24/08/2010 Author: Shannon Hawthorne

HFMWeek Daily Snapshot - 24 August

NEWSPAPERS AND WIRES
The boyfriend of a former Walt Disney administrative assistant admitted to engaging in a scheme to sell early access to the company's earnings report in US district court in Manhattan yesterday, reports the Wall Street Journal. Yonni Sebbag and his girlfriend Bonnie Hoxie, the former assistant to Disney's head of communications, allegedly contacted more than a dozen hedge funds and investment companies anonymously in March, offering to provide an early look at Disney's earnings."I disclosed material and non-public information about the Walt Disney to outside investors," Sebbag said. Sebbag pleaded guilty to conspiracy to commit securities fraud and wire fraud and one count of wire fraud. He has been in custody since his arrest in May.

Japan's Nikkei average fell below 9,000 points for the first time in 15 months today, with hedge funds and foreigners seen selling as concern mounts over authorities' inaction on a strong yen that threatens the fragile economic recovery, Reuters reports. The 9,000 to 9,100 area had been strong support for the benchmark Nikkei .N225 since last year and several attempts this month to break through on the downside had been checked just under 9,100. If the Nikkei ends the day below 9,000, that will add to downward momentum with few technical targets to break its fall, market players said. "Selling by hedge funds and European investors appears to be hurting stocks and if the Nikkei goes further below 9,000, unloading by individual investors will also likely accelerate," said Masayuki Otani, chief market analyst at Securities Japan.

Boston-based investment firm Moody Aldrich Partners has teamed up with Wilshire Funds Management to assist in the development of its open architecture hedge fund seeding platform, reports FINalternatives. The new vehicle—the MAP Harvest Fund—is a private equity fund that provides acceleration capital to promising, newly independent hedge fund investment teams. The Harvest team, with input from Wilshire, acts as an adviser to its seeded partners to assist in building out investment and key administrative functions. The Harvest platform also provides access to a global distribution network and marketing resources to drive direct asset growth in the seeded firms.  

Speculators including hedge funds are more bullish on commodity prices than at any time since April 2008 after adding to wagers that wheat and corn will keep climbing, Commodity Futures Trading Commission data show, reports Bloomberg. An index of speculative holdings in futures for 20 commodities rose 2.6% to almost 1.18 million contracts in the week ended 17 August, according to data released by the CFTC on 20 August. The index, compiled by Bloomberg, is derived by subtracting the short positions, or bets on lower prices, in each commodity from the long position. Net longs climbed in wheat and corn and dropped for gasoline, copper and cocoa.

The founder of a large hedge fund, who was once criticised as a "hard and calculating man" by a judge, was one of the Tories' biggest donors in the general election, reveals the Guardian. Jon Wood, who established the SRM Global hedge fund after a successful career as an investment banker at UBS, gave £500,000 ($769,634) to the Tories on 4 May – two days before the election. This made him the second most generous Tory donor during the election – JCB Research gave £803,000 ($1,236,032) – according to figures released today by the Electoral Commission. The Conservatives, who faced embarrassment last week when the former tax exile David Rowland resigned as the party's next treasurer, were bracing themselves for a fresh round of damaging headlines when Wood was named today for the first time as a donor.

Swiss asset manager GAM Holding said first-half net profit rose 36% after the company staunched losses from its hedge funds unit, where clients added net new money for the first time in two years, Reuters reports. Assets under management rose 3% from the year end to 116.6 billion Swiss francs ($112bn) as net new money of 5.6 billion francs ($5.4bn) offset foreign exchange losses and the impact of falling equities. The company said it remained cautious over the near term outlook, however. "Private investors remain generally risk-averse and, in particular, continue to favour other asset classes over equities and hedge fund strategies," Chairman and chief executive Johannes de Gier said in a statement.

A trade group representing hedge funds spent $980,000 in the second quarter lobbying federal officials on financial regulations, including stricter oversight of derivatives trading, according to Bloomberg. The total is up slightly from the $950,000 that the Managed Funds Association (MFA) spent on lobbying in the same quarter a year ago. But it's less than the $1.37m spent in this year's first quarter by the lobbying organisation for hedge funds, which cater to institutional investors and wealthy individuals. According to a 20 July filing with the House clerk's office, the MFA lobbied on proposals intended to bring greater transparency and accountability to trading of derivatives.

Coffee may extend gains from near a 13-year high as hedge funds and other speculators add to wagers that prices will climb amid a production shortfall, an Indian exporters’ group said, reports Bloomberg. Prices of arabica and robusta beans may climb as much as 10% in the next two months as the “balance” is in favour of demand, said Ramesh Rajah, president of the Coffee Exporters Association of India. Commodity assets under management gained about $8bn in July to more than $300bn, driven mostly by new inflows, according to Barclays Capital. Arabica is the best-performer on the Reuters/Jefferies CRB Index this year, wheat has jumped 49% since the end of June and corn has gained 15% on speculation the Russian drought will spur demand for US crops.