Boaz Weinstein’s Trade Looks Set to Flourish on Credit Suisse Demise (Reuters)
Hedge fund manager Boaz Weinstein pinned hopes on Credit Suisse’s survival, but also money on its demise. His derivatives trade which bet both on the success and failure of the bank now looks set to pay off, according to data from IHS Markit. After shares in the 167-year old lender slumped last week amid fears of contagion from a U.S. banking crisis, UBS on Sunday (UBSG.S) agreed to pay 3 billion Swiss francs ($3.23 billion) for the bank in a package engineered by Swiss regulators.
Leon Cooperman Sees Fed Raising Interest Rates a Quarter-Point (Bloomberg)
Leon Cooperman said he expects the Federal Reserve to raise interest rates another quarter-point at its meeting this week as it tries to quell the turmoil engulfing the banking industry. “They’re going to accept a higher level of inflation than they would like to accept because of the stress in the financial system,” Cooperman, founder of New York-based Omega Advisors, said Monday in an interview on Bloomberg Television. “They have to stabilize the Treasury market, because the volatility of bonds is so great that it’s destabilizing equities.”
Hedge-Fund Manager Nelson Peltz Says the Government should Insure all Bank Deposits — for a Price (CNBC)
The federal government should expand its guarantee to all bank deposits regardless of size in order to slow bank runs, but it should charge customers for that insurance, hedge-fund manager Nelson Peltz said Monday. The Trian Fund Management founding partner told CNBC that customers pulling money out of smaller banks is a “dangerous situation” and that he has talked to elected officials about expanding the deposit insurance program that is currently capped at $250,000 per account. The change would involve paying insurance premiums to the Federal Reserve.
Image by Sergei Tokmakov Terms.Law from Pixabay
US Hedge Fund Sues DPK Over Royal Albert Dock Regeneration Deal (TwinFM.com)
US hedge fund Baupost Group has filed a claim in London’s High Court against DPK Management over a deal to acquire the Royal Albert Dock development. The lawsuit concerns the allegation that DPK Management backed out of a deal to jointly acquire the east London site, with Baupost seeking damages for a breach of contract. Royal Albert Dock in London’s East End was due to be transformed into a 4.7 million sq ft financial district, supported by the Mayor of London and the UK government. The site is home to the ExCeL centre and London City Airport.
Hedge Funds and Other Holders of $17bn of Credit Suisse Bonds Wiped Out in UBS Deal (Hedge Week)
Hedge funds and other holders of $17 billion of Credit Suisse bonds have seen their investments wiped out completely under the terms of the bank’s $3 billion acquisition by rival UBS, according to a report by the Financial Times. As part of the deal, Swiss financial regulator Finma ordered that SFr16bn ($17bn) of Credit Suisse’s additional tier 1 (AT1) bonds, a relatively risky class of bank debt, must be written down to zero to add roughly $16 billion of equity to support UBS’s takeover.
