EcoR1 Goes Bottom-Fishing (Institutional Investor)
The biopharma and life sciences hedge fund firm is betting big on companies whose stocks have plummeted after reporting bad news. In recent weeks, EcoR1 Capital has sharply boosted its stake in at least four of its major holdings and established a sizable new position in another company, according to recent 13G filings. Since the trades were made in July, some of them won’t show up in the firm’s second-quarter 13F filing when it’s made public around mid-August.
Walmart Buys Out $1.4 Billion Tiger Global Stake in India’s Flipkart, Wall Street Journal Reports (Reuters)
Walmart (WMT.N) has taken further control of the Indian e-commerce firm Flipkart by buying out hedge fund Tiger Global and venture capital firm Accel’s remaining stakes, according to media reports on Monday. Walmart paid $1.4 billion to buy the remaining Flipkart shares owned by Tiger Global in recent days, valuing the Indian company at about $35 billion, the Wall Street Journal reported, citing a letter the fund sent to investors. This is down from the near-$38 billion valuation that Flipkart attained in 2021.
Redemptions at Odey AM Persist Two Months After Sexual Assault Claims (Financial News)
Funds with ties to Crispin Odey have continued to be battered by redemptions nearly two months after the hedge fund founder was hit by a string of sexual misconduct allegations. Investors have continued to pull cash from portfolios at Odey Asset Management and its subsidiary Brook Asset Management, according to data from Morningstar Direct. Odey’s Mayfair empire has been fighting for survival since a Financial Times investigation on 8 June unearthed claims of sexual harassment and sexual assault against the City titan stretching back decades. Odey strenuously denies the claims.
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The Stock Market’s Fear Gauge Just Hit a 42-Month Low. Investors are Ignoring a Load of Risks, Hedge Fund Manager Says (Business Insider)
Investors are facing a bunch of risks and challenges but by one measure, they appear more confident today than before the pandemic struck. Boaz Weinstein underlined how absurd that is in a Saturday post. “Yup, totally makes sense that financial market uncertainty is now less than pre Covid, Inflation, Ukraine, inverted yield curve, high European recession risk, moderate US recession risk, etc.,” Weinstein wrote sarcastically on X, formerly known as Twitter. The Saba Capital Management chief was referring to the CBOE Volatility Index, which on Friday notched its lowest weekly close since January 2020. The VIX is known as Wall Street’s “fear gauge” because it tracks the market’s expectations of stock-market volatility over the next month, based on the prices of put and call options.
Hedge Funds Target Closed-End Funds With Arbitrage Plays (The Wall Street Journal)
Hedge funds say it’s an ideal time for a long-running activist investor strategy: closed-end fund arbitrage. Closed-end funds are mutual funds that issue a limited number of shares when they go to market. Unlike open-end funds, which are far more common, closed-end funds don’t issue or redeem new shares based on demand. Closed-end fund shares are traded on exchanges, often for more or less than the value of their underlying assets.
