Much excitement on Wednesday on alleged news (via CNBC) that George Soros has taken a big stake in the much discussed food supplement business Herbalife. Here’s the auto-update chart on Wednesday. At pixel the price was up 7.9 per cent at $64.70.
Hans-Werner Sinn — he of Target2 imbalance fame — had a piece on Project Syndicate last week in which he stood firm against George Soros and his demands for Germany to leave the euro if it continues to block the introduction of Eurobonds.
Though not because he thinks Germany is wrong to oppose Eurobonds, but rather because he believes there is no legal basis for such demands. Article 125 of the Treaty on the Functioning of the European Union, he says, expressly forbids the mutualization of debt. Read more
Hat-tip to Sam Jones — it’s a 7.85 per cent stake (in the ordinary class A shares) by George Soros.
(Alternate Game of Thrones title: A Storm of Soros)
It’s got a lot of attention so we thought we should throw it up so… here, in its summarised glory, is George Soros’ speech from the Festival of Economics at Trento, Italy. Read more
The family fund managed by George Soros bought up $2bn of MF Global’s eurozone government bonds after the broker’s collapse, according to the WSJ. MF Global had positioned $6.3bn of Italian, Spanish and other peripheral countries’ debt in a series of repo-to-maturity trades which eventually foundered. MF Global’s liquidators sold $4.8bn of the bonds in the days after its bankruptcy, with Soros purchasing $2bn of them below market price. Italian debt has since slightly recovered from its most distressed price levels.
Oct 25 (Reuters) – Euro zone leaders will call on the European Central Bank to go on buying bonds in the secondary market to support the likes of Italy and Spain, according to draft conclusions obtained ahead of a summit on Wednesday…
So the eurozone won’t be relying on the rather meagre EFSF balance sheet after all… maybe. (See below.) Read more
… That’s George Soros and 95 others calling for a common treasury, supervision, regulation and deposit insurance in the eurozone.
George Soros, the billionaire hedge fund manager, has lost a case at the European Court of Human Rights to have his criminal conviction for insider dealing quashed, the FT reports. The failed appeal at announced in a 4-3 decision the Strasbourg-based court is the latest twist in a nine-year battle by the 81-year-old Mr Soros to clear his name following his conviction in France in 2002. The French criminal case hinged on trades that the Hungary-born investor had executed 14 years earlier in the stock of Société Générale that reaped his hedge fund, the Quantum Fund, $2.9m in profits.
John Paulson’s quarterly 13F filing was released late on Monday and the headlines make for interesting reading. We may go through it in more detail later but we thought this portfolio change-up was worth noting right away:
Monday, August 15, 2011 5:25:30 PM RTRS – PAULSON & CO INC RAISES SHARES STAKE IN WELLS FARGO & CO WFC.N BY 64 PCT TO 33.6 MLN SHARES
The decision by George Soros to convert his hedge fund into a family office casts light on to efforts by rich families to avoid disclosure under new financial regulation, the FT says. Soros will hand back cash to his few remaining outside investors so his $24.5bn Quantum fund can escape the need to register with the SEC, a new requirement under Dodd-Frank. Financial News figures the new rule may signal a black year for hedge funds, with some managers worried the SEC might second-guess, or even intervene in, their strategies. Meanwhile, MarketWatch wonders what the effect of Quantum’s closure might be on open-end mutual funds and ETFs with“alternative” or hedge-like characteristics.
George Soros, the billionaire hedge fund manager, is closing his Quantum fund to outside investors and returning their money, the FT reports. Quantum, which will continue to manage about $24.5bn of Soros family money, blamed the decision on new financial regulations requiring hedge funds to register with the Securities and Exchange Commission. “An unfortunate consequence of these new circumstances is that we will no longer be able to manage assets for anyone other than a family client as defined under the regulations”, Jonathan and Robert Soros, Mr Soros’ sons and Quantum’s co-deputy chairmen, wrote in a letter to investors on Tuesday. New regulations require hedge funds with more than $150m under management to report details about investments, employees and investors, and also makes them subject to possible inspections by the SEC. Mr Soros’ decision contrasts with his own reputation as an advocate for both government and corporate transparency.
An end of an era, of sorts.
Bloomberg reports Tuesday morning that Soros Fund Management LLC will no longer be investing non-family capital and will be returning less than $1bn to investors. Read more
A break in the clouds, for Denmark’s stormy covered bond market:
(Bloomberg) Denmark’s covered bonds are likely to be snapped up by U.S. buyers even after Moody’s Investors Service downgraded the securities, according to Alan Boyce, the head of the George Soros joint venture Absalon Project. Read more
Silver prices plunged, suffering their worst one-day drop in dollar terms in three decades, the Wall Street Journal says. Silver’s fall of $3.50, or 7.6 per cent, and a 1 per cent drop in gold prices Tuesday, came as some major investors have been selling. George Soros’s big hedge fund, a firm operated by high-profile investor John Burbank and some other leading firms have been selling gold and silver, the WSJ reports, citing people close to the matter, after furiously accumulating precious metals for much of the past two years. FT Alphaville notes that much of the silver sell-off was was attributed to the CME imposing tougher margin requirements for speculative traders for the second time in a week.
