After a rough end to 2014, hedge funds are entering the new year with a little more caution.
The Wall Street Journal reported Monday that hedge fund leverage has fallen to a two-year low, according to a confidential client memo from Morgan Stanley. Many hedge fund managers are taking a more bearish stance on stocks, decreasing exposure and betting against the market.
Surveys cited by the WSJ showed that 26 percent of hedge fund managers predict the stock market to stay flat or go down by the end of 2015, while banks predicted an average 8.2 percent rise.
Hedge funds have been falling short of S&P 500 performance for several years, returning only 2 percent in 2014. Poor performance has led to investors pulling their money and the closing of hundreds of funds last year. Among those cutting exposure, the WSJ listed Michael Hintze's CQS LLP, Kyle Bass' Hayman Capital and Passport Capital LLC.
Hedge fund titan Bill Ackman, the CEO of $18 billion Pershing Square Capital Management, made some pretty negative comments on McDonald's Wednesday on Bloomberg TV's "The Pulse."
From Bloomberg TV (emphasis ours):
"You know, at this point, we’re a Burger King shareholder. Burger King I think is taking very meaningful market share away from McDonald's. We have a lot of confidence in the Burger King management team. So I think it’d probably be unlikely for us to be competing with ourselves. And I think McDonald's stock is not cheap. You know, I think the company has serious issues, but because there’s a very strong balance sheet, pays almost a 4 percent dividend yield, I think that supports the stock price. So I think it’s not as interesting because the dividend supports a value that I think is maybe not justified based on the current performance of the company."
There was an unconfirmed rumor in December that Ackman might be long McDonald's stock. And around the time of the rumor, Ackman told Bloomberg TV's Stephanie Ruhle that "if McDonald's were run like BurgerKing, the stock would go up a lot." Following that comment, shares of McDonald's had its biggest one day climb in nine months.
Thomas Gilbert Jr. — the 30-year-old socialite accused of murdering his hedge fund father — is listed as a beneficiary in his late father's will, the New York Post reports.
According to the Post, Gilbert and his mother and sister will split the elder Gilbert's $1.6 million.
Gilbert Sr. had $50,000 in the bank, $477,000 invested in hedge funds, $1 million in private equity, and $100,000 in personal property at the time of his death, the report said.
According to the Post, which cites the will filed in Manhattan Surrogate's Court this week, Gilbert is supposed to receive quarterly payments from a trust until he is 35. After that, he is supposed to get what is left in the account all at once.
Earlier this month, Gilbert was charged with second-degree murder and criminal possession of a weapon in connection to the death of his 70-year-old father. The elder Gilbert was found dead with a gun wound to his head at his apartment in Manhattan's Upper East Side on Jan. 4.
Police said there was some sort of argument about money between the father and son. Gilbert's father, who ran Wainscott Capital Partners, was reportedly going to cut his son's monthly allowance by $200. Gilbert Sr. had also been reportedly subsidizing his son's lifestyle by paying for Gilbert's $2,400-a-month Chelsea apartment and giving him a monthly allowance of $600.
Hedge fund manager Marko Dimitrijevic is closing his largest hedge fund, Everest Capital's Global Fund, having lost almost all its money after the Swiss National Bank (SNB) scrapped its three-year-old cap on the Swiss franc against the euro, Bloomberg news reported on Saturday.
Citing a person familiar with the firm, Bloomberg said the fund had been betting that the Swiss franc would decline. The fund had about $830 million in assets at the end of 2014, according to a client report cited by Bloomberg.
It said an Everest spokesman would not comment on the fund and Dimitrijevic did not return calls.
Everest Capital, based in Miami and specializing in emerging markets, still manages seven funds with about $2.2 billion in assets, Bloomberg said.
The SNB triggered big losses around the globe on Thursday when it removed a three-year-old cap on the value of the Swiss franc against the euro, allowing it to soar.
What Happened
More than three years of stability between the euro and Swiss franc ended suddenly this week, as the Swiss central bank abandoned attempts to cap the currency's value.
The bank previously aimed to let the franc rise no higher than 1.20 to the euro. As soon as the change was announced, it smashed immediately higher, breaking through the previous "ceiling."
The euro plunged against the franc, going down by nearly 28% as the news broke. The Associated Press reported that in the world of currencies, a move like that "can seem as rare as Halley's Comet."
Foreign-exchange brokers who had relied on the stability of the Swiss franc, which until Wednesday was pegged to the euro, were taken by surprise when the Swiss National Bank abolished its controls, and millions of dollars were lost at firms around the world.
