Elliott Says Deflation Less Likely Than Asteroid Hitting (Bloomberg)
Elliott Management Corp., the $24.1 billion hedge-fund firm run by Paul Singer, said recession is a possibility in the developed world, while the deflation that keeps central bankers awake at night is less likely than an asteroid hitting the earth. “The fact remains that important structural reforms and pro-growth policies have been absent in the developed world,” Elliott wrote in a letter to investors, a copy of which was obtained by Bloomberg News. “Their economies are running on monetary extremism, which so far has not delivered the promised growth or jobs. We are not predicting a recession. We are just keeping it in the possibility mix.”
JANA Partners, the hedge fund founded by activist investor Barry Rosenstein, will stop accepting new money into its $4.7 billion Nirvana funds on May 1, and may limit capital into other portfolios, according to a letter to investors. Several other hedge funds have also curbed inflows or returned money because of a lack of clear investment opportunities at a time when demand for hedge funds has been growing. “Given the significant growth in our capital base in recent years it would be prudent to close our JANA Nirvana funds to outside investments,” JANA Partners said in its quarterly letter seen by Reuters on Tuesday.
Sotheby’s Poison Pill Said by Loeb to Hinder Proxy Fight (3) (Businessweek)
Sothebys (NYSE:BID) is misusing an anti-takeover defense to hinder Third Point LLC’s proxy fight to add directors to the auction house’s board, a lawyer for the $14.5 billion hedge fund run by Dan Loeb argued. Sotheby’s poison-pill defense shouldn’t bar Third Point from owning more than 10 percent of Sotheby’s shares because the fund isn’t angling for control of the board, Third Point lawyer William Lafferty told a judge today. Loeb wants Sotheby’s May 6 annual meeting delayed so the defensive measure can be fully reviewed.
Icahn, Ackman Bury Hatchet (FINalternatives)
For a decade, William Ackman and Carl Icahn have been enmeshed in one of Wall Street’s nastiest, bitterest and, at times, entertaining feuds. But the dispute, which intensified over the past year-and-a-half as the two battled over nutritional supplements company Herbalife Ltd. (NYSE:HLF), is at an end. Ackman, who runs Pershing Square Capital Management, and Icahn patched things up last year with a phone call. The younger hedge fund manager telephoned Icahn’s assistant on April 24 with a simple message: “I am calling to forgive Carl,” The Wall Street Journal reports. Icahn called Ackman back to reciprocate. “It is a blessing to forgive, and I forgive you,” Icahn said.
Seattle Clippers? What Donald Sterling’s lifetime ban could mean for ex-Microsoft CEO Steve Ballmer (GeekWire)
In light of racist comments Donald Sterling made during a recorded conversation, today the NBA placed a lifetime ban on the Los Angeles Clippers owner and said it will act quickly to force the 80-year-old to sell the team. That’s made at least a few people in Seattle wonder: Will former Microsoft Corporation (NASDAQ:MSFT) CEO Steve Ballmer and hedge fund manager Chris Hansen now make an attempt to purchase the Clippers and move them up to the Emerald City? Ballmer and Hansen came close to buying the Sacramento Kings franchise one year ago with plans to build a brand new sports arena, but they ultimately lost out after an NBA committee blocked the $625 million deal.
Market too similar to 2000: Cramer (CNBC.com)
The Hedge Fund Kid and the Treasure Ship (Businessweek)
On Monday, a deep-water exploration ship lingered 160 miles off the coast of Charleston, S.C. The vessel is operated by Odyssey Marine Exploration Inc (NASDAQ:OMEX), a company with a unique business model: It recovers treasure from shipwrecked vessels. Odyssey Marine hopes to retrieve an estimated $86 million in gold from the SS Central America, a steamship sunk during a hurricane in 1857 while it carried large amounts of gold from California. The publicly traded, Tampa-based company is entitled to a substantial percentage of the riches. Naturally, Odyssey Marine is promoting the possibility of a big score on its website. Not everybody is persuaded. Ryan Morris, an activist hedge fund manager who has shorted Odyssey Marine’s stock, insists that nothing of great value is left on the sunken vessel.
Hedge funds wade into systemic risk debate (Financial News)
Representatives from the hedge funds industry have joined the debate over whether asset managers could pose a systemic risk if they fail, arguing that regulators are taking the wrong approach to evaluating potential threats. The Alternative Investment Management Association, the Hedge Fund Standards Board and Brevan Howard are among the industry members that have pushed back against regulators’ proposals. Their comments, in response to a consultation by the Financial Stability Board and the International Organization of Securities Commissions on how to identify systemically important financial institutions beyond the banking and insurance sector, were made public last week.
Hedge-fund Exec: Lewis Is Wrong — Markets Better Than Ever (Moneynews)
Michael Lewis produced a top-selling book by arguing that the U.S. stock market is rigged. To one of hedge-fund operator Citadel LLC’s top executives, small investors have never been more fortunate. “It’s one of the few markets in the world where the little guy gets a better deal than the big guy,” Jamil Nazarali, the head of Citadel Execution Services, said Monday during a panel discussion at the Milken Institute Global Conference in Beverly Hills, California. “Things are much better today than they were 10 to 15 years ago.”
Ex-Hedge Fund Manager Admits $554 Million Fraud (FINalternatives)
Former hedge fund manager Stephen Walsh has pleaded guilty to fraud charges more than five years after he was first arrested and charged. Walsh, who led WG Trading and Westridge Capital Management with Paul Greenwood, admitted to ripping off investors of $554 million over the course of 13 years. His plea comes nearly four years after Greenwood pleaded guilty to the charges.
Investors Question Why Smart Money Bets on Zillow: StockTwits (TheStreet.com)
Investors followed the “smart money” into Zillow Inc (NASDAQ:Z) Tuesday. Tiger Global Management, a firm Forbes called “the world’s hottest hedge fund,” bought a 9.5% stake in the online real estate search company, according to an April 21 SEC filing that made its rounds on the Web Tuesday. The fund, run by Charles P. Coleman III, has been a top performer for several years. Zillow’s stock rose more than 11% today.
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