We live in heady times.
The epoch of hedge funds has entered its natural selection phase while Steve Cohen taunts his SEC tormentors by driving Zambonis through gaping loopholes to "not" manage outside money, and Donald Trump is running for president with asset managers as his money men.
In summary, 2016 is a crazy-ass time. So crazy, in fact, that this almost fails to register as abnormal:
Executives who have been managing more than $2 billion for [Michael] Milken and his family at his family investment office, Silver Rock Financial LLC, have transformed the firm into a hedge fund and are beginning to woo outside investors, according to securities filings and people close to the matter.
That's right, Michael Milken kinda sorta has a hedge fund.
The move could turn Silver Rock into a major hedge-fund manager, partly because of Mr. Milken’s enduring reputation on Wall Street as an astute investor, even though he remains banned from the securities business. Mr. Milken, the former junk-bond king who pleaded guilty in 1990 to felony charges for violating federal securities laws, handpicked Silver Rock’s top executive and has spent years working closely with the firm on stock and bond investments.
Mr. Milken won’t help run Silver Rock, nor will he own part of the firm, according to his spokesman. But he will seed Silver Rock with several hundred million dollars of his money, giving Silver Rock a head start and something of a seal of approval as it gets off the ground, the people said.
So Silver Rock isn't really "Michael Milken Asset Management," it's just a regualr hedge fund staffed by guys chosen and trained by Michael Milken who are trading huge amounts of Michael Milken's money.
But hey, Michael Milken paid his debt and he learned his lesson. It's not like he's going to jump back into...
Silver Rock has focused on junk bonds and distressed loans—markets that Mr. Milken dominated three decades ago—along with stocks.
But the SEC is hip now. They have rules for this stuff...
“As long as he’s discussing the management of his money and not getting something for managing other people’s money, the SEC can’t bar that,” said John Coffee, a professor at Columbia Law School.
Mr. Milken also has kept close tabs on Silver Rock’s trading. He has shared views on markets with Mr. Meyer and his team, sometimes speaking with them several times a day, the people said. Mr. Milken didn’t dictate moves, but his influence was felt, according to the person close to the matter.
2016. What a year.