Editor’s Note: Related tickers: Sony Corporation (ADR) (NYSE:SNE), Linn Energy LLC (NASDAQ:LINE), Berry Petroleum Company (NYSE:BRY), Goldman Sachs Group, Inc. (NYSE:GS), Comcast Corporation (NASDAQ:CMCSA), SandRidge Energy Inc. (NYSE:SD), Dell Inc. (NASDAQ:DELL)
Leon Cooperman of Omega Advisors said on CNBC the $8.4 billion hedge fund has done its homework on Linn Energy LLC (NASDAQ:LINE) and remains an investor in the embattled oil and gas driller. In a midday Wednesday CNBC interview, the hedge fund investor also referenced a positive conversation with management of Berry Petroleum Company (NYSE:BRY) about the firm’s proposed stock merger with Linn Energy LLC (NASDAQ:LINE). Cooperman said he spoke with Berry Petroleum Company (NYSE:BRY)’s chief executive Martin H. Young and that the company remains committed to its merger with Linn Energy LLC (NASDAQ:LINE). Omega Advisors isn’t concerned with how Linn Energy LLC (NASDAQ:LINE) accounts for a hedging program the firm has in place to reduce its exposure to volatile energy prices, Cooperman said. The former Goldman Sachs Group, Inc. (NYSE:GS) Asset Management head estimates Linn Energy LLC (NASDAQ:LINE)’s net asset value (NAV) at about $40 a share, well in excess of the company’s current price.
Loeb Must Deliver More Sony Details (WSJ)
Dan Loeb‘s story on Sony Corporation (ADR) (NYSE:SNE)‘s 6758.TO -0.10% entertainment business suffers from some serious plot holes, at least as he’s told it so far. Mr. Loeb, a U.S. hedge-fund investor, has argued in two letters to the company that a separate listing for the music and movies unit will improve efficiency—in other words, reduce costs and raise margins. That’s a worthwhile goal. Sony Corporation (ADR) (NYSE:SNE)’s film unit had a 6.5% operating-profit margin in its last fiscal year, compared with 12% at Walt Disney’s DIS -1.49% film studio and NBC Universal, a unit of Comcast Corporation (NASDAQ:CMCSA) -0.45% . …Beyond those high-level changes, though, Mr. Loeb has offered little detail on how to bring costs down. Meanwhile, Jefferies notes that structural issues constrain Sony Corporation (ADR) (NYSE:SNE)’s margins compared with those of its peers.
Smaller funds-of-hedge-funds beat larger peers on growth (eFinancialNews)
More than half of the fund-of-hedge-fund firms surveyed by Casey, Quirk & Associates and BNY Mellon, or 53%, increased both revenue and assets under management in the three years between 2010 and 2012, compared with 47% that did so from 2009 to 2011. Smaller firms, defined as those with less than $5bn in assets, have grown the fastest since the global financial crisis of 2008, according to the report, followed by midsize firms – those with assets between $5bn and $12.5bn. Large firms have not fully recovered – their assets and revenue are still below the 2008 level, the report said. In aggregate small firms were 40% larger in 2012 versus 2008, while large firms were 20% smaller.
Hedge fund technology develops across the value chain (HedgeWeek)
Getting the right technology solutions in place for today’s hedge fund manager is a pressing concern. Tighter trade margins and growing regulatory/compliance costs are hardly conducive to ramping up a hedge fund’s annual IT budget. Where possible, they need cost-efficient solutions for their technology infrastructure, yet at the same ensuring the highest standards are being upheld. One significant push in recent times has been a concerted focus on developing truly integrated front-to-back platform solutions for the buy-side. From portfolio construction and analytics, pre-trade risk assessment, through to order and execution management, reconciliation and reporting, getting a single consolidated version of the truth, based on the same consistent data set, is fast becoming a top priority.
Brevan Howard hedge fund hit by emerging market slide (Reuters)
Brevan Howard‘s emerging market hedge fund, one of the world’s largest, is nursing big losses after the recent sell-off in developing market stocks, bonds and currencies, two sources who have seen the numbers said. The $2.7 billion (1.7 billion pound) Emerging Market Strategies Fund, run by Geraldine Sundstrom, is down 11.6 percent to June 14, the sources said. This includes a 4.8 percent drop this month. The losses are big for Brevan, a $40 billion firm that prides itself on stringent risk controls. Its flagship Master Fund, for example, has never had a losing year since launching in 2003.
Hedge fund technology becomes mainstream (HedgeWeek)
Hedge funds are well known for developing advanced technology solutions that meet exacting standards and demanding requirements. Now, as their sophisticated investment strategies enter the mainstream, there is also a need for technology solutions to become more mainstream. Two decades ago, when derivatives trading was still rare, hedge funds needed accounting systems that could help them understand their notional exposures, monitor leverage and liquidity, manage collateral and counterparty risks, and value complex instruments.
