114-579: Nicolas Berggruen ( / ˈ b ɜːr ɡ r uː n , b ɜːr ˈ ɡ r uː ən / ; born 10 August 1961) is a US-based billionaire investor and philanthropist. Born in Paris, France, he is a dual German and American citizen. He is the founder and president of Berggruen Holdings, a private investment company and the co-founder and chairman of the Berggruen Institute , a non-profit, non-partisan think tank that works to address global governance issues. In 2014, through
228-414: A bull market , distressed investing works best during a bear market . Risk arbitrage or merger arbitrage includes such events as mergers , acquisitions, liquidations, and hostile takeovers . Risk arbitrage typically involves buying and selling the stocks of two or more merging companies to take advantage of market discrepancies between acquisition price and stock price. The risk element arises from
342-439: A counterparty to derivative contracts , and lends securities for particular investment strategies, such as long/short equities and convertible bond arbitrage . It can provide custodial services for the fund's assets, and trade execution and clearing services for the hedge fund manager. Hedge fund administrators are typically responsible for valuation services, and often operations , and accounting . Calculation of
456-402: A hedge fund . The firm grew to about $ 2 billion under management before the founders reportedly sold to Safra Bank in 2004. In 2005, for the symbolic fee of 1 euro, Berggruen bought the insolvent German retailer Karstadt , investing over 65 million euros (US$ 83 million) and saving over 25,000 jobs. Commenting on the importance of the retail brand, Berggruen said: “We want to take a brand with
570-1000: A lack of transparency . Another common perception of hedge funds is that their managers are not subject to as much regulatory oversight and/or registration requirements as other financial investment managers, and more prone to manager-specific idiosyncratic risks such as style drifts, faulty operations, or fraud. New regulations introduced in the US and the EU as of 2010 required hedge fund managers to report more information, leading to greater transparency. In addition, investors, particularly institutional investors, are encouraging further developments in hedge fund risk management, both through internal practices and external regulatory requirements. The increasing influence of institutional investors has led to greater transparency: hedge funds increasingly provide information to investors including valuation methodology, positions, and leverage exposure. Hedge funds share many of
684-461: A multipolar world . The Council is devoted to global governance reform with the aim to "build on a convergence of interests in order to create a community of interests." The council is chaired by former president of Mexico Ernesto Zedillo . The Council on the Future of Europe is a committee engaged in research, debate and advocacy to move forward the project of a united Europe. It advocates not only
798-535: A "fundamental growth" strategy invest in companies with more earnings growth than the overall stock market or relevant sector, while funds using a " fundamental value " strategy invest in undervalued companies. Funds that use quantitative and financial signal processing techniques for equity trading are described as using a "quantitative directional" strategy. Funds using a " short bias " strategy take advantage of declining equity prices using short positions. Event-driven strategies concern situations in which
912-478: A 137,000 sq ft (12,700 m) Scholars’ Campus. The campus will house the Center's educational programs, fellows, and scholars. Herzog & de Meuron and L.A's Gensler will lead a team of architects in the campus design. The campus, named Monteverdi, will build on approximately 22 of the 450-acre estate and delegate the remaining 95% as protected open space. Berggruen's beliefs on renewing democracy include
1026-440: A CTA from a regulatory perspective and the main divide is between systematic and discretionary strategies. A classification framework for CTA/Macro Strategies can be found in the reference. Directional investment strategies use market movements, trends, or inconsistencies when picking stocks across a variety of markets. Computer models can be used, or fund managers will identify and select investments. These types of strategies have
1140-629: A bachelor's degree in Finance and International Business in 1981. After obtaining his degree, Berggruen moved to Philadelphia to work for the real estate arm of Bass Brothers Enterprises , led by the investor Sid Bass . Between 1983 and 1987, Berggruen was a Principal at Jacobson and Co. Berggruen moved back to New York and, based on a trust fund worth about $ 250,000, he started investing in real estate and public stocks, later expanding to private equity, venture capital, and hedge funds. In 1984, he founded Berggruen Holdings, Inc. as an investment vehicle for
1254-431: A big presence all across Germany and restore it to all its former glory.” In 2010, having spent 400 million euros, he brought the company out of bankruptcy. Through Freedom Acquisitions – his first investment vehicle that went public in 2006 – Berggruen bought a stake in the hedge fund group GLG Partners in 2007. In 2009, with his second fund, Liberty Acquisitions, Berggruen bought Pearl Insurance , and in 2010, he bought
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#17328561409311368-431: A computerized system, known as "systematic/quantitative". The amount of diversification within the fund can vary; funds may be multi-strategy, multi-fund, multi-market, multi-manager, or a combination. Sometimes hedge fund strategies are described as " absolute return " and are classified as either " market neutral " or "directional". Market neutral funds have less correlation to overall market performance by "neutralizing"
1482-694: A fiscal and political union within Europe but also the engagement of European citizens . It supports "town hall" meetings and seminars to provide a forum for Council members and European leaders to bring their ideas to the public. In May 2013, the council held a "town hall" meeting endorsed by the French President Francois Hollande , Spanish Prime Minister Mariano Rajoy , and Italian labor minister. The council and Germany's labor minister, Ursula von der Leyen , proposed an investment, training, and jobs program for Europe. The program eventually became
1596-521: A fund has too much exposure to a particular investment, sector, trading strategy, or group of correlated funds. These risks may be managed through defined controls over conflict of interest , restrictions on allocation of funds, and set exposure limits for strategies. Many investment funds use leverage , the practice of borrowing money, trading on margin , or using derivatives to obtain market exposure in excess of that provided by investors' capital. Although leverage can increase potential returns,
