Cohen Preparing for a Comeback

Billionaire Steve Cohen, the former head of the firm SAC Capital Advisors—which pleaded guilty to securities fraud in 2013 and agreed to pay a record $1.8 billion fine—is considering starting a new hedge fund, according to a recent Bloomberg article. While Cohen wasn’t charged with wrongdoing in the case, he was barred from managing outside capital until January 1, 2018 and was required to convert his shop to a family office. According to the article, his “returns are just beginning to rebound after 18 months of barely making money at his family office, Point72 Asset Management. He’s now up about […]

Buffett Wins his 10-Year, Million-Dollar Wager

Warren Buffett is the winner in the bet he made with finance professionals back in 2007 that, over the ten years between January 1, 2008 and December 31, 2017, the S&P 500 would outperform a portfolio of funds of hedge funds (when performance is measured on a basis net of fees, costs, and all expenses). This according to an article in this week’s AEI. Ted Seides, co-manager of Protégé Partners, was the only fund manager to accept Buffett’s challenge. The following results are outlined in Berkshire’s 2016 letter to shareholders: “Buffett’s index investment bet is so far ahead,” the article states, […]

Paul Tudor Jones See Struggles in Main Fund

The billionaire fund manager who “helped give rise to the hedge fund industry saw clients pull about 15% of their assets from his main fund in the second quarter,” according to a recent Bloomberg article. According to Hedge Fund Research Inc., the article says, macro hedge funds “have posted their worst first half since 2013, losing 0.7%.” Jones’ main BVI Global Fund, it reports, is down 1.9% this year (through July 21). Last month, the billionaire sold the firm’s 43-acre headquarter property in Greenwich, Connecticut and plans to move to a location more accessible to New York City (where the […]

Hedge Funds Perform When Managers are Vested and Inflows are Limited

Research from NYU and Columbia University shows that hedge fund managers that invest in their own funds deliver the best results, according to a recent article in Institutional Investor. In a paper distributed this month, the researchers report that “insider investment aligns incentives between managers and investors and induces managers to limit the size of their fund, resulting in higher alphas.” The study also shows that when funds raise outside capital, managers are “compensated primarily from managerial fees and leave little value to outside investors.” Funds with no outside capital, the study shows, earned higher excess annual returns (to the […]

Hedge Fund Coatue Invests in Data Science

Hedge funds continue their push into “big data” analysis to land trading opportunities, and Coatue Management LLC is no exception, according to a recent article in The Wall Street Journal. The fund recently announced a $27 million funding round for a company called Domino Data Lab Inc., a San Francisco startup founded by Bridgewater Associates LP alumni. Coatue joins other investors including Bloomberg Beta, Zetta Venture Partners and Sequoia Capital. “Domino’s software allows data scientists to run experiments and analyze data in a collaborative program,” the article explains, “which helps analysts at Coatue discover new trends and hand them to […]