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Hedge Funds - Exclusive Newsletter Sample


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Hedge Funds - Exclusive Newsletter Sample

  1. 1. Bloomberg Hedge Funds 01.15.13    BRIEF News, analysis and Commentary www.bloombergbriefs.comEx-SAC Portfolio Manager Simonian to Start FundBy Kelly Bit league table: prime brokers Charles Simonian, a former portfolio manager at SAC Capital Advisors LP’s Sigma Goldman Sachs tops the list ahead of UBS.Capital unit, plans to start a long-short equity hedge fund, according to a person with page 9knowledge of the matter. performance snapshot Simonian, 41, will begin New York-based Trove Capital Management LLC in March or Harmonic Capital and Fort LP head the CTA/April, said the person, who asked not to be identified because the information isn’t public. managed futures tables. page 8The fund will focus on industrial, consumer, media, telecommunications and business from the minutesservices stocks with market capitalizations of $1 billion or more, and its capacity for as- Connecticut may seek a fund of hedge funds.sets is at least $1 billion, the person said. San Antonio’s Fire & Police Pension Fund Simonian confirmed the start of his fund. moves closer to filling its direct lending man- Simonian joined SAC’s Sigma Capital unit in 2008 and left in September, the person date. page 4said. At SAC, the Stamford, Connecticut-based hedge fund run by Steven A. Cohen, region reportSimonian invested in the same industries his new fund will target, the person said. Josh Asian hedge funds, led by Myriad Asset Man-Fischer, 42, a former portfolio manager at SAC from 2008 to 2010 who also traded in agement and Azentus Capital, outperformedindustrials, consumer, media and telecommunications stocks, will join Simonian at Trove global peers in 2012. page 3Capital as director of research, the person said. Simonian has also hired a chief financial Fund launchesofficer and may add one or two analysts. Palmer Square Capital started a credit fund Prior to SAC, Simonian was founder and portfolio manager of Exton Capital Manage- with Fountain Capital Management. page 4ment LLC, a hedge fund that invested in the same areas he’ll focus on at Trove Capital,from 2005 to 2007, the person said. Before that, Simonian was a partner and portfolio research round-up Female hedge funds outperform the industrymanager at Gracie Capital LLC from 1999 to 2004. From 1996 to 1998, he was a vice average, according to Rothstein Kass. page 5president at Atticus Capital LLC. He started his career as a merger and acquisitionsinvestment banking analyst at Gleacher & Co. from 1994 to 1996. from the courts Trove Capital’s prime brokers are Goldman Sachs Group Inc. and JPMorgan Chase & Leonard Blavatnik sues JPMorgan over RMBS fund. Chip Skowron appeals Morgan StanleyCo. and the fund will have a one-year soft lock-up period, the person said. In a soft lock decision. page 6up period, investors can usually take out their money before the term finishes if they paya redemption fee. OVER THE HEDGE The U.S. Securities and Exchange Commission told SAC in November it is consider- BlueMountain Capital’s Jes Staley attends Mu- seum of American Finance gala. page 7ing pursuing civil fraud claims related to alleged insider trading in two drugmakers. Theinvestigation marks the first time government officials linked Cohen, 56, to trades at the CALENDARcenter of an insider-trading case, as part of their multiyear probe into the hedge fund pages 10-11industry. Cohen hasn’t been charged with any wrongdoing. SPOTLIGHT SAC has told portfolio managers it will raise their bonuses by 3 percentage points to Exis Capital Management founder Adamhelp retain employees amid the probe by regulators, a person familiar with the matter Sender on how his fund produced double digitsaid last week. The managers are typically paid an annual bonus of about 15 percent to gains in 2011 and 2012. page 1225 percent of the profits they generate from their trades, another person mandates Investor Allocation Search Specifics manager requirements Fund of hedge funds SRF Germinate Fund, started Dec. 1, Equity-related strategies preferred. At least 10 percent returns SRF Group Pte N/A seeks up to six “early stage” managers based in Asia. sought. See story, page 5, for more information. “Botttoms-up, fundamental stock picker” with about $500 million Ridgefield, Connecticut-based fund of funds seeks a long/ Simple Alternatives LLC $10 million in assets preferred. Funds should use single-name shorts, not short equity manager. exchange-traded funds. See story, page 4, for more information. Public pension seeks “one or more full-service real estate Five year track record, “minimum of $2.5 billion of institutional Los Angeles County Employees Retirement Association N/A investment firm(s) with capabilities of investing in core, real estate assets under management.” See RFP for more value-add and high return strategies.” information:  1 2 3 4 5 6 7 8 9 10 11 12 
  2. 2.  01.15.13 Bloomberg Brief | Hedge Funds 2Returns in Brief■■ Elliott Management Corp., the $21 billion NewYork-based hedge fund founded by billionaire investor Quote of the WeekPaul Singer, posted a 1.4 percent estimated Decem-ber gain in its Elliott International Ltd. Fund, accordingto an update sent to investors. The return brings its “It’s not risk aversion,2012 advance to 12 percent. Elliott Management didnot immediately respond to a request for comment. it’s less ego.” – Kathleen Kelley, chief investment officer at Queen Anne’s Gate LLC, on why female■■ Black River Asset Management LLC, the $5.6 hedge fund managers post higher gainsbillion Hopkins, Minnesota-based firm, returned an than their male counterpartsestimated 4.6 percent last month in its Black River (see story, page 5).Equity Relative Value Fund, bringing yearly returns to2.8 percent, according to a person familiar with thematter. The fund, launched in March and co-managed Paul Singerby Martin Smith and Jack Clarke, has $122 million in Bloomberg Brief Hedge Fundsassets, invests predominantly in global equities and employs event-driven and rela- Newsletter Ted Merztive value trading. Black River was founded in October 2003 by five founding princi- Executive Editor tmerz@bloomberg.netpals including Gary Jarrett, the firm’s managing principal and chief executive officer. 212-617-2309Mike Grover, senior managing director of investor relations, declined to comment on Bloomberg News Larry Edelmanthe returns. Managing Editor 617-210-4621■■ Monarch Alternative Capital LP, the $5 billion New York-based firm that focuses Hedge Funds Nathaniel E. Bakeron the debt of distressed and bankrupt companies, posted a 0.4 percent December Editor 212-617-2741gain in its Monarch Structured Credit Fund - Series I, bringing its 2012 returns to 17percent, according to a performance update obtained by Bloomberg. Series II of the Reporter Kelly Bitfund gained 1.8 percent last month and 27 percent in 2012. Series III rose 1 percent 212-617-1097in December and 23 percent last year. Series IV, which opened in December, climbed0.9 percent during the month. Monarch’s co-founders and co-portfolio managers are Chris Larson clarson22@bloomberg.netMichael Weinstock, Andrew Herenstein and Christopher Santana, according to +44 20-3525-8840a July marketing presentation obtained by Bloomberg. The firm did not immediatelyrespond to a request for comment. Contributing Katherine Burton Reporters 212-617-2335■■ SkyBridge Capital LLC, the $7 billion New York-based investment firm run by Saijel KishanAnthony Scaramucci, rose 0.7 percent in December in its Series G fund of funds, bringing yearly gains to 20 percent, according to a performance update to investors 212-617-6662obtained by Bloomberg. The multistrategy fund of funds, run by Troy Gayeski, has Contributing Matthew Kelly$3.2 billion in assets. Suzanne Hallberg, a spokeswoman for SkyBridge, declined to Data Editors mkelly17@bloomberg.netcomment on the returns. 