One year ago
»» Risking some $4 billion in assets, Izzy Englander’s Millennium Partners offered investors the choice to leave the fund, as the firm lifted the gates imposed following financial crisis redemption requests.
At its July 1, 2008 peak, the firm managed $14.21 billion, but Millennium was hit with $5 billion in redemptions between the end of 2008 and the first quarter of 2009 after losing 3.07% in 2008. The redemptions resulting from that modest loss triggered Millennium’s gates, locking in investors with quarterly liquidity terms.
Many chose to leave: Millennium’s assets fell from $10.5 billion on July 1, 2009 to $7.4 billion on January 1, 2010, a 29.5% decline. As of July 1, 2010, Millennium managed $7.1 billion, according to AR’s Billion Dollar Club rankings.
»» John Paulson, whose short-subprime bet turned his event-driven firm Paulson & Co. into the third-largest hedge fund firm in the U.S., was named the “most admired hedge fund manager” by investors polled for AR’s inaugural Hedge Fund Report Card.
Paulson slipped in AR’s rankings this year, with Ray Dalio of Bridgewater Associates taking the most admired spot. In the overall ranking, Paulson & Co. fell to the 17th most-favored hedge fund from number three in 2009. And some investors are concerned about the negative performance of multiple Paulson funds this year, as noted in AR’s October cover story, “Will success spoil John Paulson?”
Five years ago
»» Dan Loeb of Third Point Management aimed his poison pen at Ligand Pharmaceuticals, of which it owned seven million shares, a 9.5% stake, and felt was undervalued.
Loeb wrote a letter in September 2005 to CEO David Robinson, demanding a change in management and directors. “I must wonder how in this day and age the company’s board of directors has not held you and [CFO] Paul Maier responsible for your respective failures and shown you both the door long ago—accompanied by a well worn boot planted in the backside,” the letter said. Loeb called for an investment bank to be retained to explore options including a sale of the company and for Ligand to proceed with revising its audited financial statements pursuant to an SEC investigation.
Loeb and Ligand ended up agreeing to a truce, with Third Point getting three board seats in exchange for calling off its battle plans.
»» The largest U.S. hedge funds raced to register with the SEC, with a number of big firms remaining no-shows. All domestic hedge fund advisory firms overseeing $30 million or more and serving more than 14 clients were told to register with the SEC by February 2006, but eight of the top 20 hedge fund firms were unregistered in October—Citadel Investment Group, Och-Ziff Capital Management, Tudor Investment Corp., Cerberus Capital Management, Moore Capital Management, ESL Investments, Soros Fund Management and Lone Pine Capital—funds whose combined assets totaled about $80 billion.
The rule was challenged in court and ultimately thrown out, but most large funds registered in subsequent years to appease the transparency demands of institutional investors. And the recently passed Dodd-Frank financial reform rules require funds managing $100 million or more to register, a rule embraced by the Managed Funds Association, who previously had fought against the measure.