On Friday, the UK-based FX broker Alpari announced it had entered insolvency. Here's what it said:
The recent move on the Swiss franc caused by the Swiss National Bank’s unexpected policy reversal of capping the Swiss franc against the euro has resulted in exceptional volatility and extreme lack of liquidity. This has resulted in the majority of clients sustaining losses which has exceeded their account equity. Where a client cannot cover this loss, it is passed on to us. This has forced Alpari (UK) Limited to confirm today, 16/01/15, that it has entered into insolvency.
(Reuters) - Activist investor Starboard Value LP called for office-supply chains Staples Inc <spls.o> and Office Depot Inc <odp.o> to merge, saying a combined company would lead to greater savings.
The hedge fund owned 5.1 percent of Staples last month when it boosted its stake in Office Depot to nearly 10 percent.
A merger will result in synergies of at least $2 billion, more than doubling operating profits, Starboard's founder and Chief Executive Jeffrey Smith wrote in a letter to Staples' Chief Executive Ronald Sargent on Tuesday.
"If it becomes clear to us that you have no intention of seriously pursuing this unique and highly attractive opportunity, it would be a clear sign that significant leadership change is needed at Staples," Smith said.
Staples, the No.1 office supplies chain, said it has met Starboard Value to discuss their ideas, and carefully considers all actions that would create shareholder value.
Office Depot said it did not comment on rumors and speculation.
A merger would help fend off intense competition from online retailers such as Amazon.com Inc <amzn.o> and big-box chains such as Wal-Mart Stores Inc <wmt.n> that sell the same merchandise for less.
Fears of added antitrust scrutiny, however, loom as Staples and Office Depot are the biggest remaining retailers of core office supplies, such as paper and ink toner.
Before a merger, Staples and office Depot will face a long review by the U.S. Federal Trade Commission (FTC), like the ones being faced by Dollar General Corp <dg.n> and Dollar Tree Inc <dltr.o>, Michael Keeley, partner at law firm Axinn, Veltrop & Harkrider LLP, told Reuters.
Dollar General and Dollar Tree have bid to buy Family Dollar Stores Inc <fdo.n>.
The FTC would either clear or seek to block a Staples-Office Depot deal outright, and not ask them to divest stores, Keeley said.
Regulators nixed Staples' attempt to buy Office Depot in 1997, citing antitrust concerns.
The FTC approved Office Depot's $976 million acquisition of OfficeMax in 2013 without the need to close stores, citing increased competition in the office supply industry.
The magnitude of value created from such a combination would far exceed anything that either company could achieve on a standalone basis, Smith said.
Staples shares were down 2 percent at $17.01.
Office Depot shares were down 1.4 percent at $7.93 on the Nasdaq on Tuesday.
Bloomberg reports that Schreiber's PointState Capital gained 27% after fees in 2014 with the firm's profit coming in at $2 billion for the year.
About half that profit was from Schreiber's oil trade, Bloomberg reported.
Back in November when the price of oil cratered over the Thanksgiving weekend after OPEC declined to cut production in the face of declining oil prices, we first highlighted Schreiber's comments from the Sohn Conference.
In May, Schreiber said oil prices were heading "lower, much lower," while adding: "US crude is being drilled for by the same cast of characters who oversupplied the natural gas market. Ladies and gentlemen, the song remains the same."
Schreiber's call looked prescient back in November as during the Thanksgiving holiday West Texas Intermediate crude prices fell below $70 for the first time in four years. Since then, oil has done nothing but go lower. On Wednesday morning, WTI was trading at about $48 a barrel.
Schreiber said at the Sohn Conference that, "Crude strength has led to complacency, and complacency is a killer."
It seems doubtful the market is complacent any longer.
Billionaire hedge fund manager Leon Cooperman–the 71-year-old founder of Omega Advisors–asked a CEO about the size of his balls on a conference call last week.
It was on a conference call with Luxembourg-headquartered mortgage finance company Altisource Portfolio Solution's CEO, Bill Shepro.
"...And having a sense of humor, what I’m trying to figure out to be honest with you and this is addressed to Bill for obvious reasons — whether your testicles are bigger than your brains or your brains are bigger than your testicles," he said.
Cooperman went on to slam the company for repurchasing $200 million worth of shares when the stock was trading at $104. He called it a "colossal misallocation of capital." Cooperman told the CEO that a buyback at the current stock price level would be a "no brainer," though.
Altisource's stock was last trading around $22.74 per share on Tuesday. In the last year, the stock has plummeted about 84%.
According to the most recent 13-F data, Cooperman owns just over 1.28 million shares of Altisource Portfolio Solutions.
Leon Cooperman:I think you’ve addressed this question but because of the importance of the question I want to hear you talk about it a little bit more.And having a sense of humor, what I’m trying to figure out to be honest with you and this is addressed to Bill for obvious reasons — whether your testicles are bigger than your brains or your brains are bigger than your testicles.
