Shares Of Hertz Plunge On More Accounting Troubles (Forbes)
Hertz Global Holdings, Inc. (NYSE:HTZ), a favorite stock in recent months of some closely-watched hedge funds, disclosed on Friday morning that its audit committee had concluded that problems with the company’s financial statements for the last three years must be corrected to reflect mistakes. Shares of Hertz tumbled by 10.8% in early morning trading to $27.19. The stock had recently surged as investors of the car rental company anticipated its split into two companies by next year. Specifically, the company said its 2011 financial statements were no good and must be restated, and that its 2012 and 2013 financial statements need to be fixed.
Sebi zeros in on hedge fund in L&T Finance case (IndianExpress)
The Securities and Exchange Board of India’s first insider trading case against a foreign institutional investor got the markets agog on Friday. Even though the accusations may not be strong, with a raft of disinvestment issues expected to hit the markets this fiscal, the regulator is sending out a signal to investors to be careful. Sebi has alleged that Hong Kong-based hedge fund Factorial Capital Management had shorted an L&T Finance Holdings public issue based on privileged information it had, just before the company went public. The announcement of a discount on the issue was made in March this year.
Activists Post Strong Returns, But at a Price (ai-CIO)
Activist hedge funds have outperformed overall hedge fund benchmarks but recorded lower risk-adjusted returns due to high volatility, according to Preqin research. The firm’s data—tracking more than 400 activist hedge funds with over $100 billion in total assets under management—revealed they returned an average of 11.82% in 2013, significantly higher than the 7.88% return from the benchmark. “Hedge funds using shareholder activism as a method of investment have been a big talking point in the industry in recent years,” Amy Bensted, head of hedge funds products at Preqin, said. “As activism becomes a more widely utilized approach, fund managers are increasingly seeing viable opportunities for investment in this area.”
Barry Rosenstein’s Jana Follows April Losses with May Gains (InstitutionalInvestorsalpha)
Barry Rosenstein‘s New York-based activist hedge fund firm, Jana Partners, posted very strong gains in its two main funds in May. Its flagship Jana Master Fund rose 2.7 percent in May and is now up 3.6 percent for the year to date, while Nirvana – a concentrated version of Jana Partners launched in April 2007 to co-invest in select ideas of Jana Master Fund – surged 4.1 percent and is now up 5.5 percent for the first five months. This compares with a 5 percent gain for the S&P 500 for…
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