(Opalesque) New data from hedge fund administrator Citco shows that fund of hedge funds had a positive first half of 2023, with the average fund returning 2.87% to end of June. 82% of funds delivered positive returns in the first half of 2023 – versus just 35% in the first half of 2022 and 43% for the full year 2022, Citco says.

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(Opalesque) Within private assets, they expressed the most enthusiasm for direct lending, with 60% of those surveyed planning to boost allocations, according to a new survey of the industry by BlackRock. Of 378 senior insurance executives surveyed by BlackRock, 34% said they’ll pull back on private equity.

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(HedgeCo.Net) The Securities and Exchange Commission has charged Denver-based Spruce Power Holding Corporation, the successor to XL Fleet Corp., for misleading investors about revenue projections that topped $1 billion within three years of going public. XL Fleet, which provided hybrid electric vehicle systems for commercial fleet vehicles, went public through a 2020 merger with a special purpose acquisition company (SPAC).

According to the SEC’s order, XL Fleet publicly claimed to have a more than $220 million 12-month sales pipeline, which purportedly backed its near-term revenue projections of up to $75 million and longer-term projections of up to $1.4 billion. The order finds that the company’s projections, which were featured in public filings ahead of the SPAC merger, were misleading because the sales pipeline consisted almost entirely of speculative opportunities, including sales to potential customers with whom XL Fleet had little or no contact; customers to whom XL Fleet could not legally sell its products; and stale sales opportunities that had not been updated within the company’s systems. The order also finds that XL Fleet claimed to have applied a historical conversion rate to its sales pipeline as part of its revenue projections, when, in reality, the conversion rate did not support the company’s projections.

“It goes without saying that investors commonly rely on revenue projections when deciding how and where to invest, and that’s perhaps especially true for investment decisions involving early-stage companies in the SPAC market,” said Mark Cave, Associate Director of the Division of Enforcement. “By linking its bold revenue projections to misleading claims about the company’s historical performance, XL Fleet misled investors by inhibiting their ability to differentiate between credible facts and mere aspiration.”

The order finds that Spruce Power, as the successor to XL Fleet, violated certain antifraud, proxy, and reporting provisions of the federal securities laws. Without admitting or denying the findings in the order, Spruce Power consented to a cease-and-desist order and a civil penalty of $11 million, which took into consideration the company’s cooperation and remedial efforts.

(Hedgeweek) Institutional investors and wealth managers are confident about digital asset performance and believe that both Bitcoin and ether will sustain their strong performance for the rest of this year, according to research by Nickel Digital Asset Management (Nickel), a London-based regulated digital assets hedge fund manager. 

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(Hedgeweek) Dr Robert Adelman, an ex-client of Proskauer Rose, has settled a $636m malpractice lawsuit against US law firm over his ousting from a hedge fund he co-founded, after a judge ruled the case could go to trial, according to a report by Reuters.

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(Hedgeweek) Dr Robert Adelman, an ex-client of Proskauer Rose, has settled a $636m malpractice lawsuit against US law firm over his ousting from a hedge fund he co-founded, after a judge ruled the case could go to trial, according to a report by Reuters.

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(CNBC) Stock futures were slightly higher Thursday evening as investors prepared to end a difficult September. Futures tied to the Dow Jones Industrial Average added 53 points, or 0.1%. S&P 500 futures rose 0.09%, while Nasdaq 100 futures gained 0.1%.

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(CNBC) It’s a key moment for investors with the Fed near the end of its hiking cycle but interest rates likely to remain higher for longer as the central bank continues its fight against inflation. Consumers are getting stretched, China’s economy is under stress, stocks have been shaky and bond yields are soaring. The outlook from top investors at Delivering Alpha reflected these risks from start to finish, with Wall Street pros, pension giants and hedge fund managers saying to expect more cracks in the economy and in the stock market.

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(CNBC) With the S&P 500 on pace for its worst monthly performance since December of last year, investors are increasingly turning to alternative assets outside of equities and bonds to generate returns. According to a new report by Pitchbook, investors are likely to put more than $200 billion in commitments into private credit this year, for the fourth year in a row.

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(CNBC) Shares of China Evergrande Group were suspended on Thursday, Hong Kong’s exchange announced. The chairman of the embattled Chinese real estate developer has reportedly been placed under surveillance, according to Bloomberg News.

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(HedgeCo.Net) The Securities and Exchange Commission has announced that New York-based Bruderman Asset Management LLC (BAM) and its principal, Matthew J. Bruderman, agreed to settle charges related to their failure to disclose the misuse of proceeds raised from investment advisory clients and to the firm’s failure to implement reasonably designed written policies and procedures concerning the disclosure of conflicts of interest.

