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Hedge Fund

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BUSINESS
January 26, 2016 | By Erin Arvedlund, Staff Writer
Roughly 15 years ago, I wrote an article about a notable Wall Street figure and his secretive investment fund that never, ever lost money. His name was Bernard Madoff. The dot.com bubble had just burst, yet Madoff's hedge fund earned 10 percent that year, without missing a beat. In May 2001, I wrote about some red flags surrounding Madoff's hedge fund: eerily consistent returns and no losing years even when the stock market crashed, no due diligence allowed by investors, no independent brokerage statements, and odd threats that investors could not return to the fund once they had cashed out. Madoff himself gave me a brief interview by phone, then metaphorically patted me on the head and told me to go away.
NEWS
September 11, 2007 | By Andy Borowitz
Demanding further intervention from the Federal Reserve to protect their endangered fortunes, thousands of the nation's leading hedge-fund managers marched on Washington today. Dubbed "The Million Mercedes March," the protest was said to be the largest chauffeur-driven demonstration in the capital's history. Limousines started jamming the streets of Washington at approximately 10 in the morning as irate hedge-fund owners converged on the Federal Reserve building to demand stronger action to protect their imperiled riches.
NEWS
December 5, 2015 | By Jessica Parks, Inquirer Staff Writer
A former Montgomery County hedge fund has agreed to pay $6.8 million in fines and restitution in a fraud settlement with the U.S. Securities and Exchange Commission. The SEC said Covenant Partners' two owners, William B. Fretz Jr. and John P. Freeman, raised millions of dollars from 1999 to 2014, mostly from their family and friends. "Rather than investing the money as promised," the SEC wrote, "they funneled more than $1 million to [a business of theirs that was failing], paid themselves nearly $600,000 in performance fees they had not earned, and used fund assets to repay personal obligations.
BUSINESS
July 15, 2011 | By Jane M. Von Bergen, Inquirer Staff Writer
The Journal Register Co., which publishes a number of area newspapers, has been sold to a hedge fund with offices in New York, Dallas, Mumbai, and Dubai. Terms of the deal were not disclosed. The purchaser, Alden Global Capital, was an investor in the Journal Register Co., based in Yardley, when it emerged from bankruptcy in July 2009. Alden Global Capital also owns a "significant stake" in Philadelphia Media Network Inc., according to Greg Osberg, publisher and chief executive officer of The Inquirer, the Philadelphia Daily News, and Philly.com.
BUSINESS
February 14, 2014 | By Erin E. Arvedlund, Inquirer Columnist
What is the main difference between a mutual fund and a hedge fund? These days, the goodies inside the portfolios are strikingly similar. The only difference might be the wrapping paper. For instance, which is riskier? A hedge fund holding hundreds of diversified stocks, or a mutual fund such as the popular Fairholme Fund (symbol: FAIRX), which has about 40 percent in one stock - the recovering insurer AIG? An investor's aptitude for risk should be the result of analysis. To navigate the increasingly blurred lines between mutual funds and hedge funds, we checked in with Brian Portnoy, whom I first interviewed a decade ago when he was a mutual fund analyst for the Morningstar Inc. database.
NEWS
September 27, 2012 | By Sam Wood, INQUIRER STAFF WRITER
The former CEO of a hedge fund set up for the "little guys" and "moms and pops" admitted today that he conspired with others to swindle those same "little guys" of more than $4 million. Michael J. Spak, 44, of Burlington County, ran the Osiris Fund which convinced 75 people to invest $12 million from June 2009 through November 2011, according to court documents. Though Spak and his associates had promised to take no more than 3 percent fee, they spent $300,000 to buy the "Fintastic," a luxury sportfishing boat, and fraudulently diverted another $4 million, according to U.S. Attorney Paul J. Fishman.