609-279-5064 Anibal Arrascue■■ Saiers Capital LLC’s $600 million Alphabet Partners fund rose 1.3 percent in aarrascue@bloomberg.netDecember and 10 percent in 2012, according to a person familiar with the matter. The 609-279-5084fund is run by Nelson Saiers, a former managing director for proprietary derivatives Newsletter Nick Ferristrading at Deutsche Bank AG. Nathaniel Garnick, a spokesman for New York-based Business Manager 212-617-6975Saiers Capital, declined to comment on the returns. Advertising■■ MKP Capital Management LLC, the $6.4 billion New York-based hedge fund, 212-617-6975rose 2.9 percent in December in its MKP Opportunity fund, bringing 2012 gains to Reprints & Lori Husted6.8 percent, according to a person familiar with the matter. The global macro fund Permissions 717-505-9701has $3.8 billion in assets and is run by Patrick McMahon. MKP Credit rose 2.5percent last month and 20 percent last year. The $2.1 billion fund is managed by To subscribe via the Bloomberg Terminal type BRIEFAnthony Lembke. The MKP Partners fund, a fixed income relative value strategy run <GO> or on the web at Richard Lightburn with $150 million in assets, rose 0.8 percent in December and © 2013 Bloomberg LP. All rights reserved.7.8 percent last year. Konstantin Shishkin, a spokesman for MKP Capital, declined to This newsletter and its contents may not becomment on the returns. forwarded or redistributed without the prior consent – Compiled by Kelly Bit of Bloomberg. Please contact our reprints and permissions group listed above for more information.For this week’s Performance Snapshot, featuring CTAs/managed futures funds, see page 8.  1 2 3 4 5 6 7 8 9 10 11 12 
  3. 3.  01.15.13 Bloomberg Brief | Hedge Funds 3 TAKE A NEW LINE WITH YOUR EQUITY Potential benefits of adding Sector SPDR ETFs to your portfolio include: • Undiluted exposure to a specific sector of the S&P 500 • The all-day tradability of stocks • The diversification of mutual funds • Total transparency • Liquidity Time For A Stock Alternative Visit or call 1-866-SECTOR-ETF Consumer Discretionary - XLY Consumer Staples - XLP Energy - XLE Financial - XLF Health Care - XLV Industrial - XLI Materials - XLB Technology - XLK Utilities - XLU An investor should consider investment objectives, risks, charges and expenses carefully before investing. To obtain a prospectus, which contains this and other information, call 1-866-SECTOR-ETF or visit Read the prospectus carefully before investing. The S&P 500, SPDRs, and Select Sector SPDRs are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use. The stocks included in each Select Sector Index were selected by the compilation agent. Their composition and weighting can be expected to differ to that in any similar indexes that are published by S&P. The S&P 500 Index is an unmanaged index of 500 common stocks that is generally considered representative of the U.S. stock market. The index is heavily weighted toward stocks with large market capitalizations and represents approximately two-thirds of the total market value of all domestic common stocks. Investors cannot invest directly in an index. The S&P 500 Index figures do not reflect any fees, expenses or taxes. Ordinary brokerage commissions apply. ETFs are considered transparent because their portfolio holdings are disclosed daily. Liquidity is characterized by a high level of trading activity. Select Sector SPDRs are subject to risks similar to those of stocks, including those regarding short-selling and margin account maintenance. All ETFs are subject to risk, including possible loss of principal. Funds focusing on a single sector generally experience greater volatility. Diversification does not eliminate the risk of experiencing investment losses. ALPS Distributors, Inc. a registered broker-dealer, is distributor for the Select Sector SPDR Trust.  1 2 3 4 5 6 7 8 9 10 11 12 
  4. 4.  01.15.13 Bloomberg Brief | Hedge Funds 4Region ReportMyriad, Azentus Post Gains as Asian Hedge Funds Beat PeersBy Bei Hu which started trading in Hong Kong in million, according to investor newsletters. Myriad Asset Management Ltd. and December 2011, have grown to $1.7 bil- The $420 million Asian OpportunitiesAzentus Capital Management Ltd. post- lion, one of the people said. The fund has fund of New York-based York Capitaled gains in 2012 as a market rebound in indicated that it will soon stop taking ad- Management returned 11 percent lastthe last months of the year helped Asian ditional money after existing investors take year, driven by a 6.3 percent gain in thehedge funds outperform global peers. assets to $2 billion, the person added. fourth quarter, according to an investor The Myriad Opportunities Master Fund, Azentus’s fund, overseen by former newsletter.a $1.4 billion multistrategy fund led by Goldman Sachs Group Inc. proprietary Tybourne Equity Fund, the Hong KongCarl Huttenlocher, former Asia head of trader Morgan Sze, focuses on Asia and manager founded by former regional headHighbridge Capital Management LLC, employs strategies including event-driven, of Lone Pine Capital LLC Eashwar Krish-returned about 7 percent last year, said capital structure and convertible-bond nan, returned about 5 percent in 2012,two people with knowledge of the perfor- arbitrage, distressed, volatility trading, said a person with knowledge of the mat-mance. Azentus’s $1.7 billion multistrategy private securities and equity long-short. ter. The fund started trading on July 2 withfund reversed earlier losses to post a gain Not all funds saw gains in the year. The $500 million, two people with knowledgeof about 1 percent for the year, said two event-driven fund of Senrigan Capital of the matter said then.others with knowledge of the returns. Group Ltd., founded in Hong Kong by Myriad Chief Operating Officer Scott An index tracking Asian hedge funds former Citadel LLC executive Nick Taylor Gaynor, Azentus COO Roger Denby-advanced 9.7 percent in 2012, according and backed by Blackstone Group LP, Jones, Senrigan’s investor relationsto Singapore-based data provider Eureka- pared its loss to about 11 percent after officer Katarina Bendle, Tybourne COOhedge Pte. That beat the 6.2 percent re- four consecutive positive months, accord- Tanvir Ghani and Feng Hsiung, Asiaturn by Eurekahedge’s global benchmark. ing to an investor newsletter. Assets of chief executive officer at York Capital, Assets of the Myriad Opportunities fund, Senrigan Master Fund increased to $506 declined to comment.  1 2 3 4 5 6 7 8 9 10 11 12 
  5. 5.  01.15.13 Bloomberg Brief | Hedge Funds 5Brief ExclusivesSimple Alternatives Searches for Long/Short Equity Strategy Simple Alternatives LLC, the $70 million Ridgefield, Connecticut-based fund of From the Minutesfunds that launched in 2011, is seeking a long/short equity manager for an allocationstarting at $10 million.
