Citadel Hoovers Up Team That Once Ran One-Fifth of BlueCrest Capital (Reuters)
The team running almost a fifth of former leading European hedge fund BlueCrest Capital‘s $8 billion in assets when it announced plans to go private last December have left for U.S. rival Citadel in one of the biggest mass departures to date, three sources told Reuters. Hedge funds have struggled as of late, with weak returns and mass redemptions from investors leading to fee cuts and a push for more innovative strategies. The move sees BlueCrest Head of Quantitative Equities Frank Fehle return to his old employer after a break of seven years and leaves BlueCrest focused on the core strategy of betting on macroeconomic trends, which made founder Michael Platt famous.
Here’s What Closing Sears and Kmart Would Look Like (Bloomberg)
To paraphrase Mark Twain, reports of Sears and Kmart’s death have been greatly exaggerated. Or so says Eddie Lampert, hedge-fund operator and CEO of Kmart parent Sears Holdings. He penned a blog post this week dispelling rumors of Kmart’s imminent shutdown. The situation at Sears is dire. Ratings agencies Fitch and Moody’s have placed the company on the equivalent of a death watch. It has posted four straight years of losses, amounting to about $9 billion. It carries $3.5 billion in funded debt and $2.1 billion in unfunded pension and post-retirement obligations.
Two Big Hedge Funds Unwind Bets Against Deutsche in Sign Of Confidence (Reuters)
Two leading hedge funds which made big bets on Deutsche Bank (DB) shares falling are now reducing their “short” positions, in a sign of confidence in the stability of the lender. Germany’s biggest bank has been in turmoil since mid-September when it said U.S. authorities were demanding up to $14 billion to settle claims that it missold U.S. mortgage-backed securities before the financial crisis. Hedge funds can take bets against companies – known as short positions – by borrowing the stock in the hope it will lose value and they can repay the loan for less, pocketing the difference. Marshall Wace, a $25 billion hedge fund co-founded by British financier Paul Marshall and U.S. billionaire Robert Citrone‘s Discovery Capital Management had been among the funds with the biggest short Deutsche positions, dating from before the crisis erupted three weeks ago.
Elliott Push For Samsung Makeover Puts Founding Family Plans Under Microscope (Reuters)
Samsung Electronics Co (005930.KS) shares jumped to a record high on Thursday after activist investor Elliott Management submitted unsolicited proposals for a radical corporate makeover at the world’s biggest smartphone maker. An attempt by the U.S. hedge fund to wring change at South Korea’s biggest conglomerate last year failed in acrimony. But investors and analysts said Elliott’s latest move could open the way for the founding Lee family to embrace change, cementing its grip as it negotiates succession from its ailing patriarch to the next generation and a hefty inheritance tax bill.
Camares Capital Said Liquidating $500 Million Hedge Fund (Bloomberg)
Camares Capital LLP, a hedge fund started by former Deutsche Bank AG traders in 2013, is liquidating, according to two people with knowledge of the matter. The London-based firm managed about $500 million and is in the process of returning capital to investors, said the people, who asked not to be identified because the information isn’t public. A representative for Camares Capital declined to comment. Antoine Cornut, who led flow-credit trading in the Americas and Europe at the Frankfurt-based bank, started the hedge fund in 2013 with backing from Reservoir Capital Group LLC and Saba Capital Management LP, people said at the time.
