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By NATHANIEL E. BAkER
News, aNalysis aNd CommeNtary
Arrowhawk’s 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 manager’s 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. Fan’s 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, Arrowhawk’s chief investment officer, won’t be joining Arbalet, the person said. Arbalet, named for a type of crossbow, will retain credit suisse ag, Arrowhawk’s prime broker, and rothstein Kass, its Jennifer Fan auditor, according to the person. Commodity hedge funds attracted $8.66 billion from investors in the year’s 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 cqs’s 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 chain’s 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.
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1 3.3 1.1 9. Vulpes is run by stephen diggle.8 -6.47% 1. ■ tufton oceanic ltd.net 212-617-1097 contributing Katherine Burton reporters email@example.com 2. This newsletter and its contents may not be forwarded or redistributed without the prior consent of Bloomberg.1 -9. 26.0 -firstname.lastname@example.org Bloomberg Brief | Hedge Funds 2 returnS in BrieF ■ John Paulson lost 10. 2010 through Dec.1 -1.6 -1.18% 3.This document is being provided for the exclusive use of JEAN-MARC MELCHIOR at EOS MANAGEMENT INC. are the source of the below hedge fund and fund of funds data.1 -2.1 1.11% *from Feb.6 11.1 7.7 0. Baker editors email@example.com 212-617-2335 Saijel Kishan skishan@bloomberg. All rights reserved.1 hedge funds Nathaniel E. 28.90%* 2. 2010 ■ The Eurekahedge Hedge Fund Index was down 4. 2011.8 -1. 30 last year. ■ vulpes investment management’s Testudo Fund.2 -0. according to the report.03.0 oCtoBer 2011 0.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. -3.3 -6.com 717-505-9701 To subscribe via the Bloomberg Professional Terminal type BRIEF <GO> or on the web at www.5 percent in his Gold Fund and 35 percent in his Paulson Advantage Fund for the period from Dec.4 -4. which is heavily invested in precious metals and the mining industry.0 3. The Russian Opportunities Fund declined about 10 percent in the same period. The $27 billion fund had its worst year in 2010.3 2. according to people familiar with the funds’ performance.06% 2010 total returns 2-Year Treasuries (Merrill Lynch Total Return Index) 2011 YTD total returns 8.4 -11. 1 2 3 4 5 6 7 8 9 10 11 .net 212-617-4557 reporter Kelly Bit firstname.lastname@example.org billion Oceanic Hedge Fund gained 6. 01.8 -4.8 -2.4 4.net 609-279-5064 Anibal Arrascue aarrascue@bloomberg. The benchmark measure fell for the first time since 2008.8 -0.7 11. bloomberg brief hedge funds newsletter Ted Merz executive editor tmerz@bloomberg. when it returned 1 percent. Please contact our reprints and permissions group listed above for more information.bloomberg.’s $1.6 -0. Eurekahedge started compiling the industry’s data in 2000.9 2011 through nov.com/brief/hedgefunds © 2011 Bloomberg LP.net 212-617-6662 contributing Matthew Kelly data editors email@example.com 13.8 percent in the first 11 months of the year. gained 2.0 -1. the hedge fund founded by alan howard.6 4.3 3.46% 1.1 -0.6 -1.08% -3.2 -1. gained 6 percent after launching in May 1.1 percent in 2011.4 5. the Singaporebased data provider said in an e-mailed statement today.net 212-617-6975 advertising firstname.lastname@example.org 0.3 0. gained 12.0 0.5 percent in 2011.net 212-617-6975 reprints & Lori Husted Permissions lori.3 1. 20. Hedge Funds Funds of Funds S&P 500 15.net 212-617-2309 bloomberg news Rob Urban managing editor email@example.com% hedge fund returns Bloomberg BAIF indices.net 212-617-2741 Melissa Karsh mkarsh@bloomberg. The Singapore-based firm’s long Asian volatility and arbitrage fund LAVA.1 -3.1 7.3 3.3 -1.net 609-279-5084 newsletter Nick Ferris business manager nferris2@bloomberg. 30 10.3 -0. ■ brevan howard asset management llP. which represent all funds tracked by Bloomberg data. when it dropped a record 10 percent.6 percent in its Master Fund through Nov.8 -2.
