This content is from: Opinion

Institutional Investor’s Spin on the Year That Was

As 2014 recedes, here is roundup of the high- and lowlights of 2014 from the world of finance, money management and beyond.

It was a year that began amid antigovernment protests in Ukraine followed by the annexation of Crimea by Russia and ended with plummeting energy prices. Brazil hosted the World Cup, but its national team was thrashed 7-1 in the semifinals by eventual champion Germany. The Brazil national elections in October saw incumbent Dilma Rousseff narrowly reelected president. Japanese Prime Minister Shinzo Abe won a landslide reelection in December despite the country’s being in the midst of recession, indicating that the nation is supportive of his economic reform programs.

The Federal Reserve hinted that its policy of quantitative easing was at an end, whereas U.S. interest rates defied nearly every prediction by falling to near-record lows. ISIS continued to terrorize large stretches of Syria and Iraq, while Ebola bought death and devastation to West Africa. The year witnessed the spooky disappearance of Malaysia Airlines Flight 370 in March, the destruction by missile in Ukraine of Malaysia Airlines Flight 17 in July and the late-December crash of AirAsia Flight 8501 into the Java Sea.

Democrats lost their majority in the Senate in midterm elections as Republicans took control of both houses of Congress. But in the aftermath, President Barack Obama pushed for immigration reform and normalized relations with Cuba. With hedge funds continuing to post lackluster returns, the $300 billion California Public Employees’ Retirement System (CalPERS) announced in September it was ending its $4 billion hedge fund program.

Co-founder and chief investment officer of Pacific Investment Management Co. Bill Gross up and left for the Janus Capital Group after months of power struggles, unhappiness and underperformance at the Newport Beach, California, bond giant. Activist hedge funds had another busy year, largely ratcheting up gains, even as Pershing Square Capital Management founder and CEO Bill Ackman’s assault on health supplement marketer Herbalife flamed out.

It was a big year for hedge fund manager divorces. Citadel founder Kenneth Griffin filed in New York for divorce from his wife of 11 years, Anne Dias Griffin, and Jamie Cooper-Hohn won a record settlement in London from her former husband, The Children’s Investment Fund founder Chris Hohn. Meanwhile, Moore Capital Management’s low-profile hedge fund mogul and conservationist Louis Bacon, who suffered his own costly divorce in 2002, had some of his private affairs aired in the media after a dispute with a Bahamas neighbor was exposed in New York court documents.

Climate change activists focused on fossil fuel divestment by university endowments received a boost in May, when Stanford University announced plans to pull back from companies producing coal and oil from tar sands. Any expectations of more global action on the part of policymakers, however, cooled after climate change talks in Peru earlier this month failed to produce a meaningful outcome.

The following is a reminder of some of the key stories and news drivers of 2014:

January 12. At least 50,000 antigovernment protesters march in Ukraine’s capital, Kiev.

January 21. Mohamed El-Erian abruptly resigns as CEO and co-CIO of Pimco. Bill Gross, who becomes sole CIO with El-Erian’s exit, tweets that he is “ready to go for another 40 years.” El-Erian later says that the desire to spend more time with his ten-year-old daughter was a contributing factor in his decision, but the departure causes speculation of a falling-out with Gross. Douglas Hodge becomes CEO.

February 22. After mass demonstrations, the Ukraine parliament votes to remove President Viktor Yanukovych, who flees Kiev.

February 26. Joe Dear, CIO of CalPERS, passes away after losing a battle with cancer. He is survived by his wife, Anne Sheehan, director of corporate governance at the California State Teachers’ Retirement System, and two children.

March 1. Russian President Vladimir Putin wins parliamentary approval to invade Ukraine; five days later President Obama signs an executive order authorizing sanctions against Russia. This is followed by further sanctions against Russia by the U.S., the European Union and other international groups.

March 21. Russia begins forcible annexation of most of the Crimean peninsula.

March 24. The World Health Organization announces that Guinea’s ministry of health has notified it of “a rapidly evolving outbreak of Ebola virus disease (EVD) in forested areas of south-eastern Guinea.” As of March 24, there are a total of 86 reported cases including 59 deaths. Outbreaks are subsequently reported also in Liberia and Sierra Leone.

April 2. Chrysler recalls 870,000 sport utility vehicles with potential brake problems.

April 5. Afghanistan holds its first democratic presidential election.

April 9. Imogen’s birthday!

May 6. The Stanford University Board of Trustees votes to approve recommendations that the school’s $18.7 billion endowment no longer make public equity investments in companies whose “principal business” is mining coal used primarily for energy generation.

June 10. Jane Mendillo, president and CEO of $36.4 billion Harvard Management Co., announces plans to leave by year-end.

June 12. The FIFA World Cup opens in São Paulo, Brazil, amid protests over income inequality and corruption. Brazil beats Croatia 3-1 in the opening game.

July 13. Germany wins the World Cup, defeating Argentina 1-0.

July 22. Hedge fund manager Bill Ackman gives a presentation explaining his shorting strategy on Herbalife. Share prices of the company end the day 25 percent higher.

July 30. Argentina files for default on its bonds for the second time in 13 years after talks with holdout creditors fail.

August 19. ISIS uploads to YouTube a video showing the beheading of journalist James Foley.

September 10. President Obama announces a strategy to “degrade and ultimately destroy” ISIS and sends U.S. troops back to Iraq.

September 15. CalPERS announces that it will terminate its Absolute Return Strategies hedge fund investment program.

September 22. China’s online retail giant Alibaba Group Holding becomes the largest-ever initial public offering when it issues $25 billion worth of shares on the New York Stock Exchange.

September 26. Bond manager Bill Gross announces he is leaving Pimco to join Janus Capital Group.

October 1. A U.S. court throws out a legal bid by hedge fund managers to force the government to share profits of bailed-out mortgage giants Fannie Mae and Freddie Mac with shareholders.

October 14. Ireland announces plans to close its so-called “double Irish” corporate tax loophole on January 15, 2015.

October 26. Dilma Rousseff is reelected as president of Brazil. In a runoff, Rousseff wins 51 percent of the vote, the closest election in the country since 1989.

October 29. The Federal Reserve ends its quantitative easing program.

November 5. In U.S. midterm and local elections, Republicans win control of both houses of Congress.

December 14. The ruling Liberal Democratic Party and Komeito coalition wins a two-thirds majority in Japan’s election, ensuring that Shinzo Abe will remain prime minster.

December 18. Sony pulls the comedy The Interview from U.S. release after a hacking attack and release of film executives’ private e-mails allegedly engineered by North Korea. The film depicts the attempted assassination of the leader of North Korea. Sony reversed its decision shortly thereafter, making the film available on December 24 for rental and purchase online and via a limited release at select movie theaters on December 25.

December 29. The price of oil falls to a five-year low. The Russian economy swoons, and the ruble crashes.

Related Content