1710-446: A fund manager "drifting" away from an area of specific expertise, manager risk factors include valuation risk , capacity risk, concentration risk , and leverage risk . Valuation risk refers to the concern that the net asset value (NAV) of investments may be inaccurate; capacity risk can arise from placing too much money into one particular strategy, which may lead to fund performance deterioration; and concentration risk may arise if
1824-743: A global network of "thinkers" dedicated to coming up with systemic solutions to various world problems. In 2014, the Institute created an online global publication called The WorldPost, which was partnered with Huffpost and later The Washington Post . The WorldPost is now known as Noema Magazine, which is published both online and in print. In 2015, the Institute created the Berggruen Fellowship Program in partnership with several universities, including Harvard, USC, and Peking University. The program sponsors young, emerging “thinkers”. Berggruen has recruited numerous supporters and advisers of
1938-466: A good year. Earnings at the very top are higher than in any other sector of the financial industry, and collectively the top 25 hedge fund managers regularly earn more than all 500 of the chief executives in the S&;P 500 . Most hedge fund managers are remunerated much less, however, and if performance fees are not earned then small managers at least are unlikely to be paid significant amounts. In 2011,
2052-403: A greater appetite for risk , with the intention of maximizing returns, subject to the risk tolerance of investors and the fund manager. Managers will have an additional incentive to increase risk oversight when their own capital is invested in the fund. Hedge fund management firms typically charge their funds both a management fee and a performance fee . Management fees are calculated as
2166-604: A greater exposure to the fluctuations of the overall market than do market neutral strategies. Directional hedge fund strategies include US and international long/short equity hedge funds, where long equity positions are hedged with short sales of equities or equity index options . Within directional strategies, there are a number of sub-strategies. " Emerging markets " funds focus on emerging markets such as China and India, whereas "sector funds" specialize in specific areas including technology, healthcare, biotechnology, pharmaceuticals, energy, and basic materials. Funds using
2280-449: A house, a car, or a watch. Instead, he traveled, staying in different hotels with only a small bag of clothes and his BlackBerry . He retained his Gulfstream IV private jet, noting that it is too "practical" to dispense with. In an interview with Bloomberg , Berggruen stated: "I'm not that interested in material things. As long as I find a good bed that I can sleep in, that's enough". From 2012, Berggruen purchased several apartments in
2394-439: A large amount of flexibility (due to their ability to use leverage to take large positions in diverse investments in multiple markets), the timing of the implementation of the strategies is important in order to generate attractive, risk-adjusted returns. Global macro is often categorized as a directional investment strategy. Global macro strategies can be divided into discretionary and systematic approaches. Discretionary trading
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#17328561409312508-645: A majority stake in the Spanish media group, Prisa , for a reported US$ 900 million. In 2011, alongside business partner Martin Franklin and investor William Ackman , Berggruen launched his third investment vehicle, Justice Holding, a company that raised £900m in its initial public offering. In 2012, Justice holdings took an £881m (29%) stake in Burger King Worldwide, Inc . In the mid-2000s, Berggruen Holdings began acquiring residential and commercial real estate across
2622-445: A management fee of 2% on total assets and a 20% fee on realized gains. In the 1970s, hedge funds specialized in a single strategy with most fund managers following the long/short equity model. Many hedge funds closed during the recession of 1969–1970 and the 1973–1974 stock market crash due to heavy losses. They received renewed attention in the late 1980s. During the 1990s, the number of hedge funds increased significantly with
2736-400: A manager is only rewarded if the fund generates returns in excess of the returns that the investor would have received if they had invested their money elsewhere. Some hedge funds charge a redemption fee (or withdrawal fee) for early withdrawals during a specified period of time (typically a year), or when withdrawals exceed a predetermined percentage of the original investment. The purpose of
2850-422: A manager will sometimes close a fund that has suffered serious losses and start a new fund, rather than attempt to recover the losses over a number of years without a performance fee. Some performance fees include a " hurdle ", so that a fee is only paid on the fund's performance in excess of a benchmark rate ( e.g. , LIBOR ) or a fixed percentage. The hurdle is usually tied to a benchmark rate such as Libor or
2964-551: A part of European policy in January 2015 when European Commission President Jean-Claude Juncker proposed the 315 billion euro Investment Plan . The Think Long Committee for California promotes a comprehensive approach for improving California's government. It has involved a politically bi-partisan board from the outset. In November 2011, the Committee published its report, A Blueprint to Renew California . The report recommended
3078-400: A percentage of the fund's net asset value and typically range from 1% to 4% per annum, with 2% being standard. They are usually expressed as an annual percentage, but calculated and paid monthly or quarterly. Management fees for hedge funds are designed to cover the operating costs of the manager, whereas the performance fee provides the manager's profits. However, due to economies of scale
3192-665: A position based on the predicted movement of the security or securities in question. Large institutional investors such as hedge funds are more likely to pursue event-driven investing strategies than traditional equity investors because they have the expertise and resources to analyze corporate transactional events for investment opportunities. Corporate transactional events generally fit into three categories: distressed securities , risk arbitrage , and special situations . Distressed securities include such events as restructurings, recapitalizations , and bankruptcies . A distressed securities investment strategy involves investing in
