Stylish Condoms for BSDs

News like this always worries me. When Cavalli and Versace start designing subdued (!!!) clothes for hedgies I get a desperate need to lock down another $500mm infusion of capital pronto and find it hard not to lend at least some credence to naysayers preaching of the hedge fund "bubble." The good news, however, is that maybe this new trend will tone down the effeminate rainbow that has been painting men's collections in recent seasons brighter than it ever has since the eighties.
Incidentally, highly recommend reading page 2 of the article for those with a cursory, but developed, interest in fashion. Dsquared and Jil Sander looking good for '08

clipped from www.nytimes.com "HEDGE funds, hedge funds, hedge funds,” Richard David Story said before the Ferragamo show on Sunday when asked to account for the current mood in men’s fashion all pitched to a guy with both a high net worth and a 30-inch waist. To judge from all the $700 cotton poplin trousers (Bottega Veneta), $250 flip-flops (Hermès) and $20,000 satchels in matte tobacco crocodile (Tod’s) on offer, the fractional-jet-share crowd has coffers so deep that there’ll be plenty left over for chronographs or John Currin paintings. That Bottega Veneta man — lithe, young, carefree in his moneyed assurance — seemed to be everywhere. He was spotted at Roberto Cavalli’s unexpectedly restrained show held in a cavernous disco near Linate Airport wearing not the leopard spots and junky rocker paraphernalia one expects from this designer, but instead the subdued suits and the slouchy suede driving shoes favored by the Maserati crowd. He appeared again in shiny trench coats, knife-slim suits and a muted palette at the Versace show, designed this season by the Russian-born Alexandre Plokhov, formerly of Cloak. Another avatar of the hedge-fund hottie turned out at Valentino’s brand-consistent presentation, notable as usual for natty Roman tailoring styled in a way that is often more than a little bit campy. Wasn’t that double-breasted white jacket nipped at the waist once a uniform of sorts among the high-end gigolos populating the piazzetta in Capri?

How I Spent My Summer Vacay

Ahh, to have the Treasuries keel over, the Pound rally to the 2 spot again and big LBO bets come to fruition. Certainly makes one's mind wander to things like G5s, Breguets and single malts twice your age. To that effect, I found this Forbes article both inspirational and useful.

clipped from www.forbes.com Assuming they can pry themselves away from their computers for a quick break this summer, hedge fund partners are planning to spend a fair amount of money enjoying the good life. Many in the business are already anticipating that their funds' strong performance so far this year will morph into a big incentive payoff come winter. The average hedge fund partner plans to drop $82,000 on watches and jewelry alone this summer. The biggest-ticket item of the summer seems to be yacht rentals, where the average budget is $446,000. But only 14 of the 301 partners in the survey plan to rent a yacht. The rest of them probably own. Hedge fund clients want unusual and off-the-beaten path destinations, challenges to take their minds off number crunching. Surfing down the ash covering a volcano in Nicaragua, heliskiing in Chile, anaconda hunting in the Amazon and motorbike safaris in Namibia are all popular. They plan to spend an average of $96,000 on "experiential" vacations.

Whitewashed Blackstone IPO

The Bigot Jesse Jackson is at it again, and now he's after the nappy headed baller Stephen Schwarzman and his "racist" IPO of Blackstone. Apparently Blackstone didn't go out of their way to put any "minority owned" firms at the top of the syndicate.
This is obviously a boldfaced lie. First off, who owns a public firm? A: Shareholders. This IPO is co-led by Citigroup, whose biggest shareholder is Saudi Prince Alwaleed bin Talal, member of a minority group that is highly ostracized by contemporary American culture. (Note: Prince bin Talal has not donated any money to Jesse Jackson) Second, Schwarzman belongs to a minority group himself, and a much smaller one than African Americans. (Note: Jesse Jackson hates Hymies.) Finally, note that while 7 so called "minority owned" banks did make the cut, heavyweights Goldman and JP Morgan were originally excluded, but finally were allowed to take a third-tier spot. (Note: Goldman and JPMorgan did not donate any money to Jesse Jackson and thus are of no importance to him.) So in case you haven't figured this one out yet, only firms that give money to Jesse Jackson, like Blaylock Capital, matter to Jesse Jackson. Hey, the man has illegitimate children to feed.

