Carl Icahn Isn’t Giving Up the Oshkosh Fight (WSJ)
Carl Icahn is pushing a split at truck maker Oshkosh Corp., urging it to spin a unit he’s called a mistake in the past because its value is being obscured. The activist investor said in a filing that Oshkosh should spin its JLG Industries, a business that sells construction access equipment like lifts and booms.
Hedge fund enables insurers to capitalise on bank deleveraging (Risk)
Hedge fund manager Tenax Capital has raised €250 million (£197 million) from insurers in a fund that invests in corporate bonds and loans that banks are seeking to offload. Tenax is seeking to take advantage of the de-leveraging process that the banking sector is currently undergoing and the contraction in the supply of credit arising from the recent financial crises.
In Real Estate Deal, Romney Made His Loss a Couple’s Gain (NYTimes)
Look closely and it is there, sandwiched between Goldman Sachs Hedge Fund Partners II and D3 Family Bulldog Fund: the mortgage on Timothy and Betty Stamps’s modest home on Gentle Bend Drive here. Nearly lost among the blizzard of hedge funds, thoroughbred horses and other gold-plated investments in Mitt Romney’s personal financial disclosures, the interest from the $50,500 mortgage is loose change to Mr. Romney, whose net worth has been estimated at close to a quarter-billion dollars.
Do Hedge Funds Create Jobs? (Minyanville)
There has been an ongoing discussion surrounding hedge funds and their ability (or lack thereof) to create jobs. Many financial professionals wonder: Do they really have the capacity to help the job market? And if they do, what jobs are hedge funds producing? Mitch Ackles, the President of the Hedge Fund Association and the CEO of Hedge Fund PR, told StreetID that yes, hedge funds do create jobs. And they are currently hiring in areas such as compliance and operations. “[Hedge fund] startups are bringing in traders and people that can manage the trading aspect of the business,” said Ackles.
APAC ex-Japan hedge funds up just 0.02 per cent in July, Singapore’s MAS releases hedge fund rules… (HedgeWeek)
Despite just 68 new hedge funds launching in Asia in the first six months of 2012 according to EurekaHedge, compared to 107 in the boom year of 2007, prime brokers in the region are still confident that the space will grow. The region continues to be populated by a large number of small managers, but as they increasingly close down because of performance issues and redemptions, that money is being recycled and put to work in new funds. This is creating a “huge opportunity” for banks in Asia as start-up managers seek advice and introductions, Graham Seaton, head of Asia-Pacific prime brokerage at Bank of America Corp., was quoted as saying in a Wall Street Journal blog this week.
The investor who saved Mugabe (amaBhungane)
The source of a controversial $100-million loan that allegedly made it possible for President Robert Mugabe to steal the 2008 Zimbabwean election is a major American institutional investor, the Mail & Guardian can reveal. The payment, which critics say helped Mugabe’s Zanu-PF to buy votes and unleash a campaign of brutal repression in an election in which he faced almost certain defeat, was made possible by the New York-based Och-Ziff Capital Management Group.
Veritas – How gating funds in the crisis benefited hedge fund allocators (InvestmentEurope)
The en masse gating of money in hedge funds during the global financial crisis caused more bad feelings than the asset management industry had seen for years. It also achieved three main goals. Only one of them was intended, and depending on your role during that crisis, you will probably agree more with one of them than with the others.
4 Wireless Communications Stocks Being Bought Up By Hedge Funds (SeekingAlpha)
Interested in the high-growth prospects of the wireless industry? We ran a screen with this idea in mind. We screened the wireless communications industry for stocks with bullish sentiment from institutional investors, with significant net institutional purchases over the last quarter representing at least 5% of share float. …VimpelCom Ltd. (VIP): Operates as an integrated telecommunications services provider, offering voice and data services through a range of wireless, fixed, and broadband technologies. Market cap at $11.68B, most recent closing price at $8.93. Net institutional purchases in the current quarter at 15.8M shares, which represents about 7.27% of the company’s float of 217.43M shares.
Hedge Fund Tipster Jiau Won’t Be Freed (Finalternatives)
Convicted insider-trader Winifred Jiau will have to wait out her appeal from behind bars. U.S. District Judge Jed Rakoff, who presided over her trial earlier this year, rejected her request to be freed on bail pending her appeal. “The evidence presented at trial was more than sufficient for the jury to find Jiau guilty,” Rakoff wrote. “None of Jiau’s other contentions are sufficiently likely to result in reversal, a new trial or a reduced sentence.”
