But they will all know Goldstein vs SEC. It will still be on the books!”

The SEC declined comment.

Blackstone CEO Steve Schwarzman has had more than his share of negative PR in the last year, with a lavish lifestyle that served as a lightning rod for criticism of the private equity industry. Which makes the following quote, uttered by Schwarzman at an investor meeting in Florida last week, even harder to understand.

Talking about the plight of subprime lenders, he said:

“[It’s like] being a noodle salesman in Nagasaki when they dropped the A-bomb - not a lot of noodles left, and not a lot of people either.”

As Dan Primack of Thomson Reuters’ PE Hub observes: “Yeesh, foot meet mouth.”

Private Equity Insider, which first reported the statement, suggested that it could cause trouble for Blackstone in Japan, where the firm has had an office since last year. A Blackstone spokesman declined to comment when contacted by Primack.