Editor’s Note: Related tickers: AeroVironment, Inc. (NASDAQ:AVAV), Caterpillar Inc. (NYSE:CAT), SandRidge Energy Inc. (NYSE:SD), H.J. Heinz Company (NYSE:HNZ), Goldman Sachs Group, Inc. (NYSE:GS), JPMorgan Chase & Co. (NYSE:JPM), Dell Inc. (NASDAQ:DELL), Philip Morris International Inc. (NYSE:PM)
Outspoken hedge-fund manager Whitney Tilson usually sticks to the stock markets — not sex tips. Prompted by a recent New York Times story about the campus “hookup” culture at the University of Pennsylvania, the founder of Kase Capital caused a stir yesterday with a widely circulated e-mail and blog posting offering some advice to his three daughters should a guy ever tell them to “get down on your knees.” While Tilson’s suggestions for escaping the situation started out tame (“Walk away”) it quickly escalated with his fifth and final item: “Bite it!” In all cases, Tilson — who is active in education-reform circles — said he would ask that his girls “come home and tell me his name so I can buy my first gun and … well, you get the idea!”
Hedge Fund Takes Interest in AeroVironment (LABusinessJournal)
AeroVironment, Inc. (NASDAQ:AVAV) shares jumped 14 percent Wednesday on news that an activist Newport Beach hedge fund had acquired a 5.1 percent stake in the Monrovia maker of unmanned drone aircraft and electric-car charging stations. …Engaged said in a press release that AeroVironment, Inc. (NASDAQ:AVAV)’s share price could be boosted with better corporate governance and financial disclosures, a stronger capital structure and renewed focus on capital allocation. “In our view, concerns over an excess of cash in the capital structure, a lack of granularity and specificity with respect to its growth plans, and uncertainty surrounding its heavy exposure to the defense budget are all addressable issues,” Glenn Welling, Engaged’s principal and chief investment officer, said in a statement.
Jim Chanos: Why I’m Short Caterpillar (Forbes)
China, the end of the commodities supercycle and accounting issues. In short, that’s why hedge fund manager James Chanos is shorting Caterpillar Inc. (NYSE:CAT) -2.38%. …Caterpillar Inc. (NYSE:CAT) has 30% of its revenue and half of its operating profits tied to global mining capital expenditures, Chanos says, and the hockey stick growth of that spending over the last decade-plus is waning. “One third of global mining cap-ex is equipment, and that lands you in Peoria, Ill., at the doorstep of Caterpillar Inc. (NYSE:CAT),” the hedge fund manager said.
Leon Cooperman Likes SandRidge, Qualicorp And Fat Yields In Financials (Forbes)
A year ago Leon Cooperman said the stock market was the best house in the financial neighborhood. He still feels that way, but has dialed back his expectations thanks to a strong run for the S&P 500. …Cooperman described himself as “less ebullient, but constructive” before firing out a fresh list of 10 stocks he thinks will do well, including SandRidge Energy Inc. (NYSE:SD). …He also likes Brazilian healthcare outfit Qualicorp, another stock he thinks could double, if expected earnings growth of 20% comes through. Cooperman notes that management has a 30% stake in the business and 3G, the private equity firm that teamed up with Warren Buffett to buy H.J. Heinz Company (NYSE:HNZ) earlier this year, has a seat on the boar and “keen interest,” in seeing the company do well.
Bruised FX hedge funds tiptoe back into bets on weaker yen (Reuters)
Hit by a whipsawing yen in the last two months, many FX hedge funds are still determined to bet the Bank of Japan will succeed in weakening the currency over time while the dollar climbs as the Federal Reserve withdraws its stimulus. The Fed’s first hints in May that it may start to pull back from its $85 billion dollars-per-month programme led to a rebound in the safe-haven yen as investors stampeded out of emerging markets and commodity currencies. Its more recent indications that it will stick with its stimulus until later this year have eased some of the market’s qualms, however, and some hedge funds are tiptoeing back into bets against the yen.
Where is the Sweet Spot for Hedge Fund AUM? (ai-CIO)
Investors who plumped for a middle-sized, equity-focussed hedge fund stood a better chance of outperformance last year than those opting for larger or smaller options, research has found. US-based, equity-focussed hedge funds with between $500 million and $3 billion performed the best out of their peer group in 2012, partly due to their size, a survey by Tabb Group today has shown. “Medium-sized hedge funds fared the best in 2012, with 79% reporting positive performance and only 14% experiencing negative performance,” the survey said. “Small firms reported the largest percentage of negative performance, but this represented an improvement over 2011.
Paulson says his funds’ fortunes are up; bullish on buying homes (Reuters)
Hedge fund billionaire John Paulson wants the world to know he is having a good year. After two years of losses in his once enormous Advantage Funds, Paulson has something to brag about in 2013 with his Recovery fund up 25.22 percent and his Paulson Enhanced fund up 15.63 percent. The Paulson Credit Opportunities fund is up 11.2 percent, even after some losses in June. “We are having a very strong year,” Paulson told an audience of investors and hedge fund managers at the CNBC Institutional Investor Delivering Alpha Conference on Wednesday.
