Hedge fund manager Philip Falcone is ruling out a bankruptcy filing for his telecom startup LightSquared Inc, one day after U.S. regulators said they planned to revoke approval for the company to build a national wireless broadband network.
Falcone Seeks Spectrum Swap for LightSquared (Bloomberg)
Billionaire Phil Falcone is seeking to swap spectrum owned by LightSquared Inc. with that controlled by the U.S. Department of Defense, a person with knowledge of the company said, in an effort to salvage his investment and save his hedge fund. Falcone’s Harbinger Capital Partners LLC has sunk $3 billion in LightSquared, a Reston, Virginia-based firm that plans to build a high-speed broadband network to serve 260 million Americans. The Federal Communications Commission said Feb. 14 it won’t let the company begin service because it interferes with GPS navigation of cars, boats, planes and tractors.
Falcone, LightSquared Say Interference With GPS Can Be Solved (Bloomberg)
Hedge fund billionaire Philip Falcone said his LightSquared Inc. venture remains committed to finding a solution to interference problems that led U.S. regulators to reject the proposed nationwide wireless service. The U.S. Federal Communications Commission yesterday vowed to block LightSquared after the Obama administration found the wireless service’s signals would disrupt navigation gear that depends on the global-positioning system. The FCC said it plans to withdraw the preliminary approval it granted to the Reston, Virginia-based company last year.
Clearwire Gets Boost as LightSquared Gets Blocked (Bloomberg)
The U.S. Federal Communications Commission vowed to block LightSquared after the Obama administration found the wireless venture backed by hedge-fund billionaire Philip Falcone would disrupt navigation gear. Bloomberg’s Jon Erlichman reports on Bloomberg Television’s “Bloomberg West.”
What Does George Soros Know About Google? (WSJ)
WSJ ‘Deal Journal’ lead writer David Benoit discusses significant investment changes revealed in quarterly disclosure forms filed by investors George Soros and John Paulson.
Hedge Funds Warm to Bank Stocks (Deal Book)
Amid falling profits, large layoffs and fears of looming regulation, Wall Street banks needed all the friends they could get in 2011. And in the fourth quarter, they found at least one group willing to stand on their side: some of the world’s largest hedge fund managers. This week’s 13-F bonanza, the quarterly occurrence in which large hedge funds must file a list of their stock holdings for the previous quarter with the Securities and Exchange Commission, revealed that several large hedge funds took or increased their stakes in Wall Street bank stocks during the fourth quarter of 2011, betting the industry would recover and send stock prices upward.
John Paulson Misses On Bank Stocks, Again (CNN Money)
The hedge fund manager who called the crash continues to struggle in the recovery. No one will ever call it his greatest trade ever. The worst? Maybe not. John Paulson, the hedge fund manager who made billions betting against housing in 2007 and 2008, sold much of his stakes in the nation’s largest financial firms in late-2011, missing this year’s large rally in those stocks. Shares of Bank of America (BAC) and Citigroup (C) are up 45% and 24% in 2012. Paulson’s fund, though, no longer owns either.
Icahn Pushes CVR Sale (Bloomberg)
Potential acquirers could scoop up CVR Energy Inc. (CVI) at the cheapest takeover valuation on record for a U.S. oil refiner and still reward shareholders with a billion dollar windfall. Even with the stock’s 24 percent gain since billionaire Carl Icahn disclosed an investment in January, a buyer could offer about a 40 percent premium and still purchase CVR at the lowest valuation relative to earnings of any takeover greater than $500 million in the U.S. oil refining and marketing industry, according to data compiled by Bloomberg. Icahn, CVR’s biggest investor, urged the Sugar Land, Texas-based company this week to put itself up for sale.
John Paulson’s Greek Warning (Bloomberg)
Paulson & Co., the $23 billion hedge fund run by John Paulson, said Greece may default. Bloomberg’s Deirdre Bolton reports on Bloomberg Television’s “Money Moves.”
Peek Into Paulson’s Holdings (Bloomberg)
John Paulson, the billionaire hedge fund manager who had his worst year on record in 2011, sold his entire stakes in Citigroup Inc. and Bank of America Corp. in the fourth quarter before the shares rallied. Bloomberg’s Julie Hyman reports on Bloomberg Television’s “Money Moves.”
