Archive for Hedge Funds

  • Desmond Lun’s AI trading model draws on computational biology
  • Biologists are ‘kicking butt’ in data science, professor says

Hedge fund manager Desmond Lun’s 21 percent average return over the last four years springs from an unlikely source — a petri dish of algae.

Lun, 37, is a new kind of quant, combining AI wizardry with old-school biology to trade futures. Although his Taaffeite Capital Management is small, Lun makes a big claim: His research into one of the natural world’s most byzantine systems — the biological cell — has given him an edge in untangling the secrets of financial markets…

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Investors positioned for the global recovery are in good company: it’s the most common bullish investment theme for hedge funds this summer, according to Lyxor Asset Management.

As interest in hedge funds rises again — they saw the biggest jump in demand among asset classes examined in a Credit Suisse Group AG report last week — Lyxor strategists including Jean-Baptiste Berthon set out current investment trends in a recent note…

Summer’s Most Common Hedge Fund Theme Is the Global Recovery

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  • They had record 33% of portfolios in property, survey says
  • Investor wagers on hedge funds fell to record low 4%

Wealthy investors boosted bets on real estate and left hedge funds and equities as concern over high valuations and geopolitical risk push them back to basics.

They had 33 percent of their portfolios on average in real estate at the end of the second quarter, according to a survey by Tiger 21 released Tuesday. That’s a record since the group of high net-worth investors started measuring aggregate allocations in 2007.

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  • Money managers most bearish on silver in almost 2 years: CFTC
  • Platinum net-short position reached a record as car sales slow

Gold is out of favor with money managers and it’s not the only precious metal facing investor exodus.

Hedge funds and other large speculators are hitting the exit as they brace for monetary tightening in the U.S. and Western Europe. Money managers are not waiting around for signs that the Federal Reserve may change its rate trajectory, as they turn bearish on precious metals. These charts show the trend in sentiment…

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  • Ad hoc group holds $3.3 billion of commonwealth debt
  • Puerto Rico owes $13 billion of general-obligation debt

A group of hedge funds that owns $3.3 billion of Puerto Rico bonds disclosed in court documents the amount that each of them holds.

The disclosure is related to the territory’s May 3 bankruptcy, which will allow Puerto Rico and its agencies to reduce the $74 billion of debt left after years of economic decline and borrowing to cover operating expenses. The group includes distressed-debt buyers and municipal mutual fund Franklin Mutual Advisers LLC.

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The hedge fund Elliott Management is hoping to block Warren E. Buffett’s $9 billion takeover bid for Energy Future Holdings, the bankrupt Texas power giant, by working on an even higher offer.

Elliott, the biggest creditor to Energy Future, on Monday published correspondence with the utility operator that included descriptions of an alternative takeover bid that it was working on, which carried a price of about $9.3 billion…

Elliott Hedge Fund Seeks to Challenge Buffett’s Bid for Energy Company

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  • Rolfe began working as sales trader for prime finance section
  • He is the second recruit for the division in Tokyo since May

Citigroup Inc. hired Roland Rolfe from Barclays Plc in a bid to strengthen its brokerage business for global hedge funds in Japan.

Rolfe started working at Citigroup Global Markets Japan Inc. on Monday as a sales trader in the prime finance department, according to an internal memo obtained by Bloomberg. Mika Nemoto, a Tokyo-based spokeswoman, confirmed the contents of the document.

He is the second addition to Citigroup’s prime finance business in two months. The division serves hedge funds that are seeking to borrow stocks, obtain funding and execute transactions…

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  • Hedge funds in the region are among world’s top performers
  • Greenwoods, Springs, SPQ China Funds gained more than 20%

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China-focused hedge funds bounced back from their worst performance in five years and trounced global counterparts.