clipped from blogs.wsj.com Jesse Jackson is not impressed with Stephen Schwarzman’s new-found wealth. What Jackson is more focused on is the list of underwriters for the $4.7 billion IPO of Schwarzman’s firm, The Blackstone Group. In an interview with Deal Journal, Jackson says the share sale unfairly shortchanges minority-owned firms. “We’re going to protest this pattern of exclusion,” Jackson says. He calls it “Wall Street apartheid.” “We are qualified people to be on the front side of this deal.” He named minority-owned firms including Blaylock & Co., Loop Capital and Williams Capital. Such firms have “not a capacity but an opportunity deficit.” Jackson says that because firms going public are subject to regulation, Blackstone is “obligated to be inclusive and fair.” He says he will push for hearings on the matter on Capitol Hill if his concerns aren’t addressed. We should also note that [a] number of minority-owned firms have contributed to Jackson’s various causes

Rimjob Risk

Lesson of the day - there's a reason why they call it a hedge fund. You might have to cap your upside, but at least your backside will be insured against not-so tender offers.

clipped from newyork.craigslist.org hedge fund trader: how may i help? - m4mw - 31 Date: 2007-06-13, 1:43PM EDT left the ues for the promised land of soho and my 8grand month rental nut. havent really made money in my short only portfolio and the rent is due. will basically service anyone (man women dog etc) to help maintain my over extended lifestyle. ill eat ass if i have to but i wont move back to a 650sf apt on the ues -- no way no how. hit me back if you have any ideas, im not gay but i can be for an hr or so. Location: soho

There's more than one way to film a money shot.

Hedge Funds doing Hollywood? Old news. Hedge funds doing Hollywood (San Bernardino county anyways)? Now we're cooking with gas (but still less volatile gas than the one Brian Hunter was cooking with). Hope it's gonna be a hot summer for both of them.
Might expand this post after visiting the site at home...

clipped from www.dailybreeze.com Francis Koenig, a former hedge-fund manager in New York, moved to L.A. last year with one goal: directing traditional money to a nontraditional investment. That nontraditional investment is porn. His Beverly Hills-based company is called AdultVest, and he said it's the first and only one geared toward matching investors and successful entrepreneurs with growing adult-entertainment companies and adult entertainers looking to start up, expand, acquire or be acquired. "And they have absolutely no institutional financial participation, no venture funds, angle funds or private equity funds for this industry," he said. His first convention will be later this year in Hollywood, and he's looking for actors and actresses who want to fund a production or other venture to submit a proposal to his Web site, www.adultvest.com. The fundraising started last fall and Koenig said the money is coming in at a steady pace and there are some high-profile participants, though he declined to name names.

Doug Ellin: Working for Money is Immoral

Read the quick interview with Entourage creator Doug Ellin, whose next show will be about a couple guys running hedge funds and making money that "makes Vince look like a pauper." I though that given Ellin's expertly apt and guilt-free portrayal of the Hollywood entourage there would finally be a show about finance that didn't have the message of Wall Street, Boiler Room, et.al. - that money always corrupts and the people who make markets are the devil incarnate.

Perhaps I was wrong.

Ellin calls the Entourage boys who do nothing but sleep, drink and fuck "good guys who have each other’s back", and his homies who nonchalantly buy Bentleys make him laugh, while hedgies working their ass off and making billions sadden him. Is it because actors are idiots who couldn't be doing anything else, whereas Harvard-educated hedgies could be "trying to cure cancer"? Why aren't you shooting a documentary about fuckin' Darfur then, Ellin? Get off your hybrid high horse and kiss my wingtips. People who succeed do what they are most passionate about, and all the best traders and dealmakers, the ones who really have a gift for the game, would still be doing it for free. At their level "money is just a way to keep score," as Kravis said. Not to mention that Wall Street players give a whole lot more of their wealth away than your average Hollywood celeb trying to campaign for the it cause of the day because somehow being able to act [i.e. big tits or a nice jaw line] makes one naturally adept at understanding the intricacies of world politics.

