Hedge fund assets grew to a record $2.19 trillion by the end of the third quarter, thanks to strong performance during the quarter and net new money coming into the industry, according to a new report from industry tracker Hedge Fund Research. Total hedge fund assets are up $80 billion from the prior quarter and up $183 billion for the year, according to HFR. The firm also found that 41 percent of all funds experienced inflows for the quarter, and 43 percent of all hedge funds have reached their high-water marks in the trailing 12 months. Even so, HFR points out that if inflows continue at their current pace through the end of the year, 2012 will be the lowest year since 2009 in terms of inflows. That year, investors withdrew $131 billion from hedge funds.
Score one for Farallon Capital’s Thomas Steyer. It looks like California voters approved a ballot initiative bankrolled by the hedge fund manager that will ultimately lead to out-of-state corporations that do business in California paying more taxes to the Golden State. The ballot initiative requires corporations to base their tax only on sales generated in the state rather than on a complicated formula that allows some companies to pay less by also factoring in their property holdings and number of people they employ in the state. According to one report, the initiative will allow California to raise about $1 billion each year. Steyer recently announced plans to retire and devote more time to civic matters and other issues.
Two more one-time hedge fund honchos are going to trial. Level Global co-founder Anthony Chiasson and Todd Newman, a former portfolio manager for Diamondback Capital Management, will be heading to court in Manhattan this week to stand trial on charges they engaged in illegal insider trading of the stocks of Dell and Nvidia. The government alleges they made more than $67 million in illegal profits.
Fairfield Greenwich Group is the latest firm to agree to a settlement stemming from the Bernard Madoff Ponzi scheme. The hedge fund firm – which turned out to be the biggest operator of feeder funds, or pooled investment funds that sent money to Madoff – agreed to pay as much as $80.3 million to defrauded investors. The money will be paid by founder Walter Noel and others from the firm.