3306-410: A single strategy or multiple strategies for flexibility, risk management , or diversification. The hedge fund's prospectus , also known as an offering memorandum , offers potential investors information about key aspects of the fund, including the fund's investment strategy, investment type, and leverage limit. The elements contributing to a hedge fund strategy include the hedge fund's approach to
3420-450: A stable US–China relationship, participation without populism, addressing climate change , and instituting "universal basic capital" to ensure adequate living conditions for everyone regardless of employment status. His views of democracy call for an inclusive political culture and positive nationalism. Berggruen states: "Democracy is really about giving individuals a place in society, a voice—respect, in some ways—equality as humans. It's also
3534-627: A state of maturity that is consolidating around the larger, more established firms such as Citadel, Elliot, Millennium, Bridgewater, and others. The rate of new fund start ups is now outpaced by fund closings. In July 2017, hedge funds recorded their eighth consecutive monthly gain in returns with assets under management rising to a record $ 3.1 trillion. Hedge fund strategies are generally classified among four major categories: global macro , directional, event-driven , and relative value ( arbitrage ). Strategies within these categories each entail characteristic risk and return profiles. A fund may employ
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3648-401: A strategy based on predicting the final approval of new pharmaceutical drugs ; and legal catalyst strategy, which specializes in companies involved in major lawsuits. Relative value arbitrage strategies take advantage of relative discrepancies in price between securities. The price discrepancy can occur due to mispricing of securities compared to related securities, the underlying security or
3762-496: A substantial portion of the asset management industry, with assets totaling around $ 3.8 trillion as of 2021. The word "hedge", meaning a line of bushes around the perimeter of a field, has long been used as a metaphor for placing limits on risk. Early hedge funds sought to hedge specific investments against general market fluctuations by shorting other, similar assets. Nowadays, however, many different investment strategies are used, many of which do not "hedge" risk. During
3876-528: A system. It's not every individual for themselves; it has to be society as a whole." In 2012, Berggruen and Nathan Gardels published the book Intelligent Governance for the 21st Century : A Middle Way Between West and East . The book's central argument is that populism and short-term thinking have hindered the Western democracies' progress, while many authoritarian Eastern nations, China, in particular, would benefit from strengthening their meritocratic systems with
3990-446: A thinker whose ideas are of broad significance for shaping human self-understanding and the advancement of humanity. The inaugural recipient in 2016 was Charles Taylor , one of the world's foremost philosophers who has deepened the understanding among different intellectual traditions and civilizations. The 2017 laureate was Onora O’Neill . A broad-ranging philosopher of politics and ethics, international justice and bioethics, O'Neill
4104-632: A trustee of the Asia Society . He is also a member of the World Economic Forum . Berggruen was honored by his alma mater, NYU Stern , at the 2016 Haskins Giving Society Award Dinner for his commitment to business and public service. In 2018, he received the Ellis Island Medal of Honor . In the early 2000s, Berggruen was dubbed "the homeless billionaire" when he sold off his residential properties and belongings. At 40 years old, he did not own
4218-747: A utopian country. Berggruen refused to learn English at the time because he thought it was "the language of imperialism." Berggruen had a rebellious nature, frequently challenging teachers on intellectual matters and eventually, he was expelled from the school for sedition. At 16, Berggruen passed his state exams in Paris before completing a baccalauréat in Paris as a candidat libre. In 1978, Nicolas moved to London, where he became fluent in English and trained under property developer and philanthropist Lord Max Rayne at London Merchant Securities , known today as LMS Capital Plc. In 1979, 17-year old Berggruen moved to New York to attend New York University , where he obtained
4332-635: Is a Professor Emerita of Philosophy at the University of Cambridge and the former chair of the Equality and Human Rights Commission in Great Britain. In 2018, the Prize was awarded to author and public philosopher Martha C. Nussbaum to recognize her ability to use the power of literature and the classical world to help global audiences understand vulnerability—particularly the emotions in moral and political life—and
4446-439: Is also fluent in English and French. Berggruen has two older half-siblings from his father's first marriage: John , an art dealer, and Helen, an artist. Furthermore, he has a full younger brother, Olivier , an art historian and curator. Berggruen credits his father for his competitive drive: "What I learned from my father [was] passion and focus... He valued quality over quantity". Nicolas and Olivier attended elementary school at
4560-602: Is carried out by investment managers who identify and select investments, whereas systematic trading is based on mathematical models and executed by software with limited human involvement beyond the programming and updating of the software. These strategies can also be divided into trend or counter-trend approaches depending on whether the fund attempts to profit from following market trend (long or short-term) or attempts to anticipate and profit from reversals in trends. Within global macro strategies, there are further sub-strategies including "systematic diversified", in which
4674-666: Is common for hedge fund investment strategies to aim to achieve a positive return on investment regardless of whether markets are rising or falling (" absolute return "). Hedge funds can be considered risky investments; the expected returns of some hedge fund strategies are less volatile than those of retail funds with high exposure to stock markets because of the use of hedging techniques. Research in 2015 showed that hedge fund activism can have significant real effects on target firms, including improvements in productivity and efficient reallocation of corporate assets. Moreover, these interventions often lead to increased labor productivity, although
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4788-666: Is done through its four programs: Future Humans, The Future of Capitalism, The Future of Democracy, and Geopolitics and Globalization. Additionally, the Global Fellowship Program enables thinkers to study globally in different areas of the world. In 2016, the Berggruen Prize, an annual one million dollar award, was unveiled. Launching in Fall 2022, this interdisciplinary program will unite experimentalists, creators, and scholars who will not only track, but also shape, how humans of
