Editor’s Note: Related tickers: Emulex Corporation (NYSE:ELX), Dell Inc. (NASDAQ:DELL), Goldman Sachs Group, Inc. (NYSE:GS), Broadcom Corporation (NASDAQ:BRCM)
Hedge fund manager John Paulson‘s gold fund has posted its third successive double-digit monthly loss and now stands down 65% this year, according to reports. The PFR Gold fund lost 23% in June, a month in which the price of the precious metal slumped 12% on concerns the Federal Reserve may begin scaling back its asset purchase programme. The $300m fund, which is largely made up of Paulson’s own money, has now sustained year-to-date losses of 65%, according to Bloomberg and Reuters.
Starboard Takes Emulex Stake as Search for Buyer Starts (Bloomberg)
Investment firm Starboard Value LP said it has acquired a 6.9 percent stake in Emulex Corporation (NYSE:ELX), a chipmaker that’s seeking potential buyers. …Emulex Corporation (NYSE:ELX) has hired Goldman Sachs Group, Inc. (NYSE:GS) to seek potential buyers, two people with knowledge of the situation said last week. They asked not to be identified because the process is private. Emulex Corporation (NYSE:ELX) shares have declined 21 percent since the company rejected an $11-a-share bid from Broadcom Corporation (NASDAQ:BRCM) in 2009, leaving it with a market value of $694.2 million. Activist investor Elliott Management Corp., the hedge-fund firm founded by billionaire Paul Singer, is Emulex Corporation (NYSE:ELX)’s largest shareholder with about 10 percent of the stock.
Dell Wins Support From ISS for Buyout (Bloomberg)
Michael Dell won support from Institutional Shareholder Services Inc. for the $24.4 billion buyout of his company, a surprise endorsement from an influential shareholder adviser that increases the chances he will prevail. Dell Inc. (NASDAQ:DELL) and Silver Lake Management LLC’s buyout plan would shelter shareholders from risks tied to the deteriorating personal-computer business, ISS said today. As recently as last week, ISS was leaning against recommending Dell Inc. (NASDAQ:DELL)’s offer, people familiar with the matter said at the time. Glass, Lewis & Co., another shareholder adviser, also backed the buyout proposal. …“We are pleased that ISS has recommended, as we have, that Dell Inc. (NASDAQ:DELL) shareholders approve the $13.65 per share cash sale transaction,” the special committee of Dell Inc. (NASDAQ:DELL)’s board said in a statement today. “Rejection of this transaction would expose Dell Inc. (NASDAQ:DELL) and its shareholders to serious risks and uncertainties that will harm the company’s business and erode shareholder value.”
‘Short’ on cash: Hedgie seeks $$ (NYPost)
Hedge-fund manager Steve Eisman is back in the hunt — for cash. Eisman, who shorted the housing market to fame and fortune during the subprime bubble era, is one of more than 50 equity hedge fund managers who will make his case to prospective investors at a Goldman Sachs Group, Inc. (NYSE:GS) event at Barclays Center today. It could be a tough sell. Eisman left FrontPoint Partners to start his own fund, Emrys Partners, in March 2012, with $22.9 million from friends and family. Emrys got off to a slow start, gaining 3.6 percent in 2012.
IndexIQ’s IQ Alpha Hedge Strategy Fund, First Open-End Mutual Fund Based on Hedge Fund Replication, (DailyFinance)
The IndexIQ IQ Alpha Hedge Strategy Fund (IQHIX – Institutional Class; IQHOX – Investor Class), the no-load, open-end mutual fund that launched the “liquid alternatives” revolution, marked its 5-year anniversary on June 30, 2013, it was announced today. At its introduction, the IndexIQ fund was the first open-end hedge fund replication mutual fund in the market. Total assets in U.S. alternative mutual funds and Exchange-Traded Funds (ETFs) are now approximately $550 billion, according to a recent report from SEI.1
Ex-SocGen Traders Ready Dividend Futures Hedge Fund (Finalternatives)
A group of former Société Générale traders are planning a hedge fund to invest in dividend futures. Paris-based Melanion Capital is believed to be among the first firms to focus on the burgeoning market, Financial News reports, which was created five years ago. That’s also when the Melanion group, Jad Comair, Antoine Iskandar, Erwan Tigreat and Big Zhou, began trading them at SocGen. Comair told FN that the strategy has averaged 20% annual returns before fees since its inception.
