Highfields a warning to budding pushy shareholders 4 Oct 2018 The $12 bln behind-the-scenes activist is closing amid low returns that also hit rivals. Yet investors are still throwing money at the strategy. High-profile battles waged by funds from Third Point to CalSTRS grab headlines. But poor profits make steering clear a better bet.
M&A cash shells need more than star power 27 Sep 2018 Media mogul Haim Saban’s blank-check company found something to buy just a week before it would have had to hand back its cash to investors. The deal looks quite creative. The bigger test for so-called SPACs is how they perform long term. Their track record is spotty.
Spectre of the late 1930s haunts Ray Dalio 12 Sep 2018 The Bridgewater founder made positive returns in 2008 when few other asset managers did. Today, he tells Breakingviews, he worries about the U.S. deficit and debt pressures that could soon go critical. The risk of populism and conflict sounds eerily like the pre-war years.
Review: Barry Cohen is a hedge-fund Frankenstein 31 Aug 2018 The protagonist of “Lake Success,” Gary Shteyngart’s new novel, comprises equal parts of financiers like Paul Singer, Howard Marks and Mike Novogratz. Running from a Valeant-like scandal, he hits the road through America’s heartland in search of his moral compass.
Campbell lukewarm sale pitch is begging for a cook 30 Aug 2018 The $12 bln soup and snack company plans to sell its fresh and international food brands, and step up cost cuts on stagnant core brands. It’s leaving the door open for a sale, but that’s unlikely to appease activists like Dan Loeb. A focused auction would be a better approach.
Berkshire’s India deal is so wrong it’s right 27 Aug 2018 Warren Buffett’s company is taking a small stake in digital-payments firm Paytm. Indian tech doesn’t fit the Omaha sage’s playbook, but his outfit has $110 bln in cash and holdings like Kraft Heinz are flatlining. Letting his lieutenants place some bets on the future makes sense.
GAM plays canary in bond liquidity risk coalmine 2 Aug 2018 Redemption requests spiked after the Swiss hedge fund suspended one of its asset managers. Turning down such demands prevents less agile clients from being penalised. But the move highlights the industry-wide problem of how little it can take to gum up apparently liquid funds.
Activists finagle deal in toppy real-estate market 31 Jul 2018 Brookfield is buying Forest City, owner of a hodge-podge of assets including the New York Times building, for $11.4 bln. The 27 pct premium allows Starboard to exit with a profit. Rising rates and other heady markers mean the deal may signal a peak in property values, too.
Stock picker’s exit a sign of the hedge-fund times 23 Jul 2018 Leon Cooperman is parting with investors after nearly three decades to turn his Omega Advisors into a family office. The value investor was an anachronism in a field led by systematic giants like Ray Dalio’s Bridgewater. Going out while markets are on a high, at least, is shrewd.
Activism and stubbornness collide at SandRidge 18 Jun 2018 Carl Icahn’s fight with the $550 million oil driller will dominate its annual meeting this week. Neither has a straightforward plan for ending shareholders’ misery. Meanwhile a takeover by rival Midstates could slip away. The priority should be to get that deal off the ground.
Beware the rough end of the SPAC 13 Jun 2018 Blank-check companies are back in fashion, helped by a $550 million vehicle backed by Dan Loeb. These listings have changed since they first became popular a decade ago. Though the structures sound better, bad incentives can still leave long-term investors exposed.
Elliott didn’t get into activism to make friends 11 Jun 2018 Paul Singer’s hedge fund wants board seats at $31 bln utility Sempra, and has accused it of over-expanding. Presumably that includes the Oncor deal Elliott itself backed last year. Singer is arguably helping Sempra again, though the target’s board may not feel that way.
Hedge funds are unwitting crisis altruists 5 Jun 2018 It was they, not banks or asset managers, who set the Mexican peso’s level after the 2016 U.S. election and the pound’s after Brexit, a new study finds. The irony is hedge-fund returns have remained mediocre. It suggests price discovery is a social service more than a business.
UniCredit may be stuck with costly crisis capital 10 May 2018 The Italian bank should not be able to treat the proceeds of a 2009 hybrid issue as equity, a hedge fund argues. CEO Jean Pierre Mustier might prefer to get rid of the expensive instruments. But it’s hard to extract UniCredit from the transaction without upsetting investors.
Cox: Guns, nuns and funds get ready to rumble 8 May 2018 A governance skirmish is shaping up in the Arizona desert. The Catholic Church and big investors like BlackRock will converge on Sturm, Ruger’s annual meeting on Wednesday. A shareholder proposal from the sisters deserves consideration for business, not just moral, reasons.
Elliott weaves snare around subpar Athenahealth 7 May 2018 The healthcare-software firm is long on vision under founder Jonathan Bush, but it has been patchy on performance despite the activist’s presence. Elliott’s $6.9 bln bid, including debt, raises the pressure on the board to do more and may force other bidders out of the woodwork.
Capitalism shunts all else aside in Beverly Hills 2 May 2018 Markets are fine, volatility is modest and trade war isn’t a big deal, say delegates at junk-bond king Michael Milken’s annual L.A. summit. In other words, the freewheeling spirit Milken once embodied is back in vogue. Thank President Trump – and a dose of complacency.
Mooch returns to place that’ll have him: Wall St 30 Apr 2018 Anthony Scaramucci is heading back to SkyBridge, the investment firm he founded, after HNA dropped its bid. The Chinese conglomerate’s rationale for buying it was more absurd than his chaotic turn as a White House flack. With HNA out and the Mooch back in, order is restored.
Arconic is sorely testing Elliott’s mettle 30 Apr 2018 Investors wiped $2 bln off the parts maker’s value after it slashed its earnings outlook. Activist Elliott helped oust CEO Klaus Kleinfeld last year. But new boss Chip Blankenship faces the same old production snafus and aluminum price hikes. It’s looking like a long campaign.
Steinhoff payout may test South Africa reform zeal 27 Apr 2018 Hedge funds piled into 1.6 bln euros of the failed retailer’s bonds betting that its healthy South African unit will honour them. The fallout from Steinhoff’s collapse may make a payout politically tricky, and challenge new President Cyril Ramaphosa’s market-friendly credentials.