William Ackman’s plan to wage a proxy fight to install a new chief executive officer at Canadian Pacific Railway Ltd. (CP) pivots on the legacy of the CEO who once led the carrier’s larger rival. New directors “supportive of a change in leadership” would back the hiring of Hunter Harrison, the retired Canadian National Railway Co. (CNR) chief, Ackman said yesterday in an interview. His Pershing Square Capital Management LP is Canadian Pacific’s biggest shareholder. Harrison, 67, more than tripled net income during seven years running Canadian National with an approach known as “precision railroading.” Ackman has put the retired CEO at the center of his turnaround plan for Canadian Pacific, the least- efficient major railroad in North America.
Berkshire’s Combs Hands Gain To Buffett By Increasing Bets When Picks Slip (Bloomberg)
Todd Combs, Warren Buffett’s apprentice stock picker at Berkshire Hathaway Inc. (BRK/A), posted gains on his first equity bets at the company by buying when markets fell and increasing stakes in investments that declined. Purchases of seven stocks by Combs in the nine months ended Sept. 30 advanced almost 14 percent as of Dec. 31, according to data compiled by Bloomberg. The Standard & Poor’s 500 Index was little changed last year. Combs’s results were propelled by a 51 percent surge in holdings of MasterCard Inc. (MA), the world’s second-biggest payments network, and a 28 percent advance in an investment in retailer Dollar General Corp.
This Hedge Fund Has Made A Fortune On Hepatitis C Companies (WSJ)
One hedge fund is on a winning streak when it comes to takeovers of companies developing hepatitis C treatments. QVT Financial, started by ex-Deutsche Bank prop traders, is among the largest shareholders of Inhibitex, which agreed over the weekend to a $2.5 billion acquisition by Bristol-Myers Squibb. According to regulatory filings, QVT first bought shares for about $1 each in 2009, and also took warrants to acquire millions more shares at $1.46 each. That means QVT’s stock is worth about $105 million at Bristol-Myers’s takeover price, or very roughly 25 times what QVT paid for its investment in 2009. Now the slightly bad news: QVT missed out on an even bigger windfall because it sold a block of Inhibitex last fall, just months before the company’s sale.
Jim Rogers, George Soros, And Warren Buffett Are All Bullish About Euro Assets (Insider Monkey)
Jim Rogers, George Soros, and Warren Buffett are doing the same thing together –bargain-hunting euro assets. Jim Rogers said publicly on Tuesday last week that the euro and Swiss franc will show buying opportunities in 2012. Although in the past few weeks he had sold some euros, recently he began to consider buying back. Rogers explained that there are two reasons for him to long the euro. First, there is a great bubble in U.S. dollar. The best opportunity to buy dollar was two years ago. Secondly, there are too many people that were bearish about the euro, thus the euro is over-shorted compared with the U.S. dollar.
Best Hedge Funds List Leader A Tiger Alum (Bloomberg)
Charles Payson Coleman III, known as Chase, is as close as one gets to American aristocracy. A descendent of Peter Stuyvesant, the last Dutch governor of New York, Coleman was raised in Glen Head, a posh enclave on New York’s Long Island. He went to Deerfield Academy in Massachusetts and then, like his father and grandfather, attended Williams College, where he played lacrosse. He graduated in 1997 and went to work as a technology analyst for Julian Robertson, a godfather of the hedge-fund industry, at Tiger Management LLC, Bloomberg Markets reports in its February issue. Coleman had a connection at Tiger. He had grown up with Robertson’s son, Spencer, who lived in nearby Locust Valley. Soon after Robertson, 79, closed his fund in 2000, he handed his son’s former playmate more than $25 million to manage. Coleman was 25 at the time.
Icahn Up 35% (FINalternatives)
Carl Icahn‘s decision to get out of the hedge fund business in favor of managing his own money cost his former clients dearly last year. Icahn’s Icahn Capital soared 35% in 2011, he told the New York Post. The word comes eight months after Icahn returned all outside capital, telling clients that “the losses that were incurred by investors in our fund in 2008 bothered me a great deal more, in many respects, than my own losses.” The firm had already suffered massive redemptions during the financial crisis.
Stenham AM Launches New Global Macro Fund (HFMweek)
Stenham Asset Management, the $2.7bn fund of hedge funds manager, has launched Stenham Helix, a new global macro FoHF. The Helix fund aims to invest in similar managers to those used by Stenham’s flagship macro fund, Stenham Trading, which has made annualised returns of 9.07% since its inception in the 1980s. However, Helix will focus on funds which offer better liquidity, thus allowing Stenham to offer monthly liquidity with 35 days’ notice.
