Harbinger Capital Management founder Philip Falcone has borrowed an unspecified amount from a Fortress Investment Group unit best known for giving the late Michael Jackson a mortgage on his Neverland Ranch. Falcone and his wife pledged their $39 million home on the Caribbean island of St. Barthélemy as collateral for the loan, which was revealed in a regulatory filing last month, Bloomberg News reports. Terms of the agreement were not disclosed, by Fortress Credit Corp. which says it specializes in “difficult credits, difficult borrowers and difficult situations,” and generally charges extremely high interest rates to borrowers unable to find financing elsewhere.
Hedge Fund Manager Who Shorted Aviva Stock Now Bets on Bonds (Bloomberg)
Sohail Malik, a hedge fund manager at ECM Asset Management Ltd., made 13.5 percent shorting Aviva Plc (ADR) (NYSE:AV) stock after correctly betting the firm would cut its dividend. Now he’s looking for returns in the insurer’s bonds. Malik, 39, who runs London-based ECM’s European Special Situations fund and usually invests in bonds, was monitoring Aviva Plc (ADR) (NYSE:AV)’s balance sheet before its full-year results and couldn’t see where the cash to fund its dividend was coming from.
New York Seeks Approval to Finish Merkin Settlement (Bloomberg)
New York Attorney General Eric Schneiderman asked a federal judge for permission to complete a $410 million settlement with J. Ezra Merkin, using his law enforcement powers to compensate the former Bernard Madoff investor’s victims. Madoff brokerage liquidator Irving Picard, who seeks to collect $500 million from Merkin for different investors, is trying to block the deal. Schneiderman has argued that Picard has no claim to the settlement money and lacks power as a bankruptcy trustee to stop the state from enforcing the people’s legal rights.
Talk-Show Host Hedge Fund Manager, Brokerage Chief Charged With Fraud (FINalternatives)
A conservative talk-radio host and a famed boiler-room magnate have been accused of defrauding investors in the former’s hedge fund. The Securities and Exchange Commission has sued George Jarkesy and John Thomas Financial founder Anastasios Belesis. The regulator says the two men misled investors about the funds’ independence from John Thomas, with Jarkesy inflating the funds’ value and Belesis collecting huge fees. “Jarkesy disregarded the basic standards to which all fund managers are held,” the SEC’s Andrew Calamari said. “Not only did he falsify valuations about the value of their holdings, but he bent over backwards to enrich Belesis at the funds’ expense.”
Walter Energy says British hedge fund manager trying to manipulate its stock for quick profit (AL.com)
Walter Energy Inc. and British hedge fund manager Julian Treger have turned up the heat in the ongoing fight over control of the Birmingham company’s board of directors. In a letter being mailed to shareholders Walter Energy Chairman Michael T. Tokarz and CEO Walter J. Scheller claim that Treger has misrepresented the experience of his candidates for the Walter Energy board and offered a candidate who faces insider trading allegations in Canada.
Tessera CEO stepping down, board to be overhauled (Reuters)
Tessera Technologies Inc Chief Executive Robert Young is stepping down, after activist hedge fund Starboard Value called for his sacking and an overhaul of the technology patent company’s board. The company also replaced its chairman and named three new independent directors. Tessera said on Monday it plans to nominate a slate of six independent directors including the three new directors at its annual meeting scheduled for May 23.
Gupta Sues Private-Equity Partner (FINalternatives)
Rajat Gupta, the former McKinsey & Co. chief convicted of passing inside information to Galleon Group founder Raj Rajaratnam, is seeking to hold on to the private equity firm he founded with Rajaratnam and another friend. Gupta filed suit against Parag Saxena, his co-founder at New Silk Route Partners, accusing Saxena of trying to steal the firm from him. While Gupta, who is appealing his conviction and a two-year prison sentence, agreed to distance himself from the New York-based firm, which focuses on investments in India, and to give up his chairman’s title and voting shares, he retained the right to appoint one member to New Silk Route’s two-member board.
Hedge Funds Up 0.67% MTD (FINalternatives)
Hedge funds were up 0.67% month-to-date as of March 20, according to the latest Bank of America Merrill Lynch Hedge Fund Monitor. BofAML analyst Mary Ann Bartels says their models indicate market neutral funds sold market exposure to 7% net long from 9% net long while equity long/short funds held market exposure steady at 28% net long, below the 35-40% benchmark. Macros sold the S&P 500, bought the NASDAQ 100, commodities and 10-year Treasuries, and maintained their shorts in the U.S. dollar. In addition, they partially covered EM but added to their shorts in EAFE.
U.S. Hedge Funds Swoop on Traders at Struggling Europe Startups (Bloomberg)
U.S. hedge funds Pine River Capital Management LP, Millennium Management LLC and SAC Capital Advisors LLC are taking advantage of the struggle of European startup funds to grab their pick of the region’s traders. The three firms, which manage a combined $46 billion, have over the past year all hired employees from hedge funds started by former European bankers, according to regulatory records and people with knowledge of the matter. They joined from firms including Edoma Partners LLP, Occitan Capital Partners LLP and Portman Square Capital LLP, London hedge funds that have either shut down, posted losses or failed to meet their fundraising goals, said the people, who declined to be identified because the companies are private.
Bermuda asset management firm nominated for global hedge fund award (The Royal Gazette Online)
A local asset management company has been nominated for a prestigious award at the Investors Choice European Hedge Funds Awards. Equilibria Capital Management’s flagship fund — The EQC Global Opportunities Fund- has been nominated for the Best Discretionary Global Macro Fund of 2012 in the emerging managers category. Equilibria, which was set up in Bermuda in 2011 by former Morgan Stanley portfolio managers Daniel Tafur and Lopez Ceron, is an alternative asset management company focused on absolute return strategies.
SAC Settlement Goes Before A Judge (FINalternatives)
A federal judge will consider SAC Capital Advisors’ $616 million settlement agreement with the Securities and Exchange Commission on Thursday. The pact, struck earlier this month, requires U.S. District Judge Victor Marrero’s assent. He scheduled a conference on the proposal last week for March 28. The settlement, which will be paid by two SAC units, covers the alleged insider-trading of former portfolio managers Mathew Martoma and Jon Horvath. Martoma is accused of running the most lucrative insider-trading scam in history, earning SAC $278 million on confidential tips about Alzheimer’s drug trials, and has pleaded not guilty, while Horvath has pleaded guilty and is cooperating with prosecutors on a separate insider-trading case.