who will be managing directors of the fund. formerly of ubs ag. Baker in New York.6 billion in assets under management. Levine and Abburi. The publicly traded firm has $43. Former Galleon colleagues michael levine and murali abburi will join him on the fund as equity analysts. previously at deutsche bang ag’s principal investments group in Vietnam.frallc.03. media and telecommunications stocks. which will make bets on technology. including hedge funds. korea and Japan. will be vice president and equity analyst. according to the presentation. Galleon was the target of a nine-year investigation by U.12 Bloomberg Brief | Hedge Funds 3 Fund FoCuS ex-galleon manager peter Swartz to Start technology hedge Fund for Fortress By SABRINA WILLMER Peter swartz. gordon runte. is starting a new technology hedge fund for fortress investment group llc.S.S. The fund expects to take about 25 long and short positions.This document is being provided for the exclusive use of JEAN-MARC MELCHIOR at EOS MANAGEMENT INC. the first charging a management fee of 1. Swartz has been a senior portfolio manager for the Fortress Asia Macro Fund since March. The Fortress Asia Macro lost a net 1. He was hired in 2010 as a managing director and equity analyst covering technology. Attend One Conference or Both! Financial Research Associates and the Hedge Fund Business Operations Association Proudly Presents Hedge Fund Tax 101 AND The K-1 Boot Camp Innovative Strategies to Maximize Tax Efficiency The Princeton Club. private equity and other investments.S. —With assistance from Nathaniel E. according to the presentation. companies. with the rest allocated to Europe. a former galleon group llc portfolio manager. will be an equity analyst. it adds. 54. a copy of which was obtained by Bloomberg News. Fortress Chief Executive Officer daniel mudd last month took a leave of absence following a lawsuit by the U. according to a December investor presentation. Securities and Exchange Commission over his role as the former head of Fannie Mae. nardone. were hired by Fortress in March 2010. He was replaced on an interim basis by randal a. Rajaratnam. The fund will have two share classes. culminating in the May conviction of co-founder raj rajaratnam on insider-trading charges. 01. last month began serving an 11-year sentence at a federal prison in Massachusetts. 2012 1 2 3 4 5 6 7 8 9 10 11 . according to the presentation. officials. The new fund will invest as much as 50 percent of its assets in U. Midtown Manhattan To Register: Call 800-280-8440 or visit us at www.com Earn up to 14 CPE Tax Credits * January 19 & 20. a spokesman for New B809HalfPageAd:Layout 1 11/17/11 12:57 PM Page 1 york-based Fortress. Swartz will be chief investment officer of the Fortress TMT Fund. which didn’t include a fundraising target. China.5 percent with an 18 percent performance incentive and the second 2 percent and 20 percent. media and telecom for the Fortress Macro Fund. declined to comment. the presentation says. trang Pham. Taiwan. michael Kwon. the company’s cofounder.2 percent since March.
12 Bloomberg Brief | Hedge Funds 4 Six degreeS oF tiger mAnAgement Julian robertson’s tiger management has spawned at least 30 so-called Tiger cubs--fund managers who are Tiger Management alumni.03. The chart on the right displays some of this movement. LinkedIn accounts were used to verify or source dates. who started tiger global lP in 2000. chase coleman. was not included in the chart. The “first degree” of separation from Tiger then continues chronologically in a clockwise rotation. –Nathaniel E. Bloomberg Markets reports in its February issue. it may not be comprehensive or exhaustive. starting in the “12 o’clock position” with lee ainslie’s maverick capital management lP. In a few instances. 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. 01. While the information is deemed to be accurate.This document is being provided for the exclusive use of JEAN-MARC MELCHIOR at EOS MANAGEMENT INC. with the year of launch drawn on or near the corresponding arrow. The information was compiled from Bloomberg News and other reports and individuals’ career histories as displayed on their Bloomberg biography pages. 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 1 2 3 4 5 6 7 8 9 10 11 2000 2003 . Some “seconddegree” movement is also displayed in this fashion. 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.