4902-626: Is key to Africa's prosperity, and so aiding the flow of information and finance within the agricultural sector will be especially helpful." Additionally, Berggruen Holdings, Heirs Holdings, and 50 Ventures partnered to form Africa Exchange Holdings, Ltd (AFEX), to develop a network of commodity exchanges to transform trade dynamics and ensure higher incomes for the rural poor. By 2011, Berggruen Holdings had offices in Berlin, Istanbul, Mumbai, New York, and Tel Aviv, nine senior executives, owned more than 30 companies across various industries and asset classes, and
5016-509: Is mutually administered and distributes benefits to its stakeholders and the New Political Economy program which explores innovative proposals for how leaders at all different levels of governance can best respond to and reshape globalized capitalism. The Future of Democracy program brings together leaders and thinkers to re-imagine democracy for the new era to develop new ideas for how to reinvent democratic institutions and rebuild
5130-795: Is planning a new Scholars’ Campus in the Santa Monica Mountains , off Stoney Hill Road above the Getty Center. The campus, designed by a team of architects led by Herzog and de Meuron and Gensler , will house the institute's programs, fellowships, and scholars. As of mid-2024, the Campus is under construction. Hedge fund A hedge fund is a pooled investment fund that holds liquid assets and that makes use of complex trading and risk management techniques to improve investment performance and insulate returns from market risk . Among these portfolio techniques are short selling and
5244-550: Is reduced but cannot be eliminated. According to a report by the Hennessee Group, hedge funds were approximately one-third less volatile than the S&P 500 between 1993 and 2010. Investors in hedge funds are, in most countries, required to be qualified investors who are assumed to be aware of the investment risks , and accept these risks because of the potential returns relative to those risks. Fund managers may employ extensive risk management strategies in order to protect
5358-460: Is responsible for the three "Understanding China" conferences in Beijing since its inception. The Fellowship Program is a two-year program that gives scholars the opportunity to study at academic institutions all over the world. The Berggruen Institute presented its first Berggruen Prize for Philosophy and Culture in 2016. The million-dollar award, chosen by an independent jury, is given annually to
5472-1156: Is the head of the Board of the Berggruen Museum in Berlin. He is a member of the Los Angeles County Museum (LACMA), the International Councils of the Tate Gallery in London, and the Museum of Modern Art in New York as well as a member of the Beyeler Foundation , the International Council of the Serpentine Gallery , and Sotheby's International Advisory Board. He is an International Ambassador of The Feuerle Collection, based in Berlin. In cooperation with LACMA, Berggruen has been making acquisitions intended for
5586-479: The 1990s stock market rise , the aligned-interest compensation structure ( i.e. , common financial interests), and the promise of above average returns as likely causes. Over the next decade, hedge fund strategies expanded to include credit arbitrage, distressed debt , fixed income , quantitative , and multi-strategy. US institutional investors , such as pension and endowment funds , began allocating greater portions of their portfolios to hedge funds. During
5700-680: The Cannaregio district, which is to focus primarily on dedicated artist commissions; the first artist-in-residence is Sterling Ruby . Berggruen is a member of the Council on Foreign Relations , Director on the Board of the Pacific Council on International Policy , a member of Foro Iberoamericano, a member of the Helena Group , and a member of the Commission on Global Ethics and Citizenship. In 2013 he
5814-689: The Sierra Towers , where he lived for several years. In 2016, he had two children born from one egg donor and two surrogates . He lives with them in Los Angeles. Berggruen bought a 20,000 sq ft (1,900 m) home in Holmby Hills for $ 42 million in 2017. In 2021, he acquired the Gordon Kaufmann -designed, 29,000 sq ft (2,700 m) Hearst estate in Beverly Hills for $ 63.1 million, at
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#17328561409315928-408: The net asset value ("NAV") by the administrator, including the pricing of securities at current market value and calculation of the fund's income and expense accruals, is a core administrator task, because it is the price at which investors buy and sell shares in the fund. The accurate and timely calculation of NAV by the administrator is vital. The case of Anwar v. Fairfield Greenwich (SDNY 2015)
6042-507: The École alsacienne in Paris. They were raised Catholic, their mother's faith. Growing up in Paris in the 1970s, Berggruen spent his time reading. He was particularly drawn to the work of French philosopher Jean-Paul Sartre and the issues of political governance. Berggruen attended high school at Le Rosey in Switzerland. He became interested in Marxism and by 15 had written a constitution for
6156-703: The 1,226 people on the Forbes World's Billionaires List for 2012, 36 of the financiers listed "derived significant chunks" of their wealth from hedge fund management. Among the richest 1,000 people in the United Kingdom, 54 were hedge fund managers, according to the Sunday Times Rich List for 2012. A portfolio manager risks losing his past compensation if he or she engages in insider trading . In Morgan Stanley v. Skowron , 989 F. Supp. 2d 356 (S.D.N.Y. 2013), applying New York's faithless servant doctrine,
6270-679: The Australian moral philosopher and bioethicist, was awarded the 2021 Berggruen Prize for his pioneering work on effective altruism, as well as his work on animal rights and the global eradication of poverty. In 2022, Kojin Karatani became the first Asian laureate to receive the Prize. Announcing the award, the Berggruen Prize jury lauded Karatani as a polymath whose scholarly breadth has encompassed philosophy, literary theory, economics, politics and aesthetics, among other disciplines. In 2023, sociologist and social theorist Patricia Hill Collins became
6384-412: The Center brings together leading thinkers from around the world to ponder how culture and philosophy inform political thinking. The Center offers a fellowship program between Chinese and American universities and an annual $ 1 million philosophy prize awarded by an international jury. In 2017, Berggruen purchased a 450-acre stretch of land in the Santa Monica Mountains overlooking Los Angeles to create
