Hedge Fund News Wrap: Week Ending 02/27/15

(USA Today) – Hedge fund mogul David Ganek sued Manhattan U.S. Attorney Preet Bharara, several of his staff and a slew of FBI agents over the 2010 raid of his $4 billion hedge fund, Level Global.

The lawsuit, filed Thursday in Manhattan federal court, accuses Bharara, the prosecutors and the FBI agents of “prosecutorial misconduct” in conducting the raid, which took place at the height of the government’s widespread crackdown on insider trading.

The government “fabricated information” to gain court approval to conduct the search, which resulted in the firm’s closing its doors several months later, the lawsuit said.

Ganek said the search was “based on a fabricated claim” that a former-analyst-turned-government informant told FBI agents and prosecutors that Ganek knew about alleged insider trading at Level Global.

Read the entire article at USA Today
More coverage: DealBook and Reuters

Apple still a Hedge Fund Haven as Stock Hits New Highs

(Forbes) – Apple can often seem like the only game in town given the intense scrutiny and widespread attention the company receives courtesy of its incredible stock performance and blockbuster iPhone sales. But it turns out hedge funds have just as much a vested interest in the company’s success as mom and pop investors.

Nearly one in five stockpicking hedge funds owned at least some Apple shares at the close of 2015, according to a report from Goldman Sachs. Given its weighting as 4% of the S&P 500 by market cap and 5% by earnings per share, it doesn’t come as a total surprise that funds have such a significant exposure to the iPhone maker, with a stock price up 73% over the last year and a market cap that now tops $750 billion.

“Its size and popularity means Apple will be a key driver of hedge fund returns, as well as broad U.S. equity performance and earnings growth,” says Goldman, though it bears noting that Apple’s share of hedge fund equity assets remains below its prior peak in 2012, when the stock first crossed $700 (and before it split 7-for-1 last June).

Read the entire article at Forbes
More coverage: Bloomberg News and ValueWalk

Bridgewater is Said to Start Artificial-Intelligence Team

(Bloomberg News) – The world’s largest hedge fund manager is banking on machines. Ray Dalio’s $165 billion Bridgewater Associates will start a new, artificial-intelligence unit next month with about half a dozen people, according to a person with knowledge of the matter. The team will report to David Ferrucci, who joined Bridgewater at the end of 2012 after leading the International Business Machines Corp. engineers that developed Watson, the computer that beat human players on the television quiz show “Jeopardy!”

The unit will create trading algorithms that make predictions based on historical data and statistical probabilities, said the person, who asked not to be identified because the information is private. The programs will learn as markets change and adapt to new information, as opposed to those that follow static instructions. A spokeswoman for Westport, Connecticut-based Bridgewater declined to comment on the team.

Read the entire article at Bloomberg News
More coverage: ValueWalk