Bloomberg Funds 12.07.10 BRIEF

Global Returns Man, BlueCrest, Graham Decline in November The Bloomberg BAIF Hedge Fund Index rep- By Kelly Bit resents all hedge funds tracked by Bloomberg Multi-billion dollar hedge funds managed K4D - 10 fund, which manages $3.2 billion, Data. The graph compares BBHFUNDS to by plc, BlueCrest Capital Man- dropped 1.8 percent in November and 1.3 benchmarks. percent this year, according to HSBC Private agement and Graham Capital Manage- 22.0% 20.12% ment posted declines in November as the Bank. It lost 16 percent for its biggest decline 20.0% 2010 YTD return through Oct. 29 17.68% Bloomberg aggregate hedge fund index fell from October 2001 to April 2002. The Gra- 18.0% 16.0% the most in six months. ham Global Investment Fund II - K4D - 15 Total return since 14.0% Aug. 31, 2009 The Man AHL Diversified Plc fund, which fund, which manages $3.2 billion, fell 2.2 12.0% 10.0% manages $2.6 billion, fell 5.8 percent, bring- percent last month and increased 0.7 per- 9.10% 8.48% 8.0% 7.86% ing returns for the year to 8.6 percent, accord- cent this year. It lost 30 percent from Febru- 6.0% 4.56% 4.0% ing to HSBC Private Bank. The fund had its ary 2004 to April 2005, its biggest loss. Steve 2.67% 3.19% 2.0% worst decline from December 2008 through Bruce, a spokesman for the firm, declined to 0.0% this February, when it lost 19 percent. Man comment. BBHFUNDS S&P 500 Russell 1000 2-Year Treasuries Group Plc declined to comment. “November was a difficult month for hedge BlueCrest's Bluetrend Fund Ltd - Class A, funds,” said Don Steinbrugge, managing which has $7.9 billion in assets, declined partner of Agecroft Partners LLC, a Rich- 2.9 percent last month and gained 8.8 mond, Virginia-based consulting firm that ad- percent this year, according to HSBC Pri- vises hedge funds and investors. vate Bank. Its biggest drop was from April The Bloomberg aggregate hedge fund in- Returns by Strategy Snapshot through July 2006, when it decreased 13 dex fell 1.5 percent in November as hedge Strategy % YTD return percent. Edward Orlebar, a spokesman for funds declined the most since May. The in- Mortgage-Backed 19.92 the firm, did not immediately return a call dex is weighted by market capitalization and Asset-Backed Arbitrage 15.44 for comment. tracks 2,627 funds, 1,198 of which have so far The Graham Global Investment Fund II - reported returns for November. 10.90 10.22 Arbitrage 7.10 inside / Equities 6.14 Page Page 5.21 Performance Snapshot Regulatory/Compliance 9 Long-Biased Equities 5.19 Highest-returning long/short funds 2 Commitments Of Traders 10 Short-Biased Equities 4.26 All Funds 3.79 Top Stories 3The Short of It 11 Conference Coverage CTA/Managed Futures 2.46 13F Forensics 2.09 Bloomberg LINK in New York 4-5 Soros cuts SPDR Gold Trust holdings 12 Multi-Strategy 1.72 Mandates Over the Hedge 13 Statistical Arbitrage 0.30 Le Moyne College to increase allocation 6 Calendar 15 Merger Arbitrage -0.25 On The Move 7 -4.17 Spotlight Market Calls Tiburon Capital’s Peter Lupoff 16 Bloomberg Hedge Fund Indices Einhorn predicts another crisis 8 Most recent returns new hedge fund launches

anticipated firm fund manager location asset ($Mln)* launcH date RWC Partners RWC Macro Fund Peter Allwright/Stuart Frost Dublin-domiciled - January Brummer & Partners Orvent Asset Management Scott Collison 150 January Algebris Investments LLP Algebris Coco Credit Fund Ivan Vatchkov Singapore - January Algebris Investments LLP Algebris Emerging Markets Financials Fund Ivan Vatchkov Singapore 15 January

*Commitments To Date 12.07.10 hedge funds | Bloomberg Brief 2

Performance Snapshot: Long/Short Funds A look at long/short hedge funds that report to Bloomberg data, listed by returns.

By 2010 Year-to-Date Returns inception Firm Fund manager close DAte Sharpe Ratio Return % date Prospect Asset Mgmt Shareholders’ Consensus Curtis Freeze 2/28/2005 9/30/2010 1.95 120.79 Brightline Capital Mgmt Brightline Capital Nick Khera 6/30/2005 10/29/2010 2.65 61.71 Front Street Capital Inc Resource Perfor N. Lamarche 10/22/2007 11/29/2010 2.36 52.97 RAB Capital PLC Rab Energy Fund Ltd-A€ Gavin Wilson 5/31/2004 11/18/2010 4.63 40.73 BTR Investment Mgmt Strategic Growth Fund Ltd Courtenay Wolfe 3/2/2009 10/29/2010 2.13 28.33 APS Asset Mgmt Asia-Pacific Hedge Fund Kok-Hoi Wong 4/1/2002 10/29/2010 3.1 28.23 Sprott Asset Mgmt LP/Canada Offshore Fund Ltd-A Eric S Sprott 12/31/2001 10/29/2010 2.12 26.03 Goodman & Co Investment Dynamic Power Hedge Rohit Sehgal 5/31/2002 11/26/2010 1.29 25.41 Rioni Capital Partners LLP Lensky Fund Kaha Kiknavelidze 2/1/2008 10/29/2010 2.38 24.98 Jemekk Capital Mgmt Long/Short Fund Lp Gerard Ferguson 6/30/2004 10/29/2010 3.15 24.16

By Trailing 12-Month Total Returns inception Firm Fund manager close DAte Sharpe Ratio Return % date Prospect Asset Mgmt Shareholders’ Consensus Curtis Freeze 2/28/2005 9/30/2010 1.95 120.34 Brightline Capital Mgmt Brightline Capital Nick Khera 6/30/2005 10/29/2010 2.65 87.56 Front Street Capital Inc Resource Performance Normand Lamarche 10/22/2007 11/29/2010 2.36 57.86 RAB Capital PLC Rab Energy Fund Ltd-A€ Gavin Wilson 5/31/2004 11/18/2010 4.63 51.01 BTR Investment Mgmt Strategic Growth Fd Ltd Courtenay Wolfe 3/2/2009 10/29/2010 2.13 39.51 Sprott Asset Mgmt LP/Canada Offshore Fund Ltd-A Eric S Sprott 12/31/2001 10/29/2010 2.12 36.36 Goodman & Co Dynamic Contrarian-A David Taylor 7/13/2005 11/26/2010 1.91 35.63 Broadfin Capital LLC Healthcare Fund Lp Kevin Kotler 9/30/2005 10/29/2010 3.38 35.42 APS Asset Mgmt Asia-Pacific Hedge Fund Kok-Hoi Wong 4/1/2002 10/29/2010 3.1 35.23 Larrain Vial Asset Mgmt Lv Pacific Opportunities Andres Agramonte 5/31/2008 10/29/2010 3.84 34.15

By Trailing 36-Month Total Returns inception Firm Fund manager close DAte Sharpe Ratio Return % date APS Asset Mgmt Asia-Pacific Hedge Fund Kok-Hoi Wong 4/1/2002 10/29/2010 1.68 33.03 Central Square Mgmt Central Square Capital Kelly Cardwell 8/1/2007 10/29/2010 2.1 27.87 LBN Advisers Ltd China+ Opportunity Fund Lilian Co 10/31/2007 10/29/2010 1.27 25.32 Odey Asset Mgmt Oei Mac Inc-Usd Crispin Odey 2/7/1992 11/12/2010 0.84 19.98 Brightline Capital Mgmt Brightline Capital Nick Khera 6/30/2005 10/29/2010 0.81 19.53 Jupiter Asset Mgmt Financials Hd- Res Robert Mumby 5/1/2007 11/12/2010 1.59 17.01 Broadfin Capital LLC Healthcare Fund Lp Kevin Kotler 9/30/2005 10/29/2010 1.1 16.63 Westerly Capital Mgmt Westerly Partners Lp Christopher J Galvin 6/1/2006 10/29/2010 1.24 16.02 Majedie Asset Mgmt Tortoise Fund-B Matthew Smith 8/31/2007 11/26/2010 1.42 15.88 BlackRock UK Ltd Uk Emerg Comp-I Richard Plackett 4/30/2004 10/29/2010 1.66 14.86 12.07.10 hedge funds | Bloomberg Brief 3

top stories this week BY BLOOMBERG NEWS

Carlyle to Buy Majority gic Credit Investments for a total of as of Sept. 30, according to data Stake in Claren Road $1.09 billion. compiled by Bloomberg. — Matt Townsend Carlyle Group, the world’s second- “On behalf of clients, FrontPoint was largest private-equity firm, agreed to an early participant in the govern- buy a 55 percent stake in Claren ment TALF program,” Steve Bruce, Brummer, Ex-Millennium’s Road Asset Management, a $4.5 a spokesman for the firm said in an Collison Said to Plan Fund billion long-short hedge fund focused e-mailed statement. “With our clients, Brummer & Partners, the largest on liquid credit assets. we were able to support the govern- Scandinavian hedge fund, plans to Inc., which invested in ment in this important initiative.” start an event-driven fund, said two Claren Road in 2006, and Gold- — Christine Richard people with knowledge of the matter. man Sachs Group Inc.’s Petershill The Stockholm-based firm has Fund, which bought a minority stake Algebris Plans Funds Bet- teamed up with Scott Collison, a for- in 2008, will sell their holdings, ac- ting on CoCos, EM mer portfolio manager at Millennium cording to an e-mailed statement by Management LLC’s Asian business, Algebris Investments LLP, a $1.4 Washington-based Carlyle. Claren to start Orvent Asset Management billion global financial hedge fund, Road founders Brian Riano, John Pte in Singapore to manage the fund, is starting a fund focusing on capital Eckerson, Sean Fahey and Albert the people said, asking not to be identi- securities that regulators insist banks Marino will continue to manage the fied because the information is private. must issue. day-to-day operations and make all The fund will start in January with The London-based firm plans to start investment decisions. about $150 million in initial capital from Algebris Coco Credit Fund in January Carlyle will pay for the Claren Brummer & Partners, the people said. to trade contingent convertible bonds, Road stake with a combination of Collison, 42, was portfolio manager or CoCos, that regulators have ear- cash, and payments contin- of an internal fund focusing on Asian marked as a vital part of bank buffers gent on performance, according to equity event-driven and arbitrage strat- against future losses, said Ivan Vatch- the statement. egies at Israel Englander’s Millen- kov, chief investment officer of Alge- Claren Road’s founders, former nium in Singapore. bris’s Asian unit. It plans to cap the size members of Citigroup’s credit trad- Orvent’s prime brokers are Gold- of the fund at $1 billion, he said. ing department who established man Sachs Group Inc. and Skandi- The manager also plans to raise as their firm in 2005, will invest “sub- naviska Enskilda Banken AB, the much as $500 million for a fund focus- stantially all” of the cash proceeds people said. ing on emerging markets, Vatchkov, into their funds. — Netty Ismail 32, said. — Cristina Alesci Algebris was set up in 2006 by Da- vide Serra, former head of equity re- Melis Starts Capital- Magnetar, FrontPoint on search for European banks at Morgan Raising Company List of Fed Recipients Stanley, and Eric Halet, previously Marcel Melis, whose MMT Energy Magnetar Capital LLC, the global industry analyst at Wellington Fund closed in May, started a new hedge fund which profited from bets Management Co. business raising capital for existing against mortgage securities during funds trading in markets from com- — Netty Ismail the financial collapse, participated modities to equity. in the program through Magnetar Melis, via his company MGI NV Funding II, which borrowed about Pershing Offers to Fund based in Curacao, signed an accord $1.05 billion through seven TALF Borders Bid for B&N with one fund that he will raise money transactions. Pershing Square Capital Manage- for and is in discussions with a couple “Magnetar participated in the pro- ment LP, the New York hedge-fund of others, he said in a telephone inter- gram on the same terms as the run by William Ackman, offered view, declining to provide details on hundreds of other participants in the to back bookseller Borders Group the funds. TALF program, by Magnetar provid- Inc. in making an offer for larger rival “I believe I can work with roughly 10 ing ‘first loss’ risk capital in these Barnes & Noble Inc. managers and will start with a couple,” markets,” Steven Lipin, a spokes- Ackman’s group is willing to help said Melis. “It won’t be just in energy, man for the Evanston, Illinois-based Borders fund an offer of $16 a share, but anything from long-short equity to firm, said in an e-mail. according to a regulatory filing today. emerging markets funds.” FrontPoint Partners, a hedge That price would value Barnes & Melis, 42, will work with funds that fund unit of New York-based Mor- Noble at about $960 million, based have of at gan Stanley, used the facility 48 on the shares outstanding. Pershing least $100 million. times through its FrontPoint Strate- owned about 15 percent of Borders — Lars Paulsson 12.07.10 hedge funds | Bloomberg Brief 4 conference coverage: Bloomberg LINK Hedge Funds

