570 hedge funds are members of the $1 billion club
The top hedge fund managers are dominating the industry (Chief Investment Officer)
Data released by Preqin shows 92% of hedge fund assets are controlled by the top 11% of managers. Interestingly, of the 570 funds that topped the $1 billion in assets under management plateau, those established before 1992 were the largest, averaging $20 billion AUM. Ray Dalio's Bridgewater is the world's largest hedge fund with $169.5 billion AUM, dwarfing second placed AQR Capital Management, which has $64.9 billion AUM.
FINRA is trying to change broker compensation (Wealth Management)
The Financial Industry Regulatory Authority is trying to make it easier for investors to understand how they would be impacted by their broker moving to another firm. FINRA specifically wants investors to understand how their broker would be financially compensated if their account was moved to the new firm, what assets can't be transferred and the cost of selling those assets, as well as how the products of the new firm differ from those of the old firm. Comments on the changes will be accepted through July 13, 2015.
US corporate pensions became less solvent in 2014 (Reuters)
UBS says US corporate pension funds are nearing dangerous levels as unfunded liabilities grew by more than $180 billion in 2014. The solvency ratio of retirement schemes of Russell 1000 companies tumbled to 81 percent last year, from 87 percent in 2013. The number being so close to the 80 percent level should put the entire corporate pension space on alert. UBS suggests yields on long-dated US Treasuries could fall by as much as 40 basis points as private pensions plow money into the space to meet their future obligations.
Why Yellen is in no rush to hike rates (Bloomberg)
Market participants are widely expecting the Federal Reserve to raise interest rates later this year. However, a new survey from the Fed highlights why the central bank is in no hurry. Respondents were asked if they would like to work more, less, or the same amount of hours if their wage was unchanged, and 36% responded by saying they wanted more work. The data highlights the issue of underemployment, suggesting wage pressure is still not where the Fed wants it to be. This could result in the central bank holding off on a rate hike for the time being.
The IRS had a data breach (Fox Business)
About 100,000 taxpayers were victims of a data breach at the Internal Revenue Service. Fox Business reports, "The breach at the IRS is particularly onerous because the information included on tax returns is especially detailed and personal - information that includes back account numbers, childrens' names and ages, health care expenses, addresses of various residences, etc…" This type of breach is particularly troubling, because the information that was stolen is used as an added measure of security for password protected accounts. The IRS believes the data was stolen in an attempt to submit false returns for next year's filings.