This document is being provided for the exclusive use of JEAN-MARC MELCHIOR at EOS MANAGEMENT INC.

BRIEF
By NATHANIEL E. BAkER

Bloomberg

News, aNalysis aNd CommeNtary

Hedge Funds

01.03.12

Arrowhawks Fan Said to Start Arbalet Capital

arrowhawk capital Partners Jennifer fan will start arbalet capital llc on April 1 with at least $500 million, according to two people with knowledge of the hedge-fund managers plan. Arbalet, based in Darien, Connecticut, will employ the same commodities swaps trading strategy Fan and her team have used since September 2009, said one of the people. Fans strategy returned 14 percent this year through November, according to the second person. Arrowhawk, which has assets of $575 million and is also based in Darien, is winding down because it failed to raise as much capital as hoped, Absolute Return+Alpha reported on its website Dec. 20. michael litt, previously a partner at frontpoint Partners llc, started the firm in 2008. The multi-strategy fund, which will redeem investors by March 31, returned 0 percent and 1 percent in 2011 through Nov. 30, depending on the share class, the second person said, compared with a decline of 1.8 percent for the category. Fan referred questions to Kristin mott, an Arrowhawk spokeswoman, who declined to comment. The new firm will retain 10 people from Arrowhawk, including Ken brown, who will be chief operating and financial officer, and rich itri, who will be chief information and technology officer, according to an investor presentation from Arbalet that was obtained by Bloomberg News. Arbalet will hire two new people, including a chief executive officer, the second person said. Litt, Arrowhawks chief investment officer, wont be joining Arbalet, the person said. Arbalet, named for a type of crossbow, will retain credit suisse ag, Arrowhawks prime broker, and rothstein Kass, its Jennifer Fan auditor, according to the person. Commodity hedge funds attracted $8.66 billion from investors in the years first 11 months, according to New york-based eVestment|HFN. Assets under management rose 6 percent to $82.7 billion, the firm estimated. Opening a commodity hedge fund is becoming more difficult because managers need to comply with more demands from clients, said marcus storr, head of hedge funds at feri trust gmbh in Bad Homburg, Germany. you need more money to launch, you need more professional backup, said Storr, whose company manages about 16 billion euros ($20.7 billion) of assets, including investments in 12 commodity hedge funds. A new fund probably needs to raise about $100 million from investors to generate the income needed to pay for expenses such as offices and trading systems, said david mooney, the CIO of schroders newfinance capital in London, who has been involved in commodities for more than two decades.
six degrees of tiger management A chart tracking some of the 30-plus Tiger cubs and their offspring. page 4 aib to add event-driven managers The Dublin-based money manager will add the UCITS-compliant funds to its hedge fund holdings this year. page 5 returns in brief The Eurekahedge index was down 4.1 percent in 2011, its first decline since 2008. page 2 cqss love to start ucits fund at gam Tim Love has left CQS and will start an emerging markets UCITS fund for GAM next month. page 5 13f forensics: sears holdings Hedge funds were net sellers of the largest U.S. department store chains shares during the three months ending September 30. page 6 fortress to launch tmt hedge fund The Fortress TMT Fund will be managed by former Galleon Group portfolio manager Peter Swartz. page 3 dealers tighten terms on funds: fed Wall Street dealers are making it tougher for hedge funds to finance trading of securities and derivatives, a Federal Reserve survey showed. page 7 over the hedge Steve Cohen to bid for LA Dodgers, Paulson expands black-tie portfolio. page 8 calendar pages 9-10 sPotlight First Eagle Investment Management Portfolio Manager Jason Dahl discusses his views on merger arbitrage opportunities. page 11

With assistance from Chanyaporn Chanjaroen in Singapore and Lars Paulsson in London.

new lAunCheS not FeAtured in thiS iSSue

Firm Pavilion Capital Pte Czech asset management lP, old Greenwich, Connecticut Fund(S)/StrAtegy to invest in privately-held firms in North asian markets. sJC onshore direct lending Fund i onshore direct lending Fund ii portFolio mAnAger(S) tow Heng tan stephen Czech expeCted Aum At lAunCh N/a $1.1 billion $750 million lAunCh dAte(S) N/a January may

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01.03.12 Bloomberg Brief | Hedge Funds

returnS in BrieF
John Paulson lost 10.5 percent in his Gold Fund and 35 percent in his Paulson Advantage Fund for the period from Dec. 28, 2010 through Dec. 20, 2011, according to people familiar with the funds performance. brevan howard asset management llP, the hedge fund founded by alan howard, gained 12.6 percent in its Master Fund through Nov. 30 last year. The $27 billion fund had its worst year in 2010, when it returned 1 percent. vulpes investment managements Testudo Fund, which is heavily invested in precious metals and the mining industry, gained 2.5 percent in 2011. The Russian Opportunities Fund declined about 10 percent in the same period. The Singapore-based firms long Asian volatility and arbitrage fund LAVA, gained 6 percent after launching in May 1. Vulpes is run by stephen diggle. tufton oceanic ltd.s $1.5 billion Oceanic Hedge Fund gained 6.8 percent in the first 11 months of the year.
-3.79%

hedge fund returns

Bloomberg BAIF indices, which represent all funds tracked by Bloomberg data, are the source of the below hedge fund and fund of funds data.
Hedge Funds Funds of Funds S&P 500 15.06%
2010 total returns