6498-591: The Institute after a series of organized discussions in California aimed at addressing the state's expanding debt. The talks became the Think Long Committee for California, a bipartisan initiative focused on reforming California's governance system. The initiative garnered the support of prominent political players, including former secretary of state Condoleezza Rice , billionaire entrepreneur Eli Broad , former California governor Gray Davis , and Eric Schmidt ,
6612-426: The Institute including Eric Schmidt , Reid Hoffman , Arianna Huffington , Evan Spiegel , Stephan Schwarzman , Ernesto Zedillo , Jack Dorsey , Elon Musk , and Patrick Soon-Shiong . The 21st Century Council brings together former heads of state, global thinkers and entrepreneurs from across cultural and political boundaries to address the problems arising from power shifts from Western-dominated globalization to
6726-469: The Institute's 21st Century Council include several former heads of state and government, Tony Blair , Gerhard Schröder , Helle Thorning Schmidt , Fernando Henrique Cardoso , and Nicolas Sarkozy , amongst others. In 2015, Berggruen announced the launch of the Berggruen Philosophy and Culture Center. In collaborations with Peking , Stanford , New York, and Oxford Universities, amongst others,
6840-516: The Institute, Berggruen launched Noema Magazine , formerly the WorldPost, a digital and print publication dedicated to exploring global issues. Nicolas Berggruen was born in Paris, France. He is the son of art collector and dealer Heinz Berggruen and actress Bettina Moissi . His father comes from a German Jewish family, and his mother was a Catholic Albanian and German, the daughter of actors Aleksandër Moisiu and Herta Hambach. Heinz Berggruen
6954-478: The Nicolas Berggruen Charitable Trust. Berggruen Holdings predominately operates as a long-term investor/owner for their portfolio companies. In the mid-1980s, Berggruen began purchasing distressed real estate across New York City and has since made over 100 direct control and real estate investments globally. In 1988, he and Julio Mario Santo Domingo, Jr. co-founded Alpha Investment Management,
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#17328561409317068-587: The US bull market of the 1920s, there were numerous private investment vehicles available to wealthy investors. Of that period, the best known today is the Graham-Newman Partnership, founded by Benjamin Graham and his long-time business partner Jerry Newman. This was cited by Warren Buffett in a 2006 letter to the Museum of American Finance as an early hedge fund, and based on other comments from Buffett, Janet Tavakoli deems Graham's investment firm
7182-492: The United States and Europe following the financial crisis of 2007–2008 with the intention of increasing government oversight of hedge funds and eliminating certain regulatory gaps. While most modern hedge funds are able to employ a wide variety of financial instruments and risk management techniques, they can be very different from each other with respect to their strategies, risks, volatility and expected return profile. It
7296-547: The United States collectively held $ 1.335 trillion. In April 2012, the hedge fund industry reached a record high of US$ 2.13 trillion total assets under management. In the middle of the 2010s, the hedge fund industry experienced a general decline in the "old guard" fund managers. Dan Loeb called it a "hedge fund killing field" due to the classic long/short falling out of favor because of unprecedented easing by central banks . The US stock market correlation became untenable to short sellers . The hedge fund industry today has reached
7410-468: The aim to foster more cross-cultural dialogue. It houses fellows, and offers symposia and conferences. In 2014, Berggruen Institute created a global media platform, The WorldPost , and partnered with HuffPost to publish on its platform. Later in 2017, Berggruen Institute announced a partnership with The Washington Post to publish The WorldPost content only on Washington Post as a media platform that included op-eds, videos, and features by writers around
7524-426: The benefits may not fully accrue to workers in terms of increased wages or work hours. A hedge fund usually pays its investment manager a management fee (typically, 2% per annum of the net asset value of the fund) and a performance fee (typically, 20% of the increase in the fund's net asset value during a year). Hedge funds have existed for many decades and have become increasingly popular. They have now grown to be
7638-479: The bonds or loans of companies facing bankruptcy or severe financial distress, when these bonds or loans are being traded at a discount to their value. Hedge fund managers pursuing the distressed debt investment strategy aim to capitalize on depressed bond prices. Hedge funds purchasing distressed debt may prevent those companies from going bankrupt, as such an acquisition deters foreclosure by banks. While event-driven investing, in general, tends to thrive during
7752-413: The committee helped promote SB 1253, "The Ballot Initiative Transparency Act", eventually approved on September 28, 2014. It increase the opportunities for public comment , and allows lawmakers and proponents to make changes before ballot initiatives go to the voters. The committee also supported Proposition 2 in 2014, "The Rainy Day Fund", which sets aside a small percentage of revenue each year to pay
7866-438: The conditions for human wellbeing and happiness. The 2019 Berggruen Prize was awarded to U.S. Supreme Court Justice Ruth Bader Ginsburg for her work in pioneering gender equality and using the law to advance ethical and philosophical principles of equality and human rights. The 2020 Berggruen Prize was awarded to Dr. Paul Farmer for his impactful work at the intersection of public health and human rights. Peter Singer ,
7980-541: The court held that a hedge fund's portfolio manager engaging in insider trading in violation of his company's code of conduct, which also required him to report his misconduct, must repay his employer the full $ 31 million his employer paid him as compensation during his period of faithlessness. The court called the insider trading the "ultimate abuse of a portfolio manager's position". The judge also wrote: "In addition to exposing Morgan Stanley to government investigations and direct financial losses, Skowron's behavior damaged
8094-409: The devolution of power to local governments and school districts, reform of the democracy initiative process to ensure greater consideration of measures proposed by the public, establishment of a "rainy day" fund for economic downturns, a body of long-term oversight to balance the short-term, special-interest character of the elected legislature, and modernization of California's tax system. In 2014,