After an annual loss last year, Greater China hedge funds added more than 13 percent on average in the first half of 2017 to rank among the top-performing strategies in the world, according to preliminary data from Eurekahedge. Hedge funds from Greenwoods Asset Management, Springs Capital and SPQ Asia Capital were among standout performers with gains of 20 percent or more…

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  • Pound drop ‘dangerous’ for U.K. retailers: hedge fund manager
  • Central banks ending QE will impact credit cycle, Odey writes

Crispin Odey, who made money for a second straight month by sticking to bearish equity bets, said the chance of a market crash is rising as growth slows and the Federal Reserve normalizes interest rates.

The credit cycle boosted by loose monetary policy has peaked and there’s a widespread slowdown in the auto, commodity, industrial and retail sectors, Odey wrote in a letter to investors. Unlike previous dips since the financial crisis, central banks aren’t responding by printing more money…

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  • Absolute Return Fund ‘back to normal’ after 33% surge in 2016
  • Sees potential in REITs, energy bonds while awaiting next move

A Canadian hedge fund that earned fat returns last year betting on chaos in the financial markets is finding the world is too stable to try to repeat the feat in 2017.

Hanif Mamdani, who oversees about C$7 billion ($5.37 billion) as head of alternative investments at Royal Bank of Canada’s RBC Global Asset Management, said he’s waiting for opportunities while sitting on a pile of cash as a position heavy in energy company bonds unwinds. The C$1.6 billion PH&N Absolute Return Fund has returned 4 percent this year compared with 33 percent for all of 2016…

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  • hirty-year Treasury yield breaks through 50-, 200-DMA
  • Speculators that went bullish the long end getting flushed out

Hedge funds that built up bullish long-end Treasury wagers to the highest outright level since 2008 are rushing for the exit as a government bond rout that started in Europe following a weak French debt auction is spreading to the U.S. market.

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  • Five money managers said to depart firm following closure
  • Quant trade unit was set up to develop new money-making ideas

Man Group Plc has shut a quantitative trading unit after deciding to focus on other strategies, according to a person with knowledge of the matter.

The “quantitative incubating” unit, part of Man Group’s $18.8 billion AHL division, was opened about a year ago to develop new ways to make money, the person said, asking not to be identified because the information is private. The Oxon unit, led by Francois Moreau and Jaco Vermaak, gave internal capital to individual fund managers to use mathematical models to trade across asset classes. Moreau and Vermaak will stay at the firm and the five money managers at the unit have left, the person said…

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  • Potential investors said to reach out, expressing interest
  • Sundheim will initially manage his own money in family office

Daniel Sundheim, the former chief investment officer at Viking Global Investors, is planning to start an equity hedge fund in the second half of 2018, according to a person familiar with the matter.

Sundheim will manage his own money in a family office until the fund launches, said the person who asked not to be identified since the matter is not public. Potential investors have reached out to the manager, expressing interest in a fund, the person said. Sundheim, who left Viking last week, will soon begin building his team…

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  • Corvex said to build stake above 3% disclosure threshold
  • Activist investor said to oppose Clariant deal with Huntsman

Activist hedge fund Corvex Management has built a stake in Clariant AG in a move designed to undo the Swiss chemicals maker’s $6.4 billion planned takeover of Huntsman Corp., according to people with knowledge of the situation.

Corvex, which has built a stake in Clariant that exceeds the disclosure threshold of 3 percent, plans to push the company to explore alternatives to the deal including a potential sale, said the people, who asked not to be named because the situation is private.

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  • Trump administration could rewrite some Dodd-Frank regulation
  • Low liquidity and volatility means hard slog for macro funds

Traders who fled banks for hedge funds are on their way back to Wall Street.

This month, Barclays Plc hired Chris Leonard, a founder of two hedge funds in the decade since he left JPMorgan Chase & Co., to turn around U.S. rates trading. At the end of last year, ex-bankers Roberto Hoornweg and Chris Rivelli, both of Brevan Howard Asset Management, left that London hedge fund for banks.

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  • Trustee kept $90 million owed to investors in 20 securities
  • Money held to cover legal costs related to financial crisis

Wells Fargo & Co. surprised investors this week by withholding more than $90 million due to buyers of pre-crisis residential mortgage-backed securities.

