The Morning Brief: Big Year for Stocks Hedge Funds Ignored

Shares of Facebook, one of the best stocks hedge funds mostly missed this year, surged about 9 percent in after hours trading after the social media pioneer reported very strong third quarter results. The stock has roughly doubled this year even though it was shunned by the so-called smart money set.

Shares of Baidu, a Chinese-language Internet search services company and another one of this year’s best stocks not heavily owned by hedge funds, surged 3.5 percent on Wednesday and are now up 64 percent for the year. They are up 85 percent since the beginning of July. In the next two weeks we will learn whether any major hedge funds jumped into the stock in the third quarter.

Alan Howard, the Swiss-based founder of London hedge fund firm Brevan Howard Asset Management, unwittingly paid $43 million three years ago for a Monet that was allegedly stolen by a former aide to ousted Philippine first lady Imelda Marcos, London’s Daily Mail reports. The aide, Vilma Bautista, is now on trial in New York, accused of illegally selling the 1899 painting, Japanese Footbridge Over Water Lily Pond in Giverny, from Marcos’ huge art collection. The Philippine government wants the art returned. It reportedly disappeared when President Ferdinand Marcos was overthrown in 1986. Howard is planning to take legal action against the London gallery that sold him the painting, according to the report.


The tough environment for commodity hedge funds has claimed another casualty, according to a Bloomberg report. Oakley Capital Management has shut down its London-based, commodities-focused fund of funds. The fund managed just $10 million of assets. We had earlier reported that London-based commodity hedge fund firm Clive Capital announced its closing.

Pershing Square Capital Management’s William Ackman is predicting a boom in activism in Europe. “I think it’s going to happen,” Ackman said in a speech at the University of Oxford’s Said Business School, asserting that activism there is 10 years behind where it is in North America. He says demand among pension funds in Britain and the rest of Europe “will drive shareholder-run activism.” The Pershing Square Foundation, founded by Ackman and his wife, pays for scholarships at Oxford’s business school.

The Milwaukee County Employees’ Retirement System plans to trim its hedge fund allocation from 11 percent to 10 percent, according to Pensions & Investments. It will reduce $17 million from ABS Investment Management and K2 Advisors, the retirement system’s only hedge fund allocations, according to a report, citing the board’s minutes.