Rajaratnam Insider Case Aided By Slaine’s Help In Goffer Probe, U.S. Says (Bloomberg)
David Slaine, a former Galleon Group LLC employee who pleaded guilty to criminal charges, was crucial to the prosecution of Zvi Goffer’s insider-trading ring and helped lead investigators to Raj Rajaratnam and Primary Global Research LLC, U.S. prosecutors said. Slaine wore a wire to record dozens of conversations with Goffer and others, helping to spur what became the biggest probe of insider trading at hedge funds, prosecutors from the office of U.S. Attorney Preet Bharara in Manhattan said in a letter to U.S. District Judge Richard Sullivan today. Calling Slaine’s cooperation “nothing short of extraordinary,” the government asked for leniency when he’s sentenced.
Warren Buffett Will Be On Chinese Internet Spring Festival (Insider Monkey)
Hedge fund billionaire, investment tycoon Warren Buffett will be on the annual Chinese Internet Spring Festival and meet millions of Chinese audiences, disclosed by Jiuping Wang, executive producer of Chinese Spring Festival in 2012.
Henderson Fund Sticks With Bets After 42 Pct Tumble (Reuters)
The manager running Henderson Global Investors’ (HGGH.L) equity hedge fund is sticking with his bets on oil and gas and mining shares, despite the fund losing more than 40 percent in 2011 after a number of mistimed leveraged punts. Stephen Peak’s European Absolute Return Fund, which wagers money on stock prices rising or falling, fell 42 percent versus around an 8 percent drop in the HFRI Equity Hedge (Total) Index. Peak, who is also Head of Pan European Equities at Anglo-Australian fund manager Henderson, made leveraged bets, which involve borrowing money to increase the size of positions, that share prices would rise, including oil giant BP (BP.L).
Hedge Funds Sit Out Rally With Speculation on Stock Gains Close to ’09 Low (Bloomberg)
U.S. stock futures rose, indicating the Standard & Poor’s 500 Index will advance for a second day, after Alcoa Inc. (AA)’s revenue beat analysts’ estimates and investors speculated China may act to spur growth. A gauge of hedge-fund bullishness measuring the proportion of bets that shares will rise climbed to 44.5 last week from 43.9 at the end of 2011, holding close to the lowest level since 2009, according to International Strategy & Investment Group. Compared with the price of the S&P 500, managers’ so-called net exposure is close to the lowest since June 2008, the ISI data show. “Hedge funds have made massive mistakes,” George Feiger, chief executive officer of Contango Capital Advisors Inc., the San Francisco-based wealth management arm of Zions Bancorporation, said in a telephone interview on Jan. 6. He manages $3.3 billion at Contango and Western National Trust Co.
Former Goldman Trader Sze’s Asia Hedge Fund Down 6.8 Pct (Reuters)
A hedge fund set up by former Goldman Sachs (GS.N) trader Morgan Sze — the biggest launched in Asia in 2011 — lost 6.8 percent last year, two sources with direct knowledge of the matter told Reuters, as it was rattled by a sharp drop in Chinese shares. The Hong Kong-based multi-strategy hedge fund, Azentus, which can invest globally but focuses mainly on companies related to Asia, had a blockbuster start with assets of about $1 billion on April 1 last year and now manages $1.9 billion. Its performance is keenly watched in the regional industry.
Donor-Advised Funds ‘Double’ Bottom Line (WSJ)
Deb Wetherby, a San Francisco fee-based certified financial planner, has taken a closer look at the $500,000 in investments one of her clients had in a donor-advised fund invested in large- and small-cap U.S. stocks. Only a small number of donor-advised funds also have social impact investment screens or goals, but they are attracting more interest. For example, the socially responsible pool within Schwab Charitable, the second-largest national donor-advised fund by assets after Fidelity Charitable, has more than tripled to $7.5 million since its introduction in 2009. The pool is invested in the Parnassus Equity Income Fund (PRBLX). Schwab has also seen an uptick in clients with $250,000 or more seeking to invest in socially responsible hedge funds, venture capital deals and private equity funds–for example, a fund for timber conservation.
Tremblant Capital Reports Stake In Sodastream (HFN)
New York-based hedge fund Tremblant Capital now has a stake in the soda maker SodaStream. Tremblant announced a 9.8% stake in the Israeli-based company in late December, according to a filing with the Securities and Exchange Commission on Friday. That makes Tremblant Capital the second largest shareholder behind Fidelity Investments with more than 12%.
The Euro Is A Buy, Says Jim Rogers (Reuters Hedge World)
Jim Rogers says despite his doubts over the European Union, the euro currency is oversold. Rogers says he may actually add more of the currency to his portfolio while shorting European stocks.
“I own the euro,” Rogers says. “I was most delighted to see … in the press that there’s a huge short position. All the hedge funds are now short, short the euro. I was actually thinking about selling some of my euros, but now I’m thinking about buying more euros.”
2012 Outlook Bright For Hedge Funds, Jim Rogers On Stocks In 2012, Paulson Climbing Back And More (Reuters Hedge World)