2-Year Treasuries
(Merrill Lynch Total Return Index)

2011 YTD total returns

8.18%

3.90%* 2.47% 1.46%

1.08%

-3.11%
*from Feb. 26, 2010

The Eurekahedge Hedge Fund Index was down 4.1 percent in 2011, the Singaporebased data provider said in an e-mailed statement today. The benchmark measure fell for the first time since 2008, when it dropped a record 10 percent, according to the report. Eurekahedge started compiling the industrys data in 2000.

bloomberg brief hedge funds newsletter Ted Merz executive editor tmerz@bloomberg.net 212-617-2309 bloomberg news Rob Urban managing editor robprag@bloomberg.net 212-617-5192

Source: Bloomberg News

returnS By StrAtegy
StrAtegy
mortgage-Backed arbitrage Fixed income arbitrage asset-Backed securities Capital structure arbitrage Convertible arbitrage short-Biased equities market-Neutral Cta/managed Futures multi-strategy merger arbitrage long/short equities equity statistical arbitrage Global macro emerging market debt distressed securities long Biased equities
Source: Bloomberg Hedge Fund Indices Type HFND<GO> to view return statistics

BloomBerg index Code

BBHFmarB BBHFFarB BBHFastB BBHFCred BBHFCarB BBHFsHrt BBHFmNFl BBHFmGdF BBHFmlti BBHFmerG BBHFlseQ BBHFstat BBHFmCro BBHFemdB BBHFdist BBHFloNG

2010
24.6 11.2 13.3 2.1 7.3 1.7 0.1 9.1 3.7 2.1 7.3 3.4 4.4 5.3 1.7 11.0

oCtoBer 2011
0.0 0.6 -0.8 -0.3 0.1 -1.8 -2.0 3.8 -1.0 -1.1 -2.1 -9.0 -1.5 0.1 -0.3 -1.9

2011 through nov. 30

10.6 4.3 3.1 1.2 -0.3 -0.6 -1.2 -1.6 -1.8 -2.1 -3.8 -4.4 -4.8 -6.3 -6.4 -11.1

hedge funds Nathaniel E. Baker editors nbaker14@bloomberg.net 212-617-2741 Melissa Karsh mkarsh@bloomberg.net 212-617-4557 reporter Kelly Bit kbit@bloomberg.net 212-617-1097 contributing Katherine Burton reporters kburton@bloomberg.net 212-617-2335 Saijel Kishan skishan@bloomberg.net 212-617-6662 contributing Matthew Kelly data editors mkelly17@bloomberg.net 609-279-5064 Anibal Arrascue aarrascue@bloomberg.net 609-279-5084 newsletter Nick Ferris business manager nferris2@bloomberg.net 212-617-6975 advertising bbrief@bloomberg.net 212-617-6975 reprints & Lori Husted Permissions lori.husted@theygsgroup.com 717-505-9701 To subscribe via the Bloomberg Professional Terminal type BRIEF <GO> or on the web at www.bloomberg.com/brief/hedgefunds 2011 Bloomberg LP. All rights reserved. This newsletter and its contents may not be forwarded or redistributed without the prior consent of Bloomberg. Please contact our reprints and permissions group listed above for more information.

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01.03.12 Bloomberg Brief | Hedge Funds

Fund FoCuS
ex-galleon manager peter Swartz to Start technology hedge Fund for Fortress
By SABRINA WILLMER

Peter swartz, a former galleon group llc portfolio manager, is starting a new technology hedge fund for fortress investment group llc. Swartz will be chief investment officer of the Fortress TMT Fund, which will make bets on technology, media and telecommunications stocks, according to a December investor presentation, a copy of which was obtained by Bloomberg News. Former Galleon colleagues michael levine and murali abburi will join him on the fund as equity analysts. The new fund will invest as much as 50 percent of its assets in U.S. companies, with the rest allocated to Europe, China, Taiwan, korea and Japan, according to the presentation, which didnt include a fundraising target. The fund expects to take about 25 long and short positions. gordon runte, a spokesman for New

B809HalfPageAd:Layout 1 11/17/11 12:57 PM Page 1

york-based Fortress, declined to comment. The publicly traded firm has $43.6 billion in assets under management, including hedge funds, private equity and other investments. Swartz has been a senior portfolio manager for the Fortress Asia Macro Fund since March. He was hired in 2010 as a managing director and equity analyst covering technology, media and telecom for the Fortress Macro Fund. The Fortress Asia Macro lost a net 1.2 percent since March, according to the presentation. Levine and Abburi, who will be managing directors of the fund, were hired by Fortress in March 2010, according to the presentation. michael Kwon, formerly of ubs ag, will be vice president and equity analyst, the presentation says. trang Pham, previously at deutsche bang ags principal investments group in Vietnam, will be an equity analyst, it adds.

