According to a U.S. Federal Election Commission report two billionaire hedge fund managers gave substantial donations to a super-political action committee whose goal is to help elect republican candidates to Congress.
The super-PAC, known as Ending Spending, was founded by Ameritrade’s Joe Ricketts, and taken over by his son Todd in 2013. President of Elliot Management, Paul Singer, donated $350,000 to the PAC, while the Baupost Group, a Boston-based fund, gave $450,000. Founder Ricketts also contributed $550,000. The combined value of the three donations, $1.35 million, is the sum total of all donations Ending Spending has received for the first quarter of 2014.
The Baupost gift should have been recorded in FEC paperwork as coming directly from Seth Klarman, Baupost’s chief, said the firm’s spokeswoman Diana DeSocio.
Ending Spending has been primarily a pet project of the Ricketts’ family until Todd Ricketts took over its operations, trying to promote the cause and elicit funding from outside family sources. The super-PAC and its partner non-profit, which does not publicize its donors, have raised about $25 million since 2010 when Joe founded it.
The elder Ricketts made his fortune through the Omaha-based TD Ameritrade online brokerage service, valued at about $3 billion, says the Bloomberg Billionaires Index. Todd and his three siblings have a majority stake in the Chicago Cubs.
According to two unnamed sources, Bartosz Pawlowski, chief of emerging market strategy at BNP Paribas, will be leaving to take up the role of portfolio manager at Finisterre Capital. Pawlowski was with BNP since 2009.
Finisterre Capital is London-based and was founded in 2002 with about $1.7 billion assets under management. The fund mostly focuses on emerging markets. In 2011 the Principal Financial Group, a US-based investment manager, bought a majority of the firm.
Finisterre has been adding managers at a quickening pace. In the earlier part of this year the company hired David Burnside as the head of business development. Burnside was at BlueBay Asset Management previously.
It is useful to note that while Finesterre seems to be on a successful slope, other hedge funds in the emerging market space are moving more slowly, or closing shop. Avantium Investment Management, which was started in October 2011 was forced to shut down due to slow gains. In February Brevan Howard Capital Management also closed-up their Emerging Markets Strategies Fund as a result of a lot of 15% during 2013.
Finesterre boasted porfits of £6.3 million during 2012, and its Principal Finisterre Emerging Market Debt fund is so far up 3.48% this year, compared to a benchmark of 1.59%.
The best performing midsize fund in 2013, according to Bloomberg Markets’ hedge-fund ranking, was Senvest Partners, reeling in a 79.4 percent catch overall. Richard Mashaal and Brian Gonick, Senvest’s managers, have their eyes set towards stocks which have a good chance of doubling, or even tripling in price in from one to three years.
The $550 million long/short fund saw seven of their top 20 positions lift-off by 100 percent or even more, accounting for the fund’s overall phenomenal return.
Since Senvest was launched 17 years ago the hedge fund has gained an average of 20.6 percent each year, as of December 31, 2013. Of course the fund has had its share of downturns, including a crippling loss of 54 percent in 2008. That downturn, however, was easily compensated by a skyrocketing comeback the following year of a 229 percent gain in 2009, while buoyed by the impressive, to say the list, uptick of 169 percent in 2003.
Senvest’s largest holding is Howard Hughes Corporation, says Gonick. Shares of this Dallas-based property management company climbed by 17 percent so far this year; reaching a price of $14.43 on March 24. Hughes Corp’s chairman is Bill Ackman, hedge-fund manager of Pershing Square Capital Management LP.
In a recent interview reported in Seeking Alpha, CEO and President of Doral Financial Glen Wakeman, spoke about the firm’s Q4 2013 earnings.
Despite some of the losses the firm encountered he outlined the positive side of the firm’s activities. He said:
“Our U.S. operations continued to execute extremely well. Assets now exceed $2.8 billion and we continue to maintain a track record of minimal delinquency. Also importantly we continue to grow our U.S. deposit base. We have now reached $1.7 billion in retail deposits and expect to continue to see solid growth during 2014. The U.S. operations are now essentially funding independent….once again our capital exceeds our regulatory requirements. So in a summary, we are making progress building a good bank that can offset the cost of a bad bank.”
He was joined in the interview by colleague Enrique R. Ubarri-Baragano and David E. Hooston.
The west, including Europe and the United States, are beginning to take action in the form of sanctions against Russia to register their displeasure with Russian action against Ukraine and Crimea. In response to those sanctions hedge fund managers are making adjustments to their positions to prepare for any economic backlash that could result.
So far governmental sanctions against Russia have been a far cry from severe as western countries proceed cautiously in fear that the backlash to their actions could hurt economically at a time when many governments are feeling the beginning of economic recoveries which have been years in the making.
Some of the sanctions imposed so far against Russia have included travel bans on some of Russia’s high-echelon officials; the freezing of assets; and credit card payment restrictions. More moves are threatened if Russia makes further excursions into Ukrainian territory.
“So far, it’s been relatively mild. But I think if there is going to be wider impositions of sanctions, which I think is the program they’re speaking of, in the next phase of the sanctions it would be much more severe,” Deep Kumar of III Associates said at the Investor’s Choice Hedge fund Awards, a hedge fund industry event.
“And if that were to be imposed, I think there would be implications for global growth and implications for asset market valuations or stresses, banking stresses to develop. I think all of those could start to come into play and asset markets would get hit in that situation,” he added.
Head of Greenlight Capital, David Einhorn, has decided to drop the lawsuit he filed to unearth the name of the Seeking Alpha blogger who revealed his fund’s stock positions in advance of a public announcement.
Greenlight announced that it “has resolved the matter privately to our satisfaction,” but did not name the indiscreet blogger. Einhorn spokesperson Jonathan Gasthalter did not comment further.
