Hedge Fund News Wrap: Week Ending 07/02/15

Hedge Funds Fight to Save Puerto Rico Investments
(DealBook) – Hedge funds like Appaloosa Management, Paulson & Company and Blue Mountain Capital gathered in a conference room at the Barclays offices in Midtown Manhattan last September to talk about what was then the hottest trade: Puerto Rico.

An hour into the conversation, however, it became clear that if things started going bad, not everyone in the room was going to get along. Some had wagered on real estate, while others had bought up the debts of the central government and its troubled electric utility.

Those divisions intensify an increasingly contentious battle the hedge funds are beginning to wage to salvage an investment that, less than a year ago, looked like a sure thing.

Read the entire article at DealBook
More coverage: CNBC and The Washington Post

Hedge Funds Are Wagering Greeks Will Vote Yes in Sunday’s Referendum

(Bloomberg Business) – As the prospect of a Greek referendum on austerity measures sends global stock markets tumbling, some hedge-fund managers are brushing aside concerns that the Mediterranean country will cause a global calamity.

Leon Cooperman, who runs Omega Advisors, said Monday it’s hard to imagine that Greece would become a major event for the markets, as he put the chances of the country quitting the euro at less than 50 percent. Greylock Capital Management, an emerging-market firm that owns Greek debt, said people will probably vote for the austerity measures in the July 5 referendum, called on Saturday by Prime Minister Alexis Tsipras.

“I think the idea of the referendum took the market by surprise, because it does not seem to help Tsipras in any significant way,” said Diego Ferro, co-chief investment officer at Greylock. “We still believe the most likely outcome is an agreement, as it is the only way for Greece to reopen the banks and have a functioning system.”

Read the entire article at Bloomberg Business
More coverage: Reuters and The Wall Street Journal

U.S. SEC says Connecticut Firm Inflated Hedge Fund Valuations

(Reuters) – AlphaBridge Capital Management LLC and its owners will pay $5 million to settle U.S. Securities and Exchange Commission charges that they fraudulently inflated the prices of mortgage-backed securities in their hedge fund portfolios to boost fees.

Wednesday’s settlement calls for the Greenwich, Connecticut-based firm, Thomas Kutzen and Michael Carino to give up $4.03 million of profit and pay a combined $975,000 of civil fines.

They also agreed to wind down their AlphaBridge Fixed Income Master Fund and two similarly named “feeder funds,” which were all launched in 2001, and Carino accepted a three-year ban from the securities industry, the SEC said. None admitted wrongdoing.

Read the entire article at Reuters
More coverage: ValueWalk and Automated Trader