Did Hedge Fund Inflows Really Rise 14% in 2010?
Tepper may invest in other hedge funds (Marketwatch)
David Tepper, head of Appaloosa Management LP, may back other hedge fund managers in coming years as he reinvests big profits generated in the wake of the financial crisis. Appaloosa generated returns of more than 100% in 2009 by betting on Bank of America (NYSE:BAC), Citigroup (NYSE:C) and other big financial-services companies when they were at their weakest. Appaloosa’s returns that year meant that Tepper personally made billions of dollars. The firm generated strong gains in 2010 as well, adding to his wealth. Forbes recently listed Tepper as the 62nd richest American with a net worth of $4.3 billion. Tepper said in a recent interview with MarketWatch that Appaloosa is planning to return money to investors so the firm’s hedge funds don’t get too big to run profitably.
10 Magic Formula Canadian Stocks (Forbes)
John Heinzl, columnist for Canada’s Globe & Mail, highlights Validea Canada’s Magic Formula strategy based on bestselling author and hedge fund manager, Joel Greenblatt. The Magic Formula looks at two important variables—return on capital and earnings yield. The higher the return on capital—which he defines as pretax operating profit divided by the sum of net working capital and net fixed assets—the more effectively a company is using its capital to generate profit. The higher the earnings yield—defined as pretax operating profit divided by enterprise value, or the sum of stock and debt—the more attractive the stock is from a valuation standpoint.
Horus launches pattern recognition strategy for two quant hedge funds (Hedge Funds Review)
Horus Capital Management has launched a pair of hedge funds using pattern recognition technologies to invest in US equities. Horus was established by William Pearlman and Shannon Peace in late 2010. Pearlman is the CEO of Parascript, a company specialising in image analysis and pattern recognition which he co-founded in 1996. Parascript’s software has been used to automate processes in multiple fields, including postal services, medical research and fraud prevention. The recognition technology powers the fraud prevention programs of many banks and financial institutions. A version of Parascript’s technology is also used by the US Postal Service to sort and manage mail deliveries.
Hedge Fund Inflows Put Industry at $2.5T in 2010 (HFN)
Hedge fund inflows were up about 14% in 2010, putting the asset class at about $2.47 trillion at the end of last year, according to a new report. That meant that $80.6 billion came into hedge funds in 2010, according to the HedgeFund.net Q4 2010 Asset Flow/Performance Report. Peter Laurelli, vice president of Channel Capital Group, the parent company of HFN, said at an industry event Thursday that a key finding of the report was that there had been a steady shift toward more targeted investments.
This is a guest post by Insider Monkey.