Editor’s Note: Related tickers: Facebook Inc (NASDAQ:FB), Dell Inc. (NASDAQ:DELL), Apple Inc. (NASDAQ:AAPL), J.C. Penney Company, Inc. (NYSE:JCP), SPDR Gold Trust (ETF) (NYSEARCA:GLD), The Blackstone Group L.P. (NYSE:BX)
Leon Cooperman‘s Omega Advisors soured on Facebook Inc (NASDAQ:FB) in the second quarter, while Patrick McCormack’s Tiger Consumer Management took a shine to the social networking company. Regulatory filings on Wednesday from hedge funds and other investment firms reveal how big money managers reshaped their portfolios in the quarter. Their so-called 13F filings with the US Securities and Exchange Commission offer a window into the strategies of managers when it comes to buying and selling US stocks. Omega, for instance, in the quarter sold 3.67 million shares of Facebook Inc (NASDAQ:FB), according to the firm’s regulatory filing. The hedge fund also took a new stake of 5.72 million shares in New Residential Investment, a mortgage real estate investment trust. Tiger Consumer, meanwhile, added 1.2 million shares of Facebook Inc (NASDAQ:FB), bringing its total holding to 4.8 million shares…
Hedge Funds Triple Dell Stakes Boosting Buyout’s Prospects (BusinessWeek)
Hedge-fund managers almost tripled their holdings of Dell Inc. (NASDAQ:DELL) common shares in the second quarter while traditional mutual-fund firms cut their stakes in the computer maker, a trend that could boost Michael Dell’s bid to take his company private. Money managers classified as hedge funds increased their portion of Dell Inc. (NASDAQ:DELL)’s 1.78 billion shares outstanding to 18 percent as of June 30 from 6.5 percent as of March 31, according to holder reports filed as of yesterday with the U.S. Securities and Exchange Commission. Elliott Management Corp., the hedge-fund firm founded by Paul Singer, bought almost 22 million shares during the period, and Abrams Capital Management LP, a Boston-based firm run by David Abrams, purchased 15 million.
Apple regaining its popularity among the biggest hedge funds (NDTV)
Apple Inc. (NASDAQ:AAPL) is regaining its popularity among the biggest hedge funds, some of which have said a massive sell-off this year has gone too far. After Apple Inc. (NASDAQ:AAPL) was dumped left and right starting in late 2012, noted stock picker Leon Cooperman of Omega Advisors re-entered Apple Inc. (NASDAQ:AAPL) shares in the second quarter, while George Soros’s Soros Fund Management LLC increased its stake and Greenlight Capital’s David Einhorn held on to his 2.4 million shares, according to quarter regulatory filings on Wednesday. Cooperman, whose hedge fund had roughly $7 billion in assets last November, took a new position of 31,000 shares in the iPhone, iPad and Mac computer maker after selling 266,404 shares of the company in the fourth quarter of last year.
Porsche Faces New Hedge Fund Cartel Claim in Legal Battle (BusinessWeek)
Porsche Automobil Holding SE faces a new legal maneuver from hedge funds seeking to recoup billions of euros they say they lost amid the former sports carmaker’s aborted bid to buy Volkswagen AG (FRA:VOW) The funds, which include Elliott International LP and Perry Partners LP, are suing Porsche for 1.81 billion euros ($2.4 billion) over claims it manipulated Volkswagen shares by denying interest in a deal before it made a bid. After other investors lost two similar claims at a German tribunal last year, the funds added antitrust claims against Porsche to their suit, forcing a move to a court that specializes in cartel suits.
Hedge funds need to tackle insider trading perception (Risk)
No one likes being fooled, being seen as a fool, thought to have been foolish. But that is exactly what most hedge fund managers are, or at least according to economic theory, a ‘greater fool’: the idea that it is possible to make money by buying securities, whether overvalued or not, and later selling them at a profit because there will always be someone – a bigger or greater fool – who is willing to pay the higher price. This activity has come under an intense spotlight since the financial crisis. Some would say regulators, and in particular the Securities and Exchange Commission, are on a witch hunt, unjustly targeting successful hedge funds. Others would say it is about time regulators stop unfair practices and clean up trading practices at hedge fund houses.
Icahn seeks to fast-track his Dell lawsuit (Reuters)
Activist investor Carl Icahn will ask a Delaware court on Friday to fast-track his lawsuit against Dell Inc. (NASDAQ:DELL), a key thrust in his months-long effort to derail CEO Michael Dell’s controversial $24.8 billion offer to buy and take private the No. 3 PC maker. Icahn is trying to accelerate the timeframe on his lawsuit, hoping to head off a September 12 special shareholders’ vote on a takeover proposal that the hedge fund billionaire and other major investors argue severely undervalues the company. …Icahn, who wants to install his own directors on the board and oust the founding CEO, argues that Dell Inc. (NASDAQ:DELL) and a special committee overseeing the takeover are short-changing investors.