Ellin then has the gall to say that people go to finance to hit a home run and take a shortcut to wealth. This is what worries me the most as it sets up the show to be completely unrealistic. As we all know there is no easy money in finance. You earn every penny you make, sometimes you just have a bit of tailwind. True, there are a very few brilliant traders out there who make a killing early on an keep on doing it, but even 80% of them spent years studying the trade before they got a chance to hit one out of the park. And I assure you - none of them could have cured cancer even if they tried.

clipped from www.nytimes.com Q: Why do you find the subject of money so interesting? Sadly, right now, that’s the world people are aspiring to. You have Harvard-educated medical doctors who would rather work at an investment bank than try to cure cancer. Q: The desire to make money is nothing new. No, but now people are looking for the home runs constantly. That’s the difference. People are seeing shortcuts and easy routes. Q: Is [Entourage] intended as a sendup of Hollywood excess? No. I consider the show 100 percent realistic. I have friends who wake up in the morning and want a Bentley and they go get it. I find it funny. I look at them [the Entourage cast] as good guys who have each other’s back and just want to take care of each other. They watch out for each other like family. Q: How much do you earn? I’m not going to tell you. Q: About $3 million a year? Yeah, you can put it in that neighborhood.

Red Losers - Crybaby Hedgies Whine about a Bear's Fierce Chomp

To sum up: 30 different funds who did speculative CDS trades on subprime names with Bear are suing the bank for allegedly manipulating the market by flexing its renowned fixed income muscle and buying up some subprime bonds and servicing a few mortgages which would tighten up the CDS and cause the aformentioned hedge funds to incur losses serious enough that it could start that downward spiral of investors withdrawals.

Unfortunately for the hedgies, the fact is that Bear can make its own bets regardless of what its prime brokerage clients do. In fact, as counterparty by default (no pun intended) to the CDS trade it is entirely rational that Bear would scale its risk as needed. It's job as PB is to ensure that all trades are booked and executed correctly, nothing more. To those in the business who still haven't realized it yet - the prime broker is not your friend. It's not even a very good butler. More like the butler from Clue (sometimes helpful, most of the time full of shit), but that's just how the game works.
In any case, there's little that the hedgies could do against the dirty Bear even if they were correct. Neither the SEC, nor any other regulatory body has direct jurisdiction over CDS contracts.

clipped from online.wsj.com Hedge-fund managers accuse Wall Street's Bear Stearns Cos. of attempting to manipulate the market for securities backed by subprime loans by purchasing shaky mortgages. Bear's main antagonist in the squabble, hedge-fund executive John Paulson of Paulson & Co., used to work for the investment bank. "All we're after is very simply to maintain the market's integrity," says Kyle Bass, a former Bear employee who is now managing partner of Hayman Capital, which oversees about $3 billion in the subprime market. Bear is one of Wall Street's largest players in the market for credit default swaps, or CDS, instruments that act as insurance policies on various kinds of bonds. Many hedge funds have bought these swaps, effectively making a bet on an acute downturn in subprime home loans. Bear is widely believed to have taken the opposite position, selling swaps and making a bet that conditions will improve or won't deteriorate as much as some people think. Bear's mortgage desk had sent Paulson a copy of new language it was proposing to the International Swaps and Derivatives Association. The proposed rules would codify its right to prop up a faltering pool of home loans in a mortgage security, even if it knew its clients bet those loans wouldn't perform. "We were shocked," says Paulson vice president Michael Waldorf, that a firm "like Bear would introduce language that would try to give cover to market manipulation."

Goldman Embarrasses Fashionistas with Smarts and Street Style

Goldman Sachs won a fancy fashionista quiz bowl after several analysts pulled consecutive weekend all nighters prepping the GS team on every manner of trivia. An Analyst who worked on the project speaking on condition of anonymity, as it's close to bonus, remarks [with a sigh] "At least this time my work was used for something. Usually the weekend pitchbooks are just coasters for the MD's Monday coffee. Naturally, they promised us that we would get to come, but inevitably "found out" that the team was at capacity right before they left for the event, but not before they made me do another turn - even internal books need to show Goldman's commitment to quality lest some bum find them in the dumpster and think less of us."

