David Einhorn’s top small-cap picks (MarketWatch)
Investors, including most billionaire hedge fund managers , can’t generate meaningful outperformance when they invest in large-cap stocks. David Einhorn was extremely bullish about Apple Inc. (NASDAQ:AAPL) a couple of years ago when the stock was trading at a split-adjusted price of $100. Since those days, the stock market has zoomed 45% and Apple shares have lost 10%. Apple was Einhorn’s top position two years ago, and it still is. Blue Harbour Group isn’t good at picking large-cap stocks. What makes it successful is its small-cap stock picks. These stocks generated double digit annual outperformance during the same five year period.
Hedgie Paul Singer’s ‘vulture investing’ paid off royally (New York Post)
Hedge-fund mogul Paul Singer, after an 11-year battle to collect on defaulted Argentine bonds — a fight that included three huge legal victories and a global hunt for assets — stands weeks away from possibly collecting $832 million on an estimated $48 million investment. That’ s a 1,608 percent return — a huge payday, to be sure, but not even the biggest in Singer’s 37-year career. It’s the kind of investment acumen that has helped Singer’s $23 million Elliott Management, the ninth-largest US fund, post an annualized return of 14 percent since 1977 — outpacing the 11.3 percent return for the S&P 500 during that time.
Millennium parts ways with hedge fund star (Financial Times)
Millennium Management, the $23bn New York hedge fund, has parted ways with one of the longest-serving partners in its European office after he made a sizeable trading loss this year, according to people with knowledge of the matter. Chris Dale, who had worked at Millennium in London since the New York hedge fund opened its office there in 2006, left the company in May, the people with knowledge of the situation said. They added Mr Dale was running one of Millennium’s largest trading books in Europe worth more than $1bn but left after he made a loss of about 5 per cent in a short period.
Divorce Hearing For TCI’s Hohn, Wife Opens (FINalternatives)
The Children’s Investment Fund founder Christopher Hohn’s estimate of his net worth is at least one order of magnitude smaller than his estranged wife’s. At a divorce hearing, Jamie Cooper-Hohn’s lawyers alleged that Hohn was hiding assets, claiming the couple’s joint assets are about £850 million and that Hohn has personal assets of at least £872 million more, including TCI itself. Hohn has countered that he’s worth only £67 million.
Wexford Capital Trims Stake in Diamondback Energy Inc (FANG) by 10% (Insider Monkey)
Charles Davidson’s Wexford Capital has reduced by 10% its position in Diamondback Energy Inc (NASDAQ:FANG), a $4.5 billion market cap independent oil and natural gas company. The fund disposed of 1.0 million shares of Common Stock (par value $0.01) last week, at a price of $89.12 per share. Following the reported transaction, Wexford Capital owns 8.63 million shares of the oil and natural gas company, worth roughly $761.745 million at the current stock price.
Private equity leverage ‘creeping up rapidly’: Pro (CNBC.com)
Some prominent hedge funds hurt by tech are back with gains (Reuters)
For some hedge funds hurt by tumbling technology stocks earlier this year, tenacity has been a virtue. Andor Capital and Tiger Global Management, two of the industry’s most closely watched investment firms, delivered good news to clients as they finalized first-half returns. Tiger Global, which oversees $14.5 billion in hedge fund and private equity portfolios and was founded by Chase Coleman, told investors that the hedge fund portfolio rose 6 percent in June, leaving it up 15.25 percent for the year, said an investor who is not permitted to discuss the portfolio publicly.
American Apparel Investor FiveT Sells Most of Its Stake (Bloomberg)
American Apparel Inc. (APP) investor FiveT Capital AG, once the retailer’s largest outside shareholder, has cut its stake by about 79 percent amid a battle between the chain’s board and its founder. FiveT disclosed yesterday in a filing that it cut its American Apparel holdings to 5.54 million shares from 26 million earlier this year. The Zurich-based firm now holds about 3.2 percent of the stock, down from almost 13 percent.
Jeffrey Arsenault Calls on Participants to Register Early for the 2014 Swing Into It! Golf Tournament (DigitalJournal.com)
Golf enthusiast and Hedge Fund Investment Manager Jeffrey Arsenault is calling on golfers and supporters to register early and join this year’s Stepping Stones Swing Into It! Golf Tournament, which will be held on October 2, at the Stanwich Club in Greenwich, Connecticut. The Swing Into It! Golf Tournament is an annual event that directly supports the Open Arms initiative created by Stepping Stones Museum for Children. This unique program makes it possible for every child, family and school to enjoy the museum’s exhibits, activities and themed events regardless of financial, language or special needs barriers.
David Winters on Asia, the Consumer, and Coca-Cola (Barron’s)
Investors who toss proxy statements straight into the recycling bin take note: These documents, dry as they are, really do offer a window into what management is doing. It was one such disclosure, buried on page 86 of The Coca-Cola Company (NYSE:KO)’s most recent proxy, that has venerable value investor David Winters speaking out against this large and long-term holding in his $1.7 billion Wintergreen fund, which he launched in 2005 after nearly two decades managing money at Franklin Mutual Series. The source of his ire is a plan to issue new stock for the purpose of compensating management. Winters says that the plan, which was passed by shareholders at Coke’s April meeting, will transfer billions of dollars of stock to Coca-Cola management at the expense of existing shareholders.
Small funds on FCA umbrella platforms could be hit by AIFMD (COOConnect)
Start-up hedge fund managers using umbrella platforms to speed up their Financial Conduct Authority (FCA) registration process have been warned they could be ensnared by the Alternative Investment Fund Managers Directive (AIFMD). The majority of these umbrella platforms are electing to become AIFMD compliant as their clients will most likely collectively manage more than €100 million, which is the minimum threshold to which AIFMD applies.
