Editor’s Note: Related tickers: BlackRock, Inc. (NYSE:BLK), Transocean LTD (NYSE:RIG), Dell Inc. (NASDAQ:DELL), iShares Gold Trust (NYSEARCA:IAU), The Procter & Gamble Company (NYSE:PG), MBIA Inc. (NYSE:MBI), Hess Corp. (NYSE:HES), General Electric Company (NYSE:GE)
Israel A. Englander and Co. today announced that its Managed Accounts & Prime Services (MA&PS) division, the first and only technology platform offering powerful solutions for emerging hedge fund managers and investors, has expanded its footprint to Palm Beach County, Fla. Brett Langbert, Managing Director, Head of Sales, is in charge of MA&PS’ newly opened Palm Beach office, where he will be dividing his time between this office and MA&PS’ New York office. MA&PS also has an office in Santa Monica, Calif. MA&PS’ clients include emerging hedge funds, fund of funds, family offices, pension funds, endowments, and managed account platform providers.
Dell committee asks Icahn for more information (Reuters)
The special committee of Dell Inc. (NASDAQ:DELL)‘s board of directors on Monday asked Carl Icahn for more details on the activist investor’s proposed offer for the computer maker. Last week Icahn and Southeastern Asset Management Inc challenged Michael Dell’s $24.4 billion bid to take Dell Inc. (NASDAQ:DELL) private with an offer of $21 billion in cash. But in a letter to Icahn, the committee said it was not clear if he intended to make “an actual acquisition proposal that the Board could evaluate” or if he intended his offer as an alternative in the event the pending sale to Silver Lake and Michael Dell is not approved.
Gold Bears Pull $20.8 Billion as BlackRock Says Buy (Bloomberg)
Hedge funds increased bets on lower gold prices after investors pulled a record $20.8 billion from bullion funds this year while BlackRock, Inc. (NYSE:BLK), the world’s biggest money manager, said it’s still bullish. Speculators held 67,374 so-called short contracts on May 7, 6.4 percent more than a week earlier, U.S. Commodity Futures Trading Commission data show. The net-long position dropped 10 percent to 49,260 futures and options. Net-bullish wagers across 18 U.S.-traded raw materials climbed 5.8 percent to 582,265, with gains for cocoa, cotton and hogs. …The metal helps diversify portfolios, BlackRock, Inc. (NYSE:BLK)’s Kapito said in an interview with Tom Keene on “Bloomberg Surveillance.” Kapito said he would “still be a buyer of these short-term technical blips.” BlackRock, Inc. (NYSE:BLK) is the top investor in the iShares Gold Trust (NYSEARCA:IAU).
Transocean Chairman Talbert to Step Down Amid Fight With Icahn (BusinessWeek)
Transocean LTD (NYSE:RIG), the world’s largest offshore oil rig contractor, said Chairman Michael Talbert plans to step down as the company fights board nominees from billionaire investor Carl Icahn. Talbert will give up his position as chairman by November and retire from the board by the 2014 shareholder meeting if re-elected at the company’s annual meeting on May 17, Vernier, Switzerland-based Transocean LTD (NYSE:RIG) said today in a statement. Talbert has been on the Transocean LTD (NYSE:RIG) board since 1994 and was chief executive officer until 2002. …Icahn, who holds a 5.6 percent stake in Transocean LTD (NYSE:RIG), called on the company in January to issue a $4-a-share dividend and is seeking to replace three board members, including Talbert. Transocean LTD (NYSE:RIG) has proposed a $2.24-per-share dividend after not issuing one last year as it sought to maintain an investment grade credit rating and a “strong, flexible balance sheet” while reducing the value of its businesses.
Bill Ackman’s Big Presentation On Why Procter & Gamble Is ‘One Of The Great Businesses Of The World’ (BusinessInsider)
Activist investor Bill Ackman, who runs $12 billion Pershing Square Capital Management, made a bullish case for The Procter & Gamble Company (NYSE:PG) at the Sohn Investment Conference this week. Ackman, whose fund owns more than 27.9 million shares of The Procter & Gamble Company (NYSE:PG), called it “one of the great businesses of the world.” Basically, Ackman believes the company is under-earning relative to its intrinsic earnings power. He sees the company’s earnings per share growing from $4 to $6. If the company is able to reach this earnings potential of $6 per share, Ackman also sees the company being able to achieve an intrinsic value of $125 per share in approximately two years. The Procter & Gamble Company (NYSE:PG)’s stock was last trading above $78.59 per share.
Mortgages are investment du jour for hedge funds (CNN)
In less than five years, mortgages have gone from toxic to tonic. It’s the same life span as the annual hedge fund conference SALT, where many of the top professional managers met last week to talk investments, hear speeches from luminaries like Al Pacino and generally have a good time. In all, Las Vegas SALT, officially the Skybridge Alternatives Conference, drew 1,800 attendees — hedge funders, but also accountants, lawyers and others who service the industry. The conference wrapped up on Friday with an appearance from Oliver Stone and a pool party. This year, what people seemed to be talking about more than anything else on the investment panels and in the hallways was the mortgage market.
Hedge fund gurus show bear stance during Sohn conference, SALT conference (Opalesque)
Hedge fund industry leaders gathered in Las Vegas for Skybridge’s SALT conference this week, during which Ingrid Pierce of Walkers law firm talked to Opalesque about hedge fund launch trends; hedge fund manager Josh Birnbaum said he believes in a housing recovery, and that the macro trade today is not as good as it was. Stanley Druckenmiller said the supply and demand situation in commodities is deadly and recommended shorting “commodity currencies” during the Sohn conference in New York, BusinessInsider reported; many of the investment gurus speaking at the conference warned of tougher times ahead; energy stocks came up as top ideas several times; and David Einhorn advised his fellow investors to “do your own homework” (it was reported elsewhere that Einhorn’s Greenlight Capital had increased its exposure in Apple, and had closed its longstanding “short” position in bond insurer MBIA Inc. (NYSE:MBI)).