“We’re not out of the Tim Love woods on EU risks but emerging market equitities look compelling. and soybean oil and meal. Money managers have cut bets on higher prices by 65 percent since this year’s high in April. futures and options increased by 18 percent in the week ended Dec. Love said about the new fund.” said nic Johnson. resigned to pursue other opportunities. currency. oil in New york and heating oil rose at least 2 percent today. Comptroller thomas dinapoli is the sole trustee and manager. kiernan said in a telephone interview. The GAM Star Emerging Equity Fund will launch by the end of the first quarter. Commodity Futures Trading Commission data show. it rallied 12 percent from a 10-month low reached in October on mounting optimism about growth. Gains were led by wheat traded in kansas City. On a total return basis. the first annual drop since 2008. Love. Start uCitS Fund tim love. 01. Twelve of the 24 raw materials tracked by the S&P GSCI rose last week. While the Standard & Poor’s GSCI Total Return Index of 24 commodities declined 1. It will likely be focused on Asia and Latin America with a “Mid East overweight bias. Speculators trimmed bets on declining prices for copper.S. The firm will analyze whether a hedge fund’s strategy can work in a UCITS framework.S. Soybean holdings jumped more than ninefold and those for corn reached a five-week high. AIB prefers daily liquidity. AIB’s only restriction regarding assets is that it prefers that its allocations comprise more than 10 percent of a hedge fund’s size.2 percent last year.03.” he said. putting the chances of “EU shock” at around 30 percent. cocoa. a request that comes from its clients.4 billion euros ($11 billion) in assets. in Newport Beach.2 percent.2 percent last year. can avoid a recession. “We opted to go long-biased due to valuation in emerging markets. Davidson was previously principal at the teacher retirement system of texas. wheat.y. according to eugene Kiernan. has left the firm and will join gam holding ag in London next month where he will launch a UCITS fund. State Common retirement Fund’s davidson resigns charles davidson. global macro.” said he’s “very excited to be at GAM. the Dublin-based money manager with 8. California. most of whom are pension funds. At GAM. who was at CQS for “a material period. cocoa. in a telephone interview. commodities lost 1.677 contracts. director of opportunistic investments at the new York state common retirement fund. trend wAtCh hedge funds raise bullish bets by most in 16 months By DEBARATI ROy —Nathaniel E. head of investment solutions. Baker n. He does not have a replacement yet at CQS.12 Bloomberg Brief | Hedge Funds 5 BrieF exCluSiveS on the move CQS’s tim love to Join gAm.S. spokesman for the Office of the State Comptroller.This document is being provided for the exclusive use of JEAN-MARC MELCHIOR at EOS MANAGEMENT INC. is searching for one or two event-driven UCITS-compliant funds to add to its hedge fund holdings early this year. Love said. The fund invests about $140 billion for more than one million employees and retirees from New york state governments. Sumberg did not provide details. Combined net-long positions across 18 U. kiernan said. AIB will also consider equity market neutral. “We have seen people reducing risks. 1 2 3 4 5 6 7 8 9 10 11 . Silver. the biggest gain since July 2010. AIB typically invests about 15 million to 30 million euros initially and has about $850 million in alternative assets. Love said he will report to david solo. A measure of 11 U. —Kelly Bit Hedge funds and other large speculators increased long commodity bets by the most since August 2010. which surged 6.” he added. who was cqs uK llP’s senior portfolio manager for emerging markets. and the future of commodities largely depends on whether Europe and U. snapping two consecutive three-month drops. Cotton climbed 5. The S&P GSCI Total Return Index rose 9 percent last quarter. managed futures and commodities funds that are UCITS-compliant. farm goods showed speculators increased bullish bets in agricultural commodities by 35 percent to 273.” which are at levels not seen since the first quarter of 2009. 27. He was also a director of financial institutions at Standard & Poor’s.2 percent. —Kelly Bit mAndAteS AiB to Add event-driven uCitS-Compliant Funds aib investment managers ltd. who helps manage $30 billion in commodity assets at Pacific investment management co.” in a telephone interview. said eric sumberg.. research analyst at axa alternative advisors llc and associate at the canadian imperial bank of commerce.
