In two separate events in Las Vegas and New York on Wednesday, the hedge fund faithful gathered to hear investment advice and rub elbows with some of the biggest names in the industry. The newer of the two events, the SkyBridge Alternatives Conference, or SALT, is a Wall Street schmooze-fest in Sin City that lets the world’s richest investors mingle with funds peddling their services, DealBook’s Peter Lattman reports. Overseeing the star-studded event is Anthony Scaramucci, a hedge fund impresario, or, as Mr. Lattman puts it, a P.T. Barnum in a Ferragamo tie. “In a gilded industry that has preferred to stay below the radar, Mr. Scaramucci embraces the white-hot center of it all.â€
Mr. Scaramucci, a relentless and ubiquitous self-promoter, has built his $4.6 billion firm, SkyBridge Capital, on the belief that hedge funds are not just the domain of institutional investors and the ultrawealthy. But the “fund of funds†model has its critics, especially as hedge funds have lagged behind stocks in recent years. “Hedge funds tend to be a losing game for most investors,†said Mebane T. Faber, co-founder of Cambria Investment Management. “With fund of funds, it is even more of a losing game because of the layers upon layers of fees.†Still, Skybridge’s main fund returned 20.2 percent last year net of fees, handily outperforming the S.& P 500.
The scene in Manhattan at the 18th Annual Sohn Investment Conference, which raised money for pediatric cancer, was comparatively low-key. The hedge fund manager Steven Eisman, who rose to prominence in the financial crisis after betting against mortgages in the United States, made a gloomy argument about housing in Canada. David Einhorn, something of a rock star on Wall Street, spoke positively about Oil States International, a company that provides services to oil and gas companies â€" but he acknowledged that another investor, Barry Rosenstein, had stolen his thunder some days earlier by disclosing a stake in the company. And William A. Ackman, a hedge fund manager who has had his share of drama in recent months, gave a subdued prsentation about Procter & Gamble, one of his biggest holdings.
MORE ERRORS IN CHECKS FOR HOMEOWNERS  | “Three weeks after checks sent to homeowners as compensation for foreclosure abuses were rejected for insufficient funds, the consulting firm at the center of the mishap erred again: a fresh round of checks was written for the wrong amounts,†Ben Protess and Jessica Silver-Greenberg report in DealBook. “In recent days, according to officials briefed on the matter, Rust Consulting issued nearly 100,000 checks for less than the homeowners were owed. The mistake potentially cheated consumers out of millions of dollars they were owed under a deal reached between the government and the nation’s biggest banks.â€
Rust, which was ordered to fix its mistake, said in a statement that it had “corrected the error and plans to mail supplemental checks to affected borrowers as soon as May 17†and attributed the mistake to a “clerical error.†But the developments put the company in another harsh spotlight. And some homeowners say the problem is broader than Rust has acknowledged.
TESLA’S DISAPPEARING DATA  | In the past, Tesla Motors has regularly disclosed the number of reservations that existed for its cars at the end of each quarter, giving the public an idea of the demand for the vehicles. But on Wednesday, the company said it would no longer provide that data, saying it was “no longer a meaningful metric.†The company’s doubters “think there may not be that many buyers of Tesla’s cars beyond the electric car enthusiasts who have swooped in early. As a result, an early surge in sales could soon wane, they argue,†DealBook’s Peter Eavis writes. “The skeptics may conclude that the decision to pull the reservation data is a sign that new orders aren’t coming in at a strong rate.â€
ON THE AGENDA Â |Â The Carlyle Group reports earnings before the market opens. Stephen A. Schwarzman of the Blackstone Group is on CNBC at 7 a.m. Joel Greenblatt of Gotham Asset Management is on Bloomberg TV at 11 a.m. Leon Cooperman of Omega Advisors is on CNBC at 12:30 p.m.
DEBATING GOVERNANCE AT JPMORGAN  | Shareholders of JPMorgan Chase have had plenty of outside input as they ponder whether to vote to strip Jamie Dimon, the chief executive, of his chairman role. Simon Johnson, a professor at the MIT Sloan School of Management, writes on the Economix blog on Thursday that shareholders and the public would be well served by separating the roles. “JPMorgan Chase undoubtedly has a serious problem from a shareholder perspective that needs to be addressed through strengthening board oversight,†he writes.
