October 12, 2011 at 4:03am
UPDATE 1-Paulson braces investors for the worst
* Paulson not expected to take in new moneyBy Svea Herbst-Bayliss and Katya WachtelBOSTON/NEW YORK, Oct 11 (Reuters) - John Paulson could face
a two-pronged problem in the coming weeks as outside investors
and possibly even some of his own employees walk in the wake of
the hedge fund firm’s worst-ever returns.The firm told investors on Tuesday that as much as a
quarter of its assets could depart in a “worst-case” scenario
if all people who are eligible cash out by the end of the
year.Paulson’s team hosted a call to go over last month’s
results only a few days after he notified investors that one of
Paulson & Co’s biggest funds is down 47 percent for the year.Many of Paulson’s funds have lost big this year, as the
well-known money manager bet wrong that the U.S. economy would
revive sooner rather than later.However, in the days leading up to the investor call, some
on Paulson’s team had been telling brokers and others on Wall
Street that at least 20 percent of the $30 billion in assets
the fund manages could be redeemed. The deadline to get out of
the biggest funds — the Advantage funds — is coming up on
Oct. 31.Outsiders have long said Paulson is in no danger of
collapsing because about 40 percent of the assets are owned by
the billionaire stock picker and his dozen or so most trusted
lieutenants.But some analysts working in the $2 trillion hedge fund
industry say with Paulson’s funds slumping so badly, some of
his top employees could look to leave at year’s end and cash-in
their chips.Some of Paulson’s employees — whose money has been locked
up for years — will receive the final installment of their
bonus for 2008 this year, say people familiar with the hedge
fund.For some time Paulson had structured bonuses to vest over a
four-year period. That practice has been scrapped this year so
that bonuses for 2011 — a year where Paulson’s flagship
Advantage Fund is off 32 percent and its Advantage Plus cousin
is down 47 percent — would be paid immediately.Consultants who track personnel movements in the hedge fund
industry believe that there will not be a mass exodus from
Paulson. The man who earned the hedge fund industry’s biggest
payday with his $5 billion last year will still be able to pay
his roughly 120 employees very well considering the management
fees he will earn on $30 billion in assets.One recruiter in the industry said he has not yet received
any resumes from Paulson employees.”He has huge management fees and his team will likely still
be compensated very well so I think they will stick it out —
everyone can have a bad year,” said the person who asked not to
be named because he is fielding calls from many hedge fund firm
employees.One critical point is that industry consultants and bankers
on Wall Street are fairly sure Paulson will not be able to
attract new money now even though he promised not to charge
performance fees on new money.The billionaire investor had been a possible target of the
Occupy Wall Street protesters on Tuesday when they threatened
to march to the upper east of New York City to the homes of the
wealthiest on Wall Street.He was spared, according to several witnesses.In addressing the growing protests against Wall Street,
Paulson sent out a statement. “Instead of vilifying our most
successful businesses, we should be supporting them and
encouraging them to remain in New York City and continue to
grow,” the New York native wrote.He underscored that he and his employees contribute plenty
to the city’s coffers.”The top 1 percent of New Yorkers pay over 40 percent of
all income taxes, providing huge benefits to everyone in our
city and state. Paulson & Co and its employees have paid
hundreds of millions of dollars in New York City and New York
State taxes in recent years and have created over 100 high
paying jobs in New York City since its formation,” he said in
the statement.