200 13 7 221.556 981 542 0 0 N/a Horizon asset management inc. divesting 466.128 3 2 18. Bloomberg data shows.8 rmB Capital management llC 53. the company’s largest shareholder. down from 355.S. such sales in the department-store sector will climb an estimated 4 percent in November and December.063. the most among all shareholders.683 shares of the largest U.145 64 35 390. 25. On Dec.358 -6 0.9 empyrean Capital Partners lP 889.3 Fine Capital Partners lP 221. 2.317 11 6 -310.804. Meanwhile. Sears employed 312. esl Partners Founder edward lampert.000 5 3. 28.683 -62 0. Cotten Timberlake and Miles Weiss largest hedge fund shareholders as of september 30 Fund Amount held vAlue on Sept. compared with the same period a year ago.131 161 89 -119.12 Bloomberg Brief | Hedge Funds 6 13F ForenSiCS: SeArS holdingS Hedge funds were net sellers of sears holdings corp.200 100 2. Kinetics asset management inc.3 Great oaks Capital management 59. closing 171 large U. –Nathaniel E.000 people as of January. according to the International Council of Shopping Centers. stores and cutting the headcount by about 12 percent.887 6 3 0 0 0.418 54 2. 100. has presided over 18 consecutive quarters of declining sales.1 tiger Global management llC 189.229 -4 4. tiger global management llc sold 310.This document is being provided for the exclusive use of JEAN-MARC MELCHIOR at EOS MANAGEMENT INC. reducing its position by 62 percent. 1. 30* vAlue on deC.6 1 2 3 4 5 6 7 8 9 10 11 . lampert 17. department store chain’s stock during the three months ending September 30. added 390.S.2 percent in the eight weeks ended Dec. 30* lAteSt ChAnge (ShAreS) lAteSt ChAnge (perCent) perCentAge oF portFolio edward s.908 51 28 45. Lampert.019 2 1 0 0 0. 49.8 Kinetics asset management inc. Sears reported that it would close as many as 120 locations after same-store sales fell 5.03.800 47 1.418 shares during the quarter. his hedge funds have made money on the original investment.2 water street Capital inc.000 in June 2006.4 Hanawalt associates * $millions 35. 01. the most of any of the retailing company’s shareholders. stock in the third quarter. according to data compiled by Bloomberg. a New york-based trade group.116.523 shares on aggregate. By contrast.680 3 2 -3. Baker. has reduced costs since becoming chairman in 2005.
to hedge funds. an SEC spokesman. who didn’t admit or deny wrongdoing. Brookes was also suspended from trading for 25 business days. he testified.000 for “acts detrimental” to the marketplace for a Feb. the central bank said. said Dec. fined neil brookes. The agency posted a revised schedule on its website today.” ray casas. of which 4.” especially hedgefund clients. Those rules moved to an undetermined-date category.000.This document is being provided for the exclusive use of JEAN-MARC MELCHIOR at EOS MANAGEMENT INC. 2010. The latest responses “reflect an apparent continuation and intensification of developments already in evidence in the September survey. CME fined Chicago-based Infinium Capital Management in November a total of $850. 3. adoption of morestringent market conventions and deterioration in the strength of counterparties as the reasons. 01. according to transcripts of a court deposition. MATTHEW LEISING —Jesse Hamilton Cme Fines infinium oil trader for high-Speed trading error cme group inc. according to the disciplinary notice. covering June through August. and in fact that’s what we did. had decreased somewhat over the past three months. The revision also removed two items from the calendar -. “We have already proposed or adopted more than three-quarters of the rulemaking required by the Dodd-Frank Act. according to an updated calendar.” Rothstein was later asked about “false exculpatory e-mails” he had sent to co-conspirators. —Susannah Nesmith 1 2 3 4 5 6 7 8 9 10 11 . to a lesser extent. and level 3 capital fund agreed not to tell potential new investors he failed to make payments to them. said his scheme began to collapse early in 2009.12 Bloomberg Brief | Hedge Funds 7 regulAtory/CompliAnCe derivatives rules delayed in SeC dodd-Frank plan The U. the Florida lawyer sentenced to 50 years in prison for running a $1. showed that 86 percent of respondents reported the number of dealers tightening financing rates outnumbered those easing. 49.03. fed says dealers tighten terms on hedge funds By SCOTT LANMAN. such as financing rates.” the Fed said. 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.” said John nester. “He admits he has no knowledge that anyone at the funds lied for him. more than half of dealers “indicated that hedge funds’ use of financial leverage. 