Financial Elite's Offspring Start Their Own Hedge Funds (WSJ)
The scions of a number of wealthy families, including the sons of prominent Wall Street figures Howard Marks and Ken Moelis, have either recently launched hedge funds or plan to do so soon, according to people familiar with the matter. The young men (no daughters appear to be involved so far) are in some cases wagering part of the family fortune that they can thrive in one of the most lucrative—and unforgiving—fields in finance. Andrew Marks, the 28-year old son of billionaire Howard Marks, has told potential investors and industry executives he expects as much as $200 million in funding from his father along with other "friends and family" money. The fund, which he has named "Anicca" after the Buddhist doctrine of impermanence, is expected to launch later this year or next. The elder Mr. Marks founded Oaktree Capital Group OAK +0.60% LLC, a Los Angeles-based investment firm with more than $90 billion under management. Mr. Marks's former classmate at the University of Pennsylvania, Ken Moelis's son Jordan, plans to start a fund in Los Angeles as early as the first quarter of 2015, people familiar with the plans said. Ken Moelis took his eponymous New York investment bank public earlier this year in a deal that valued his family's stake at $400 million. He will personally invest in his son's fund but won't have an ownership stake, one person said. Other young traders have started hedge funds with family money relatively recently. They include Schuster Tanger, whose family started a string of outlet malls; and Till Bechtolsheimer, 32, who nabbed about $200 million with a 10-year commitment from his grandfather Karl-Heinz Kipp, the billionaire founder of German department-store chain Massa, people familiar with the situation said. Mr. Bechtolsheimer named his New York-based Arosa Capital Management LP after his family's adopted hometown in the Swiss Alps.
Man Pleads Guilty to Passing Tips in ‘Post-it’ Insider Trading Ring (Dealbook)
Federal prosecutors in New Jersey contend that Mr. Metro and Mr. Tamayo met at various bars and restaurants in Midtown Manhattan. Mr. Tamayo then wrote the stock symbols for companies on which he had inside information on either Post-it notes or napkins, prosecutors said. Later, Mr. Tamayo met up with Mr. Eydelman, a Colts Neck, N.J., resident, and showed him the notes, according to authorities. Mr. Eydelman memorize the ticker symbols, and then Mr. Tamayo put the notes in his mouth and swallowed them to destroy the evidence, prosecutors said.
Hedge Funds Caught in Iceland’s Failed Banks Closer to Pay Date (Bloomberg)
Hedge funds caught in Iceland’s $85 billion banking failure may be closer to getting repaid. The administrators overseeing claims against bankrupt lender Glitnir Bank hf say there are signs recent talks with a government committee will make it easier to complete creditor settlements...The main obstacle to repaying creditors has been Iceland’s concern that any outflow of money would drag down the krona and derail efforts to remove capital controls. Yet Glitnir now says it has presented a payment model to policy makers that allows offshore creditors to be reimbursed without disrupting the exchange rate. The plan affects $4.55 billion in cash and cash equivalents, or more than half Glitnir’s total assets and about one-third the island’s gross domestic product, according to the bank’s winding-up committee.
Silver Lake Reaps a Golden Return on Its Alibaba Stake After the I.P.O. (Dealbook)
Thanks to $500 million in investments made in 2011 and 2012, Silver Lake now sits on a stake worth more than $5.1 billion, after having reaped $278.8 million by selling a fraction of its holdings.
Pabst not moving to Russia (NYP)
Panic broke out this week across America — from hipster bars in Brooklyn to living-room sofas in Denver — when it was revealed that Pabst has been purchased for more than $700 million by a firm called Oasis Beverages. Scant info was available about Oasis in the announcement, but the company’s Web site notes that it operates breweries in Moscow, Kazakhstan and Belarus. With little else to go on, news outlets ran with the connection: “Pabst Blue Ribbon is Defecting to Russia,” the Huffington Post warned, while the Daily Beast said Pabst “will now take orders from Russia.” But Oasis, whose site indicates it is based in Cyprus, “will be strictly a passive investor with a minority stake” in Pabst, alongside minority holder TSG Consumer Capital, a New York private-equity firm, a source close to the situation said. The more precise truth, according to people close to the deal, is that majority ownership and control of Pabst is going not to Oasis but to its chairman, an American beer entrepreneur named Eugene Kashper. According to a written statement this week, Kashper will become CEO of Pabst, which will keep its corporate headquarters in Los Angeles.