The Company has had a pattern of deciding to return 100% of its cash flow to its investors by repurchase and you thought your stock was cheap I believe when you spent $200 million at $104 and obviously that was a colossal misallocation of capital.
I look at the numbers and I’m smart enough to understand if you’re buying something back at $19 or $20 that you think can earn as much as 775 or as little as 435, it makes sense. But we have to obviously risk adjust that. So my question is if you took the midpoint of those numbers of $6 on 20 million shares, you’re earning $120 million. If you took a third of that let’s say, take $40 million, that would equate to a dividend of $2 per share which would slap a yield on the stock at 10 and you would be able to buy back less stock but you would be able to still buy back almost 20% of the Company if you decide to take the remaining cash flow and buy back stock.
So I’d just like to hear that you guys have used very sharp pencils, have been very diligent and understand that the opportunity is so extremely attractive at the current price level basically that the notion of splitting the returning of cash to shareholders via a dividend and repurchase is less sensible than just going straight out for a stock repurchase.
Then secondly, what is the timeline for this repurchase to be effectuated? In other words I understand that there some need to get your 10-K out which will take time and then shareholder approval etc. but what are we looking at? Because of the end of the day I want us to buy the stock back cheap not expensive. I don’t want you to turn around and pay $30 or $40 for the stock when it’s been trading actively at $17, $18 or $19. So what is the timetable for us to get into the market?
Bill Shepro: Lee, this is Bill. I will start with your second question. So we’re working with our SEC Counsel now to determine whether or not we’ve disclosed enough information with this call to start the buyback program if we can open a window following this call. I don’t know the answer yet. If it is not following this call, it would be after our 10-K is issued and following the window opening after our 10-K is issued.
Leon Cooperman:I would just say this — excuse me for interrupting you. But I really don’t want to see the company being picked off. You came out — you made your statement. You made a statement for $200 million at $104 when you bought the stock back. You’ve now given a comprehensive forecast telling people what your plans are in terms of repurchase, telling people what you think your range of earnings is, telling people you think our stock is significantly undervalued. Find a law firm that has common sense that says you have put enough information into the market that if you want to buy back stock you could buy back stock.
And based upon our track record of repurchase I can't say we're sitting on any kind of inside information. That again, a sense of humor.
Bill Shepro: We are certainly working on evaluating. Let me address your first question. We recognize, Lee that we repurchased shares during 2014 at prices that are higher — much higher than where the stock is trading today. But if you look, we have a five-year history of substantially growing our revenue and earnings and based on what we knew at that time we believed it made sense to repurchase shares.
Now if you look at where the share price is trading today which is roughly 3 times the midpoint of our adjusted 2015 earnings per share scenario that we have just gave you today, we believe the stock is trading at a very substantial discount to its value.
So when you take a look – would you let me finish please?
When you take this into consideration along with our belief that the share buyback doesn't materially change our risk profile and that a repurchase is more efficient than a dividend we think and along with our Board that a share buyback makes more sense. And keep in mind, Lee, that management and insiders own in excess of 30% of the stock. We've also received feedback from some of our other shareholders that are encouraging us to buy back shares.
Leon Cooperman: I understand that. I’m not against it. I understand all that, I understand the arithmetic. I just want to make sure that you’ve crossed every T, dotted every I and you understand what you’re doing. Because as I told you a year ago, stock repurchase only makes sense and only makes sense if you are buying back something that is significantly undervalued. And if it’s not undervalued then you have no business buying it back. And we’ve made a mistake for the last year and we just want to make sure that we’re not making another mistake now.
But I would say on your numbers it's a no-brainer. And you should – and I believe ver strongly that your stock is up 5 as we're speaking because of this constructive call but the idea is to buy the stock back, give the information to all your [shareholders] at the same time which you've done and then buy it back when it's cheap not when it's expensive. And I can't believe any reasonable law firm with common sense would not say you put enough information into the market that come Monday you would be able to do what you want to do. I've said enough. Thank you for listening. I appreciate it.
Hedge fund manager Owen Li sent a letter to his investors apologizing for losing all but $200,000 of the fund's capital by acting "overzealously," CNBC's Lawrence Delevingne reports.
Li, who previously worked at convicted insider trader Raj Rajaratnam's now-closed Galleon Group, is the founder of New York-based Canarsie Capital. According to CNBC, Canarsie once managed around $100 million in assets.
In the letter, Li told investors that he was "truly sorry."
"My only hope is that you understand that I acted in an attempt — however misguided — to generate higher returns for the fund and its investors," Li wrote in the letter. "But even so, I acted overzealously, causing you devastating losses for which there is no excuse."
We also tried calling Canarsie's offices. No one answered.
Hedge funds are known for pulling in the big bucks, and with that comes compensation. Lots of it.