NEWS
February 8, 2013 | By Sam Wood, PHILLY.COM
The founder of several hedge funds, already serving 10 years in a German prison for defrauding investors of nearly $500 million, is now facing similar charges in Philadelphia. Helmut Kiener, 53, controlled a number of hedgefunds including K1 Global Limited, Oceanus, Mezzanine and K1 Invest. According to federal prosecutors, Kiener misappropriated $311 million in an elaborate Ponzi scheme that he used to pay for a luxurious lifestyle. Among Kiener's alleged victims: Bear Stearns which lost $82 million to Kiener for three years until the financial institution went belly up in 2008; Barclays Bank which lost $137 million and BNP Paribas which lost $13.4 million.
BUSINESS
May 23, 2004 | By Joseph N. DiStefano INQUIRER STAFF WRITER
The New Jersey Pine Barrens aren't known as a financial center. But a hedge fund based in a Medford home enjoyed a brief and improbable reign atop lists of the nation's best-performing investments this year, before regulators and a federal judge in Camden shut it down. Shasta Capital Associates' claims of double-your-money yearly profit evaporated last month when the federal Commodity Futures Trading Commission won a court order from Judge Robert B. Kugler to freeze its assets and suspend its operations.
BUSINESS
January 23, 2004 | By Joseph N. DiStefano INQUIRER STAFF WRITER
Does money grow best in the dark? At a time when securities cops and small investors are demanding more accountability in the financial markets, Pennsylvania's state pension fund is following some other big institutions in hiring unregulated investment managers whose methods are deliberately obscure. The $24 billion State Employees' Retirement System is moving billions from familiar, transparent, government-regulated stock-index funds to hedge funds, whose managers do not have to report what they do with clients' cash.
BUSINESS
May 13, 2003 | By Wendy Tanaka INQUIRER STAFF WRITER
Investors who have been hurt by the stock market have searched for anything that has been making money during the last three years. For some, the answer has been hedge funds - high-risk, largely unregulated investment pools. Indeed, hedge funds gained an average of 11.2 percent annually in value the last five years, while stock mutual funds lost 1.2 percent in the same period, according to data from Van Hedge Fund Advisors Inc. Since 1990, the hedge-fund industry has grown more than 600 percent after adjusting for inflation, from $92 billion in assets to $650 billion, Van Hedge Fund Advisors estimated.
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NEWS
January 27, 2016
By Dean Baker According to their acolytes, the rich are great innovators and job creators. But they haven't lived up to that billing in this century, as both job growth and overall economic growth have been extraordinarily weak since 2000. If their benefit to the economy is in doubt, no one can dispute that the wealthy are world-class tax avoiders. The New York Times recently reported that the country's 400 wealthiest families paid an average of just 17 percent of their income in taxes.
BUSINESS
January 26, 2016 | By Erin Arvedlund, Staff Writer
Roughly 15 years ago, I wrote an article about a notable Wall Street figure and his secretive investment fund that never, ever lost money. His name was Bernard Madoff. The dot.com bubble had just burst, yet Madoff's hedge fund earned 10 percent that year, without missing a beat. In May 2001, I wrote about some red flags surrounding Madoff's hedge fund: eerily consistent returns and no losing years even when the stock market crashed, no due diligence allowed by investors, no independent brokerage statements, and odd threats that investors could not return to the fund once they had cashed out. Madoff himself gave me a brief interview by phone, then metaphorically patted me on the head and told me to go away.
NEWS
December 5, 2015 | By Jessica Parks, Inquirer Staff Writer
A former Montgomery County hedge fund has agreed to pay $6.8 million in fines and restitution in a fraud settlement with the U.S. Securities and Exchange Commission. The SEC said Covenant Partners' two owners, William B. Fretz Jr. and John P. Freeman, raised millions of dollars from 1999 to 2014, mostly from their family and friends. "Rather than investing the money as promised," the SEC wrote, "they funneled more than $1 million to [a business of theirs that was failing], paid themselves nearly $600,000 in performance fees they had not earned, and used fund assets to repay personal obligations.