4:03am
UPDATE 1-Paulson braces investors for the worst
* Paulson not expected to take in new moneyBy Svea Herbst-Bayliss and Katya WachtelBOSTON/NEW YORK, Oct 11 (Reuters) - John Paulson could face
a two-pronged problem in the coming weeks as outside investors
and possibly even some of his own employees walk in the wake of
the hedge fund firm’s worst-ever returns.The firm told investors on Tuesday that as much as a
quarter of its assets could depart in a “worst-case” scenario
if all people who are eligible cash out by the end of the
year.Paulson’s team hosted a call to go over last month’s
results only a few days after he notified investors that one of
Paulson & Co’s biggest funds is down 47 percent for the year.Many of Paulson’s funds have lost big this year, as the
well-known money manager bet wrong that the U.S. economy would
revive sooner rather than later.However, in the days leading up to the investor call, some
on Paulson’s team had been telling brokers and others on Wall
Street that at least 20 percent of the $30 billion in assets
the fund manages could be redeemed. The deadline to get out of
the biggest funds — the Advantage funds — is coming up on
Oct. 31.Outsiders have long said Paulson is in no danger of
collapsing because about 40 percent of the assets are owned by
the billionaire stock picker and his dozen or so most trusted
lieutenants.But some analysts working in the $2 trillion hedge fund
industry say with Paulson’s funds slumping so badly, some of
his top employees could look to leave at year’s end and cash-in
their chips.Some of Paulson’s employees — whose money has been locked
up for years — will receive the final installment of their
bonus for 2008 this year, say people familiar with the hedge
fund.For some time Paulson had structured bonuses to vest over a
four-year period. That practice has been scrapped this year so
that bonuses for 2011 — a year where Paulson’s flagship
Advantage Fund is off 32 percent and its Advantage Plus cousin
is down 47 percent — would be paid immediately.Consultants who track personnel movements in the hedge fund
industry believe that there will not be a mass exodus from
Paulson. The man who earned the hedge fund industry’s biggest
payday with his $5 billion last year will still be able to pay
his roughly 120 employees very well considering the management
fees he will earn on $30 billion in assets.One recruiter in the industry said he has not yet received
any resumes from Paulson employees.”He has huge management fees and his team will likely still
be compensated very well so I think they will stick it out —
everyone can have a bad year,” said the person who asked not to
be named because he is fielding calls from many hedge fund firm
employees.One critical point is that industry consultants and bankers
on Wall Street are fairly sure Paulson will not be able to
attract new money now even though he promised not to charge
performance fees on new money.The billionaire investor had been a possible target of the
Occupy Wall Street protesters on Tuesday when they threatened
to march to the upper east of New York City to the homes of the
wealthiest on Wall Street.He was spared, according to several witnesses.In addressing the growing protests against Wall Street,
Paulson sent out a statement. “Instead of vilifying our most
successful businesses, we should be supporting them and
encouraging them to remain in New York City and continue to
grow,” the New York native wrote.He underscored that he and his employees contribute plenty
to the city’s coffers.”The top 1 percent of New Yorkers pay over 40 percent of
all income taxes, providing huge benefits to everyone in our
city and state. Paulson & Co and its employees have paid
hundreds of millions of dollars in New York City and New York
State taxes in recent years and have created over 100 high
paying jobs in New York City since its formation,” he said in
the statement.
October 11, 2011 at 1:34pm
Shuttered UK News of World sales go to charity
LONDON Oct 11 (Reuters) - Rupert Murdoch’s News
International is to donate 2.8 million pounds ($4.4 million)
from the last edition of the News of the World, it said on
Tuesday, as it set out how it had handled the closure of the
tabloid at the centre of a phone-hacking scandal.Tom Mockridge, the chief executive of the News Corp
British newspaper arm, said the money had been raised from the
sale of 3.8 million copies from the last edition in July of the
paper which was found to have hacked the phones of everyone from
celebrities to crime victims in search of exclusive stories.Following the closure, nearly 200 people have left the
company and 65 members of staff have been redeployed elsewhere.”Since the closure of the paper, we have worked to find
roles throughout the company for as many of those affected as
possible,” Mockridge told staff in an email. “Of those who
applied for jobs, two thirds were made an offer.”Those staying on at the media group included the staff from
a magazine which had accompanied the Sunday tabloid before it
was switched to accompany the Saturday Sun newspaper. A number
