Editor’s Note: Gannett Co., Inc. (NYSE:GCI), Belo Corp. (NYSE:BLC), Sothebys (NYSE:BID), Goldman Sachs Group, Inc. (NYSE:GS), Sears Holdings Corporation (NASDAQ:SHLD)
Shaking Up The Art World: Sotheby’s Feels The Pressure Of Billionaire Hedge Funders Dan Loeb And Nelson Peltz (Forbes)
On Wednesday, with its shares trading just below their highest levels in two years, Sothebys (NYSE:BID)’s announced it is reviewing its capital allocation and financial position to determine the best ways to return capital to shareholders. The move appears as a response to increased pressure from billionaire activist hedge fund managers Dan Loeb and Nelson Peltz, who were joined by Marcato Capital Management in pushing the 269-year-old auction house to unlock value, and are probably targeting its impressive real estate holdings. Estimates suggest their New York and London headquarters could unleash as much as $700 million in excess value.
Hedge Funds Are Among the Winners of the Lehman Spoils (Wall Street Journal)
Lehman Brothers Holdings Inc.’s historic bankruptcy burned the once-highflying securities firm’s investors, employees and many others. But five years later, a group of hedge funds has found a way to profit handsomely from it. In the past 18 months, billions of dollars in distributions from the Lehman bankruptcy estate have been paid to investors—including Elliott Management LP and Paulson & Co.—that snapped up claims in the years following the firm’s collapse, according to company documents, court filings and people familiar with the matter. Paulson, which made a fortune on a well-timed housing-market bet in the early stages of the financial crisis, is up more than $1 billion on its investments in Lehman claims, while Elliott is ahead by more than $700 million, according to the people familiar with the matter.
Why Hedge Funds Love This Former Dow Stock (DailyFinance)
The retail bears are quick to point out that Sears Holdings Corporation (NASDAQ:SHLD) is bleeding substantial cash each quarter from retail operations, has declining same store sales, a lack of investment in updating retail stores, legacy pension obligations, a poor bond rating, and point to CEO Eddie Lampert‘s total lack of experience in managing big box retail operations. Well, depending upon what you believe, either almost everything or almost nothing changed. The majority of Sears Holdings Corporation (NASDAQ:SHLD) common shares are owned by CEO Eddie Lampert and ESL, the hedge fund that he controls. Several other hedge funds have very large stakes: Fairholme Capital Management (19.2%) run by Morningstar hedge fund “manager of the decade” Bruce Berkowitz; Index Funds holds (7.5%), with 7 other funds controlling (11.4%), including Los Angeles-based hedge fund Baker Street Capital Management.
Belo Investors to Vote Against Deal (Wall Street Journal)
Investor opposition to the terms of Gannett Co., Inc. (NYSE:GCI)’s $1.5 billion takeover offer for TV station-owner Belo Corp. (NYSE:BLC) is intensifying, two weeks before Belo shareholders are due to vote, spotlighting the question of whether Belo should have put itself up for a broader auction. Pine River Capital Management, a Minnesota-based hedge fund that disclosed a 6.6% stake in Belo on Tuesday, said Thursday it planned to vote against the deal, as currently structured, arguing that the $13.75-per-share Gannett agreed in June to pay is less than Belo is worth. Taking into account super-voting shares owned by others, Pine River’s voting stake is equivalent to 3.6%.
Gold bear bets reach record as Soros cuts holdings (BusinessDay)
Hedge-fund managers are making the biggest ever bet against gold as billionaire George Soros sold holdings last quarter and Goldman Sachs Group, Inc. (NYSE:GS) predicted more declines after the longest slump in four years. The funds and other large speculators held 74,432 so-called short contracts on May 14, US Commodity Futures Trading Commission data show. That’s the highest since the data begins in June 2006 and compares with 67,374 a week earlier. The net-long position dropped 20 percent to 39,216 futures and options, the lowest since July 2007. Net-bullish wagers across 18 US-traded raw materials rose 1.1 percent to 588,482, led by gains in hogs, corn and cotton.
Top performing plays on Fannie & Freddie return 500% (CNBC.com)
Hedge fund maestro Hintze voices concern over regulation (Financial Standard)
Tighter regulation poses the greatest challenge to the hedge fund industry, according to Australian industry legend Sir Michael Hintze. Speaking at the Alternative Investment Management Association’s Hedge Fund Forum in Sydney this week, Hintze said the alternative investment industry has had to adapt to sweeping policy interventions in the wake of the GFC such as Dodd Frank in the US and Basel III globally. “Normally we say ‘don’t waste a good crisis’ but every regulator around the world is beating their chest,” he said.
Narula’s Metacapital Said to Win $130 Million in Fund (Bloomberg)
Metacapital Management LP, the top-ranked hedge-fund manager in 2012 whose flagship vehicle this year suffered its worst quarter ever, has attracted about $130 million for a fund designed to profit from rising interest rates, a person with knowledge of the matter said. The Rising Rate Fund returned 2.7 percent in August, bringing gains since it opened in May to 13.5 percent, according to a notice this week to investors from Deepak Narula’s Metacapital. That compares with a 2 percent gain last month for the New York-based firm’s Mortgage Opportunities Fund, which has about $1.3 billion of assets, said the person, who asked not to be identified because the information isn’t public.
Macro hedge fund manager joins Swedish state fund (Financial News)
Kerim Kaskal was announced as the Tredje AP-Fonden’s new investments chief earlier this month, and will take up the position on October 1. He was previously deputy chief investment officer at Nektar Asset Management, Brummer’s €3.5 billion macro and fixed-income unit. It will be Kaskal’s second stint at the state pension fund – he was previously head of asset management there between 2005 and 2008. He was also at Brummer & Partners before that, working at Nektar between 1998 and 2004 – meaning he has spent the past 15 years alternating between the hedge fund and the pension fund.
Mixed August For Major Hedge Funds (FINalternatives)
As usual, August proved a tough month for hedge funds. “Since 2000, if I had taken £100 each time a fund manager moaned about August and exclaimed, ‘I should have just stayed on the beach,’ I could almost have afforded to stay on the beach, too,” Clareville Capital’s David Yarrow said. Yarrow can joke: While his Pegasus Fund lost 4.9% last month, it is still up 4.1% on the year. Others are not so lucky. Take Tudor Investment Corp.‘s Tensor Fund: It lost 2.2% in August to extend its year-to-date decline to 6.2%, DealBreaker reports. And that loss is positively modest compared to some others.
SEC Rewards Three Whistleblowers Who Helped Stop Sham Hedge Fund (SmartPros Accounting)
This is the first installment of anticipated payments to the whistleblowers as additional assets are collected from the purported hedge fund manager. The whistleblowers are expected to ultimately receive approximately $125,000 in total. The SEC issued an order earlier this summer rewarding each of the three whistleblowers with 5 percent of the money that the SEC ultimately collects from its enforcement action against Locust Offshore Management and its CEO Andrey C. Hicks.
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