How Einhorn unmasked the blogger remains a mystery, and whether Greenlight will take any further action against “Valuable Insights,” the blogger’s pen name, is still unknown.
Director of contributor success at Seeking Alpha, Colin Lokey, stated on their website that they did not give Greenlight the name of the blogger. He added that his website is supports their contributors rights to remain anonymous if they so choose.
“Greenlight dropped the suit of its own accord,” said Mr. Lokey. “We did not at any time disclose the author’s identity formally or informally, and at no time were our actions dictated by reaching a deal with Greenlight.”
A lawyer for Seeking Alpha, David Korzenik, confirmed Lokey’s position. He said that they did not make any deals with Greenlight, explaining that there was absolutely “no disclosure” to the hedge fund.
A hearing was supposed to take place on April 1 in New York State Court to decide if Seeking Alpha could be forced to reveal the name of “Valuable Insights.” Greenlight made the claim that the blogger’s post had disrupted the hedge fund’s strategy of buying shares of Micron Technology.
According to an announcement made by LSK & Partners, Dominique Strauss-Kahn is planning on raising $2 billion for a macro hedge fund, in response to the trend of investors backing low-risk investment strategies. Strauss-Kahn is a former head of the International Monetary Fund and now runs LSK & Partners.
This development is the first partnership Strauss-Kahn established with an asset manager on behalf of the DSK Global Investment Fund, which will invest internationally, according to Mohamad Zeidan, CEO of the company.
Strauss-Kahn will be part of a two person team managing the fund, his partner being his daughter, economist Vanessa Strauss-Kahn. He is now visiting China raising capital for the hedge fund. His target audience is institutional investors and high net-worth individuals.
“China plays and will play a predominant role in this fund,” Zeidan said. He is in Shanghai now also promoting the new fund. The fund is waiting for approval from regulators in Luxemburg before it is permitted to raise money.
“We have met with the largest groups in each sector and I’m talking to the financial sector, insurance companies, bankers, financial groups, private and public,” he added.
Exchange traded funds, or ETFs, have been gaining in popularity recently in the separate accounts type of investments. Investors and investment advisors are both examining the potential of ETFs to contribute to the success of customized portfolio strategies.
A new type of investor is emerging, known as an ETF strategist, who will customize tactical short-term, or strategic long-term portfolios to navigate more safely through a volatile marketplace.
Today the largest ETF portfolio manager is a firm called F-Squared. They have made the decision to break away from conventional investments; making the change to strategies that give protection when markets tumble.
In addition, F-Squared also includes in their investment strategies what are known as smart-beta ETFs. One example is ETFs of the First Trust AlphaDEX. These ETFs are chosen by examining growth factors such as 3-, 6-, and 12-month price appreciation; sales to price, and one year sales growth. First Trust AlphaDEX also picks their holdings based on value factors such as book value to price, cash flow to price, and return on assets.
The rise in the popularity of ETFs has been described by Morningstar, an online financial advisor.According to them, ETF managed portfolios and strategies in which more than half of their investment is in ETFs, realized an increase in their assets by 40 percent during 2013, amounting to $96 billion.
David Einhorn, vocal head of Greenlight Capital, wants to know who leaked the name of one of his firm’s investments last year in a blog post published on the financial website “Seeking Alpha.”
Mr. Einhorn is angry that an anonymous blogger revealed that Micron Technology was one of his investments, and he wants to go to court to find out who was behind the revelation.
Greenlight has already filed a legal motion which is attracting attention from various quarters around Wall Street demanding that Seeking Alpha own up to the identity of the blogger. With the name in hand, the firm said in its legal brief, it “can sue the pseudonymous poster under his or her real name.”
New York Supreme Court Judge Carol R. Edmead originally ordered Seeking Alpha representatives to appear in court this past Tuesday to explain to the court why she should not agree to Greenlight’s motion, but the hearing was delayed until April 1st.
The case has great significance for what types of financial information can be reported using anonymous sources. Of even greater importance is how courts will deal with the ever more prevalent trend of confidential information being posted on social media sites and comments in established news websites.
Leaks to the media on Wall Street are not unusual; it is even an accepted tradition. It is quite rare for firms to legally seek out the leakers, or the media outlets where the information was published. It is not clear that any kind of criminal violation took place by leaking confidential information. Yet, it could be a civil violation if the leaker transgressed a fiduciary duty or a particular agreement to maintain the privacy of certain information.
Mr. Einhorn’s brief stated that, “the only persons who lawfully possessed information regarding Greenlight’s position in Micron were persons with a contractual, fiduciary or other duty to maintain the confidentiality of Greenlight’s position: Greenlight’s employees, counsel, prime and executing brokers and other agents.”
Many people could have had access to Greenlight’s stake in Micron, including his employees, his outside lawyers, and army of bankers and traders who helped him build the investment position. Any of them could have either written the blog post or leaked the information to the blogger.
In a rare moment of agreement, Leon Cooperman, CEO of Omega Advisors hedge fund; and iconic investor Carl Icahn, agreed that the best thing for eBay to do at the moment would be to spin off its PayPal online payment business.
“I give Carl a lot of credit for taking the time and showing the energy, and in this case, we happen to agree with him,” Cooperman, an eBay shareholder to the tune of about 2 percent of shares, said. “I think they should spin out a portion of PayPal.”
Icahn, who also happens to own about 2 percent of eBay, has been sending a strong message to the on-line bidding company for the past few weeks that the time has come to unleash PayPal. Icahn has more than once said that eBay behaves in a less than perfect manner when it comes to corporate governance.
In a different interview Icahn said that John Donahoue, CEO of eBay, has achieved “mediocre” results for the company, especially compared to Amazon, Visa and Matercard.