Paulson’s Ex-Partner: Opportunities Aren’t in U.S. or Europe (WSJ)
A former partner with billionaire investment manager John Paulson’s hedge fund said he believes the biggest opportunities with financial stock investments aren’t in the U.S. or Europe. Robert Lacoursiere, former partner and head of global banks at Paulson & Co., has set up Petrarca Capital, a long/short equity hedge fund focused on the financial sector. In marketing material sent to investors, the fund said opportunities lie in such nations as Russia, Brazil, Chile and Australia. These countries are “levered to changes in global growth, and financials securities most sensitive to their domestic economies,” the document said. The firm also put Canada, Turkey, Sweden and India, among others, in the category.
HSBC Hires New Hedge Fund Sales Head (HedgeFund)
HSBC has hired a former Deutsche Bank employee as its new head of foreign exchange hedge fund sales. Chris Smith will be based in London and will start his new role on November 5, according to FX Week.
Second Quarter Pain For Top Hedge Funds (Finalternatives)
The second quarter wasn’t kind to some of the most prominent hedge funds in the U.S. Elliott Management, Baupost Group and York Capital all disappointed during the period. Elliott lamented a “frustrating quarter” which saw its flagship hedge fund fall 0.5%, and Baupost marveled at the “strange world we inhabit.”
BlackRock pares 6% from Boston Scientific stake (MassDevice)
Mammoth hedge fund BlackRock Inc. cut more than 4.5 million shares from its stake in medical device company Boston Scientific (NYSE:BSX), regulatory filings show. BlackRock said it owned about 74.0 million shares as of July 31, according to the filings, down from 78.5 million as of Dec. 30, 2011. The hedge fund now owns about 4.8% of Natick, Mass.-based Boston Scientific, representing a 5.8% cut. The selloff might have been fueled by the medical device company’s swing to 2nd-quarter losses last month.
Soros-linked PAC targets Bass in ads (ConcordMonitor)
A political action committee founded by the son of George Soros is targeting U.S. Rep. Charlie Bass and, starting today, will run attack ads questioning his relationship with oil companies. Jonathan Soros, the son of liberal activist George Soros, formed Friends of Democracy in late April. The goal: to fight the “corrosive effect money is having on the political system,” the group said yesterday in a press release.
Duke Energy CEO Jim Rogers to talk with Florida regulators (BizJournals)
Jim Rogers, chief executive of Duke Energy Corp., has a date with Florida regulators on Monday to talk about how the Charlotte-based utility’s merger with Progress Energy Corp. will affect customers in that state, the Tampa Bay Business Journal reports. In his appearance before the Florida Public Service Commission, Rogers will discuss an agreement in place between the regulating body and Progress Energy Florida that sets rate continuity for customers through 2016.
Nouriel Roubini on Threats to the Global Economy (BusinessWeek)
A professor at New York University and chairman of a consulting firm that bears his name, Roubini earned the nickname Dr. Doom for predicting hard times before the financial crisis began in 2008. He talks with Peter Coy about his current outlook. Who’s to blame for the economic mess we’re in? Or is it all the fault of impersonal forces? The underlying economic forces are partially independent of policy choices. I don’t think that if [John] McCain had been elected, the economy would be any better than it is today.
Icahn Petitions Delaware Court On Forest Lab Documents (Bloomberg)
Billionaire investor Carl Icahn said he’s asking a Delaware Chancery Court judge to allow him to publicize documents related to change of corporate control at Forest Laboratories Inc. (FRX) The documents, released to Icahn Aug. 6 by Judge Abigail LeGrow in Wilmington after a trial, are on licensing agreements with other drugmakers, and one involves an embedded “poison pill” shareholder-rights agreement that may any potential Forest takeover, Icahn said today in a statement. Related papers were filed under seal yesterday, according to court electronic records.
WellPoint CEO Faces Ire Of Investor Who Says She Must Go (Bloomberg)
WellPoint (WLP) Inc.’s Angela Braly chided Barack Obama for spreading “false information” about health insurers two years ago. She’s now facing tough questions about her own performance from investors calling for her ouster. WellPoint, the second-biggest U.S. insurer, reported earnings last month that missed analyst estimates. The company predicted it would lose 900,000 members and cut its 2012 forecast. Now two investors, citing a litany of complaints, say Braly is the problem.
Massachusetts Sees 8% Pension Gains Shunned By Calpers (Bloomberg)
Massachusetts Treasurer Steven Grossman wants to reduce the assumed rate of return on the state’s $50 billion in pension-fund assets, currently at 8.25 percent and among the highest for U.S. public retirement plans. Grossman, a former Democratic National Committee chairman, said he’s gathering legislative support for a cut to 8 percent, with an option to go lower. That would put Massachusetts more in line with other states, yet the move would cost taxpayers and covered workers $1.7 billion to maintain funding commitments.
