Top Hedge Fund News Wrap – Week of 090312
Attention Poor People – Ignore This Advertisement! The market continues to buzz about the Jobs act from the Securities and Exchange Commission, which rolls back restrictions on Hedge Funds conducting public relations and advertising. An editorial in the New York Times questioned the message being sent by regulators, who are removing restrictions on marketing just as the SEC is declining to create investor greater protections around Money Market funds. US News covered resistance to the act from mutual fund groups and others, that are concerned that lower-level, non-accredited investors may somehow get sucked into investing in sophisticated hedge funds through advertising. Finally, Barrons delves deeper into investor accreditation, saying that, until Madison Avenue figures out how to create ads that are invisible to poor people, the responsibility will be on the hedge funds to determine investor accreditation.
Fighting Short-termism With Lock-ins. Brummer & Partners raises $500 million for a new long-term hedge fund named Carve. The fund is a novel approach to managers who are plagued by short-term investment outlooks by investors, and the threat of redemptions. The solution: Require a three-year lock-in period for anyone who puts money into the fund.
Exploring The Pain Trade: The financial press continues to take swings at the pinata of lackluster Hedge Fund performance results from two weeks ago, and The Wall Street Journal has managed to knock out some more editorial candy in a piece about “pain trades”- that is, investments that hedge fund managers have to make in the already-popped S&P to avoid being left behind even further behind. Hedge Funds bet on further sell-offs earlier in the year, and now have a large gap to close, with the S&P up more than 10% year to date, compared to sub-2% returns in the broader hedge fund index.
Women Make Better Traders… Not Because Of The Trades They Make, But Because of The Trades They DON’T Make. Lex van Dam, former Goldman Sachs trader and partner in Hedge Fund Hampstead Capital discusses research in Forbes that shows that female traders perform better than their male counterparts. The reason is not because they make better or faster analytical decisions, but rather because they are more patient, trading less and ergo, paying less to brokers in performance squelching commissions. Lex goes on to push the value of diversity on the trading desk and in the boardroom.
News in Brief:
Man Group has teamed up with Nomura to launch a computer driven bond hedge fund called Nomura Man Systematic Fixed Income fund.
Hyung Lim, ex-Altera executive pleads guilty to insider trading.
Strategic Value Partners LLC hires Steve McGuinness, a former executive at Goldman Sach’s.
Atom Capital Management has launched a new long-short Japan hedge fund called Atom Japan Fund (importance: third come back, will this time be the charm?)
Hedge fund manager Tom Steyer’s Green stance makes him the sole billionaire to address the Democratic Convention.