China’s soccer dreams lead to strange bedfellows 28 Mar 2017 Elliott is saving a Chinese takeover of Italian club AC Milan with 300 mln euros of funding, Reuters says. The U.S. hedge fund must be driving a hard bargain. But the buyers may have been boxed in by Chinese curbs on moving capital and the prospect of losing a hefty down-payment.
Eton Park pegs hedge-fund cycle at 13 years 23 Mar 2017 Eric Mindich set a possible record raising over $3 bln to launch his fund in 2004. After a dismal 2016 cut the firm’s assets to $7 bln, the ex-Goldman star is following other big names who could no longer make the high-fee model work and closing down. Good luck to lesser mortals.
Hedge fund creative destruction has further to go 8 Mar 2017 Investors are trimming the number of funds they put money in, according to a bank survey. Weak performance has made investors choosier, and writing bigger tickets helps them force down fees. Yet they are still probably spread too thin. The cull in the $3 trln industry isn’t over.
Bridgewater’s radical reality is a revolving door 1 Mar 2017 Ray Dalio is relinquishing management duties at the hedge-fund goliath to focus on investing. His co-CEO also stepped down after just 10 months on the job. The $160 bln firm promises radical transparency and truth. Investors may feel shortchanged on both counts.
Pared Tudor fees still in hedge-fund royalty zone 28 Feb 2017 Paul Jones' $10 bln firm, once among the most successful and expensive, is cutting fees to 1.75 pct of assets and 20 pct of gains. That's finally inside the archetypal "2-and-20" but it remains above average. Like other hedgies, the veteran needs to rediscover elusive returns.
Warren Buffett risks losing his own winning wager 26 Feb 2017 The Berkshire Hathaway boss devotes a big portion of his latest missive to extolling the virtue of index funds. He has proved his point in a successful bet with a market pro that hedge funds wouldn't overcome the S&P 500. By one metric, Buffett is struggling to do the same.
Review: Steven Cohen’s enduring edge 24 Feb 2017 Sheelah Kolhatkar’s “Black Edge” is a compelling tale of the U.S. government’s decade-long failed attempt to charge the billionaire fund boss with insider trading. As Cohen prepares to open a new firm and politicians embrace deregulation, the epic struggle is clearly in the past.
Buying Co-op Bank calls for leap of faith 13 Feb 2017 The troubled UK lender has put itself on the block despite saying it is short of capital. Viewed generously, the underlying Co-operative Bank might be worth 200 million pounds. But any scale-hungry peers would have to overlook legacy problems that militate for a discount.
Dan Loeb gets a little too bullish on bank stocks 8 Feb 2017 The high-profile hedge-fund manager reckons rate hikes will bolster lending and trading enough to jack up returns before tax cuts or deregulation. But sticky rules, the Trump rally's fragility and the fuzzy link between tighter monetary policy and fatter earnings warrant caution.
Activist gets CSX train to run early 19 Jan 2017 Ex-Pershing Square partner Paul Hilal wants departing Canadian Pacific CEO Hunter Harrison to work his cost-cutting magic at the rival railroad firm. Grinding CSX's expenses down to a similar level could be worth more than $7 bln. Much of that value has already left the station.
Regulators try to save fund lemmings from selves 12 Jan 2017 Customers of open-ended investments rely on false promises of liquidity that tend to evaporate in market panics. The Financial Stability Board has some ideas for addressing the ensuing risks. Its ideas are sound, but would be superfluous if fund managers did their jobs.
Hot Platinum returns turn into alleged fool’s gold 19 Dec 2016 U.S. prosecutors arrested top executives of Platinum Partners on fraud charges. The $1.7 bln hedge-fund firm posted years of outsized gains on illiquid investments before seeking bankruptcy protection for two funds in October. Like Madoff, the case screams caveat emptor.
Elliott’s cunning trap for GE risks backfiring 21 Oct 2016 The hedge fund has built up stakes in two 3D printing firms that the U.S. industrial giant wants to buy for a combined $1.4 bln. This gives Elliott enough leverage to extract a higher price. But GE is not budging. The deals are small and caving in to such tactics has its costs.
Shadow activist takes flyer at Colombian airline 6 Oct 2016 Paul Singer's investment firm is urging a sale of Avianca, where it isn't directly an investor. Elliott wants to protect the value of the stake it was offered as collateral for loans it extended to Avianca's controlling shareholder. The logic is clear but the method is fuzzy.
Elliott’s Samsung attack may have staying power 5 Oct 2016 The hedge fund wants the electronics giant to restructure and pay a $27 bln special dividend. Foreign activists often do poorly in Asia. But Elliott nearly won a previous battle with the family-run conglomerate. Samsung's flammable smartphone battery exposes a new vulnerability.
Uncle Sam adds bite to overseas anti-bribery bark 4 Oct 2016 Och-Ziff just settled a U.S. kickback case in Africa. The Feds are also probing JPMorgan, Microsoft and others for possible corruption abroad. With extra resources behind them, authorities finally have more heft to force multinationals to get their far-flung operations in order.
Cox: Stock picking for a “Trump Victory Portfolio” 28 Sep 2016 The U.S. presidential race is tight after the first debate between the two candidates and only six weeks until the election. Investors will have bigger asset-allocation decisions to make in the event Trump wins. A new fund might start by shorting Amazon and going long Greyhound.
Richard Perry calls tough time for hedge funds 27 Sep 2016 Industry-wide, decent returns are hard to find even before fees – which some firms, like Brevan Howard, are cutting. Perry, a former star once in charge of $15 bln of assets, is giving up. Management turnover hasn't helped, but the veteran clearly expects headwinds to continue.
Harvard struggles to overcome its hedge-fund past 23 Sep 2016 The Ivy League university's $36 bln endowment lost 2 pct in the year to June, falling short of its yardsticks and rival Yale's 3.4 pct gain. More than a decade after the champion of its partially in-house operation quit, Harvard faces problems of leadership and investment style.
Hedge-fund fee reality will set in only slowly 22 Sep 2016 The archetypal 2-and-20 structure isn't actually the norm. Even slightly lower charges, though, look way too high against the feeble returns of late. New data suggests fees are drifting lower, as they should. There are, though, plenty of reasons to think the process will drag.