 ■■ The State of Connecticut will The firm prefers a bottoms-up fundamental stock picker with about $500 million in expand its “Connecticut Horizonassets, Jim Dilworth, founder and chief executive officer, said in an e-mail. Fund initiative,” a subset of its Alter- Simple Alternatives prefers funds with no more than 50 percent net exposure and native Investment Fund, “throughless than 150 percent gross exposure, Dilworth said. It will not consider managers a competitive search for a sepa-that use exchange-traded funds. Managers should use single-name shorts to gener- rately managed account fund ofate risk-adjusted returns, rather than as offsetting bets, he said. hedge fund manager,” according to Simple Alternatives currently invests in five underlying funds, Dilworth said. The firm statements attributed to Treasurerwould consider being a “day-one investor” for “the right manager with a solid pedigree Denise L. Nappier in the minutesand track record,” he said. of its Dec. 12 investment advisory – Kelly Bit council meeting. Square Starts Credit Pool with Acquired Hedge Fund ■■ Fire & Police Pension Fund San Antonio is scheduled to discuss Palmer Square Capital Management, the $1.8 billion Leawood, Kansas-based and possibly take action on itscredit and alternative investment firm majority owned by Mariner Holdings LLC, search for a direct lending manager started a credit fund with Fountain Capital Management LLC, the high-yield bond and at its investment committee meetingbank loan portfolios firm Palmer Square acquired this year. tomorrow. Candidates include Gen2, The $50 million Palmer Square Opportunistic Credit Fund launched in November, Highbridge and White Oak, accord-primarily investing in secondary mezzanine and equity collateralized loan obligations, ing to meeting agenda.according to a person familiar with the matter. The fund, run by Angie Long, chief officer of Palmer Square, and Erin Carney, portfolio manager and partnerof Fountain Capital, has a one-year lock-up period. Palmer Square bought a majority stake in Fountain, the firm said in a statement ■■ Milwaukee County Employees’last week, its first credit fund acquisition. Fountain, based in Leawood and founded in Retirement System has placed1990, had previously done advisory work within Palmer Square’s mutual funds. managers AQR, Barings EM and “We’re not planning on being incredibly acquisitive -- this is a partnership we’ve had K2 on alert, according to minutesfor a long time,” Long said in a telephone interview. from its Jan. 3 meeting. Palmer Square last year sought emerging managers for allocations, a search thathas since been completed, Long said. The last investment the fund of funds madewas in Geneva Arbitrage Fund LP in September. ■■ Sacramento County Employ- – Kelly Bit ees’ Retirement System will decide on a “proposed engage- ment” with Grosvenor Capital at itsGapstow Sees RMBS Gains, Eyes CLO Opportunities retirement board meeting tomorrow. Gapstow Capital Partners, the $650 million New York-based fund of funds, sees SCERS will also receive an “educa-opportunity in non-agency residential mortgage-backed securities, collateralized loan tional presentation” by Claren Roadobligation equity, regulatory capital transactions, trust preferred collateralized debt Capital Management, according to obligations and community bank equity, Chris Acito, chief agenda items. executive officer and chief investment officer, said during a presentation last week. While home loan debt not backed by the U.S. government ■■ Fresno County Employees’ rallied in 2012 and early 2013, prices have only matched Retirement Association had $48 2010 peaks, Acito said. The firm favors funds investing in million invested in CSP - Common non-agency RMBS that target option-ARM, seasoned sub- Sense Partners LP, a holding that prime, home equity line of credit and second lien segments, was down 4 percent in 2012 through as well as put-back strategies. Nov. 30, according to performance Gapstow expects CLO issuance to continue in 2013 and a summaries included for discussion pickup in regulatory capital transactions as banks are able at its board meeting tomorrow. to get beneficial capital treatment for assets if they share (meeting agenda) the risk with external parties, such as hedge funds, Acito (performance)Chris Acito continued on next page  1 2 3 4 5 6 7 8 9 10 11 12 
  6. 6.  01.15.13 Bloomberg Brief | Hedge Funds 6brief exclusivescontinued from previous pagesaid. Community banks are attractive as the banking industry continues its recovery,he said. One way to gain exposure to community banks is through trust preferredCDOs, he said. Research Round-Up Gapstow gains exposure to the areas in which the firm sees opportunity throughhedge fund managers and in some cases direct investments, Acito said. Female Managers Beat – Kelly Bit Average Returns: Study By Kelly Bit Female hedge fund managerslaunches posted average gains of 9 percent last year through the third quarter,Ex-UBS Banker Starts Asia Fund of Hedge Funds beating the overall industry, accord- ing to a report by Rothstein Kass. A former UBS Securities Japan Ltd. prime broker and a manager at Zest Asset Hedge funds overall rose 2.7Management Co. have started a fund of hedge funds that will invest mainly in Asia- percent on average over the samebased managers seeking to grow. period, according to Hedge Fund The SRF Germinate Fund started on Dec. 1 with $20 million and has grown to $35 Research Inc. The Standard &million, said Osamu Yamashita, chief executive officer of Singapore-based SRF Poor’s 500 Index rose 16 percentGroup Pte who set up the fund with Zest manager Toshikazu Yamazaki. It is in- during that period. Over five years,vested in nine funds in Asia and returned 1.5 percent the first month, Yamashita said. hedge funds run by women gained The SRF fund plans to capitalize on finding emerging hedge funds in the region. 