The bank said it invoked its right as trustee to hold back funds to cover legal costs. The 20 transactions had a principal balance of $540 million and are among more than 2,000 deals involved in a lawsuit brought by bondholders including BlackRock Inc. and Pacific Investment Management Co. in 2014 to recover losses from the financial crisis.

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LONDON — Over the past two decades, the hedge fund mogul Daniel S. Loeb has established himself as one of the biggest activist investors around. Now, he has set his sights on one of Europe’s largest corporate citizens: Nestlé, the global food giant.

In a letter to investors sent on Sunday, his Third Point hedge fund argued that Nestlé, a Swiss conglomerate whose wares range from candy to baby food to pet food, should sell its stake in L’Oréal and sell off nonessential operations as part of a broad shake-up.

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  • Implied volatility surges for 1-week Australian dollar options
  • Volatility picking up around RBA, Riksbank policy meetings

Speculators looking to profit from the hawkish shift among global central banks have a fresh target: the Australian dollar.

With the pound, euro and Canadian loonie all surging more than 2 percent this week after officials signaled a bias toward tightening monetary policy, hedge funds are piling into Aussie options on expectations the Reserve Bank of Australia will follow suit. Implied volatility contracts with a tenor of one week surged to 8.0975 Thursday, the highest since June 14. Speculators added almost $1.5 billion of options on the Australian currency at a strike price of 77 U.S. cents, DTCC data show…

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In 31 minutes a hedge fund managed by Martin Shkreli in 2012 went from a roaring success to an empty shell, one of his investors told a jury.

Sarah Hassan, 27, who gave Shkreli $300,000 to invest, said she got an email at 8:13 p.m. on Sept. 9, 2012, saying she was up $135,000, a return of 45 percent. At 8:44 p.m., Shkreli sent out a second email notifying Hassan and other investors he was shutting the fund down.

“We went through operational mishaps,” Shkreli said in the email. “There is no longer any cash in the funds.”

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  • SocGen sees changing dynamics in producer and consumer hedging
  • Lower oil prices may deter future shale oil investments

The past month’s plunge in oil prices has turned the market for hedging upside down.

Oil producers have scaled back locking in future prices “considerably” since February, Societe Generale SA said in a report, citing a shift in options pricing driven by consumer companies like shippers and airlines. Late last year, sellers including U.S. shale drillers locked in prices in droves when benchmarks rose after OPEC announced plans to cut production.

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  • Quantitative investment funds have record $500 billion assets
  • Performance varies, but average quant fund is flat this year

Believe the hype. Quants have never been more popular.

After doubling over the past decade, assets run by so-called systematic funds have hit a record $500 billion this year, according to estimates from Barclays Plc.

In some ways, their meteoric rise is due to the same technological advances that are disrupting most industries. Faster computers and better data has enabled asset managers to automate skills that once were limited to market legends…

Rise of Robots: Inside the World’s Fastest Growing Hedge Funds

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  • 74,300 block of call options purchased on Tuesday morning
  • Strategist suggests buy linked to June VIX options expiry

50 Cent spent roughly $3.8 million hedging against a selloff in risk assets this morning.

Not the rapper — the mysterious volatility buyer or buyers who earned the moniker due to their penchant for buying huge lots of VIX call options priced at roughly a half-dollar apiece.

The CBOE Volatility Index, known as the VIX or fear index, has remained at historically low levels for years. Explanations for the prolonged period of market tranquility have ranged from central bank largesse to the growth of social media…

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Viking Global Investors, one of the larger hedge funds, is losing a top money manager and getting smaller in the process.

The hedge fund, led by O. Andreas Halvorsen, a protégé of the famed hedge fund manager Julian Robertson, notified investors on Monday that the firm’s chief investment officer, Daniel Sundheim, was leaving and that the firm would begin returning some $8 billion to investors, a Viking officer said.

Rose Shabet, chief operating officer at Viking, said Mr. Sundheim’s departure from the firm was “amicable.”