B.C. fund of hedge funds strives for 10 per cent returns (TheGlobeAndMail)
Ari Shiff, founder of alternative investment firm Inflection Management Inc., likens good hedge funds to gut bacteria that digest problems such as the subprime-mortgage crisis. You may not like their volatility, but they buy assets in a way that can support economic health. Not all bacteria are good for you, though, and for the Vancouver-based head of one of the few for-Canadians-by-Canadians funds that invest in global hedge funds, the challenge of identifying the right investment strategies, managers and regions is matched in difficulty by knowing exactly when to deploy capital.
Former Soros Employee Starts Hong Kong-Based Hedge Fund Company (SFGate)
Zhang Xinliang, a former employee of billionaire investor George Soros’s family office, started his own Hong Kong-based hedge-fund company, Magnolia Capital Management Ltd. Magnolia was licensed by the city’s Securities and Futures Commission on April 18, according to information posted on the regulator’s website. Zhang, also known as Nick Zhang, was licensed by the regulator as a representative of Soros Fund Management LLC’s Hong Kong office between January 2011 and December 2012. Soros Fund Management oversaw $24 billion earlier this year. Zhang worked for Goldman Sachs Group, Inc. (NYSE:GS) before Soros Fund Management, according to his licensing record.
New EU rules may attract hedge funds -regulator (Reuters)
One of Europe’s top regulators has some good news for the hedge fund industry; pay curbs are not on the agenda. While they will avoid the caps on bonuses facing bankers, Europe’s hedge fund managers can still expect restrictions on the manner and timing of their pay under new regulations coming into force on Monday. The Alternative Investment Fund Managers Directive (AIFMD) is the European Union’s attempt to help protect investors and Gareth Murphy, a former hedge fund manager and equity derivatives trader with JPMorgan Chase & Co. (NYSE:JPM), is one of the key figures behind it.
Is the Government About to Move the Goal Posts on Steve Cohen? (BusinessWeek)
Government investigators have been scrambling through the heat wave to make decisions about whether to bring securities fraud charges against a certain billionaire hedge fund owner based in Greenwich, Conn. The assumption had been that prosecutors had five years to charge said hedge fund owner, SAC Capital founder Steven Cohen, for trades that took place in July 2008 in Elan (ELN) and Wyeth (WYE), which form the basis of an insider trading case that was filed last November against former SAC portfolio manager Mathew Martoma, or for August 2008 trades in Dell Inc. (NASDAQ:DELL) that the government alleges were based on inside information. Cohen has not been charged, and he had been feeling that by the end of this summer, the worst of the legal threats against him would be over, according to a person familiar with his thinking.
Roddy Boyd exposes a hedge-fund fraud (CJR)
Roddy Boyd has the business read of the week with his dynamite investigation into Anthony Davian, the social-media loving hedge-fund manager of Akron. Supposed hedge-fund manager, that is—Boyd’s piece exposes him as a fraud. Anthony Davian claimed to manage $200 million through Davian Capital and also claimed his newsletter, the Davian Letter, took in hundreds of thousands of dollars a year. Both claims were false. Davian apparently managed no more than a couple million bucks and the newsletter made a max of $30,000, Boyd reports. …It’s a helluva story, deeply reported. We’ve got a self-promoting phony, gullible investors, a CFO prohibited from seeing the fund’s bank statements, Jimmy Carter’s son, employees wearing wires, the federales swooping in, and an apparent suicide attempt by Davian.
‘Prime Minister for Benson & Hedge fund’ (TheSun)
DAVID Cameron was yesterday branded “the Prime Minister for Benson and Hedge funds” over his election guru’s links to tobacco firms. Labour leader Ed Miliband demanded a Whitehall probe into whether spin doctor Lynton Crosby lobbied the PM to ditch a plain cigarette packs plan. Among the clients of Mr Crosby’s own lobbying firm are cigarette giant Philip Morris International Inc. (NYSE:PM). In the Commons yesterday, Mr Miliband asked Mr Cameron: “Can’t you see that there is a devastating conflict of interest between having your key adviser raking it in from big tobacco and then advising you not to go ahead with plain packaging?”
Dell’s future hangs on looming shareholder vote (USAToday)
The fate of PC manufacturer Dell Inc. (NASDAQ:DELL) as a public company bidding to go private is near some kind of resolution. Dell Inc. (NASDAQ:DELL) hareholders are scheduled to vote Thursday on a sale of the company to an investment group including founder and CEO Michael Dell. But last-minute offers and other efforts by critics of the deal could derail the shareholder meeting. Michael Dell and Silver Lake Partners investing partners are offering to take the company private for $13.65 per share, or $24.4 billion. But so far, billionaire investor Carl Icahn, a vocal critic of the offer, has refused to drop his counteroffer. The outcome is far from certain, experts say. On Monday, brokerage and shareholder T. Rowe Price voiced its opposition to Michael Dell’s offer. At the urging of Icahn, some shareholders are grousing that the offer undervalues Dell Inc. (NASDAQ:DELL), hinting that they might balk at the vote in hopes of getting CEO Dell and his group to sweeten the bid.