According to the SEC’s order, from at least February 2017 through August 2021, BAM and Bruderman advised at least 13 clients to invest at least $6.1 million in three companies in which Bruderman had decision-making authority and significant ownership interests. The SEC’s order finds that BAM and Bruderman failed to disclose to the clients that their investments would be temporarily used for other purposes, such as to fund BAM’s payroll and to repay loans owed to Bruderman or to the other companies with which he was affiliated. According to the SEC’s order, BAM, through Bruderman, also failed to implement reasonably designed written policies and procedures concerning the disclosure of conflicts of interest.

“Full disclosure of conflicts of interest is a central safeguard for investors who place their trust in investment advisers,” said Sheldon L. Pollock, Associate Director of the SEC’s New York Regional Office. “Our program remains focused on ensuring that investment advisers make full and complete disclosures in order to increase investor confidence.”

Without admitting or denying the SEC’s findings, BAM and Bruderman each consented to an order requiring them to cease and desist from committing or causing violations of various provisions of the Investment Advisers Act of 1940, imposing a censure, and ordering them to pay, jointly and severally, a civil penalty of $250,000.

(Hedgeweek) A consortium of investors led by Marshall Wace co-founder Paul Marshall looking to prepare a bid to acquire the Telegraph Group – publisher of the UK’s Daily and Sunday Telegraph newspapers – has won the support of Citadel founder Ken Griffin, according to a report by the Financial Times.

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(CNBC) Meta has new artificial intelligence tools and celebrity-endorsed digital assistants that CEO Mark Zuckerberg hopes will help to jump-start the metaverse. Zuckerberg showed off the AI software as well as the company’s new Quest 3 virtual reality headset and latest Ray-Ban smart glasses on Wednesday at Meta’s Connect conference for VR developers at its headquarters in Menlo Park, California.

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(HedgeCo,Net) The Securities and Exchange Commission has announced that Concord, California-based registered investment adviser AssetMark Inc. has agreed to pay more than $18 million to settle charges related to undisclosed conflicts of interest involving a cash sweep program operated by its affiliated custodian and its receipt of millions of dollars in revenue sharing payments from third-party custodians.

According to the SEC’s order, from at least September 2016 to January 2021, AssetMark failed to provide full and fair disclosure of conflicts of interest arising from its affiliate’s cash sweep program, which transferred, or “swept,” clients’ uninvested cash into interest-earning bank accounts. AssetMark did not advise clients that it helped set the fee that its affiliate custodian received for operating the cash sweep program. The fee reduced amounts of interest paid to those clients. Additionally, the order finds that, from at least January 2016 through August 2019, AssetMark received custodial support payments from some third-party custodians based on assets held in certain no-transaction-fee mutual funds, but it failed to disclose to clients that, in some cases, there were lower-fee share classes with lower expense ratios available to clients which, if used by clients, would not have resulted in payments to AssetMark.

“Investment advisers have a fundamental duty to disclose conflicts between their own financial interests and those of their clients,” said Andrew Dean, Co-Chief of the SEC Enforcement Division’s Asset Management Unit. “Here, AssetMark failed to disclose multiple financial conflicts of interest where AssetMark and its affiliated custodian reaped significant financial benefit from decisions it made.”

The SEC’s order finds that AssetMark violated the antifraud and compliance provisions of the Investment Advisers Act. Without admitting or denying the SEC’s findings, AssetMark consented to a cease-and-desist order requiring it to be censured, comply with certain undertakings, and pay a civil penalty of $9.5 million and disgorgement and prejudgment interest of more than $8.5 million, all of which is to be distributed to harmed investors.

(Hedgeweek)With appetite for equities subsiding last week after a 20% rally this year on the back of investor excitement over artificial intelligence, hedge funds are ramping up their bets against stocks, according to a report by Bloomberg.

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(Fortune) Wall Street was spooked last week when the Federal Reserve said it would keep interest rates higher for longer than previously anticipated—but according to JPMorgan boss Jamie Dimon, the world is still unprepared for the potential “stress” on the horizon.

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(CNBC) Traffic rose 5.2% worldwide and 5% in the U.S. on a year-over-year basis. Costco’s average transaction amount in the quarter dropped nearly 4% worldwide and 4.5% in the U.S., he said.

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(CNBC) U.S. stock futures traded near the flatline Tuesday night.  Dow Jones Industrial Average futures rose by 34 points, or 0.1%. Futures linked to the S&P 500 inched up 0.1%, while Nasdaq 100 futures added 0.1%. Shares of Costco fell 2.5% in after-hours trading.

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(CNBC) The Federal Trade Commission has filed its long-anticipated antitrust lawsuit against Amazon. In a sweeping complaint filed in federal court in Seattle on Tuesday, the FTC and attorneys general from 17 states accused Amazon of wielding its “monopoly power” to inflate prices, degrade quality for shoppers and unlawfully exclude rivals, thereby undermining competition.

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(Hedgeweek) Digital asset investment products saw outflows for the sixth consecutive week last week with investors pulling $9m in total, according to a the latest Digital Asset Fund Flows Weekly Report from CoinShares.

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