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Christian Baha Wall Street

Christian Baha Cameos in Wall Street: Money Never Sleeps

Christian Baha, the manager of Superfund, has taken a cameo role in “Money Never Sleeps”, the sequel to “Wall Street”. How did the hedge fund manager land the role? Director Oliver Stone is an investor in Baha’s $1.2 billion Superfund hedge fund group.

Hedge fund managers are well known for extracting huge fees from their wealthy investors. Relatively few have landed a role in a client’s Hollywood blockbuster.

However, Christian Baha, head of $1.2 billon hedge fund group Superfund, has been given a cameo in “Wall Street: Money Never Sleeps,” the sequel to the 1987 original “Wall Street”, thanks to a friendship with director — and Superfund investor — Oliver Stone.

Baha, whose computer-driven funds aim to exploit trends in global futures markets, has a short speaking role as, perhaps unsurprisingly, a hedge fund manager, while Michael Douglas resumes the role of ruthless financier Gordon Gekko in a film some have seen as a thinly-veiled attack on Goldman Sachs (GS.N).

Baha, a serial entrepreneur who quit a job as a policeman in Vienna in the 1990s to focus on his businesses, now divides his time between Monaco, Vienna and Los Angeles, where he met Stone, a spokesman said. Source

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Asia-Focused Hedge Funds

Number of Asia-Focused Hedge Fund Hits New Peak in July

Hedge funds focused in Asia hit a record high in the month of July 2010. The number of Asia-focused hedge funds was 1,278 in July, higher than the previous peak of 1,240 in 2007.

The number of hedge funds investing in Asia hit a record high of 1,278 in July, Singapore-based fund tracker Eurekahedge said on Wednesday, as new funds look to raise their exposure to Asia’s fast-growing economies.

This compares with around 1,200 funds in existence at the end of 2009 and exceeds the previous peak of 1,240 in 2007.

Hedge funds have been making a beeline for Asia, attracted by strong economic growth and lighter regulation in Singapore and Hong Kong at a time when Western countries are looking to tighten control of hedge funds following the financial crisis.

“The 125 Asian hedge fund launches in the first seven months of the year represent a return to the healthy growth seen before 2008,” Eurekahedge said in a report.

It said the rise was a result of growing interest in Asia as well as the ease in setting up hedge funds in the region compared to several years ago. Source

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For Immediate Release

New York, NY, September 21, 2010 – TradeStation Securities, Inc. (Member NYSE, FINRA, SIPC and NFA) today announced the hiring of Robert Sackett to start up and lead the securities lending department of, and co-head, its TradeStation Prime Services division.

“Securities lending services are a critical component of our plan to build a first-class prime brokerage offering to small and mid-sized hedge funds and other buy-side traders who can no longer receive important prime brokerage services directly from the large firms,” said Salomon Sredni, CEO of TradeStation Group, the parent company of TradeStation Securities. “We believe TradeStation’s position as a self-clearing broker-dealer serving this market allows it to offer a more compelling value proposition compared to other firms that cannot directly provide custody, clearing, settlement and securities lending and must instead rely on the large firms to which they introduce all of their accounts.”

“We believe Rob’s 15 years of experience and relationships in securities lending will allow TradeStation to compete effectively in a market that continues to see industry fragmentation and where small to mid-sized buy-side institutional traders continue to seek prime brokers capable of directly delivering to them basic, critical prime services,” added Lance Baraker, Senior Managing Director and co-head of TradeStation Prime Services.

Mr. Sackett is leaving his position of Managing Director at Citigroup Global Markets Inc. to join TradeStation Prime Services as Senior Managing Director and co-head of the division. He has over 15 years of securities lending experience at Citigroup and its predecessors, and has been a NYSE-approved Securities Lending Representative since 1995 and a NYSE-approved Securities Lending Supervisor since 2002. He is scheduled to begin his employment with TradeStation after the Thanksgiving holiday, following the expiration of his 75-day garden leave period with Citigroup. TradeStation Prime Services expects to begin offering securities lending services in the 2011 first quarter.

For additional information about TradeStation Prime Services, please visit:
http://www.tradestationprime.com/.