Mr. Sundheim, who has been with Viking for about 15 years, is leaving to pursue “entrepreneurial” ventures, the firm said in a letter to investors…

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  • Ben Jacobs and Ning Jin to become co-CIOs, firm says in letter
  • Sundheim to pursue own entrepreneurial interests, firm says

Viking Global Investors, the hedge fund firm founded by Andreas Halvorsen, is returning about $8 billion to investors as Chief Investment Officer Daniel Sundheim departs to pursue his own business interests.

Sundheim, 40, who joined Viking as an analyst and rose through the ranks in his 15 years there, is leaving at the end of the month, according to a letter Viking sent to investors on Monday. Ben Jacobs and Ning Jin, two long-time portfolio managers, will take over the central portfolio as co-CIOs, the firm said…

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  • Mexico said to ask banks for options quotes to fix 2018 prices
  • Mexico annual sovereign hedge is Wall Street largest oil deal

Mexico has taken the first step in its annual oil hedging program, asking Wall Street banks for price quotes on the put options it buys to lock in prices for the following year, according to people familiar with the matter.

Mexico usually buys put options from a small group of investment banks, starting as early as May but sometimes as late as July, in what’s considered Wall Street’s largest — and most secretive — annual oil deal

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  • Asgard fund buys mainly AAA rated debt, takes no credit risk
  • Leverage is now about 11 times, goes long risk premiums

The best returns are not in the riskiest stocks but in the least risky bonds. But you can’t get them without leverage.

That philosophy helped Asgard Fixed Income Fund deliver a 19 percent return in the past year.

“That’s the core of our strategy,” Morten Mathiesen, 45, chief investment adviser at Copenhagen-based Moma Advisors A/S, said in a phone interview on Thursday. “The best risk-adjusted returns are actually the low vol trades.”

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Have you ever watched an adult cat stare at a human baby and wondered what it could possibly be thinking? Well thanks to Ray Dalio’s ineffably beautiful LinkedIn blog, we may be able to answer that.

Naturally, my inclinations are to view Donald Trump’s policies through the lens of one who thinks about economies and markets, as well as from my vantage point of being a global and US citizen. My perspectives are colored by studying patterns and the cause-effect relationships of history and nature. My inclinations are to view things in a mechanistic way and to try to express the cause-effect relationships in principles and algorithms. While most cause-effect relationships can be expressed that way, not all can. Human nature is one that is difficult to express this way, and it is uniquely important now in Donald Trump’s presidency.

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Also bribery, market structure, VIX, unicorns, lunching and learning and the Bowling Green menagerie.

Jobs for RMBS bankers.

Why do we fine banks lots of money for doing bad things? The fines are more or less paid by the shareholders, and it’s not like the shareholders did the bad things. But in theory, the shareholders don’t want to be fined, so they will hire directors who don’t want to be fined, who will hire executives who don’t want to be fined, who will hire employees who don’t do bad things. The banks are supposed to be integrated rational economic actors that want to avoid fines, and so the fines should deter them from hiring people who will do the things that incur fines…

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  • Net-long position on WTI rose by most this year: CFTC
  • U.S. supply drop will be key to sustaining the enthusiasm

Hedge funds are giving OPEC some credit again.

Following four weeks of growing pessimism, bets on rising West Texas Intermediate prices jumped the most this year just as Saudi Arabia and Russia were mustering support for the deal they struck in Vienna last week, U.S. Commodity Futures Trading Commission data show.

What happens to U.S. stockpiles will be key to sustaining the enthusiasm, and the Saudis know that. In addition to prolonging a historical deal with allies, the kingdom plans to reduce exports to the world’s biggest consumer…

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For hedge funds, information is a valuable currency. A scrap of insight about a coming change in government policy can be as precious as any market data, potentially making the difference between a profit or loss on a trade.