have also been retained to work on a digital start up, which the
company is yet to announce.Mazher Mahmood, dubbed the “Fake Sheikh” investigative
reporter, has moved to work for Murdoch’s Sunday Times.Mockridge, who was updating staff at the end of a legally
mandated 90-day consultation period, said 81 members of staff
had opted to take the early-leaver option and around 100 were
made redundant.”All former News of the World staff were offered enhanced
redundancy terms,” he said, adding that the 2.8 million pounds
would be donated to three UK-based charities. Five charities in
Ireland will split the profits from the Irish sale.The British agencies were children’s charity Barnardo’s,
Forces Children’s Trust, which helps the children of dead or
wounded members of the armed forces, and the Queen Elizabeth
Hospital Birmingham Charity.Murdoch’s News International closed the News of the World,
the most popular Sunday tabloid at the time, in July at the
height of the hacking scandal, in a bid to contain the crisis
which had hammered the value and reputation of News Corp.The paper was closed after senior management admitted that a
private investigator working for the tabloid had hacked into the
phones of celebrities, crime victims and Britain’s war dead to
generate stories.But many staff, who said the hacking occurred before their
time at the paper, felt they had been fired to protect the
reputation and jobs of senior management. Several former staff
have since told Reuters that they have struggled with the News
of the World on their jobs resume.Mockridge replaced Rebekah Brooks, a key aide to Rupert
Murdoch, who was eventually forced to step down after initially
refusing. Brooks, who was also a former News of the World
editor, had angered staff by holding on to her job when the
paper closed.The National Union of Journalists at the time said the
eventual resignation of Brooks was “too little too late” for the
journalists who would lose their jobs.
1:34pm
Shuttered UK News of World sales go to charity
LONDON Oct 11 (Reuters) - Rupert Murdoch’s News
International is to donate 2.8 million pounds ($4.4 million)
from the last edition of the News of the World, it said on
Tuesday, as it set out how it had handled the closure of the
tabloid at the centre of a phone-hacking scandal.Tom Mockridge, the chief executive of the News Corp
British newspaper arm, said the money had been raised from the
sale of 3.8 million copies from the last edition in July of the
paper which was found to have hacked the phones of everyone from
celebrities to crime victims in search of exclusive stories.Following the closure, nearly 200 people have left the
company and 65 members of staff have been redeployed elsewhere.”Since the closure of the paper, we have worked to find
roles throughout the company for as many of those affected as
possible,” Mockridge told staff in an email. “Of those who
applied for jobs, two thirds were made an offer.”Those staying on at the media group included the staff from
a magazine which had accompanied the Sunday tabloid before it
was switched to accompany the Saturday Sun newspaper. A number
have also been retained to work on a digital start up, which the
company is yet to announce.Mazher Mahmood, dubbed the “Fake Sheikh” investigative
reporter, has moved to work for Murdoch’s Sunday Times.Mockridge, who was updating staff at the end of a legally
mandated 90-day consultation period, said 81 members of staff
had opted to take the early-leaver option and around 100 were
made redundant.”All former News of the World staff were offered enhanced
redundancy terms,” he said, adding that the 2.8 million pounds
would be donated to three UK-based charities. Five charities in
Ireland will split the profits from the Irish sale.The British agencies were children’s charity Barnardo’s,
Forces Children’s Trust, which helps the children of dead or
wounded members of the armed forces, and the Queen Elizabeth
Hospital Birmingham Charity.Murdoch’s News International closed the News of the World,
the most popular Sunday tabloid at the time, in July at the
height of the hacking scandal, in a bid to contain the crisis
which had hammered the value and reputation of News Corp.The paper was closed after senior management admitted that a
private investigator working for the tabloid had hacked into the
phones of celebrities, crime victims and Britain’s war dead to
generate stories.But many staff, who said the hacking occurred before their
time at the paper, felt they had been fired to protect the
reputation and jobs of senior management. Several former staff
have since told Reuters that they have struggled with the News
of the World on their jobs resume.Mockridge replaced Rebekah Brooks, a key aide to Rupert
Murdoch, who was eventually forced to step down after initially
refusing. Brooks, who was also a former News of the World
editor, had angered staff by holding on to her job when the
paper closed.The National Union of Journalists at the time said the
eventual resignation of Brooks was “too little too late” for the
journalists who would lose their jobs.