Who’s right on gold: Hedge funds or consumers? (CNBC)
Polar Capital plans global convertibles fund launch (InvestmentWeek)
Polar Capital is planning to launch a UCITS global convertibles fund with a long bias run by its experienced global convertibles team. The fund will be an extension of the group’s existing Polar Capital ALVA Global Convertible hedge fund, domiciled in the Cayman Islands. The group launched the hedge fund – run by David Keetley and Steve McCormick – in 2010, after poaching both from Vicis Capital. The strategy has so far gathered around $40m in assets according to Trustnet data, and the group is keen to create a similar product which has a long bias.
Shares of Third Point Reinsurance open flat in debut (Reuters)
Shares of Third Point Reinsurance Ltd (TPRE.N) hovered around their offer price on the first day of trading, valuing the property and casualty reinsurer at about $1.27 billion. About 3.4 million shares changed hands by 0953 ET, making the stock the most traded on the New York Stock Exchange. Third Point Reinsurance, controlled by billionaire hedge fund manager Dan Loeb, raised $275.6 million after its initial public offering of 22.05 million shares was priced at $12.50 each. Third Point LLC, the $11.6 billion hedge fund run by Loeb, launched its reinsurer arm last year with $750 million in capital. The reinsurer is led by John Berger, former CEO of Alterra Capital Holding’s reinsurance business.
When Shareholder Activism Goes Too Far (Newyorker)
With the hedge-fund manager Bill Ackman having resigned from J.C. Penney Company, Inc. (NYSE:JCP)’s board of directors on Tuesday, we can now declare the end of his extraordinarily unsuccessful attempt to reinvent J.C. Penney Company, Inc. (NYSE:JCP). It was months in the making: J.C. Penney Company, Inc. (NYSE:JCP)’s board fired Ackman’s handpicked C.E.O., the former Apple Inc. (NASDAQ:AAPL) retail head Ron Johnson, back in April. But Ackman, who still owns more than seventeen per cent of the company, had stayed on the board after Johnson’s departure, and still seemed to harbor hopes of remaking the company. The debacle at J.C. Penney Company, Inc. (NYSE:JCP) is now prompting people to look more skeptically at Ackman, who manages Pershing Square Capital, and that’s fitting. But it should also make us skeptical, in general, of one of the more dubious trends in today’s market: money managers who also fancy themselves corporate visionaries.
Hedge funds lose faith in gold (CNN)
Paulson slashed his position in the SPDR Gold Trust (ETF) (NYSEARCA:GLD), one of the most popular funds for investors seeking exposure to physical gold, by more than half in the second quarter “due to a reduced need for hedging,” the firm said in an e-mailed statement. That’s the largest chunk he has sold since he first announced his big bet on gold in early 2009. Meanwhile, fellow billionaire investor George Soros, who has been lowering his exposure to gold for some time, completely dumped his stake in the gold ETF in the second quarter. So did Dan Loeb’s Third Point Capital.
You only need $50K to be a hedge fund player (Reuters)
Investing in hedge funds or their strategies has never been easier. And the price of admission into what used to be an exclusive club has never been so low. On Monday, Fidelity Investments underscored how the world of hedge fund investing, previously reserved for the uber wealthy, is opening up to mom and pop investors. Fidelity said it struck a deal with The Blackstone Group L.P. (NYSE:BX) to have clients in Fidelity’s Portfolio Advisory Service (PAS) program – with as little as $50,000 in their accounts – invest in the The Blackstone Group L.P. (NYSE:BX) Alternative Multi-Manager Fund.
Buffett Acolyte Zhao Returns to China Stocks (Bloomberg)
Zhao Danyang, the Chinese investor who won a charity lunch with billionaire Warren Buffett in 2008, led his hedge funds to post returns three times more than their Asian peers this year by shifting assets back to Chinese stocks. Zhao’s Hong Kong-based Pureheart Capital Asia Ltd. has more than 80 percent of its $217 million in Chinese stocks traded in Hong Kong, Singapore, the U.S. and at home from 50 percent at the start of 2013, said Jerrie Huang, its business development manager. The $162 million Pure Heart Value Investment Fund returned 24 percent this year through July, Huang said. The Eurekahedge Asian Hedge Fund Index rose 8 percent in the first seven months.
