“Even if no laws were broken, companies are becoming even more sensitive to the appearance of a conflict of interest following the recent scandals. Conduct that may have been okay in the past is being closely scrutinized and firms don’t want to take any risks.” Mitchel Kraskin, CEO of compliance consulting firm Compliance Science, on hedge fund firms sacking employees who share information, to Bloomberg. The news service reports that BlueCrest Capital Management fired Nicholas O’Grady for sharing information with a trader for Steven Cohen’s Point72 Asset Management. O’Grady is suing BlueCrest, claiming the firm failed to pay a promised bonus.
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“We find that marriages and divorces are associated with significantly lower fund alpha, during the six-month period surrounding the event and for up to two years after the event. Relative to the pre-event window, fund alpha falls by an annualized 8.50 percent during a marriage and 7.39 percent during a divorce.” Yan Lu and Sugata Ray of the University of Florida and Melvyn Teo of Singapore Management University - Lee Kong Chian School of Business, in an abstract of a paper they co-authored called “Limited Attention, Marital Events, and Hedge Funds.”
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“There’s no money in being against hedge funds. If you’re a consultant and say, ‘Put it in Vanguard,’ they won’t need you anymore.” Simon Lack, to the New York Times DealBook, on why he thinks pension funds continue to invest in hedge funds despite flagging returns.
