CVR Energy Inc. investors moved again Tuesday to prevent Carl Icahn from gaining complete control of the oil refiner’s stock, adding derivative claims to their putative class action and repeating their call for an injunction to stop him from buying CVR’s remaining shares on the cheap. Filed June 5 in Delaware Chancery Court, the original suit accused Icahn of making an unfair power play for CVR’s outstanding shares as an acquiescent board left investors to his mercy, and the plaintiffs claim that while the first two…
Polar Capital’s AUM hits $5.3bn as hedge funds power flows (CityWire)
Polar Capital’sasset under management (AUM) have increased by 4.3% to $5.3 billion, with strong inflows welcomed into its hedge fund. The specialist asset manager saw its AUM creep up from the $5.08 billion reported at 31 March. The company said its rise in assets represents a 34.5% increase in AUM from the $3.94 billion it reported last September, with $405 million of net inflows seen in its first half, $31 million of which were in the last quarter. The investment house, which is home to Polar Capital Technology star Ben Rogoff, said its report to investors was ‘encouraging’.
Greek bonds double as bets on euro exit decline (Ekathimerini)
Greek government bond prices doubled during the past three months as investors, including the $9 billion hedge fund Third Point LLC, bet the likelihood of the nation leaving the euro-region has diminished. The nation’s 10-year yields are heading for a fifth monthly decline, the longest streak in seven years, as European politicians step up efforts to stem the debt crisis and after European Central Bank President Mario Draghi pledged to “do whatever it takes” to defend the euro. Money managers at Germany’s Universal-Investment GmbH and TT-ELTA AEDAK, a Greek mutual fund company, added to their holdings in the period.
Investment platform seeks hedge fund managers (HedgeFundsReview)
Asset managers link their brokerage accounts to Covestor and share real-time trade data with other members on the platform. The site ranks the performance of managers across different asset classes, sectors, strategies and risk levels. Investors can find and follow managers they are interested in, delve into their investment commentaries and research and open separate accounts through Covestor to replicate their trades.
Feelin’ ‘empty’ (NYPost)
A Manhattan hedge fund’s no-brainer investment in a Canadian telecom is turning into one huge headache. Mason Capital Management is being widely criticized for its attempt to scuttle a move by Vancouver-based Telus to collapse its dual-class stock structure. If successful, Mason could generate tens of million of dollars in profits for the $8 billion fund. The unusual foray into shareholder activism by Mason has sparked an unusual amount of debate because the fund has no economic interest in Telus — it’s perfectly hedged by being long the voting shares and short the non-voting shares.
Activist fund Octavian says it is shutting down (CNBC)
Octavian Advisors, a roughly $1 billion hedge fund firm specializing in distressed investments, said it was shutting down, becoming the latest casualty of tough market conditions as it suffered double-digit losses. The New York-based firm, run by Richard Hurowitz, told investors by letter that it will start sending money back before the end of this year and return the bulk of cash next year. “While we have significantly outperformed the international equity markets we focus on over a multi-year period, we have not generated attractive absolute returns in an exceptionally difficult environment,” Hurowitz wrote in a the letter, which was seen by Reuters. “The last eighteen months have been particularly difficult,” he said. This year, alone, the fund lost 11 percent through August, a person familiar with returns but not authorized to discuss them publicly said.
Market report / IDB Development rallies (Haaretz)
Nochi Dankner’s IDB group captured the attention of the Tel Aviv Stock Exchange on Wednesday after TheMarker revealed that the U.S. hedge fund York Capital Management is mounting a takeover bid. Prices for bonds of IDB Development Corporation, the company being targeted by York, soared as its Series Zion through Yud issues rose between 11% and 22%. IDB Holding Corporation, its parent company, saw its bond prices fall 4.5%.
Scotiabank to Expand Derivatives Services for Hedge Funds (BusinessWeek)
The Bank of Nova Scotia (NYSE:BNS), Canada’s third- largest bank, will offer more products to hedge funds including derivatives trading as it expands prime services to compete inside and outside its home country. Scotiabank plans to provide trading of listed derivatives by the end of 2013 or early 2014, said John Stracquadanio, head of prime services for Scotiabank Global Banking and Markets. The Toronto-based bank may also clear trades, he said.