29 by e-mail. a trader at high-frequency-trading firm infinium capital management.45. a Federal Reserve survey showed. 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. 2010 when. the system placed 6. said officials at three Manhattan hedge funds helped him prop up the fraud in its final months. considering the entire range of transactions with such clients.2 billion Ponzi scheme. malfunction. “We were going to use as much of the new money coming in to pay them off. “Mr.” the Fed said. Rothstein’s 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. Securities and Exchange Commission is delaying action on rules for regulating derivatives and credit-rating firms until the second half of 2012. and the updated schedule on the website reflects our plans for the remaining rulemaking. and not a single one of the dozens of investors in Rothstein’s scheme has said that the funds recommended the investment to them. Rothstein. 3. malfunction of an algorithm. 2010. in an e-mail.” he said in testimony released Dec.a proposal on defining the fiduciary duty of broker-dealers and adoption of a conflicts-of-interest ban in assetbacked securities deals. 3. 28. centurion structured growth llc. while one-fourth reported tightening nonprice terms including maximum maturity. The prior survey. $50. CME said in a disciplinary notice. About one-third of respondents tightened pricing terms. “The funds were going to give us a positive credit rating. was testing an algorithm on Feb. a spokesman for the funds. The questioning took place behind closed doors in a Miami courtroom. Officials at Platinum Partners value arbitrage. shifting expected approval of a number of Dodd-Frank Act rules from a January-June time frame to July-December instead. Transcripts are being released on the website of the plaintiffs’ law firm conrad & scherer. —With assistance from Bob Willis in Washington and Anchalee Worrachate in London.767 orders for March 2010 crude futures. trading real estate investment trusts and nonfinancial corporations.67 to $77. including $350. when he could no longer pay customers.612 were purchased for prices ranging from $76. Brookes relied on a safety system that was supposed to shut down if Infinium obtained 10 or more fills per second. —Asjylyn Loder ex-lawyer rothstein Says Funds didn’t warn investors scott rothstein. Brookes.” Wall Street dealers made it tougher for hedge funds to finance trading of securities and derivatives in the three months through November. At the same time.000 for the Feb.S. according to the quarterly survey of senior credit officers at 20 dealers covering the period of September to November. Responses “indicated a broad but moderate tightening of credit terms applicable to important classes of counterparties. He couldn’t be reached for comment.” the Fed said.
2011. Cohen bid this year for a minority stake in the New york Mets. who co-founded Capula in 2005. Connecticut. he said. banked the payment as part of a 92-million-pound bonus pool shared between the company’s 18 top executives in the year to March 31. the Duke and Duchess of Marlborough. paid its partners as much as 128. Dad was dancing in front of the stage. the team’s owner. who was granted anonymity because the sale process is confidential. according to the Los Angeles Times. where the music of katy Perry played as they shared the dance floor with Paul McCartney. sports bankers said the Dodgers may fetch up to $1 billion. said the person. His party portfolio. a 79 percent drop from a year earlier after fees plunged.” Evershed said of Duffield’s comments in a telephone interview.’s Companies House.3 million pounds. ■ capula investment management llP. once again at the Breakers. the hedge fund founded by alan ■ John duffield. filed for bankruptcy on June 27. founder of new star asset management holdings inc.8 million pounds. A spokesman for Cohen. Sonia Jones. and have agreed to keep them confidential.3 million pounds ($201. compared with 267. Jenny. Bids are due on Jan. the dress code was jeans and cowboy hats for kenny Chesney’s gig at the Everglades Foundation gala. 55. gala – after kid Rock had performed a new song in tribute to American veterans.. received the most pay. The average number of Brevan Howard partners for the year ending in March was 52. Howard Covington. Cohen. The highest-paid partner received 64.12 Bloomberg Brief | Hedge Funds 8 over the hedge ■ steve cohen is bidding for the Los Angeles Dodgers. Yan huo.k. Ed Norton and Steve Buscemi. Fees fell to 236. which took place in a former bus depot. Among the black-tie benefits he attended were the Foreign Policy Association’s annual Financial Services Dinner. lost