20 percent, compared with a 14 per-Some 821 funds started last year, compared with 1,139 in 2011, according to Singa- cent loss for the industry, accordingpore-based data provider Eurekahedge Pte. to Rothstein Kass and HFR, and a “Money has been flowing to bigger managers that are requiring longer track record 5.4 percent rise in the S&P 500.and larger assets,” Yamashita, 45, said in an interview in Singapore. “For us, none of “Studies have consistently shownthat matters. So long as we can find quality managers, we are willing to become an that women tend to have differentearly-stage investor and that’s where we think we can find the low-hanging fruit.” risk-reward profiles than men, which SRF is betting that Japan-focused managers will outperform at least until March could lead to disconnects betweenafter a leadership change in December, said Yamazaki, 33, senior fund manager of how the constituents want theirSRF, said in the interview. Eight out of nine managers that the fund invests in are money managed and how it actuallyJapanese hedge funds, with strategies dominated by equity long-short, he said. is managed,” Rothstein Kass said in The fund will get an additional $15 million from investors on Feb. 1, bringing total the report.assets to $50 million, Yamashita said, adding that it targets $120 million in three “The literature out there suggestsyears. It will invest in about 10 to 15 managers and aims to get at least 10 percent that it’s not risk aversion, it’s lessreturn annually, Yamazaki said. ego,” said Kathleen Kelley, chief – Tomoko Yamazaki and Komaki Ito investment officer of New York- based Queen Anne’s Gate LLC. “Women tend not to get so marriedCarVal Investors Raises $1.1 Billion for Distressed Debt Fund to an idea when they’re traders -- CarVal Investors LLC, the asset-manager unit of Cargill Inc., raised $1.1 billion for they will cut loss.” The bar is high fora distressed debt credit fund as it seeks to invest in assets off-loaded by European female entrants in a male-dominat-banks shrinking their balance sheets. ed industry, which may be another The CVI Credit Value Fund II, which CarVal expects to close later this year, will explanation for why those who startinvest in a range of debt, including corporate bonds, mortgage-backed securities and their own funds or lead investmentloan portfolios, the Minneapolis-based company said in an e-mailed statement. teams at firms post higher average “The fund will invest globally in distressed credit opportunities coming from the dele- performance, Kelley said.veraging of financial institutions in Europe and beyond,’’ according to the statement. Rothstein Kass created an index European banks will sell off about 60 billion euros ($80 billion) of loans this year, of 67 hedge funds run by womencompared with 45 billion euros sold in 2012 and 36 billion euros in 2011, according to that reported monthly performanceestimates by PricewaterhouseCoopers LLP on Jan. 4. to either or HFR, it CVI Credit Value Fund I, a CarVal-managed credit fund that already invests in said in its annual Women in Alterna-distressed debt, recorded a 28.4 percent return in the first 10 months of 2012, CarVal tive Investments report. The fundssaid Nov. 28. were selected based on individual CarVal, founded by Cargill in 1987 to focus on proprietary and high-yield debt trad- knowledge of women-owned oring, agreed to buy 380 million euros of non-performing real estate loans from Lloyds -managed status or the presence ofBanking Group Plc in November, paying about 25 percent of the face value, people female principals in the HFR diver-with knowledge of the transaction said at the time. sity category listing, the firm said. – Patricia Kuo  1 2 3 4 5 6 7 8 9 10 11 12 
  7. 7.  01.15.13 Bloomberg Brief | Hedge Funds 7from the courtsBlavatnik Says JPMorgan ‘Stuffed’ Fund With Risky RMBS JPMorgan Chase & Co. filled a fund started by billionaire Leonard Blavatnik with risky Goldman Demands Audiomortgage securities instead of the conservative investments it was told to make, lawyers Records in Abacus Lawsuitfor Blavatnik told a New York state judge. By Phil Milford, David McLaughlin The CMMF fund was started by Blavatnik’s Access Industries in 2006 as a “short-term, Goldman Sachs Group Inc. ac-highly liquid and very conservative cash management account,” according to court filings. cused ACA Financial GuarantyJPMorgan “stuffed” the account with risky mortgage securities, turning it into something Corp. of withholding thousands ofit was never meant to be, said Richard I. Werder Jr., an attorney with Quinn Emanuel audio recordings the investmentUrquhart & Sullivan LLP, which is representing the fund. bank wants in its fight against a JPMorgan should be held responsible for the loss, Blavatnik, who is ranked 47th in lawsuit over a collateralized debtBloomberg’s billionaires index with a net worth of $15.3 billion, said in his lawsuit, be- obligation called Abacus.cause it loaded his Access Industries fund with subprime and Alt-A mortgages while CEO Goldman Sachs asked a NewJamie Dimon was unloading such securities from the bank’s books. York state judge in court papers “The market believed these securities were safe,” Lewis R. Clayton of Paul Weiss Rif- Jan. 11 to order bond insurer ACAkind Wharton & Garrison LLP, which is representing JPMorgan, said during opening argu- to produce the recordings, pointingments. The securities had no downgrades until March 2008, Clayton said. to one phone call that it says “utterly The trial is set to last as long as two weeks. Blavatnik isn’t scheduled to testify, ac- eviscerates” ACA’s claims.cording to a list of witnesses. Goldman’s bid for the recordings – Chris Dolmetsch comes after ACA