Apple's hedge fund fans got a shock on Thursday when the tech giant reported quarterly earnings that came in short of Wall Street's expectations. The company's outlook also came in below estimates. The stock initially plummeted in after-hours trading before rebounding sharply. All eyes will be on Apple when official trading resumes Friday morning. Stay tuned for the 13F filings for the third quarter, which should come trickling in over the next three weeks or so, to see who owned the stock.
Greenlight’s David Einhorn continued his campaign of opposing Federal Reserve Bank policy. The hedge fund manager told the audience at the Economist's annual Buttonwood Gathering that the central bank’s loose monetary policy is undermining economic growth. “We would be way better off if we did pretty much the opposite of the current monetary policy,” he said.
Is it time to say goodbye to tax havens? Well, not just yet. However, offshore favorites like the Cayman Islands and Bahamas are mulling changes to certain tax policies. For example, the Bahamas may impose the country’s first income and sales tax, while in the Cayman Islands, home to the largest number of hedge funds in the Caribbean, the Premier promises to hike registration fees for the industry after foreign workers opposed a tax on their earnings.
Early data from the comprehensive 2012 NACUBO-Commonfund Study of Endowments show that the endowments at 463 U.S. colleges and universities declined by an average of 0.3 percent (net of fees) for the 2012 fiscal year ended June 30, 2012. This is way down from the average fiscal 2011 return of 19.2 percent. When the study is completed, 800 institutions are expected to have participated. Interestingly, the larger the institution, the bigger the allocation to alternative investments. For example, at institutions with assets over $1 billion, alternative strategies accounted for 59 percent of endowment assets. They accounted for 49 percent among institutions with assets between $501 million and $1 billion. It only worked out to 14 percent among institutions with assets under $25 million.
It is not uncommon for star hedge fund managers to be treated like royalty. Now, Christopher O'Neill, a partner at New York hedge fund Noster Capital, will know how it feels first hand. The 38 year-old plans to marry Princess Madeline of Sweden, the youngest of King Carl XVI Gustaf and Queen Silvia's three children, who is fourth in line to the throne. Fun fact: O’Neill’s mother, German-born Eva Maria O'Neill, is a former girlfriend of Prince Charles.
Another person is headed to prison as a result of the government’s insider trading probe. Alnoor Ebrahim was sentenced to one year and one day in prison for conspiring to commit securities fraud and wire fraud. The former associate director of channel marketing at AT&T was part of a so-called expert-networking group that helped provide material, nonpublic information to hedge funds and other members of the investment community. Ebrahim, who pled guilty in June, was also sentenced to two years of supervised release and ordered to forfeit $189,893, pay a $10,000 fine, and a $100 special assessment.