plenty of money last year. “I’d love to give a detailed response to some of the points. a fete for Blenheim Palace in the company of its occupants and caretakers.” Duffield said on his website. In Palm Beach. Lady Gaga came out in a luminescent egg-shaped chariot for a long set at the Robin Hood Foundation ■ brevan howard asset management llP. deSteve Cohen clined to comment. The suspension came shortly after Evershed wrote a letter to New Star’s human resources department complaining about Duffield’s conduct. New Star was bought by London Stock Exchange-listed henderson group Plc in 2009 for about 107 million pounds ($167.03. At the time of the bankruptcy. Tellem and Greenberg didn’t return e-mails seeking a comment. Last month. 13.) 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. The case was settled before New Star could fully refute them in court. the person said. agreed to sell. The Dodgers. 01.This document is being provided for the exclusive use of JEAN-MARC MELCHIOR at EOS MANAGEMENT INC. recording the performance on her white mobile phone. Evershed and New Star “reached an agreement which resolves the employment tribunal proceedings without admission of liability. denied claims made by a former fund manager that he bullied his staff. with mom. based in London. which reported the story earlier. couldn’t be reached. the Sunday Times reported. paid its founder a 27-million-pound ($42 million) dividend this year. on Feb. Executives of kansas City. (Dave Matthews has that job in 2012. 17. the paper said. a managing director at Allen & Co. on the other hand.. the filing said.. is working with Steve Greenberg.3 million pounds in the year earlier period. citing company accounts. Tellem may end up running the team if Cohen is successful in his bid. Sarah Jessica Parker. “Patrick made a number of statements that were exposed as misleading during cross-examination or were refuted under oath by New Star’s witnesses before he truncated the hearing. who runs the $14 billion sac capital advisors llc in Stamford. who have won six World Series championships. david einhorn of greenlight capital inc.8 million pounds from 736. but the two parties later walked away from the deal. seemed happiest at the autumn and spring galas for New york City Ballet. Brevan Howard executives didn’t immediately respond to a request for comment.” —Ben Moshinsky 1 2 3 4 5 6 7 8 9 10 11 . He’s also met with sports agent Arn Tellem. 48. —Amanda Gordon —Jesse Westbrook —Nandini Sukumar ■ John Paulson. the founder of Paulson & co.” Henderson Group said in an e-mailed statement. but I can’t. and has hired the architectural firm Populous to look at the possible renovation of Dodger stadium. according to the filing. expanded. “Both parties are satisfied with the terms of the agreement.3 million) in the year ending in March. Duffield said in comments on a website. 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. Frank McCourt. and the Whitney Museum of American Art spring gala. 22 at the U. Evershed sued New Star for unfair dismissal after being suspended in 2008 by the fund’s chief executive officer. according to a person familiar with the effort. according to a Brevan Howard filing posted on Dec. ■ Paul tudor Jones’s parties often featured live music. whose offices are closed for the holidays. Patrick evershed made “extreme and colorful statements” at an employment tribunal hearing in a dispute that was subsequently settled this month. Missouri-based Populous. won the bid. It didn’t disclose whether Howard. —Katherine Burton howard. Paulson and his wife.8 million) in cash and stock. his second try this year to buy at least a piece of a Major League Baseball team.
org/2012/ worldrg. +1 646-834-5014. keberhard@frallc. 01. "over 900 managers. "where does the alpha Come From?" Keynote by randolph Cohen. New york Paris the Breakers. Fla. invitation-only event bringing together an estimated 1.com http://www. robert Picard. +1 704-341-2439. sharon watkins. Kestrel asset management.com continued on next page 1 2 3 4 5 6 7 8 9 10 11 . 26 Jan. stephen Foster. K2 advisors. 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. Palm Beach. 17-18 Jan. Hugh Hendry.com menahedgefunds.com lseaic. man Group." Hedge fund ping pong tournament to raise money for Big Brothers Big sisters of New york City. more. the sutton Place. sandstone asset management. 30-31 hedgefundscare. James dondero." "issues that are critical to the investment success of senior public pension fund officers and trustees. Bjorn tuypens.bigsnyc. Highland Capital." Nicolas Papageorgiou. 26-27 Jan. 5pm Jan.ca hfmweek.com argyleforum. scottsdale. Jonathan Kanterman. 