sought court per- mission to file a revised complaint that adds Paulson & Co. as a defen-Morgan Stanley Seeks $10.2 Million From Skowron dant. ACA claims it was deceived Insider traders like Joseph F. “Chip” Skowron III must be held responsible for the harm into believing that Paulson was athey cause their employers, Morgan Stanley lawyers told an appeals court yesterday in a long investor in the deal when thebid to recover $10.2 million. fund was in fact betting against it. Skowron, 43, who is serving five years in prison, was a hedge fund manager at Morgan Goldman agreed to a $550 millionStanley’s FrontPoint Partners LLC until he was charged in April 2011 with using inside settlement in 2010 with the SEC. information to avoid $30 million in losses. In its filing, Goldman Sachs quotes The U.S. Court of Appeals in Manhattan heard arguments yes- from a May 2007 call between an terday in Skowron’s appeal of a judge’s order that he pay $10.2 ACA portfolio manager and a bond million in restitution to the New York-based bank. Morgan Stanley trader at Morgan Stanley in which and prosecutors argued in support of the judge’s order, saying ACA is told Paulson was pursuing he hid his activities from his employer and the government. a “doomsday” strategy and betting Joshua Epstein, Skowron’s lawyer, told the appeals panel against the mortgage market. that Morgan Stanley is entitled to file a lawsuit to seek the Marc Kasowitz, an attorney for money it paid his client. The firm isn’t entitled to restitution New York-based ACA, said in an in the criminal case, he said. Jerika Richardson, a spokes- interview that the call wasn’t about woman for U.S. Attorney Preet Bharara, declined to comment Abacus and was instead “anecdotal on the case. Jim Wiggins, a Morgan Stanley spokesman, market chatter” about Paulson.Chip Skowron declined to comment on the appeal. ACA, which is seeking to recover – David Glovin, David Voreacos and Bob Van Voris $120 million in damages, cites in its complaint a recording in which a Goldman Sachs managing director told ACA that Paulson was a “100Albert Hu Gets 12 Years in Prison for Fraud percent equity” investor in the deal. Albert K. Hu, who was convicted of running a scheme that the government said ACA has produced 6,900 recordingscheated investors of at least $6.5 million, was sentenced to 12 years in prison. to Goldman Sachs and will turn over Hu, 50, formerly of Fremont, California, and Hong Kong, was found guilty by a jury in more as they become available,June of seven counts of wire fraud. Hu also faces a civil lawsuit by the SEC. Kasowitz said. Jerry Fong, a lawyer for Hu, had no immediate comment on the sentence. “Goldman Sachs’s specific misrep- Hu founded and operated hedge funds under the names Asenqua Beta Fund and resentation to ACA about Paulson’sFireside LS Fund out of San Francisco, Singapore, and Sunnyvale, California, pros- ‘100 percent equity’ interest in Aba-ecutors said. He lured investors with promises of returns as high as 30 percent a year, cus trumps any anecdotal marketaccording to prosecutors. Instead of investing the money, Hu “converted that money for ‘color’ by a third party,” Kasowitzhis own personal use and for other non-investment purposes,” according to an indictment. said in a statement. – Joel Rosenblatt  1 2 3 4 5 6 7 8 9 10 11 12 
  8. 8.  01.15.13 Bloomberg Brief | Hedge Funds 8Over The Hedge■■ Jes Staley attended the Museum of Co. when Banc One was acquired, bringingAmerican Finance’s gala last week, just Jamie Dimon into the firm as his successor.hours after he announced his departure – Amanda Gordonto BlueMountain Capital Management ■■ While wine sales by the biggest auctionLLC, where he’ll be managing partner, houses fell 19 percent last year, the marketfrom JPMorgan Chase & Co, where he “feels a bit more positive,” Chris Smith,worked for more than 34 years. investment manager at The Wine Invest- The museum’s exhibitions include a 1792 ment Fund in London, said. “Demand hastreasury bond issued to George Washing- been fairly consistent over the past sixton as well as information on hedge funds months.” The fund, which has $73 millionand electronic trading. under management, is predicting a 14 per- The 25-year-old institution has a $3.6 Duncan Niederauer, CEO of NYSE Euronext, cent increase in the Bordeaux-dominatedmillion budget and last year had 43,000 Jes Staley, managing partner, BlueMountain Liv-ex Fine 100 wine index this year.visitors. The newest temporary exhibition Capital Management LLC, and Debora Staley. – Guy Collinslets visitors weigh in on five investments Photographer: Amanda Gordon/Bloombergmade by Barings Bank, including the ■■ Anne Carley, managing partner atLouisiana Purchase. Award for Distinguished Public Service and Greenwich Advisors LLC, attended The museum is located at 48 Wall St., Financial Leadership, created by former Labyrinth Theater Company’s “Celebritythe site of Alexander Hamilton’s Bank of Goldman Sachs co-chairman John White- Charades” benefit at Capital in New YorkNew York. head, who was present and lamented the last night. The event featured Chris Rock The event raised a record $750,000 and “lack of leadership today.” and Paul Rudd in a game of charades. Thehad record attendance of 250 guests. The recipient of the award was Bill Har- company spends about $1 million a year on After a meal of asparagus salad and rison, who expanded Chemical Bank and productions, readings and workshops.beef, the museum presented its Whitehead was chief executive of JPMorgan Chase & – Amanda Gordon GLOBAL MARKETS SUMMIT THE Jan 17, 2013 FOREIGN AFFAIRS NEW YORK BOLDEST SPEAKERS DENNIS P. LOCKHART Federal Reserve Bank of Atlanta CALLS DAVID MCCORMICK Bridgewater Associates LP MARK L. ATTANASIO Crescent Capital Group FOR 2013 TERRENCE A. DUFFY CME Group DEEPAK NARULA Metacapital Management LLC +MORE Sponsor:  1 2 3 4 5 6 7 8 9 10 11 12 