About TradeStation Prime Services, a division of TradeStation Securities, Inc.

      TradeStation Prime Services, a division of TradeStation Securities, Inc., was founded to
serve the needs of start-up to mid-sized hedge funds, registered investment advisers, professional
traders and asset managers who need quality prime brokerage services, including execution and
clearance, securities lending, capital introduction, and “incubation” services. Clients are offered
electronic trading and decision-support platforms, including TradeStation, to analyze their
trading strategies and automate or manually place their orders, and may avail themselves of the
firm’s NYSE floor membership, which allows it to execute trades on behalf of clients on the
NYSE floor as well as in other market centers from its NYSE floor booth/outsourced trading
desk. TradeStation Prime Services is located at 400 Madison Avenue, New York, New York.

     TradeStation Securities, Inc. (Member NYSE, FINRA, SIPC & NFA) is a licensed, self-clearing securities broker-dealer and a registered omnibus-clearing futures commission merchant, and has memberships or similar approved status (as well as direct connectivity for both market data and order execution) with BATS Z-Exchange, Boston Options Exchange, Chicago Board Options Exchange, Chicago Stock Exchange, EDGA Exchange, EDGX Exchange, International Securities Exchange, NASDAQ OMX BX, NASDAQ OMX PHLX, The NASDAQ Stock Market, NYSE Arca and NYSE Amex. For futures accounts, TradeStation connects directly (for both market data and order execution) with the CME Group, Eurex Group and ICE Group (U.S. and Europe) exchanges. TradeStation is a clearance member with DTCC and OCC for equities and options, serves its futures accounts on an omnibus clearance basis, and also introduces institutional equities accounts to J. P. Morgan Clearing Corp., as clearance agent. TradeStation Securities has offices in South Florida, New York, Chicago and Dallas, and an affiliated introducing broker (TradeStation Europe Limited) in London.

About TradeStation Group, Inc.

       TradeStation Group, Inc. (NASDAQ GS: TRAD), through its principal operating subsidiary, TradeStation Securities, Inc., offers the TradeStation platform to the active trader and certain institutional trader markets. TradeStation is an electronic trading platform that offers state-of-the-art electronic order execution and enables clients to design, test, optimize, monitor and automate their own custom Equities, Options, Futures and Forex trading strategies. TradeStation Group’s other operating subsidiaries are TradeStation Technologies, Inc. and TradeStation Europe Limited.

Forward-Looking Statements – Issues, Uncertainties and Risk Factors 


      This press release contains statements that are forward-looking and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. When used in this press release, the word “believe,” “expects,” “plan” and similar expressions, if and to the extent used, are intended to identify forward-looking statements. All forward-looking statements are based largely on current expectations and beliefs concerning future events that are subject to substantial risks and uncertainties. Actual results may differ materially from the results herein suggested. Factors that may cause or contribute to the various potential differences include, but are not limited to, the company’s new “TradeStation Prime Services” division, generally, including the planned new securities lending department, turning out to be less profitable, less successful, and/or more costly than expected, or resulting in unanticipated claims or liabilities against the company, as a result of (1) Mr. Sackett’s employment, and/or the securities lending department he is expected to head, not beginning or working out as planned and expected, (2) unanticipated start-up or development costs and expenses that are not offset or exceeded by expected revenues as and when planned (or at all), (3) the TradeStation prime services offering generally, and securities lending services particularly, not growing in appeal to prime services clients to the extent the company believes they will, (4) the failure of the company to make timely and quality enhancements to its trading platform, or to offer alternative platforms, which are believed necessary to attract prime services clients to use TradeStation to execute and clear trades, (5) TradeStation’s size and balance sheet being unacceptably small to mid-size and larger prime services clients (which are part of the market segment the company intends to serve) and third-party providers of credit, funding and inventory required for a successful securities lending department, and (6) the general unpredictability of operating results for a start-up business division, particularly given TradeStation’s lack of experience in offering prime brokerage services generally and securities lending in particular.