6:30pm Jan. Brockhouse Cooper. debate on the future of the hedge fund industry.com iirusa. 10-11 event To submit an event email firstname.lastname@example.org opalgroup. $75 per spectator. New york Princeton Club.net. marathon asset management.fr http://network. 9. steve Braverman. Christian levett. email@example.com Nicole matesich. arrowhawk.net foundationendowment. 19 Jan.com alphametrix. +1 212-908-4694 or jdriscoll@moaf. mit sloan and Vision Capital. 25 Jan. Boca raton.html crest.12 Bloomberg Brief | Hedge Funds 9 CAlendAr dAte Jan. Costs are $150 per player. 26 Jan. Blackrock. New york Boca raton resort & Club. New york Baruch College. 25 Jan. toronto Harvard Club. Florida Beverly Hills. 23-24 Jan. 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. investors and other industry professionals. Keynote speaker stanley Fink on challenges of building a successful hedge fund. mashreq. loCAtion New york New york (exact location provided to attendees) the Phoenician. +1-646-375-2583 http://tocpong. ariz. Pathstone. london Vanderbilt Hall at Grand Central terminal. 10-12 Jan. Pritzker Group. open bar. Credit suisse. 19 Jan.org http://www. "Hear directly from leading fund CFos.net FeAturing Felix rohatyn to receive John C. 23 Jan. 25 Jan.org investoregulation. randall dillard.com sqa. Peter Clarke. abdul Hussain.org Kathie eberhard. Vice chairman richard Chilton.managedfunds. 19 and 20 Jan. Clive Capital.winterantiquesshow. 19. bloomberglink. endowment & Not for Profit investment summit HFmweek's U. 29-31 Jan.com elizabeth Gooch. academic sessions. hors d'oeuvres and wine tasting. michael litt.000 investors.03. 24 Jan. 22-25 Jan. miami Grosvenor House Hotel. Jason Friedman.This document is being provided for the exclusive use of JEAN-MARC MELCHIOR at EOS MANAGEMENT INC.us. stillwater Capital. eclectica." Keynote speakers John angelo and eric sprott. California (exact location provided to attendees) ContACt / regiStrAtion Jeanne Baker driscoll.org/index. whitehead award for distinguished public service and financial leadership. Platinum Grove. New york 643 Park avenue.s. liongate.frallc. Kelsey Biggers. "speaker faculty" includes richard Griffin. 25-27 Jan. Coos and CCos. marriott Hotel london Grosvernor square Jumeirah Beach Hotel. Joanna Cound. allocators and hedge funds.com museum of american Finance Gala Fra's optimizing Hedge Fund Business operations opal Group's Public Funds summit 9th annual Foundation. mike Kane. "innovative strategies to maximize tax efficiency.com hedgefundintelligence.
+1 646-834-5061. 28 Feb. daniel Booth. 01.com argyleforum.com amanda dugan.hedgefundscare.com markets this year. dubai New york (exact location provided to attendees) http://www. LEARN MORE CLICK TO ORDER businessweek." Kong will look at China's economy and the moves the government is taking to manage the challenges of rapid economic growth.This document is being provided for the exclusive use of JEAN-MARC MELCHIOR at EOS MANAGEMENT INC. former New york yankees manager. Jerome lussan. Zurich the radisson martinique. 16 Feb.fxinvesteurope.net. issues and challenges that the region's industry now faces. bloomberglink." to honor Joe torre. Protege. New york Jumeirah Beach Hotel. swiss National Bank. radisson Blu.03. Jeff tarrant. Hong as an international cast of hedge fund allocators. topics of discussion include european banking crisis. man investments. Pierre lequeux. 1 event Citi's 5th annual asian Capital introductions Conference Bloomberg China Conference FeAturing loCAtion ContACt / regiStrAtion http://www. laven Partners. abbas Hashimi. Receive exclusive subscriber savings on in-home delivery. New york Jw marriott Hotel. aviva investors. firstname.lastname@example.org Bloomberg Brief | Hedge Funds 10 Calendar continued from previous page dAte Jan. 29 march 1 march 5-8 march 6 Bloomberg Portfolio manager mash-up FX-invest europe informa's UCits for Hedge. saudi aramco. 28-29 Feb.citiconferences. Paul Chappell. "addresses the strategies.com For Bloomberg BRIEF Readers: Comprehensive and indispensable. +1 646-834-5024. Your single source for global business news and insights. emerging markets.com hedgefundintelligence.org terrapinn.com http://www. bloomberglink. 31 Feb. C-View.net. Hong Kong Cipriani 42nd street. kleee437@ firms to discuss the biggest issues that will impact to be determined) bloomberg.com/brief 1 2 3 4 5 6 7 8 9 10 11 . 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.com "Global and regional hedge fund managers as well Jw marriott Hotel. New york academy of sciences Feb. rhodri mason.com/ informaglobalevents. Qatar Family office. martin schlegel.
