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  Wednesday, 20 May 2015 | 12:47 PM ET

Black: Icahn 'the brilliant investor of our age'

Posted By: Lawrence Delevingne

It was a good day for Carl Icahn.

First, it emerged on Tuesday that the 79-year-old corporate activist made roughly $3.4 billion in paper profits on his Apple bet, arguably one of the greatest trades of all time. At lunchtime, he talked up his investments on CNBC with his son, Brett, laughing about how much he wanted an Apple Watch. Then, in the evening, Icahn was feted by friend and fellow billionaire Leon Black at a charity event in Manhattan.

"Carl is the smartest single investor I have ever met," the Apollo Global Management CEO said Tuesday night at the Leveraged Finance Fights Melanoma event, which raised $1.6 million for the Melanoma Research Alliance.

"He has been the brilliant investor of our age," Black added, speaking below the gleaming golden statue of Prometheus at the Rockefeller Center skating rink. "Not only has he enriched himself, but more importantly, he has enriched countless other shareholders and creditors in terms of the fights he has taken on and waged successfully again and again and again."

»Read more
  Tuesday, 19 May 2015 | 1:46 PM ET

The incredible shrinking Wall Street banks?

Posted By: Jeff Cox

Like a dog with some really big fleas, the largest U.S. banks are likely to start shaking off some assets.

After decades of swallowing up their smaller competitors, regulatory and political pressure is putting warehouse financial institutions on the firing line to divest their businesses.

While too-big-to-fail banks have only gotten bigger since the financial crisis, analysts view that trend as about to change.

"We expect more divestiture to come from universal banks as higher capital requirements, the Volcker rule and higher liquidity requirements are fully phased in," Keefe, Bruyette & Woods said in a report for clients. "We believe this trend will create opportunities for small and midsized firms in the U.S. and abroad."

Five of the nation's biggest banks control a record 45 percent of the industry's total assets while the eight so-called universal banks hold about 60 percent of the total, according to KBW and SNL Financial.

Read MoreProof! CEOs hurt companies by golfing too much

However, much of the growth has come in the form of cash on hand as regulations require more of a cushion for banks, particularly those with more than $50 billion in assets. Dodd-Frank rules as well as Basel III guidelines are redefining the way banks will operate in the future.

"Prior to the financial crisis, consolidation was a consistent profitable investment theme in financial stocks," KBW wrote. "Since then, and with the labeling of the country's largest banks as globally systemic, the reverse has been true: the fragmentation of the largest financial firms is creating arguably the best opportunities in the sector."

Indeed, despite a growing cash pile banks have been shedding assets over the past five years:

»Read more
  Tuesday, 19 May 2015 | 11:47 AM ET

Wow! Here's how much Icahn made on Apple trade

Posted By: Lawrence Delevingne

Carl Icahn's big bet on Apple is now one of the greatest trades of all time.

Icahn has made about $3.4 billion on the technology company since he first tweeted about the position on Aug. 13, 2013, according to a CNBC analysis of public ownership disclosures and stock prices. (Tweet This)

Read MoreIcahn: Apple shares should double

That gain puts Icahn in elite company. John Paulson's Paulson & Co. made about $15 billion shorting subprime mortgages in 2007; George Soros' Soros Fund Management made an estimated $1 billion shorting the British pound in 1992; David Tepper's Appaloosa Management made about $7.5 billion mostly by going long financial stocks in 2009; and Bill Ackman's Pershing Square Capital made about $3 billion betting on General Growth Properties from 2008 to 2014.

When asked if the Apple trade was one of the greatest of all time, Icahn declined to comment on the profit but told CNBC.com this, "I will certainly say Apple is one of the greatest companies of all time."

Read MoreApple shelves TV plans, despite Icahn's hopes: Rpt

»Read more
  Monday, 18 May 2015 | 12:02 PM ET

Proof! CEOs hurt companies by golfing too much

Posted By: Jeff Cox

Companies whose CEOs spend too much time on the golf course often end up in the rough.

