08/12/2011 Author: Will Wainewright

HFMWeek Daily Snapshot - 8 December

NEWSPAPERS AND WIRES
Fifty money managers have used Securities and Exchange Commission rules to keep confidential their stakes in certain companies so far this year, an analysis of securities filings shows, says the Wall Street Journal. The longstanding practice got a new burst of attention last month when billionaire Warren Buffett's Berkshire Hathaway disclosed a $10.7bn bet on International Business Machines Corp.

Some of the hedge fund industry's best-known "macro" hedge fund managers – celebrated for shrewd bets on global economic events – are struggling this year to generate returns befitting their star status, reports Reuters. In a 2011 littered with market-moving events such as the eurozone debt crisis and sweeping central bank action, veteran managers such as Louis Bacon and Paul Tudor Jones might have been expected to book record profits.

Money managers are trying to reduce the number of counterparties to focus on bigger and stable banks to secure their assets and payments as they plan for the worst-case scenario in the euro zone debt crisis, writes Reuters. Uncertainty about the outcome of the two-year-old debt crisis – with the worst-case scenario being a break-up of the 17-nation currency bloc – and shrinking liquidity are complicating the life of asset managers, who are already struggling with diminishing market returns.

Goldman Sachs Group investor James Mercer, in a lawsuit against former board member Rajat Gupta in which the bank is a “nominal plaintiff,” filed court papers opposing a motion by the defendant to dismiss the case, reports Bloomberg. In the lawsuit, Mercer alleged Gupta disclosed confidential bank information to Galleon Group co-founder Raj Rajaratnam, the hedge fund manager who was later convicted of insider trading. Gupta has been charged by federal prosecutors in connection with the Rajaratnam probe.

A turf war may be brewing between two high-profile US prosecutors over who will take the lead in a criminal probe of collapsed futures brokerage MF Global Holdings, writes Reuters. US Attorney Patrick Fitzgerald in Chicago and Preet Bharara, his counterpart in Manhattan, are examining how hundreds of millions of dollars went missing from the futures brokerage, sources familiar with the matter have told Reuters.

LAUNCHES
Germany's Aquila Capital plans to launch an Asia-focused hedge fund and a $150m agricultural fund in the first half of 2012, as part of a plan to expand in Asia and broaden the range of offerings for its largely European clientele, according to Reuters. "The whole mess in Europe at the moment has increased demand for diversification products for the Asian markets," Aquila founder and chief executive Roman Rosslenbroich told Reuters in an interview. Aquila, which manages about €3bn ($4.02bn), opened its first Asian office in Singapore in October.

PEOPLE MOVES
Highbridge Capital Management has laid off "a few" members of its equities strategy team, including Asia joint head Shyan Wen Lim, as the US hedge fund refocuses its investment strategy, people familiar with the situation said on Wednesday, reports the Wall Street Journal. The changes leave co-chief Arjun Menon as the sole regional boss. Highbridge wound down its Asia fund after Carl Huttenlocher, its former Asia head, said he was leaving in March of this year. That fund focused on trading equities and convertible bonds.