q: What’s 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.This document is being provided for the exclusive use of JEAN-MARC MELCHIOR at EOS MANAGEMENT INC. Without the ability to take costs out to grow earnings. Upon the announcement. but many don’t have an expertise in following deals to close. which is consistent with our firm’s long history. when you have strategic buyers in the market. mentor: Keith Moore. the success or failure of a particular deal is based on its own merits. Charitable work: Juvenile Diabetes Research Foundation. and author of “Risk Arbitrage: An Investor’s Guide. 01. When you have cash in your balance sheet it is a drag with negative real returns. event-driven strategist. in assuming the particular risks that arise from a merger process. 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. q: how is your strategy different from other merger arb funds? a: We are geographically and market cap agnostic. Vermont 1 2 3 4 5 6 7 8 9 10 11 . and how Europe looks to open. The day before the definitive deal was announced. When many other investments become correlated. Is it up? If it’s a stock. In addition. Connecticut College/university/grad School(s): Bucknell University (‘91) professional Background: Merger arbitrage career began at Neuberger Berman in 1993. have taken costs out. We see this phenomenon as well with deals like PharMerica and Omnicare. if the deal closes at the end of June as we project. We start from the premise that we are fundamental investors. where deals are announced and the impact on the competitive landscape changes so dramatically that it is a competitive response. I think you’re going to see M&A as a tool. given what we went through with Lehman and the financial crisis. spoke to Bloomberg’s kelly Bit about what deals he’s watching and why the outlook remains bright for M&A activity in 2012.’ We do a tremendous amount of research to judge whether a transaction will close or not. In addition. Their balance sheets are bloated with cash and they have maintained access to credit. cut staff. who manages $360 millionworth of merger arbitrage strategies at New york-based First Eagle Investment Management LLC. we attempt to isolate our investors from this type of volatility. I typically feel that it’ll be up if it’s a risk-on day and it’ll be down if it’s a risk-off day. we subcategorize the merger arbitrage universe into investments that tend to be rate-ofreturn focused versus those that are event focused. Portfolio manager at First Eagle since 2003. with consensus closer to 2 percent. there’s this natural uptick in competitive bidding situations. Hertz and Dollar Thrifty would be a similar story. That is below what most of corporate America is hoping for and wanting to show on their top and bottom line. Queechee.12 Bloomberg Brief | Hedge Funds 11 Spotlight First eagle investment management’s Jason dahl on profiting From m&A Jason Dahl. 2011 has been a really good example of incredible market dislocation. as it always has been. I can wake up and see where Asia is going. GDP growth estimates for 2012 range from 1 percent to nearly 4 percent. where one party announces a definitive transaction and another competitor in the industry will say. as well as trying to determine when it might close. With our strategy. q: What m&a deals are you watching? a: The hostile acquisition by Martin Marietta Materials for Vulcan Materials is an interesting one because it’s a horizontal merger. We believe that the market is pricing this transaction to yield approximately 8 percent annualized. they are largely driven by their own dynamics.” Favorite restaurant: Simon Pearce. MKM Partners. even more importantly. m&a wise? a: Many corporations globally. With our strategy. and approach both differently. we are basically buying something and taking on a risk – what we call ‘deal risk. We think this helps us to manage volatility as well as to allocate capital. utilizing that cash to buy companies makes a tremendous amount of sense for many companies. Family: Married with four kids. That is why we think we’ll see very robust M&A in the next few years. q: What drove returns in a volatile year? a: We have invested this year as we do every year.’ That’s the optimal situation.03. it traded up to reflect the probability of closing. made their businesses more efficient. 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. In general. we’re pleased when our investments are not. yet the strategy was able to perform in August and September. to identify risks that might be underpriced and that we want to avoid. to get to that earnings growth. So there’s typically a natural flow of capital out of long-only portfolios and to investors like us. it’s two like businesses that could potentially be put together to get $250 million of costs savings out per year. Goodrich was trading at what we believe was fair value. q: What can we expect from 2012. We have 65 to 70 deals in our portfolio right now. and that ultimately fundamentals will drive the probability of deal closure. to begin with. you’re taking $250 million in cost savings out? I want that and if you buy them I can’t. ‘Wow. It is interesting to see that this year with many alternative strategies. Institutions that were long Goodrich before the transaction was announced earned a one-day premium on their investment. the correlation between them has been heightened. hometown: wilton. We see this around the world. where the proposed merger is designed to take costs out.
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