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Prudential Investment changes name with global look
Asset Management
<p>Prudential wants you to know that its investment management business is global.</p> <p>The $947 billion Prudential Investment Management is changing its name to PGIM, effective January 4. Prudential Investment Management currently operates in 16 countries, across a span of asset classes, and plans to expand its global presence.</p> <p>“The PGIM name represents our scale, and our conviction to deliver time-tested, long-term solutions and outcomes for institutional and retail investors,” says David Hunt, CEO of Prudential Investment Management.</p> <p>Prudential Fixed Income will use the PGIM name outside of the U.S., where it is currently known as Pramerica. Prudential Mortgage Capital Company will be known as PGIM Real Estate Finance, and Prudential Real Estate Investor will be called PGIM Real Estate.</p> <p>Prudential Investment Management will also be housed in a new headquarters in Newark, N.J., near the Prudential global corporate headquarters.</p> <p>&nbsp;</p> <p>&nbsp;<br /> Photo: istock <br /> &nbsp;</p>
AMG buys BlueCrest’s stake in Braga’s Systematica
Hedge Funds
<p>Affiliated Managers Group disclosed it has agreed to buy a majority stake of the equity held by Michael Platt’s BlueCrest Capital Management in Leda Braga’s Systematica Investments. Braga’s venture recently surpassed the assets of her former employer, overseeing $8.8 billion as of Oct. 1, compared with BlueCrest’s $7.9 billion.<br /> Systematica trims ties with BlueCrest<br /> Braga’s venture was spun out of Platt’s firm in January. Platt left JP Morgan Chase to start BlueCrest in 2000, and Braga joined him the following year. BlueCrest was one of Europe’s three biggest hedge funds in the aftermath of the financial crisis. The firm has faded in recent years and sustained billions of dollars in withdrawals after lackluster returns.</p> <p>British hedge fund manager Michael Platt’s firm was once managing $37 billion. In May, New Jersey’s public pension plan sought to redeem its full interest in BlueCrest Capital International, stating that the fund “underperformed expectations.” On the contrary, in May, bucking the price persistence trend, Braga cracked into the top 20 hedge funds.</p> <p>Last month, a person familiar with the matter disclosed that Braga’s BlueTrend fund returned 5.9% in the first nine months of the year. Platt’s biggest fund, AllBlue, invests in Systematica’s BlueTrend fund. AllBlue gained 2.9% this year through October, beating the 1% advance in the Bloomberg Global Aggregate Hedge Fund Index.</p> <p>As part of the deal unveiled Sunday, Platt’s BlueCrest will be selling most of its stake in Leda Braga’s Systematica to AMG. However, the terms of the deal were not disclosed. According to a filing with U.S. authorities, BlueCrest held 25% to 50% of Systematica’s equity, and hence the latest deal would mean the firm would be left with less than 25%.</p> <p>Via S&amp;P CapIQ<br /> AMG’s rapid expansion over the past decade<br /> At the end of September, Affiliated Management Group, Inc., had $619 billion in assets. The firm, which takes equity stakes in investment firms didn’t disclose the size of the stake it was buying. A person close to the firm indicated that the firm typically acquires stakes of between 25% and 30% in alternative-investment firms.</p> <p>AMG announced Sunday that it had agreed to acquire a majority of BlueCrest’s remaining stake in Systematica for an undisclosed amount. Braga and other senior executives will continue to control and hold most of Systematica’s equity. AMG also announced Sunday that it has agreed to buy equity stakes in Abax Investments.</p> <p>According to The Wall Street Journal, the latest deal for the stake in Systematica came about after AMG Chief Executive Sean Healey met Mr. Platt for dinner at 5 Hertford Street, a private club in London’s upmarket Mayfair district, in the spring. Braga said a key recommendation had come from Feldstein, chief executive of BlueMountain Capital Management LLC, who launched his firm out of BlueCrest.</p> <p>Braga indicated that working with AMG will help her make management decisions such as setting rewards for staff to encourage growth and cultivate future leadership.</p> <p>This article was originally published by ValueWalk. <br /> Photo: uberof202 ff<br /> &nbsp;</p>
John Hussman: Pyschological whiplash
Asset Management