As a result, political intelligence firms have proliferated inside the Beltway. But among the firms that traffic in information between Washington and Wall Street, one political insider’s tips to a New York hedge fund crossed a bright line, the authorities said on Wednesday…

Insider-Trading Case Ensnares Hedge Fund

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  • Hong Kong hedge funds are leaving Central as Chinese move in
  • It’s hard to hire top talent if you’re ‘sitting in a shoebox’

Benjamin Fuchs raised eyebrows five years ago when he opened his hedge fund next to a place selling live chickens in Hong Kong’s hustling, bustling Tin Hau neighborhood.

It was akin to choosing Queens over Manhattan in New York — or lowly Croydon over moneyed Mayfair in London.

But nowadays Fuchs is no outlier. He’s part of a swelling exodus of hedge funds from the tony confines of Hong Kong’s Central district, home to luxury landmarks like the Mandarin Oriental hotel…

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And it ignited a money-printing machine.
The rules of insider trading are complicated. You might think it’s as simple as “don’t trade on nonpublic information you got from an insider,” but it isn’t. There are strange and subtle rules about how you can get that information, about what sorts of benefits to the insider, or friendship between you and the insider, that make his tips and your trading illegal. The rules are even more complex for traders who get their tips indirectly; there, the inquiry involves not only what benefit the insider got, but also what the traders knew about it…
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  • Hong Kong hedge funds are leaving Central as Chinese move in
  • It’s hard to hire top talent if you’re ‘sitting in a shoebox’

Benjamin Fuchs raised eyebrows five years ago when he opened his hedge fund next to a place selling live chickens in Hong Kong’s hustling, bustling Tin Hau neighborhood.

It was akin to choosing Queens over Manhattan in New York — or lowly Croydon over moneyed Mayfair in London.

But nowadays Fuchs is no outlier. He’s part of a swelling exodus of hedge funds from the tony confines of Hong Kong’s Central district, home to luxury landmarks like the Mandarin Oriental hotel…

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  • Puerto Rico hedge fund targets general-obligation bonds
  • Millennium Management fund gained 2.5% this year through April

A hedge fund at Emerging Sovereign Group that has bet against the Chinese economy sunk about 62 percent this year through April.

The Nexus fund dropped 8.2 percent last month, according to an email to investors seen by Bloomberg News. The April results mark at least the third consecutive month of negative returns for the fund…

Hedge Fund Plummets 62% After Betting Against the Chinese Economy

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It was one of the most bitter battles between a company and a hedge fund in years, a fight rife with insults and innuendo — and it ultimately led to a chief executive’s ouster.

But on Monday, with days to go before Arconic shareholders met to vote on directors, the industrial parts maker settled its monthslong dispute with the activist investor Elliott Management.

The pact ends what had been an intensely watched proxy fight on Wall Street, at a time when much of corporate America has accepted shareholder activists — investors who prod companies for changes in strategy — as a way of life…

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  • U.S. 10-year yield may have already peaked for 2017, BMO says
  • Fiscal policy on hold, weaker inflation support bond market

A buildup in risk across the globe is getting too big for U.S. bond investors to ignore.

After staking their biggest bet ever against the $14 trillion Treasuries market at the start of 2017, hedge funds and other large speculators have had a rapid change of heart. Their net-long position in 10-year Treasury futures is now the most since December 2007, reaching 240,010 contracts as of May 16, U.S. Commodity Futures Trading Commission data released Friday show…

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Paul Tudor Jones, the founder of Tudor Investment Corp., has invested in two artificial-intelligence startups as the money manager expands into strategies that employ big data.

The hedge fund manager has invested in CargoMetrics Technologies, an investment firm that uses tools such as satellite signals and shipping data to trade commodities, currencies and equity futures, according to a person with knowledge of the matter. He’s also backed Numerai, a San Francisco-based hedge fund that makes wagers using anonymously submitted models, said the person, who asked not to be identified because the information is private…

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Will the third time be the charm for Jon S. Corzine?

Mr. Corzine won a United States Senate seat after being maneuvered out of Goldman, eventually moving on to become governor of New Jersey. After losing the governorship to Chris Christie, he took over MF Global, which collapsed in 2011.