However, according to data from the online investor network SumZero, the majority of hedge fund analysts don't actually make more than other professionals in traditionally well-paid jobs. SumZero used numbers from 2,500 entries in its compensation database to evaluate what pay to expect at a hedge fund.
SumZero COO Nicholas Kapur said most compensation reports relied on using averages to draw conclusions, which makes them susceptible to being skewed by extreme outliers. To correct for these, SumZero based its report off the median of compensation reported instead.
Here's a graph of plot points SumZero has collected.
At the very beginning of analysts' careers, their pay is mostly clumped together, ranging from $72,500 to $190,000 for the first year. Then as the timeline progresses, the discrepancy between lowest- and highest-paid employees widens considerably, ranging from $225,000 to $700,000.
"What you see here is that (1) yes, individuals are quite well-paid in the middle quartiles as you might expect, but (2) they're not paid at levels that are out of scope given their levels of advanced education/experience," Kapur wrote in an email."In fact, these are salary ranges that are not uncommon for doctors, dentists, lawyers, engineers, etc. at comparable points in their careers."
Here's another graph that shows the extreme growth rate only experienced by the 99th percentile, compared with those of everyone else.
So according to SumZero, though hedge fund pay is still high, it can become misleading or sensationalized thanks to the extremes of compensation that very few people actually earn.
Then what can you expect to earn at a hedge fund, if you're not going to be raking in billions?
Here are SumZero's charts on the median base pay and bonuses based on the size of your fund:
And the fund's location:
The asset class it invests in:
And finally (not just for hedge fund people) by the kind of fund:
But of course, someone had to be on the other side of those positions and, those are the investors that came out on top.
According to the Wall Street Journal, here are a few hedge funds, specifically, that actually made money betting on the Swiss franc:
Brevan Howard Asset Management, where Alan Howard runs $23.7 billion, was up 0.8% last week and 1.9% this year.
Lynx Asset Management in Stockholm with $5.5 billion in assets gained 2% last week and 4% for the year.
Quaesta Capital AG, a Swiss investment firm with $3 billion AUM, is up 14% this year.
Rubicon Global, a London-based macro hedge fund which manages over $1 billion, regained on it's 2.3% decline.
Omni Partners LLP in London also made a small profit, and both Moore Capital Management and Soros Fund Management weren't much impacted by the move, WSJ reported.
Hedge fund billionaire Louis Bacon has filed a $50 million defamation suit in New York against his Bahamas vacation home neighbor–Canadian fashion magnate Peter Nygard.
In the complaint, Bacon alleges that Nygard has waged an "obsessive and malicious" smear campaign against him since mid-2010.
According to the complaint, Bacon alleges that Nygard spread "brazen lies" that he:
murdered multiple individuals who died under suspicious circumstances, and then covered up those murders from law enforcement;
He is a white supremacist and a member of the Ku Klux Klan ("KKK"), determined to exclude native Bahamians from Clifton Bay;
He was charged by prosecutors and "accused of criminal conspiracy" in a "billion dollar scam" that is in "one of the biggest Wall Street insider trading cases ever," referring to the insider trading arrest of Rajat Gupta;
He smuggled narcotics and fugitives;
He possessed terrorist weaponry (such as illegal speakers) that pose a national security threat to the Bahamas;
He committed arson of Nygard's residence; and
He has bribed Bahamian officials.
Bacon categorically denied all of those statements and said they were untrue, the complaint said.
Bacon also alleged that Nygard and his co-conspirators spread lies about him via internet videos and social media. He also alleged that Nygard organized a protest in July 2014 where some Bahamians marched in Nassau wearing t-shirts and holding posters accusing him of being in the KKK.
Bacon said in the complaint that Nygard "harbors spite, ill will, and animus" toward him and that he had "evil and sinister motivations" for publishing the statements.
Bacon also said that the statements allegedly made by Nygard have damaged his "professional, philanthropic and personal reputations." He also said he has suffered damages like attorneys' fees and investigator fees.
"The allegations in Louis Bacon's latest lawsuit are completely without merit and will be proven so if they ever get to trial. The assertion that Mr. Bacon has been defamed is not supportable," a spokesperson for Nygard said in a statement to Business Insider.
The two tycoons, who own adjacent mansions on the exclusive Lyford Cay, have been famously feuding for years.
Nygard is the founder of Nygard International, which specializes in designing and manufacturing women's fashion. The fashion magnate owns a 150,000-square-foot Mayan-themed mansion on Lyford Cay.
Bacon is the founder and CEO of Moore Capital Management–a New York headquartered macro hedge fund. Bacon is known for being a huge environmentalist and conservationist.
