Hedge Fund News: Paul Singer, SG Capital Management, Citigroup Inc. (C)

Editor’s Note: Related Tickers: II-VI, Inc. (NASDAQ:IIVI), Westpac Banking Corporation (ASX:WBC), UBS AG (USA) (NYSE:UBS), Deutsche Bank AG (USA) (NYSE:DB), Citigroup Inc. (NYSE:C), Sequenom, Inc. (NASDAQ:SQNM)

Hedge Fund Manager Believes Gold Remains A Good Store of Value (PR Web)
Even with the recent drop in gold prices, many hedge funds and analysts believe gold is still a good investment and the best store of value. Paul Singer, founder and president of the Elliot Management Corp., which manages over $22 billion in assets, is still one of the believers in the yellow metal. “We remain unconvinced that genuine normalization of global economic and financial conditions has been achieved,” said Singer in a recent interview with Bloomberg. (2) “There is only one store of value and medium of exchange that has stood the test of time as ‘real money,’ and that is gold.”

Top hedge funds bet on Greek banks (Financial Times)
Some of the world’s leading hedge funds are pouring money into the Greek banking sector in expectation of huge potential returns, even as the country struggles to right its economy in the face of deep government spending cuts. Farallon Capital, York Capital Management, QVT Financial and Dromeus are among hedge funds that are set to participate in the recapitalisation of the country’s banks. The hedge funds are among the largest institutions involved in a €550m share issue from Alpha Bank, Greece’s second-largest lender, set for completion in mid June, said people familiar with the plans.

This Hedge Fund Just Overhauled Its Equity Portfolio; Should You Pay Attention? (Seeking Alpha)
SG Capital Management, one of the “elite” 450 hedge funds we track, has filed its 13F filing for the first quarter of 2013, and it indicates that some significant changes have been made. Ken Grossman and Glen Schneider, the fund’s managers, have a new favorite holding in the No.1 spot, while a couple of newcomers occupy the 4th and 5th positions. II-VI, Inc. (NASDAQ:IIVI), a manufacturer of engineered materials and opto-electronic components, is a new addition to SG Capital Management’s 13F portfolio, and incredibly, now holds the No. 1 spot. Grossman and Schneider bought more than 800,000 shares worth by the end of the first quarter.

Citigroup’s Corbat Says Spending Needed for Full Recovery (Bloomberg)
Michael Corbat, hunting for revenue seven months into his tenure as chief executive officer of Citigroup Inc. (NYSE:C), said the improving U.S. housing market and declining unemployment won’t ignite the nation’s economy unless companies start spending. Corbat and his fellow CEOs at other U.S. banks need stronger economic growth to fuel revenue that’s being undermined by a slump in trading and regulators’ efforts to rein in risks in the wake of 2008’s credit-market turmoil.

Image: Citigroup Inc. (NYSE:C)

Time to bale out of the banks (WA today)
“We concluded that by almost any affordability metric, Australia had the largest housing bubble on the planet.” The words of David Hurwitz of SC Fundamental, a large US-based hedge fund, neatly explain why he’s shorting Commonwealth Bank. He’s not alone, either. Jim Grant of Grant’s Interest Rate Observer recently recommended shorting Westpac Banking Corporation (ASX:WBC) and Bank of Queensland. Intelligent Investor Share Advisor recently expressed similar concerns. Even the banks themselves are cautious. As reported by Fairfax Media, UBS AG (USA) (NYSE:UBS) and Deutsche Bank AG (USA) (NYSE:DB), hardly organisations known for talking down share prices, call the sector “overpriced”.

Funds rush to dodge new European rules (Financial Times)
A controversial hedge fund-lite structure looks likely to survive, despite a regulatory clampdown that has claimed its first victim. Cantab Capital Partners, a $5.5bn systematic global macro manager, last week announced the imminent closure of its only onshore Ucits fund as a result of pressure from European regulators. However, fund promoters are restructuring a swath of similar funds, advised by groups such as Winton Capital, Man Group and Aspect Capital, to get around new rules imposed by the European Securities and Markets Authority.

Asia’s Best Analyst: India (Wall Street Journal)
As India’s benchmark Sensex index returned 26% in 2012, Amit Anwani, an analyst at a little-known brokerage firm, doubled investors’ money with a bet on midcap real-estate stocks. Mr. Anwani, who works at Mumbai-based Kantilal Chhaganlal Securities Pvt., said his best calls were on regional real-estate companies Sobha Developers Ltd. – which rose 92% under his buy call last year – and Housing Development & Infrastructure Ltd., which he rated a buy throughout the year as it more than doubled. Mr. Anwani covers midcap companies, with a focus on capital goods, real estate and construction.

Reuters: Detroit’s municipal debt attracting hedge fund ‘vultures’ (MLive.com)
Hedge funds have found success in the last two decades in corporate bankruptcies, but now they have set their sights on struggling municipalities, “and no place beckons like Detroit,” according to a report in Reuters called “Analysis: Hedge funds in search of distress take a look at Detroit.” With Detroit’s billions of dollars in long-term debt, Reuters notes that the city’s bankruptcy would be comparable to some of the largest corporate restructurings, should it go down that route. The size of Detroit’s debt means that the hedge funds could take large chunks of it at time – hundreds of millions of dollars – making it a more attractive investment.

5 Stocks This Growth-Oriented Hedge Fund Is Most Committed To (Seeking Alpha)
Bluefin Investment Management is a value-oriented hedge fund founded and managed by Brian K. Russell. During the first quarter of 2013, they have made important changes in their equity portfolio, which can be approximated thanks to their latest 13F filing with the SEC. The fund’s new lead equity investment is in a biotech player, closely followed by a popular apparel stock. The biggest position in Bluefin’s latest 13F is Sequenom, Inc. (NASDAQ:SQNM), a biotechnology firm. The hedge fund has increased its stake in Sequenom by 20% quarter-over-quarter. The reported value of their investment is approximately $10 million.