So goes the conclusion of a study from researchers at the University of Tennessee and University of Alabama that could send shivers through C-suites across the U.S.

The team looked at four years' worth of data from the United States Golf Association, which logs member rounds and scores as part of its official handicapping system for hard-core links lovers. Using the records from 363 chief executives in the S&P 1500, the study drew some conclusions sure to scare more than a few of them off the course.

For one, it found that executives who use their time to lower their handicaps also often lower their firms' returns. ( Tweet This ) The study also concluded, not surprisingly, that these same executives who play more often than their peers are more likely to lose their jobs.

"Top traders want to know everything they can about a company before they get involved in a name—down to where its C-level executives dined the night before a big day of investor meetings, for example. You never know how an overdone steak or disagreeable conversation will affect their mood after all, and inadvertently the stock price," New York brokerage Convergex said in a note that unearthed the study from August 2014.

»Read more
  Friday, 15 May 2015 | 12:30 PM ET

All hail Ken Griffin, the new hedge fund king

Posted By: Lawrence Delevingne

In April, a hedge fund firm in Chicago snagged arguably the most sought after economic mind in the world: Ben Bernanke.

"He has extraordinary knowledge of the global economy," Citadel founder and CEO Ken Griffin crowed in a statement announcing that his investment shop had hired the former Federal Reserve chairman as a senior advisor. "His insights on monetary policy and the capital markets will be extremely valuable to our team and to our investors."

Bernanke's role at Citadel is part time, given his other duties as a Brookings Institution fellow and advisor to Pimco, the fund giant. But the symbolism of the estimated $1 million hire was clear: Citadel is once again a dominant force in the investment industry.

»Read more
  Monday, 18 May 2015 | 4:02 PM ET

Hedge funds are beating the S&P 500; here's how

Posted By: Lawrence Delevingne
Valeant Pharmaceuticals International signage is displayed outside of the company's headquarters in Mississauga, Ontario.
Norm Betts | Bloomberg | Getty Images
Valeant Pharmaceuticals International signage is displayed outside of the company's headquarters in Mississauga, Ontario.

Stock-picking hedge funds are finally beating low-cost equity index funds this year thanks to bets like Valeant Pharmaceuticals, Microsoft and Yum Brands.

The S&P 500 index gained 1.29 percent from January through April this year, while the Absolute Return U.S. Equity Index, which tracks hedge funds in the sector, is up 2.03 percent over the same period.

A small group of hedge funds has done even better. Symmetric, which analyzes the quarterly public disclosures of hedge fund stock ownership, ranked the top 20 firms of 1,000 total based on their three-year performance above sector benchmarks. Broadfin Capital is first, followed by Brave Warrior Advisors and Hound Partners.

Here are the stocks that made the most money for that elite group of hedge funds so far in the second quarter, according to a cumulative analysis by Symmetric.

»Read more
  Friday, 15 May 2015 | 8:50 AM ET

Dalio's Bridgewater: We're not in a bubble

Posted By: Lawrence Delevingne
Ray Dalio, Bridgewater Associates
Scott Mlyn | CNBC
Ray Dalio, Bridgewater Associates

The largest hedge fund manager in the world is convinced the market is not a bubble about to burst.

"We think asset prices are high and, as a result, the future expected returns of passive investing are likely to be low. But ... we do not see current conditions as a bubble," Greg Jensen and Jacob Kline of Bridgewater Associates wrote in a private note to clients on May 1 obtained by CNBC.com.

Jensen is co-chief investment officer of Bridgewater along with founder Ray Dalio and Bob Prince. The Westport, Connecticut-based firm manages $169 billion for institutional clients like pensions and endowments and its economic views are widely followed and respected.

»Read more
  Friday, 15 May 2015 | 11:17 AM ET

HSBC's ultra-rich unit to get new leader

Posted By: Lawrence Delevingne
Man walks past HSBC bank branch
Philippe Lopez | AFP | Getty Images

HSBC, one of the world's largest money managers for the ultra-wealthy, has changed the leadership of a key private banking unit that serves them.