Over 300 hedge fund managers, investors, and regulators gathered at New York’s Guggenheim Museum Dec. 2 for the Bloomberg LINK New York Hedge Funds conference. The program featured interviews with Bill Ackman, Greg Lippmann, Paolo Pellegrini and Leon Cooperman, among others. Topics of discussion included the impact Dodd-Frank will have on the industry, opportunities in the current market environment and the European debt crisis. Bloomberg News covered the event and filed the following stories:

Bullish Views

Paolo Pellegrini, the former Paulson & Co. Glenn Dubin, manager of about $27 billion in assets executive who helped the firm make more than at Highbridge Capital Management, said he feels $3 billion during the U.S. housing crash, said he “fairly constructive” about the U.S. equity and bond stopped betting that equity prices will fall. “I’m not markets, mostly due to the Federal Reserve’s latest short anymore,” said Pellegrini, who added round of stimulus measures. that he doesn’t like most bonds because prices are After sitting on the sidelines earlier this week while Ire- at “ridiculous levels.” land’s debt crisis unfolded, Dubin said he put “risk on” U.S. equities will advance about 11 percent during over November 28 and 29. “We were encouraged when the next year because earnings are rising and valu- we saw the U.S. market activity was actually beginning ations are below historical levels, according to Leon to decouple from what was happening in Europe,” he Cooperman, chief executive officer of Omega Ad- said, adding that it gave his team “the confidence to in- visors Inc., and Laszlo Biriny, president of Birinyi crease our risk exposure.” Associates Inc. Dubin also said he sees new opportunities in collat- — Jon Erlichman and Kelly Bit eralized-debt obligations. Highbridge added a team of CDO specialists to scour the market for the securities Betting against U.S. stocks may be a losing strat- as other investors look to offload them, Dubin said. “We egy given the Federal Reserve’s attempt to boost think the CDO market will revitalize itself,” Dubin said. economic growth by driving down Treasury yields, “Looking ahead to that period in 2014, we think there according to Orin Kramer. will be extraordinary opportunities as people unwind “They believe that by pushing down the risk-free these CDOs.” rate, they can push people into risk assets and push — Dawn Kopecki and Carol Massar up the value of risk assets,” Kramer, general partner of Boston Provident Partners LP and the former Changes Ahead for Pellegrini chairman of New Jersey’s said. “If you’re short, the fact that the Fed is working against Paolo Pellegrini in August said he will return money you and the fact that most of the world is somewhat to clients of his Hamilton, Bermuda-based PSQR short makes it a little more dangerous to be short.” LLC. The fund, which Pellegrini started last year, Kramer said he likes shares of Citigroup Inc. “You slumped about 11 percent in the first seven months take a bank like Citi, most of their earnings come of the year, after gaining 62 percent in 2009. A from developing countries,” he said. “People used potential reopening of the fund to outside investors is to like Citi in the early ‘90s because they said they “not a short-term issue,” he said, and is something he have this consumer footprint globally that nobody can replicate. Despite everything that Citi’s been through, would consider in two to four years. “I’m trying to put that’s actually still true.” together a more stable team, focusing a lot on more Matthew Lindenbaum, money manager and prin- quantitative types of disciplines,” he said. He cited cipal at Basswood Capital Management LLC, said D.E. Shaw & Co. as an “interesting example” of a he likes Citigroup as well as , “which quantitative hedge fund. is part of my theme of recapitalization, normalization — Jon Erlichman and Kelly Bit and consolidation. They are positioning themselves as sort of the anti-. They want to be Fed Bashing an investment bank for the customer. They are not trading their own book.” Mark Yusko of Morgan Creek Capital Management — Nick Baker and Rita Nazareth LLC said the Fed’s attempt to stimulate the economy

continued on next page

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Conference Coverage continued from page 4

through quantitative easing is a “terrible idea.” of a lot of GDP.” “Low interest rates is a sign of economic weakness, Taylor also predicted a “smaller euro,” with some not strength,” said Yusko, who is president of Morgan weaker countries spun off. Eventually, economically Creek in Chapel Hill, North Carolina. For money man- stronger members “have to say ‘enough, you guys, get agers, “if you avoid QE2 and you don’t pay attention to out of the euro,”’ he said. the impact it’s going to have on your investments, watch — Mary Childs and Jeff Kearns out for that iceberg. “Liquidity creates a wave,” said Yusko. “We’re becom- Portugal may get bilateral help from China and Brazil, ing the carry-trade currency. You’re going to borrow in according to Davide Serra, co-founder of London’s dollars because we don’t charge any money for it. The Algebris Investments (UK) LLC. Portugal has money is going to commodities. You’re going to see the strategic natural resources in Angola that China is biggest commodity bubble in history.” buying, and a large economic interest in Brazilian eq- — Nick Baker and Rita Nazareth uity and infrastructure, he said. “So I do believe, like in the case of Ireland, push comes to shove, because The Fed’s second round of quantitative easing in the market wants to see who’s next in line, they will which it’s buying $600 billion of U.S. debt through actually probably get a bilateral agreement and help June may cause inflation to accelerate, according to from both China and Brazil.” Edward Yardeni of Yardeni Research Inc. The Fed “couldn’t give it a rest this summer,” said Yardeni. — Saijel Kishan — Dennis Fitzgerald Regulation Federal Reserve Bank of St. Louis President James Bullard isn’t a proponent of raising interest rates to The U.S. Securities and Exchange Commission keep inflation from accelerating, according to Lau- official in charge of spotting risk to financial markets rence Meyer of Macroeconomic Advisers LLC, a said the agency will never be able to match the pace former Fed governor. Investors who have that percep- of industry innovation even as it expands its under- tion have misread his comments, Meyer said. standing of complex financial instruments. “There’s no question that the people in industry will — Dave Liedtka always be far ahead of regulators,” Henry Hu, the out- going head of the SEC’s Division of Risk, Strategy and Commodities Financial Innovation, said. Hu, who joined the SEC in 2009 to lead the newly Wall Street’s “unprecedented” participation in com- created unit, said he focused on bringing in staff with modity markets will spur “extreme” volatility for raw different legal and investment backgrounds to improve materials, said Mari Kooi, the chief executive officer the agency’s understanding of “how exactly derivatives of Wolf Asset Management International LLC. work, what should be done in terms of their regulation.” “Pay attention to how it’s different this time,” Kooi said. — Jesse Hamilton Supply and demand is “not going to be the ultimate driver of the extreme volatility we’ll see.” Hedge funds will benefit and the broader economy The increased “globalization” of commodities com- will suffer if the Volcker rule is left unchanged, ac- bined with the bigger roles of banks and other finan- cording to , the head of cial institutions will create a “confluence of events” that Anthony Scaramucci Sky- . The rule keeps rival traders “makes this particular time in history unique,” Kooi said. Bridge Capital LLC out of his business and a proposed rewrite by Re- — Millie Munshi publican lawmakers “would be bad for hedge funds and bad for my firm. It would be better for society,” Oil prices will climb in the next year as demand Scaramucci said. “Anytime you’re taking specula- increases, predicted Timothy Flannery, a managing tors out of a market, you’re widening spreads. When partner at Copia Capital LLC. you widen spreads, you’re increasing the costs of — Yi Tian transactions for normal citizens. When you increase the costs for normal citizens, it hurts the society. Europe “We have to embrace some level of regulation in our businesses,” Scaramucci added. “We have to accept a speed limit because there’s a lot of people through Europe will sink into recession next year as bailout human nature who will hurt themselves in order to packages fail to solve the region’s sovereign debt cri- get short-term performance over another person. The sis, according to John Taylor of FX Concepts LLC. American athlete did it with anabolic steroids. The “We have a lot of time to go” before the situation American banker did it with leverage.” in Europe is resolved,Taylor said. “That means the market is going to be twitching because that’s a heck — Donal Griffin 12.07.10 hedge funds | Bloomberg Brief 6

Mandates BY kelly bit

■■Le Moyne College in Syracuse, Investigations sweep last month, the ■■Arizona Public Safety Person- N.Y. plans to gradually layer in up to St. Louis-Dispatch reported. MOS- nel Retirement System has real- 35 percent of its $107 million dollar ERS also has an indirect invest- located up to $70 million to Bridge- endowment into alternative invest- ment of $1.5 million in Level Global water Associates’ All Weather ments, according to an editorial by Investors LP, another firm whose Portfolio II, Pension & Investments J.W. Burns & Co. President Jim offices were searched by federal reported, quoting James Hacking, Burns in the Syracuse Post-Standard. agents, the paper said. That invest- administrator of the $6.5 billion sys- To date, 15 percent of the endowment ment is managed by Blackstone tem. The reallocation comes from had been targeted toward hedge Alternative Asset Management, distributions received from an earlier funds and private equity, Burns said. MOSERS’ hedge fund consultant. In investment in Bridgewater Pure The move comes as a result of a $50 a memo to the MOSERS board of Fund II, P&I said. million gift from Bob and Kay McDe- trustees, Tricia Scrivner, manager vitt, known as the McDevitt endow- of the system’s hedge fund invest- ■■Endowments, foundations and ment, Burns wrote. ments, said pension officials had charitable organizations should been in contact with both Diamond- consider liquidity and limit invest- ■■The Missouri State Employees back and Blackstone since news of ments “with defined capital lockup HedgeRetirement SystemFunds, or MOSERS, the Adinquiry broke, according to the periods,” according to CFA Insti- has $104 million — 1.4 percent of its Dispatch. Scrivner told the paper tute’s first Investment Management $7.4 billion portfolio — invested with MOSERS paid a lower fee in ex- Code of Conduct for Endowments, Diamondback Capital Manage- change for locking up its money Foundations and Charitable Organi- ment LLC, one of the funds that in the fund for two years, or until zations. Compliance with the code was a target of a Federal Bureau of Oct. 1, 2011. is voluntary.