Buffett’s New Money Manager: Top Five Stock Picks Out-Performed Those of New Boss (Forbes)
Hedge fund manager Ted Weschler was picked last September to manage about $1 billion to $3 billion of Berkshire Hathaway’s (BRK.A) (BRK.B) money. Berkshire’s shareholders should hope he brought some of his magic with him. Weschler had racked up an impressive investment history at Peninsula Capital Advisors, reportedly returning double-digit gains to investors. A look at Peninsula’s top holdings as of Sept. 30, 2011, shows that Weschler’s biggest positions outpaced Berkshire’s biggest current holdings, if you’d held each manager’s current top five picks over the past five years.
Ex-Citigroup Trader Denies Wrongdoing in Tibor Probe (Bloomberg)
Christopher Cecere, an ex-Citigroup Inc. (C) executive, accused in a probe by Japanese regulators of suspected interest- rate manipulation denied wrongdoing and said authorities never questioned him before they issued findings. During Citigroup’s internal investigation, the New York- based bank didn’t question Cecere about his conduct or indicate to him that it suspected he had acted improperly, he said in a Feb. 10 phone interview. Regulators also didn’t seek his version of events, he said. He left the firm in good standing, he said. He later joined Brevan Howard Asset Management LLP, a London- based hedge fund that manages about $33 billion.
Hedge Funds Forgiven for Slump by Insurers Shunning Low-Yield Bond Wagers (Bloomberg)
Hedge funds are being spared punishment for their 2011 performance as insurers that suffered last year with lower-than-expected returns decide they won’t be able to do much better in the bond market. Policyholder-owned insurer FM Global plans to boost the allocation to hedge funds in its $10.5 billion portfolio this year, after the bets “didn’t really deliver too well” in 2011, said Paul LaFleche, the company’s senior vice president of investments. The funds provide diversification and historically had attractive returns, he said.
Samuel Won on Hedge Fund Strategies, Returns (Bloomberg)
Samuel Won, founder and managing director of Global Risk Management Advisors, talks about efforts by hedge fund managers to generate greater returns in 2012. He speaks with Pimm Fox on Bloomberg Television’s “Taking Stock.”
Hedge Fund Tyrus Profits From M&A Revival (Reuters)
Event-driven hedge fund Tyrus Capital has made a strong start to 2012, one of several managers to benefit from this year’s revival in European corporate deal making. The flagship $1.8 billion (1.1 billion pounds) fund at the London-based firm, run by Tony Chedraoui, rose 3.74 percent by February 3, one source who has seen the numbers said, outperforming a benchmark index.
Ex-M.Stanley Asia Debt Head Readies Hedge Fund (Reuters)
Morgan Stanley’s former head of fixed income for Asia-Pacific, Ranodeb Roy, is preparing to launch a hedge fund that will focus on liquid Asian interest rates, credit and foreign exchange, he told Reuters on Thursday. Singapore-based RV Capital Management that Roy is setting up with Vickram Mangalgiri, a former adviser at Pacific Investment Management Co., will start trading in April or May.
British Fund Told To Pay SEC $77 Million For Abusive Trades (Thomson Reuters)
A federal judge ordered a British hedge fund firm and its chief executive to pay $76.8 million following a trial on Securities and Exchange Commission civil charges that it engaged in abusive mutual fund trading. The SEC case against Pentagon Capital Management Plc and Lewis Chester is among the last related to a long-running industry-wide probe into improper trading in mutual fund shares, and one of the few to go to trial. That probe was unveiled in September 2003 by then-New York Attorney General Eliot Spitzer.
Insider-Trading Bill Clouds Legality of Tips (WSJ)
The political-intelligence industry thought it scored a great success last week when Republicans yanked a provision from a bill that would have forced firms to register their activities. Now it is confronting the possibility that the legislation—more broadly aimed at banning insider-trading in Congress—could put the entire industry in jeopardy. As securities lawyers and industry executives examine the legislation more closely, they say it could prohibit lawmakers and their staffs from divulging market-moving information to individuals who could trade on it—neutering a major purpose of political intelligence.
British Regulator Fines Ex-Merrill Broker in Greenlight Insider Case (Deal Book)
The Financial Services Authority said the onetime Merrill corporate broker, Andrew Osborne, will pay £350,000 ($548,622) for what the agency called “a serious case of market abuse.” It is the latest charge tied to Greenlight’s sale of shares in Punch Taverns in 2009, in which the hedge fund avoided what the F.S.A. said were millions of dollars in losses. Several executives have already been penalized for their roles in the matter; Greenlight’s chief, David Einhorn, was fined about $11 million.