<p>Investors have experienced a great deal of whiplash in recent months. After a rapid but relatively contained retreat in August and September, the stock market has rebounded to within 2% of its May record high. Only weeks ago, investors were concerned about economic deterioration. As of Friday, strength in nonfarm payrolls has suddenly convinced investors that a December rate hike by the Fed is all but certain.<br /> From an economic standpoint, my impression is that this whiplash is largely psychological, and has very little to do with any underlying change in economic fundamentals. Instead, it reflects a tendency to respond to all economic data as if it is coincident (reflecting the current state of the economy) rather than carefully distinguishing leading data — primarily new orders and order backlogs, from coincident data — primarily income and production, from lagging data — employment figures, particularly payrolls and the unemployment rate, which are essentially the most lagging data series in economics.<br /> The overall signal we draw from the economic data continues to lean much more toward deterioration than to strength. Friday’s data was undoubtedly a blowout number, at 271,000 new jobs, but it’s important to recognize that payroll data is a lagging, not leading, measure of economic activity. Indeed, extremely high payroll figures often immediately preceded recessions prior to 1990, though we haven’t seen that in recent economic cycles. What’s true most generally is that economic data proceeds in a sequence that moves from financial indicators, to new orders, to production and income, and finally to employment. As I noted in February:<br /> “The combination of widening credit spreads, deteriorating market internals, plunging commodity prices, and collapsing yields on Treasury debt continues to be most consistent with an abrupt slowing in global economic activity. Generally speaking, joint market action like this provides the earliest signal of potential economic strains, followed by the new orders and production components of regional purchasing managers indices and Fed surveys, followed by real sales, followed by real production, followed by real income, followed by new claims for unemployment, and confirmed much later by payroll employment. Stronger conclusions, particularly about the U.S. economy, will require more evidence, but from a global perspective, these pressures are already quite evident.”<br /> An evaluation of this sequence may provide a somewhat more tempered view of economic conditions than Friday’s employment figure, taken by itself, might suggest.<br /> First, recognize that in the context of divergent market internals across a broad range of individual stocks, the kind of whipsaw stock market behavior we’ve seen in recent months has historically been more characteristic of market topping processes than not. One way to measure this whipsaw movement is to examine cumulative absolute weekly percentage changes in the market over the most recent 10-week period. Those familiar with nonlinear analysis will recognize this as a sort of “fractal ruler”; much like measuring the length of a coastline by adding up all of the edges, which capture the irregular shoreline better than simply drawing a straight line. When significant market whipsaws have occurred along with recent overvalued, overbought, overbullish conditions and flagging participation from the broad market, steep market losses have often followed. We observed the same thing in 1973, 1987, 2000 and 2007. Still, a clear improvement in market internals would defer our immediate concerns.<br /> Read more at Advisor Perspectives.</p> <p>Photo: Wally Gobetz</p>
How to avoid the pharmaceuticals fallout with these three ETFs
Asset Management
<p>Investors that closely follow the healthcare sector are most likely familiar with the carnage at Valeant Pharmaceuticals International Inc. (NYSE: VRX). Shares of the controversial pharmaceuticals maker have lost nearly two-thirds of their value over the past 90 days, plaguing some hedge funds and exchange traded funds along the way.</p> <p>On Monday, shares of Mallinckrodt PLC (NYSE: MNK) slid more than 17.4, a decline, triggered by a tweet from Citron Research that read, "At these prices $MNK has signif more downside than $VRX-- far worse offender of the reimb sys - more to follow. VRX can't live in a vacuum."</p> <p>Clearly, Citron expects more downside for Mallinckrodt, another pharmaceuticals favorite among the hedge fund ...</p> <p>Full story available on Benzinga.com<br /> Photo: e-Magine Art</p> <p>&nbsp;</p>
Gaw Capital Partners to launch fifth Asian real estate fund
Asset Management