Brief Hedge Funds Newsletters

BRIEF Mergers 09.10.10 Friday deal p By Carol Chuang,remiums data analyst Hit Highest Since 1st Bloomberg the price of acquisitions BRIEF 09.07.10 is rising. the average premium qtr 2009 Structured Hedge Funds global acquirers pay over M&A Announcements the trading price for public Premiums Trend Upward vol 35.00% U companies has reached mes 26.99 percent in the third 30.00% U.s. strUctUred notes volUmes* Enterprise GP Notes quarter, the highest since 25.00% Sold Last Week BRIEF Associated Materi Enterprise Products 31.56 percent in the first Quarter-to-Dateals 20.00% Avoca Resources Hellman & Friedman 21,029.7 quarter of 2009. Second Quarter 15.00% Arizant Inc Anatolia Mineral 1,300.0 Many of the big deals this First Quarter s Develop Munters AB 3M Co 876.7 10.00% Year-to-Date quarter carried high premi- Tres Pala Alfa Laval AB $546.8 million n cios 810.0 omura Paves ums. global interest-linked notes volUmes** By Deir Goldcorp Inc.'s $3.1 5.00% Zymogenetics Inc Inergy LP 796.7 $9.56 billion billion cash bid for Sold Last Week NomuraD Holdings, Inc. 0.00% Gladstone L Bristol-Myers Sq 735.0$11.61 billion re Fretz Resources Ltd. hadAndean a Quarter-to-DateNG uibb to begin competing in the U.S. retail market 09.10.10 Overland Pass Total SA 725.2$10.65 billion for structured notes. 55.5 percent premium and 2008 Second Quarter w 2008 2008 Bottli Williams Partners 599.0$29.1 billion ay to brief the Q1 Q2 2008 First Quarterng Intel Corp. Q3 2009 2009 Embotelladoras Ar with thet Securities and Q4 2009 Year-to-Date 424.0 okyo-based firm filed is a signalingprospectus plans e outflows reach highest level Since January a premium ofagreed 52.32 percentto pay for its $6.59 billion acquisition of Q1McAfeeQ2 Inc. 2009 ca sion on Sept. 8 that would allow it to issue nter U. Page Q3 2010 2010 $2.14 375.0 billion inSiDe Q4 2010 registered structured notes this year. most read on bloomberg one reason for the higher premiums is there has been an increase in hostileQ1 andQ2 Most Read M&A Stories $14.22 billion Q3 are currently no Japanese firms among the s ited deals. $22.26 billion . r1. Basel means Higher Capital ratios there were 14 such deals this quarter, almost triple the amount in the same quarter 16 banks that have issued SeexchangeC-registered Commis - etail By NATHANIel e. BAkeR last year. Trump Spurned in NYC Islamic Center$31.01 Bid billion notes this year. 2010 U. 2. eu raises Growth Forecast performance tables 2 hostile deals paid premiums of 38 percent on average this quarter; fr s $67.49 billion Morgan Stanley. retail3. u note.S. y iss m Economics 27.99 percent. t NEWS he decision reflects the growing interest arket Vodafone Sells Stake in China Mobile in the market, where a total of $31 billion of there was also a $27 billion increase in basic material deals versus the prior quarter. 4. China’s Demandields may m ayFall Weaken to eisenhower Case for Low y & The hedge fund industry posted an outflow funds in the BarclayHedge database. sold this week S COMMENTARY average premium on basic material deals is 23 percent. It is 11.45 percent for industrial takeunsolic eC-registered structured notes have been there 5. Consumer DemiseUers in u.S. exaggerated the Wire 3 - Flowers, Others Weigh More Irish Buys sold so far in 2010. (See table at right). overs. ■■ Goldman Sachs iendly deals paid Eksportfinans ASA Nomura spokesman Peter 6. Boehner Supports middle-Classamo t Unt of $2.9 billion, or 0.2% of its total assets, this Commodity trading advisors fared better, at- three-monthBank of America month notes To thatHire pay Nomura's inves Mee JPMorgan $7,077,620,725 the proportion of all-cash deals is also rising. york declined to comment. 7. China’s Car Sales Signal ‘Sound’ Demand tors if the Deutsche Bank $6,501,693,542 regulatory/Compliance 4 ments, a 7 percent increase from the prior quarter. NAB's A$13.3 Billion Axa Bid is Blocked the registration is the first step in offer- 8. Swaps Show Subbarao rates Peak July, the most since January, according to es- tracting $3.8 billion in July. It was the twelfth declines, according to a Sept. 9 S ing notes under a medium-term notes pro $4,641,729,777 mium for all-cash transactions has been 24 percent compared with 18 percent for stock deals.t Standard & Poor’s sold 500 $22.3 Index million of Citigroup Bank Shares Gain on Basel Capital he the notesPotash will CEO pay investorsSays BHP five Likely times Notany Only Bid gram which may include fixed-rate notes, 9. nflation Outlook may Prompt SNB to raise sixty-eight percent of deals have all-cash pay decline in the index. HSBC $2,581,388,000 - floating-rate notes or structured notest 10. ruble Bond Debut to Cut y timates by research firm Trimtabs. month of inflows in the past 14 months, a sign loss directlyEnterprise proportional to Buy to anyEnterprise gain in the GP for $8 Bln ruell in New $2,321,516,843 Market Calls 5 over the last five years, the average pre linked to the performance of securities, RBC uan first wor index between the issue date and maturity. $1,313,947,865 Deal By Deal - commodities, foreign exchange rates, or Credit Suissedata reports ax Cuts July's number follows an outflow of $2.7 bil- of demand even as returns posted by the t-he notes were placed by $1,272,661,070 investors will takee a an index or basket of such assets. A spe UBS Brad D Co.- C filing. D 13F Forensics 6 for a 0.5 percent fee. cific offering would require additional in SEK $1,123,344,632 ies in skillmanay CUS Book: 09.13.10 lion in June. The industry has dropped 4 per- CTAs are down 1 percent so far this year. gold m formation to be filed. ■ iP 282649177 - Eksportfinans $1,122,978,150 ■ m ■WHAT TO WATCH: Monday ining m Recent Completed Deals ield ■COMPANIES:arch 2009. Basel By PratI ■ Nomura is ranked 27th among banks that $1,074,326,181 a person familiar with the matter says. &a ■Bank of America Corp. Merrill Lynch & issue structured notes in Wells Fargo with stiffer capital requirements, more time than some analysts cent since April 2010, according to Trimtabs, Trimtabs said that hedge funds appear to k M. Patel, dat reaches 10-y million of ten-year, fixed-to-floating $1.56 billion, topping c over the hedge 7 gold mining company takeovers have kets, according to Bloomberg. RBS $1,073,904,928 predicted (seeommittee story on gave page firms 6). as much as eight years to comply a analyst ear High rate notes, according to a Sept. 3 SeC explore options for its platformObama solutions delivers business. remarks reached their highest annual volumes in 10 underwrote at least seven issues totaling lower yields filing. Sep 8 BMO $903,568,500 ■ Hewlett-Packard may buy ArcSight which attributed the decline mostly to nega- have missed out on market gains in the S&P Healthcare Bus ■ Bank shares gained after years. fixed interestthe securities rate of will6 percent pay an per initial year. - source: Bloomberg $793,395,379 ECONOMY: there have been $37.6 billion worth of Sep 9 Abbott ■■ transactions so far this year, with the average Enterprise Products Partners Beginning in the third yearInspectorate the notes issued will $20.2 european mar- - MARKETS: at a rate not seen since $122,991,000 turing growth. avis' latest bid. r tive returns in May and June. Flows have now 500 Index during July because of conserva- all-stock offer for pay a floating rateSep of 7 three-month, U.S. Bureau Veritas 3,720 premium on the deals reaching 39.96%. Bioniche Pharma $585 million in europe so far this year.$114,857,000 Peru’s sol Treasury budget statement, ules; HP Deal ' $21dollar billion Libor plus 1.75Sep 8percent, subject to Mylan Inc U. 668 the bank o a was the largest. Enterprise GP Holdings Aabar Invest s ctober 1997. c on the economy at 2 p.m. ndean a cap of 7.25 percent. interest will be paid . n ineconomic-events the U.S., Nomura has calendar underwritten$59,350,000 11 hina's yuan rose to a record afterHertz government data showed faster manufac been negative five of the last eight months tive positions. The S&P 500 surged 6.9 per- resources received a $3.2 billion been 35 takeoverss in the pipeline industry for Sep 9 Abu Dhabi InvestBy Deir 550 ote agency deals totaling $427.5 million, ac ■ climbedThe to cost a two-year of insuring high. bank bondsBAE Systems hires Wells FargoBond and investor JPMorgan offer from o far this year therequarterly have beginning in December,Overland 2010. Pass ■TRADING: goldcorp and six more deals worth v cording to Bloomberg data. inc., the trading platform used by institutions to buy and sell large raises blocks offer of for shares after the Global Hedge Fund Returns almost $1 billion were announced. a total volume of $40.78 billion. Merrill & Lynch Co. Williams PartnersBanks 526 haveDre Fretz sold $4.98 olume billion of structured notes to individual9/13 inves a 10 percent increase from July, and the largest monthly volare not registered with the SeC. nated 45 employees Cocoathis week fell because of a slo f (see chart, this page), the worst eight-month cent during the month, while hedge funds for a 0.7 percent fee. 424 9/13 for $1.5 billioned as begansoon as buying today, there were 297 transactions worth $34.35 filings with the SecuritiesAND and 2:00 t s are betting on i g 9/13 he latest fallout from a The Bloomberg BAIF Hedge Fund Index rep- billion announced this week, a 33.4 percent D BBG0014 zeke rows 10 Percent in5:00 EC Bimon SpotligH Anticipated Approvals Sales may total more than $47 billion for the year should 9/13 for a fifth day to a one-year 2 low. p.m., Dollar Thrifty Automotive stretch since the September 2008 to April gained only 1.93 percent. ing 2008 volumes when banks issuedFAU a record $ 5:00 Thailand Bo decrease in deal count and a 4.8 percent de ■ distributed the notes x 9/13 thly mee t ■ x 5:15 EU General Big Picture Malaysia’s ringgit rosea t resents all hedge funds tracked by Bloomberg Goldcorp Inc. and Eldorado Gold CorpBank of AmericaQP Corp. tured 9/13 these deals ug., estimate -$95 billion. reasur crease in dollar volume over the prior week. t5 r 8:45 European ard of Investmentting BIS 2009 period. A survey by Trimtabs shows hedge fund MorganetailProducts.com. Stanley led U.S. issuers, selling $1.8 billion of notes9/13 in Augus against plunged to a five-week low. executives discuss TBA EU’s Barroso, Affairs - t - Data. The graph compares BBHFUNDS to - 15-year callable step-up notes, the largestexchange S Commission9/13 that were compiled by Commi Bloomberg. richet slowdown in equity trading: their $3.2 billion Sep 14 TBA Mauritius Core I Ministers Allegheny Bank of America was the second-largest issuer, selling $1.079/13 billion in a TBA Botswana Eneugustssion F s Meetin European Central Bank managers merger. Sep 15 FirstEnergySachs followed with $600 million. Ukr Jean-Claude Trichet Davi to benchmarks. issuedRed $21.3Back Mi ning 11:00 Co-Generation aine’s President Meet is Out of Sep 17 Acq, Targ orecasts need to be capable of three things:D humility, to Back Page Continental Kinrosst Goldhe jump in total note sales was driven by an increaseTOPtop in new CURRENCYcurrency notes U.S. linked FedPERFORMERSperformers to toPur intere nflation R g G. Blanchflower, to the strongest level since Hedge Fund Flows, 2009-2010 t ume so far thisrgy year, according to alertness and swift action. wdown in business. remain bear- Sep 16 hese notes madeAcq up 56 percent of the total dollar volume of sales in tors in Conference the U.S. in August, Dollar Thrifty UAL Corp Worl ates more: flexibility. this is an increaseAcq, Targ from an average of 21 percent during the38 first billion six ofmonths the notes, of according to Struc touch: His Sep 15 Hertz Global the current pacech continue,d Africa 201 exceed- a 8.98% Boots & Coots a full break down of notes by asset class, see chart on ase Note t t Jackson 20 ish on equi- 9.0% richet made clear how out of touch says he policy and makers l 8.51% Halliburton Targ presumably the majority of the iquidnet eC-registered deal in 2010 to date. s/Bonds0 Bloom - 2010 YTD Return wieldy 22-member 17.29 Targ h Presidenti 7.5% through July 30 ole, nflation BOrge h ties. That may to the dangers that he's missing one er oldings facing. w G yoming, last month, columnist , elimi 15.01 14.84 Total Return Since t, including $1 billion of on maintaining a focus on price stability, along 6.0% a a - 15 reflect the ug. 27,t a symposium of central bankers side the importance of heavy budget cuts. Aug. 31, 2009 - Governing Council t i 4.5% trichet emphasized the need for hese policies are outs ofPure place andFiction out of deteriorat- notes. Goldman europe's economy is time when a global recovery is fading. 3.44% ec seems to have lost the plot. page 6. B's un 3.0% the month of August. the governors of the 10 ing economic are - Greek central banks can't have been happy 2.00% st rates. with the speech. 1.5% 1.03% the year. For thing in it addressed their problems, especially 6.45 landscape and those of the KeeNe’ ing deflation and a rising cost of borrowing, 0.0% - even after imposing austerityi measuresi 5 4.31 4.68 the reluctance -0.11% t remains unclearrish, how any C irish, who are already experienc trichet -0.83% -1.02% O spanish and of hedge funds -1.5% r 1.32 BBHFUNDS S&P 500 Russell 1000 2-Year Treasuries NerS Mohamed El-Erian of Pimco on -2.60 -2.54 -2.70 -2.86 to take on risk economic uncertaint 0 -

