Chipotle recipe is deep inside activist cookbook 7 Sep 2016 Pushy investor Bill Ackman bought a 10 pct stake in the struggling burrito chain, but hasn't revealed his plans. Previous stakes in Burger King, McDonald's and Wendy's have few obvious parallels. Creative finance can't fix Chipotle's real problem: reviving a damaged brand.
ValueAct’s Morgan Stanley logic goes only so far 16 Aug 2016 The activist's $1 bln-plus stake comes with support for CEO James Gorman. Fund boss Jeff Ubben reckons investors just don't get the firm. In fact, they fully grasp its volatile, low returns. There's room for the stock to rise. But the serious upside case involves radical change.
Republican donors reach for yield beyond Trump 21 Jul 2016 Wealthy hedge-fund bosses like Paul Singer and other Wall Street financiers wasted millions betting on candidates who lost to the real-estate mogul. Rather than back the GOP nominee, they're giving to congressional races instead. The risk-adjusted return could be higher.
Ackman and Herbalife both win a Pyrrhic victory 15 Jul 2016 Pershing Square's claim that the $6.4 bln supplements seller deceived customers was justified, but the activist hedge fund lost a four-year campaign to label it a pyramid scheme. Herbalife's victory, however, comes with painful settlement costs and forced business-model changes.
Facebook has new free-speech problem: Peter Thiel 25 May 2016 The venture capitalist has been revealed to be a secret backer of Hulk Hogan’s lawsuit against Gawker. That calls into question his media neutrality just as the social network is under fire for bias. As a director, Thiel’s First Amendment position is at odds with Facebook’s.
Puerto Rico fix gives everyone something to hate 19 May 2016 U.S. lawmakers’ latest effort to provide a framework for the island to restructure $70 bln of debt would impose strong oversight. While it appears to bolster senior creditors’ claims, holdouts could end up with a bigger haircut than they’d like. That makes it a decent compromise.
Pushy investors test herd mentality in Washington 19 May 2016 The likes of Bill Ackman and Dan Loeb have been piling into the same stocks and now are joining forces to fight a perception they’re short-term focused. Congress could use the education, but is as excited about a call to do with Wall Street as boards are to hear from activists.
Whiff of hedge-fund fear overpowers animal spirits 12 May 2016 Alpha-seekers assembled in Las Vegas for the annual industry SALT shindig sound mostly gloomy. That won’t change the minds of investors already inclined to push for lower fees after a run of poor returns. Omega’s Leon Cooperman did, however, offer some 46-year-old solace.
Shaming VW could be pushy TCI’s best tactic 6 May 2016 Chris Hohn’s hedge fund has tackled the likes of Japan Tobacco and Coal India. That puts the 61 bln euro German carmaker in some bad company. Yet complaints of excessive pay, weak governance and inefficient operations are not new. Only VW’s controlling owners can force change.
Steve Cohen returns as beau of Wall Street ball 3 May 2016 The billionaire investor starred at Michael Milken’s annual bash, warning global grandees that overcrowding in the hedge-fund world is lowering returns. Now managing $11 bln of mostly family money, his joviality seemed justified: U.S. watchdogs left him bruised but unbowed.
Shrinkage may be just what subpar hedge funds need 2 May 2016 Warren Buffett is well ahead with his bet that the S&P 500 will beat them over a decade. In the first quarter, the $3 trln industry suffered its largest outflow in years. It could be for the best. The high-fee model is better suited for the periphery than the mainstream.
Credit Suisse wise to flaunt Brexit neutrality 8 Apr 2016 The Swiss bank has banned staff from events and debates tied to the UK’s EU referendum. Overt partisanship might have unnerved some Credit Suisse clients. As Switzerland renegotiates its own trading terms with Europe, Brexit impartiality also makes sense for its domestic banks.
Pfizer-Allergan is dead, merger arb isn’t 6 Apr 2016 Some big funds were caught out by the failed $160 bln pharmaceutical merger, the second such “Arbageddon” after AbbVie-Shire. Embarrassing as that is, the business of betting on deals can withstand the shock: arb performance is okay, and big flops like this can be easily avoided.
David Tepper exposes tax-avoidance paradox 5 Apr 2016 The billionaire boss of hedge-fund firm Appaloosa is relocating to Florida. Though he’ll pay less tax, it’s rarely the motivation for such migration. Physically moving to save money seems easy enough, but doing so on paper with overseas M&A and offshore accounts is even easier.
An activist loss marks a win for all shareholders 16 Mar 2016 The board at U.S. restaurant chain Bob Evans, a third of which was installed by pushy investor Thomas Sandell, nixed his call for a breakup. The law demands fealty to the company first. Seeing representatives of aggressive owners take that duty seriously is a reassuring sign.
Permanent capital is Ackman’s smartest trade 16 Mar 2016 His $11 bln Pershing Square fund is hurting from Valeant’s flameout. Ackman has had plenty of wins, too, though. One of the biggest was locking up over $4 bln of investment that can’t be withdrawn. That makes it far less likely short-term troubles can force him off the field.
United Airlines board dogfight could be win-win 8 Mar 2016 Two hedge funds are gunning to get six new directors appointed, including a retired Continental boss. It’s a headache for CEO Oscar Munoz as he returns from sick leave. Despite heated rhetoric, though, a compromise on a revamped board should suit both sides better than a battle.
Review: A love letter to shareholder poison pens 4 Mar 2016 In “Dear Chairman,” hedge fund manager Jeff Gramm unearths prickly missives fired off to boards to chronicle decades of pushy investing. The book, which features Benjamin Graham, Warren Buffett and Carl Icahn, is a breezy but sophisticated guide for today’s activist era and beyond.
Schroders picks bad time for not-great governance 3 Mar 2016 Michael Dobson will stand down as chief executive of the UK asset manager and become non-executive chairman. That’s not good practice. Schroders has reasons for the move, but given the tough environment for fund managers, there are good grounds for fresh blood.
Argentina reaches endgame with bond adversaries 19 Feb 2016 A U.S. judge says he will allow the Latin American nation to resume paying creditors by March if Argentina’s Congress cooperates. He also praised President Mauricio Macri for helping forge a deal. Settlement looks like the only option for hedge fund Elliott and fellow holdouts.