Editor’s Note: Related tickers: Apple Inc. (NASDAQ:AAPL), Cisco Systems, Inc. (NASDAQ:CSCO), Dell Inc. (NASDAQ:DELL), Goldman Sachs Group, Inc. (NYSE:GS), Office Depot Inc (NYSE:ODP), Tessera Technologies, Inc. (NASDAQ:TSRA)
In October, Marcel “Mac” DeGuire became president and chief operating officer of Guyana Goldfields, an exploration-stage company listed on the Toronto Stock Exchange that has been losing money trying to develop gold mines in South America for years. Within a few weeks DeGuire was helping to convince investors to buy into a Guyana Goldfields financing for C$3.40 a share, a significant fund raise for the company of some $100 million that closed in February. Eleven days later, however, DeGuire resigned from Guyana Goldfields, citing “personal reasons.” The stock has plunged by more than 60% in 2013 and is now changing hands for C$1.24. It might be surprising for some market watchers to learn that Guyana Goldfields’ biggest shareholder is the Baupost Group, the massive Boston hedge fund firm run by Seth Klarman. Baupost owns 19.7% of Guyana Goldfields, a stake recently worth about $30 million.
Apple to Cisco Lead Record Dividends as Google Holds Out (Bloomberg)
Technology companies are paying out dividends at the fastest pace in more than a decade, boosting cash returns to appease investors dismayed by slowing growth. Led by Apple Inc. (NASDAQ:AAPL) and Cisco Systems, Inc. (NASDAQ:CSCO), technology companies in the Standard & Poor’s 500 Index distributed $10.8 billion in dividends in the most recent quarter, up from $5.1 billion in the same period in 2010. They paid a record $11.9 billion in dividends in the previous quarter, according to data compiled by Bloomberg. …That wasn’t enough for some investors, as the Cupertino, California-based company continued to rake in money, boosting its cash hoard to $137.1 billion at the end of last year. Investors, led by hedge-fund manager David Einhorn of Greenlight Capital Inc., lobbied Cook to return more money as Apple Inc. (NASDAQ:AAPL)’s stock price languished.
SEC lifts ban on hedge fund ads (USAToday)
Hedge funds and other firms that seek private investments will be allowed to advertise publicly for the first time under a rule adopted Wednesday by the Securities and Exchange Commission. Adopted by a 4-1 vote, the rule eliminates an 80-year regime of advertising restrictions intended to safeguard small investors from taking on potentially dangerous risk. The rule covers the way issuers raise funds through private offerings, a process that is exempt from requirements to report public financial statements. While the rule would authorize firms to raise unlimited amounts via mass advertising of private offerings, it would require reasonable steps to ensure that buyers are so-called accredited investors — who are wealthier and deemed better able to gauge investment risks.
Why Hedge Funds’ Glory Days May Be Gone for Good (BusinessWeek)
At the height of the financial crisis in 2008, a group of famous hedge fund managers was made to stand before Congress like thieves in a stockade and defend their existence to an angry public. The gilded five included George Soros, co-founder of the Quantum Fund; James Simons of Renaissance Technologies; John Paulson of Paulson & Co.; Philip Falcone of Harbinger Capital; and Kenneth Griffin of Citadel. Each man had made hundreds of millions, or billions, of dollars in the preceding years through his own form of glorified gambling, and in some cases, the investors who had poured money into their hedge funds had done OK, too. They were brought to Washington to stand up for their industry and their paychecks, and to address the question of whether their business should be more tightly regulated.
Andy Kessler, Former Hedge Fund Manager, Says Shelter Volunteers Cause Homelessness (HuffingtonPost)
If only volunteers would just stop serving soup to the homeless then maybe, just maybe, the issue of people not having a place to live would cease to exist. At least that’s what Andy Kessler, a wildly successful former hedge-fund manager, thinks. In his frank Wall Street Journal op-ed on Monday, Kessler neatly sums up what advocates, philosophers and lawmakers have been struggling to conclude for decades. Shelter workers and volunteers, like his own teenage son, are to blame for perpetuating this country’s homelessness problem.