The fund will have two share classes, the first charging a management fee of 1.5 percent with an 18 percent performance incentive and the second 2 percent and 20 percent. Fortress Chief Executive Officer daniel mudd last month took a leave of absence following a lawsuit by the U.S. Securities and Exchange Commission over his role as the former head of Fannie Mae. He was replaced on an interim basis by randal a. nardone, the companys cofounder. Galleon was the target of a nine-year investigation by U.S. officials, culminating in the May conviction of co-founder raj rajaratnam on insider-trading charges. Rajaratnam, 54, last month began serving an 11-year sentence at a federal prison in Massachusetts.
With assistance from Nathaniel E. Baker in New York.

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January 19 & 20, 2012

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01.03.12 Bloomberg Brief | Hedge Funds

Six degreeS oF tiger mAnAgement

Julian robertsons tiger management has spawned at least 30 so-called Tiger cubs--fund managers who are Tiger Management alumni, Bloomberg Markets reports in its February issue. The chart on the right displays some of this movement, starting in the 12 oclock position with lee ainslies maverick capital management lP. The first degree of separation from Tiger then continues chronologically in a clockwise rotation, with the year of launch drawn on or near the corresponding arrow. Some seconddegree movement is also displayed in this fashion. chase coleman, who started tiger global lP in 2000, was not included in the chart. The information was compiled from Bloomberg News and other reports and individuals career histories as displayed on their Bloomberg biography pages. In a few instances, LinkedIn accounts were used to verify or source dates. While the information is deemed to be accurate, it may not be comprehensive or exhaustive.
Nathaniel E. Baker

Lee Hobson Highside Capital Lee Ainslie Maverick Capital

Bob Bishop Impala Asset Management (via Soros Fund Management) Roberto Mignone Bridger Management

John Thaler JAT Capital Marc Andersen, Eliav Assouline Axial Capital 1993

David Gerstenhaber Argonaut Capital David Saunders K2 Advisors

John Griffin Blue Ridge Capital

Matt Crake Greenheart Capital

Paul Hudson Glade Brook Capital Ashwin Vasan Trend Capital

2011

Chris Shumway Shumway Capital

Larry Bowman Bowman Capital Robert Karr Joho Capital

1997

Steve Mandel Lone Pine Capital Steve Shapiro Intrepid Capital

Tom Wilcox Cider Mill Rob Ellis Ridgefield Capital

Tiger Management Julian Robertson

Tom McAuley North Sound Capital 1998 2001 1999 Rob Ellis & Paul Touradji Catequil Asset Management

James Lyle Millgate Capital

Paul Spieldenner, Quinn Riordan Bamboo Capital 2004 Quinn Riordan Elmwood Advisors

Paul Touradji Touradji Capital

Peter Vig Roundrock Capital 2001 Phil Duff & Mike Kelly FrontPoint Partners Patrick Earle KiCap 2000

Philippe Laffont Coatue Rob Citrone Discovery Capital 2000 Tom Brown Second Curve Capital Dan Morehead Atriax

Andreas Halvorsen Viking Global

Phil Duff Duff Capital Richard Davies JGL Investments 2005

Martin Hughes Toscafund

John Lykouretzos Hoplite Capital Dan Morehead Pantera Capital

Anson Beard Archimedes Capital

Kris Kristynik Longhorn Capital

Firm no longer in business

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01.03.12 Bloomberg Brief | Hedge Funds

BrieF exCluSiveS
on the move
CQSs tim love to Join gAm, Start uCitS Fund
tim love, who was cqs uK llPs senior portfolio manager for emerging markets, has left the firm and will join gam holding ag in London next month where he will launch a UCITS fund. Love, who was at CQS for a material period, said hes very excited to be at GAM, in a telephone interview. The GAM Star Emerging Equity Fund will launch by the end of the first quarter, Love said. It will likely be focused on Asia and Latin America with a Mid East overweight bias, he added. We opted to go long-biased due to valuation in emerging markets, which are at levels not seen since the first quarter of 2009, Love said about the new fund. Were not out of the Tim Love woods on EU risks but emerging market equitities look compelling, he said, putting the chances of EU shock at around 30 percent. At GAM, Love said he will report to david solo. He does not have a replacement yet at CQS.

trend wAtCh
hedge funds raise bullish bets by most in 16 months
By DEBARATI ROy

Nathaniel E. Baker

n.y. State Common retirement Funds davidson resigns

charles davidson, director of opportunistic investments at the new York state common retirement fund, resigned to pursue other opportunities, said eric sumberg, spokesman for the Office of the State Comptroller, in a telephone interview. Sumberg did not provide details. Davidson was previously principal at the teacher retirement system of texas. He was also a director of financial institutions at Standard & Poors, research analyst at axa alternative advisors llc and associate at the canadian imperial bank of commerce. The fund invests about $140 billion for more than one million employees and retirees from New york state governments. Comptroller thomas dinapoli is the sole trustee and manager.

