Ackman Says Student Loans Are the Biggest Risk in the Credit Market (Bloomberg)
Bill Ackman says the biggest risk in the credit market is student loans. “If you think about the trillion dollars of student loans we have outstanding, there’s no way students are going to pay it back,” Ackman, who runs $20 billion Pershing Square Capital Management, said today at 13D Monitor’s Active-Passive Investor Summit in New York. The balance of student loans outstanding in the U.S. – also including private loans without government guarantees – swelled to $1.3 trillion as of the second quarter 2014, based on data released by the Federal Reserve in October.
Former Massachusetts Governor Patrick to join Bain Capital – Paper (CNBC)
Former Democratic Massachusetts Governor Deval Patrick is joining the Boston-based private equity firm Bain Capital founded by his predecessor, Republican Mitt Romney, the Boston Globe reported on Tuesday. Patrick said last year when he decided not to run for a third term in office that he planned to return to the private sector. He will work at a new Bain arm focused on “social impact” investing, addressing issues such as climate change or hunger, the Globe reported. “This is a chance to have real meaning and mission in my work,” the newspaper quoted Patrick as saying.
Goldman Has Some Tips for Hedge Funds That Can’t Short Straight (Bloomberg)
Short selling stocks in the U.S. is sort of like playing the theremin — it’s not exactly a lost art form, but neither is it a very profitable one for many people these days. A six-year bull market that has tripled the value of the stock market has taken its toll on hedge funds that bet shares will fall. Apart from an occasional master stroke from the likes of Carson Block or Whitney Tilson, the whole practice in general has been somewhat of an exercise in frustration.
Embattled BNY Mellon CEO Concedes Improvement Is Needed (Reuters)
Embattled BNY Mellon Corp CEO Gerald Hassell, under fire from activist investors, said on Tuesday the direction of the bank has broad-based support from shareholders, but acknowledged improvements need to be made. “We know there are things we have to do better,” Hassell said at the bank’s annual meeting in New York City. Earlier this month, activist hedge fund Marcato Capital Management said BNY Mellon’s employee base is “bloated” and disproportionately larger than its rivals.
Investors Trim Hedge Fund Bets in April – Data (Reuters)
Investors reduced their allocation to hedge funds in April, pulling out more cash than they invested, data showed on Monday. The SS&C GlobeOp Capital Movement Index (CMI), which calculates monthly hedge fund subscriptions minus redemptions, fell 1.14 percent at the beginning of April, compared with a rise of 0.63 percent in March, the data showed. “The negative CMI for April reflects the typical seasonal pattern,” Bill Stone, chairman and CEO of SS&C Technologies, said. “So far in 2015, the overall trend suggests stability in allocations to hedge funds.”
