Tuesday, 21 October 2014
Last updated 8 hours ago
Apr 20 2010 | 1:44pm ET
It’s hard to remember now, but before the Goldman Sachs collateralized debt case exploded on Friday, it was hedge fund Magnetar Capital that was at the center of criticism about subprime CDOs.
Two lengthy articles had profiled the Evanston, Ill.-based hedge fund’s subprime investing strategy. But the firm has moved to distance itself from the allegations against Goldman, which is accused of misleading investors about a CDO it structured for hedge fund Paulson & Co.
Magnetar told investors it did not “‘bet’ that any CDO, any group of CDOs, or the housing or mortgage markets as a whole would fail either in the short term or the long term.”
“There was no embedded view regarding the direction of housing prices, the rate of mortgage defaults or the subprime mortgage market generally,” it said.
What’s more, the Securities and Exchange Commission apparently offered its imprimatur to Magnetar’s practices, according to Bloomberg News. Lawyers for Goldman wrote that other CDOs, included two created for Magnetar, had better disclosure than its own Abacus series.
“At our meeting, the staff suggested that at least some market participants disclosed the involvement in the portfolio selection process of third parties that took short positions with respect to the CDO’s portfolio and referenced as examples the Auriga, Norma and Sorrento transactions,” the lawyers wrote in the statement to the SEC. Magnetar was behind the Auriga and Norma CDOs.
Sep 22 2014 | 4:15pm ET
"I tell people that everybody likes good news and so if you have good performance that’s wonderful,” explains Mike McKitish of Peddie School's endowment, “but it’s the people that want to talk about the bad news or where they drifted and how they came back and how they stayed to their discipline…” that he wants to hear from. Read more…
Sep 30 2014 | 9:29am ET
The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…
Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...