Kelly Bit

mAndAteS
AiB to Add event-driven uCitS-Compliant Funds
aib investment managers ltd., the Dublin-based money manager with 8.4 billion euros ($11 billion) in assets, is searching for one or two event-driven UCITS-compliant funds to add to its hedge fund holdings early this year. AIB will also consider equity market neutral, global macro, currency, managed futures and commodities funds that are UCITS-compliant, according to eugene Kiernan, head of investment solutions. The firm will analyze whether a hedge funds strategy can work in a UCITS framework, kiernan said. AIB prefers daily liquidity, a request that comes from its clients, most of whom are pension funds, kiernan said in a telephone interview. AIBs only restriction regarding assets is that it prefers that its allocations comprise more than 10 percent of a hedge funds size. AIB typically invests about 15 million to 30 million euros initially and has about $850 million in alternative assets.
Kelly Bit

Hedge funds and other large speculators increased long commodity bets by the most since August 2010. Combined net-long positions across 18 U.S. futures and options increased by 18 percent in the week ended Dec. 27, Commodity Futures Trading Commission data show. Soybean holdings jumped more than ninefold and those for corn reached a five-week high. Speculators trimmed bets on declining prices for copper, cocoa, wheat, and soybean oil and meal. While the Standard & Poors GSCI Total Return Index of 24 commodities declined 1.2 percent last year, it rallied 12 percent from a 10-month low reached in October on mounting optimism about growth. The S&P GSCI Total Return Index rose 9 percent last quarter, snapping two consecutive three-month drops. Twelve of the 24 raw materials tracked by the S&P GSCI rose last week. Gains were led by wheat traded in kansas City, which surged 6.2 percent. Cotton climbed 5.2 percent. Silver, cocoa, oil in New york and heating oil rose at least 2 percent today. On a total return basis, commodities lost 1.2 percent last year, the first annual drop since 2008. Money managers have cut bets on higher prices by 65 percent since this years high in April. We have seen people reducing risks, and the future of commodities largely depends on whether Europe and U.S. can avoid a recession, said nic Johnson, who helps manage $30 billion in commodity assets at Pacific investment management co. in Newport Beach, California. A measure of 11 U.S. farm goods showed speculators increased bullish bets in agricultural commodities by 35 percent to 273,677 contracts, the biggest gain since July 2010.

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01.03.12 Bloomberg Brief | Hedge Funds

13F ForenSiCS: SeArS holdingS

Hedge funds were net sellers of sears holdings corp. stock in the third quarter, divesting 466,523 shares on aggregate, Bloomberg data shows. tiger global management llc sold 310,683 shares of the largest U.S. department store chains stock during the three months ending September 30, the most of any of the retailing companys shareholders, reducing its position by 62 percent. Kinetics asset management inc. added 390,418 shares during the quarter, the most among all shareholders. esl Partners Founder edward lampert, the companys largest shareholder, has presided over 18 consecutive quarters of declining sales. On Dec. 28, Sears reported that it would close as many as 120 locations after same-store sales fell 5.2 percent in the eight weeks ended Dec. 25. By contrast, such sales in the department-store sector will climb an estimated 4 percent in November and December, compared with the same period a year ago, according to the International Council of Shopping Centers, a New york-based trade group. Lampert, 49, has reduced costs since becoming chairman in 2005, closing 171 large U.S. stores and cutting the headcount by about 12 percent. Sears employed 312,000 people as of January, down from 355,000 in June 2006, according to data compiled by Bloomberg. Meanwhile, his hedge funds have made money on the original investment.

Nathaniel E. Baker, Cotten Timberlake and Miles Weiss

largest hedge fund shareholders as of september 30

Fund Amount held vAlue on Sept. 30* vAlue on deC. 30* lAteSt ChAnge (ShAreS) lAteSt ChAnge (perCent) perCentAge oF portFolio

edward s. lampert

17,063,556

981

542

N/a

Horizon asset management inc.

2,804,131

161

89

-119,229

-4

4.8

Kinetics asset management inc.

1,116,145

64

35

390,418

54

2.9

empyrean Capital Partners lP

889,908

51

28

45,000

3.3

Fine Capital Partners lP

221,200

13

221,200

100

2.1

tiger Global management llC

189,317

11

-310,683

-62

0.2

water street Capital inc.

