Hedge Fund News: David Einhorn, Microsoft Corporation (MSFT), Citigroup Inc (C)

Page 2 of 2

Yet another twist in Billabong saga (SMH)
The never-ending battle for control of troubled surfwear group Billabong, now almost entering its second year, has taken another twist after an activist New York hedge fund demanded a shareholder meeting to dump the board and derail an already partially executed $325 million rescue deal. But as more bidders for the crippled Billabong come crashing through the front door, key managers of the retailer are leaving by the back, with two executives from the company’s Von Zipper fashion sunglasses brand resigning last week, adding to the two who jumped ship only a week before.

Bad Actor rule does not worry Asian hedge funds (AsianInvestor)
Asian hedge fund managers say they are not worried that incoming legislative amendments under Dodd-Frank rules which will require the disclosure of past offences will impact the region. Under the Bad Actor rule, set to become effective on September 23 along with other updates, senior management will need to disclose to US investors criminal convictions, injunctions and disciplinary orders from US courts and regulators. Securities offences committed outside the US will be exempt.

Ebullio exits physical metals (Reuters)
Hedge fund Ebullio Capital Management says it has exited physical metals trading after struggling to compete in a market dominated by big banks and trade houses, which are facing U.S. regulatory scrutiny of their metals business. A drought in financing for metals trading since the global financial crisis has also slashed profits, Lars Steffensen, executive managing partner of British-based Ebullio, told Reuters. “It’s a market that’s been sown up by banks and trade houses, and others can’t operate. That’s ok, that’s business, but we can choose not to be in that business,” said Steffensen.

Nokia handset sale hammers hedge funds (MSN)
Hedge funds betting that the collapse in Finnish telecom group Nokia Corporation (ADR) (NYSE:NOK)‘s share price would continue got a rude surprise on Tuesday, and their rush to unwind their bets left the stock eyeing a record daily gain. Nokia shares, which are down 93 percent from a 2000 high of 65 euros, rose nearly 50 percent on news the firm would sell its handset business to U.S. group Microsoft Corporation (NASDAQ:MSFT), a move analysts said should lure back longer-term investors. Before the announcement nearly 12 percent of Nokia’s stock was out on loan from long-term holders of the stock, which is an indication of the demand by hedge funds and others to borrow the stock to engage in a ‘short’ trade.

Hedge fund beta interest grows, but capacity strained (PIOnline)
A small but growing number of institutional investors are abandoning hedge funds in favor of their clones — hedge fund beta portfolios. But those still making up their minds had better hurry: The industry’s largest hedge fund beta manager, AQR Capital Management LLC, is running out of capacity and few other institutional-quality strategies are ready for prime time, consultants said. Interest among institutional investors in rules-based hedge fund beta strategies is growing, part of “an evolution of the understanding of hedge fund returns,” said Steven J. Foresti, managing director and head of the investment research group of the consulting unit at Wilshire Associates Inc., Santa Monica, Calif.



Page 2 of 2