Here's the full statement from Nygard's spokesperson:
The allegations in Louis Bacon's latest lawsuit are completely without merit and will be proven so if they ever get to trial. The assertion that Mr. Bacon has been defamed is not supportable. This action is simply the latest attempt by Mr. Bacon to deflect media attention away from his real agenda, which is to unseat the ruling political party in the Bahamas so that his own candidate can take power and block reconstruction of Mr. Nygard’s residence, which is next door to his own estate. It is no secret that Mr. Bacon has long expressed interest in buying Mr. Nygard’s property and has sought to block his neighbor from rebuilding after a suspicious fire destroyed part of Nygard Cay several years ago. Mr. Bacon has falsely and maliciously accused Mr. Nygard and Prime Minister Perry Christie of government corruption as part of a judicial review in the Bahamas that is designed to advance his agenda by damaging the Administration and further delaying Mr. Nygard’s reconstruction, which cannot be permitted as long as the review is underway. In fact, Mr. Bacon has falsified evidence of corruption.
The allegations of both the new lawsuit and several filed by him in the Bahamas concern videos about Mr. Bacon posted on YouTube as well as protests in the Bahamas that have resulted from Mr. Bacon’s own actions. Mr. Bacon insulted scores of Bahamians last year by taking what several locals described as undue credit for “saving” sacred Bahamian land at Clifton Bay where countless Black slaves landed from Africa. In accepting an Audubon award for leading this work, which he had not led, Mr. Bacon also made a galling reference to the racist novel “Gone with the Wind” as his “holy book” and guide. The videos at issue in the complaint accurately reflect that Mr. Bacon was untruthful about his involvement with Clifton Bay, that his remarks were racist, and that his family has a history of involvement with racist crime, as leaders of the KuKlux Klan.
What is more, Mr. Bacon brings this defamation action with unclean hands. He has over the last five years defamed and attacked Mr. Nygard innumerable times, including recently, in August, in a filing in a lawsuit he brought in New York federal court that included voluminous false, defamatory and irrelevant allegations about Mr. Nygard. In fact, Federal Judge Denise Cote ordered that all such statements by Mr. Bacon be redacted from the public record.
Finally, one has to question why Mr. Bacon would bring this action in New York when the so-called allegations took place primarily in the Bahamas, many of the witnesses are in the Bahamas, and he already has brought the same charges against several other individuals in several lawsuits in the Bahamas. This lawsuit is nothing more than yet another abuse of the judicial system by Mr. Bacon, a man who views himself as being above the law.
British hedge fund manager Crispin Odey thinks we've entered an economic downturn that is "likely to be remembered in a hundred years," and central banks won't be able to stop it.
In his Odey Asset Management investor letter dated Dec. 31, Odey writes that the shorting opportunity "looks as great as it was in 07/09."
"My point is that we used all our monetary firepower to avoid the first downturn in 2007-09," he writes, "so we are really at a dangerous point to try to counter the effects of a slowing China, falling commodities and EM incomes, and the ultimate First World Effects. This is the heart of the message. If economic activity far from picks up, but falters, then there will be a painful round of debt default."
Odey also writes that he thinks "equity markets will get devastated."
Here's an excerpt:
"So, where am I placing my money?
"Firstly, I think equity markets will get devastated. Unannounced business cycles ensured Japan's stock market rating fell by two thirds over 20 years.
"Equities are priced for perfection, pushed up by SWF [sovereign wealth funds] and high yield investors looking for higher yields and better covenants that high yield bonds.
"Commodity-related sectors look unappealing and dangerous.
"International consumer companies look overexposed to EMs [Emerging Markets].
"Volatility is rising. Not every trade will work.
"Australia is still to see rates down to 0.5% at the short end, 1.5% at the long end, down from 2.5% currently.
"Currency trading is still to make the money. It made money last year as it was where the 'tyres hit the road' — equities are just the residual.
"Equity markets will struggle to understand the quarterly translation and transaction effects of these currency moves on corporate profits, starting with Q1 2015."
Right now, Odey believes that we are in the first stage of the downturn.
"It is too early to see what will happen — a change of this magnitude means the darkness and mist is very great. We will make some mistakes but with our thinking we won't make the major mistakes. The problem is where you stand — I am amazed to see so many are fully invested given that equities are already fighting the downtrend. Mid and smallcaps have moved into bear markets and much relies on large caps to keep the whole thing going and they are very exposed to international trade."
Hedge fund managers spend their time navigating through thick piles of data and analyzing the inner workings of the companies they invest in. Understandably, they like to keep those activities on the down-low, and make every effort to do that.
Unfortunately that's not always the case. According to The Wall Street Journal's David Benoit, many hedge fund managers were not aware that their own data providers were essentially tipping everyone off about their intentions.
It turns out that when subscribers, like hedge funds, read research reports from Bloomberg, McGraw Hill, S&P Capital IQ, and possibly Thomson Reuters, those data providers then turn around and inform the companies who wrote them.
"The information can be as detailed as naming the firm and even the person inside the firm who viewed the report," Benoit reported.