100,887

0.3

Great oaks Capital management

59,128

18,800

47

1.8

rmB Capital management llC

53,680

-3,358

-6

0.4

Hanawalt associates
* $millions

35,019

0.6

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01.03.12 Bloomberg Brief | Hedge Funds

regulAtory/CompliAnCe
derivatives rules delayed in SeC dodd-Frank plan
The U.S. Securities and Exchange Commission is delaying action on rules for regulating derivatives and credit-rating firms until the second half of 2012, according to an updated calendar. The agency posted a revised schedule on its website today, shifting expected approval of a number of Dodd-Frank Act rules from a January-June time frame to July-December instead. The revision also removed two items from the calendar -- a proposal on defining the fiduciary duty of broker-dealers and adoption of a conflicts-of-interest ban in assetbacked securities deals. Those rules moved to an undetermined-date category. The timetable for implementing Dodd-Frank rules has slipped for the SEC and other agencies because of the number and complexity of rules tightening financial regulation in the wake of the 2008 financial crisis. We have already proposed or adopted more than three-quarters of the rulemaking required by the Dodd-Frank Act, and the updated schedule on the website reflects our plans for the remaining rulemaking, said John nester, an SEC spokesman, in an e-mail.

fed says dealers tighten terms on hedge funds

By SCOTT LANMAN, MATTHEW LEISING

Jesse Hamilton

Cme Fines infinium oil trader for high-Speed trading error

cme group inc. fined neil brookes, a trader at high-frequency-trading firm infinium capital management, $50,000 for acts detrimental to the marketplace for a Feb. 3, 2010, malfunction of an algorithm. Brookes, who didnt admit or deny wrongdoing, was testing an algorithm on Feb. 3, 2010 when, the system placed 6,767 orders for March 2010 crude futures, of which 4,612 were purchased for prices ranging from $76.67 to $77.45, CME said in a disciplinary notice. Brookes relied on a safety system that was supposed to shut down if Infinium obtained 10 or more fills per second, according to the disciplinary notice. Brookes was also suspended from trading for 25 business days. He couldnt be reached for comment. CME fined Chicago-based Infinium Capital Management in November a total of $850,000, including $350,000 for the Feb. 3, 2010, malfunction.

Asjylyn Loder

ex-lawyer rothstein Says Funds didnt warn investors

scott rothstein, the Florida lawyer sentenced to 50 years in prison for running a $1.2 billion Ponzi scheme, said officials at three Manhattan hedge funds helped him prop up the fraud in its final months, according to transcripts of a court deposition. Rothstein, 49, said his scheme began to collapse early in 2009, when he could no longer pay customers. Officials at Platinum Partners value arbitrage, centurion structured growth llc, and level 3 capital fund agreed not to tell potential new investors he failed to make payments to them, he testified. The funds were going to give us a positive credit rating, he said in testimony released Dec. 28. We were going to use as much of the new money coming in to pay them off, and in fact thats what we did. Rothstein was later asked about false exculpatory e-mails he had sent to co-conspirators. The questioning took place behind closed doors in a Miami courtroom. Transcripts are being released on the website of the plaintiffs law firm conrad & scherer. Mr. Rothsteins claims that the funds or their managers would lie for him are absolutely false and are flatly inconsistent with his unequivocal statement that the funds were not his co-conspirators, ray casas, a spokesman for the funds, said Dec. 29 by e-mail. He admits he has no knowledge that anyone at the funds lied for him, and not a single one of the dozens of investors in Rothsteins scheme has said that the funds recommended the investment to them.

Wall Street dealers made it tougher for hedge funds to finance trading of securities and derivatives in the three months through November, a Federal Reserve survey showed. Responses indicated a broad but moderate tightening of credit terms applicable to important classes of counterparties, especially hedgefund clients, trading real estate investment trusts and nonfinancial corporations, according to the quarterly survey of senior credit officers at 20 dealers covering the period of September to November. Respondents reporting tougher borrowing terms for hedge funds most frequently pointed to a worsening in general market liquidity and functioning and to reduced willingness to take on risk and, to a lesser extent, adoption of morestringent market conventions and deterioration in the strength of counterparties as the reasons, the Fed said. The prior survey, covering June through August, showed that 86 percent of respondents reported the number of dealers tightening financing rates outnumbered those easing. The latest responses reflect an apparent continuation and intensification of developments already in evidence in the September survey, the Fed said. About one-third of respondents tightened pricing terms, such as financing rates, to hedge funds, while one-fourth reported tightening nonprice terms including maximum maturity, the central bank said. At the same time, more than half of dealers indicated that hedge funds use of financial leverage, considering the entire range of transactions with such clients, had decreased somewhat over the past three months, the Fed said.
With assistance from Bob Willis in Washington and Anchalee Worrachate in London.

Susannah Nesmith

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01.03.12 Bloomberg Brief | Hedge Funds

over the hedge

steve cohen is bidding for the Los Angeles Dodgers, according to a person familiar with the effort, his second try this year to buy at least a piece of a Major League Baseball team. Cohen, 55, who runs the $14 billion sac capital advisors llc in Stamford, Connecticut, is working with Steve Greenberg, a managing director at Allen & Co., and has hired the architectural firm Populous to look at the possible renovation of Dodger stadium, said the person, who was granted anonymity because the sale process is confidential. Hes also met with sports agent Arn Tellem, the person said. Tellem may end up running the team if Cohen is successful in his bid, according to the Los Angeles Times, which reported the story earlier. A spokesman for Cohen, deSteve Cohen clined to comment. Tellem and Greenberg didnt return e-mails seeking a comment. Executives of kansas City, Missouri-based Populous, whose offices are closed for the holidays, couldnt be reached. Guggenheim Partners Chief Executive Officer Mark Walter said last month than he was joining with Basketball Hall of Fame member Magic Johnson to bid for the team. The Dodgers, who have won six World Series championships, filed for bankruptcy on June 27. Last month, Frank McCourt, the teams owner, agreed to sell. Bids are due on Jan. 13. At the time of the bankruptcy, sports bankers said the Dodgers may fetch up to $1 billion. Cohen bid this year for a minority stake in the New york Mets. david einhorn of greenlight capital inc., won the bid, but the two parties later walked away from the deal.
Katherine Burton