But all this criticism seems like a “Jamie Dimon lynch mob†to Jeffrey A. Sonnenfeld, a professor at the Yale School of Management, who writes in an essay in The New York Times: “I have studied corporate governance for 35 years, and I have come across no evidence to suggest that anything would be gained by separating those roles. While the model can work on occasion, it is surely no panacea that ensures good economic results or good governance.â€
Microsoft Said to Consider Buying Nook Assets for $1 Billion  | “Microsoft is offering to pay $1 billion to buy the digital assets of Nook Media L.L.C., the digital book and college book joint venture with Barnes & Noble and other investors, according to internal documents we’ve obtained,†TechCrunch reports. TECHCRUNCH
Facebook Said to Be in Talks Over $1 Billion Acquisition  | Facebook “is in advanced talks to acquire Israeli mobile satellite navigation start-up Waze for $800 million to $1 billion, the business daily Calcalist reported on Thursday,†Reuters says. REUTERS
In Brazil, Energy Deals Are Coming Back  | Bloomberg News writes: “Brazilian energy acquisitions, on a steady decline after a record $57 billion deals in 2010, are showing signs of a revival, led by Chinese and Malaysian state-owned buyers seeking lower valuations for offshore oil fields.†BLOOMBERG NEWS
Unions Protest a Sale of Papers to the Kochs  | “An effort by two conservative billionaires to take over The Los Angeles Times and seven other newspapers is setting off a firestorm of opposition†in Los Angeles, The New York Times reports. NEW YORK TIMES
Oaktree in Talks to Merge German Real Estate Unit With Rival  |Â
REUTERS
Goldman Traders Had 2 Losing Days in First Quarter  | The two days of trading losses at Goldman Sachs in the first quarter compared with one day in the period a year earlier, Bloomberg News reports. On 17 days in the recent quarter, traders made more than $100 million. BLOOMBERG NEWS
Traders at JPMorgan and Bank of America Post Flawless Record  | The trading businesses of JPMorgan Chase and Bank of America made money on every day in the first quarter. BLOOMBERG NEWS
Yields on Junk Bonds Fall Below 5% Â |Â In a sign of persistent demand for risky debt, junk bond yields fell to a level that is comparable to what 10-year United States Treasury debt was yielding six years ago. MARKETWATCH
Half of Americans Don’t Benefit From Rising Stocks  | While economists argue that a robust stock market makes Americans feel richer, many people are left out of that hopeful story, the Economix blog writes. NEW YORK TIMES ECONOMIX
Goldman Said to Earn $500 Million in Malaysian Bond Deals  |Â
BLOOMBERG NEWS
Calpers Calls JPMorgan’s Combined Top Roles a ‘Fundamental Conflict’  | To Anne Simpson, the Calpers pension plan’s director for corporate governance, the move is rooted in the belief that systemically important institutions need plenty of oversight. DealBook »
K.K.R. Finds Success in Asia  | With relatively robust returns, K.K.R. “is emerging as the global private equity winner in Asia,†Bloomberg News writes. BLOOMBERG NEWS
Go Daddy Lures an Executive From K.K.R.  | Scott Wagner, a senior executive at K.K.R.’s Capstone arm who had served as Go Daddy’s interim chief executive, will leave the private equity firm to join Go Daddy full time as its chief operating officer and chief financial officer, he told DealBook in an interview. DealBook »
An Embattled Hedge Fund Manager Doesn’t Dwell on Losses  | In an off-the-record conversation in Las Vegas, John A. Paulson “barely touched on the losses that his long-standing bet on gold and gold miners had inflicted on several of his portfolios, including a small fund which has lost 47 percent this year,†Reuters reports. REUTERS
Tim Hortons Names New C.E.O.  | The company, under pressure from Highfields Capital, a hedge fund, named a longtime Nestlé executive as its new chief executive. REUTERS
Groupon’s Revenue Is Better Than Expected  | Groupon reported on Wednesday that it narrowed its quarterly loss with revenue that was higher than expected, sending its shares up 10.6 percent in after-hours trading, Reuters reports. REUTERS
Manchester United Investors See Risk in Manager’s Exit  | Shares of Manchester United, which went public in New York last year, fell after Alex Ferguson announced his retirement as manager of the English soccer team. DealBook »
Silicon Valley’s Political Advocacy Causes Uproar  | Mark Zuckerberg’s latest foray into Washington politics could be characterized as “Move fast, play hardball and be prepared for blowback,†The New York Times writes. NEW YORK TIMES
Tech Investor Files Suit Against Rape Accuser  | Michael Arrington, a start-up investor who founded TechCrunch, has filed a defamation lawsuit against a former girlfriend who has claimed in online forums that Mr. Arrington raped and threatened to kill her. NEW YORK TIMES BITS
MBIA Strikes $350 Million Settlement With Societe Generale  | MBIA said the agreement ended all litigation brought against it by 18 financial institutions. REUTERS
Freddie Mac Reports $4.6 Billion Profit  | Freddie Mac reported its sixth quarter of profit, helped by strength in the housing market. ASSOCIATED PRESS
On Banks and Mortgages, More of the Same  | Plans by Attorney General Eric T. Schneiderman of New York to sue Bank of America and Wells Fargo “are another sign that more than a year after the mortgage settlement between five big banks and state and federal officials banks are still mishandling foreclosures in ways to benefit themselves while harming borrowers,†The New York Times editorial board writes. NEW YORK TIMES
In Wheeler, Obama Picks an Industry Man for F.C.C.  | President Obama’s choice of Tom Wheeler, a former telecommunications lobbyist and campaign fund-raiser, to be chairman of the Federal Communications Commission, raises “serious questions about his 2007 pledge that corporate lobbyists would not finance his campaign or run his administration,†The New York Times editorial board writes. NEW YORK TIMES
Austria Faces Pressure to Reveal More About Tax Evaders  |Â
NEW YORK TIMES
A Step Closer to Banking Union in Europe  | The New York Times reports: “Europe inched closer on Wednesday to establishing a European banking union for the Continent’s largest lenders after the German cabinet approved legislation that would grant to the European Central Bank oversight of such institutions.†NEW YORK TIMES