8208-609: The effect of market swings whereas directional funds utilize trends and inconsistencies in the market and have greater exposure to the market's fluctuations. Hedge funds using a global macro investing strategy take large positions in share, bond, or currency markets in anticipation of global macroeconomic events in order to generate a risk-adjusted return . Global macro fund managers use macroeconomic ("big picture") analysis based on global market events and trends to identify opportunities for investment that would profit from anticipated price movements. While global macro strategies have
8322-431: The fee is to discourage short-term investing, reduce turnover, and deter withdrawals after periods of poor performance. Unlike management fees and performance fees, redemption fees are usually kept by the fund and redistributed to all investors. Hedge fund management firms are often owned by their portfolio managers , who are therefore entitled to any profits that the business makes. As management fees are intended to cover
8436-540: The firm's operating costs, performance fees (and any excess management fees) are generally distributed to the firm's owners as profits. Funds do not tend to report compensation, and so published lists of the amounts earned by top managers tend to be estimates based on factors such as the fees charged by their funds and the capital they are thought to have invested in them. Many managers have accumulated large stakes in their own funds and so top hedge fund managers can earn extraordinary amounts of money, perhaps up to $ 4 billion in
8550-736: The firm's reputation, a valuable corporate asset." A hedge fund is an investment vehicle that is most often structured as an offshore corporation , limited partnership , or limited liability company . The fund is managed by an investment manager in the form of an organization or company that is legally and financially distinct from the hedge fund and its portfolio of assets . Many investment managers utilize service providers for operational support. Service providers include prime brokers, banks, administrators, distributors, and accounting firms. Prime brokers clear trades and provide leverage and short-term financing . They are usually divisions of large investment banks. The prime broker acts as
8664-560: The first African-American woman to be awarded the Berggruen Prize. In their statement, the Berggruen Prize jury described her work and writing which has identified often overlooked arenas of political action and explored injustice and resistance to it. Berggruen Prize Essay Competition In 2024, The Berggruen Institute announced the annual Berggruen Prize Essay Competition. The competition welcomes essay submissions in English and Chinese, awarding $ 25,000 per language category. By delving into fundamental philosophical inquiries relevant to both
8778-600: The first decade of the 21st century, hedge funds gained popularity worldwide, and, by 2008, the worldwide hedge fund industry held an estimated US$ 1.93 trillion in assets under management (AUM). However, the financial crisis of 2007–2008 caused many hedge funds to restrict investor withdrawals and their popularity and AUM totals declined. AUM totals rebounded and in April 2011 were estimated at almost $ 2 trillion. As of February 2011 , 61% of worldwide investment in hedge funds came from institutional sources. In June 2011,
8892-471: The first hedge fund. The sociologist Alfred W. Jones is credited with coining the phrase " hedged fund" and is credited with creating the first hedge fund structure in 1949. Jones referred to his fund as being "hedged", a term then commonly used on Wall Street to describe the management of investment risk due to changes in the financial markets . Jones also developed the popular 2-and-20 structure of hedge funds, in which hedge funds charged investors
9006-430: The former CEO of Google. The sessions produced a bill to reform California's referendum system, which then California governor Jerry Brown signed into law in 2012. Through the Institute, Berggruen has launched several government reform projects, including the 21st Century Council, which is focused on global governance challenges, the Council for the Future of Europe , to support work on European integration . Members of
9120-585: The four main categories, there are several strategies that do not entirely fit into these categories. For an investor who already holds large quantities of equities and bonds, investment in hedge funds may provide diversification and reduce the overall portfolio risk. Managers of hedge funds often aim to produce returns that are relatively uncorrelated with market indices and are consistent with investors' desired level of risk. While hedging can reduce some risks of an investment it usually increases others, such as operational risk and model risk , so overall risk
9234-645: The fund and investors. According to the Financial Times , "big hedge funds have some of the most sophisticated and exacting risk management practices anywhere in asset management." Hedge fund managers that hold a large number of investment positions for short periods are likely to have a particularly comprehensive risk management system in place, and it has become usual for funds to have independent risk officers who assess and manage risks but are not otherwise involved in trading. A variety of different measurement techniques and models are used to estimate risk according to
9348-654: The fund trades in diversified markets, or sector specialists such as "systematic currency", in which the fund trades in foreign exchange markets or any other sector specialisation. Other sub-strategies include those employed by commodity trading advisors (CTAs), where the fund trades in futures (or options ) in commodity markets or in swaps. This is also known as a "managed future fund". CTAs trade in commodities (such as gold) and financial instruments, including stock indices . They also take both long and short positions, allowing them to make profit in both market upswings and downswings. Most global macro managers tends to be
9462-436: The fund's net asset value , whereas private-equity funds generally invest in illiquid assets and return capital only after a number of years. Other than a fund's regulatory status, there are no formal or fixed definitions of fund types, and so there are different views of what can constitute a "hedge fund". Although hedge funds are not subject to the many restrictions applicable to regulated funds, regulations were passed in
9576-464: The fund's leverage, liquidity, and investment strategy. Non-normality of returns, volatility clustering and trends are not always accounted for by conventional risk measurement methodologies and so in addition to value at risk and similar measurements, funds may use integrated measures such as drawdowns . In addition to assessing the market-related risks that may arise from an investment, investors commonly employ operational due diligence to assess