howard, paid its partners as much as 128.3 million pounds ($201.3 million) in the year ending in March, a 79 percent drop from a year earlier after fees plunged. Fees fell to 236.8 million pounds from 736.3 million pounds, according to a Brevan Howard filing posted on Dec. 22 at the U.k.s Companies House. The average number of Brevan Howard partners for the year ending in March was 52, according to the filing. The highest-paid partner received 64.8 million pounds, compared with 267.3 million pounds in the year earlier period, the filing said. It didnt disclose whether Howard, 48, received the most pay. Brevan Howard executives didnt immediately respond to a request for comment. capula investment management llP, based in London, paid its founder a 27-million-pound ($42 million) dividend this year, the Sunday Times reported, citing company accounts. Yan huo, who co-founded Capula in 2005, banked the payment as part of a 92-million-pound bonus pool shared between the companys 18 top executives in the year to March 31, 2011, the paper said.

gala after kid Rock had performed a new song in tribute to American veterans. In Palm Beach, the dress code was jeans and cowboy hats for kenny Chesneys gig at the Everglades Foundation gala. (Dave Matthews has that job in 2012, on Feb. 17, once again at the Breakers.) As for which 2011 gala musician was his favorite? Jones seemed most enthusiastic when his daughter Caroline played at the inaugural benefit for the Dubin Breast Center. Dad was dancing in front of the stage, with mom, Sonia Jones, recording the performance on her white mobile phone.

Amanda Gordon

Jesse Westbrook

Nandini Sukumar

John Paulson, the founder of Paulson & co. lost plenty of money last year. His party portfolio, on the other hand, expanded. Among the black-tie benefits he attended were the Foreign Policy Associations annual Financial Services Dinner, a fete for Blenheim Palace in the company of its occupants and caretakers, the Duke and Duchess of Marlborough, and the Whitney Museum of American Art spring gala, which took place in a former bus depot. Paulson and his wife, Jenny, seemed happiest at the autumn and spring galas for New york City Ballet, where the music of katy Perry played as they shared the dance floor with Paul McCartney, Sarah Jessica Parker, Ed Norton and Steve Buscemi. Paul tudor Joness parties often featured live music. Lady Gaga came out in a luminescent egg-shaped chariot for a long set at the Robin Hood Foundation

brevan howard asset management llP, the hedge fund founded by alan

John duffield, founder of new star asset management holdings inc., denied claims made by a former fund manager that he bullied his staff. Patrick evershed made extreme and colorful statements at an employment tribunal hearing in a dispute that was subsequently settled this month, Duffield said in comments on a website. The case was settled before New Star could fully refute them in court, he said. Patrick made a number of statements that were exposed as misleading during cross-examination or were refuted under oath by New Stars witnesses before he truncated the hearing, Duffield said on his website. Evershed sued New Star for unfair dismissal after being suspended in 2008 by the funds chief executive officer, Howard Covington. The suspension came shortly after Evershed wrote a letter to New Stars human resources department complaining about Duffields conduct. Id love to give a detailed response to some of the points, but I cant, Evershed said of Duffields comments in a telephone interview. New Star was bought by London Stock Exchange-listed henderson group Plc in 2009 for about 107 million pounds ($167.8 million) in cash and stock. Evershed and New Star reached an agreement which resolves the employment tribunal proceedings without admission of liability, Henderson Group said in an e-mailed statement. Both parties are satisfied with the terms of the agreement, and have agreed to keep them confidential.

Ben Moshinsky

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01.03.12 Bloomberg Brief | Hedge Funds