Hedge fund performance up, inflows down according to SS&C GlobeOp (Opalesque)
The gross return of the SS&C GlobeOp Hedge Fund Performance Index for September, 2012 measured 1.11%. The SS&C GlobeOp Hedge Fund Performance Index is an asset-weighted, independent monthly window on hedge fund performance. On the ninth business day of each month it provides a flash estimate of the gross aggregate performance of funds for which SS&C GlobeOp provides monthly administration services on the GlobeOp platform. Interim and final values, both gross and net, are provided in each of the two following months, respectively. Online data can be segmented by gross and net performance, and by time periods. The SS&C GlobeOp Hedge Fund Performance Index is transparent, consistent in data processing, and free from selection or survivorship bias. Its inception date is January 1, 2006.
Debut debt-for-equity deal proposed by Peter Bush and David Gyngell buys time on Nine (HeraldSun)
NINE’S US hedge fund lenders have been handed a starring role in determining whether the network can avoid receivership after a debt-for-equity deal was signed yesterday. Under the deal proposed by Nine chairman Peter Bush and chief executive David Gyngell, investment bank Goldman Sachs will swap about $1 billion in mezzanine, or second-tier, debt for a 7.5 per cent stake in the company. It will also get a 12.5 per cent cut of any future sale proceeds above $2.3 billion. The equity stake is estimated to be worth $150 million. The deal is well below the 30 per cent stake initially sought by Goldman which would have been worth about $400 million.
Man Group Stock Surges On Report Of Possible BlackRock Takeover (ValueWalk)
Shares of Man Group Plc. (LON:EMG) surged as much as 6.7 percent, to 96 pence at the London Stock Exchange, on reports that BlackRock would submit a proposal to take over the embattled hedge fundcompany. A report from This is Money cited that a group of bidders, including BlackRock, Inc. (NYSE:BLK) might buy Man Group Plc (LON:EMG) for £2.5 billion, or 140 pence per share. According to the report, Man Group’s acquisition of FRM Holdings, a global hedge fund and investment research specialist, for £51million, added value to the company, making it more attractive to interested bidders.
Glencore Tie-Up With Xstrata Has Miles to Go (GJ)
Glencore International GLEN.LN +0.84% PLC’s tie-up with miner Xstrata XTA.LN +1.08% PLC looks likely to succeed, hedge-fund managers say, but hurdles remain. Shareholder and regulatory approvals, at the very least, are likely to hold up the deal. Hedge-fund positions on big mergers are often a reliable gauge on whether a deal will go through. The tie-up to create a $67 billion mining behemoth is still in the cards, although there are concerns that further delays could crimp returns. Funds have been employing a strategy that involves buying shares in the target company and short-selling the acquirer. In a short sale, an investor borrows a company’s shares and sells them, in the hope of later buying them back at a lower price and pocketing the difference.
Starting a Hedge Fund Is Easier Than You Think (Minyanville)
Don Conrad has come a long way. As a teenager in the small Long Island hamlet of Port Washington, Conrad worked the night shift at a factory. He operated a pinion, which is best described as a machine with toothed gears. Conrad spent a year in Boston pursuing his dream of becoming a professional percussionist. He attended night school at Nassau Community College in Long Island, never earning a bachelor’s degree. Now a successful hedge fund manager, how has Conrad thrived in an industry chock full of Ivy League pedigrees and advanced degrees? “I have a PhD from the school of hard knocks,” Conrad said.
The Mercenary Technologist (WatersTechnology)
At last week’s Buy-Side Technology North American Summit, some hedge fund managers noted that they are now employing vendors to deploy individuals to be embedded inside the hedge fund to help, full-time, with specific projects. When the project is done, that programmer, developer, technician or general tinkerer goes back to the vendor, or gets moved over to a new project. Either way, he is an outsourced entity for the hedge fund and if anything goes awry, that person is simply released from duty. There aren’t any human resource meetings and there aren’t any health insurance requirements or promotion issues to be addressed.