NEWS
August 2, 2015 | By Andrew Seidman and Jonathan Lai, Inquirer Staff Writers
The super PAC backing Gov. Christie's presidential candidacy disclosed its list of donors to federal regulators Friday, offering the first detailed glimpse of his national network of financial backers. Among the donors are members of the Christie campaign's national finance team, such as hedge-fund billionaire Steven A. Cohen and Home Depot cofounder Kenneth G. Langone. Other contributors include New Jersey firms that have been awarded a total of more than $100 million in state contracts.
NEWS
April 21, 2015 | By Jessica Parks, Inquirer Staff Writer
William B. Fretz Jr. and John P. Freeman thought they had hit a low point in 2009, when one of their biggest clients - and one of the state's premier power brokers - was convicted of corruption. As former State Sen. Vincent J. Fumo headed to prison, their Montgomery County hedge fund, Covenant Partners, sagged under the weight of the recession and federal investigations. But the two were never charged, and Covenant carried on with the type of high-risk, high-reward investments that had made them millions.
BUSINESS
November 30, 2014 | By Harold Brubaker, Inquirer Staff Writer
The $134 million corporate meeting center rising at Harrah's Resort Atlantic City is supposed to represent the city's less casino-centric future. But a lawsuit filed this week also gave it a role in the high-stakes battle between Caesars Entertainment Corp. creditors, owed about $25 billion, and the Las Vegas firm's private-equity backers over who will get paid from Caesars' insufficient resources. The lawsuit, filed in Delaware Chancery Court on Tuesday by a bank representing senior lenders owed $1.25 billion, called efforts to deal with Caesars' debt load "a case of unimaginably brazen corporate looting and abuse.
NEWS
November 21, 2014 | By Maddie Hanna, Inquirer Trenton Bureau
An ally of Gov. Christie announced his resignation Wednesday as chairman of the State Investment Council. Robert E. Grady, a private-equity firm director who served in President George H.W. Bush's administration, said during the council's meeting Wednesday that he needed time to deal with an illness in his family, officials said. The council oversees the state's pension funds, which have about $80 billion invested. Grady also said during the meeting that he had stayed longer than he intended, wanting to oversee a leadership change in the investment division of the state Treasury Department, officials said.
BUSINESS
October 6, 2014 | By Joseph N. DiStefano, Inquirer Staff Writer
Struggling to raise cash for future pensions without bigger taxpayer bailouts, state workers' and teachers' retirement plans in the last dozen years or so have sought higher returns by betting on "alternative" investments not traded on public markets: hedge funds, real estate, private equity. Hedge-fund managers have collected billions in fees, but their returns have mostly trailed stocks in recent years. The largest U.S. pension plan, the California Public Employees Retirement System , plans to dump its $4 billion hedge-fund portfolio, citing "complexity, cost," and the difficulty of buying enough good ones.
BUSINESS
June 3, 2014 | By Erin E. Arvedlund, Inquirer Columnist
Pennsylvania's Public School Employees Retirement System (PSERS), the 18th-largest state-sponsored, defined-benefit public pension fund in the nation, runs money for more than 400,000 teachers and retirees. And PSERS likes hedge funds. But are hedge funds worth it? PSERS oversees assets of $50.4 billion. Roughly 10 percent, or $5 billion, of that is invested in hedge funds, which generally charge 2 percent of assets and 20 percent of performance annually. An index mutual fund typically charges much less, say, 0.50 percent a year.
BUSINESS
February 14, 2014 | By Erin E. Arvedlund, Inquirer Columnist
What is the main difference between a mutual fund and a hedge fund? These days, the goodies inside the portfolios are strikingly similar. The only difference might be the wrapping paper. For instance, which is riskier? A hedge fund holding hundreds of diversified stocks, or a mutual fund such as the popular Fairholme Fund (symbol: FAIRX), which has about 40 percent in one stock - the recovering insurer AIG? An investor's aptitude for risk should be the result of analysis. To navigate the increasingly blurred lines between mutual funds and hedge funds, we checked in with Brian Portnoy, whom I first interviewed a decade ago when he was a mutual fund analyst for the Morningstar Inc. database.
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