Editor’s Note: Related tickers: The Blackstone Group L.P. (NYSE:BX), HSBC Holdings plc (NYSE:HBC), Berkshire Hathaway Inc. (NYSE:BRK.A), Dell Inc. (NASDAQ:DELL)
A battle within the Republican Party over same-sex marriage is unfolding on two fronts, in public, and behind the scenes. In the latter case, one of the most influential players is a billionaire hedge fund manager largely unknown to those who don’t work in finance or mix with political mega-donors. That man is Paul E. Singer, who over the years has used his wealth to spur Republicans to support gay marriage laws. Now, Singer is expanding his reach with the creation of an advocacy group which aims to spend millions influencing the legislative debate over same-sex marriage across the country. Singer, the 68-year-old founder of Elliott Management Corporation, is not a newcomer to the political battle over gay rights. He coaxed Republican state senators in New York to back a same-sex marriage law in 2011, offering financial cover against backlash stemming from their votes, helping raise six figures for each of them.
Hedge funds find value in French bonds, Greek corporate debt, Japan’s Abenomics (Opalesque)
Hedge funds are reportedly betting French bond prices will fall, buying Greek corporate debt, and benefiting from Japan’s Abenomics. In the week ending May 3, 2013, it was also reported that London-based hedge fund 36 South had launched an ERISA Fund which is a version of their long volatility flagship fund; former Rubicon executives Tim Attias and Santiago Alarco raised $300m to launch their new hedge fund Canosa Capital; and CICC Investment and PineBridge Investments launched their first global fund of hedge funds that targets Chinese investors. In a surprise move, Hong Kong-based Richland Capital announced it would close down its hedge funds, Reuters reported; and health care hedge fund Ayer Capital said it would shut down and return capital to its investors.
This Former Hedge Fund Analyst Wants to Launder Your Clothes (AdWeek)
Robert Hennessy has an unusual talent. If you tell this ex-analyst entrepreneur where you live in New York, he can name every laundry and dry cleaner within a stone’s throw. “Seventy-eighth between First and Second? There’s four dry cleaners on that block,” he reports, reeling them off one by one before sniffing, “They’re all 7-to-7 places.” The term 7-to-7 refers to the typical operating hours of drop-off laundries and dry cleaners—and for Hennessy, it translates to a huge business opportunity. A year ago, Hennessy launched DashLocker, premised around the idea that New Yorkers—perhaps millions of them—have fast-paced, complicated lives that the business hours of the average dry cleaners simply don’t take into account. For them, DashLocker offers a simple alternative: Dump your dirties in a locker and about a day later, everything comes back fresh, clean and folded.
Hedge fund sector set to let loose in Las Vegas (AsianInvestor)
The US hedge fund industry is gearing up to let down its hair – and possibly its scruples – at the biggest annual conference for the sector, taking place this week in Las Vegas. AsianInvestor is crossing the Pacific to attend this year’s SkyBridge Alternatives Conference (Salt) in Sin City, which kicks off on May 8. …About half of attendees will be investors, with 25-30% comprising managers and 10% service providers, according to organiser SkyBridge Capital, the US-based alternatives manager running about $7 billion in assets. The remainder represents non-profit organisations, public policymakers, academia and media. We will not be alone in making the 16-plus hour flight from Asia, as it is understood the National Pension Service of Korea, a Japanese broker-dealer and a few hedge funds from Hong Kong and the mainland will be in attendance as well.
Infonic AG and Blackstone Announce Strategic Partnership (WSJ)
Infonic AG, thought leader in software for investing into hedge funds has announced a strategic partnership with The Blackstone Group L.P. (NYSE:BX), a leading asset management and advisory firm. Infonic’s HedgeSphere product is a core component of Blackstone’s Hedge Fund Solutions technology platform. Under the agreement, The Blackstone Group L.P. (NYSE:BX) will hold a minority-interest in Infonic AG, and will share future innovation and technology with the company to help them build out their suite of products. Tom Furrer, Founder and Chairman of Infonic AG, said, “Strengthening our long term relationship with Blackstone solidifies our leadership and helps position us for the future in this rapidly reshaping market. Access to The Blackstone Group L.P. (NYSE:BX)’s business and technology innovation is a huge plus for our clients and us.”
Indian hedge funds dare where others fear to tread (DeccanHerald)
Kinariwala’s Capveda Capital (India) Advisory fund, which he runs from a modest office in a decrepit industrial estate in Mumbai, has returned 11.86 per cent so far this year, outperforming average negative returns of 2 per cent from India-focused foreign hedge funds. Local hedge funds are eager to show off double-digit returns in the hopes of drawing wealthy Indians and succeeding where overseas players including HSBC Holdings plc (NYSE:HBC) have failed. Local market knowledge and the lack of foreign currency exposure will favour domestic funds, but it remains to be seen whether Indians would embrace new investment styles in a country that traditionally prefers buying and holding stocks. “It will be very difficult,” said Samir Arora, founder of Singapore-based Helios Capital, which manages hedge funds focused on India.