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N S ered many of returnS by Strategy SnapShot ANUARY Back Page J Monthly Hedge Fund Flows, Flows, Hedge FundMonthly $ Bln by the losses that -10 Strategy % ytD return occurred in Mortgage-backed arbitrage 1.14 2008. -15 Convertible arbitrage 1.05 -14.85 The industry Asset-backed arbitrage 0.98 -18.15 continues to -20 show signs of Capital structure arbitrage 0.77 consolidation. Distressed 0.45 Trimtabs expects August to be a quiet month The funds with more than $5 billion in assets Fixed income arbitrage 0.10 as there are historically very few redemptions have recorded net inflows of $7.7 billion this All funds -0.23 due to seasonality, it said in the report. year, while funds with less than $200 million Global Macro -0.44 "Redemptions should resume in Septem- have seen net losses of $18.3 billion, equiva- Multi-strategy -0.83 For a risk-free trial visit ber; historically one of the worst months for lent to 15.7 percent of assets. Merger arbitrage -1.34 hedge fund flows," the report said. For the Market-neutral -2.01 year, flows toward hedge funds stand at $1 Equity statistical arbitrage -2.39 billion, following redemptions of $172 billion in Spotlight CTA/managed futures -3.45 www.bloomberg.com/brief/hedgefunds 2009 and $150 billion in 2008. Long/Short equities -4.09 "We believe it is safe to assume this “lost” Liam Dalton, Ceo and founder of Axiom Fixed income arbitrage -4.19 $320 billion will not come back to the indus- Capital Manage- Short-biased equity -5.24 try any time soon," the report said. Trimtabs' Bloomberg Hedge Fund Indices findings are based on a survey of 954 hedge ment Back Page Most recent returns www.bloomberg.com/brief/mergers www.bloomberg.com/brief/structurednotes www.bloomberg.com/brief/economics

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On The Move BY BLOOMBERG NEWS

■■Andre Mazzella joined European program, the company said. bank announced. Albano reports Credit Management Ltd. from CQS globally to Talbot Stark, global head UK LLP as lead high-yield portfo- ■■D.E. Shaw & Co., the $20 billion of investor relationship management lio manager in London. ECM also asset manager founded by David for hedge funds and institutions. hired Duncan Warwick-Champion Shaw, will add staff in Japan as part Albano was most recently with the from Vanguard Group Inc. as lead of its quest to capture more money Royal Bank of Scotland as head of investment-grade corporate analyst from Japanese pension funds. The financial institutions, Americas and and Satish Pulle, formerly a finan- money manager, whose Tokyo office previously spent 17 years at Bear cials trader and analyst at Bank of has two employees including country Stearns where he was most recently America Corp., as lead financials an- representative Scott Roney, plans to responsible for credit sales for the alyst, ECM said in a statement. Chief hire or relocate staff from other parts Americans and emerging markets Executive Officer Steven Blakey of the world, said Julius Gaudio, who sales globally. has become chairman and will be oversees the Asian business of the replaced in his current role by Chief New York-based firm. ■■Robert Earl also joins BNP Investment Officer Stephen Zinser, Paribas as a managing director fo- said the company, which is majority ■■ LLC plans to cusing on hedge funds, reporting to owned by Wells Fargo & Co. in San open an office in Sydney to direct an Chris Lane, head of the Americas Francisco. Frances Hutchinson, for- expansion into the Asia-Pacific region, hedge fund relationship manage- mer head of research, will be head of the reported, citing ment team. Earl began his career business and strategic planning, while people familiar with the plans that it at Goldman Sachs before joining Ross Pamphilon has become head didn’t identify. Barclays Capital and later co- of investments. Matthew Craston has launching Vernon Square Capital. been appointed head of alternative ■■Peter Albano has joined BNP BNP’s investor relationship team investments and is responsible for the Paribas as head of investor relation- also added Chantale Goyette as loans team, now headed by Torben ship management for hedge funds relationship manager for Canada on Ronberg, and the special situations and institutions, Americas, the French an internal transfer.

On Twitter Recent tweets from hedge fund managers and others

@jaltucher (James Altucher, Formula Capital @LakshmiCapital (Lakshmi Capital), Silver LP) Why can’t good things happen in life? Like just broke above $30/oz… with every consecu- when will Justin Bieber do a cover of Led Zeppe- tive up day (6 now) odds of a violent pullback lin’s “Kashmir”? I need to manage his career. increase, but use as buying opportunity Dec. 5 Dec. 5

@Scaramucci (Anthony Scaramucci, Sky- @DougKass (Douglas Kass, Seabreeze Bridge Capital), Am looking forward to speak- Partners Management) In Bernanke We Trust?: ing and signing copies of Goodbye Gordon This blog post originally appeared on RealMoney Gekko on Monday at the Port Washington Public Silver on Dec. 6 at 8:02 a.m. Library, 7:30 PM. Dec. 4 @LakshmiCapital @Cymorfund (Cymor Hedge Fund) The Sheer @DougKass are you still short equities? Must be a painful trade. Size of the Fiscal Bailouts Prevents Observers from Understanding What is Happening Dec. 4 12.07.10 hedge funds | Bloomberg Brief 8 market calls BY bloomberg news unless where otherwise noted

David Einhorn, president of hedge- David Gerstenhaber, founder of for tech stocks, Divney wrote in his fund operator $1.6 billion hedge fund Argonaut monthly letter to investors. He also Inc., predicts another crisis in the Capital Management, sees Portugal likes industrial companies because global economy. In an interview as potentially the next casualty of of their “returns on capital and global with Charlie Rose, Einhorn said Europe’s debt crisis. “Portugal is struc- secular demand for U.S. industrial the global economy “is in a period turally weak,” he said in a telephone products as developing countries between two crises. We had a crisis interview from New York. “There’s a 90 expand,” says the letter. Spending is in 2007 and 2008, call it the private percent chance that they will get some selectively returning for consumer sector banking crisis or the real form of help” to keep concern over companies, Divney said. Still, “caution estate bubble popping.” The last two the country’s creditworthiness from on the bottom line is warranted given years of “cleanup and respite” have spreading to Spain and Italy, he said. the price reductions we saw” on Black now “laid the seeds for what eventu- Friday and Cyber Monday, he added. ally will turn out to be yet another Daniel Arbess, who manages Xerion crisis,” Einhorn said. “A lot of what for Perella Weinberg Partners, does Centaurus Capital LP and David- we did was sweep things under the not expect quantitative easing to give son Kempner Capital Management rug and put short term bandage fixes a boost to the economy, according LLC have shorted Gestevision on things. We managed to transfer a to Seeking Alpha’s Market Folly blog. Telecinco SA, Spain’s largest com- lot of the problems from the private “The unintended consequences of QE mercial television station. Davidson sector to the public sector. I’m con- are eroding confidence in the dollar Kempner has a position worth about cerned that it will eventually threaten and the entire monetary system,” 26 million euros ($34.5 million), the public sector as well. It’s created Arbess wrote to investors, according covering 3.25 million shares of the a very, very large budget deficit. And to Seeking Alpha. Madrid-based media company, it’s created a monetary policy that’s according to a regulatory filing, and Hedgeextremely easy. Funds And it seems to be AdKevin Divney of Beaconcrest Centaurus a 40.8 million-euro wager, perpetuating itself into a way that I Capital Management LLC still likes representing 4.87 million shares, or think is eventually going to come to a technology stocks. “Current valuations 1.46 percent of the stock, according tough spot.” don’t reflect future earnings potential” to a filing dated Dec. 6. Submit your market calls to [email protected]

