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  Thursday, 10 Apr 2014 | 8:33 AM ET

Gross: Pimco turmoil a 'near-death experience'

Posted By: Jeff Cox
Bill Gross' fund needs to perform
Jeff Cox breaks down the chatter about Bill Gross and said it all boils down to one thing, his fund's performance.

Recent turmoil around megabond fund manager Pimco has been "like a near-death experience," firm's founder Bill Gross says.

Significant underperformance coupled with the exit of high-profile CEO Mohamed El-Erian caused Gross to re-evaluate the way he was running the firm, which manages nearly $2 trillion for clients and runs the world's largest bond fund, the Pimco Total Return, which has assets of $232 billion.

"People have different impressions of themselves, and where reality lies is somewhere in between," Gross told Bloomberg Businessweek in a profile slated to hit newsstands Friday. "And maybe I hadn't been forced to be in between. I always thought of myself as being part of a family and sharing and, yes, leading, but not forcing people to do anything.

»Read more
  Wednesday, 9 Apr 2014 | 2:27 PM ET

Surprise: These funds are back as big winners

Posted By: Lawrence Delevingne
A short history on risk parity
CNBC.com Enterprise Reporter Lawrence Delevingne talks about the firm that pioneered the concept of risk parity, Bridgewater Associates.

Surprise, surprise: Low-key investment funds that diversify their portfolios across asset classes to protect them for the long term are again proving their value.

So-called "risk parity" funds—run by prominent investment firms like Bridgewater Associates, AQR Capital Management and Invesco—are up an average of 3.3 percent through March, according to data from Morningstar, easily beating returns for stocks and bonds. That also is better than a classic 60-40 percent stock-bond allocation, which gained 1.87 percent in the first quarter.

Risk parity is a strategy that holds steady investments in stocks, bonds and commodities that in theory will make money in any economic environment, including inflation or deflation, in cases of either high or low growth. Bonds in the portfolio are often modestly levered to increase their return, which can help make up for equity market losses. The basic diversification idea is a time-honored one: You can't predict the market, but you can predict what assets will do well in different environments.

Bridgewater founder Ray Dalio pioneered the idea to manage his fortune, and his firm launched its risk parity fund for external investors in 1996. Most other funds were created following the financial crisis.

The problem is that investors are getting out of the funds following average losses of 0.01 percent in 2013—and worse at several major firms. Morningstar estimates that $1.45 billion of investor capital has been pulled from risk parity funds in 2014, bringing capital in the previously fast-growing strategy to $11 billion as of March 31.

»Read more
  Wednesday, 9 Apr 2014 | 8:29 AM ET

Morning six-pack: What we're reading Wednesday

Posted By: Jeff Cox
Pepsi Cola billboard on Long Island City in New York.
Adam Jeffery | CNBC
Pepsi Cola billboard on Long Island City in New York.

Happy Wednesday from the crew (of one) at the Morning Six-Pack, where we're always buying the dips.

So this guy walks into his doctor's office ... and finds out his doctor is making $21 million. Ouch. (The New York Times)

The day's big news in soda is that Pepsi is replacing sugar aka "high fructose corn syrup" with sugar aka "real sugar" in some of its soft drinks. (USA Today)

»Read more
  Tuesday, 8 Apr 2014 | 4:53 PM ET

Volatile rotation puts investors on edge

Posted By: Jeff Cox
Reading the value ETFs
CNBC's Jeff Cox and Patti Domm discuss what value ETFs are really telling us about the market.

Investors give and investors take away, and nowhere has that been more true lately than in value stocks.

Last year's 30-percent stock market rally was powered largely by value stocks—those with low valuations that investors believe can jump higher—that looked like they had nowhere to go but up.

Almost on a dime, however, that belief has changed in recent trading days, with investors looking to put their money elsewhere as growth stocks—health care and biotech are two of the current hot hands—gain preference.

»Read more
  Tuesday, 8 Apr 2014 | 3:30 PM ET

SEC lifer: We're way too soft on Wall Street

Posted By: CNBC.com staff
Joshua Roberts | Bloomberg | Getty Images

A nearly 30-year employee of the Securities and Exchange Commission used his recent retirement party to deliver a stinging criticism of his agency being too "tentative and fearful" of prosecuting senior executives on Wall Street following the financial crisis, according to a report.

James Kidney, who joined the SEC in 1986 and retired this April, said the SEC has become "an agency that polices the broken windows on the street level and rarely goes to the penthouse floors," according to the Bloomberg report.

Kidney said his superiors were "more focused on getting high-paying jobs after their government service than on bringing difficult cases," according to the report.

»Read more
  Tuesday, 8 Apr 2014 | 2:29 PM ET

This hedge fund outperformed macro peers

Posted By: Lawrence Delevingne
Ray Dalio, founder of Bridgewater Associates.
Getty Images
Ray Dalio, founder of Bridgewater Associates.

