Return of the arbs: Activists target struggling hedge funds (InvestmentWeek)
While the investment trust sector had a bumper year in 2013, raising a record £7.4bn in IPOs, the hedge fund sector trailed far behind, raising just £1.6m. Discounts have remained large, attracting the attention of arbitrage investors looking to wind up poorly-performing funds and collect the net asset value of their investments. In particular, arbitrageurs are exploiting a loophole allowing investors to buy into hedge funds’ more liquid sterling share classes, before converting into a smaller dollar or euro share class and forcing a wind down or payout at NAV.
George Soros Wondering If That’s All Adriana Ferreyr’s Got (Dealbreaker)
When one becomes a multi-billionaire, there are a few questions he or she has to ask him or herself. The first is, will I still eat my food with my own two hands or will I have someone cut it and feed it to me? Will I put my pants on myself each morning, or would it be nice to be have someone dress me, French aristocracy-style? Will I walk around like I did before becoming a man or woman of immense wealth, or will I be carried, leaving my legs to be simply ornamental?
Elon Musk Sides with Carl Icahn on eBay (EBAY) PayPal Split (StreetInsider)
eBay Inc (NASDAQ:EBAY) is modestly higher Wednesday as Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk is siding with Carl Icahn on a spinoff of PayPal. Importantly, Musk was one of the cofounders of the payment service. In a Forbes cover story, Musk is quoted as saying, “It doesn’t make sense that a global payment system is a subsidiary of an auction website. It’s as if Target owned Visa Inc (NYSE:V) or something.” PayPal, he adds, “will get cut to pieces by Amazon Payments, or by others like Apple and by startups if it continues to be part of eBay.”
Loeb’s Third Point blasts Dow Chemical ‘lack of transparency’ (Reuters)
The Dow Chemical Company (NYSE:DOW)‘s “lack of transparency” makes it difficult to determine whether the petrochemical giant should be split up or kept together, hedge fund titan Daniel Loeb said on Wednesday. The harsh words escalate the tension between the largest U.S. chemical maker and Loeb, operator of the $14 billion Third Point hedge fund. Loeb, who last month said Dow Chemical had become the largest equity investment held by Third Point and urged the company to spin off its lucrative but slow-growing petrochemical unit and focus on specialty materials, issued the remarks a day after Dow Chemical said an internal review found breaking up the company would not help shareholders.
Robert Wood Johnson’s Brian O’Neil on Ethical Hedge Fund Investing (InstitutionalInvestorsAlpha)
As chief investment officer of the Robert Wood Johnson Foundation, Brian O’Neil is responsible for the financial vigor of the fourth-largest private foundation in the U.S., with an endowment of $9.5 billion. RWJF trails only the Bill & Melinda Gates Foundation, the Ford Foundation and the J. Paul Getty Trust. When O’Neil, 61, joined RWJF in 2003, after two decades at the Equitable Life Assurance Society, he found a board of directors that had approved alternative investing back in the 1990s. But it was O’Neil’s job to come up with alternatives that didn’t conflict with the foundation’s mission of being, as the bylaws state, a steward of private resources that must be used…
Connecticut commits to 3 hedge fund-of-funds managers (PIOnline)
Connecticut Retirement Plans & Trust Funds, Hartford, agreed to make a commitment of up to an aggregate $175 million to three hedge fund-of-funds managers for the Connecticut Horizon Fund portfolio, confirmed Denise Nappier, the state treasurer and principal fiduciary for the $27.1 billion state pension system, in an e-mail. Appomattox Advisory, Grosvenor Capital Management and Morgan Stanley (NYSE:MS) Alternative Investment Partners were selected. Mandate sizes have not been determined. The Connecticut Horizon Fund provides opportunities for Connecticut-based and emerging investment management firms as well as investment firms owned by women and minorities.
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