Brief Hedge Funds Newsletters

BRIEF Mergers 09.10.10 Friday deal p By Carol Chuang,remiums data Hit Highest Since 1st Bloomberg the price of acquisitionsanalyst BRIEF 09.07.10 is rising. the average premium qtr 2009 Structured Hedge Funds global acquirers pay over M&A Announcements the trading price for public Premiums Trend Upward vol U companies has reached mes 26.99 percent in the third Notes BRIEF quarter, the highest since 31.56 percent in the first quarter of 2009. Many of the big deals this quarter carried high premi nomura Paves ums. Goldcorp Inc. - billion cash bid for 's $3.1 Nomura Hol Resources Ltd. Andean to begin competi 09.10.10 for structu w 55.5 percent premium had and a dings, Inc. ay to brief the Intel Corp. red notes.ng in the U.S. r with thet okyo-basedSecurities fi is signaling p outflows reach highest level Since January a premium ofagreed 52.32 percentto pay for its $6.59 sion on Sept. 8 enter U. inSiDe Page registered stru one reason for the higher premiums is Most Read M&A Stories etail market most read on bloomberg are currentl rm filed a prospect lans ited deals. and s. 1. Basel means Higher Capital ratios billion acquisition of 16 banks that that wouldexchange allow it toComm i retail By NATHANIel e. BAkeR last year. there were 14 such deals this quarter, almo ctured notes thi 2. eu raises Gr performance tables 2 hostile deals paid premiums of 38there percent has on been av anMcAfee increase Inc. in hostile and unso Trump Spurned in NYC Islamic Center Bid notes this yeay no Japanese fir Morgan Stanley3. u.S. y m Economics 27.99 percent. t us NEWS & COMMENTARY he decision have issued SeC-re arket Vodafone Sells Stake in China Mobile in the market, w Bank of America there was also a $27 billion increase in basic st triple the amount in the same quarter r. s year. is- 4. China’s Demand may Weaken Case for y The hedge fund industry posted an outflow funds in the BarclayHedge database. sold this week S ms among thessue ields mayowth Fall to Forecast eisenhower Low average premium on basic material deal eC-registered s there Barclays 5. Consumer Demise in u.S. exaggerated the Wire 3 erage this quarter; friendly deals paidlic- Flowers, Others Weigh More Irish Buys sold so far in 2010 reflects the growing i overs. ■■ here a total of Goldman Sachs Eksportfinans Nomura spoke gistered 6. Boehner Supports middle-Class t of $2.9 billion, or 0.2% of its total assets, this Commodity trading advisors fared better, at- material deals versus the prior quarter. three-monthBank of Americamon To Hire Nomura's Mee JPMorgan $7,077,620,725 the proportion of all-cash deals is als s is 23 percent. It is 11.45 percent for industrial tak york decline tructured notes ha 7. China’s Car Sales Signal ‘Sound’ Demand tors if the Deutsche Bank $6,501,693,542 regulatory/Compliance 4 ments, a 7 percent increase from the prior qua NAB's A$13.3 Billion Axa Bid is Blocked the registration . (See table $31 billionnterest of 8. Swaps Show Subbarao rates Peak July, the most since January, according to es- tracting $3.8 billion in July. It was the twelfth declines, accordi ASA ing notes un sman Peter $4,641,729,777 mium for all-cash transactions ha the t Standardth & notes Po sold that $22.3pa million d to comment. Citigroup Bank Shares Gain on Basel Capital r o rising. he notesPotash wil CEO Says BHP Likely Not Only Bid gram which may ve been 9. nflation Outlook may Prompt SNB to raise sixty-eight percent of deals have all-cash pay decline in the at right). HSBC $2,581,388,000 e- floating-rate noder a medium-term t 10. ruble Bond Debut to Cu timates by research firm Trimtabs. month of inflows in the past 14 months, a sign rter. loss directlyEnterprise tong Buy to a EnterpriseSept. 9 GP for $8 Bln is the first stepruell in inof Ne RBC $2,321,516,843 Market Calls 5 s been 24 percent comparedover the last with five 18 percentyears, the for saver l pay investors or’sfi 500 yIndex inves linked to t uan index between of $1,313,947,865 Deal By Deal index. commoditi include fixed-rate w Credit Suissedata reports ax Cuts July's number follows an outflow of $2.7 bil- of demand even as returns posted by the t- proportional to a - age pre he notes were pla investors will Se an index or bashe performancetes or structured UBS $1,272,661,070 Co.- ve timesC anyfiling. notes pro 13F Forensics 6 tock deals. for a 0.5 percentthe issue date an cific offerin es, foreign exchang fer $1,123,344,632 ies in m CUS - SEK 09.13.10 lion in June. The industry has dropped 4 per- CTAs are down 1 percent so far this year. g take a formation to b ■ old i notes, - $1,122,978,150 Monday m P 282649177 ced by ny gain in the ket of such Eksportfinans t y ■ ■WHAT TO WATCH: ining Recent Completed Deals Nomura is rang would require ad of securities, notes ield ■COMPANIES:arch 2009. Obama deliversBasel remarks c on th By Prat m& ■■ Wells Fargo $1,074,326,181 a person familiar with the matter says. Hertz raises of Ik M. Patel, dat a reaches 10- Bank of Ameri fee. Merrill dLynch maturity. issue structured $1.56 billion, topping with stiffer capital requirements, more time cent since April 2010, according to Trimtabs, Trimtabs said that hedge funds appear to over the hedge 7 million of ten-y e filed. assets.e rates, A spe or $1,073,904,928 gold mining company a takeovers analyst ha kets, accordi RBS explore options for its platform solutionspredicted business. (seeommittee story on gave page firms 6). Bond as much investor as eight years to com year High rate notes, ac ked 27th among reached their highest annual volumes i underwrote a lower yields at a rate not seen since f filing. ca Corp. & ditional in BMO $903,568,500 ■ Hewlett-Packard may buy ArcSight which attributed the decline mostly to nega- have missed out on market gains in the S&P ear, fixed-to-floa notes in ■ECONOMY: Bank shares gained after a years. fixed interestthe securi rate ng to Bloomberg. - $793,395,379 there have been $37.6 billion ve cording to a Sep ■■ transactions so far this year, with the average Enterprise Products Partners Beginning in th issued $20.2 t least seven issueseuropean banks mar that- - MARKETS: n 10 $122,991,000 turing growth. The cost of insuringavis' latest bank bid. bonds BAE a Systems hire tive returns in May and June. Flows have now 500 Index during July because of conserva- all-stock offer for pay a floating ties will pay an Peru’s sol climbed to a two-year high. ules; HP Deal premium on the deals reaching 39.96%. worth of ting $585 million $114,857,000 Treasury budget statement, 2 p.m., a dollar Li of 6 percent per y U. o was the largest. Enterprise GP ' Holdings $21 billion t. 3 SeC s the bank ctober 1997. Cocoa fell for a fifth day to a one-year low. andean a cap of 7. e third year the no . n ineconomic-events the U.S., Nomur calend $59,350,000 china's yuan rose to a record after government data been negative five of the last eight months tive positions. The S&P 500 surged 6.9 per- resources received a $3.2 billion been 35 takeoverss in the pipeline industry bor plusrate 1.75 of percen three-mont initial ote agency deals ■ e economy at 2 p.m. offer from o far this year therequarterly have beg totaling in europe so far th ■TRADING: g inc., the trading platform used by institutions to Global Hedge Fund Returns oldcorp and six more deals wort a total volume of $40.78 billion. 25 percent. interest will be Banks have sold $volume cording to Bl than some analystsfter the almost $1 billion were announced Merrill & Lynch C ear. a 10 per nated 45 employees this week because of a slowdown in bus (see chart, this page), the worst eight-month cent during the month, while hedge funds tes will are not registere for $1.5 billion edas begansoon as buying today, t for a 0.7 perc inning in December filings with th totalinga $427.5 has underwritten m 11 fer for here were 297 transactions worth $3 h for h, U.S. cent increase from Jul g the latest fallout from a slowdown in equity trad s are betting on The Bloomberg BAIF Hedge Fund Index rep- . iD BBG0014 t, subject to rows 10 Percent in oomberg data. is year. ply billion announced this week, a 33.4 percent Spotlig Anticipated Approvals Sales may total m 4.98 billion of struct s WellsDollar Fargo Thrifty and AutomotiveJPMorgan to stretch since the September 2008 to April gained only 1.93 percent. ent fee.o. ing 2008 volumes d with the SeC. decrease in deal count and a 4.8 perce 4.35 Ht ■ distributed the e Securities and resents all hedge funds tracked by Bloomberg Goldcorp Inc. and Eldorado Gold Corp■Bank of AmericxQP tured illion, ac Big Picture Malaysia’s ringgit rose treasur crease in dollar volume over the prior week. t , 2010.paid thesear d ug., estimate -$95 billion. 5 r y, and the largest 2009 period. A survey by Trimtabs shows hedge fund executives discuss MorganetailProducts.c Stan ore than $47 billio ured notes to ind - - Data. The graph compares BBHFUNDS to nt de notes 15-year callab when banks issue eals trichet i gainst default plunged to a five-week low. - their $3.2 billion xchange Com a Corp. Bank of Ame a managers ley led U.S.om. issuer ugust Jean-ClaudeEuropean Trichet Central Bank benchmarks. merger. issued $21. Sachs followed le step-up notes, n for the year monthlysho volividual inves s Out of t showed faster manufac ed a record $mission that were co need to be capable of three things: humility, buy and sell large blocks of shares, elimi to Back Page the jump in total no TOPtop CURRENCYcurrency PERFORMERSp to the strongest level since t rica was the se ume so far this alertness and swift action. Hedge Fund Flows, 2009-2010 remain bear- 3 hese notes ma with $600 million s, selling $1.8 tors in the U. more: flexibility. this is an incr the largest S uld 38 billion ofthe t current pace co a ouch: His i ing: a full break do cond-largest issu mpiled by Bloo t t Jackson 20 ish on equi- 9.0% de up 56te sales percent was of year, accordingS. in August, richet made clear how out of touch says he policy and makers iness. l billion of notes in Au presumably the majority of the iquidnet h 2010 YTD Return ease from an avera . eC-registered d he notes,erformers accor - wn of notes by ass wieldy 22-member President 17.29 7.5% through July 30 driven by an increase in mberg. hole, nflation Orge i ties. That may er, selling $1.07 ntinue, exceed to to the dangers that he's missing one oldings eal in 2010gus to date. facing. w ge ofthe 21 totalpercent dollar d ding to Struc yoming, last month, 15.01 14.84 Total Return Since t, including $1 on maintaining a focus on price stability, along- 6.0% et class, see chart - a a - 15 reflect the ug. 27,t a symposium of central bankers side the importance of heavy budget cuts. Aug. 31, 2009 billion in - Governing Council are volume ofnew sales notes i link billion of t 4.5% trichet emphasized the need for hese policies are outs ofPure place andFiction out o deteriorat- uring the first six notes. Goldman europe's economy is time when a global recove on ecB's un- seems to have lost the plot. page 6. ed to intere 3.0% n the month of t 10 ing economic months of Greekhe central governors ban of the st rates. with the speech. landscape and 1.5% the year. August. For thing in it addressed their problems, especially 6.45 those of the ry is fading. KeeNe’ ing deflation and a rising cost of 0.0% ks can't have been happy 5 4.31 4.68 the reluctance even after imposing austerityit remains measures unclearirish, how any C irish, who are already experienc trichet O spanish and f of hedge funds -1.5% r 1.32 BBHFUNDS S&P 500 Russell 1000 2-Year Treasuries NerS Mohamed El-Erian of Pimco on -2.60 -2.54 -2.70 -2.86 to take on risk economic uncertainty and risk avers 0 - borrowing,