Henry Lee is now global head and CEO of HSBC's Alternative Investment Group, replacing Peter Rigg, who is leaving the bank.

HSBC's alternative investment business manages and advises for more than $28 billion of client assets in hedge funds, private equity and real estate. The private bank manages $382 billion overall.

A spokeswoman for London-based HSBC, Louise Harvey-Miller, confirmed the move. She said the alternatives group is a "priority division" and that HSBC "will be investing heavily" in it.

"Henry will continue to grow HSBC Private Bank's market-leading alternatives business and embed the alternatives product portfolio ... into the core offering available to HSBC Private Bank clients," Harvey-Miller added in an email to CNBC.com.

»Read more
  Thursday, 14 May 2015 | 2:32 PM ET

Today's Bonnie and Clydes getting tougher to find

Posted By: Jeff Cox
Warren Beatty and Faye Dunaway getting away in a scene from "Bonnie and Clyde," 1967.
Warner Brothers | Getty Images
Warren Beatty and Faye Dunaway getting away in a scene from "Bonnie and Clyde," 1967.

Banks have gotten safer in more ways than one since the financial crisis.

As regulators and legislators have gone to great lengths to get banks to bolster their cash positions, the cash itself has come under less frequent assault.

That's because bank robberies have declined 35 percent since 2009, continuing a 10-year trend, according to data from the FBI and SNL Financial.

Total robberies at financial institutions—commercial banks, mutual savings banks, savings and loans, credit unions and armored carrier companies—fell to 3,961 in 2014, down from 6,062 in 2009 and 6,822 in 2004.

The decline in bank crimes is generally attributed to several factors: improving security through surveillance and other techniques, better efficiency from police in capturing those who pull jobs, and the increasing migration of bank transactions out of physical buildings and to online platforms.

"While cyberattacks represent an increasing threat to financial institutions, physical security and theft prevention remain key factors in banks' management of operational risk," SNL's Chris Vanderpool and Daniel M. Burkard said in a report on the trend.

The data provide an interesting glimpse into bank robbery trends, some of which seem intuitive and others not as much.

»Read more
  Thursday, 14 May 2015 | 12:17 PM ET

Active managers beating the market! (Well, almost)

Posted By: Jeff Cox
Financial Advisor
Ariel Skelley | Getty Images

A lackluster year for the stock market has turned into a strong one for active fund managers.

After a full decade of languishing well behind the benchmarks used to gauge their performance, the group has turned in a stellar performance in 2015, at least compared to historical norms.

Active managers across most classes are close to 50 percent after-fee outperformance. U.S. equity managers are beating at a 49 percent rate, more than 47 percent of all equity managers are ahead of the game, while even managers of taxable bond funds are beating at a 49 percent clip, according to data that Morningstar provided to CNBC.com this week. (Tweet this)

That's a massive change for a group that's been beaten up during this area of low volatility where aggressive central bank easing has made asset classes move up and down in unison and where stock pickers have had increasingly fewer opportunities to find assets that break away from the pack.

"You don't have a market that from an index perspective is outperforming. What we have is an increase in volatility," said Todd Schoenberber, president of LandColt Capital. "That's great on a number of levels.... If you're an active manager and you believe that stocks will do well in the second half of the year but you're trying to find an entry point, you take advantage of those selloffs."

Indeed, the S&P 500, despite being within 0.6 percent of its all-time high, is up just 2.6 percent year to date, while the Dow Jones industrials are up only 2.2 percent. However, the broad market indexes have traded within a broad range, with the S&P 500 16 percent off its 52-week low.

Active managers and stock pickers look for dispersion, or the difference between sector returns, as opportunities. After years of low dispersion, this year has provided yawning gaps, with the best-performing sector, health-care, separated from the worst-performing, utilities, by 14.4 percentage points. The low-volatility environment came about while the Federal Reserve was pumping nearly $4 trillion of liquidity into the markets and keeping short-term interest rates near zero.

»Read more

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