The Suitsy: the suit that lets you go to work in a onesie (Guardian)
Have you ever wished that you could combine the comfort and practicality of a onesie with the social acceptance of a casual business suit? If so, you are probably part of the generation that will lead to humanity’s downfall, but anyway: good news! The Suitsy is here, to answer your prayers. Designed by Jesse Herzog, a financier from San Francisco, the Suitsy promises “a revolution in apparel for the modern gentleman”. It looks like a typical business suit worn over a white shirt (tie, shoes and belt not included). But the sleeves poking out from under the jacket cuffs don’t go anywhere; the shirt front is connected directly to the blazer; and, hidden behind the buttons down the front, is a zipper that runs from the neck to the base of the fly. Herzog says he had the idea around six months ago, and found a seamstress who would help him realise his dream. “At first,” he says, “she thought it was crazy, but when it actually worked, she thought it was fantastic.” The product is aimed at businessmen – “people that appreciate class, convenience and comfort” – and Herzog says he often wears it himself. “It feels great, and no one knows it isn’t a real suit. Its debut was at the rehearsal dinner for my wedding.” Herzog hasn’t designed any other clothing, but he ran a popular hot-dog shack called Zog Dogs until 2013, which briefly became famous for launching a hot dog into space. He is now looking for support to bring the Suitsy to a wider audience. He’s put the idea, and a video of the prototype, on crowdfunding site Betabrand, where it has attracted 400 votes in three days.
Investors Bet on Asia Despite U.S. Rate Threat (WSJ)
Fund managers see stepped up corporate and economic overhauls by leadership in China and India this year, combined with relatively strong growth in Asian economies compared with the rest of the world, as reasons to be bullish. Investors choosing Asia have been rewarded in the past three months. The MSCI Asia ex-Japan index is up 2.4%, topping the 0.4% gain in emerging markets globally and comparable to the 2.6% increase in the S&P 500.
Europe groups fear US tax crackdown (FT)
European multinationals have launched a rearguard effort in Washington to prevent them becoming unintended victims of a US crackdown on tax-driven international mergers. As the Obama administration finalises plans to curb “tax inversion” deals, big European companies that typically stay out of US politics – including Nestlé, Royal Dutch Shell, Airbus and BASF – are alarmed at the risk to their own US divisions. US companies are using inversions to shift their addresses to countries with lower tax rates, reducing their US tax bills and putting their non-US earnings beyond the reach of the American authorities. In recent weeks a little-known lobby group has arranged for executives from European multinationals to voice their concerns directly to administration officials and lawmakers, according to a person with knowledge of the meetings.
Dancing With the Start-Ups (Dealbook)
...some celebrities — both established and up-and-coming — are lavishing their promotional love on start-ups rather than big brands. Often, those deals involve equity. In exchange for a small percentage of a company, a celebrity investor agrees to provide publicity, feedback and valuable connections. Celebrities who have taken this route include Ashton Kutcher, Tyra Banks, Bono and Drew Barrymore. With equity, of course, there is a risk of losing money. But if a celebrity picks a company that turns out to be a hit, it’s a gift that keeps on giving, unlike most endorsement deals. And investing in a start-up generally requires less legwork than, say, starting a clothing line or opening a restaurant — other celebrity pet projects.
Pot-infused Pizza Sauce Comes To Marijuana Dispensaries (HP)
L.A.-based Podey Pizza has started selling jars of pot-infused pizza sauce at marijuana dispensaries in Los Angeles, San Francisco, Washington State and Colorado. Each 5-ounce jar of Podey Pizza sauce sells for $20 and contains 300mg of medical cannabis per jar, enough for one large pizza or two smaller ones, according to Steve Thomas, Podey Pizza's vice president of operations. "You can eat three slices and be fully medicated," he told HuffPost. Thomas believes his pot-laced pizza sauce is a good option for medical marijuana users who don't to rely on sweets like candies and cookies to get their cannabis. But getting there wasn't easy. "We spent a lot of time getting it right so the sauce didn't taste 'green,'" Thomas said. "We probably made 150-200 pizzas and would invite three or four people to try them. We even put ads looking for people who were 300 pounds plus to make sure the dosage was right." Thomas said the sauce is slightly sweet and uses tomatoes, mixed with cannabis-laced safflower oil. "We may come out with a garlickly version or more of a butter sauce," he said.