AY -

ULY having only PRIL UNE J M J

ARCH t A 2009 2010 he UGUST CTOBER M

A recently recov- EBRUARY ECEMBER O OVEMBER

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N S ered many of returnS by Strategy SnapShot ANUARY Back Page J Monthly Hedge Fund Flows, Flows, Hedge FundMonthly $ Bln by the losses that ion. -10 Strategy % ytD return occurred in Mortgage-backed arbitrage 1.14 2008. -15 Convertible arbitrage 1.05 -14.85 The industry Asset-backed arbitrage 0.98 -18.15 continues to -20 show signs of Capital structure arbitrage 0.77 consolidation. Distressed 0.45 Trimtabs expects August to be a quiet month The funds with more than $5 billion in assets Fixed income arbitrage 0.10 as there are historically very few redemptions have recorded net inflows of $7.7 billion this All funds -0.23 due to seasonality, it said in the report. year, while funds with less than $200 million Global Macro -0.44 "Redemptions should resume in Septem- have seen net losses of $18.3 billion, equiva- Multi-strategy -0.83 For a risk-free trial visit ber; historically one of the worst months for lent to 15.7 percent of assets. Merger arbitrage -1.34 hedge fund flows," the report said. For the Market-neutral -2.01 year, flows toward hedge funds stand at $1 Equity statistical arbitrage -2.39 billion, following redemptions of $172 billion in Spotlight CTA/managed futures -3.45 www.bloomberg.com/brief/hedgefunds 2009 and $150 billion in 2008. Long/Short equities -4.09 "We believe it is safe to assume this “lost” Liam Dalton, Ceo and founder of Axiom Fixed income arbitrage -4.19 $320 billion will not come back to the indus- Capital Manage- Short-biased equity -5.24 try any time soon," the report said. Trimtabs' Bloomberg Hedge Fund Indices findings are based on a survey of 954 hedge ment Back Page Most recent returns www.bloomberg.com/brief/mergers www.bloomberg.com/brief/structurednotes www.bloomberg.com/brief/economics

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Regulatory/Compliance BY BLOOMBERG NEWS

Insider Trading Probe High-frequency traders face Euro- UBS AG for at least $2 billion, claiming Some hedge funds under investi- pean Union limits on the number of the Swiss wealth-management firm gation in an insider-trading case orders they can place, as well as also helped Madoff in his fraud. UBS invested in health-care companies requirements to tell regulators how and JPMorgan Chase said they bear that are also subjects of the probe, their computer algorithms work. no responsibility for Madoff’s crimes. reported, cit- They would not be allowed to ex- Picard has filed other claims seeking ing its own analysis. The health-care ceed a “ratio of orders to transactions the return of $15.5 billion paid to Mad- stocks rose in price after merg- executed” and to “notify their compe- off friends and family, feeder funds and ers were announced, the Journal tent authority” of the trading strategies some investors. In addition, he’s sued reported. It was unclear whether they use, under draft EU proposals hundreds of so-called “net-winner” in- the stock purchases came before or obtained by Bloomberg News. The EU vestors — those who withdrew more after the deals were made public, measures are part of an overhaul of money from their Madoff accounts the Journal reported. the Markets in Financial Instruments than they invested. Directive, or Mifid, scheduled to be Picard, who has recovered $1.5 bil- — Mike Millard published Dec. 8 by Michel Barnier, lion for Madoff creditors, has said that the European Union’s financial ser- any money received in judgments or Regulatory Reform vices commissioner. The revamped settlements in the suits will be returned The U.S. Securities and Exchange law will also include rules on bond to creditors on a pro rata basis. Commission is considering rules to markets, investor protection and dark Madoff, 72, is serving a 150-year determine which firms face higher pools, which are trading platforms that sentence in a North Carolina federal capital and margin requirements in allow investors to buy and sell securi- prison after admitting he directed the the $583 trillion over-the-counter ties away from regulated exchanges so biggest Ponzi scheme in history. swaps market. they don’t have to disclose positions. — Bob Van Voris and Alex Lange The measure considered by the SEC Investment firms should have to at a meeting in Washington on Dec. 3 tape telephone calls of clients sub- Enforcement is meant to match rules proposed by mitting orders, and keep the record- Two operators of a hedge fund that the Commodity Futures Trading Com- ings for at least three years, accord- prosecutors called a scam pleaded mission in a 3-2 vote on Dec. 1. ing to the EU document. guilty to defrauding investors out of The SEC proposal defines secu- The step would improve “the detec- more than $7 million, Manhattan U.S. rity-based swap dealers as firms tion of abusive and manipulative be- Attorney Preet Bharara said. that hold themselves out as and are haviors affecting the integrity of the Igor Levin, 40, of Brooklyn, New commonly known as -based markets,” the draft said. York, and Yevgeny Shvartsshteyn, swaps dealers, make a market in — Ben Moshinsky and Jim Brunsden 40, of Belle Harbor, New York, admitted security-based swaps and regularly to one count of conspiracy to commit enter into such swaps with counter- Madoff mail and wire fraud on Dec. 1 before parties. The statute says that those HSBC Holdings Plc was sued for $9 U.S. Magistrate Judge Ronald Ellis. entering into such swaps for their billion over claims it aided Bernard The two said they ran A.R. Capital, a own accounts — but not on a regular Madoff’s fraud through a network of general partner of A.R. Capital Global basis — aren’t included. feeder funds in Europe, the Carib- Fund LP, which they described as a CFTC Chairman Gary Gensler said bean and Central America. hedge fund that invested primarily in in September that 200 global finan- Irving H. Picard, trustee for the equity of international real estate, oil, cial firms might fall under the swap- liquidation of Bernard L. Madoff In- gas and other commodities, according dealer definition already proposed by vestment Securities LLC, sued to a statement from Bharara’s office. the CFTC. HSBC and a dozen feeder funds in The U.S. said that in reality, there The regulators are required to spell U.S. Bankruptcy Court in Manhattan, were no such investments and more out details of a three-part test for deter- Picard said in a statement. The claim is than $7 million of investor funds were mining whether a firm is a major swap the latest by Picard, who faces a Dec. wired instead to various bank ac- participant. The proposals being con- 11 deadline for suits claiming money counts in the Ukraine. Levin and Sh- sidered this week flesh out the tests from parties alleged to have profited vartsshteyn received the proceeds for whether a firm has a “substantial from Madoff’s fraud. from these illegally obtained invest- position” in a swaps market, whether The suit alleges the bank was aware ments, prosecutors said. it is using swaps to hedge or mitigate of concerns that Madoff’s investment Both men face as long as 20 years commercial risk and whether it is high- business was fraudulent and didn’t in prison when they are sentenced by ly leveraged. take steps to protect investors, accord- U.S. District Judge Sidney Stein in Designation as a major swap ing to the statement. New York on Feb. 25. As part of their participant would subject a firm to Last week, Picard sued JPMorgan guilty pleas, the men agreed to forfeit higher capital, margin and business- Chase & Co. for $6.4 billion over the $7 million in proceeds, Bharara’s conduct standards. claims the bank aided and abetted office said. — Silla Brush and Jesse Hamilton Madoff’s fraud. On Nov. 23, he sued — Patricia Hurtado 12.07.10 hedge funds | Bloomberg Brief 10

COMMITMENTs OF TRADERS david powell, bloomberg economist Speculative interest in the euro is close to flat, suggesting the decline in the currency is being driven by a genuine loss of confidence of investors who hold euro-denominated assets--rather than hedge funds.

Currencies U.S. Treasury Securities

Contracts Contracts 300000 175000 200000 EUR 100000 JPY 100000 GBP 2-Year 25000 CHF 0 5-Year CAD 10-Year -50000 -100000 AUD 20-Year NZD -125000 -200000 USD -200000 -300000 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Source: Bloomberg Note: 1 USD contract = $200,000; Futures + Options Source: Bloomberg Note: Futures + Options

There is no evidence to suggest hedge funds are Hedge fund traders may expect that the full effect of driving the fall of the euro. They reduced their net quantitative easing on U.S. Treasury securities has short holdings of euros by 5,757 contracts to 5,253 already been experienced. They cut their net long contracts in the week ended Nov. 30. That is much position in 5-year notes by 29,770 contracts to 59,941 smaller than the net short euro position of 105,145 and the net short position in 10-year notes increased contracts that was in place on May 11, the day after by 41,187 contracts to 56,991, suggesting an expec- the establishment of the European Financial Stability tation that yields will rise. Facility was announced. The close-to-flat position of hedge funds and other speculators suggests that the euro is facing a genuine loss of confidence as euro- denominated assets are sold.

Gold Energy Products

Contracts Contracts 300000 250000 200000 250000 150000 200000 100000 Gold 50000 150000 Crude Oil 0 Natural Gas 100000 -50000 -100000 50000 -150000

0 -200000 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10

Source: Bloomberg Note: Futures + Options Source: Bloomberg Note: Futures + Options

Funds' interest in gold peaked in early October, and Long holdings of crude oil rose by 8,534 contracts the number of net long positions has since trended over the last week to 189,899. Speculators may be down, even though it rose in the latest reporting unwilling to take on the additional risk required to period by 7,556 contracts to 244,799. The reduction bring that total to the November high of 267,301 con- is likely to continue as the U.S. dollar, which normally tracts as the year draws to a close. The oil-price rally trades inversely with the commodity, rebounds and may fade as a result. as deflation remains more of a concern for the U.S. economy than inflation. 12.07.10 hedge funds | Bloomberg Brief 11

the short of it By Will Gordon, Senior Researcher, Data Explorers

Consumer Companies See Rising Short Interest

Of companies whose shares hit 52-week highs in terms of short- Bob Evans Farms Inc. selling, one quarter are in the 10 consumer sector. 50 9.75 Bob Evans Farms Inc. is a restau- 40 rant group focused on pork foods. 9.5 Active Availability Supply Qty Inflation is rampant in this area 30 SI as % of Free Float given the rising feed costs for hog 9.25 producers buying grain with the Active Availability Ratio 20 9

summer droughts. This may be the Ratios Interest Short reason some investors are gloomy 10 about the company. Demand to QuantitySupply (Millions) Available 8.75 borrow has now risen to 6% of the shares in issue. 8.5 0 10/1/2010 11/1/2010 12/1/2010 Lancaster Colony Corp is a food manufacturer with a specialty in salad dressings, sauces and candles. This $1.4bn market cap firm has 7.5% of its shares on loan after some profit taking in September. Great Canadian Gaming Corp Trouble may be ahead for Great Ca- 11.5 80 nadian Gaming Corp, with a near 70 11 doubling of short interest just recently 60 to 7% of all shares. 10.5 50 40 In Europe, marmite stock Autono- Active Availability Supply Qty 10 30 Ratios my Corporation plc features with SI as % of Free Float 6.3% on loan, making it in the top 20 9.5 Active Availability Ratio 10 U.K. largest shorts. Perennially 10 unpopular Yell Group PLC is up 9 0 to 16.4% short and France’s video Available Available Supply Quantity (Millions) 10/1/2010 11/1/2010 12/1/2010 game publisher UbiSoft Entertain- ment SA is up to 10.5%.

