26/01/2012 Author: Will Wainewright

HFMWeek Daily Snapshot - 26 January

NEWSPAPERS AND WIRES
One of America's most high-profile hedge fund managers David Einhorn has been fined £7.2m ($11.3m) by the Financial Services Authority for trading on insider information, reports Bloomberg. The man who made millions shorting Lehman Brothers was fined together with his hedge fund Greenlight Capital for trading in Punch Tavern shares while in possession of insider information. In June 2009 Einhorn gave instructions to sell Greenlight's entire 13% holding in Punch minutes after being told the company was to undertake a "significant" equity-raising.

Hedge funds that loaded up on Greek bonds in the last month — betting on a quick gain — are now scrambling to sell those holdings, fearful that European policy makers will force them to take a deep and binding haircut on the debt, writes the New York Times. But walking away from the trade may not be that easy. While the money managers had little problem snapping up the bonds from European banks eager to sell, the pool of potential buyers is drying up.

Danny Kuo and Todd Newman, two of seven men accused of taking part in a “criminal club” of hedge fund traders and analysts who swapped illegal secrets involving Dell, were allowed to remain free on bond, writes Bloomberg. Both Kuo, a former fund manager at Whittier Trust, and Newman, a former portfolio manager at Diamondback Capital Management, were arrested on 18 January by agents of the Federal Bureau of Investigation. Kuo, who was arrested at his home in San Marino, California, and Newman were ordered to appear in Manhattan federal court today to face the charges.

Several high-profile hedge fund managers are preparing to strike out on their own this year, supported by strong followings and unfazed by a year of poor industry performance that has shaken investor confidence in the $2trn sector, writes Reuters. Managers including ex-Gartmore star Guillaume Rambourg, ex-Barclays Capital commodities trader Todd Edgar and Sutesh Sharma, a senior proprietary trader at Citi, are among those trying their luck, said several hedge fund investors and sources familiar with capital raisings in the industry.

The Dow Jones Credit Suisse Hedge Fund Index team has released its 2011 Hedge Fund Market Review. The report, which examines the drivers of hedge fund performance and asset growth in 2011, found that hedge funds, as measured by its index, finished the fourth quarter up 0.71%; however, the overall performance for the year was down 2.52%.

Hedge fund industry veteran Philippe Gougenheim wants to raise $50m-plus for a highly liquid global macro hedge fund he says can guard against the unpredictable influence of euro zone politicians on markets, reports Reuters. Gougenheim, who was head of hedge funds at Swiss fund firm Unigestion, will launch the Cayman-domiciled Glasnost fund in June, named after the former USSR's 1980s policy of openness and transparency. The fund will offer investors weekly access to their cash with three days' notice, making it far more liquid than most hedge funds, and it will also disclose all its positions to investors every month.