Hartford Mulls Client Buyouts To Cut Risk Buffett Called Ungodly (Bloomberg)
Hartford Financial Services Group Inc. (HIG) Chief Executive Officer Liam McGee may follow Axa SA and Aegon (AGN) NV’s Transamerica in offering to pay customers to exit savings products that are weighing on the company’s results. McGee is under pressure from investors such as billionaire John Paulson to boost the stock, which trades for less than 40 percent of book value. McGee has said he’s “laser focused” on reducing risk and that options include lump-sum payments to clients who agree to exit variable annuities guaranteeing minimum returns. The firm already scaled back annuity sales and agreed in April to divest the unit that originates the products.
For some money managers, a cornucopia of returns in corn (Reuters)
The worst Midwest drought in a half century and resulting damage to the U.S. corn crop are creating an investment opportunity for some hedge fund managers. Hedge funds Galtere, a $550 million commodity-focused global macro fund led by Renee Haugerud, and Woodbine Capital Management, a $500 million fund led by former SAC Capital Advisors portfolio manager Joshua Berkowitz, are among the winners on this summer’s so-called “corn play.”
Justice Department drops Goldman financial crisis probe (Reuters)
The U.S. Justice Department said it will not pursue criminal charges against Goldman Sachs Group Inc or its employees related to accusations that the firm bet against the same subprime mortgage securities it was selling to clients. The decision not to prosecute Goldman, a firm held up by critics as a symbol of Wall Street greed during the 2007-2009 financial crisis, highlights the difficulty in prosecuting crisis-related cases.
Yahoo may rethink use of cash from Alibaba deal (Reuters)
Yahoo Inc startled investors by announcing that new Chief Executive Marissa Mayer may reconsider what it does with the cash it gets from a multi-billion dollar sale of half of its 40 percent stake in Chinese Internet company Alibaba Group. Shares of Yahoo, which had previously promised to return most of the cash to shareholders, slid 3.5 percent to $15.45 in afterhours trade.
A Career Not Yet Terminated (WSJ)
Arnold Schwarzenegger promised he’d be back—but that was before his governorship, his tabloid scandal and his 65th birthday. …He has already shot three films, including the ensemble piece “The Expendables 2,” which opens next week and is the first movie since 2003 to feature him in any role beyond a cameo. He has signed on to star in three more, including a new “Terminator” installment, for which he has met recently with director James Cameron and producer Megan Ellison, who paid $20 million last year to buy the rights from a hedge fund that bid for the property in a bankruptcy proceeding.
Study Finds Bankruptcy Bonuses Work (WSJ)
In bankruptcy, you need to spend money to save money, even if that means spending it on the same management team that steered a business into Chapter 11. …On the contrary, creditor control—for example, when a hedge fund or lender is directing the bankruptcy case—increases the likelihood that bankrupt firms offer retention and incentive bonuses to managers, he said.
SEC Charges Mutual Fund Adviser With Failing to Turn Over Records to SEC Examiners (SEC)
The Securities and Exchange Commission today charged a Florida-based investment manager and his firm for failing to provide SEC examiners with records of a mutual fund advisory business that invested in NASCAR-related stocks. The SEC examiners sought records from David W. Dube and Peak Wealth Opportunities LLC while examining a mutual fund they advised called the Stock Car Stock Index Fund. Despite repeated requests, Dube and Peak Wealth failed to furnish certain records to the SEC.
SS&C Technologies announced record revenues of $120.9 Million (HedgeCo)
Hedge fund tech provider SS&C Technologies Holdings, Inc., announced record revenues of $120.9 million. “I am delighted to report that our second quarter revenue of $120.9 million rose 31.6 percent year-over-year,” said Bill Stone, Chairman and Chief Executive Officer, SS&C Technologies Holdings, Inc. “Q2 was a transformational quarter for SS&C. We began the quarter with 1,492 personnel and ended with 4,034. Our people in all of our businesses stayed focused, tended to our customers and delivered solid results. Organic adjusted revenue rose 3.4% as we overcame some customer attrition and the daily focus on the two large acquisitions. Hans Hufschmid, founder and chief executive officer of GlobeOp, has decided to move on to pursue other opportunities. We wish him all the best and he will continue in a consultative role with the company until January 2013. Rahul Kanwar, Senior Vice President and Managing Director, will assume overall responsibility for the SS&C GlobeOp Business reporting to Normand Boulanger President and Chief Operating Officer.”
CTAs experience continued inflows despite choppy markets – Newedge (Opalesque)
CTAs have had a rough ride this year. After a strong start in January, losses in March eliminated any early gains and pushed the strategy into negative territory. New research from Newedge CTA Indices shows that CTAs rebounded in May, only to have the worst month since October 2011, in June. According to the report, the last trading day in June had the worst single day performances for the indices since May 2011, with the Newedge CTA Index losing -1.73%, and the Trend Sub Index losing -3.12%. The Newedge CTA Index finally ended down -0.83% for the first six months. Other notable findings in the report include, March to 20th April which saw the Newedge CTA Index down 5 weeks running, which is particularly unusual.