CAlendAr
dAte Jan. 9, 6:30pm Jan. 10-11 event

To submit an event email hedgebrief@bloomberg.net

FeAturing Felix rohatyn to receive John C. whitehead award for distinguished public service and financial leadership. "Hear directly from leading fund CFos, Coos and CCos." "issues that are critical to the investment success of senior public pension fund officers and trustees." Nicolas Papageorgiou, Brockhouse Cooper; sharon watkins, sandstone asset management. robert Picard, Jonathan Kanterman, stillwater Capital. "where does the alpha Come From?" Keynote by randolph Cohen, mit sloan and Vision Capital. Vice chairman richard Chilton. "innovative strategies to maximize tax efficiency." Keynote speakers John angelo and eric sprott. Peter Clarke, man Group; randall dillard, liongate; Hugh Hendry, eclectica; Christian levett, Clive Capital. Kelsey Biggers, K2 advisors; abdul Hussain, mashreq. michael litt, arrowhawk; Bjorn tuypens, Platinum Grove. James dondero, Highland Capital; Jason Friedman, marathon asset management. open bar, hors d'oeuvres and wine tasting. Costs are $150 per player; $75 per spectator. stephen Foster, Credit suisse; Joanna Cound, Blackrock. invitation-only event bringing together an estimated 1,000 investors, allocators and hedge funds. "over 900 managers, investors and other industry professionals." Hedge fund ping pong tournament to raise money for Big Brothers Big sisters of New york City. academic sessions, debate on the future of the hedge fund industry. Keynote speaker stanley Fink on challenges of building a successful hedge fund. "speaker faculty" includes richard Griffin, Pritzker Group; mike Kane, Kestrel asset management; steve Braverman, Pathstone; more.

loCAtion New york New york (exact location provided to attendees) the Phoenician, scottsdale, ariz. the sutton Place, toronto Harvard Club, New york Baruch College, New york 643 Park avenue, New york Princeton Club, New york Boca raton resort & Club, Boca raton, Fla. marriott Hotel london Grosvernor square Jumeirah Beach Hotel, dubai New museum, New york New york (exact location provided to attendees) the City Club of san Francisco london (exact location tBd) the Fontainebleau Hotel, miami Grosvenor House Hotel, london Vanderbilt Hall at Grand Central terminal, New york Paris the Breakers, Palm Beach, Florida Beverly Hills, California (exact location provided to attendees)

ContACt / regiStrAtion Jeanne Baker driscoll, +1 212-908-4694 or jdriscoll@moaf.org Kathie eberhard, +1 704-341-2439, keberhard@frallc.com opalgroup.net foundationendowment.ca hfmweek.com sqa.us.org http://www.winterantiquesshow.com http://www.frallc.com iirusa.com lseaic.com menahedgefunds.com elizabeth Gooch, +1 646-834-5014, egooch@bloomberg.net; bloomberglink.com argyleforum.com

museum of american Finance Gala Fra's optimizing Hedge Fund Business operations opal Group's Public Funds summit 9th annual Foundation, endowment & Not for Profit investment summit HFmweek's U.s. investor outlook for 2012 international association of Financial engineers' society of Quantitative analysts 58th annual winter antiques show opening Night Hedge Fund tax 101 and the K-1 Boot Cap Gaim Usa 2012 london school of economics sU alternative investment Conference 2012 middle east Hedge Funds' investors summit 2012 Bloomberg sovereign debt Conference argyle executive Forum's 2012 leadership in the distressed markets Hedge Funds Care's 2nd annual west Coast Committee of Hope Poker tournament investoregulation Financial education's 3rd annual Hedge Fund regulation alphametrix 2012 summit euroHedge awards 2011 toC Pong 4th annual Crest Conference on Hedge Funds mFa Network 2012 National Family office Forum

Jan. 10-12 Jan. 17-18 Jan. 19 Jan. 19 Jan. 19, 5pm Jan. 19 and 20 Jan. 22-25 Jan. 23 Jan. 23-24 Jan. 24

Jan. 25

Jan. 25 Jan. 25 Jan. 25-27 Jan. 26 Jan. 26 Jan. 26-27 Jan. 29-31 Jan. 30-31

hedgefundscare.org investoregulation.com alphametrix.com hedgefundintelligence.com Nicole matesich, +1-646-375-2583

http://tocpong.bigsnyc.org/index.html

crest.fr http://network.managedfunds.org/2012/ worldrg.com

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Calendar

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dAte Jan. 31 Feb. 1

event Citi's 5th annual asian Capital introductions Conference Bloomberg China Conference

FeAturing

loCAtion

ContACt / regiStrAtion http://www.citiconferences.com amanda dugan, +1 646-834-5061, adugan@bloomberg.net; bloomberglink.com

"Global and regional hedge fund managers as well Jw marriott Hotel, Hong as an international cast of hedge fund allocators." Kong will look at China's economy and the moves the government is taking to manage the challenges of rapid economic growth. New york academy of sciences

Feb. 16 Feb. 28 Feb. 28-29 Feb. 29 march 1 march 5-8

march 6

Bloomberg Portfolio manager mash-up FX-invest europe informa's UCits for Hedge, mutual & investment Fund managers asiaHedge Forum 2012 14th annual New york Hedge Funds Care open your Heart to the Children Benefit 13th annual Hedge Funds world middle east
argyle executive Forum's 2012 research and Portfolio manager membership Breakfast

Portfolio managers from 5-6 asset management New york (exact location Katie lee, +1 646-834-5024, kleee437@ firms to discuss the biggest issues that will impact to be determined) bloomberg.net; bloomberglink.com markets this year. martin schlegel, swiss National Bank; Pierre lequeux, aviva investors; Paul Chappell, C-View. rhodri mason, man investments; Jerome lussan, laven Partners. "addresses the strategies, issues and challenges that the region's industry now faces." to honor Joe torre, former New york yankees manager. Jeff tarrant, Protege; daniel Booth, saudi aramco; abbas Hashimi, Qatar Family office.
topics of discussion include european banking crisis, emerging markets.