  9. 9.  01.15.13 Bloomberg Brief | Hedge Funds 9Performance Snapshot: CTAs/Managed FuturesA look at some of the best-performing CTAS/managed futures funds that report to Bloomberg data. Only funds with $50 million or more under manage-ment that have reported performance through at least Nov. 30 are included. For questions contact Anibal Arrascue at aarrascue@bloomberg.netBy 2012 ReturnsFirm Fund manager inception date sharpe ratio Return % Richard ConyersHarmonic Capital Partners LLP Harmonic Alpha Plus Global Currency Fund 4/30/2003 1.65 25.47 David Pendlebury Alexei ChekhlovSystematic Alpha Management LLC Systematic Alpha Futures Fund Ltd 12/31/2007 1.09 22.14 Peter KambolinMan Investments Ltd AHL Evolution Ltd Timothy Wong 11/1/2006 3.76 21.2Amplitude Capital AG Amplitude Klassik Fund-A USD Karsten Schroeder 9/1/2009 1.04 17.36Global Sigma Group LLC Global Sigma Plus Program Dr. Hanming Rao 11/1/2009 6.41 15.13 Paolo CompagnoLow Volatility Asset Management Ltd The 1.2 Fund Ltd 6/20/2008 7.59 14.09 Andrea De Lorenzo Smit John R HummelAIS Futures Management LLC AIS Futures Fund LP (3X-6X) 4/1/1993 0.59 13.74 Bradley C Stern Jaffray WoodriffQuantitative Investment Management LLC Quantitative Global Fund 3x LLC 6/13/2005 0.51 12.36 Michael Geismar Fred G SchutzmanBriarwood Capital Management Inc Briarwood Diversified Trading Program 07/12/2001 1.06 10.7 Paul J Demarco Jr Conor MacManusLCJ Investments SA LCJ FX Fund-A EUR 9/7/2007 1.35 7.61 Jonathan TullettBy Five-Year Annualized ReturnsFirm Fund manager inception date sharpe ratio Return % Yves BalcerFort LP FORT Global Diversified Program 10/31/1993 1.15 17.47 Sanjiv KumarHawksbill Capital Management Hawksbill Global Diversified Program Thomas Shanks 11/1/1988 0.68 15.37 Jaffray WoodriffQuantitative Investment Management LLC Quantitative Global Fund 3x LLC 6/13/2005 0.66 15.26 Michael GeismarMan Investments Ltd AHL Evolution Ltd Timothy Wong 11/1/2006 1.2 15.07 Yves BalcerFort LP FORT Global Contrarian Program 10/01/2002 1.1 13.01 Sanjiv KumarSaxon Investment Co Saxon Aggressive Diversified Program Howard Seidler 11/1/1993 1.14 12.91Bayesian Efficient Asset Management LLC BEAM LLC-Multi-Strategy Program Dr Jose Mario Quintana 6/19/2007 1.18 12.48Mulvaney Capital Management Ltd The Mulvaney Global Markets Master Fund Ltd Paul G Mulvaney 4/30/1999 0.5 12.38Dunn Capital Management LLC World Monetary & Agriculture Program William Dunn 11/1/1984 0.54 11.25Paskewitz Asset Management LLC Paskewitz Contrarian S&P 500 Stock Index Bradford Paskewitz 12/1/2003 0.6 8.97 For Sharpe Ratio Calculation MEthodology Type FLDS Sharpe <Go> on Bloomberg. “Risk Free Rates” IDOC 2047613 <go>  1 2 3 4 5 6 7 8 9 10 11 12 
  10. 10.  01.15.13 Bloomberg Brief | Hedge Funds 10league table: prime brokersThe table below lists prime brokers of U.S. hedge funds by their clients’ fund assets, as reported by the funds to Bloomberg data. “Fund clients” refers toindividual funds with each prime broker in Bloomberg’s database. For questions contact Anibal Arrascue at Fund clients corresponding assets (US$ millions)Goldman Sachs Group Inc. 152 41,329UBS AG 85 28,773JP Morgan Chase & Co. 104 28,491Morgan Stanley 92 23,610Citigroup Inc. 39 7,696Credit Suisse AG 25 7,352Banc of America Securities LLC 49 5,612Newedge Group SA 35 3,634Deutsche Bank AG 24 3,602Jefferies & Co 32 1,976Total Funds Surveyed 728Hedge Funds Added to Bloomberg This WeekThe following hedge funds were added to Bloomberg’s database this week. Access the Hedge Fund Database Portal by typing HFND <GO> on yourBloomberg Terminal. To view U.S. hedge fund managers, users must fill out an Accredited Investor Form (Option 13). Manager Inception Ticker bloomberg id Fund Manager Management Company strategy administrator Location Date GRAMBOB KY BBG003S3WHP6 DEREK KWONG Basic Asset Management Ltd Long Biased Hong Kong 10/25/2010 ABN AMRO Fund Services Cayman Ltd Mortgage-Backed BKOPPSA KY BBG003S0FBV7 OLIVIER GOZLAN BK Advisory Ltd U.K. 11/30/2012 Apex Fund Services Ltd Arbitrage Event Driven Diversi- Wells Fargo Global Fund Services BREQRVF US BBG003T53V08 MARTIN SMITH Black River Asset Management LLC U.S. 3/1/2012 fied Ireland Ltd Fixed Income CHMS2EU KY BBG003SDJM78 LOIC FERY Chenavari Credit Partners LLP U.K. 2/29/2012 Quintillion Ltd Diversified Emerging Market CCFFSA1 KY BBG003SGHG49 LUIS A PIMENTA GARCIA Corttex Capital Gestao Recursos Ltda Brazil 1/2/2013 UBS Fund Services Cayman Ltd Equity Managed Futures AITFFKY KY BBG003S44FG9 TEAM MANAGED EuroFin Investments Pte Ltd Singapore 11/30/2012 Standard Chartered Bank Systematic Emerging Market GRAMDEE US BBG003SDLV11 ROBERT KOENIGSBERGER Gramercy Fund Management LLC U.S. 3/1/2010 International Fund Services NA LLC Equity NEBCRFA KY BBG003S42Y43 TEAM MANAGED Hesperian Capital Management Ltd Long Short Canada 7/1/2011 Admiral Administration Ltd Lyxor Asset Management Ireland Managed Futures Societe Generale Securities Services LYXCFUU ID BBG003SB2J31 PHILIPPE BALTHAZARD Ireland 3/28/2011 Ltd/Ireland Systematic Paris OCEBZEQ KY BBG003S9XNQ8 LEONARDO MESSER Oceana Investimentos Ltda Long Biased Brazil 12/31/2012 UBS Fund Services Cayman Ltd MONSREMS CN BBG003RYRR46 FRANCOIS MAGNY RDA Capital Multi Strategy Canada 1/1/2011 CIBC Mellon Global Securities Services SREDGAA GU BBG003T1SZF5 TEAM MANAGED Sciens Group Fund Services Ltd Multi Strategy Guernsey 2/1/2013 HSBC Securities Services Guernsey Ltd WAINSCP US BBG003S451G9 THOMAS S GILBERT Wainscott Capital Management LLC Long Short U.S. 9/1/2011 Wainscott Capital Management LLC  1 2 3 4 5 6 7 8 9 10 11 12 
