T. Boone Pickens not suprised by lower crude prices (Reuters)
Crude oil prices are plunging, but T. Boone Pickens isn’t surprised. The billionaire oilman has seen plenty of spikes and dips during more than 60 years in the industry, including some he predicted. Texas is producing more oil than it has in 30 years, and pumping twice as much as it did just three years ago. It now accounts for more than one-third of all U.S. production. The surge, however, comes as a stagnant global economy slows demand.
Bonus Season Brings More Pain for Traders (WSJ)
Many of Wall Street’s deal makers are heading toward a happy year-end bonus season, while traders and hedge-fund employees are bracing for a disappointing payout. Investment bankers, including those who advise companies on mergers and underwrite stock offerings, and private-equity employees should see bonuses rise as much as 15% from a year ago, according to an analysis by Johnson Associates, a New York compensation-consulting firm.
Vodafone facing €8B Kabel Deutschland charge (MobileWorldLive)
Activist hedge fund Elliott Management said that Vodafone Group Plc (ADR) (NASDAQ:VOD) may have to dish out an additional €8 billion for Kabel Deutschland, which the operator acquired for €7.7 billion last year, depending on the outcome of a court case. Elliot has filed a complaint in German courts against Vodafone, saying the company undervalued its stake in Kabel Deutschland Holding AG. In a quarterly letter to investors, cited by Financial Times, Elliott, which owns 13 per cent of Kabel Deutschland shares, claimed Vodafone should have paid €250 per share instead of €84.53.
Hedge Founder’s Break Up May Alter U.K. Divorce Law (BusinessWeek)
Chris Hohn, one of the most successful U.K. hedge-fund managers, may recast the country’s divorce law if he wins more than half the family assets in his split from his wife. A judge may rule as soon as this week in Hohn and Jamie Cooper-Hohn’s dispute over their $1.3 billion estate and roles in the $4.3 billion charitable foundation they created with their fortune. The case, which may lead to the country’s largest divorce settlement, could change the law for the super rich if the judge accepts Hohn’s argument that his financial talents constituted a special contribution to the marriage.
Hedge Fund Hiring Speeds Up In 2014 (HedgeCo)
With the industry reaching a new high of $2.82 trillion in assets and net inflows at their highest level since 2007, the industry finds itself in tight competition for talent against other industries, as well as other hedge funds, for top finance professionals. Compensation increased 5-10 percent over 2013 compensation, according to the 2015 Glocap Hedge Fund Compensation Report, with front office roles including Portfolio Managers, Traders and Senior Analysts seeing increases, as well as professionals in Marketing and IT at top performing funds.
How Karsch found Juice Press (CNBC)
San Francisco pension fund likely to stay out of hedge fund deep end (PIOnline)
The board of the $20 billion San Francisco City & County Employees’ Retirement System is expected in the next several weeks to reject Chief Investment Officer William Coaker’s plan for a 15% allocation to hedge funds and instead reduce the allocation to no more than 5%, sources say. The board is also expected to bar or severely limit the use of leverage by hedge fund managers, a common strategy to increase returns. Mr. Coaker’s plan would shift assets from fixed income and equities to create the pension fund’s first hedge fund allocation.
Hedge funds of funds are competing with consultants (PIOnline)
Hedge funds-of-funds managers are turning the tables on investment consulting firms that have been poaching their institutional clients. As asset owners allocated fewer dollars to hedge funds of funds over the past few years, many consultants successfully convinced their clients to invest in the consulting firms’ own commingled vehicles, instead of with external funds of funds. Now, officials at the large institutionally oriented funds-of-funds managers increasingly are pushing back, offering free services — typically found in an investment consulting relationship — to their biggest clients.
NCR adds hedge fund Marcato Capital’s McGuire to board (Reuters)
NCR Corp, which makes automated teller machines, said on Monday that hedge fund manager Richard McGuire, NCR’s biggest shareholder, will join its board less than a month after the company lowered its earnings forecast for the year. McGuire’s Marcato Capital Management owns 10.85 million shares, or 6.44 percent, of 130-year-old NCR. The company’s stock price has tumbled 22 percent in the last 52 weeks. When hedge funds, including Marcato Capital Management, first took notice of NCR two years ago, managers suggested that the share price could reach $51 by 2015, far above its current $28.44 price.
Hedge Funds Morph Into Bond Dealers in Post-Crisis World (Bloomberg)
Hedge funds are serving as the middle man in more bond trades as regulatory changes limit the amount of risky assets Canadian banks can hold on their books. Picton Mahoney Asset Management and RP Investment Advisors are among the Toronto-based firms banks are turning to in the wake of regulatory changes put in place to prevent a repeat of the 2008 global financial crisis. The funds say they are doing what regulators want, transferring risks away from systemically important institutions. Critics say the risks have only migrated to loosely regulated shadow banks.
Hedge-Fund-Backed Detroit Bankruptcy Plan OKed (Finalternatives)
The largest municipal bankruptcy in U.S. history is over, thanks in no small part to hedge funds. A federal judge on Friday approved Detroit’s plan to exit Chapter 9 bankruptcy protection. The sign-off came just weeks after the city reached accord with a group of hedge funds that own more than 90% of bonds issued in 2005 to cover unfunded pension liabilities. The hedge-fund creditors include Aurelius Capital Management, Monarch Alternative Capital and Stone Lion Capital Partners. Detroit’s bankruptcy-exit plan aims to cut the city’s debt by $7 billion.
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