Roman debunks gold myth (eFinancialNews)
Roman, who took over from Peter Clarke at the helm of Europe’s largest listed hedge fund manager in February, took the opportunity to talk about why he thinks the price of gold should be $1,000 per ounce. The precious metal is currently trading at around $1,465 per ounce. Roman, a keen wine collector, used a wine analogy to debunk the myth that gold is very cheap. He said that under the formula for the equilibrium price of gold, which is money supply divided by total stock of gold in the world, the equilibrium price of gold is $10,000 per ounce. Applying the same calculation to Lafite Rothschild, Roman calculates that a bottle of Lafite Rothschild should be worth $900,000 a bottle, “which makes absolutely no sense”, he said.
Salt provides party backdrop to thorny capital-raising (AsianInvestor)
“If you like money, put your hands in the air!” bellowed a singer from the stage at the poolside party for Salt Las Vegas. Of the hundreds of hedge fund industry delegates attending the conference’s Latin-themed gala dinner, not a single hand went up. Possibly it was out of good taste, or because they were holding a drink in one hand and a freshly-rolled Cuban cigar in the other. One delegate was seen stirring his drink with an unlit cigar.
Rumours rife US billionaire George Soros is shorting the Aussie dollar (Malaysia-Chronicle)
Speculation was rife that Hungarian-American business magnate George Soros, known as the man who broke the Bank of England, was planning the raid on our currency. A large number of trades shorting the dollar totalling $US1 billion were placed via Hong Kong and Singapore by the business magnate’s Soros Fund Management, according to ValueWalk. One Sydney-based FX trader told the website someone has picked a mark around $US1.0270 and seemed to be betting on a rate cut.
Master of doom Marc Faber is feeling gloomy about Canada (TheGlobeAndMail)
Marc Faber, editor and publisher of The Gloom, Boom and Doom Report, was late to arrive to our Tuesday live discussion at Inside the Market alongside David Rosenberg. But we posed some of the questions you left for him in a later telephone conversation. Before we did, however, we couldn’t resist asking him about his views on Canada. Not surprisingly, the famed economist known for his contrarian and often pessimistic bent didn’t exactly offer an uplifting view. “I think Canada is a case where you have huge leverage in the private sector and where the economy is slowing down, where you have a strong currency and where the price levels are now relatively high,” Dr. Faber told us from Thailand.
Why Hedge Fund Managers Should Never Buy Sports Teams (InstitutionalInvestorsAlpha)
The hedge fund sports owner hex strikes again. The latest victim: Harbinger Capital Partners’ Philip Falcone. Last week the minority owner of the Minnesota Wild ice hockey team agreed to settle civil charges with regulators, which will result in the Minnesota native winding down his hedge funds. Falcone thus becomes at least the third hedge fund manager in the past few weeks who either owns or has made a bid to buy a professional sports team who has suffered a big setback in his day job. He joins Jeffrey Vinik of Vinik Asset Management, who recently announced he is shutting his hedge funds to devote his time to running the Tampa Bay Lightning hockey team, and Valiant Capital Management’s Christopher Hansen, whose losing streak at his hedge fund roughly tracks his negotiations to buy the Sacramento Kings basketball team.
Soros Vet Dai Adds DH & YZ Execs. To New Hedge Fund (Finalternatives)
Former Soros Fund Management trader Jixin Dai has begun staffing his planned new Hong Kong hedge fund. Tian Fund Management features Ye Qingjun and Zhang Yongjun as directors, alongside Dai, the South China Morning Post reports. Ye is the former chairman of DH & YZ Capital, where Zhang was chief investment officer. Dai left Soros last year after the firm returned outside capital. He founder Tian in Hong Kong, where he helped set up Soros’ office, in January.
Hillhouse spin-out Brilliance Capital creates buzz in Asia (HedgeFundIntelligence)
In what is one of the most talked-about new Asian hedge fund launches this year, former Hillhouse Capital director Shi Lin is looking to debut a China-focused equity long/short fund by the end of May or early June under the Brilliance Capital moniker. The new Beijing-based fund is creating waves due to the manager’s credentials and by virtue of being the first spin-out from the legendary $7.5 billion China-based Asian hedge fund shop Hillhouse Capital. Brilliance is understood to have already garnered $30…
Iceland Gets Tough With Foreign Creditors of Failed Banks (BusinessWeek)
Iceland is a Nordic free-market democracy with glacier-covered volcanoes and hyperactive geysers. If you’re into mind-bendingly complex song lyrics, there’s Björk and Sigur Rós. In the rarefied world of global finance, Iceland is also where local pols and central bankers trample on the interests of bondholders like a herd of marauding reindeer. At least that’s the perspective of foreign bondholders and distressed asset hedge funds hoping to recoup their investments in three Icelandic lenders—Landsbanki Islands, Glitnir Bank, and Kaupthing Bank—that defaulted on $85 billion in debts in 2008.
Hess bails on chairman job (NYPost)
Hess Corp. (NYSE:HES) agreed to split the chairman and CEO roles yesterday, caving to pressure from billionaire hedge fund manager Paul Singer. Yesterday, the Texas oil and gas giant said Chairman and CEO John Hess would relinquish his chairmanship following the company’s annual meeting set for Thursday in Houston. Hess, the son of the company’s founder and former owner of the New York Jets, Leon Hess, has held both roles since 1995. The company said that the chairmanship will go to John Krenicki, a former vice chairman of General Electric Company (NYSE:GE), if he is elected to the board next week.