The cat's out of the bag now, and many hedge funds – particularly activist shareholders – are upset about it. But the practice isn't even new – it's long been in place, Benoit reported, and is readily disclosed by the data providers themselves.
Hedge fund manager Bill Ackman, the CEO of Pershing Square Capital, has gained $11.6 billion for his investors since 2004, according to fund-of-funds LCH Investments NV.
The 48-year-old activist investor is now ranked No. 19 on LCH's "Greatest Money Managers" list.
The list measures net gains (after fees) of hedge fund manager's since their respective fund's inception. The list includes fund managers like George Soros, Paul Tudor Jones, Louis Bacon and Ray Dalio.
Ackman is now the youngest person on the list.
According to LCH, Pershing Square generated $4.5 billion in net gains in 2014. A large part of those returns were a result of his profitable stake in Allergan.
Ackman, who runs Pershing Square Capital Management, had a big year in 2014, netting 40.4% for the year, according to the performance report for the fund.
Overall, 2014 was an incredibly underwhelming year for hedge funds. According to research firm Preqin, hedge funds on average returned just 3.78%, the lowest annual return since their 1.85% loss in 2011. To put that in perspective, the Standard & Poor 500 rose 13% last year.
Hedge fund manager Buzzy Geduld didn't follow a conventional path to Wall Street.
Raised in a middle-class Brooklyn neighborhood, he was fired from his first two Wall Street jobs within months of getting hired, and he left the industry to open a chain of donut shops. It was several years before he got back into finance, and he worked for the brokerage firm that would become Herzog Heine Geduld. (Merrill Lynch acquired it in 2000.)
Geduld sat down with OneWire's Skiddy von Stade and shared his thoughts on what he now looks for when recruiting for his fund, Cougar Capital.
"I want somebody that's smart, hungry, not spoiled. Someone that comes in and actually says, 'I'll work 15, 18, 20 hours a day — just give me a shot. I'll mop floors, I just want an opportunity to learn,'" he said. "I'm not impressed by fancy schools — doesn't matter to me."
Geduld described one of his analysts — a first-generation American, born to Colombian parents, who worked days and took night classes at Baruch College. She later did an MBA, also at night, at Fordham University.
"She lives it, breathes it, eats it. That's the kind of person that I like to have," he said.
And, while Geduld is a particular fan of unconventional career paths, he added, "You've got to enjoy that journey. That's the best part of it, is the beginning all the way through to the end."
It's not enough making billions of dollars and being masters of the universe.
Today's business leaders and hedge fund gods want to get even better, so many of them are now spending their weekends at a Navy SEAL training camp.
You're probably envisioning a bunch of alpha Type A hedge funders being really intense in military gear on a deserted beach for a weekend. And you're right! But that's not all it's about.
While there is definitely a physical aspect, SEAL training for civilians has a heavy focus on leadership, team building, and communication. It's an incredible bonding experience in which folks take lessons from the battlefield and bring them back to the boardroom.
Last weekend, 24 guys from the business and finance communities, including Pershing Square Capital CEO Bill Ackman and Kase Capital's Whitney Tilson, got a taste of the infamous six-month BUD/S course that aspiring Navy SEALS go through.
The group participated in the "Leadership Under Fire" program. It's hosted by the San Diego-based award-winning leadership and team-building company Special Operations Training Group, or SOT-G. It was founded in 2005 by Rob Roy, a former Navy SEAL and the author of the coming book "The Navy SEAL Art of War."
Roy, who was a member of SEAL Team Six, said the program was about personal growth.
"What you are going to take away is who you are as an individual," Roy told Business Insider. "If you don't know who you are when you get there, you will when you leave."
Roy explained that the physical stuff wears off and that it was the lessons of humor, creativity, teamwork, decision-making, planning, communication, and mental toughness that participants take home.
Roy added that the program aimed to instill four pillars of leadership: inspiration, direction, guidance, and hope.
About 99% of the participants are company executives. A large contingency comes from New York and the hedge funds based there.
Apparently the program was a huge success for this past weekend's group with Ackman and Tilson.
"Overall, it was an incredible experience," Tilson wrote in a group email seen by Business Insider.
He wrote: "Over 2½ days (~4pm Thursday to ~6am Sunday), we swam nearly two miles in the ocean in the middle of the night in 59-degree water (with wetsuits, thankfully!), paddled 6-person inflatable dinghies through the surf again and again during one day and for many miles during another night, crept (stumbled?) around in the dark for an hour preparing to assault a 'terrorist camp', lifted, carried, curled and ran with nearly 200-lb. logs for a couple of hours, slept for two night in cots in tents on a beach, did more running, push-ups, sit-ups, pull-ups, bear-crawls, crab-walks, wheelbarrow races, fireman's carries, etc. than we'd ever done before, crawled in the sand until our knees and elbows looked like a belt sander had worked on them, learned self-defense techniques, how to walk patrol, respond as a team to being shot at, raid a room and building, etc."
