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2. Calpers puts more pressure on JPMorgan board

Every top bank has legions of regulators working in their buildings. While they share space, they are hardly friends. And the atmosphere can heat up quickly, especially at an embattled bank like JPMorgan Chase.

So it's notable that JPMorgan CEO and Chairman Jamie Dimon recently met with on-site and off-site regulators from the OCC and Federal Reserve Board. According to the Financial Times, he "pledged to iron out a string of compliance problems and force his staff to co-operate with regulators."

"If you get the Heisman from someone, call me directly," Dimon was quoted.

The acrimony between the bank and regulators seemed to hit a peak over the investigation into possible abuse of the energy markets. JPMorgan Chase has apparently been informed by the Federal Energy Regulatory Commission that it intends to recommend an enforcement action against the bank and specific individuals.

The agency believes that Blythe Masters, a well-known derivatives executive, lied under oath to the commission. A regulatory document cited her "knowledge and approval of schemes" carried out by energy traders in Houston, even though she denied any knowledge of these schemes under oath.

Whether the charges are true or not, she just might become the latest executive casualty.

Needless to say, all this is coming to a head at the worst possible time, given the May 21 annual shareholders meeting, which looms as a referendum on Dimon's performance as Chairman and CEO.

For more:
- here's the article

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By Jim Kim

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3. Sohn conference underway with recommendations, questions

It's not a surprise that Calpers has cast its lot with supporters of the resolution that would split the chairman and CEO positions at JPMorgan Chase. The big public California pension has been vocal in the past about the need for what is becoming a standard corporate governance move. It voted for a similar resolution at JPMorgan's meeting last year.

"There's a fundamental conflict in combining the roles of chairman and C.E.O.," the head of the pension said to DealBook. "It's all thrown into stark relief when you're dealing with a company that's too big to fail."

She also detailed Calpers' history with JPMorgan on this issue.

"Calpers first met with him to discuss splitting the roles in 2010. At that meeting and in other conversations, JPMorgan emphasized that it had top-notch risk management systems that would keep the business in check. Nevertheless, Calpers voted to split the JPMorgan roles at last year's shareholder meeting, which took place even before the disclosure of the multibillion-dollar trading loss at the bank's chief investment office. That incident, which racked up about $6 billion in losses, has only reinforced the need for tighter oversight in Calpers's view."

So the issue for the board is whether other pensions decide to embrace this view, which wouldn't at all be surprising, as Calpers tends to be seen as a corporate governance leader. The annual shareholder meeting is scheduled for May 21 in Tampa, FL, and the board is no doubt keenly aware of what's at stake. It might be pondering some dramatic overtures to halt the "split the positions" momentum.

For more:
- here's the article

Read more about: CalPERS, Pension
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By Jim Kim

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4. SALT conference: the center of the hedge fund industry

The Sohn Investment Conference has evolved into a leading event in the hedge fund industry, where elite hedge fund managers love to throw out ideas, some of which draw massive media attention. This year's version got underway this week amid some questions about the value of the recommendations put forward at the event in 2012.

A Financial Times analysis found "decidedly mixed results. An investor who followed every top idea from the 12 speakers last year would have made 19 percent, less than the 22 percent gain available from a passive index fund tracking the US stock market. Many of the ideas have proved woefully miscued, including some from the most high-profile managers who will return to the stage on Wednesday: David Einhorn of Greenlight Capital and Bill Ackman of Pershing Square."

Ackman's recommendation focused on JCPenney, "However, a turnaround backed by the investor led to plummeting sales and profits, and the stock is down 37 per cent since."

Einhorn's, in contrast, "gave a rapid fire 137-page presentation. Some ideas, such as selling the yen versus the dollar, and buying Japanese social networking companies have fared well. However, investors following his call to sell the stock of Martin Marietta Materials, a construction company boosted by government stimulus spending, would have lost 66 percent of their money, and a favoured stock, Apple, has dropped 16 percent. On average his top ideas would have left an investor up just 0.7 percent."

In the end, most professionals take the ideas put forward at the event with a grain of salt. All acknowledge that various agendas are at work.

The event's larger goal is to raise money for pediatric cancer care and research. Recall that the event honors the memory of Ira Sohn, a Wall Street professional who passed away from cancer at the age of 29.

For more:
- here's the article

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By Jim Kim

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5. Profits, dividend payments soar at Fannie Mae

The Sohn Investment Conference is underway in New York, while the SkyBridge Alternatives Conference (SALT) has started up in Las Vegas.

The New York Times weighs in with a look at the latter, calling it a four-day "schmooze fest" that also serves as "a matchmaking service, with funds peddling their services to the world's richest investors, and the world's richest investors seeking out the next superstar manager. And this being Sin City, it is, perhaps above all else, a good time."

The event is the brainchild of Anthony Scaramucci, "a Goldman Sachs alumnus with a Harvard Law degree whom many simply call 'the Mooch.' In an industry known for reclusive traders and math geeks, the boyish Mr. Scaramucci, 49, is Wall Street's first hedge fund impresario, a P.T. Barnum in a Ferragamo tie. In a gilded industry that has preferred to stay below the radar, Mr. Scaramucci embraces the white-hot center of it all."

It's interesting that this prime mover-and-shaker is known mainly for his fund of hedge funds, one that caters to a "mass affluent" market, including lots of retail investors. He has managed to buck the woeful performance of most funds of funds, returning "20.2 percent last year net of fees, handily outperforming the S.& P. But over a 10-year stretch, the fund has slightly underperformed the index," according to the NYT.

The bloom is off the rose for funds of hedge funds, no doubt. But that doesn't stop the firm from throwing one heck of an event.

For more:
- here's the profile

Related Articles:
The future of funds of hedge funds

Read more about: SALT Conference, Fund Of Hedge Funds
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By Jim Kim

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