<p>Hong Kong-based Gaw Capital Partners, known for such hits as acquiring the InterContinental Hong Kong Hotel and developing Vietnam’s tallest skyscraper, is apparently hitting the fundraising circuit for its fifth and largest real estate fund.</p> <p>Mingtiandi reports that the family-run firm plans to raise $1.5 billion for the Gaw Capital Gateway Fund V, a fund, unlike its China-centric predecessors, which will carry a pan-Asian mandate and just $750 million set for mainland Chinese properties.</p> <p>The move apparently comes after regional REPE firms dimmed their outlook on mainland real estate:<br /> “Gaw’s decision to move beyond its traditional base in Hong Kong and mainland China to look for opportunities may reflect the challenges that fund managers are currently facing raising funds for acquisitions in China after a flurry of sour economic news from the mainland.</p> <p>In 2014 Gaw invested a reported $200 million to acquire an office tower in Seoul, South Korea, and that same year purchased the Hyatt Regency in Osaka for a reported $30 million.”<br /> Gaw, according to its website, has raised over $5.2 billion since its inception and now commands over $10.6 billion in capital.<br /> Photo: InterContinental Hong Kong</p>
Hedge funds are dumping gold at a record pace
Hedge Funds
<p>With the Fed practically trapped into producing a December rate hike; investors around the globe are starting to flee precious metals at a rapid pace – and hedge funds seem to be among the biggest sellers, writes FINalternatives:<br /> “Hedge fund managers sold gold contracts during the week ended November 4 by the most since Bank of America Merrill Lynch began tracking their movements in 2006, according to the last edition of the bank’s Hedge Fund Monitor.”<br /> Long positions in gold have apparently been sold off, while holdings in silver and palladium have been largely slashed. Short positions on copper meanwhile have been added to, a move that has not done well for the already-battered copper ETFs.</p> <p>Still though, the report does add that gold may still bounce back, but with one hulking caveat:<br /> “Gold may rally tactically, but remains vulnerable on sizable longs by large speculators, wrote BofAML.”<br /> I wonder how Peter Schiff feels about all this.<br /> Photo: Giorgio Monteforti</p>
PIMCO says former bond king Gross needs better screenwriter
Asset Management
<p>Former bond king Bill Gross needs a better screenwriter, says the investment giant Gross founded. On Monday PIMCO asked a California state judge to dismiss a lawsuit filed by Gross, saying reads more like a movie script than a strong legal argument.<br /> PIMCO: Gross legal document reads more like a screenplay than a court pleading<br /> Calling Gross’s lawsuit against the firm he once headed “a sad postscript to what had been a storied career at PIMCO,” lawyers for PIMCO wrote in their rebuttal filed Monday in California Superior Court in Orange County. PIMCO, headquartered in Newport Beach, said the complaint reads “more like a screenplay than a court pleading” in that it “uses irrelevant and false personal attacks on Mr. Gross’s former colleagues in an apparent effort to distract attention from the fundamental failings” of the legal complaint.</p> <p>In its rebuttal, PIMCO made the case sound more like a divorce trial with a despondent lover, claiming Gross was engaging in “reputational warfare.” Like any good divorce, it’s time to turn the page, forget about the past and stop blaming others regarding financial problems. “Pimco has moved forward since Mr. Gross’s resignation,” PIMCO’s rebuttal said. “It is time for him to do the same, instead of treating this court as a forum to engage in the kind of reputational warfare embodied in his legally groundless complaint.”</p> <p>PIMCO said the Gross lawsuit “is only the latest step in Mr. Gross’s effort to resurrect a personal reputation damaged by his own unacceptable behavior.”  During his final year at PIMCO, Gross engaged in some rather unusual behavior, which the PIMCO lawsuit didn’t forget:</p> <p>During his final year with PIMCO, Mr. Gross engaged in a pattern of conduct that was incompatible with the values and standards that PIMCO expected of those entrusted with its leadership. When Mr. Gross finally came to understand that PIMCO would not exempt him from these standards, he abruptly resigned from the firm without notice or transition— disregarding the potential impact on the individual and institutional clients whose assets he was responsible for managing.<br /> Bill Gross had a messy divorce from the love of his life: PIMCO<br /> As reported in ValueWalk, the October legal complaint attacked PIMCO and its management head on. “Driven by a lust for power, greed, and a desire to improve their own financial position and reputation at the expense of investors and decency, a cabal of Pacific Investment Management Company LLC (“PIMCO”) managing directors plotted to drive founder Bill Gross out of PIMCO in order to take, without compensation, Gross’s percentage ownership in the profitability of PIMCO,” the legal complaint reads in its first paragraph, not holding back. “Their improper, dishonest, and unethical behavior must now be exposed.”