More money moved into hedge funds than out of them during the monthly period ending November 1, according to the SS&C GlobeOp Capital Movement Index, which monitors net new investments in and redemptions from hedge funds. This reverses the trend the previous month but constituted a much lower level of inflows than the similar period in 2011.
Morgan Stanley is suing Joseph “Chip” Skowron, the former hedge fund manager of the firm’s former FrontPoint Partners hedge fund unit. It is seeking to recover the $35 million Morgan Stanley paid regulators for its ex-employee’s insider trading activities. Skowron, who was also convicted of insider trading in criminal court, was sentenced to five years in prison and ordered to forfeit $5 million.
Hedge funds are moving aggressively into the Australian dollar. The play is based on the very high 3.25 percent interest rates, much higher than those found in many G10 countries, and the notion that the economy in China is not weakening as much as some fear. To a lesser extent, investors also like the Norwegian krone and Swedish krona.
Satellite communications company Loral Space’s recent completion of the sale of its subsidiary Space Systems/Loral (SS/L), to MacDonald, Dettwiler and Associates Ltd. for more than $1 billion, mostly cash, has paid off big-time for Tiger Veda, the hedge fund run by Tiger cub Manish Chopra. At the end of the third quarter, the company accounted for 10.3 percent of the assets of the $374 million fund. The stock is up more than 13 percent since then and more than 40 percent since late June, partly because the company is issuing a special distribution of 29 percent. “We believe the remaining stub, Telesat, is an attractive asset at an attractive price, and compounds equity value at an attractive pace,” the fund stated in its third-quarter letter to investors. “Clarity around the independent Telesat organizationa structure should be a catalyst for the market to narrow the gap between its market price and intrinsic value.” Loral owns 64 percent of Telesat Canada, which operates telecommunications and direct broadcast satellites.
