Editor’s Note: Related tickers: Yahoo! Inc. (NASDAQ:YHOO), Herbalife Ltd. (NYSE:HLF), Google Inc (NASDAQ:GOOG), American Capital Mortgage Investment Crp (NASDAQ:MTGE), Dell Inc. (NASDAQ:DELL), Goldman Sachs Group, Inc. (NYSE:GS), Facebook Inc (NASDAQ:FB), Citigroup Inc (NYSE:C), Bank of America Corp (NYSE:BAC), Credit Suisse Group AG (NYSE:CS)
Dan Loeb’s profits on his two-year play on Yahoo! Inc. (NASDAQ:YHOO) reached $1.2 billion yesterday — one of the largest scores in Wall Street history on trades of a single company’s shares. Loeb had amassed a 73-million share block of Yahoo! Inc. (NASDAQ:YHOO) at an average price of $11.09 a share. In February, Third Point sold off 11 million shares for a total of $216.7 million — or an average of $19.70 a share. The deal with Yahoo! Inc. (NASDAQ:YHOO) yesterday will leave Third Point with 22 million shares. As part of the deal, each of the directors nominated by Third Point — Harry Wilson, Michael Wolf and Loeb — will step down on July 31. Yahoo! Inc. (NASDAQ:YHOO) shares were worth about $11 apiece when Loeb first waded into the company’s path — just about when it fired CEO Carol Bartz.
Carl Icahn Is Squeezing Bill Ackman To Death With Herbalife Trade (Forbes)
Last week, billionaire investor Carl Icahn sat on a stage at New York’s Pierre Hotel and was feeling so good about his bet on Herbalife Ltd. (NYSE:HLF) +6.43%that he almost sounded magnanimous towards his biggest Wall Street rival, the billionaire hedge fund manager William Ackman. “I like Ackman,” Icahn said. “Anybody that makes me a quarter billion dollars I like.” During his talk, televised on CNBC, Icahn carefully explained his approach to investing this year in Herbalife Ltd. (NYSE:HLF), the controversial nutritional supplements seller that Ackman has been vocally shorting in a massive way. Icahn and Ackman, of course, don’t like each other at all, but their big duel over Herbalife Ltd. (NYSE:HLF) has turned into a one-sided affair so far in 2013.
Pine River Picks REIT Winners in Renewed Housing Bets: Mortgages (BusinessWeek)
Pine River Capital Management LP, whose bets on U.S. home-loan bonds fueled the second-best hedge fund performance of last year, is picking winners and losers among the publicly traded companies that invest in the debt. The firm bought shares of mortgage real-estate investment trusts, including two run by ex-Freddie Mac portfolio chief Gary Kain, while wagering against others amid the industry’s worst quarterly slump since 2007, said Steve Kuhn, its fixed-income trading head. Pine River, which disclosed this month it quintupled its stake to 9.2 percent in Kain’s American Capital Mortgage Investment Crp (NASDAQ:MTGE), is investing based on its view of the skills of the managers and the value of their assets, he said.
SAC to Employees: Cohen Didn’t Read Dell Email at Heart of SEC’s Case (WSJ)
SAC Capital Advisors LP fired back at the U.S. government, telling employees Monday that the evidence shows Steven A. Cohen “did not even read” the email at the heart of allegations he failed to take proper steps to prevent insider trading at his hedge-fund firm. A 46-page “white paper” prepared by lawyers for Mr. Cohen responded point by point to the Securities and Exchange Commission’s civil-enforcement action Friday against Mr. Cohen. …The lawyers also took direct aim at the SEC’s assertion that Mr. Cohen got an email in August 2008 that reflected “the clear possibility” that information about upcoming Dell Inc. (NASDAQ:DELL) -0.91% earnings was improperly obtained.
As Banks Retreat, Hedge Funds Smell Profit (WSJ)
School Specialty Inc., a distributor of classroom supplies, borrowed $64 million from a private investment fund last year after it couldn’t get a loan from a bank. Its financial problems persisted, and, in January, it sought bankruptcy protection. Most of the company’s creditors lost money and its shareholders were wiped out. But its last-ditch lender, Bayside Capital, had its loan repaid in full, plus 12.5% interest. It also stands to collect a $23.7 million “early-payment” fee that would vault its profit above 30%, which has prompted a bankruptcy-court challenge by other creditors.