John Thomas Investor Demands Access To Hedge Fund Files (Law360)
A hedge fund investor fired off a books-and-records complaint at John Thomas Capital Management Group LLC Tuesday, demanding access to internal documents in the wake of fraud charges brought against the firm’s manager by the U.S. Securities and Exchange Commission. In March, the SEC launched administrative proceedings accusing George R. Jarkesy Jr., head of the Houston-based firm, of defrauding investors in two hedge funds by inflating valuations and the books-and-records suit was filed in Delaware Chancery Court by Paul Rodney, a limited partner in one of…
Hedge-Like Funds More Correlated with Stocks (WSJ)
As funds using hedging strategies soar in popularity, there may actually be less reason to like them. Many investors are attracted to such mutual funds and exchange-traded funds due to a lack of close correlations with stocks. In the past, that divergence has provided investors with an added degree of portfolio diversification to weather market turbulence. But a new study by boutique investment manager the Leuthold Group of Minneapolis suggests alternative funds may now be moving more in tandem with stocks than they used to. So-called hedge-like funds, which can hold a variety of different types of securities, have seen their ranks swell.
Hedge fund hires former RBS managing director (eFinancialNews)
Financial News has learnt that Christopher Lynch has been recruited by the $250m manager as head of structured solutions. Lynch will be responsible for the origination and execution of structured products for EQI’s clients. Steve Smith, head of trading at EQI, confirmed the hire. He said: “It’s part of an expansion that EQI continue[s] to make.” EQI, founded in 2009, implements equity strategies through listed and over-the-counter derivatives. Its chief executive, Salim Mohamed, has held roles at Merrill Lynch and Goldman Sachs Group, Inc. (NYSE:GS). Most recently, Lynch was at Evoia Capital, a boutique financial services firm that works in asset management, agency brokerage and structured solutions.
Icahn takes Dell battle to court (ITWeb)
Billionaire investor Carl Icahn plans to seek a higher price for his Dell Inc. (NASDAQ:DELL) shares in court and urged other investors to do the same, in an effort to block Dell Inc. (NASDAQ:DELL) founder Michael Dell’s $24.4 billion buyout offer ahead of a key shareholder meeting. Icahn opposes the proposal from Michael Dell and private equity firm Silver Lake, arguing it undervalues the PC maker, and has put forth a number of alternative options in concert with fellow Dell Inc. (NASDAQ:DELL) shareholder Southeastern Asset Management.
Hedge Funds Stumbled in June After Months of Gains (WSJ)
It was good while it lasted, we’re sure, but nothing lasts forever. After seven months in the black, hedge funds around the world hit the skids in June, according to data provider Eurekahedge. Six of Eurekahedge’s seven regional hedge fund indexes finished in the red last month–meaning that hedge funds invested exclusively in those regions lost money. At least on paper. The exception was the Eurekahedge Japan Hedge Fund Index, which despite the Nikkei Stock Average’s wild ride last month eked out a gain of 0.15%. It’s up 17.38% on the year.
Starboard Zeroes In on New Target: Emulex (InstitutionalInvestorsAlpha)
Jeffrey Smith’s Starboard Value, the New York hedge fund firm that has picked battles with corporate targets including Office Depot Inc (NYSE:ODP) and Tessera Technologies, Inc. (NASDAQ:TSRA), has identified its newest activist target. The firm’s hedge fund, which manages between $1.3 billion and $1.4 billion, disclosed late Monday that it owns 6.9 percent of Emulex, a provider of products that connect servers, storage and networks within data centers. The filing comes less than a week after Bloomberg reported that Emulex hired Goldman Sachs Group, Inc. (NYSE:GS) to find potential buyers, citing two people with knowledge of the situation.