That sounds intense, but it wasn't the hardest part, according to Tilson.
"The worst drill was called the 'whistle drill': on one whistle, you dropped down onto your belly in the sand; when you heard two whistles, you started crawling toward the instructor; and three meant you leapt to your feet. After the first whistle, he [our instructor] mostly just kept blowing two whistles over and over – and moving backwards to keep just out of reach, up the beach, down the beach, around in circles, etc. Just when the fast guys had reached the front, he liked to walk around in a circle and go in the other direction, so the slow guys were now in front and the fast guys were stuck in the back of a scrum of sweating, miserable humanity. (Have you ever seen lots of baby turtles crawling out of the ocean, up the beach, leaving tracks? It was sort of like that.) If you lifted your butt or tried to crawl on your hands and knees, they screamed 'you cheater'! Within a minute or two, your elbows and knees started to chafe badly — and it progressed from there to pure torture."
Being able to put yourself through a regimen this intense would require months of preparation. Roy told us participants must train well in advance.
Tilson said he began training six months ago. As a result, he is now in the best shape of his life.
Still, the SEAL training was intense.
"I could barely walk on Sunday," Tilson said, "as I was feeling acute pain in muscles I never knew I had!"
The pain was clearly worth it, though.
"Every one of us pushed ourselves harder physically and perhaps also mentally than we ever had before, learned a lot about leadership and teamwork — and about ourselves and each other," Tilson wrote. "It was an intense bonding experience and an outside-the-box, once-in-a-lifetime experience. And it was just really cool hanging out with the SEALs and seeing how they operate."
It sounds awesome.
You can watch a promo video of the "Leadership Under Fire" program below:
Billionaire activist investor Bill Ackman told The Wall Street Journal that he had committed the largest amount of money he had ever allocated to another hedge fund.
Ackman, who runs $18 billion Pershing Square Capital and was the best-performing hedge fund manager in 2014, has invested an undisclosed sum in 38-year-old Phil Hilal's new fund Clearfield Capital Management.
Hilal is the younger brother of Pershing Square Capital partner Paul Hilal, a friend of Ackman's. Ackman told Bloomberg News last fall that Phil Hilal was someone to watch.
Phil Hilal previously worked at Kingdon Capital Management, Davidson Kempner Capital Management, and Goldman Sachs. He graduated with a bachelor's degree in economics from Yale. He received his MBA from Harvard.
Clearfield Capital Management is expected to debut in the second quarter of this year. Reuters reported earlier that Clearfield would be a long/short equity and event-driven fund.
Japan has a growing league of activist investors – and they're friendly and polite, according to The Wall Street Journal's Kosaku Narioka.
The shareholders have even rebranded themselves to seem less brash, adopting the term "engagement" funds, the report said.
Activist investing has historically been rare in Japan, a country where the corporate culture "has favored the status quo and shunned big disruptions like split-ups or spinoffs," Narioka wrote.
But as the Abe administration pushes for corporate growth, and encourages companies to be more receptive to shareholders, some have begun to welcome these funds.
"They probably understand our business better than any other institutional investors," said a pharmaceutical CEO currently working with an active investor.
The funds are striving to work together with companies too.
"Let’s say shareholder rights is a sword. We don’t use that last resort. We don’t even touch it," said a Tokyo-based asset manager.
Meanwhile, the Standard & Poor's 500 fell 3.1% in January.
Greenlight Capital, which manages around $11.8 billion in assets, returned a respectable 8% in 2014 compared to the S&P 500's 13% rise. Hedge funds, on average, returned only 3.78% last year, according to research firm Preqin.
Hedge fund manager William "Bill" Browder was once the largest foreign investor in Russia, making his investors piles of money, but if he had to do it all over again, he never would have entered the country in the first place.
"I now understand how completely naive I was to think that as a foreigner I was somehow immune to the barbarity of the Russian system," Browder said.
Over the past eight years, Browder, the founder of Hermitage Capital Management, has made fighting corrupt Russians his life's work after the killing of his friend and colleague Sergei Magnitsky.
Browder started successfully investing in Russia in 1996. He even had an office in Moscow.
By 2005, however, Browder was barred from entering the country, "blacklisted," and named a "threat to national security" after he accused Russian tax officials of corruption and embezzlement.
Browder's friend and tax attorney Magnitsky discovered that Moscow tax officials embezzled $230 million.
The same officials Magnitsky testified against retaliated, and arrested him on charges of tax evasion. He was placed in pretrial detention for 11 months. There, Browder writes, the 37-year-old married father of two was beaten to death at the hands of Russian authorities. He never said goodbye to his family.