Third Avenue Investing in Millstein & Co. (WSJ)
Third Avenue Management, an investment firm with distressed-debt expertise, is investing in Millstein & Co., giving the nascent restructuring-advisory firm fresh capital as it ramps up to hire and try to compete with established investment banks. Third Avenue has agreed to give Millstein, founded by former Treasury Department chief restructuring officer Jim Millstein, an equity injection that will make it a minority investor in the firm, according to the two firms. Millstein will use the money to start hiring other advisers, with the hopes of getting notable deals related to restructurings and bankruptcies, Mr. Millstein said. Millstein is currently advising …
Citigroup Wins Credit Suisse Hedge Fund Admin Contract (HFM Week)
Citigroup has won the mandate to provide hedge fund administration services for Credit Suisse’s asset management unit, adding $28bn to the firm’s AuA. The deal, to support part of the Swiss investment bank’s US-based alternative investments business, will include middle-office, custody, and hedge fund administration services, detailed a Citigroup statement.
Goldman And Bridger Alums Launch Global Equity And Credit Fund (AR)
Fourteen-year Goldman Sachs Asset Management alum Roberta Goss and former Bridger Management and Chilton Investment Company senior analyst David Shuman opened Northwoods Capital Management Partners to investors February 1. Goss and Shuman co-founded the New York firm in 2011. The pair, combined with the Northwoods team, will use their credit and private equity backgrounds to invest in public credit and equity markets…
Pensions Seek Liquidation of Fletcher Hedge Fund (FINalternatives)
Three Louisiana pension funds have apparently had their fill of Fletcher Asset Management. The public pension plans have filed a winding-up petition against the New York-based hedge fund’s Cayman Islands-domiciled vehicle, calling for its liquidation. In the Caymans filing, the pensions wrote that the Fletcher fund “is unable to pay its debts” and “should be wound up.” The lawsuit further alleges that Fletcher has filed no audited financial statements in three years and that the fund appeared to have no directors between Nov. 21, 2011 and Jan. 24.
Investor Lawsuit Against Listed Hedge Fund Tossed (FINalternatives)
A federal judge has junked a lawsuit against Polygon Investment Partners and a subsidiary because the shareholder bringing the case bought the fund long after the alleged malfeasance occurred.
Lasry, Gallogly Stick With Obama As Pres. Prepares For Wall Street Fundraiser (FINalternatives)
President Barack Obama is heading to New York to collect money for his reelection campaign from the hedge fund managers and others on Wall Street who have not abandoned him for the Republican candidates for his job.
Conn. Fines Hedge Fund For Brokerage Issues (FINalternatives)
A troubled Connecticut hedge fund has been fined $250,000 over its former brokerage business. The Nutmeg State’s Banking Department said that Southridge Capital Management’s defunct brokerage, Southridge Investment Group, failed to keep e-mails from key employees and did not properly control its restricted trading list. The department also revoked SIG’s broker registration, a fact that Southridge CEO Stephen Hicks doesn’t seem all that concerned about.
Hedge Funder’s Seattle Arena Plans Set For Unveiling (FINalternatives)
Seattle’s mayor is expected to hold a press conference today to unveil plans for a new arena in the city to be financed by a hedge fund manager. Details of the presser remained unclear, with final arrangements still being worked on last night. But Mayor Mike McGinn will likely detail the offer to build a new home for a professional basketball team—and possibly hockey team—from Valiant Capital Management founder Chris Hansen.
Steve Mandel Rejoins The Gold Party; World Gold Council Chimes In (Zero Hedge)
Following the barrage of 13Fs released two days ago, another hedge fund that has eventually found its way to the one undilutable currency is Steve Mandel’s Lone Pine. His thoughts on the matter need no commentary: ‘We re-established a position in gold during the quarter. Although we certainly have misgivings about an asset that does not produce cash, it seems very likely that developed market governments will try to inflate away their outsized debt burdens, debasing their currencies in the process.
Marc Lasry’s $2.6 Billion Bet On European Vice Is Up Over 19% (Business Insider)
Bloomberg has a lengthy profile of Avenue Capital founder Marc Lasry. Somewhat unsurprisingly, the distressed investor sees good times for his funds ahead, as turmoil in Europe depresses asset values.
Today’s Events: Housing Starts, Jobless Claims, PPI And Philly Fed (Zero Hedge)
Busy day in the economic headlines arena, with Housing Start, Claims PPI and Philly Fed all on deck. Goldman summarizes the expectations and the upwardly biased consensus.
Jim Chanos: Property Market in China Has Entered Recession (Value Walk)
Hedge fund manager Jim Chanos says slowing demand in China will continue and may have ripple effects around the global economy.
Wilbur Ross:Greece Is Being Rewarded For Failing To Live Up To Its Commitments (Value Walk)
Greece is being rewarded for failing to live up to its commitments and every time they fail to live up to their commitments they get more concessions out of the EU or out of the private sector lenders, says Wilbur Ross, RL Ross & Co.