Bridgewater Associates, the largest hedge fund firm in the world, has posted modest, positive returns this year as others that bet on macroeconomic trends have faltered.

Bridgewater's largest hedge fund, Pure Alpha II, fell 0.41 percent in March but is up 2.36 percent over the first three months of the year, according to two sources with knowledge of the performance. Pure Alpha I, a similar strategy that is designed to be less volatile, also fell 0.24 percent in March and gained 1.59 percent in the first quarter.

Bridgewater's Pure Alpha funds bet on dozens of different global markets at once, including stocks, bonds, interest rates and currencies.

The winning percentage for all bets in March was 55 percent, according to an investor in the fund. The largest winner for the month was developed market currencies, which gained 0.40 percent. The fund also gained 0.20 percent on stocks. Losers for the month included emerging market currencies (down 0.30 percent) and commodities (down 0.20 percent), according to the investor. Most other bets were "flat," meaning they did not gain or lose much money.

»Read more
  Tuesday, 8 Apr 2014 | 12:48 PM ET

Ex-Wall Street cop to help new Cohen firm

Posted By: Kate Kelly
Steven A. Cohen
Scott Eells | Bloomberg | Getty Images
Steven A. Cohen

Five months after a groundbreaking criminal settlement with the U.S. attorney for the Southern District of New York that turned it from a major hedge fund into a private family office, Point72 has hired a former prosecutor from that office to handle internal surveillance.

Point72's new hire, Vincent Tortorella, begins work Tuesday, according to an internal memo issued by company President Tom Conheeney on Tuesday morning.

Tortorella's hiring, the memo states, is part of a broader effort at the family office, which manages company head Steve Cohen's own money alongside that of certain employees and family members, to "heighten our emphasis on surveillance and to add someone with outstanding investigative skills, preferably honed in law enforcement, to lead this effort."

»Read more
  Tuesday, 8 Apr 2014 | 10:34 AM ET

Morning six-pack: What we're reading Tuesday

Posted By: Jeff Cox
Getty Images

Happy Tuesday, and welcome to the final bracket-busting edition of the Morning Six-Pack.

We're marking Equal Pay Day by helping report that things aren't as bad in terms of male-female income discrepancy as you think they are. (Pew Research Center)

Private equity goes kosher, as Sankaty Advisors plans a takeover of the kosher king itself, Manischewitz. (DealBook)

»Read more
  Monday, 7 Apr 2014 | 3:48 PM ET

Dishing on a tony NYC high-rise: Think $22K in tips

Posted By: CNBC.com staff
The lobby at 15 Central Park West in New York.
Daniel Acker | Bloomberg | Getty Images
The lobby at 15 Central Park West in New York.

Mega-rich people aren't always miserly penny-pinchers, especially to workers at one exclusive Manhattan co-op.

According to the dirt-dishing new book by Michael Gross, "House of Outrageous Fortune," service employees at 15 Central Park West pocketed an average of $22,500 during the 2011 holidays, according to a New York magazine peek into the book.

Goldman Sachs CEO Lloyd Blankfein is among those who live at "Fifteen," and he's considered "a sweetheart" who is "humble, sweet, always says hello."

»Read more
  Monday, 7 Apr 2014 | 2:31 PM ET

With full coffers, Cohen's SAC tries on new name

Posted By: Kate Kelly
Point72 Asset Management launches
SAC Capital Advisors officially changed its name to Point72 Asset Management and became a family office managing $9 billion to $10 billion of Steven Cohen's money, reports CNBC's Kate Kelly.

The private fund company Point72 Asset Management, the former SAC Capital, launched officially Monday with about $9 billion in funds and a year-to-date return of close to 10 percent through March, according to people familiar with the matter.

The size and rate of return remains in line with its former life as a hedge fund that traded public money.

Point72, a moniker that was drawn from the fund company's address at 72 Cummings Point Rd. in Stamford, Conn., was unveiled in March in an employee memo. But because it was still working out the technicalities of changing names and returning some remaining money to outside investors through the first quarter, the firm only started doing business with the new logo, email and letterhead on Monday.

»Read more

About NetNet

  • NetNet is where you'll find the low-down and the high jinks of Wall Street. It's the place for insider stories, trader gossip, and tales of the foibles of the moneyed crowd and the culture of finance.Wall Street news and commentary served fresh all day long.

 

  • Jeff Cox is finance editor for CNBC.com.

  • Lawrence Develingne

    Lawrence Delevingne is the ‘Big Money’ enterprise reporter for CNBC.com and NetNet.

  • Stephanie Landsman is one of the producers of CNBC's 5pm ET show "Fast Money."

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