Billionaire Paulson’s Merger Hedge Fund Said to Gain 10% in 2015 (Bloomberg)
Billionaire John Paulson’s merger strategy has gained 10 percent this year, lifted by consolidation among drugmakers. The $19.3 billion New York-based firm posted a 0.7 percent gain last month in a merger fund that uses leverage to amplify gains, according to three people familiar with the matter, who asked not to be identified because the information is private. An unlevered version rose 0.3 in March and is up 4.5 percent this year. Valeant Pharmaceuticals International Inc.’s takeover of Salix Pharmaceuticals Ltd., of which Paulson & Co. was the largest shareholder as of Dec. 31, helped drive performance. Other strategies had mixed performance.
Hedge Fund Kamunting Capital Shutting Down (The Wall Street Journal)
A once-$1 billion hedge-fund firm founded by former Citigroup Inc. proprietary trading star Allan Teh is shutting down partly because of losses related to oil’s historic plunge. Mr. Teh said he is returning external capital provided to his Kamunting Capital Management L.P., which suffered over the past nine months from junk bond bets jostled by hard-hit energy companies. The hedge fund lost 4% last year, and was down an additional 2% in 2015. Since inception, the fund returned an average of more than 8% per year, after fees.
Canadian Designer Nygård links NY Billionaire Bacon to Bahamas Fire (Reuters)
Canadian fashion designer Peter Nygård escalated his acrimonious U.S. legal battle with Louis Bacon, saying the billionaire hedge fund manager may have driven a groundskeeper to set a fire that heavily damaged Nygård’s neighboring Bahamas beachfront estate. Nygård made the accusation in a countersuit filed Wednesday in a New York state court in Manhattan, where he sought $50 million to punish Bacon for an alleged years-long “vendetta” that he said included harassment and frivolous litigation.
Investor Activism May be Hard on Corporate Creditors – Moody’s (Reuters)
Tactics that activist investors say will benefit a company’s shareholders may also raise the risk for the firm’s creditors, a leading credit rating agency warned on Thursday. “Often these changes are aimed at carving out value for shareholders and this may come at bondholders’ expense,” Chris Plath, vice president and senior analyst at Moody’s, said in an interview. For example if activist investors win a seat on the board of a company, as Third Point’s Daniel Loeb did last year at auction house Sotheby’s, there is often increased uncertainty about a company’s strategic direction, Plath said. “If Bill Ackman or Dan Loeb get a seat on the board, there is an entirely new board room dynamic,” he said.
Ex-Taconic Fund Manager Hampaul Readies Own Hedge Fund – Sources (Reuters)
Former Taconic Capital Advisors portfolio manager Kelly Hampaul is preparing to launch his own hedge fund in the second half of the year, sources said, joining a string of other high profile European start-ups expected in coming months. A combination of buoyant equity markets and divergent monetary policies has helped push first-quarter European hedge fund returns past 4 percent, giving them their best start for three years, data from industry tracker Eurekahedge showed. London-based Hampaul, 37, invested in equity and credit markets for Taconic but left at the end of last year after more than a dozen years at the $8 billion New York-based hedge fund.
Hedge Fund Machines Cash in – Again (CNBC)
The robots are winning again. Hedge funds that rely on sophisticated computer algorithms to invest are once again producing the industry’s best returns. Funds managed by ISAM, Cantab, AHL, Systematica and others produced double-digit gains over the first three months of 2015, according to private performance figures obtained by CNBC.com. Those funds practice a so-called trend-following strategy using contracts on the future price of securities related to stocks, bonds, currencies and commodities.
Meet the Activist Targeting the Activist Who Runs Steak ‘n Shake (The Wall Street Journal)
A small Minneapolis hedge fund has tried to take a bite out of the company that runs Steak ‘n Shake and the activist that runs it. Groveland Capital is seeking to remove the entire board of Biglari Holdings Inc., including its chairman and CEO Sardar Biglari, himself an activist. It’s a campaign that’s garnered attention among activists, no strangers to fighting and mudslinging, for its unusually colorful twists and turns. Who is Groveland? The hedge fund was started in 2009 and currently manages about $25 million. It’s run by Nick Swenson, a 46 year-old trader who got his start in distressed debt and previously built a $1.7 billion high-yield debt fund before launching Groveland.
Vivendi, Under Pressure From Hedge Fund, Increases Payout (The New York Times)
Vivendi, the French media conglomerate, said on Wednesday that it planned to raise the amount of money it will pay to shareholders, settling a fight with the American hedge fund P. Schoenfeld Asset Management. The move settles an unusual challenge by a United States investor against one of France’s top companies. The hedge fund, commonly known as PSAM, has pressed Vivendi for bigger payouts and the sale of the Universal Music Group.