radisson Blu, Zurich the radisson martinique, New york Jw marriott Hotel, Hong Kong Cipriani 42nd street, New york Jumeirah Beach Hotel, dubai
New york (exact location provided to attendees)

http://www.fxinvesteurope.com/ informaglobalevents.com hedgefundintelligence.com http://www.hedgefundscare.org terrapinn.com

argyleforum.com

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Spotlight
First eagle investment managements Jason dahl on profiting From m&A
Jason Dahl, who manages $360 millionworth of merger arbitrage strategies at New york-based First Eagle Investment Management LLC, spoke to Bloombergs kelly Bit about what deals hes watching and why the outlook remains bright for M&A activity in 2012. q: how is your strategy different from other merger arb funds? a: We are geographically and market cap agnostic, to begin with. In addition, we subcategorize the merger arbitrage universe into investments that tend to be rate-ofreturn focused versus those that are event focused, and approach both differently. We think this helps us to manage volatility as well as to allocate capital. We believe that understanding what paradigm in which to place a particular deal at any point in its lifecycle helps us find opportunities that may be overlooked and, even more importantly, to identify risks that might be underpriced and that we want to avoid. We start from the premise that we are fundamental investors, which is consistent with our firms long history, and that ultimately fundamentals will drive the probability of deal closure. q: What m&a deals are you watching? a: The hostile acquisition by Martin Marietta Materials for Vulcan Materials is an interesting one because its a horizontal merger, its two like businesses that could potentially be put together to get $250 million of costs savings out per year. We see this phenomenon as well with deals like PharMerica and Omnicare, where the proposed merger is designed to take costs out, Hertz and Dollar Thrifty would be a similar story. The idea of putting together two like companies and being able to run forward with EBITDA that jumps by 20 or 30 percent is pretty powerful. We see this around the world. That is why we think well see very robust M&A in the next few years. In addition, when you have strategic buyers in the market, theres this natural uptick in competitive bidding situations, where one party announces a definitive transaction and another competitor in the industry will say, Wow, youre taking $250 million in cost savings out? I want that and if you buy them I cant. Thats the optimal situation, where deals are announced and the impact on the competitive landscape changes so dramatically that it is a competitive response. q: Whats an example of a trade you might make? a: A good example of a rate of return investment is the acquisition of Goodrich by United Technologies. We believe that the market is pricing this transaction to yield approximately 8 percent annualized, if the deal closes at the end of June as we project. The day before the definitive deal was announced, Goodrich was trading at what we believe was fair value. Upon the announcement, it traded up to reflect the probability of closing. With our strategy, we are basically buying something and taking on a risk what we call deal risk. We do a tremendous amount of research to judge whether a transaction will close or not, as well as trying to determine when it might close. Institutions that were long Goodrich before the transaction was announced earned a one-day premium on their investment, but many dont have an expertise in following deals to close, in assuming the particular risks that arise from a merger process. So theres typically a natural flow of capital out of long-only portfolios and to investors like us. q: What drove returns in a volatile year? a: We have invested this year as we do every year. We have 65 to 70 deals in our portfolio right now. In general, the success or failure of a particular deal is based on its own merits. 2011 has been a really good example of incredible market dislocation, yet the strategy was able to perform in August and September. When many other investments become correlated, were pleased when our investments are not; they are largely driven by their own dynamics. It is interesting to see that this year with many alternative strategies, the correlation between them has been heightened. I can wake up and see where Asia is going, and how Europe looks to open. Is it up? If its a stock, I typically feel that itll be up if its a risk-on day and itll be down if its a risk-off day. With our strategy, we attempt to isolate our investors from this type of volatility. q: What can we expect from 2012, m&a wise? a: Many corporations globally, given what we went through with Lehman and the financial crisis, have taken costs out, cut staff, made their businesses more efficient. Their balance sheets are bloated with cash and they have maintained access to credit. GDP growth estimates for 2012 range from 1 percent to nearly 4 percent, with consensus closer to 2 percent. That is below what most of corporate America is hoping for and wanting to show on their top and bottom line. Without the ability to take costs out to grow earnings, I think youre going to see M&A as a tool, as it always has been, to get to that earnings growth. When you have cash in your balance sheet it is a drag with negative real returns, utilizing that cash to buy companies makes a tremendous amount of sense for many companies.

hometown: wilton, Connecticut College/university/grad School(s): Bucknell University (91) professional Background: Merger arbitrage career began at Neuberger Berman in 1993. Portfolio manager at First Eagle since 2003. Charitable work: Juvenile Diabetes Research Foundation. Family: Married with four kids. mentor: Keith Moore, event-driven strategist, MKM Partners, and author of Risk Arbitrage: An Investors Guide. Favorite restaurant: Simon Pearce, Queechee, Vermont

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