Hedge fund firm Farallon Capital Management LLC is raising a new real estate fund of about $350 million to $400 million, the first time Farallon has set up a separate fund exclusively for the asset class, according to two sources familiar with the situation. Farallon is pitching the fund to its existing investors and is targeting a 20 percent internal rate of return, said one of the sources, who was not authorized to speak publicly.
Scene Last Night: Giving Touted at New Manager Awards (Bloomberg)
San Francisco-based Marcato Capital Management LLC was named Best Emerging Manager last night at the first annual Global Emerging Manager Awards presented by S&P Capital IQ and New Legacy Group LLC. During dinner at the Waldorf Astoria, Thomas J. Tierney, chairman and co-founder of the Bridgespan Group, led a panel about philanthropy based on the book “Give Smart,” which he co-authored with Joel L. Fleishman. The idea, said Joseph Weilgus, chief executive officer of New Legacy, was to inspire the next John Paulsons gathered in the room.
Activist Fights Draw More Attention (The Wall Street Journal)
Even giant Apple Inc. (NASDAQ:AAPL) sought advice from Goldman Sachs Group Inc. (GS) when it came under fire this year from activist hedge-fund manager David Einhorn, who has been pushing the company to return more cash to shareholders, according to people familiar with the matter. Apple Inc. (NASDAQ:AAPL) declined to comment but Chief Executive Tim Cook has said several times recently that the company is looking at ways to return cash to shareholders. Activist investors snap up stakes in companies and press for changes such as a sale or stock buyback, often throwing public barbs in the process. Lately, activist William Ackman has been waging a campaign against nutritional-supplements company Herbalife Ltd., (HLF) calling it a pyramid scheme, which the company denies. Meanwhile, Paul Singer‘s Elliott Management has pressed for change at oil producer Hess Corp., (HES) calling for the company to shed assets and split in two. Hess recently said it would seek to sell some businesses, but not because of Elliott’s demands.
Should John Q. Public Invest in the Carlyle Group? (Bloomberg)
Carlyle Group, the Washington-based private-equity firm, filed documents with the Securities and Exchange Commission last week detailing plans to start a fund open to accredited investors with a $50,000 minimum investment. This represents a sea change for the private-equity industry, which until now was only open to people who could make much bigger minimum investments (in the neighborhood of $5 million to $20 million) or giant pools of savings, such as endowments and pension funds.
Highland Takes Issue With Ex-P.E. Chief’s Plans (FINalternatives)
Highland Capital Management’s former private equity chief plans to launch a new firm, raising tensions in the already extremely-litigious relationship between him and his former employer. Patrick Daugherty told the New York Post that he’s readying his own firm with another former Highland executive, Greg Stuecheli. And Highland fears that Daugherty is planning to poach its clients, nearly a year after it accused him of spreading “lies” about it to investors and others.
Hedge Funds and Old GM Trust Fail in Settlement Talks (Bloomberg)
Elliott International LP and a unit of Fortress Investment Group LLC (FIG) are among hedge funds that failed to reach an agreement with the trust liquidating General Motors’ old assets over $3 billion in claims related to the automaker’s 2009 bankruptcy filing, according to court papers. The dispute stems from a settlement made between the hedge funds and a Canadian unit of GM the day of the bankruptcy filing. The trust liquidating the old assets, called Motors Liquidation Company GUC Trust, seeks to reduce or eliminate the claims that the hedge funds negotiated. General Motors Co. (GM)’s Chief Financial Officer, Daniel Ammann, testified in past hearings that a negative outcome in the dispute over the Canadian notes could cost the automaker, now out of bankruptcy, as much as $918 million, or 50 cents a share.
Rivelli Joins Hedge Fund Proteus Global Partners (Traders Magazine)
Doug Rivelli has joined hedge fund Proteus Global Partners as its chief executive officer. Proteus describes itself on LinkedIn as a multi-catalyst long/short event fund. Prior to this, Rivelli was chief executive at Algorithmic Trading Management – ATM – for two years. ATM, formed in 2009, is a global and multi-asset class electronic trading company and part of Cowen Group. Cowen Group purchased ATM in 2012.
Ackman’s J.C. Penney Losses Signal Buyout Need: Real M&A (Bloomberg)
Bill Ackman’s best shot at salvaging his investment in J.C. Penney Co. (JCP) is to push the department store to go private before it runs out of cash and loses another billion dollars for shareholders. Because J.C. Penney also has the industry’s highest ratio of net debt to market value, a traditional leveraged buyout is unlikely, said Morningstar Inc. Instead, Ackman would need to find buyout firms willing to put up cash for a deal and buy time for Chief Executive Officer Ron Johnson, a former Apple Inc. (NASDAQ:AAPL) executive, to attempt a turnaround by converting the department stores into collections of boutiques. Another option is to place some properties into a real estate investment trust, according to International Strategy & Investment Group LLC.
Paulson Asks Court To Junk CDO Lawsuit (FINalternatives)
Paulson & Co. said that it had done nothing wrong in its dealings with Goldman Sachs on a collateralized debt obligation, and asked a judge to dismiss a lawsuit to the contrary. The hedge fund yesterday said it had not misrepresented anything about the CDO, Abacus 2007-AC1, and that its “obligations ended” after it struck a deal with the bank to short the vehicle. Paulson’s lawyers cited three federal investigations, all of which looked at Abacus “without finding any wrongdoing by Paulson.”
Eurekahedge Hedge Fund Index up 0.22% (HedgeCo.Net)
New York – The global hedge funds sector currently standing at more than US$1.8 trillion, the sector has seen positive returns across all regions in 2012 – with Asia ex-Japan as the best performing region at 12.14% of gains. It is also less than three months away to the 10th Asian Hedge Fund Awards in Singapore which will be held on Friday June 7th at Capella Singapore.