Now, Mr. Corzine, 70, is planning his next act: a hedge fund tailored to take advantage of the chaos of the Trump era.

In his first interview since the MF Global meltdown began, Mr. Corzine said that he would seek to anticipate how the Trump administration and other world leaders would enact policy…

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LAS VEGAS — The billionaire investor Steven A. Cohen may be barred from managing outside money until next year, but he has already hinted that he plans to get back into the hedge game.

The most telling sign yet? Mr. Cohen’s unexpected appearance at a Las Vegas hedge fund conference this week.

Mr. Cohen was seen late Thursday night playing craps at a table in the casino of the Bellagio Las Vegas, one of the city’s most extravagant hotels. Mr. Cohen, 60, was rolling the dice with Ilana Weinstein, a sister of the hedge fund manager Boaz Weinstein, at a table with a maximum bet of $5,000…

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LAS VEGAS — Hedge fund managers know him as one of their own — the wealthy, backslapping host of their industry’s splashiest conference each year in Las Vegas.

Regulars at the World Economic Forum know him as the politically connected insider who organizes an annual wine tasting party in the Swiss Alps.

President Trump knows him as a major Wall Street fund-raiser with hopes of joining the administration…

Anthony Scaramucci, Hedge Fund Showman, Finds Himself in Limbo

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When securities regulators sued the hedge fund manager Leon G. Cooperman last year, accusing him of violating insider trading laws, he vowed to fight to the bitter end. His decades-long reputation on Wall Street was on the line, he said at the time.

Now, nearly eight months later, he and his firm, Omega Advisors, have agreed to settle, paying just under $5 million in civil penalties and forfeited profits.

But unlike other hedge fund managers who have reached settlements with the Securities and Exchange Commission in insider trading cases, Mr. Cooperman is not admitting any wrongdoing. Significantly, he will not be barred from the securities industry…

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  • Reduced positions in the country’s stocks by $800 million
  • Itau Unibanco remains the most popular holding among funds

It looks like a smart move in retrospect.

U.S. hedge funds reduced equity holdings tied to Brazil by about a net total of $800 million from the start of the year to end of March, according to data compiled by Bloomberg. The profit taking came after a 69 percent surge in Brazil’s benchmark stock index last year.

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  • As the trio rallied, they missed almost $600 million in profit
  • The misfortune may add pressure on manager performance

The rally in America’s biggest technology companies is making the smart money look dumb.

In a quarter when Apple Inc., Amazon.com Inc. and Alphabet Inc. rose three times as fast as the market, regulatory filings show hedge funds were net sellers of a combined 7.5 million shares. On paper, that’s $600 million of lost upside since March 31, since each stock has kept rising…

Tech Stocks Surge as Hedge Funds Bail Out

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Jeffrey W. Ubben has long been a different kind of activist investor. Mr. Ubben, a founder of ValueAct Capital, largely avoids the limelight and mostly works with companies behind the scenes to improve performance, often focusing heavily on corporate governance.

Now Mr. Ubben is practicing what he preaches by putting into effect his own orderly succession.

In passing control of the firm’s $16 billion portfolio to his longtime deputy, Mason Morfit, Mr. Ubben is promoting a degree of continuity that is rare in the hedge fund world. Mr. Morfit was one of his first hires after ValueAct’s founding in 2000, and he has played a major role in some of its most prominent investments, including holding board seats at Microsoft and Valeant Pharmaceuticals International…

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Good performance, mediocre results or even downright ugly returns. When it comes to hedge funds, it scarcely matters. Even as some investors begin to sour on these high-priced stock pickers, the top fund managers still haul in enormous paychecks.

The 25 best-paid hedge fund managers earned a collective $11 billion in 2016, according to an annual ranking published on Tuesday by Institutional Investor’s Alpha magazine.