Japan’s pay TV broadcaster SKY Perfect JSAT Holdings Inc. has seen a quadrupling of short selling in the last 60 days. cial results this week. Short interest Dec. 8. Institutional ownership has had reduced from 12% earlier this fallen to 130 million since early No- The exponential price rises in com- year and has been relatively static vember, following a high in the third modities such as grain does not at 4% of total shares outstanding on quarter of 152 million, expressing seem to have impacted the perfor- loan since July. Institutional owner- negative sentiment. Still, short inter- mance of fresh meat producer and ship has surged from 36 million to 42 est has decreased from 6.7% to 5%. distributor Smithfield Foods Inc. Its million since September. Will Gordon is a guest columnist whose views share price continues to trade com- do not necessarily reflect those of this publi- fortably at the upper-quartile range U.K.-listed Stagecoach Group PLC cation. He can be reached by email at willduff. ahead of second quarter 2011 finan- will announce interim 2010 earnings [email protected] 12.07.10 hedge funds | Bloomberg Brief 12

13F Forensics: Soros Fund Management

George Soros cut his hedge fund's holdings in SPDR Dendreon Corp., CenturyLink Inc., Dow Chemical Co. Gold Trust from nearly 14 percent of the portfolio to 10 per- and CSG Systems International Inc. Soros sold off stakes cent. Soros Fund Management LLC, which oversees $25 in Cobalt International Energy Inc., Best Buy Co. Inc., billion, added 173 new positions in the third quarter, turning PowerShares DB Agriculture exchange traded fund and over about 24 percent of its portfolio. New holdings included Arena Resources Inc.

Holdings by Market Value

change in return since holding % portfolio % held market value* market value* June 30 SPDR Gold Shares 10.10 1.09 600.79 -37.38 5.95 Monsanto Co 5.26 1.21 312.64 52.65 28.44 InterOil Corp 4.63 8.97 275.30 124.55 12.03 Plains Exploration & Productio 3.04 4.84 180.86 75.93 8.59 Teva Pharmaceutical Industries 2.17 0.26 128.94 128.68 -5.08 Weatherford International Ltd 2.06 0.97 122.70 52.65 23.89 Novagold Resources Inc 1.90 5.73 112.79 22.71 67.85 Emdeon Inc 1.59 8.57 94.85 1.20 2.13 Dendreon Corp 1.26 1.26 74.80 74.80 -9.28 Kinross Gold Corp 1.22 0.55 72.60 6.52 -3.94 * $millions

Sector Specific Aggregate sector-specific portfolio changes from Q2 to Q3.

Soros Fund Management increased Changes From Last Quarter exposure to health care companies, largely through the purchase of Den- Utilities -0.2% dreon shares, a stock that has lost 10 Telecoms 3.9% percent since Sept. 30. In healthcare, the hedge fund also bought shares IT 1.1% of Mindray Medical International Financials 0.8% Ltd., which would have dropped 10 percent, and Salix Pharmaceuticals Health Care 6.8% Ltd., which would have gained 13 Consumer Staples -2.1% percent. Exposure to telecommunica- tions companies was ramped up. So- Consumer Discretionary -2.5% ros increased its holdings of Verizon Industrials -0.3% Communications Inc., whose stock is little changed since Sept. 30, and Materials -1.5% AT&T Inc., which has decreased 1.1 Energy -1.7% percent.

Type FLNG on Bloomberg to analyze 13f filings 12.07.10 hedge funds | Bloomberg Brief 13 over the hedge

Andrew Rabinowitz, Marathon As- nization, to help elect Republican sold a three-bedroom, three-bath set Management LP’s chief operating candidates in this year’s mid-term home in West Hollywood, Calif., for officer, held Jingle Ball 2010, on Dec. elections. Both groups were advised $999,000 on Oct. 25, according to 6 at New York’s Covet Lounge to sup- by Rove, former President George W. BlockShopper.com. port his charity, R Baby Foundation. Bush’s chief political strategist. Marcel Herbst, Weston Capital — Jonathan D. Salant Robert Mignone, portfolio manager Management's managing director and at Bridger Management in New R Baby board member, co-hosted the Soros Fund Management LLC and York, has pledged to match up to event. “He thought it would be a good Fortress Investment Group were $1 million-worth of donations to the idea to get people from the hedge fund among contributors to the annual American History of Natural History, and Wall Street community together Samuel Waxman Cancer Research the Wall Street Journal reported. to have a holiday party for the charity,” Foundation gala on Nov. 18 at “We have a crisis in America when it Rabinowitz said of Herbst. New York’s 69th Regiment Armory. comes to science literacy, something Irv “Mr G” Gikofsky, the meteo- Sheryl Crow headlined the event, we talk a lot about but aren’t ad- rologist on New York television station which raised $3.4 million, a record dressing enough,” the Journal quoted WPIX 11, also spoke to the crowd of for the group. Mignone as saying. “The museum more than 500 who packed the mid- is generating great scientific study town east club. — Patrick Cole and content that they can then push R Baby gives grants to support train- out to people all over the city and ing, equipment and education to im- present in an intersting and informa- prove medical care for infants. It has SAC Capital Management Founder tive way.” raised $4.5 million and funded efforts Steven Cohen bought a world map at Yale and NYU, including simulation made of tin cans for about $300,000 John Paulson spent $2.85 million training for physicians learning to diag- and acquired Tim Hawkinson’s for a midtown Manhattan apartment, nose viral infections and treat babies “Bike,” a work of collaged inkjet believed to be his fourth residence with breathing problems. prints, for $180,000, the Wall Street and second in , Rabinowitz and his wife Phyllis Journal reported. Dressed in sneak- FINalternatives reported. The 1,800 founded R Baby in 2006 after their in- ers and a Brown University baseball square foot residence is as fraction fant daughter died from a viral infection cap, Cohen made the purchases of his other New York apartment, that she contracted in a hospital’s neo- within five minutes of the opening of which measures 28,500 square natal intensive care unit. Art Basel Miami’s VIP preview, the feet, it said. Paulson won’t live at R Baby received 20 percent of prof- Journal said. the 26th-floor apartment across the its from drinks sold at Covet Lounge’s street from St. Patrick’s Cathedral, bar and suggested a $20 donation at The holiday light show at Paul Tudor and would instead use the condo- the door. Jones’ home in Connecticut is tenta- minium as a guest house for friends, — Kelly Bit tively scheduled to start at sundown family and business associates, on Feb. 22, the Greenwich Citzen FINalternatives said. Paulson got a Kenneth Griffin, chief executive of reported. The display is expected to deal on the digs, paying 23% less Citadel Investment Group LLC, rival those of past years, when the than the apartment was listed for and his wife Anne each contributed property was rigged with 36,000 last year, the website added. $250,000 to Karl Rove’s American ornamental lights and synchronized to Crossroads fundraising group, new music that onlookers could listen to on High-frequency trading firm Teza Federal Election Commission reports FM radio in their cars, the paper said. Technologies LLC is not allowing show. Griffin, who runs the $12.5 employees to use the proprietary billion hedge fund based in Chicago, Moore Capital Management Found- code of other firms, the Wall Street called the U.S. government’s role in er Louis Bacon spent $45 million Journal reported. Mikhail Malyshev, the financial system “frightening’’ at to acquire a historic estate in North formerly of Citadel LLC, said all of an April 2009 conference. His wife is Carolina originally built by one of his Teza’s employees, including former managing partner of Aragon Global forebears, according to FINalterna- Goldman Sachs Group Inc. pro- Management LLC, also based in tives. The 8,300 acre Orton Planta- grammer Sergey Aleynikov, signed Chicago. American Crossroads is tion is located in southern North employment agreements in which the biggest of the so-called “super” Carolina, just outside of Wilmington, they were prohibited from using other political action committees, which it said. The house was built in 1725 company’s proprietary ideas, the can take in unlimited donations from by Roger Moore, an ancestor of the Journal story said. Federal prosecu- corporations, unions and individu- billionaire hedge fund manager, FIN- tors allege that Aleynikov secretly als. The group, which discloses its alternatives reported on its website. copied Goldman Sachs’s confidential donors, and its affiliate, Crossroads source code for its trading platform in GPS, which doesn’t, spent $38 Pine Cobble Capital LLC Founder his last days at the investment bank, million, more than any other orga- Zev Nijensohn and his wife Lynda according to the Journal. 12.07.10 hedge funds | Bloomberg Brief 14

Hedge Funds Added to Bloomberg This Week

The following hedge funds were added to Bloomberg’s database this week. Access the Hedge Fund Database Portal by typing HFND on your Bloomberg Terminal. To view U.S. hedge fund managers, users must fill out an Accredited Investor Form (Option 13).

