29/11/2011 Author: Will Wainewright

HFMWeek Daily Snapshot - 29 November

NEWSPAPERS AND WIRES
Raj Rajaratnam, the Galleon Group hedge fund co-founder convicted of directing the biggest insider trading scheme in a generation, said the use of wiretapped calls by the US raises “substantial” issues of law that should allow him to remain free during his appeal, according to Reuters. Rajaratnam, 54, who is scheduled to report to prison on 5 December, is seeking to remain free pending the outcome of his appeal, according a letter his lawyers sent today to Catherine O’Hagan Wolfe, clerk of the US Court of Appeals in Manhattan.

GlobeOp Financial Services has developed its GoLoans service to offer bank loan portfolio managers online access to a single, integrated source of lifecycle events data. “In today’s low interest rate environment, syndicated bank loans are a key investment strategy option for managers seeking better yields,” said Vernon Barback, GlobeOp president and chief operating officer. Established in 2006, GoLoans is an independent, proprietary service and offers highly automated lifecycle management support for a wide range of instruments.

Emerging hedge fund managers are getting more attention from institutional investors because they tend to produce better returns than larger, more established funds, but industry insiders disagree about the extent of the outperformance, says Pensions & Investments. Hedge fund investment consultants and early-stage fund of hedge funds managers are critical of industry-produced and academic analyses that don't correct for survivorship and backfill biases found in the various public databases that aggregate self-reported hedge fund returns.

A management consultant used tips from a hedge fund employee to profit by betting on shares in companies including Julius Baer Group and Swatch Group, prosecutors said in a London court today, reports Bloomberg. Rupinder Sidhu faces 23 insider-trading charges and one count of money laundering in a jury trial that began today and is expected to last three weeks. Sidhu pleaded not guilty in April.

US District Judge Jed Rakoff intimated last month that he wasn’t happy with the Securities and Exchange Commission’s proposed settlement with Citigroup over the creation and sale of a security that cost investors $700m, writes Bloomberg. Yesterday, Rakoff made it official: The proposed $285m penalty seemed disproportionately small when compared with the losses, Rakoff ruled, and would keep secret crucial details of the risky instrument Citigroup was selling.

Hedge fund managers see global growth dipping next year amid likely eurozone sovereign defaults and a slowdown in China, reports the FT. The views are disclosed as part of a survey covering more than a third of the world’s hedge fund managers with $800bn of assets between them. The hedge fund managers, asked about their macro-economic views, foresaw bleak prospects for 2012. Many felt the European Central Bank should embark on further monetary easing, with just under 80% of respondents saying they thought the Federal Reserve should as well.