In today's Morning Brief:
It’s getting harder to start a new hedge fund.
Industry tracker Hedge Fund Research reports there were 245
launches in the second quarter of 2012, which is the lowest
number since the fourth quarter of 2010. But this
isn’t surprising: Investors are becoming a little
leery of hedge funds, given that most funds are missing out on
the great bull market of 2012 and the average fund lost money
last year, according to HFR.
Bad news for Apple fans, a group that seems to include most
hedge funds. Its stock closed Friday below its 50-day moving
average for the first time since late July. Maybe the funds
that bought the stock last Friday for quarter-end window
dressing are now kicking themselves.
Finally some (relatively) good news for John Paulson. The
hedge fund manager still living off the reputation he built
betting against sub-prime loans in 2007 pared his losses in his Gold and Advantage
funds in September. Now the Paulson Gold fund is only down
3.9 percent for the year after a 13 percent gain that month,
while the Advantage fund is off 14 percent after returning 3.6
percent in September. Of course, the S&P 500 was up more
than 16 percent in the first nine months.
Moore Capital Management’s European unit made $51.3 million in 2011, which was a 45
percent increase from 2010, after the firm cut expenses,
according to reports. Moore Europe’s profits were
then distributed to seven individuals, including firm founder
Louis Bacon and portfolio manager Greg Coffey. Never mind that
Moore Global Investments (managed by Bacon), Moore Macro
Managers and the funds run by Coffey all lost money last year.
(Earlier this year, Bacon returned $2 billion to investors on
the grounds that the size of the firm’s
flagship fund may have hampered performance.)
The average hedge fund was up 2.6 percent in the third quarter
and 5.1 percent for the year, according to one database. Sorry,
but my Vanguard index fund is doing more than three times as
well with low fees. (Yes, I know it got hammered in
Remember that Argentinian ship that Elliott Management is
trying to seize? Well, the folks in the government of Ghana are
still holding it in the port of Tema,
outside Accra, Ghana, awaiting a court order.