9690-482: The future will collaborate with forecasted natures and technologies. The Future of Capitalism program seeks to envision new models and mechanisms for managing and legitimating market economies while addressing the current environmental and distributional challenges. It has two main programs: the Universal Basic Assets program which explores ways to equip individuals with universal access to an asset base that
9804-418: The hedge fund management firms with the greatest AUM were Bridgewater Associates (US$ 58.9 billion), Man Group (US$ 39.2 billion), Paulson & Co. (US$ 35.1 billion), Brevan Howard (US$ 31 billion), and Och-Ziff (US$ 29.4 billion). Bridgewater Associates had $ 70 billion in assets under management as of March 2012 . At the end of that year, the 241 largest hedge fund firms in
9918-402: The hedge fund manager must identify an upcoming event that will increase or decrease the value of the company's equity and equity-related instruments. Other event-driven strategies include credit arbitrage strategies, which focus on corporate fixed income securities; an activist strategy, where the fund takes large positions in companies and uses the ownership to participate in the management;
10032-539: The management fee from larger funds can generate a significant part of a manager's profits, and as a result some fees have been criticized by some public pension funds, such as CalPERS , for being too high. The performance fee is typically 20% of the fund's profits during any year, though performance fees range between 10% and 50%. Performance fees are intended to provide an incentive for a manager to generate profits. Performance fees have been criticized by Warren Buffett , who believes that because hedge funds share only
10146-456: The market overall. Hedge fund managers can use various types of analysis to identify price discrepancies in securities, including mathematical, technical , or fundamental techniques. Relative value is often used as a synonym for market neutral , as strategies in this category typically have very little or no directional market exposure to the market as a whole. Other relative value sub-strategies include: In addition to those strategies within
10260-592: The market, the particular instrument use, the market sector the fund specializes in ( e.g. , healthcare), the method used to select investments, and the amount of diversification within the fund. There are a variety of market approaches to different asset classes , including equity , fixed income , commodity , and currency . Instruments used include equities, fixed income, futures , options , and swaps . Strategies can be divided into those in which investments can be selected by managers, known as "discretionary/qualitative", or those in which investments are selected using
10374-663: The museum. In 2006 he purchased the Chris Burden kinetic sculpture Metropolis II and lent it on a long-term loan basis to LACMA. In 2021, Berggruen signed a preliminary agreement to purchase the Casa dei Tre Oci on the Giudecca island in Venice, with plans to use the space to host symposia, workshops and exhibitions in partnership with major museums. In 2022, he also bought the Palazzo Diedo in
10488-413: The one-year Treasury bill rate plus a spread. A "soft" hurdle means the performance fee is calculated on all the fund's returns if the hurdle rate is cleared. A "hard" hurdle is calculated only on returns above the hurdle rate. By example the manager sets a hurdle rate equal to 5%, and the fund return 15%, incentive fees would only apply to the 10% above the hurdle rate. A hurdle is intended to ensure that
10602-499: The opportunity for larger gains is weighed against the possibility of greater losses. Hedge funds employing leverage are likely to engage in extensive risk management practices. In comparison with investment banks , hedge fund leverage is relatively low; according to a National Bureau of Economic Research working paper, the average leverage for investment banks is 14.2, compared to between 1.5 and 2.5 for hedge funds. Some types of funds, including hedge funds, are perceived as having
10716-451: The popular legitimacy that is typical of Western governments. Published in English, the book was later translated into Spanish, Portuguese, and other languages. The Financial Times named it as one of their "Best Books of 2012". In 2019, Berggruen and Gardels published their second book, Renovating Democracy: Governing in the Age of Globalization and Digital Capitalism . The authors advocate for
10830-481: The possibility that the merger or acquisition will not go ahead as planned; hedge fund managers will use research and analysis to determine if the event will take place. Special situations are events that impact the value of a company's stock, including the restructuring of a company or corporate transactions including spin-offs , share buy backs , security issuance/repurchase, asset sales, or other catalyst-oriented situations. To take advantage of special situations
10944-474: The present and future, it aims to broaden the scope of our quest for fresh ideas and new paradigms during unprecedented times. This contest complements the Berggruen Prize for Philosophy & Culture which acknowledges significant lifelong contributions. In June 2018, the Berggruen Institute announced plans to house a China Center at Peking University , an interdisciplinary research center founded with
11058-491: The profits and not the losses, such fees create an incentive for high-risk investment management. Performance fee rates have fallen since the start of the credit crunch . Almost all hedge fund performance fees include a " high water mark " (or "loss carryforward provision"), which means that the performance fee only applies to net profits ( i.e. , profits after losses in previous years have been recovered). This prevents managers from receiving fees for volatile performance, though
11172-427: The public square for the 21st century. The Geopolitics and Globalization Program, home to the 21st Century Council, focuses on two projects: Thriving in a Transactional International Order, which is aimed at building a forward-looking model of the international system that focuses on liberal outcomes without relying on the revival of anachronistic institutions, and Promoting US-China Dialogue on AI & Security, which
11286-512: The restructuring of democratic government frameworks to ensure adequate living conditions for everyone. They argue that in a time where jobs are being replaced by technology, employment should not determine if a person's basic needs are accounted for. Berggruen has committed to giving the majority of his wealth through the Nicolas Berggruen Charitable Trust. In 2010, he joined Bill Gates and Warren Buffett 's The Giving Pledge to address some of society’s most pressing problems. Berggruen's father
