Apparently slavish devotion to following the crowd and going to whatever bar everyone else is going to (Netti’s, Marquee), drinking what everyone else is drinking (Red Bull, Bud Light from a keg), and thinking what everyone else is thinking (Kappa Sig RULES) isn’t just for first-years anymore, it’s for hedge fund managers, too. And it’s not only “art, restaurants, preschools or Caribbean hideaways” that hedgies are pretending to care about just so they can show one another up and assert their virility (you have no idea the of street cred the comes with being able to say “my daughter got into the 92 Street Y”), but stuff that actually matters, like all their funds going up and down by the same amounts.
Just this past week the New York Federal Reserve issued a warning, claiming that the risks of the suspiciously named “group think” (are we at a local Scientology meeting?) are among the biggest hedge funds are the “highest since the Long Term Capital crisis of 1998.” The huge amount of leverage available –no one knows quite how much–means that these correlated positions are even larger–and riskier–than they would appear if you merely judged them by the size of their investment capital. Of course, this could all be the Fed worrying over nothing, but, for what it’s worth, we saw Dan Loeb, Stevie Cohen and Paul Tudor Jones all wearing the same pink tube top at brunch on Sunday afternoon. Make of that what you will.
Great Hedge Fund Minds Think Too Much Alike [NYP]
art
While Stevie Cohen/Wynn may be content to simply own paintings suitable for sticking one’s elbow in, Rajiv Chaudhri, founder of Digital Century Capital, a technology hedge fund, demands more of his art. For him to shell out upwards of $1.6 million, it must “ooze power” from all of its orifices. Only then will he place it among “curvy stone goddesses butt[ing] up against thickly impastoed canvases,” or photograph it for posterity and to add to his “office-computer screen saver [that] flashes with images of his collection—interspersed with pictures of Payal, his photogenic wife.”
Do you want this man managing your money?
Hedge-Fund Founder Rajiv Chaudhri Loves Art That `Oozes Power’ [Bloomberg]
Bloomberg’s reporting today that Steve Wynn is suing Lloyds of London for $54 million, the amount of the claim he submitted after he stuck his elbow through a Picasso that SAC Capital founder Stevie Cohen had agreed to buy for $139 million.
We don’t know. We like to think that if we put our elbow through a Picasso we’d do a lot more than wreck 1/3 of the thing. What kind of girly elbows does Wynn have, anyway?
But nonetheless we’re making a note to ourselves that if we ever find ourselves as guests at Stevie Cohen’s place, we’re keeping our gestures tight to the body and not pointing at anything at all.
Wynn Sues Lloyd’s After Claiming $54 Million for Picasso Tear [Bloomberg]
Stevie-boy has said that he makes 90% of his money from 5% of his investments. We hope he’s trying to make money with this art stuff because the alternative–that someone would actually like to have stuff like this painting hanging around their home–is too horrible to contemplate.
From the New York Times:
As records were being broken at contemporary art auctions this week, the hedge fund billionaire Steven A. Cohen privately scooped up a de Kooning “Woman” painting for roughly $137.5 million, adding to the prestige of a personal collection that is fast becoming one of the world’s greatest.
Landmark De Kooning Crowns Collection [New York Times]
While researching for his forthcoming book, Fortune’s Fortress: A Primer on Wealth Preservation for Hedge Fund Professionals, Russ Alan Prince polled a group of hedge funders about their spending habits, and found that, on average, each one spent roughly $4 million on art in 2005. And though they’d never really struck us right side of the brain-type folks, and we actually paused for a second or two and said “Really? Fine art? Seriously?”, we concluded that $87.9 million paintings and the like are probably pretty good status symbols and that “maybe that Prince character knows what he’s talking about.” But then—whoa there, Skippy. Run down the respondents’ average spending from last year and there seems to be a subtle but obvious reason why art tops the list and not, perhaps, something else.
2005 personal average spending:
Fine art: $3.99 million
Yacht charters: $429,700
Jewelry: $376,400
Hotels & resorts: $304,900
Watches: $271,300
Fashion and accessories: $204,200
Traditional spa services: $124,000
Electronics: $99,300
Entertaining friends: $76,700
Wine & spirits for the home: $48,900
The Spending Habits of Hedgies[DealBook]
We totally saw this on the Brady Bunch once. (Yeah, we know it was a vase, but it’s the same idea and you know it). The thing to do is tape it together and hope mom and dad don’t notice.
The Ganz collection went up for auction in 1997, Wynn was saying — he was standing in front of the painting at this point, facing us. He raised his hand to show us something about the painting — and at that moment, his elbow crashed backwards right through the canvas.
There was a terrible noise.
Wynn stepped away from the painting, and there, smack in the middle of Marie-Therese Walter’s plump and allegedly-erotic forearm, was a black hole the size of a silver dollar – or, to be more exactly, the size of the tip of Steve Wynn’s elbow — with two three-inch long rips coming off it in either direction. Steve Wynn has retinitis pigmentosa, an eye disease that damages peripheral vision, but he could see quite clearly what had happened.
“Oh shit,” he said. “Look what I’ve done.”
The rest of us were speechless.
“Thank God it was me,” he said.
For sure.
The word “money” was mentioned by someone, or perhaps it was the word “deal.”
Wynn said: “This has nothing to do with money. The money means nothing to me. It’s that I had this painting in my care and I’ve damaged it.”
My Weekend In Vegas [Huffingston Post]
Page Six details the latest crimes of hedge fundsters against art. Well, this time it wasn’t actually a hedge fundster who was responsible for the damage. It was allegedly casino operator Steve Wynn who put his hand through “Stevie Baby” Cohen’s Picasso, according to Page Six.
DID casino king Steve Wynn put his elbow through a Picasso? Sources said Wynn was hosting a cocktail party in his penthouse at the Wynn Las Vegas for the likes of Barbara Walters, Louise Grunwald, Georgette Mosbacher, David and Mary Boies, Henry and Nancy Silverman, Nora Ephron and Nick Pileggi, and Tatiana and Serge Sorokko. “It was a Picasso from the Blue Period, worth $140 million, which he had just sold to hedge-fund billionaire Steven Cohen,” said one source. Wynn gallantly told his guests, “I’m glad that was me.” The canvas was rushed off for repairs on a 6-inch tear. Wynn’s rep said, “We don’t have any information on this.”
Cubist Killer [Page Six, New York Post]
Update: We can’t really put up an item about Pablo Picasso without linking to the all time best thing about the artist. That’s right. It’s Jonathan Richman’s song, “Pablo Picasso.”
- Use the Bloomberg command
NH BLG_DEALBREAKER <GO>
to access Dealbreaker