13 proves unlucky for hedgIes as 12-month winning streak ends (CityWire)
For the first time in a year all hedge fund strategies have fallen into red, research has shown. Across the board, hedge fund strategies returned -1.52% during June, with long/short strategies enduring the biggest monthly loss, Preqin, which analyses the performance of alternative asset classes, discovered. Returns for the quarter were also poor, the research house said, though this comes as little surprise given analyses conducted earlier in the year by Goldman Sachs Group, Inc. (NYSE:GS) and EDHEC-Risk Institute found that hedge fund managers had been caught out by short selling.
Find money owed to you from old accounts (Today)
Mark Zuckerberg of Facebook Inc (NASDAQ:FB) has misplaced some. So has hedge fund billionaire John Paulson. Locked in various state comptrollers’ vaults are billions of dollars owed to millions of people, ranging from the average Joe to Wall Street heavyweights like hedge fund manager Bill Ackman and former Citigroup Inc (NYSE:C) CEO Vikram Pandit. …By law, businesses including banks, insurance companies, utilities, investment companies, are required to turn over inactive accounts to the applicable state after a dormancy period. In many states, the comptroller’s office then serves as the custodian of this money until the person, person’s heir or business comes to claim it.
Yahoo’s Media Head Leaves (WSJ)
All Things Digital is reporting that Mickie Rosen Yahoo! Inc. (NASDAQ:YHOO) -4.49% top executive for for media, is leaving the company. The news comes the same day Third Point investor Daniel Loeb and two associates at the hedge fund sold 40 million shares and exited the company’s board. As senior vice president for global media and commerce, Rosen had a large portfolio that included the heavily trafficked content sites for Finance, Sports and News. Rosen isn’t taking another job it seems, and Yahoo! Inc. (NASDAQ:YHOO) has no one on tap to immediately fill the post, according to Kara Swisher at All Things D. Rosen is one of the highest-ranking executives to depart Yahoo! Inc. (NASDAQ:YHOO) in recent months, Swisher says.
Illinois Teachers looking to enroll hedge fund consultant (PIOnline)
Illinois Teachers’ Retirement System, Springfield, launched a search for its first hedge fund consultant. The $39.6 billion fund has a total of $2.2 billion invested directly in single and multistrategy hedge funds as well as in hedge funds of funds. Investment staff has relied on the advice of its hedge funds-of-funds managers, Grosvenor Capital Management and K2 Advisors, about direct investment in individual hedge funds. In May, trustees accepted the recommendation of Kenneth Musick, absolute-return investment officer, to search for a consultant to assist with a planned overhaul of the hedge fund portfolio.
White Elm’s White-Hot Streak (InstitutionalInvestorsAlpha)
White Elm Capital’s Matthew Iorio continues to have one of the hottest hands among the Tiger Management offspring. Iorio — who is unofficially called a Tiger Grandcub because he worked with Tiger Cub Stephen Mandel Jr. of Greenwich, Connecticut–based Lone Pine Capital for six years — posted gains of between 5 and 6 percent in the second quarter of 2013 in his main fund, White Elm Capital Partners, depending on the share class. This was nearly double the nearly 3 percent increase posted by the S&P 500. For the first half of the year, the hedge fund is up between 10 and 11 percent compared with 13.8 percent for the S&P 500.
To hedge or not to hedge, that is the question (IVCPost)
It is highly recommended that for smooth investment returns, it is imperative that hedges be put in place in order to manage the currency risks present. Foreign exchange is hard to forecast and the short term projections can go awry at a moment’s notice. “Automatic hedging may also prove to be expensive in the long run. Thus, it is recommended that viewing the movements of the exchange rate in the long term and projecting its possible direction would be used as the basis of any action, whether to hedge on a position or withdraw,” according to FXWELLS, a corporate FX hedging service provider based in New York.
Billionaire Batista’s Battered OGX Bonds Lure Hedge Funds (BusinessWeek)
CarVal Investors LLC, the hedge-fund manager with $8 billion in assets, is buying bonds sold by Brazilian oil producer OGX Petroleo & Gas Participacoes SA (OGXP3) after they posted the worst selloff in emerging markets. Notes due in five years from OGX, controlled by billionaire Eike Batista, have plunged 82 cents from their January high to 16 cents on the dollar, the biggest drop among all developing-nation securities in Bank of America Corp (NYSE:BAC)’s Global Corporate and High Yield Index. Their price is the lowest of any performing corporate bond in the world. Credit Suisse Group AG (NYSE:CS) estimates OGX, which has $3.6 billion of dollar debt due in 2018 and 2022, may have about $13 million left in cash by year-end.