Baupost Mega-Quarry: More Unanswered Questions (Value Walk)
Fortune had an interesting story about Seth Klarman’s Baupost Group today. The article is not a typical Klarman article about the man being an investment genius or a new investment he made. It is about a contraverisal quarry that Baupost Group has gotten involved with in Ontario. Our genius writer. Kim Palacios has written several (very popular articles) on the topic, which can be found here. She also was invited to speak on the radio twice about the topic.
Hedge Funds Pilling Into Apple: Even David Tepper (Value Walk)
Hedge fund managers that added Apple include: Ken Griffin (Citadel Advisors), David Shaw (D.E. Shaw & Co.), Robert Citrone (Discovery Capital), Steven Mandel (Lone Pine Capital), Chase Coleman (Tiger Global), David Einhorn (Greenlight Capital), Andreas Halvorsen (Viking Global), Phillipe Laffont (Coatue Management), Steven Cohen( SAC Capital Advisors), Barry Rosenstein (Jana Partners) and David Tepper (Appaloosa Management).
David Einhorn Buys Rim: What?! (Value Walk)
It is surprising to read that hedge fund manager David Einhorn is purchasing shares of Research in Motion and Yahoo for his Greenlight Capital group. During the same time, Einhorn sold off his stake in CVS, Marathon Oil Corp, Ingram Micro Inc. and Synaptics Inc. The fourth quarter filing also showed us that Einhorn’s Greenlight Capital picked up shares in Dell, Xerox, Liberty Media, OmniVision Technologies, Delphi Automotive Plc and CA Inc.
Credit Suisse Hedge Fund Completes $2.9 Billion Fundraising (Hedge Co. Net)
CS Strategic Partners, the exclusive dedicated secondary private equity arm of Credit Suisse and one of the leading secondary buyers of private equity limited partnership interests, today announced the final close of its most recent hedge fund, CS Strategic Partners V, L.P. (together with affiliates, “SPV” or “the Fund”), with total capital commitments of over US $2.9 billion. Consistent with regulation, this capital includes over US $87 million committed by Credit Suisse and the Strategic Partner investment team.
Ken Griebell Joins Hedge Fund Ramius (Hedge Co. Net)
Ken Griebell has joined Ramius LLC, the global alternative investment management business of Cowen Group, Inc., in New York as a Director. In this newly created role, Griebell will expand Ramius’ marketing and distribution activities for liquid alternative products to new and existing customers and grows the $11.2 billion hedge fund’s presence across distribution channels that focus on mass affluent retail investors.
Survey: Hedge Fund Allocations to Increase in 2012 (Hedge Co. Net)
A new survey by AlphaMetrix Global Marketplace found that a majority of investors in hedge funds, commodity trading advisors and private equity funds expect to increase their allocations to those private investments in 2012. More than 250 managers representing more than $610 billion in assets under management and over 400 investors participated in the Summit. Overall, more than 200 total investors and managers participated in the survey.
Hedge Fund MR Capital Sees Opportunities In Chinese Reverse Mergers (Opalesque)
Mohannad ALRashoudi, Founder and fund Director of hedge fund MR Capital Management, which is managed by the Cayman Islands-based Global Consumer Loyalty Fund Ltd., sees opportunities in the Chinese reverse mergers or “reverse takeovers” (RTOs) but advised investors to conduct due diligence before dipping into what he described as the “Sino Curse.” ALRashoudi said in an interview, “Maybe it’s too late to talk about false opportunities in Chinese reverse mergers, but it could actually be too early ahead of the true opportunities. The Sino Curse drove its entire universe down. In general terms, market reaction can well be justified, especially when the subject is accounting fraud and the worst case scenario isn’t worse enough.”
Morning Read: Just Default Already, Watch VIX ETNs (Barrons)
Hot Links: Back to Reality (The Reformed Broker)
Morning News: February 16, 2012 (Crossing Wall Street)
10 Thursday AM Reads (The Big Picture)
Don’t Make A Hulking Hedge Fund Angry (CNN Money)
Thursday 7atSeven: two-way trading (Abnormal Returns)
Frontrunning: February 16 (Zero Hedge)
HFMWeek Daily Snapshot – 16 February (HFM Week)
SEC Form D Filings For Feb. 15, 2012 (Reuters Hedge World)
Hedge Funds Up In January, Obama Fundraiser Targets Hedge Funders, Morgan Stanley To Raise HF Money And More (Reuters Hedge World)
