Hedge Fund Manager Ackman Still Betting Against Herbalife (Reuters)
Billionaire investor Bill Ackman said on Thursday that he was still betting against Herbalife Ltd (HLF.N) shares and that the company needed to make “material changes to its incentive structure.” Ackman has waged a four-year campaign against Herbalife, making a $1 billion short bet against it in 2012 and accusing it of running a pyramid scheme which pays members more for recruiting new members than for selling the company’s supplements and weight-loss products. Short sellers borrow securities to sell on the belief that the price will decline and allow them to be repurchased for less later. Ackman, the founder and chief executive of Pershing Square Capital Management, said in a CNBC interview that the cost on carry of his $1 billion bet is about $20 million.
Billionaire Andreas Halvorsen’s Hedge Fund Backs Private Biotech Roivant Sciences (Forbes)
Billionaire Andreas Halvorsen’s Viking Global Investors disclosed on Wednesday that it has made an investment in Roivant Sciences, the private holding company that claims to be in the business of rescuing the pharmaceutical industry’s forgotten drugs. Viking Global, a hedge fund that manages about $30 billion, made its investment in Roivant in December, Securities & Exchange Commission filings show. The investment was disclosed on Wednesday as part of Roivant’s announcement that it had appointed to its board Andrew Lo, a well-known finance professor at the Massachusetts Institute of Technology’s Sloan School of Management. The size of Viking Global’s investment was not disclosed.
Klarman’s Baupost Posts 4% Return in First-Half Rebound (Bloomberg)
Seth Klarman is making money again after experiencing the third losing year in his history. Klarman’s $28 billion hedge fund rose about 1.25 percent in June, bringing its gain this year to about 4 percent, according to a person with knowledge of the firm who declined to be named. Baupost, whose multiple partnerships have varying returns, has seen some energy bets rebound after they dragged on performance in 2015.
Ackman Says Valeant Has No Current Plans To Sell Core Assets (CNBC)
Valeant Pharmaceuticals has no plans to sell core assets like Bausch & Lomb, according to board member Bill Ackman. He told CNBC’s “Halftime Report” on Thursday that while it’s likely there will come a day where the pharmaceutical company sells a lot of its non-core assets, Bausch & Lomb will not be one. In fact, Ackman says it’s possible that in the future, the brand could become “an even more dominant part of the franchise.” He said Valeant may someday even rename itself Bausch & Lomb.
Hedge Fund That Bet On Terror Lawsuit Is Accused Of Fraud By SEC (The Wall Street Journal)
The Securities and Exchange Commission sued hedge-fund firm RD Legal Capital LLC on Thursday, accusing it and its owner, Roni Dersovitz, of defrauding investors by misrepresenting the types of assets it held and by assigning improper values to those assets. The firm, known for making a controversial bet on the outcome of terrorism litigation, marketed its funds as a way to profit from expected settlements, but instead “invested the funds’ money however they saw fit,” the SEC said. Mr. Dersovitz didn’t immediately respond to a request for comment.
Investing: Hedge Funds Facing Heavy Pressure To Cut Fees (CNBC)
The hedge fund industry’s storied 2-and-20 fee structure finally may be on its way out. After years of underperformance and in the face of growing competition elsewhere for the deep-pocketed investor’s dollar, hedge fund investors are clamoring for lower costs. The current structure, which charges 2 percent of assets annually and 20 percent of return, has long been a sticking point, but the demand for change has grown in recent years.
Quantedge Hedge Fund Jumps 12% in June as Brexit Roils Markets (Bloomberg)
Quantedge Global Fund gained 12 percent last month to return almost three times as much as global peers, as bond holdings gained amid the market dislocation that followed the unexpected U.K. decision to leave the European Union. The June gains brought first-half returns at the $1.3 billion Singapore-based fund, which uses quantitative models to bet on global macro themes, to 40 percent, according to a newsletter to clients obtained by Bloomberg News. The HFRI Macro Systematic Diversified Index, which tracks similar strategies, rose 4.4 percent in June and 4.5 percent year to date, according to Hedge Fund Research Inc. in Chicago.
