Hedge Fund News Wrap: Week Ending 6/6/14

Hedge Fund Performance: Strong First Quarter, But Still Lagging Behind Broader Market

According to the Eurekahedge Hedge Fund Index, hedge funds are up 1.05 percent for the first quarter of 2014, generating a total of $30 billion in net assets. While hedge fund gains are high, the industry still lags behind the broader market.


The S&P 500 is up 1.38 percent for the first quarter of 2014, according to data from Bank of America Merrill Lynch.

North American and European hedge funds led the race, posting returns of 2.50 percent and 1.63 percent respectively. Japan-based hedge funds posted negative returns for the third consecutive month, and are down 2.09 for the first quarter of the year.

Eastern Europe and Russia focused hedge funds are down 8.02 percent year to date, largely due to political turmoil in the region.


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Schroders to Close Commodity Hedge Fund

One of the most promising commodity hedge funds is closing its door.

Schroders NewFinance Capital is closing its Opus fund of commodity hedge funds, following in the footsteps of Arbalet Capital, Clive Capital, Higgs Capital, and SandRidge Capital.

At its peak, Schroders’ Opus commodities fund managed $2.3 billion. According to Financial Times, assets have fallen down to hundreds of millions of dollars, leading the parent fund to make a decision to shut it down.

We can confirm that in the best interests of shareholders, Schroders has decided to wind up Opus Commodities Fund Limited and Opus Commodities Core Plus A Fund Limited given pending redemptions and the challenging market for commodities more generally,” Schroders said in a statement.

Soaring prices for raw materials and rising demands have dried up opportunities for investors interested in commodities. The Newedge Commodity Trading Index has fallen for the past three years, as commodities hedge funds continue to trail behind all other stocks and markets.


See detailed coverage from:

The Wall Street Journal

Financial Times





Accused Hedge Fund Criminal Homm Freed

Florian Homm, the accused hedge fund fraudster who was once the Chief Investment Officer of Absolute Capital Management Holdings, has been freed by Italy’s highest court.

Homm, who has been on the run from American officials for the past five years, was released from a jail in Pisa and returned to Germany shortly thereafter.

According to FINalternatives, Homm faces criminal charges in the United States after being accused of defrauding investors by more than $200 million. Allegedly, Homm cross-traded penny shares between ACM funds to boost their value before dumping his own shares.

In 2013, Homm was arrested in Florence, Italy on a U.S. warrant after emerging in public to market his controversial autobiography, The Rogue Financier: Adventures of an Estranged Capitalist. In the book, Homm recounts boarding a private plane with $500,000 stuffed in his underwear and disappearing for five years.

In January 2013, an Italian court approved Homm’s extradition to the United States, which was appealed by his lawyer and proved to be another hurdle for the United States.

Then, in a major setback for United States prosecutors, Italy’s highest court freed Homm, stating that he had been held in jail longer than allowed without trial.

Homm is now in Germany, which does not extradite its own citizens.

See detailed coverage from:

Bloomberg BusinessWeek


The New York Times



Hedge Fund Manager to Help Detroit with Goats, Not Investments

To most, the only way to help debt-ridden Detroit is by investing money. For one, JPMorgan Chase has pledged to invest $100 million to help the city over the next five years. However, one hedge fund manager believes he can help the fallen city with goats.

Mark Spitznagel, the founder of Universa Investments, brought twenty billy goats to graze on the lawns of abandoned homes in Detroit’s Brightmoor neighborhood in a project called “Idyll Farms Detroit.”

The $6 billion hedge fund manager contends that he is contributing to the community in a direct way.

It’s an urban farming experience,” said Spitznagel. “Goats are an effective way to do landscaping.”

The goats, which are expected to grow from twenty to sixty, come from Spitznagel’s farm in Northport, Michigan.

The New York Times’ DealBook reports that Spitznagel will hire unemployed adults and youths from the community to help herd the goats. He also plans to build portable housing, pens, and electric fencing for the goats. Afterwards, the goats will be sold to Detroit butchers and the proceeds will be given back to the community.


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Deadline Detroit