Even managers who had a tough year were able to cash in. Nearly half of the top-25 earners made single-digit returns for their investors, a lackluster sum in a year when the Standard & Poor’s 500-stock index was up 12 percent, accounting for reinvested dividends…

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Brevan Howard Asset Management’s flagship hedge fund suffered about $1 billion in outflows in April as investors continued to pull money, according to a Bloomberg News calculation based on the fund’s letters to investors.

Assets managed by Brevan Howard Master Fund, which lost 0.7 percent last month, dropped to $8.7 billion at the end of April, from almost $10 billion a month ago, the letters show. The calculation doesn’t take into account currency fluctuations.

Assets have roughly halved in the past year after investors asked for their money back following poor performance. A spokesman for the investment firm run by billionaire Alan Howard declined to comment…

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  • Nykredit hedge fund has delivered 11% on average since 2008
  • Strategy involves spotting mispriced call options on bonds

The Danes invented handball and they are mad about football. But their real national sport is deciding when to refinance their mortgages.

The $440 billion Danish mortgage bond market is more than 200 years old, and legend has it there’s never been a single default. When Denmark, the country, went bust during the Napoleonic wars, its notoriously efficient mortgage-bond market chugged along without investors taking a hit…

Hedge Fund Makes a Fortune on a $440 Billion Danish Obsession

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  • Facebook tops list of stocks getting the most new investments
  • Many of the hedge fund darlings have been involved with deals

The favorite new bets by hedge funds ranged from the predictable Facebook Inc. to the less known VCA Inc., a pet-service provider.

Many companies attracting the most hedge fund money in the first quarter have either agreed to deals or closed them. Dow Chemical’s $78 billion merger with DuPont Co. is expected to close in August. Liberty Media Corp. purchased Formula 1 in January, Mead Johnson Nutrition Co. agreed to buy Reckitt Benckiser Group during the first quarter, and T-Mobile US Inc. has been in preliminary talks to merge with Sprint Corp…

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  • Commonwealth’s pension systems set to go broke this year
  • Island’s $123 billion bankruptcy biggest in municipal history

The message in Puerto Rico is blunt: pay us, not Wall Street.

Anger over the biggest municipal bankruptcy in U.S. history has centered on the urgent question of public pensions. Puerto Rico has promised its workers and retirees $49 billion in benefits, but it’s guaranteed bondholders even more.

The pension system is scheduled to run out of money as soon as July, and many on the island fear, with benefit cuts already under discussion, that the hedge funds who own one-third of the commonwealth’s bonds will wrangle a better deal than ordinary Puerto Ricans…

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U.S. prosecutors are investigating one of Wall Street’s darkest markets, focusing on hedge funds suspected of inflating the value of debt securities in their portfolios to juice the fees they collect.

Having prosecuted traders who lied to customers about bond prices, the government is now scrutinizing hedge funds that allegedly solicited bogus price quotes from brokers, according to three people familiar with the matter who asked not to be identified. Such a practice would have enabled the funds to pump up the value of illiquid securities on their books…

Hedge Funds Are Facing a U.S. Criminal Probe Over Bond Valuations

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  • British tax agency wrongly identified year-end as April 6
  • Legal dispute over whether the mistake invalidates inquiry

A hedge fund manager says the British tax collection agency can’t investigate his 2009 finances because of a mistake in the letter warning him about the probe.

Her Majesty’s Revenue & Customs wrote to Michael Mabbutt, then at Thames River Capital, saying it wanted to open an inquiry into the tax year ending April 6, 2009, according to evidence from a London court hearing. The U.K. tax year ends on April 5.

Mabbutt’s lawyers say the error invalidates the notice.

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Carl C. Icahn, the billionaire activist investor, was once known for causing consternation in the boardroom. Now, he is the source of much hand-wringing on Capitol Hill.

On Tuesday, eight Democratic senators led by Elizabeth Warren of Massachusetts called for a federal investigation into whether Mr. Icahn violated laws against insider trading and market manipulation in his role as a special adviser to President Trump.

