Bad July: Boone Takes His Eye off the Ball
Boone Pickens might be doing the Lord's work in trying to spearhead a change in America via the Pickens Plan, but he took his eye of the ball in July, with his commodity fund suffering a horrific drawdown last month:
Sources say the commodity half of the legendary wildcatter's hedge fund BP Capital sank about 35 percent in July. The fund is believed to be down about 10 percent currently for the year.
"We notified our commodity-fund investors last week that the steep decline in natural gas and oil prices has had an adverse impact on our performance," a Pickens spokeswoman said in an e-mail.
"We continue to analyze the market and adjust accordingly," she added, declining to comment further. New York Post
BP Capital runs roughly $7 billion in two funds with the BP Capital Commodity fund apparently taking the hit. Boone called for $150 oil before Morgan Stanley famously did in early June, but his promotion of the Pickens Plan clearly consumed him last month, and it would appear he did not take any chips off the table. With Brian Hunter back staking the natural gas pits, and Peter Thiel sitting on the sidelines after making a well timed exit from crude this spring, you can bet the drama in the energy pits is far from over. But this round goes to the young bucks.
Caffeinated Trader Sets New Record for Portfolio Turnover
I might have to revise my dire outlook for the SellSide...even at 2 cents a share they could make a killing from servicing Greg Coffey…
Greg Coffey, emerging markets manager at $23.7bn (€15.7bn) London hedge fund GLG Partners (GLG-NYSE), turned over the portfolio of his flagship $5bn fund 56 times in May.
Investors have dubbed this an extreme example of a trend this year for hedge funds to trade more actively in a volatile environment. They said average turnover rates had almost doubled, but one investor said Coffey changing his portfolio on average 2.8 times daily was “an extraordinary example”.
The trading data is contained in reports to investors seen by Financial News. They showed Coffey traded $254.6bn of emerging market securities for the fund in May, ending the month up 5.1%. He made estimated returns of 1% in June to end the first half down 13.5%, according to the documents.
I thought Mary Lisanti and some of the growthstock jockey’s were a little extreme earlier this decade when they essentially held a position an average of 30-40 trading days, constantly flipping stocks around while underperforming their peers and relevant benchmarks. Those numbers, which approximated 600% annualized turnover, were extreme for mutual fund managers.
But this turnover is insane, even if Coffey and GLG were re-positioning the portfolio ahead of his looming departure. Is he currying favor with the SellSide ahead of his new gig? Do the clients care? Brokers need to eat too, but this is ridiculous.
There has gotta be an easier way to make 5% in a month.
Heartthrob? Sure..his institutional equity salespeople and the dark pools love him.
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No time for a haircut....too busy trading..
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City heartthrob gives up £160million bonus at hedge fund to be his own boss
Mail Online
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The content contained in this blog represents the opinions of underthecounter. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author. No Position
Icahn Enterprises Year in Purgatory
Carl Icahn is far from infallible. His foray into WCI Communities left me questioning my own judgment, but sometimes you can win taking the opposite side of the big boys.
Hopefully Carl's son did not put him into that stock, but whatever analyst did deserves to be fired. Add up Carl's losers, and all of a sudden you are talking real money. Fortuantely he hedged via S&P puts, which was the best move he made, but is having a tough year:
The Far Rockaway, Queens native's hedge funds are suffering their first losses since the 72-year-old opened them in 2004. The losing streak, which started midway through 2007, is expected to continue when Icahn Enterprises, the publicly-traded holding company for his hedge funds and other investments, reports earnings on Tuesday.
Shares of Icahn Enterprises, which include the hedge funds and other businesses, have plummeted nearly 50 percent this year as investors have backed away from their initial enthusiasm for the activist investor. His funds were up about 2 percent last month, but are down roughly 6 percent for the year, according to investors.
His biggest loss has been on his Motorola investment, which is down nearly 30 percent since he first got involved with the company in February.
Sources said the funds would have been down much more except that Icahn, who's been bearish on the overall market, hedged most of his positions by shorting the S&P 500 and betting against some high-yield bond indexes. New York Post
Surf’s Up: Hedgistan Heads for The Highway (House)
It is summer in Hedgistan, and with apologies to Aspen and Nantucket there is really only one place to be. Hanging there is comparable to a crowded trade with little downside, save for the traffic. The downside is easily avoided.
Dan Loeb is no doubt enjoying himself, and if if you are fan of modern architecture his Rafael Vinoly designed home (click here for pics...hit projects then Highway House-1995). Dan bought the house well, after it had lingered on the market for some time during the previous downturn. And while it might offend the sensibilities of Hamptonites who prefer more traditional architecture, his zinc-roofed and teak house is quite spectacular, at least if you appreciate natural light after punching tickers up all day bathed in fluorescent lightsin a cave like office..
Dan it doing a little entertaining at his spread, including screening movies of his surfing exploits with Wingnut, who gained legend in the Endless Summer sequel:
Two years ago he traveled to Costa Rica with famous surfer Robert "Wingnut" Weaver and a professional filmmaker in tow. Her returned with a tan and a beautifully edited montage of him surfing pristine beaches with attractive and famous people-a film he invites friends to view in the screening room upstairs at his East Hampton home. Hampton Style
Loeb's home was designed in an "L" configuration to protect the lap pool and outdoor areas from the prevailing breezes, and three guest bedrooms give him ample room to invite his less fortunate friends "out East". Of course, it is unknown if Loeb commissioned his very own surf song...
RenTech’s Medallion Fund Smokes Its Peers
Peter Thiel might be a smart guy, but he has figured not yet figured out how to get away with charging 5/44. Thiel's Clarium Capital is running neck and neck with Simon's Medallion Fund year-to-date, with both funds up in the mid 40% range through the end of July....
Simons' $8 billion Medallion fund, the oldest of the three Renaissance Technologies funds, was up 48 percent at the end of July, net of fees, according to people familiar with the funds' returns.
Medallion, which is funded mostly by Renaissance insiders, charges a whopping 49 percent in fees, including a 5 percent management fee and 44 percent incentive fee.That's high even by the standards of an already costly industry - the industry average is a 2 percent management fee and a 20 percent incentive fee - but with such eye-popping returns, no one's likely to complain.
Last year, Medallion earned upward of 85 percent. And despite tumultuous markets last month, which slammed some of the year's best performing funds, Medallion was up nearly 7 percent in July, The Post has learned. New York Post
Thiel and Clarium are within spitting distance, and these two funds have among the best numbers among strategies managing more than $3 billion. But their is a lot of pain in Hedgistan, no matter what the strategy or the manager's pedigree:
