Another Major Shareholder Joins CommonWealth REIT Fight (WSJ)
Hedge fund firm Perry Corp. said it supports the views of two major shareholders of CommonWealth REIT (CWH), as it becomes the latest stakeholder pushing for a removal of the real estate investment trust’s board. Perry, which owns a 5.5% stake in CommonWealth, said in a regulatory filing it supports the views expressed by Corvex Management LP and Related Fund Management LLC, which launched an initial bid for the real-estate investment trust in February, citing poor corporate governance and undervaluation. The pair also called on shareholders to vote out the entire board.
Dr Doom: Markets heading for bubbles as Fed commits ‘massive fraud’ (FundWeb)
The loose monetary policy being pursued by the US Federal Reserve is increasing the risk of bubbles emerging in equity and credit markets in the short term, Nouriel Roubini warns. Writing on Project Syndicate, the New York University economics professor points out that the Fed is likely to maintain its third, indefinate bout of quantitative easing for the foreseeable future owing to the weak economic growth, high unemployment and below-target inflation blighting the world’s largest economy. The Fed unveiled QE3 on 13 September 2012, initially pledging to buy $40bn in agency mortgage-backed securities a month and later increasing this to $85bn a month. This bout of QE followed two earlier rounds that pumped about $1.75trn and then $600bn into the financial system.
Herbalife says KPMG’s resignation hindered stock buybacks (LATimes)
Herbalife Ltd. (NYSE:HLF) said it had to scale back plans to repurchase its shares after KPMG resigned in early April as its auditor and withdrew its review of the company’s annual financial statements for the last three years. The Los Angeles nutritional products company canceled plans to borrow money that “would have been used to repurchase a meaningful amount of company stock,” John DeSimone, Herbalife Ltd. (NYSE:HLF) chief financial officer, told analysts Tuesday in a conference call. …Ackman’s allegations led to a massive sell-off in the company’s shares in December. But rival investor Carl Icahn immediately started buying what would amount to more than 15% of Herbalife Ltd. (NYSE:HLF) shares, betting that Ackman was wrong and the company would continue to thrive. Icahn’s holdings are worth more than $600 million.
Hedge Funds Drive Demand For Greek Corporate Debt (WSJ)
Hedge funds are the driving force behind the substantial demand for Greek corporate debt most recently seen in the Hellenic Petroleum ELPE.AT +3.45% bond sale, say market participants, in a sign that investors with longer-term horizons still shun the riskiest of high-risk debt despite renewed appetite for yield. Hellenic’s bond was 5.5 times oversubscribed with the final deal size set at €500 million ($654.9 million), twice the amount initially contemplated. Demand emanated from a “combination of wealthy Greek money coupled with decent interest by US and UK fixed income hedge funds,” said George Zois, head of Greek equities and fixed income at emerging market investment banking boutique Exotix. “Domestic Greek based-funds were also seeking allocation,” Mr Zois said.
Three Columbia Business School Students Won $100,000 With This Monster Presentation About Investing In Hertz (BusinessInsider)
This year, three Columbia Business School students took home $100,000 from Bill Ackman’s hedge fund, Pershing Square Capital, for their long thesis on rental car company, Hertz Global Holdings, Inc. (NYSE:HTZ). They were the winners of the Pershing Square Challenge, an investment thesis contest Ackman has held since 2008. And it just so happens that two of the winners of Ackman’s contest are members of SumZero, an online community for buy-side investors. They were kind enough to share the winning slide deck with Business Insider.