For the commute home, where no-one criticises your fiscal policies,
– More on Goldman’s bearish commodities turn. Read more
The top 10 hedge funds made $28bn for clients in the second half of last year, $2bn more than the net profits of Goldman Sachs, JPMorgan, Citigroup, Morgan Stanley, Barclays and HSBC combined, according to new data, reports the FT. Even the biggest of the hedge funds have only a few hundred employees, while the six banks employ 1m between them. According to the data, calculated by LCH Investments, which invests in hedge funds run by Edmond de Rothschild Group, the top 10 funds have earned a total of $182bn for investors since they were founded, with George Soros making $35bn for clients – after fees – since he set up his Quantum Fund in 1973. But John Paulson’s Paulson & Co is closing in on Soros’s fund as the hedge fund to have made most money for investors, after scoring net gains of $5.8bn in the second half of 2010.
The US Treasury has been urged to sell “ultra-long” bonds with maturities of up to 100 years to help lower the government’s borrowing costs, reports the FT. The issue was raised at the quarterly meeting on Monday of the Treasury Borrowing Advisory Committee (TBAC) with officials from the US Treasury and New York Fed. The longest US bond has a maturity of 30 years, and in recent years, the UK, France and China have sold 50-year debt. The TBAC panel comprises 13 executives from Goldman Sachs, JPMorgan, Morgan Stanley, RBS Securities, Bank of America and investment firms active in Treasury trading, including Soros Fund Management, Moore Capital and Tudor Investment.
Respected economist Paul de Grauwe, of Leuven University, has a big warning for the eurozone — on the back of the Irish and Greek sovereign crises.
According to him, it was the idea of a sovereign debt restructuring mechanism (or burdensharing for investors) proposed on October 18, that triggered the latest spree of speculative bond attacks on weak eurozone members. Read more
Out from AR magazine just moments ago is their annual ranking of the biggest hedge fund managers in the US. Unsurprisingly, Bridgewater is still number one. Surprisingly, it has increased its lead by a significant margin.
The firm now manages a titanic $50.9bn according to AR. Its nearest rival is JP Morgan – the bank – which manages around $41.1bn in hedge funds connected to its Highbridge business. Read more
Stanley Druckenmiller, the hedge fund manager known for making the bet that helped George Soros “break the pound” in 1992, announced his retirement on Wednesday, saying he was disappointed in his performance during this year’s market volatility, the FT reports. The exit of Druckenmiller, 57, could be followed by similiar departures. from the top ranks of macro hedge fund managers. Bloomberg reports that Druckenmiller will create a family office overseeing some of his fortune, estimated at $2.8bn, when he winds down the firm in 2011.
Stanley Druckenmiller, the hedge fund manager known for making the bet that helped George Soros “break the pound”, announced his retirement on Wednesday, saying he was disappointed in his performance during this year’s market volatility, the FT reports. For decades, Mr Druckenmiller, 57, ranked among the world’s most successful macro hedge fund managers – who seek to profit from long-term economic trends – and his retirement could signal a parade of similar departures.
You know things are heating up when George Soros wants to invest, and in this case, it’s Asia’s oldest stock exchange. Soros is in final talks to buy Dubai Holding’s 4 per cent stake in the Bombay Stock Exchange for about $40m, valuing the bourse at about $1bn. FT Alphaville ponders the move. Read more
George Soros, the billionaire investor, is in final talks to buy Dubai Holding’s 4% stake in the Bombay Stock Exchange, reports the FT, citing people close to the matter. Soros Fund Management plans to pay about $40m for its stake, valuing Asia’s oldest bourse at about $1bn, the report added. Under India’s rules, individual foreign entities can own up to 5% in a local bourse.
Within the big wide world of Asia-focused funds, some interesting trends emerge via recent research from Singapore-based consultancy GFIA.
As the FT reports on Tuesday, Asia-based hedge fund managers have been generating higher returns than those outside the region running similar strategies, according to the GFIA study, which tracked the performance of 668 funds from January 2005 to May 2010. Read more
Hugh Hendry thinks George Soros is a swell guy. The kind of guy hedge fund managers want to be. But Hendry also thinks Soros has embraced socialism, and that it’s time for the Eclectica fund manager to take his place. Oh, and London’s taxes are too high. See FT Alphaville for the video. Read more
While hedge funds have been virtually stampeding out of Japan for the last few years, DE Shaw, the $24bn hedge fund founded by computer scientist David Shaw, is set to open offices in Tokyo as well as Shanghai, in a push to expand its Asian operations.
The group’s Shanghai office, according to the FT, will mark its first expansion into mainland China, with a team of private equity analysts focusing on what the firm describes as “investment opportunities”, including financial research and facilitating relationships with portfolio companies. The Tokyo office, meanwhile, will focus more on investors in Japan, including providing marketing and account management services. Read more
Gold is rallying — but is it all because of one man’s lack of faith in the euro?
As Bloomberg reported on Monday: Read more
It’s just as well that George Soros has a philosophy (as the Wall Street Journal reminds us) of spotting a bubble and buying it, as he puts it.
When it comes to gold, which he famously described at the recent World Economic Forum in Davos as “the ultimate asset bubble”, he has indeed put his money where his yellow metal is. Read more
The great, the good and the simply pompous of finance have been gathering in Davos, Switzerland for the annual World Economic Forum on Tuesday.
Lucky for us — the great uninvited — the rise in social media means we too can feel part of the buzz and economic hot air conjecture. Read more
Top Wall Street bankers attending the World Economic Forum this week in the Swiss town of Davos will use the meeting to lobby regulators against Barack Obama’s plan to curb banks’ size and trading activity and break-up big institutions. Executives said they would push their case quietly to avoid giving the US president the “fight” he promised last week. Alistair Darling, UK chancellor, at the weekend rejected the US idea of limiting banks’ size and activities. But billionaire financier George Soros welcomed the plan.