Preqin study shows institutional investors largely disappointed with hedge fund returns (Opalesque)
Research group Preqin has conducted a study of hedge fund investors based globally, seeking to establish whether their attitudes to hedge funds have changed after what has been a ‘tumultuous period’ and ‘testing times’ for the hedge fund asset class. In July 2012 Preqin conducted extensive interviews with 85 institutional investors based around the globe, representing a cross section of institution types and sizes, from North America to emerging economies in Asia. Investors were asked to share their thoughts on the hedge fund industry and how they view the performance of their hedge fund portfolios in light of the recent disappointing returns being posted by many funds.
Fidelity Introduces Hedge Fund-Friendly Tool (HedgeFund)
Fidelity Capital Markets’ prime brokerage division has launched a pricing instrument that will enable hedge funds to rate prime brokers. Designed to bring transparency to the securities lending industry, the PB Optimize tool “displays, compares and ranks securities lending rates and performance from a variety of prime brokers,” Financial News reported.
ConvergEx Taps SocGen Vet As General Counsel (Finalternatives)
Tech company ConvergEx Group has appointed Steven P. Heineman as general counsel. He also joins the firm’s executive committee. Heineman comes to ConvergEx from Société Générale where he most recently was general counsel in the Americas region, overseeing the legal and compliance coverage of the firm’s financing, derivatives, equities and fixed income sales and trading, FX, commodities and investment banking activities. Prior to that, he served as director of litigation and regulatory affairs for Société Générale’s U.S. business lines. Heineman also spent eight years as a litigator at Debevoise & Plimpton and more than three years as an Assistant United States Attorney in the United States Attorney’s Office for the Southern District of New York.
Dai-ichi buying stake in U.S. fund firm Janus Capital (Reuters)
Dai-ichi Life (8750.T), Japan’s largest listed life insurer, struck a deal to buy a stake of up to 20 percent in U.S. asset manager Janus Capital Group (JNS.N), the latest move by a Japanese financial company to counter slowing growth at home by expanding overseas. Shares of Janus jumped more than 18 percent in premarket U.S. trading.
In ‘Supercapitalist,’ Wall Street Is Back as a Villain (NYTimes)
We at DealBook often dream of reviewing movies for The New York Times (A.O. Scott, we’re available if you want a vacation). And once in a while, a finance-oriented film comes along to pique our interest. A new independent movie, “Supercapitalist,” incorporates modern-day tools (smartphones, computer data dumps) to the familiar villain of Wall Street greed. The film also touches on many of the business themes familiar to Wall Streeters: poison pills, short-selling, bets on Fed monetary policies and of course, wealth.
Mitt Romney loves NY (NYPost)
Mitt Romney yesterday professed his love for the Big Apple and its deep-pocketed donors during a fund-raising swing through the city — and he lashed out at President Obama and his allies for their latest and increasingly bitter TV attack ads. “Whatever happened to a campaign of hope and change,” lamented Romney on Bill Bennett’s “Morning in America” radio show, which aired yesterday as Romney headed to a couple of top-dollar Manhattan fund-raisers. “I thought [Obama] was a new kind of politician. But instead, his campaign and the people working with him have focused almost exclusively on personal attacks,” Romney said. “It’s really disappointing.”
Troubled waters: Hedgie soon to bite struggling Wet Seal (NYPost)
The battle for control of struggling teen girl apparel retailer Wet Seal isn’t going to be a pillow fight. George Hall, who heads up an activist investor in the 553-store chain, plans to nominate a mostly female slate of board candidates to replace Wet Seal’s current five-member board, The Post has learned. Hall, the founder of Clinton Group, a $2.7 billion New York hedge fund, has been pushing for the sale of the 22-year-old chain — which has lost customers to hotter rivals like Forever 21 and H&M.
Morgan Stanley’s Greg Fleming could be candidate to run ETrade (NYPost)
Morgan Stanley’s brokerage boss, Greg Fleming, may be a candidate to run embattled electronic trading house ETrade Financial, The Post has learned. Fleming may be on the short list of the Manhattan-based brokerage firm, which is about to kick off a hunt for a new chief after giving the heave-ho yesterday to CEO Steven Freiberg. Freiberg was two years into a four-year contract — over which time shares in the company have fallen about 48 percent. The trading firm appointed Chairman Frank Petrilli to run the firm on an interim basis — making him the fourth leader in five years — until a new CEO is identified.