11400-416: The risk that error or fraud at a hedge fund might result in a loss to the investor. Considerations will include the organization and management of operations at the hedge fund manager, whether the investment strategy is likely to be sustainable, and the fund's ability to develop as a company. Since hedge funds are private entities and have few public disclosure requirements, this is sometimes perceived as
11514-454: The same types of risk as other investment classes, including liquidity risk and manager risk. Liquidity refers to the degree to which an asset can be bought and sold or converted to cash; similar to private-equity funds, hedge funds employ a lock-up period during which an investor cannot remove money. Manager risk refers to those risks which arise from the management of funds. As well as specific risks such as style drift , which refers to
11628-428: The state's debt and safeguard against economic downturns. The LA Committee, introduced in 2016, is made up of Los Angeles and California residents from across sectors whose aim is to assist the institute in building a community of support and creating impactful programs in Los Angeles. The committee is chaired by Geoffrey Cowan , the founding president of Annenberg Foundation Trust at Sunnylands. The Sense LA program
11742-506: The time the most ever paid for a home at an auction. The property was renamed the Beverly Estate in 2022. He dated Noor Alfallah in 2018. [REDACTED] Media related to Nicolas Berggruen at Wikimedia Commons Berggruen Institute The Berggruen Institute is a Los Angeles-based think tank founded by Nicolas Berggruen . Berggruen Institute was formed in 2010 by founder Nicolas Berggruen and co-founder Nathan Gardels as
11856-490: The top manager earned $ 3 billion, the tenth earned $ 210 million, and the 30th earned $ 80 million. In 2011, the average earnings for the 25 highest-compensated hedge fund managers in the United States was $ 576 million while the mean total compensation for all hedge fund investment professionals was $ 690,786 and the median was $ 312,329. The same figures for hedge fund CEOs were $ 1,037,151 and $ 600,000, and for chief investment officers were $ 1,039,974 and $ 300,000, respectively. Of
11970-404: The underlying investment opportunity and risk are associated with an event. An event-driven investment strategy finds investment opportunities in corporate transactional events such as consolidations, acquisitions , recapitalizations , bankruptcies , and liquidations . Managers employing such a strategy capitalize on valuation inconsistencies in the market before or after such events, and take
12084-743: The use of leverage and derivative instruments . In the United States, financial regulations require that hedge funds be marketed only to institutional investors and high-net-worth individuals . Hedge funds are considered alternative investments . Their ability to use leverage and more complex investment techniques distinguishes them from regulated investment funds available to the retail market, commonly known as mutual funds and ETFs . They are also considered distinct from private equity funds and other similar closed-end funds as hedge funds generally invest in relatively liquid assets and are usually open-ended . This means they typically allow investors to invest and withdraw capital periodically based on
12198-714: The world in Tel Aviv , Berlin, Istanbul , and the American West Coast. In 2012, the company owned and operated a portfolio of more than 90 buildings in Berlin, Germany. In Tel Aviv, Berggruen worked with architect Richard Meier to design a luxury-apartment complex on Rothschild Boulevard . In 2014, the real estate investments became the foundation of Berggruen's NBP Capital, specializing in investment management, development, construction, hospitality, and property management services. In 2020, NBP Capital's market value exceeded $ 1 billion. In 2012, through Berggruen Holdings, Berggruen
12312-405: The world. In 2020, The WorldPost was changed to a digital and print magazine and named Noema Magazine . Noema publishes essays, interviews, reportage, videos, and art on several topics including culture, technology, philosophy, governance, geopolitics, and economics. As of 2021, Nathan Gardels is editor-in-chief of Noema, and Kathleen Miles is the executive editor. The Berggruen Institute
12426-637: Was a primary investor and developer in Newark, New Jersey's Teachers Village . Designed by Richard Meier , the project revitalized five blocks of downtown Newark. In 2013, Berggruen Holdings invested in the East Africa Exchange , a privately funded regional, agricultural commodities exchange in East Africa . The exchange aims to increase regional market efficiency and ensure higher incomes for farmers, especially smallholder farmers. Berggruen said, "Agriculture
12540-501: Was an influential art dealer and collector who left a legacy of donations to various museums. His youngest brother, Olivier Berggruen , is an art historian and curator. An avid collector in the early 1980s and 1990s, while living in NYC, Berggruen began collecting Andy Warhol and Jean-Michel Basquiat . In his approach to collecting, Berggruen stated: "Collecting should be guided by your eye, your tastes. It's an intellectual pursuit." Berggruen
12654-583: Was appointed by Harvard's Center for European Studies as its first non-resident Senior Fellow. He was named a member of the Brookings Institution 's International Advisory Council and the NYU President's Global Council. In 2014 he was named a member of the Leadership Council at Harvard Kennedy School 's Center for Public Leadership , a member of Harvard University 's Global Advisory Council, and
12768-679: Was considered one of the world's greatest art collectors, having donated and sold works by Picasso , Klee , and Matisse to the Berggruen Museum in Berlin, the Metropolitan Museum of Art in New York City, and the National Gallery in London. His mother played the female lead in the 1948 German Holocaust film Long Is the Road . Although born in France, Berggruen's first language is German. He
12882-528: Was unveiled in 2019 to be a tool for social cohesion and public participation in Los Angeles using the power of art and the city's collective intelligence. In September 2019 it launched its first project with the Korean American Federation to develop formal and actionable recommendations for the city's master urban plan, a field test in participatory representative democracy. Sense LA is led by Berggruen fellow Gabriel Kahan. The Institute's core work
12996-419: Was valued at more than 1.5 billion euros. In 2010, Nicolas founded the Berggruen Institute , an independent think tank aiming to reshape political and social institutions on governance, economic systems, globalization, geopolitics, and technology. To address these issues, Berggruen invested US$ 100 million into the Institute, subsequently endowing it with an additional US$ 500 million in 2016. Berggruen launched
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