Justice for Sergei
Since then, Browder has embarked on a human-rights campaign on behalf of Magnitsky.
While Hillary Clinton was secretary of state, she sanctioned a visa ban for 60 top Russian officials associated with Magnitsky's death. The European Parliament also voted in favor of a resolution for European Union member states to introduce a visa ban and freeze bank accounts of the Russian officials linked to Magnitsky's death. Browder even persuaded the Swiss to freeze some of the bank accounts of the officials.
This week, Browder will be visiting Washington, D.C., to push for the passage of theGlobal Magnitsky Act, which would punish human-rights abusers all over the world.
"This is a real exponential move forward in terms of defining Sergei's legacy," Browder told Business Insider. "If this law gets passed, his death will have hopefully saved hundreds of thousands of lives by creating a consequence."
An activist approach
Aside from being one of the biggest foreign investors in Russia, Browder was also one of the most successful.
Browder formed Hermitage Capital in 1996 with $25 million in backing from late banking magnate Edmond Safra.
Browder's approach to investing in post-Soviet Russia was shareholder activism. That meant challenging corrupt, all-powerful oligarchs.
At its peak, Hermitage managed about $4.5 billion in assets. Since its inception, the fund has generated returns of 1,500% for investors.
An unlikely capitalist
Browder has an interesting past. He is the grandson of the former leader of the American Communist Party. He grew up in Chicago in a family of academics.
He, however, identifies himself as a capitalist. — though at first not a very entrepreneurial one.
Browder slacked off at his skiing-focused boarding school. He later attended the University of Colorado at Boulder, where he joined an "Animal House"-like fraternity. He eventually got it together, though, and transferred to the University of Chicago, where he studied economics. He earned his MBA from Stanford Business School.
'Biggest capitalist in Eastern Europe'
Browder moved to London in August 1989 to work for Boston Consulting Group. He made the move across the Atlantic because he wanted to focus on Eastern Europe.
"I wanted to become the biggest capitalist in Eastern Europe," Browder wrote in his book.
While at BCG, Browder was assigned to help a failing bus company is post-communist Poland.
'The financial equivalent of smoking crack cocaine'
It was in Poland where Browder discovered privatizations of companies that used to be run by the state. He purchased $2,000 worth of shares and watched his small portfolio take off.
"Over the course of the following year my investments would double, and then double again," Browder wrote. "Ultimately, they went up almost ten times. For those who don't know, the sensation of finding a 'ten bagger' is the financial equivalent of smoking crack cocaine. Once you've done it, you want to repeat it over and over and over as many times as you can."
Browder left his consulting job and joined Salomon Brothers. At Salomon, he established himself as the investment banker in charge of Russia. He later quit the bank job and went out on his own to start Hermitage.
Russia today is a 'sucker's market'
Today, Hermitage operates as a "family office" hedge fund in London's Golden Square. Browder returned outside capital to the rest of his investors about a year ago. The fund focuses on emerging markets, but Browder told us that's not where he's investing at the moment.
As for Russia, he called it a "value trap."
Russia "looks cheap on paper but the problem is the economics don't matter anymore," he explained, adding "It's really a sucker's market."
'If I'm killed ...'
Browder's real focus these days isn't on his fund, it's on fighting for justice for Sergei Magnitsky. Browder knows there's a real risk for those who are enemies of Russian President Vladimir Putin and his allies.
"I have to assume that there is a very real chance that Putin or members of his regime will have me killed someday," Browder wrote in his book.
He continued: "Like anyone else, I have no death wish and I have no intention of letting them kill me. I can't mention most of the countermeasures I take, but I will mention one: this book. If I'm killed, you will know who did it. When my enemies read this book, they will know that you know."
Browder wouldn't call himself brave, though. He saves that accolade for Magnitsky, who he calls "the bravest man I've ever known."
Earlier this month, Gilbert was 
Bacon also said that the statements allegedly made by Nygard have damaged his "professional, philanthropic and personal reputations." He also said he has suffered damages like attorneys' fees and investigator fees. 
The group participated in the "Leadership Under Fire" program. It's hosted by the San Diego-based award-winning leadership and team-building company 
About 99% of the participants are company executives. A large contingency comes from New York and the hedge funds based there.
That sounds intense, but it wasn't the hardest part, according to Tilson. 
Being able to put yourself through a regimen this intense would require months of preparation. Roy told us participants must train well in advance. 
David Einhorn's Greenlight Capital fell 2.5% in the month of January, 
Hedge fund manager William "Bill" Browder was once the largest foreign investor in Russia, making his investors piles of money, but if he had to do it all over again, he never would have entered the country in the first place.
Browder formed Hermitage Capital in 1996 with $25 million in backing from late banking magnate Edmond Safra.