Raj shares hospital with Boston bomber (SundayTimes)
Raj Rajaratnam, the Sri Lankan-born hedge fund billionaire who was sentenced to 11 years in a federal prison on charges of fraudulent insider trading, has remained in a federal medical centre in the state of Massachusetts. Since last week, he has been in the not-so-distinguished company of one of the surviving Boston bombers. The 19-year old Dzhokhar Tsarnaev, whose brother died in a shoot-out with police following the bombing during the Boston marathon last month, is being treated at the same federal facility for gunshot wounds in his throat, head and legs. Since the hospital rooms resemble prison cells, there is little or no chance the Sri Lankan hedge fund honcho and the Boston bomber would cross each other’s paths. But the security around the facility has been considerably strengthened. According to an article in the Wall Street Journal, Rajaratnam may require “indefinite” treatment because of his chronic medical conditions, including kidney disease that requires dialysis treatment.
PineBridge partners with CICC Investment Management to Launch first global fund of hedge funds (AmeInfo)
CICC Investment Management (USA), Inc. and PineBridge Investments LLC (PineBridge) announced the launch of the first global fund of hedge funds (Fund) on April 1 targeting qualified Chinese investors. The launch of the global fund of hedge funds demonstrates the strategic decision of CICC Investment Management (USA)’s parent company, China International Capital Corporation Limited (CICC), to expand its investment management business globally. PineBridge and CICC Investment Management (USA) have both invested proprietary capital to seed the Fund and ensure alignment of interests with investors.
Buffett To Hedge Fund Manager: ‘You Didn’t Convince Me To Sell The Stock’ (BusinessInsider)
Weeks ago Warren Buffett called on investors far and wide to be the “credentialed bear” at his Berkshire Hathaway Inc. (NYSE:BRK.A)’s massive annual shareholder blowout in Omaha. Ultimately, Palm Beach hedge fund manager Doug Kass was selected, and as “credentialed” bear he got to ask the first question in front of thousands of onlookers today. That’s probably tough. After Berkshire announced earnings yesterday and blew past analyst earnings by $307 a share, it was probably even more tough. All that said, Kass opened with a valid question, and not one that isn’t unheard of when people whisper criticism of Buffett’s legendary firm — they ask if in recent years his acquisitions have become too large.
Soros and Dell back Waypoint helicopter leasing group (FT)
The funds of two of the world’s highest-profile individual investors – Michael Dell and George Soros – are betting on future high levels of offshore oil production by investing hundreds of millions of dollars in a helicopter leasing company. Waypoint Leasing is one of only two significant lessors of helicopters, alongside Ireland’s Milestone Aviation, and plans to build up a fleet of up to about 65 aircraft. The fleet will mainly be aimed at meeting fast-growing demand for helicopters to ferry workers to and from offshore oil and gas platforms, which are gradually moving further from land. Mr Dell’s family investment vehicle, MSD Capital, and Mr Soros’s private vehicle, Quantum Strategic Partners, are the two biggest investors of three that have invested $375m in Waypoint. Two people involved said both MSD and Quantum had taken equal stakes, while a third investor, Cartesian Capital, had taken a smaller stake. The firms are expected to announce the investment formally early this week.
Icahn, Southeastern Eye Board Fight Over Control of Dell (FoxBusiness)
After backing off from a potential bidding war over Dell Inc. (NASDAQ:DELL), billionaire investor Carl Icahn reportedly plans to join forces with the PC maker’s largest outside shareholder in the next week to force a board fight. A proxy fight between Icahn and Dell Inc. (NASDAQ:DELL) anagement would be the latest drama since founder and CEO Michael Dell unveiled a $24.4 billion leveraged buyout in February in a deal with private-equity firm Silver Lake Partners. According to the New York Post, the board fight could be a prelude to Icahn and Southeastern Asset Management calling on Dell Inc. (NASDAQ:DELL) to unload parts of its business and pay shareholders a dividend by repatriating about $9 billion in overseas cash. Both Icahn and Southeastern, Dell Inc. (NASDAQ:DELL)’s largest outside shareholder, have criticized the $13.65-a-share LBO from Michael Dell as being too cheap.
Dr. Doom: Buy stocks while you still can (HartfordBusiness)
The famously gloomy economist Nouriel Roubini has finally fingered an investment he likes. But his advice carries an expiration date. Roubini is predicting an uptick in stock prices over the next two years as the Federal Reserve continues its stimulus efforts. But buyer beware, Dr. Doom says, because a day of reckoning is lurking at the end of the two-year horizon. Roubini, an economics professor at New York University best known for predicting the U.S. housing crisis, thinks the Federal Reserve and other central banks around the world can and will prop up stocks and bonds for the next two years.
This Accounting Quirk Is Setting Up Public Pensions For Disaster (BusinessInsider)
The Economist has an interesting piece in Buttonwood this week about how U.S. public pensions do their accounting. Basically, they discount their liabilities using the expected return on their assets. …This perverse accounting treatment got me thinking about why pension funds continue to invest in hedge funds seeking 8% returns, even though it’s been many years since hedge funds made 8% and it’s not likely they will in the near future either. Certainly not with over $2 trillion competing for opportunities. Based on the accounting, including an asset with an 8% return target helps reduce the value of their liabilities even if the 8% return expectation is an unreasonable expectation. So the motivation for a pension fund trustee could be to include hedge funds because of their helpful impact on the discount rate on their liabilities even while their continued failure to achieve that target doesn’t cause huge immediate problems.
