Ackman’s Pershing Square Holdings gains 5.8 percent in August (Reuters)
Billionaire investor William Ackman‘s portfolios climbed nearly 6 percent in August, boosted by strong gains at drug company Valeant Pharmaceuticals International Inc where changes that the hedge fund manager has helped push for appear to be instilling new confidence. Pershing Square Holdings, one of the hedge fund’s portfolios, climbed 5.8 percent last month, shrinking its loss for the year to 14.3 percent, an investor in the fund said. In March the fund had been down 25.6 percent. Valeant gained roughly 39 percent in the last month. A year ago, Valeant’s stock began cratering amid questions about the company’s business and accounting practices and its stock price is still down 87 percent in the last 52 weeks.
Dow Chemical’s Stock Action Works in Warren Buffett’s Favor (The Wall Street Journal)
Dow Chemical Co.’s shares are showing clear signs of tinkering, according to an analysis by a Yale University professor. The shares come within cents of an important threshold—$53.72—pretty often, but they have closed above that level so rarely that there’s less than a one-in-a-thousand chance thatit’s happening randomly, according to the analysis. If the stock closes above $53.72 enough times, Dow has the option to buy back $3 billion worth of preferred shares from Warren Buffett’s Berkshire Hathaway. The Wall Street Journal reported last week that people familiar with the matter say that executives at Dow believe someone is selling its stock short—or betting that its price will fall—to keep it from rising above $53.72.
The World’s Biggest Hedge Fund Expects A Bust In China (Business Insider)
The world’s biggest hedge fund firm thinks that China is preparing for a bust. Ray Dalio‘s Bridgewater says that China has experienced an “unsustainable buildup of credit,” which is “typical of debt boom and busts,” according to a private note to investors viewed by Business Insider. “This rapid expansion in credit looks like it has created significant vulnerabilities in the Chinese financial system at a time when the economy is still near the front end of a material loss cycle,” the note added.
BlueCrest Hires Ex-Visium Fund Manager Chetwynd-Talbot in London (Bloomberg)
BlueCrest Capital Management has hired Nick Chetwynd-Talbot, a former money manager at Visium Asset Management in London, to focus on investments in the consumer sector. Chetwynd-Talbot, who has worked for BlueCrest in the past, returned to the investment firm run by billionaire Michael Platt last week, according to Ed Orlebar, a spokesman for BlueCrest. Chetwynd-Talbot, who declined to comment, has joined BlueCrest’s equities investment team run by Christian Dalban. Chetwynd-Talbot started at Visium in January and left last month, according to records with the Financial Conduct Authority.
U.S. Hedge Fund TPG-Axon To Shut Its Two Asian Offices (Reuters)
TPG-Axon Capital Management is shutting its office in Hong Kong, where it employs 10 people, and ending its presence in Tokyo in the coming months, according to a letter sent to investors that was seen by Reuters and a person familiar with the situation. The stock-focused hedge fund firm, led by Dinakar Singh, has approximately 45 staff in total, spread between Hong Kong and New York, according to the person, who requested anonymity because the information is private. Of the staff, 15 are investment analysts or traders. No employees are based in Tokyo. “The increasing volatility of the environment for fundamental investing means that the negatives of having too many people and too much exposure have increased dramatically, tipping the balance towards ‘smaller and simpler,'” Singh wrote in the letter, which was sent Wednesday evening.
Ken Griffin’s Citadel Securities Is Muscling Into Credit Derivatives (Bloomberg)
Ken Griffin has become impossible to ignore in the once-lucrative world of credit derivatives, where a group of Wall Street dealers long maintained a stranglehold. After being kept on the sidelines for the past eight years, Griffin’s Citadel Securities is muscling into the market. The firm has traded more than $116 billion of credit-default swaps tied to U.S. benchmark indexes since April, according to spokesman Zia Ahmed. That’s about 11.5 percent of total trading of those contracts when compared to reported data aggregated from the Depository Trust and Clearing Corp. and Bloomberg’s swap data repository.
A Gamble Too Far (BloombergGadfly)
It’s the last throw of the plastic dice. On Wednesday, shareholders in Poundland will vote on whether to accept Steinhoff’s 610 million pound ($809 million) takeover bid. The South African retailer was forced to raise its offer after hedge fund Elliott Associates built a 17.5 percent stake in the British discount chain. Yet since then, Elliott has kept on increasing.