  11. 11.  01.15.13 Bloomberg Brief | Hedge Funds 11Calendar  To submit an event email daTe event featuring location contact / registration Jan. 16, IAFEs The "Retailization" of Alternative Kirk Strawn, Altegris; Jason Schwarz, Wilshire Funds PwC, New York 6pm Investments Management; Andrew Hoffman, PIMCO. Jan. 16, Hedge Fund Symposium South Florida: Luis Laboy, Everest Capital; Michael Levas, Olympian Turnberry Isle, 5pm Hedge Funds in the New Year Group; David Friedland, Magnum. Miami David McCormick, Bridgewater; Wilbur Ross; Council on Foreign Rela- Jan. 17 Bloomberg Global Markets Summit Dinakar Singh, TPG-Axon. tions, New York For more information, call +1 845-260-2785 or Jan. 17 National Audubon Society gala Honoring Louis Moore Bacon. Plaza Hotel, New York email Jan. 17, 100 Women in Hedge Funds Washington, D.C. (location Keynote speaker Alfred Pollard, general counsel, FHFA. 6pm Winter Cocktails and Networking Reception provided to attendees) First-ever "hedge fund immersion" program where criti-Jan. 21-24 GAIM USA 2013 Boca Raton Resort & Club cal issues are discussed in classroom setting. Keynotes by Scott Minerd, Guggenheim; Marriott LondonJan. 21-22 LSEs Hedge Funds & Private Equity Randall Dillard, Liongate. Grosvenor Square Fourth annual conference on quantitative strategies, Jan. 23 CBOE/Bloomberg Equity Volatility Symposium Hilton Toronto E-mail market trends and the outlook for volatility. Presenters Ray Carroll, Breton Hill; Geoffrey Fila, Gal- New York (exact location Jan. 23 2013 Newedge Macro Outlook tere; Mark Spindel, Potomac River. provided to attendees) "Celebrate fund excellence in the European hedge fund Grosvenor House Hotel, Jan. 24 EuroHedge Awards 2012 industry." London Jan. 24, 100 Women in Hedge Funds Greenwich, Conn. (location Joan Solotar, Blackstone Group. 5:30pm View from the Top provided to attendees) Crosby Street Hotel, Jan. 25 HFMWeek U.S. Breakfast Briefing "Investor Outlook for 2013" New York "New in 2013 Meet the Manager booths and business The Ritz -Carlton KeyJan. 28-30 Managed Funds Association Network 2013 development salons." Biscayne, Florida "Next generation education for single and multi-family IntercontinentalJan. 29-30 National Family Office Forum offices." Los Angeles Jan. 30, 100 Women in Hedge Funds Jane Mendillo, Harvard; Larry Schloss, NYC Retirement Deutsche Bank, 6pm 2013 and Beyond - The CIO Perspective Systems; Ash Williams, Florida Board of Administration. New York Jan. 30- One-on-one meetings between qualified investors, al- Fontainebleu AlphaMetrix Miami 2013 Summit Feb. 1 locators and hedge funds. Miami Beach Institutional Investors 19th Annual Alpha Daniel Levinson, Atalaya; Peter Lupoff, Grayco; Westin Canal Place, Feb. 5-7 Hedge East Conference Jason Huemer, Visium. New Orleans 100 Women in Hedge Funds Setting the Anne Casscells, Aetos; Lisa OConnor, Mellon; Susan Blackrock, Feb. 6 Course in 2013: Women Investment Managers Preston, CalCEF; Alyssa Rieder, Dignity Health. San Francisco 7th Annual Alternative Investment Consul- "How to develop new business opportunities" from Hyatt Regency Greenwich,Feb. 7, 8am tants Summit consultants and family offices. Connecticut Hedge Funds Care Young Professionals Com- Parlor Private Club, of contact Sarah Blaker atFeb. 7, 7pm Cocktail party fundraiser. Open bar and hors doeuvres. mittees Hedge Funds Night Out New York "Identify the best-performing U.S. hedge fund managers Gotham Hall, Feb. 12 Absolute Return Awards for 2012 based on risk-adjusted returns." New York Feb. 13, The Museum of Mathemat- IAFEs Financial Engineer of the Year Gala Reception followed by award dinner and ceremony. 6:30pm ics, New York "Navigate regulation to gain investment from Europe, New York (exact location to Feb. 27 HFMWeeks UCITS for U.S. Managers Asia and LatAm." be determined) continued on next page  1 2 3 4 5 6 7 8 9 10 11 12 
  12. 12.  01.15.13 Bloomberg Brief | Hedge Funds 12Calendarcontinued from previous page daTe event featuring location contact / registration Connecticut Hedge Fund Associations Indian Harbor Yacht Club, Feb. 28 Agenda to be determined. Liquid Alternatives Greenwich, Connecticut Opal Financial Grops "Dialogue driven panel discussions led by consultants Crowne Plaza Times Square, March 4 Family Office Winter Forum and family offices." New York "Where Middle East investors access global hedge Jumeirah Beah Hotel, March 4-5 Hedge Funds World Middle East funds." Dubai March 7, Hedge Funds Cares 15th Annual New York Cipriani 42nd Street, or contact Sarah Blaker at Fundraising dinner. 6pm Open Your Heart to the Children Benefit New York "Will give focus to key issues of importance to serious British Museum, March 13 Bloomberg #FXDebates participants in the foreign exchange markets." London IIs 5th Annual Middle East Institutional Daniel James, Aviva Investors; Emirates Palace, March 13 www.iiforums/meiis Investor Summit Greg Saichin, Pioneer Investments. Abu Dhabi March IMNs 8th Annual Foundations & Endow- Bill Lockyer, State Treasurer, and Dave Jones, Insurance Hyatt Regency Huntington 14-15 ments Summit Commissioner, State of California. Beach, California March David Marcus, Juilliard School; Christine Kelleher, Copacabana Palace Hotel, Latin Markets Hedge Fund Brazil Forum 18-19 Georgetown; Dan Slack, Colorado Fire & Police. Rio de Janeiro Goldman Sachss Fifth Annual April 23 Capital introduction event . New York Private event by invitation only U.S. Hedge Fund Symposium Goldman Sachss Fifth Annual U.S. Yankee Stadium, Bronx, April 23 Capital introduction event . By invitation only Hedge Fund Symposium New York TRADEBOOK BUYSIDE MARKET INSIGHT EVENT: USING RISK TO RAISE ASSETS IN 2013 >>> How are alternative investments being used to fulfill the needs of institutional investors? >>> What are the preferred investment structures and investment vehicles for institutions? >>> How can hedge fund managers position their offerings to win allocations? MODERATOR: John Netto: President, M3 Capital and author of The Global Macro Edge PANELISTS: Steve Hotovec: COO, Sitra LLC Curt Overway: President, Natixis Global Asset Management Saro Picciotto: Chairman and CEO, of Wainwright Investment Counsel Brian Weiner: Senior Managing Director, Family Endowment Partners DATE: Tuesday, January 29th 2013 5:00-7:30 PM LOCATION: 731 Lexington Ave., New York, NY RSVP:  1 2 3 4 5 6 7 8 9 10 11 12 
