Analyst Who Worked on Herbalife Leaves Pershing Square (NYTimes)
An investment analyst who played a leading role in Pershing Square Capital Management’s bet against Herbalife Ltd. (NYSE:HLF) has decided to leave the hedge fund, according to a letter sent to its investors. The analyst, Shane Dinneen, is leaving for “areas of his own interest outside of activist investing,” William A. Ackman, the head of Pershing Square, said in the letter sent on Tuesday evening. Mr. Dinneen, who joined the hedge fund’s investment team in 2007, has been publicly singled out for praise by his boss. Mr. Dinneen performed much of the research underpinning Mr. Ackman’s contention that Herbalife, a nutritional supplements company, is an abusive pyramid scheme.
Hedge fund’s $250 million bet values Alibaba at up to $200 billion (CNBC)
A rising hedge fund star has made a big bet on Chinese e-commerce site Alibaba, believing the company will be worth at least $200 billion when it goes public. Glade Brook Capital Partners, the hedge fund firm founded in 2011 by Shumway Capital Partners veteran Paul Hudson, has amassed a roughly $250 million stake in private shares of Alibaba, according to a person familiar with the situation. Yahoo! Inc. (NASDAQ:YHOO) owns about 24 percent of Alibaba, which is expected to hold an initial public offering in 2014 or 2015. Expectations are high for the IPO–which is likely to be held either in New York or Hong Kong–and could be one of the largest in recent years.
Canadian Dollar To Sink To 70 Cents, Hedge Fund Manager Says (HuffingtonPost)
A California hedge fund manager who notoriously went all-in against the Canadian economy last year expects the loonie to fall to 70 cents. Vijai Mohan, head of Hyphen Partners LP, told the Globe and Mail a Canadian dollar worth 70 cents U.S., “if not worse,” is possible within five years. That’s especially the case if the divergence between the U.S. and Canadian economies continues to grow, he said. Though others have called for the loonie to keep falling, Mohan’s forecast may be the most pessimistic. Goldman Sachs Group, Inc. (NYSE:GS) is calling for an 88-cent loonie this year.
Shareholder activism hedge funds stand out (Risk)
Investor interest in China hedge funds increased at year end with net inflows in Q4 of nearly $2 billion, the highest quarter in more than four years. Total universe AUM jumped in the second half of the year, surpassing $20 billion for the first time since mid-2011 and reaching its highest level since late 2007. The universe was one of the best-performing segments of the hedge fund industry in 2013, with the current group of reporting funds posting returns in excess of 20% for the year. This comes during a stretch when Chinese equity indexes were broadly negative for the year.
Top investment banker and stay-at-home husband in £11m divorce battle after ‘final straw’ row on a family holiday ended their marriage (DailyMail)
A City high-flier is locked in an £11million divorce battle with her stay-at-home husband after a blazing argument during a family holiday proved the ‘final straw’ for their 15-year marriage. Weng Choy and his wife Lena Tan amassed a huge fortune thanks to her career as an investment banker, including a wine collection worth £1million and a £4.5million flat in Kensington which they bought without a mortgage. After the couple split, Mr Choy demanded a large share of their wealth, claiming that he sacrificed his own banking career for the sake of his wife’s job.
Quantitative Brokers opens UK office (AutomatedTrader)
Quantitative Brokers (QB), a best execution algorithmic broker for interest rates, has hired hedge fund professional Jonathan (Jonty) Field to head its EMEA business. Field, 35, joins QB from European hedge fund, AHL, where he led the Trading Analytics team. He has spent the last decade developing algorithmic execution strategies, including the tools to monitor and systematically benchmark execution performance. “The appointment of Jonty Field to head up our presence in the region reflects QB’s commitment to meeting the intensifying European buy-side interest in best execution for interest rates,” said Christian Hauff, CEO of Quantitative Brokers.
Earnings: QCOM, LVS & NOK (CNBC)
Context Capital Entering Mutual-Fund Arena (HFAlert)
Look for hedge fund seeder Context Capital to launch a multi-manager vehicle in the form of a mutual fund. The Bala Cynwyd, Pa., firm, through a newly created business called Context Asset Management, filed registration documents with the SEC last week for Context Alternative Strategies Fund. The vehicle will deploy the bulk of its capital to outside managers including Del Mar Asset Management, ESM Management, First Principles Capital, Highland Capital and Weatherbie Capital, but it reserves the right to directly manage up to 35% of its assets in securities portfolios.
On Position Sizing in Equity Long-Short Hedge Funds (IStockAnalyst)
This article is prompted by the following article by John Hempton of Bronte Capital. This is not meant as a criticism of him; I have nothing but respect for him. The article triggered memories of my own experiences with position sizing at a hedge fund. The hedge fund I once worked for had great expertise with financial companies, and I worked for them in the boom years of the 2000s. Our leader was bearish on depositary financials, a view that would eventually be right. Of course “eventually right” is another way to say “wrong in the short run.” Let me describe the problem from another angle. When I was a corporate bond manager, I would mentally set three levels with the bonds that I held.
UBM facing hedge fund play as Levin and Carter depart (Conference-News)
Leading events and publishing company UBM has been targeted by a Mayfair hedge fund in a move that could lead to its break-up. Investment group Hengistbury has amassed a 5.2 per cent stake in the global organiser, according to a report in the The Sunday Times newspaper, making it the second-largest investor in the £1.7bn business. UBM recently confirmed Chief Executive David Levin is to bring forward his departure date in order to join McGraw-Hill Education in the US in March.
Marc Faber Returns To His Normal Refrain Of Owning Physical Gold (NewslEdge)
With the emerging market crisis expanding outward, the doom and gloom has returned to the market. That means Marc Faber is back with a wide-ranging interview with Barron’s. If you think he has changed his tune on the economy, well think again. He’s just as pessimistic as before, and judging by equity reaction to the Turkish central bank, that action had about a 12-hour round trip. What does Marc Faber recommend for the common investor? Gold. The physical kind. Faber doesn’t place much faith in paper assets, and thinks it’s a good insurance policy. Responding to a question, he said that most people have not seen a benefit from rising stock prices. He used a Gallup poll in which 52% responded positively that they have seen a benefit to the rising stock prices.
Hedge Fund Wants to See Just How Much Everyone Dislikes JPMorgan (Bloomberg)
A rough theory you could have of the mortgage-backed securities problem goes like so: Banks packaged and sold a lot of mortgages to a lot of people. …I always enjoy good maneuvering-by-tender-offer and I think this qualifies. Fir Tree has launched a tender offer for about $300 million or so worth1 of bonds from a handful of the 330 JPMorgan Chase & Co (NYSE:JPM) residential mortgage backed securities trusts that are part of a $4.5 billion settlement that JPMorgan reached with 21 institutional investors a while back
Nouriel Roubini is worried about asset bubbles, China; he’s bullish on Japan (MarketWatch)
For the most fragile emerging markets, things could get worse for their equity investors before they get better, economist Nouriel Roubini said Wednesday. Roubini also said European equities could do better than U.S. stocks, predicting 2014 gains of 15%. Japanese will fare even better, advancing 15% to 20%, he said.
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