Kyle Bass Is ‘Frustrated’ by Shire’s Lialda Patent Ruling (Bloomberg)
Hedge fund manager Kyle Bass expressed frustration that the U.S. Patent and Trademark Office upheld the only patent covering Shire Plc’s colitis drug Lialda and argued that “the system must be fixed.” The Patent Trial and Appeal Board within the agency on Wednesday rejected arguments by Bass’s Coalition for Affordable Drugs that the patent never should have been issued. The coalition had argued the patent covered old ideas. Bass said in a statement he was “frustrated” that the ruling “enables Shire to improperly maintain a government-granted monopoly and to exploit the U.S. health-care system, doubling the price of Lialda since 2007, much like EpiPen,” the allergy shot that U.S. regulators accuse Mylan NV of pricing too high.
Goldman Employees to Pull $300 Million From Omega Advisors (Bloomberg)
Goldman Sachs Group Inc.’s retirement plan is pulling about $300 million from Leon Cooperman’s Omega Advisors Inc., marking the second time this year it’s cutting ties with a famous alum who ran afoul of U.S. authorities. The bank informed employees of the decision in a memo Wednesday, according to a person with knowledge of the situation. Most of the funds, which are held in a separately managed account, will be liquidated by Oct. 31, said the person, who asked not be identified because the information is private.
Hedge Fund Lansdowne Extends Losses This Year to $1.8 Billion (The Wall Street Journal)
Lansdowne Partners (UK) LLP, one of the world’s largest hedge funds, extended its losing run last month, missing out on a rebound enjoyed by many of its peers. Lansdowne’s flagship Developed Markets fund lost 2.3% in September, according to numbers sent to investors and seen by The Wall Street Journal. That equates to a loss of about $250 million. It means the fund, which has been one of the best-performing hedge funds of recent years and which is run by Peter Davies and Jonathon Regis, is now down 14.7% this year, according to the numbers.
New Fund To Launch Where You’ll Pay No Performance Fee (CNBC)
A new fund spun out from hedge fund manager Odey Asset Management will only charge investors a 1 percent management fee and zero performance fees, levels sharply lower than traditional industry standards. The first fund from Latitude Investment Management, the Latitude Horizon fund, has been moved from Odey’s hedge fund stable into a UCITS (Undertakings For The Collective Investment Of Transferable Securities) structure. The fund’s fees are being cut as part of the move and represent a steep drop from the historical hedge fund benchmark billings of 2 percent management and 20 percent performance fees.
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.