  13. 13.  01.15.13 Bloomberg Brief | Hedge Funds 13SpotlightExis Capital’s Adam Sender on How to Trade Global Markets Amid Government Interventions selling, not a potential shift in monetary saying they had the votes and at the timeAdam Sender, founder and chief investment policy coming. The previous year, a similar consensus was Boehner could deliver theofficer of Exis Capital Management, spoke trade took place and gold and silver had House. Because of that, most of the streetto Nathaniel Baker about his fund’s discretion- their best months of the year bouncing was looking at it as a non-event and forary global macro strategy, how it was able toproduce double digit returns the last two years back in January. When the minutes hit, we us to go on our merry way. Our style is toand why U.S. equities may be on the verge of a knew the market was playing for a repeat look for outlier events and inflection pointssecular bull market. of the same trade so we got short silver so we had traders watching every news and it dropped about 4 percent or so. source. When the news hit that the vote was going to be postponed, we were ableQ: Your fund was up 20 percent in 2011 Q: What are some other areas that are to get short a large S&P futures positionand 15 percent last year. Few hedge ripe for opportunities? ahead of the market dropping 40+ handlesfunds hit double digits both years. What A: Our thesis, and why we tend to be long during a normally quiet period.differentiates your strategy? risk currently, is that market internals andA: We specialize in short-term directional seasonals are very strong right now. In Q: If there is a big equities rally, howtrading, which I don’t think many hedge the U.S. equity market, a lot of small-cap much of a concern is it that the Fedfund managers are still doing. Our forte is names and beat-up stocks are rallying. might decide to remove the punchbowl acapturing inflection points in global mar- There’s clearly a lot of new money coming little early, or at least make noise to thatkets. Basically whatever’s volatile, wherever in. We could potentially be on the cusp of effect? Or is that premature?we think we’re going to get the biggest a massive asset allocation where flows A: For my purposes it’s premature but it’sbang for our buck as quickly as possible, move out of bonds and into stocks. China certainly something that we think where we’re looking to trade. We start data has been getting better, Europe One concern coming into this month’swith a top-down world view: what we think is stable and with the fiscal cliff hurdle payroll release was the possibility that theabout the economy, where the equity mar- jumped, it just seems as though there is a number might be stronger than expectedkets are going, what fiscal and monetary green light for guys to put money to work. and it would cause the bonds to collapse,policies are in place, and from there we try Our concerns are what happens when we leading to a worry about a backup into narrow down our investment universe get closer to the end of February and the rates. That being said, interest rates areto find the best alpha-generating product government starts to be a factor again in so low, I think as long as interest ratesto reflect that view. So if we’re bearish on terms of day-to-day trading. rise slowly, the market will be able to climbChina we might short copper or a machin- that wall of worry. At some point, maybeery company levered to Asia or even the Q: That tripped up a lot of folks in 2012. when the 30-year gets above 5 percentAussie dollar. We’re really migrating all over How did you, a macro fund, avoid it? or so, it will be a concern. I like to stay inthe world and looking for what the best A: We spent a lot of time and energy on harmony with the trend. This asset alloca-instrument is to trade at that moment. different scenarios and potential market re- tion that I’m talking about, out of bonds actions. One of the best trades that we had and into equities, could potentially be theQ: And then you won’t stay in these in December was the day that Speaker beginning of a brand new secular bullpositions very long? Boehner was going to hold the vote for market. I wouldn’t be surprised at all toA: No, our average holding period is mea- Plan B. Earlier in the day, Representa- see the U.S. equity market have a muchsured in days and weeks, not months and tive Cantor had called a press conference better year than most people predict.years. But we are not day-trading looking tomake pennies or doing what these high-frequency traders are doing. Age: 43Q: Got it. Can you provide an example ofyour strategy in action? Hometowne: Woodmere, New YorkA: When the Fed minutes came out Family: Married, two kidsthis month it was clear something had Education: University of Michigan (B.A., history)changed regarding the very consensusQE-infinity trade. The Fed expressed Professional Background: Founder, Exis Capital Management, in 1998.potential concerns arising in the future Previously portfolio manager at SAC Capital Advisors.regarding their balance sheet and silverand gold at that moment became very vul- Charitable Work: Business committee, Metropolitan Museum of Art.nerable. Both metals had been performing Trustee at Parish Museum and JCC Miami.poorly into the end of the year and thecommon view was it was due to year-end Favorite New York City Restaurant: Emilio’s Ballato  1 2 3 4 5 6 7 8 9 10 11 12