After extensive "wardrobe consultation" spanning a month the team decided to kick it old school with blue and white shirts (after all, Goldman Sachs isn't about being "wild and crazy and different"). The subtle deviations from regular banker attire is that the blue shirt was tight enough to bust at the seams, teasing the paparazzi with the possibility of a strategic wardrobe malfunction (but an undershirt was worn to prevent the world from actually seeing the hairy underbelly of banking), while the white shirt had two buttons undone and was slightly untucked, showing a Devil-may-care "we don't care that our Global Alpha underperformed every major fund on the street" attitude.
The real winners, however, are the first years at Deutsche Bank whose team won a "vast" supply of sexy lingerie. It's the closest any of them have gotten to a woman since the drunken debauchery that is investment banking training.

clipped from nymag.com Great triumph mixed with crushing defeat the other night as highly competitive people with lots of disposable income gathered at the Gramercy Park Hotel Private Roof Club for a fancy quiz night socialites, models, fashion designers, and, of course, investment bankers, who felt a little out of place. "We're investment-bank nerds, so we spent pretty much a month planning our outfits," said a member of the Goldman Sachs team. "We had wardrobe consultations on conference calls." Corporations from Valentino to Bloomberg sponsored teams, which then went from room to room, debating the questions in each. Goldman, surprising no one in the room, took home the grand prize. Other teams won various smaller prizes; Deutsche Bank, for example, won a vast supply of Agent Provocateur lingerie. Are you good enough to win a trip to a model's villa — or at least some fancy underwear? Here are the questions. (And the answers.)

...he didn't work there to study poverty!

Campaign-related stories generally have the highest degree of barely veiled hypocrisy so it's no surprise that NYT ran an article today about the evils of Private Equity and LBOs as they relate to Mitt Romney, founder of Bain Capital. Naturally, there was no mention of Crazy "$400 Haircut" Eddie's stint at Fortress, where he learned about poverty, and picked up a partly $479,512 (when top hedgies are making over a billion it actually is) for his services to the poor PMs who have since dropped their crack habit in favor of uncut Bolivian marching powder, and no longer beat their wives with their Callaway drivers - nothing but Maruman Majesty will do for the honey now. Thanks, John!
Naturally the unions will complain of layoffs. G-d forbid, that you may actually have to earn the right to live in a democratic capitalist society where companies must strive to always improve themselves and answer to shareholders (as in your union pension funds - and yes they invest in PE too).
Meanwhile the Democrats are quick to take from those they deem are making "too much money". How dare those PE cowboys not pay triple taxation on their profits? (I've already blogged about this).
What upsets me the most is that Romney isn't standing up to these douchebags any more than he absolutely has to. He's masking Bain as a VC firm and trying to downplay the LBO aspect. Naturally this is a bit hard with the deal flow Bain Cap has been having lately and just makes him seem foolish, complacent and ready to be shackled up by ignorant opinions of the masses instead of standing up for what he clearly believed throughout his professional life. For someone who asks voters to be weary of "career politicians" he has sure started to act like one.
There's a reason why Kravis gave his money to McCain and not a fellow private equiteer.

clipped from dealbook.blogs.nytimes.com The New York Times takes a look at Mr. Romney’s ties to Bain Capital, finding that he has drawn upon his contacts for eye-popping levels of fundraising — and yet has drawn criticism for his role in the sometimes messy world of leveraged buyouts. leveraged buyouts often lead to layoffs, a business reality that has impinged on Mr. Romney’s political hopes at least once before. In his 1994 campaign for the Senate, Mr. Romney’s efforts to unseat Edward M. Kennedy were derailed in part because of accusations that Bain Capital had fired union workers at an Indiana company it controlled. “Sometimes the medicine is a little bitter but it is necessary to save the life of the patient,” he said. But buyout firms have run into growing opposition from politicians and labor unions recently. On the campaign trail, Mr. Romney usually refers to Bain as a venture capital firm, largely to evoke a spirit of entrepreneurship, innovation and perhaps even scrappiness.