Hedge fund Grandmaster sees stock market crash in China (Reuters)
Former chess grandmaster-turned hedge fund manager Patrick Wolff is betting on a stock market crash in China, where he says corruption and bad debts have spiralled to dangerous levels. Speaking to Reuters on the sidelines of the GAIM conference in Monaco this week, Wolff said investors were too focused on trying to work out when easy money policies will taper off in the United States and ignoring a looming correction in China. “People are talking way too much about the Federal Reserve and not enough about China,” he said. “We’ve been saying that the U.S. is the safest place to invest, while China is a crash waiting to happen.”
Truth behind Tory donor in honours row: Why multi-millionaire hedge fund baron was pushed through to be knighted (DailyMail)
His name on the Queen’s Birthday Honours list triggered a storm of protest. But the nomination of multi-millionaire hedge fund baron Michael Hintze, who has donated millions to the Tory Party, did not enjoy whole-hearted support from Downing Street. Indeed I can reveal Hintze’s knighthood was pushed through by the many charities he has backed, despite the opposition of No?10 who feared the political embarrassment. His close involvement with Prince Charles also played a part. Sir Michael, 59, who was yesterday at Royal Ascot with his wife Dorothy, received his honour for ‘services to the arts’ after gifting over £30?million to good causes.
This Hedge Fund Could be Taking a Bath on EM ETFs (FoxBusiness)
Not that the funds needed any additional help searching for new downside, but emerging markets ETFs got just that on Wednesday when Federal Reserve Chairman Ben Bernanke and his colleagues noted downside risk to the U.S. economy and labor market have diminished. …That could be bad news for Ray Dalio’s Bridgewater Associates. At the end of the first quarter, Bridgewater held massive stakes in both ETFs. A filing with the Securities and Exchange Commission showed that at the end of the quarter, Bridgewater owned nearly 84 million shares of VWO, a stake that was equivalent to the 32.8 percent of the fund’s equity holdings.
SandRidge ousts CEO Ward, Bennett takes the helm (Reuters)
SandRidge Energy Inc. (NYSE:SD)‘s board of directors removed the energy company’s founder and chief executive, Tom Ward, on Wednesday after a months-long struggle with activist investors who accused him of strategic mistakes and self-dealing at the expense of shareholders. …The company has been under fire since last year from hedge fund TPG-Axon and another activist investor for governance lapses and strategic missteps. Under a deal reached with TPG-Axon in March, the board agreed to replace Ward by June 30 or give the hedge fund a controlling number of seats.
Marc Faber: People With Assets Are All Doomed (DailyReckoning)
When the always cheerful Dr. Marc Faber gave his midyear forecast to Barron’s, it was, as you might expect, predictably sunny. ‘People with assets are all doomed,’ he began, ‘because prices are grossly inflated globally for stocks, bonds and collectibles.’ Faber warns the Federal Reserves low interest rates could lead to a global crash. Faber acknowledged the Fed’s role in rising equity prices this year. And suggested the party wouldn’t last, due to the uneven flow of money through the economy. …Faber amended his prediction last year that there would be a 20% correction last fall:‘We might be in the final acceleration phase now. The Standard & Poor’s 500 could rally to 1,750 or even 2,000 in the next month or two before collapsing.’
Icahn changes tack, seeks $16b Dell stock buyback (GulfNews)
Activist investor Carl Icahn on Tuesday proposed a $16 billion share buyback in his latest effort to thwart Dell Inc. (NASDAQ:DELL) founder Michael Dell’s effort to take the struggling computer maker private. Icahn, now the company’s second-largest shareholder after buying 72 million shares from fellow activist investor Southeastern Asset Management Inc., wants the company to buy back up to 1.1 billion Dell Inc. (NASDAQ:DELL) shares at $14 apiece to boost shareholders’ return on their investment. The price of the buyback would represent about two-thirds of Dell Inc. (NASDAQ:DELL)’s current market value of about $23.5 billion. Dell Inc. (NASDAQ:DELL) and other personal computer makers have seen their sales crumble because of the growing popularity of smartphones and tablets.
Starboard’s Office Depot Battle Could Test Smith’s Mettle (InstitutionalInvestorsAlpha)
You could argue that Jeffrey Smith, the founder, chief executive officer and chief investment officer of New York–based activist hedge fund firm Starboard Value, is the Carl Icahn of small-cap shareholder activist campaigns. But unlike Icahn, who has experienced a few high-profile failures in recent years, Smith is on a hot streak. Smith — who created Starboard in March 2011 through a spin-off from Ramius, the investment management subsidiary of the Cowen Group — has scored big successes in his activist campaigns, adding or replacing some 100 corporate directors at 35 companies since 2004. Lately, Smith has notched victories against three targets:
