Bill Ackman: ‘We Made One Very Big Mistake’ With Valeant And Lost Big Time (CNBC)
Billionaire hedge fund boss Bill Ackman told CNBC on Friday the past 12 months were the “worst period of performance” of his investment career, and the implosion of Valeant Pharmaceuticals was mostly to blame. “It’s almost entirely been driven by Valeant. I’ve never owned a stock down 90 percent,” the Pershing Square Capital Management chief told “Squawk Box,” referring to Valeant’s plunge from a 52-week high of $245 per share to around $18 per share in late June. Since then Valeant has recovered to around $31 per share, as the embattled drugmaker works to regain investor confidence after questions about its pricing strategy and ties to a specialty pharmacy led to wider political and regulatory scrutiny, and hammered the stock.
Carl Icahn Mulled Selling Herbalife Stake to Group That Included Bill Ackman (The Wall Street Journal)
Carl Icahn has recently discussed selling his stake in Herbalife Ltd. to a group including the company’s arch-nemesis William Ackman, another surprising twist in a battle between billionaires that has riveted Wall Street for years. Investment bank Jefferies Group LLC has been seeking over the past month to find buyers for Mr. Icahn’s 18% stake, which is worth roughly $1 billion, people familiar with the matter said. The status of the talks and which other investors may be involved wasn’t clear and Mr. Icahn may sell nothing in the end. The fact that he even entertained selling his shares, by far the biggest single stake in Herbalife—and that Mr. Ackman could be a buyer—adds more drama to a tug of war over a once-obscure nutritional-products company that Mr. Ackman says is a pyramid scheme, an allegation it denies.
Citadel Hires ex BlueCrest Portfolio Manager For London Office (Reuters)
Former BlueCrest Capital Management portfolio manager Ashish Goyal is set to join hedge fund manager Citadel, a Citadel spokesman said on Thursday. Goyal will start at Citadel’s London office in November and will be a portfolio manager on its global fixed income team. He will be part of an expansion of the firm’s macroeconomic investing unit, Citadel said. Goyal declined to comment. At BlueCrest until May, Goyal was a portfolio manager for so-called “macro” bets with a focus on emerging markets. BlueCrest, led by Michael Platt, said in December that it would return outside capital and become a private partnership.
Lampert’s Lifeline Renews Debate Over Whether Sears Can Be Saved (Bloomberg)
It’s Eddie to the rescue once again at Sears. Hedge fund manager Edward Lampert has been all things to the iconic American company: the architect of its merger with Kmart, its chief executive officer and marketing guru, and its biggest shareholder. With his latest $300 million loan to the perennially money-losing retailer, he’s also helping it survive. The capital infusion announced Thursday will help provide funds for the all-important holiday season and reassure lenders and vendors nervous about more than $9 billion in losses since 2012. Sears Holdings Corp. has raised cash by selling and spinning off assets such as stores and its Lands’ End clothing business. But those funds are merely offsetting the more than $6 billion the company’s operations have consumed since 2012, according to Matt McGinley at Evercore ISI.
These Are The Personality Tests You Take To Get A Job At The World’s Largest Hedge Fund (Yahoo Finance)
Bridgewater Associates, with $150 billion in assets under management, is not only the world’s biggest hedge fund. It’s also a highly ambitious, 1,700-person management experiment. And to get a job there, you have to undergo an intensive examination of your psyche. Ray Dalio founded Bridgewater in 1975 out of his apartment, and throughout the ’80s he laid the foundation of a corporate culture based on “radical transparency.” This culminated in “Principles,” his manifesto of 210 management insights, first published in 2011, that all employees must read. Employees are encouraged to regularly dissect each other’s thinking to determine the root of decision-making, to rate each other’s performance using a proprietary iPad app called “Dots,” and to send an audio file to any person mentioned in a meeting — which isn’t an outlandish practice internally, since all meetings, with few exceptions, are digitally recorded for either audio or video. “Pain + Reflection = Progress” is a phrase all employees are intimately familiar with.
Gates’s Cascade Reports 15.9% Passive Stake in Gabelli’s Gamco (Bloomberg)
Cascade Investment, the family office that invests the wealth of Microsoft Corp. co-founder Bill Gates, has agreed to purchase a note that could be converted into a 15.9 percent stake in Gamco Investors Inc., the asset management firm founded by Mario Gabelli. Cascade has invested in Gamco previously, Douglas Jamieson, Gamco’s president and chief operating officer, said in a phone interview Thursday. One of Cascade’s investment officers, Alan Heuberger, was once on Gamco’s board. The $110 million, five-year convertible note has a coupon of 4.5 percent, converts into Gamco’s Class A common stock at $55 a share and provides certain put rights and an escrow agreement, according to a regulatory filing Thursday and an Aug. 16 statement from Gamco.
Gold Believers From Soros to UBS Lose Faith in Miners’ Gain (Bloomberg)
The red-hot market for gold-mining companies has made the shares too expensive for some investors, even though they remain bullish on the outlook for bullion. Earlier this year, fund managers including George Soros had gobbled up shares of producers such as Barrick Gold Corp. and Newmont Mining Corp. in a bet that the surprise rally in the price of the metal would spark a surge in profit. After a five-year slump marked by mine closures and losses, the companies were cheap. But now, many are worth twice what they were in 2015 — after rising at almost five times the rate of the commodity — so funds have begun unloading the equities while retaining or expanding holdings in physical gold.