Allied World Assurance in hedge fund partnership (Artemis)
The boundary between the reinsurance sector and the hedge fund world have never been totally defined, but as convergence between the capital markets and reinsurance sector continues apace the lines are becoming even more blurred, with hedge funds operating reinsurers and reinsurers operating investment funds. There are also partnerships, some of which are almost symbiotic in nature, and Allied World Assurance is the latest to form one of those with fund manager MatlinPatterson. The announcement today will see Allied World Assurance Company, a provider of property, casualty and specialty insurance and reinsurance solutions through their subsidiaries including a Lloyd’s syndicate, leverage MatlinPatterson to expand its asset management business and opportunities.
Another distressed debt hedge fund does well: Zencap Octra +15% YTD (Opalesque)
The Octra Fund, a fixed income arbitrage fund managed by Zencap Asset Management, tries to generate alpha from the dislocation of the European ABS and CDO market through a selection of fundamentally healthy assets. The selection must have been right, as the fund returned 2.40% in September and it is up 15% YTD, annualising 10.8% since its April-10 inception. The Zencap Octra Fund features in Opalesque’s ASquare database. Zencap Asset Management is a Paris-based European distressed debt specialist fund house launched in 2009; it runs four funds (the oldest fund being up 30% YTD) and Eur360m in total; it is a majority-owned subsidiary of OFI, a large French fund management group.
BlueMountain raises $1.4 billion for “less liquid” credit fund (CreditFlux)
BlueMountain Capital has announced that it has closed a longer dated credit fund, the BlueMountain Credit Opportunities Master Fund I, at a size of $1.4 billion. The credit hedge fund manager says that the fund will focus on less liquid credit instruments, such as CLOs, synthetic CDOs and off-the-run single corporate names. The New York-based manager now has assets under management of over $11 billion, according to the announcement.
Are You A Humble Christian? (MDCP)
Many were the prayers o?ered for our church family and shepherd. Praises included the fact Geraldine Cox is home and WMU will commence again this Wednesday. Jim Rogers announced his class at 5 p.m. will address Proverbs. There will be no family matters class this Sunday. Bibles were available to be distributed to the newly baptized. Our choir performed a great rendition of “I’m Feeling Fine.” Flyers are available for the Decision 2012. All are encouraged to take some and distribute. Associate Pastor Ryan Crawford brought a message from Luke 16 as he titled it, “What In Hell I Want.” Hell, he assured us, is a scary place and no one would choose Hell over Heaven. More people, however, are going to Hell than Heaven. It was interesting as he assured us that the devil knows his Bible and is a better Christian than some, but he’s not saved. Do we know our Bible as well as he does? The devil comes to church as indicated by the bad attitudes and tired people who attend and people who just don’t feel it’s that urgent orimportant to come and bring others. Satan, he assured us, is in church Sunday morning, Sunday evening and Wednesday evening because the word of God is preached.
In Gupta Sentencing, a Judgment Call (WSJ)
Former Goldman Sachs Group Inc. director Rajat Gupta is the highest-profile of more than 70 defendants convicted of insider trading in New York federal court in the past three years. But this month he will likely receive a more lenient sentence than the 11-year-prison term given to Raj Rajaratnam, to whom Mr. Gupta provided his illegal leaks, legal experts say. The sentence may have reverberations beyond the 63-year-old Mr. Gupta, a former chief of consulting giant McKinsey & Co. It will be widely watched in executive suites nationwide because it will be among the first handed down to a major corporate figure in the recent insider-trading crackdown. Previous sentences have largely involved traders, lawyers, lower-rung corporate employees and others.
Warren Ashenmil starts own hedge fund Jerica Capital (HedgeWeek)
Warren Ashenmil, who managed the commercial-mortgage backed securities and commercial real estate portfolio for multi-strategy credit fund Tricadia Capital since 2008, has left to start his own hedge fund called Jerica Capital. Jerica will invest in CMBS and related securities. Those securities could include commercial real estate CDOs and resecuritisations, as well as debt and equity issued by real estate investment trusts. The fund also will take positions in the CMBX index and employ other hedges, including credit and equity index options.