Manager Inception Ticker bloomberg id Fund Manager Management Company strategy Location Date Prime Broker

AAAGDRE SP BBG0019HJ5H0 BILL SUNG Absolute Asia Asset Mgmt Eq Mkt Neut Singapore 11/26/2010 ALINDCB KY BBG0019Q2TK2 SANJEEV MOHTA Alchemy Investment Mgmt FI Directional Singapore 10/15/2010 Nomura International PLC HAMABRA LX BBG0019Q2HX4 Andbanc Asset Mgmt Global Macro Luxembourg 11/22/2010 Citigroup Global Markets Ltd BLKVOLA CN BBG0019Q2F31 CHRIS. FOSTER Blackheath Fund Management CTA/Mgd Futures Canada 10/1/2010 CSIARBM KY BBG0019LPY54 SILVER KUNG CSI Asset Management Global Macro Hong Kong 12/1/2010 DARECMS US BBG0019VL808 TASHAN YEN Darewind LLC CTA/Mgd Futures U.S. 9/1/2003 Interactive Brokers LLC DUNNMIP US BBG0019K1RV8 WILLIAM DUNN Dunn Capital Management Inc CTA/Mgd Futures U.S. 10/1/2006 DYNEQLP US BBG0019LPWJ3 RAJ NANDIWADA Dynamic Investment Advisors LLC Eq Directional-Long/Short Eq U.S. 8/1/2010 India Infoline Ltd ECKFUTC KY BBG0019LP1C8 WILLIAM ECKHARDT Eckhardt Trading Co CTA/Mgd Futures U.S. 7/1/2001 ETCSTPL US BBG0019LPC34 WILLIAM ECKHARDT Eckhardt Trading Co CTA/Mgd Futures U.S. 10/1/1991 ETCSTAN US BBG0019LP922 WILLIAM ECKHARDT Eckhardt Trading Co CTA/Mgd Futures U.S. 8/1/1991 MLISGC1 LX BBG0019R7GC2 Graham Capital Management LP Global Macro U.K. 12/1/2010 Merrill Lynch International INNLPCD CN BBG0019R9QL8 Innocap Investment Mgmt Multi-Strategy Canada 11/22/2010 MAAD134 LX BBG0019RBJH6 Man Investments Luxembourg CTA/Mgd Futures Luxembourg 12/7/2010 MANMUST LX BBG0019R9RH1 SANDRO KRATTLI Man Investments Luxembourg CTA/Mgd Futures Luxembourg 12/7/2010 PCTABTR US BBG0019VGWZ3 ROGER M PEARLMAN Pearlman CTA CTA/Mgd Futures U.S. 10/1/2010 PRLMLTD KY BBG0019SRGN6 STEVE KUHN Pine River Capital Management Mortgage Backed Arb U.S. 9/1/2010 FULABZS LX BBG0019R9SR8 RBS Luxembourg SA Multi-Strategy U.K. 11/16/2010 Rothschild SATURNP US BBG0019MTQ64 SYED ALI Saturn Capital Management LLC Eq Mkt Neut U.S. 11/1/2006 Merlin Securities LLC SILVCAP US BBG0019LP1J1 BRUCE SILVER Silver Capital Management LLC Long/Short Eq U.S. 5/1/2002 BNP Paribas SKYSPII US BBG0019SSSN9 CHARLES PAQUELET Skylands Capital LLC Global Macro U.S. 5/1/2005 Goldman Sachs & Co STVIINV US BBG0019VKGX5 SPENCER C PATTON Steel Vine Investments LLC CTA/Mgd Futures U.S. 2/1/2009 SYSADVA VI BBG0019PY1F6 ALEXEI CHEKHLOV Systematic Alpha Management Multi-Strategy U.S. 12/31/2009 Newedge Group VEGCROE KY BBG0019Q1TQ7 Vega Fund Holdings Multi-Strategy Spain 8/1/2009 12.07.10 hedge funds | Bloomberg Brief 15

To submit an event email [email protected] Calendar daTe event featuring location contact / registration Dec. 7, High Frequency Trading Happy Hour "Upscale networking and complimentary appetizers." La Barrique, New York hfthappyhour.com 6pm Dec. 7, Hedge Fund Association's Annual Holiday Party Complimentary for HFA members. $25 per person for non- Brown Rudnick, New Lara Block, lblock@ 6pm members. York thehfa.org Dec. 8, Young Jewish Professionals' Hedge Fund and Private "Panel speakers Bruce Richards, Marathon Doral Arrowwood, Rye Lara Block, lblock@ 6:30pm Equity Summit Brook, N.Y. thehfa.org Dec. 8 U.K.-Japan Alternative Investments Club Informal networking group's regularly-scheduled meeting. By invitation only If you are in the sector and interested, email to nichieialternatives@ yahoo.co.uk. Dec. 8 U.K.-Japan Alternative Investments Club Informal networking group's regularly-scheduled meeting. By invitation only If you are in the sector and interested, email to nichieialternatives@ yahoo.co.uk. Dec. 9, Toys For Tots Cocktail Hour Admission: Toy or $20 Pranna, New York [email protected] 8:30pm Dec. 9-10 High-Frequency Trading Experts Workshop Peter van Kleef, Lakeview Arbitrage will instruct attendees Golden Networking Edgar Perez, 516-761- how to launch an HFT operation. office, New York 4712 Dec. 10, New York Hedge Fund Roundtable: The Federal Fiscal Senator Judd Gregg (R-N.H.) to discuss Dodd-Frank, more. Princeton Club, New Jill Adler, rsvp@newy- 8:30am Future York orkhedgefundround- table.org Dec. 13 Cap Intro: Emerging Markets Alternative Investing Ten managers and 15 investors by invitation only. The Harvard Club, New [email protected] York to apply Dec. 14 CAIA New York Holiday Social Drinks and snacks will be provided. Inside Park at St. caia.org Bart's, New York Dec. 22 High-Frequency Trading Experts Workshop 2010 - Hong Practical implementation of high-frequency trading strate- One International hftewhongkong.event- Kong gies. Finance Center, Hong brite.com Kong Jan. 13 Argyle Forum's 2011 Leadership in the Distressed Wilbur Ross; Jason Friedman, Marathon Asset Management; New York (exact argyleforum.com Markets Joel Holsinger, Fortress Investment Group. location disclosed to attendees) Jan. 18-20 GAIM USA 2011 Second annual investor summit, "rising stars" and "quickfire" Boca Raton Resort & iirusa.com/gaimusa showcases. Club, Florida Jan. 26-28 2011 AlphaMetrix Summit "An invitation-only event bringing together over 400 qualified The Doral Resort & alphametrix.com/ investors, allocators, hedge funds and CTAs." Spa, Miami summit Jan. 30- Managed Funds Association's Network 2011 "Launched in January 1995, the event has become MFA’s flag- The Breakers Hotel, managedfunds.org Feb. 1 ship conference event and generally draws approximately Palm Beach, Fla. 700 delegates." Feb. 9-10 2nd Annual High Frequency Trading Summit Peter Nabicht, Allston Trading; John Netto, M3 Capital; Gar- Wyndham Chicago worldrg.com rett Nenner, Trading Partners. Feb. 11 Bloomberg China & the World Summit Leaders in infrastructure, government, banking and global New York. Exact venue Tracy David, 646- investing. TBD 834-5021, mdavid20@ bloomberg.net Feb. 16 FINforum's The Search for Alpha in Latin America David Brillembourg, Brilla Group. Miami City Club, Miami finforums.com March 2 5th Annual OpRisk Conference Top challenges your firm could be facing in 2011. Bayards, New York 646-395-6341 March 12th Annual Hedge Funds World Middle East Keynote addresses by Nouriel Roubini, Bill Ackman, Orin Jumeirah Beach Hotel, terrapinn.com 7-10 Kramer Dubai March 15 Bloomberg Hedge Funds London "Brings together managers with hundreds of billions under London Tracy David, 646- management and pairs them with academics and economists 834-5021, mdavid20@ to discuss what role hedge funds should play as the rules bloomberg.net change." March 36th Annual Futures Industry Conference Expected audience of 800 senior-level futures industry pro- Boca Raton Resort & futuresindustry.org/ 15-18 fessional including members of Congress, regulatory officials Club, Florida boca-2011.asp and congressional staff. March 17 Hong Kong Hedge Funds Club Networking event. China Club, Hong Kong stefan.x.nilsson@ jpmorgan.com 12.07.10 hedge funds | Bloomberg Brief 16

what’s really in the portfolio presently. Q: Back in June, after the flash When we develop ideas, sometimes crash, you said you were feeling spotlight we’ll impose a top-down macro point- bearish heading into the end of of-view. Among them would be that the year. Well, high- yield spreads Peter Lupoff, Founder and CEO Of Tiburon regulators have heightened authority have come down. Stocks are up Capital, spoke to Bloomberg Television host in these present markets. Now, we 10 percent since then. How do you Erik Schatzker last week. Lupoff's firm cel- run our pool of capital’s fiduciaries. think we’ll end out the year? ebrated its one-year anniversary after leaving It’s not a source of a political point- Millennium Partners. of-view, so I’m agnostic about those A: My gut feel is that we’re up. And things. It’s just very rarely is the part of it is it’s December. The street circumstance that regulators have is basically paid to be long. There is heightened authority. They’re seeking this enormity of cash. People want Q: Peter, you told your investors companies that have misbehaved to believe. There is the notion of last month, “We are one event in one way or another, taxing them. confirmation bias.Y ou want to look away from another market move They have taxing authority. So a for reasons that markets will be like the one we had in May.” What macro thesis of ours for the last year do you see happening? or so has been to look at Department This interview was condensed and edited. A: It’s any number of things. I would of Justice inquiry, whether it’s price say the market seems to be react- fixing, tampering with foreign officials, ing in a reasonable way to Ireland. regulatory intervention in industries Bloomberg Brief Hedge Funds In one of my white papers I quoted like the for-profit education space. Bloomberg LP Don Rumsfeld saying there are “the This is a theme that can play out in a 731 Lexington Avenue, New York, NY 10022 212-318-2000 unknown unknowns.” The unknown portfolio, more or less regardless of unknowns can create that kind of what happens in Europe. Newsletter Ted Merz Executive Editor [email protected] market shock. I’m not saying that’s a 212-617-2309 tomorrow event or a next year event, Q: Regardless of what happens in but clearly we have to manage with Europe. Interesting. You, Peter, are Bloomberg News Rob Urban that in mind, that it’s always looming. among those people who believe Managing Editor [email protected] 212-617-5192 that ultra-low interest rates got Q: You also said you are mak- us into trouble in the first place, Hedge Funds Nathaniel E. Baker ing bets on disaster . effectively creating a bubble and Editor [email protected] Not for the purpose of hedging forcing investors to go chasing 212-617-2741 but because you see potential yields. Aren’t we really in the same Reporter Kelly Bit opportunity. Is that to say once situation once again, maybe even [email protected] again people are mispricing tail augmented by QE2? 212-617-1097 risk and that it’s actually cheap to A: It’s kind of interesting how much buy this out of the money option, Contributing Katherine Burton dialogue there is on this topic. We’re Reporters [email protected] so to speak? extremely self-aware of it after 212-617-2335 A: It appears so. I think that we’re watching what happened from 2003 deep value, bottoms up by our train- through 2008 with virtually zero risk- Saijel Kishan [email protected] ing. We’re event-driven as a strategy. free rates. At the same time, there’s 212-617-6662 But when we pull the camera back enormous amount of capital on side- we work in a world where macro lines looking to be deployed. It is very Contributing Matthew Kelly factors matter. Technicals prob- much the fact that when rates are Data Editors [email protected] 609-279-5064 ably outweigh deep value in this managed to a zero rate of return, in- time and place. We see a number vestors will reach for some rate over Anibal Arrascue of things that can create significant the risk-free rate. And what we’re in [email protected] opportunities being short, and where right now is a period that feels like 609-279-5084 those options are intrinsically cheap, multiple equilibrium where there’s Staff Economist David Powell whether it’s currency related, com- a form of schizophrenia in markets. [email protected] modities related, what have you. Where on one day there’s risk on, on +44-20-7073-3769 the next day there’s risk off. It’s not Q: There is amove away from risk. like the events we read in the papers To subscribe via the Bloomberg professional Where to? You said currencies, terminal type BRIEF or on the web at every morning are new. It’s that we www.bloomberg.com/brief/hedgefunds commodities. Let’s get a little are reacting in arguably - otherwise more specific. rational actors are acting irrationally, To contact the editors: [email protected] A: Well, let’s talk a little bit about and that can create opportunities. © copyright 2010 Bloomberg LP. All rights reserved.