Contact –

William P. Cahill
President & Chief Operating Officer
TradeStation Securities, Inc.
954-652-7852

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Hedge Fund Industry Consolidation

Report: 1 in 5 Hedge Funds Could be Liquidated by Next Year

Merrill Lynch has issued a gloomy report about the hedge fund industry, predicting that as much as 20% of hedge funds could be liquidated by next year. The reason for the consolidation, according to the report, is that investors increasingly prefer larger hedge funds making it very difficult for hedge fund start-ups to raise capital.

Consolidation isn’t the only force likely to shrink the hedge fund industry, according to a new report.

Bank of America Merrill Lynch predicts that as many as one in five hedge funds could be liquidated by next year. The culprit? A brutal fundraising environment in which investors increasingly prefer larger hedge fund managers.

“Going into the year-end, there will be significant closures and we estimate it could be as high as 20%,” the firm’s Justin Fredericks told Bloomberg News. “A large portion of managers are still below high-water marks. Performance is flat and money hasn’t been flowing to smaller managers.”

Hedge fund managers running less than $100 million are the most likely to be affected by the hedgicide, Fredericks, Merrill’s head of U.S. capital introductions said. Source

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Hedge Funds Hiring Process

Hedge Funds Increase Difficulty & Hurdles in Hiring Process

Hedge funds and private equity firms have had their pick of the business school litter for years and now the hiring process is becoming more difficult. Every year, hedge funds and buyout shops have become more meticulous in their hiring, with more far trickier interview questions and even psychological evaluations.

“It’s more and more each year,” said J. Patrick Gorman, cofounder of iFind Group, a New York-based recruiting firm. “We’ve had clients ask for SAT scores from people who have been in the industry for 20 years.”

Private-equity firms and hedge funds, which are typically smaller than banks and brokerages, have grown particularly — some would say excruciatingly — deliberate.

Todd Monti, managing partner of the private equity and venture capital practice at the Heidrick & Struggles search firm, said that until recently very few firms brought in third-party psychologists or hiring consultants. Today, between 10% and 15% of the candidates that he places are screened by such professionals, typically at the later stages. The wide-ranging and personal Q&As can take up to six hours.

“I view that as part of an evolution of our business,” Monti said. “More and more firms really try to understand at a granular level how a candidate would fit in the institution.” Read the whole article

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Ron Beller Hedge Fund

Ron Beller of Collapsed Peloton to Launch New Hedge Fund

In the hedge fund industry, managers sometimes get second chances. Ron Beller founded Peloton Partners but the hedge fund went bust over a big subprime securities bet. Beller is now teaming up with a former Peloton trader, Manal Mehta, to launch a new hedge fund with $40 million of their own capital. The new fund, Branch Hill Capital, is looking to raise $250 million from outside investors over the next year.

Ron Beller, the hedge fund manager whose firm, Peloton Partners, collapsed after a huge bet on subprime securities went catastrophically sour, has launched a new shingle with former Peloton colleague Manal Mehta, Financial News reported.

The two have seeded the new hedge fund, Branch Hill Capital, with $40 million of their own capital, and are looking to raise $250 million from outside investors over the next year, the publication said. The fund, which began trading in June, is up 15 percent in its first three months, according to Financial News.

One of London’s most successful hedge funds, Peloton imploded in February 2008, putting the assets of its $2 billion flagship fund up for sale and freezing its remaining fund after mortgage trades left it unable to meet lenders’ demands.

Mr. Beller, now based in San Francisco, led Goldman Sachs’s fixed-income currency and commodity sales group in London before leaving in 2001 to help reorganize the New York City school system. He co-founded Peloton with Geoff Grant, a former co-head of Goldman’s macro proprietary trading group. Source

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Barnegat Hedge Fund Bonds

Barnegat Fund Made One of the Most Successful Trades

For many traders, the collapse of Lehman Brothers and the ensuing crisis led to huge losses. Others, namely New Jersey-based Barnegat Fund Management, saw this moment as a way to make what the Financial Times notes as “one of the most successful hedge fund trades in recent memory.” 

The paper details how prices for US Treasury inflation-linked securities – government bonds that provide protection against rising prices – and regular Treasury bonds were thrown out of sync by as much as 23 cents on the dollar following the collapse of Lehman Brothers two years ago this week.