</p> <p>In his initial charges Gross said his one-time anointed successor Mohamad El-Erian didn’t want to be held accountable for performance on risky investments. El-Erian had engaged in a risky hedge fund approach while Gross wanted to stick to his bond market strategy. After El-Erian’s “abrupt departure,” the lawsuit charged that PIMCO management conspired to rid the firm of Gross so they could be done with his high percentage of profits he took for himself.</p> <p>PIMCO essentially says in court documents that the charges made against the firm are irrelevant and more dramatic than substantiative. Lawyers from Gross note that PIMCO did not directly dispute any of the charges in their rebuttal, saying they “are confident in our case moving forward. Notably, Pimco’s papers do not dispute the substance of Mr. Gross’s allegations in any material way.”</p> <p>Gross currently managed nearly $1.4 billion in the Janus Global Unconstrained Bond Fund, which recently witnessed a high profile redemption in the wake of his lawsuit. This is but a shadow of his former glory when at his peak Gross was managing nearly $293 billion at the PIMCO Total Return Fund and had a reputation for consistent industry outperformance. With a record of unde
Cohen's Point 72 Asset Management HQ suffers three alarm fire
Hedge Funds
<p>Billionaire hedge funder Steven Cohen's Point 72 Asset Management suffered a fire over the weekend, reports the Stamford Daily Voice.</p> <p>A fire started at the firm's headquarters Saturday morning as workers were installing air conditioning units. Two of the workers were taken to the hospital for smoke inhalation, but no one was seriously injured.</p> <p>The firm's trading floor and data rooms were unharmed by the fire.</p> <p>The cause of the fire remains under investigation.<br /> Photo: Andrew Malone</p>
Making a deposit with the European bank ETF
Asset Management
<p> </p> <p>When it comes to exchange-traded funds that hold bank stocks, many U.S. investors focus on familiar ETFs such as the Select Sector Financial Slct Str SPDR Fd (NYSE: XLF) and theiShares Dow Jones US Financial (ETF) (NYSE: IYF), but that domestic bias could be costing those investors opportunity across the Atlantic.</p> <p>The $340.3 million Ishares MSCI Europe Fincls Sctr Indx Fd (NASDAQ: EUFN) does not have the look of an ETF chock full of upside potential. EUFN has tumbled 9.8 percent over the past 90 days as investors have seemingly punished the fund on the back of dour news, including massive job cuts and substantial share price retrenchment at Deutsche Bank AG (USA) (NYSE: DB).</p> <p>However, Germany's largest bank accounts for just over 2 percent of EUFN's weight and is not even a top 10 ...</p> <p>Full story available on Benzinga.com</p> <p>Photo: Neal Jennings</p> <p>&nbsp;</p>
Jim Chanos recommends shorting Alibaba
Hedge Funds
<p>Is Alibaba’s accounting as fake as the watches being sold on it? Probably not, because its pretty hard to out-fake this Audemars Piguet currently for sale there, I mean, it even has replica stamped on its one and only photo. Still, legendary short-seller Jim Chanos seems to be a little bit concerned with the company’s accounting, and might even be building a short position on it at the moment, as CNBC reports:<br /> “Short-selling specialist Jim Chanos pitched Alibaba as a short at a conference Friday, according to sources.</p> <p>Chanos — founder and president of Kynikos Associates — made his pitch at the Morgan Stanley Lyford conference, citing ‘accounting concerns,’ the sources said.”<br /> This isn’t the first time someone singled out Alibaba for numerical shenanigans. Barron’s, in an epic piece which sent BABA shares tumbling, pointed out the “improbability” of the e-commerce giant’s reported growth rate, quoting JCapital Research’s Anne Stevenson-Yang as saying “Alibaba’s financial reports have broken free of verifiable reality and have reached an escape velocity that doesn’t comport with Chinese government figures of overall retail sales, consumer spending, or online commerce.”</p> <p>Meanwhile, Bronte Capital’s John Hempton questioned the company’s delivery numbers, saying that:</p> <p> The company’s 278 million “Singles Day” deliveries mean that “Alibaba delivered more parcels in a single day than Amazon had users in a whole year.”<br /> To process the 8.6 billion packages Alibaba claims to have delivered in a year (versus UPS’ 4.6 billion), the company “would need more staff or capital (or both) than Amazon and UPS combined.” Alibaba has 35,000 full-time staff. UPS has 435,000 and Amazon has 150,000 – plus robots.<br /> And that Alipay’s supposed 2.85 million peak minute transactions beat Visa’s 840,000 per minute global volume, suggesting “a level of shopping in China that puts the US, Europe and most of Asia to shame.”</p> <p>This should an interesting play to watch. Following news of Chanos’ pitch, BABA fell as much as 4%, and even took down Yahoo! by around 3%. Let’s see how it goes from there.<br /> Photo: Insider Monkey</p>