In a letter addressed to current and acting heads of the Commodities Futures Trading Commission, the Securities and Exchange Commission and the Environmental Protection Agency, the senators raised questions about Mr. Icahn’s majority investment in CVR Energy, an oil refiner…

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  • Money managers least bullish on WTI crude in five months
  • Longs fell, shorts surged just before oil took near 5% tumble

Hedge funds jumped out of the oil market just in time.

Before West Texas Intermediate crude nosedived on Thursday, wiping out the rally driven by OPEC’s deal, money managers slashed bets on rising prices by 20 percent, according to U.S. Commodity Futures Trading Commission data. Now they may soon be well poised to start betting on the next rally.

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  • Big names made calls on Trump, gold, GM at last year’s event
  • Gundlach, Ackman, Einhorn to present at today’s conference

Stanley Druckenmiller contended that the stock market had hit a wall. David Einhorn recommended General Motors Co. And Jeffrey Gundlach reiterated his prediction of a Trump presidency.

Since 1995, heavyweight fund managers have stood before their peers at the Sohn Investment Conference to share their most compelling views. Today in New York, they’ll do it again.

So how did the picks from 2016 fare? Let’s take a look…

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  • Money managers least bullish on WTI crude in five months
  • Longs fell, shorts surged just before oil took near 5% tumble

Hedge funds jumped out of the oil market just in time.

Before West Texas Intermediate crude nosedived on Thursday, wiping out the rally driven by OPEC’s deal, money managers slashed bets on rising prices by 20 percent, according to U.S. Commodity Futures Trading Commission data. Now they may soon be well poised to start betting on the next rally.

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For investors having a last-minute wobble about whether they’re hedged for France’s presidential election, overnight volatility on the euro versus the dollar shows options are relatively cheap. Deutsche Bank AG estimates the pair would tumble by 3 to 6 percent at the open if far-right candidate Marine Le Pen were to win, given her open discussions about abandoning the euro and the fact that few people are positioned for this outcome, meaning the effect would be magnified…

Euro Options Offer Cheap Last-Minute Hedge for Le Pen Win: Chart

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  • Dentists, plumbers add more value in aggregate, CEO says
  • Billionaire advocates index strategy for most investors

Warren Buffett isn’t done criticizing hedge-fund managers for wasting clients’ money.

At the annual meeting of his Berkshire Hathaway Inc. he again pressed the argument that, in aggregate, investment professionals aren’t worth their fees — and that people would be better off sticking their money in a low-cost index fund. He also challenged how hedge fund managers are paid.

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  • Tribeca Investment Partners buys into Cann Group IPO
  • Cann Group has a license to grow cannabis for medical use

Tribeca Investment Partners Pty, owner of the world’s best-performing hedge fund last year, has found its next stock pick: a tiny grower of cannabis.

The Sydney-based money manager has bought shares in the initial public offering of Cann Group, the only Australian company that has a federal government license to cultivate marijuana for medicinal purposes, according to Ben Cleary, who co-manages the Tribeca Global Natural Resources Fund with Craig Evans. The fund, which soared 145 percent in 2016, is up 2.7 percent this year through the end of March…

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John A. Paulson is one of the best-known names in the hedge fund industry. But these days, Mr. Paulson is having more success in the political realm than he is managing his business.

Mr. Paulson, 61, was one of the first people on Wall Street to back Donald J. Trump’s bid for the presidency. He counseled Mr. Trump on economic matters during the campaign. He gave $250,000 to Mr. Trump’s inaugural committee. And he recently visited President Trump at the White House for a “C.E.O. Town Hall.”

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  • Accord resolves Partners Management Fund’s Delaware suits
  • Theranos seeking to end other litigation over testing scandal

Theranos Inc. agreed to settle an early investor’s claims that the embattled blood-testing firm misrepresented its performance and technology in order to raise more than $96 million in funding.

Partner Management Fund LP will drop two lawsuits related to the startup’s fumbling of blood tests, Theranos officials said Monday in an emailed statement. Terms of the accord weren’t released.

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