“The arbitrages reported are stunning in magnitude,” the researchers said. “What makes these findings even more dramatic is that the Tips [Treasury inflation-protected securities] and Treasury markets are two of the most liquid and largest financial markets in the world … The sheer magnitude of this mispricing presents a serious challenge to conventional asset pricing theory.”

The NBER said the arbitrage had narrowed during 2009 to more normal levels. However, for a small group of savvy traders the pricing discrepancies at their widest led to one of the most successful hedge fund trades in recent memory.

One of the biggest beneficiaries was the low-profile New Jersey-based $450m Barnegat fund, founded in 1999.

Read more

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Hedge Fund Closures 2Q 2010

Fewer Hedge Fund Closures and Fewer Fund Launches

The hedge fund industry had fewer funds close their doors in the second quarter of 2010 but there were also less hedge fund launches. This seems to reflect a change in investors in favor of the large established hedge funds over new, smaller funds.

Hedge fund liquidations fell to 177 in the second quarter from 240 in the first quarter, bringing the total number of fund closures in the first half of the year to 417, according to data released by Hedge Fund Research Inc.

The industry tracker said steady returns and greater clarify around the impact of financial reform legislation helped reduce the number of fund closures.

In the first nine months of the year, HFR’s weighted composite index returned 1.65%. That compares with a gain of 19.98% for all of 2009 and a loss of 19.03% for all of 2008.

Performance dispersion among hedge funds declined from record levels, with 69 percentage points separating the best and worst performing deciles of funds for the 12-month period ending July 2010: the top decile of hedge funds averaged a return of 52.2% during this period, while the bottom decile lost 16.8%. Performance dispersion had reached a peak level of over 130 percentage points in the 12-month period ending in March 2010. source

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Hedge Funds Yen

Japan Gov’t Intervention Costs Hedge Funds Trading Yen

Hedge funds trading in foreign currencies said that the move by the Japanese government to weaken its currency cost them big. John Taylor, head of New York hedge fund FX Concepts, candidly talked about the move by Japan’s government and its effect on the fund, “We’ve lost a whole bunch of money.” Many hedge funds had been betting on a stronger yen and, until the government stepped in, had been making a lot of profits doing so.

Other funds that had made money betting on the yen also suffered, including big funds operated by London firms Aspect Capital Ltd. and Winton Capital Management, according to investors. Still, Winton’s $5 billion Winton Futures Fund remains up nearly 8% this year, an investor said. Both companies declined to comment.

While the yen’s ascent had sparked debate within Japan’s government and the investment community over whether Tokyo might intervene, the timing and the size of Wednesday’s moved surprised many investors.

Overall, investors held a near-record level of “long” positions on the yen as of Sept. 7, according to Kathy Lien, director of currency research at Global Forex Trading, citing data compiled by the Commodity Futures Trading Commission. They held a net 52,000 contracts on the yen, compared with a sizable bearish position on the yen as recently as May. source

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FSA Bonus Rules

Hedge Funds to Meet with FSA over Bonus Rules

Continuing with our focus on European regulation of hedge funds, representatives of the hedge fund industry will meet with the Financial Services Authority. Hedge funds will talk with the FSA about pending regulations on bonuses that could have a dramatic effect on the industry.

With financial authorities moving closer deciding how they will control remuneration at thousands of hedge funds in Great Britain, an industry association is lobbying to contain the new regulations to what it deems “appropriate” levels.

The Financial Services Authority, under the impetus of a new European Union directive, is currently in consultation with market participants over the ultimate implementation of the pay law.

The agency’s feedback period will close October 8, with a decision set to be issued in November, as officials attempt to gauge how provisions in the new regulation should be applied to financial firms according to their size, complexity and risk types.

The Alternative Investment Management Association, which has almost 1,200 corporate members worldwide, said Tuesday that it would be meeting with the regulatory agency to push for “an appropriate and proportionate regime.”

“The original justification by global leaders for action on remuneration was that a ‘bonus culture’ at large, systemically-important financial institutions had incentivised reckless and short-termist behavior, increasing systemic risk, and creating financial instability,” said Andrew Baker, chief executive of the organization. Source

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