Editor’s Note: Related Tickers: BMC Software, Inc. (NASDAQ:BMC), Berkshire Hathaway Inc. (NYSE:BRK.B), The Procter & Gamble Company (NYSE:PG), Bank of America Corp (NYSE:BAC), J.C. Penney Company, Inc. (NYSE:JCP), Herbalife Ltd. (NYSE:HLF)
IN-DEPTH: What’s Bill Ackman’s next move with P&G? (Cincinnati.com)
Buffett Says Next CEO to Bolster Berkshire Aura for Crisis Deals (Bloomberg)
Berkshire Hathaway Inc. (NYSE:BRK.B)’s reputation as a lender of last resort will get stronger under its next chief executive officer because the company will have more capital to deploy in times of crisis, Warren Buffett said. Buffett boosted returns at his company in recent years by injecting a combined $8 billion into Goldman Sachs Group Inc. and General Electric Co. during the 2008 financial crisis and $5 billion in Bank of America Corp (NYSE:BAC) in 2011 after the lender’s stock slumped. Investors have questioned whether similar opportunities will be available after the departure of Buffett, whose bets can boost market confidence. The next CEO will have access to even more capital as Berkshire Hathaway Inc. (NYSE:BRK.B) expands, he said in response to a question from Doug Kass, the investor who was invited to ask bearish questions at the meeting.
Cargill fund ups BFB stake (Stock Journal)
A hedge fund run by an arm of the world’s largest agriculture company, Cargill, has increased its stake in the unlisted agricultural company BFB Group, which has reported another solid full-year profit. The fund, Black River Asset Management, increased its stake in the $186 million unlisted agricultural land and logistics company by more than $11 million, signalling that profitable Australian agriculture is still on the radar for the world’s biggest fund managers. BFB, which purchased the prized Billabong Station in the Eurongilly Valley, east of Wagga Wagga, NSW, last year, reported a $3.7 million profit for 2012.
Exclusive: Bain, Golden Gate nearing more than $6.5 billion deal for BMC – sources (Reuters)
Image: BMC Software, Inc. (NASDAQ:BMC)
Cooperman: Bill Ackman is ‘foolish’ (Fortune)
Leon Cooperman, who runs hedge fund firm Omega Advisors, wasn’t directly knocking the investment. And he said Ackman is “one of the best investing minds around and his research may be right.” But he also called Ackman “foolish” for…
…making his investment so public. By doing so, Cooperman said Ackman has taken on a public responsibility that he now has to defend. Cooperman said if Ackman were to change his mind without telling the world, he could be in legal trouble. “Someone else who followed his advice and shorted the stock could turn around and sue because they were misled,” says Cooperman. A short position makes money when a company’s shares fall. “That’s a real risk.”
Gold rallied 4.9 percent in the past two weeks after entering a bear market April 12. The Federal Reserve raised the prospect of increasing its monthly bond buying on May 1 and the European Central Bank cut borrowing costs to a record low the next day. Billionaire investor Warren Buffett said the metal has no appeal even after the slump, and a weekly Bloomberg survey of analysts and traders was the most bearish since February 2010. “It’s reasonable to say that the currency debasement and easing measures will support gold,” said Alan Gayle, a senior strategist at RidgeWorth Capital Management, which oversees about $48 billion of assets. “The bulls still have to prove a lot. There is lot of skepticism surrounding gold. We have to watch to see if prices have found a near-term bottom.”
Vinik to shut down hedge fund (iStockAnalyst)
Jeff Vinik says he will close down the hedge fund he has operated for 16 years and focus on running the Tampa Bay Lightning hockey team. In a letter to investors, the head of Vinik Asset Management said he would return his client’s money and devote his time to his hockey team and his family. The firm has lost 4.8 percent of its value since July 2012, a period during which stock markets have soared. The negative return was a far cry from the hedge fund’s average return of 17 percent in the previous 15 years.
Hedge fund firm Palmer Square Capital Management hires industry veteran Jeffrey Fox (Opalesque)
Palmer Square Capital Management, an investment management firm that provides portfolios of structured credit, collateralized loan obligations (CLOs) and hedge fund strategies to a wide range of investors, today announced that Jeffrey Fox has joined the team as executive director. Reporting to Angie Long, Palmer Square’s chief investment officer, Mr. Fox’s primary focus will be on managing the analytics, trading and modeling behind the firm’s structured credit and CLO platform. He will also play a key role in new product development and working with the rating agencies. Mr. Fox draws upon more than a decade of fixed income experience, most recently serving as a managing director at Sandler O’Neill and Partners, where he focused on the structuring and sales of a wide range of products, including CLOs.
Asian credit hedge funds back in favour (Asian Investor)
The current low interest-rate environment, combined with an abundant issuance of Asian corporate bonds, has set the stage for a comeback of credit hedge funds in the region. Industry data provider Eurekahedge lists fixed income hedge funds as the second-best performing Asia strategy last year, with an average gain of 11.7%, behind event-driven funds, which returned 15.6%. A chief reason behind this performance…
…has been a renewed focus on credit amid a low interest-rate environment. “Asian spreads are tight, but they’re still relatively attractive, particularly in relation to US high yield and US investment grade [bonds] on a ratings basis,” says David Walter, head of Asian research at Pacific Alternative Asset Management Company (Paamco).
Statehouse beat: Pershing Square has its issues (Charleston Gazette)
As hedge funds go, billionaire Bill Ackman’s Pershing Square Capital has made financial news headlines of late. The fund is making two billion-dollar bets: that troubled retailer J.C. Penney Company, Inc. (NYSE:JCP) will not only turn things around, but will thrive; and that Herbalife Ltd. (NYSE:HLF), the distributor of nutrition and skin care products, will collapse. Which has put the hedge fund under pressure, since neither assumption is playing out. Pershing Square has shorted $1 billion of Herbalife stock, under Ackman’s assertion that the business model, which relies on local salespersons and distributors, is a “sophisticated pyramid scheme,” and will either collapse or be subject to intervention by the Federal Trade Commission.
Modern-day Robin Hood applies business skills to philanthropy (CBS News)
Paul Tudor Jones wonders that if billionaires, like him, are such geniuses, then why do nearly two million people live in poverty in New York City alone? In 1988, he started a charity called the Robin Hood Foundation. Twenty five years later, Robin Hood has given away more than one and a quarter billion dollars. It’s become the city’s largest private backer of charter schools, job training and food programs. Tudor Jones has learned hard lessons — for a latter day Robin Hood, it turns out giving to the poor is harder than he thought. And as for taking from the rich? Well, he finds it’s best to distract them.
AIB sells €240m of loans to hedge fund (Irish Independent)
AIB is reported to have sold around £200m (€240m) of loans secured by a portfolio of airport hotels in the UK. Property specialists CoStar said the ‘Project River’ loans were sold to Davidson Kempner Capital Management, a New York-based hedge fund. The loans are reported to have sold for £140m, or 70pc of face value. The loans that are understood to have been sold were AIB’s share of syndicated loans secured on the hotels, not full loans. The loans are secured on airport hotels owned by Arora Hotels. Davidson Kempner saw off competition from big-name private equity houses Apollo Global Management, Cerberus Capital Management, Och-Ziff and Kohlberg Kravis Roberts.