Investment group raises $53.5 million for health IT and life science hedge fund (MedcityNews)
An investment manager named for its knack for adapting to shifting market conditions, has raised $53.5 million for a hedge fund, according to an amended Form D filed with the U.S. Securities and Exchange Commission. Iguana Healthcare Partners takes long and short bets in publicly traded healthcare companies. Although the healthcare sector seemed ready to settle down following the U.S. Supreme Court decision on the Affordable Care Act, which recently passed its one year anniversary, there’s still plenty of uncertainty to go around. That could mean big returns for shrewd investors.
SEC Poised to Lift Prohibition on Hedge Fund Advertising (ComplianceWeek)
The Securities and Exchange Commission on Wednesday is expected to take action on a long-awaited provision of the Jumpstart Our Business Startups Act that would eliminate solicitation and advertising restrictions on hedge funds and private securities offerings. The JOBS Act, enacted nearly 10 months ago, directed the SEC to remove prohibitions on marketing securities offerings by amending Rule 506, a safe harbor exemption contained in Regulation D of the Securities Act. By requiring the SEC to remove these restrictions, Congress sought to make it easier for companies to inform the public that they are seeking to raise capital through the sale of securities.
Hedge funds face big losses if weather fears hold (AgriMoney)
Hedge funds, having avoided a second drubbing at the hands of US grain stocks numbers, face heavy losses if forecasts hold of worrying heat for Midwest crops, having extended short positions on corn to a record high. Managed money, a proxy for speculators, slashed its net long position in futures and options in the major US-traded agricultural commodities by 134,000 contracts in the week to July 2, according to analysis of data from the Commodities Futures Trading Commission, the regulatory authority.
Hedge Fund Bets On Soccer Player Transfers (Finalternatives)
A controversial hedge fund has won some big-name backers for its strategies. Doyen Capital counts the families of Bayrock Group founder Tevfik Arif and Rixos Hotels CEO Fettah Tamince among its investors, Bloomberg News reports. The ties go deeper than that, as well, with Arif’s son serving as a Doyen manager. Doyen invests in energy trading and other areas, but has received the most attention for its plays on soccer. The firm has struck deals with soccer players, including Brazilian star Neymar, paying them in exchange for a share in their future transfer fees.
Pershing Square looks to raise $1 billion for bet on unnamed company (Gnom)
Hedge fund manager William Ackman is ready to bet big on an unnamed U.S. company and is asking pension funds and endowments to commit $1 billion to two new funds by the end of next week to help him make that investment. “We are launching two new co-investment funds PS V, L.P. and PS V International,” Ackman wrote in a three-page letter dated July 8 and seen by NEWS.GNOM.ES. “Because of confidentiality considerations, it is not prudent for us to share the target company name with all of our 500+ investors,” he added.
Where next for gold? (III)
Nouriel Roubini, the US economist nicknamed Dr Doom for his frequent predictions of impending financial misery, is used to a bit of hostility. His warnings early in the credit crunch that the crisis would intensify and cause a global recession prompted scorn from his critics (often accompanied with mocking references to his reputation for throwing lavish parties at his trendy New York home, where the walls were adorned with modern art – including plaster of Paris vaginas).
Jim Rogers Destroys The Last Argument Of The Gold Bugs (BusinessInsider)
Gold prices have been tumbling. But the ardent gold bulls have been hanging on. The most popular argument that these gold bulls have clung to has been that mining costs will create a floor for gold prices. The idea is that if gold continues to be below the cost of mining, then miners will stop mining and supply will disappear forcing gold prices up. Peter Schiff made this argument late last month. And so did Art Cashin. However, it’s not completely obvious that a mine would shut down just because the market price falls below cost.
Christopher Hansen’s Troubles Multiply as Valiant Struggles (InstitutionalInvestorsAlpha)
You can say that Christopher Hansen of Valiant Capital Management is one of the most consistent hedge fund managers this year. Unfortunately for him, his performance has been consistently bad. The San Francisco–based hedge fund firm has the dubious distinction of being perhaps the worst-performing long-short hedge fund in 2013. The Tiger Management–affiliated Hansen, who unsuccessfully tried to buy the Sacramento Kings basketball team earlier this year, lost another 1.87 percent in June. His liquid fund lost 2.10 percent while his side pockets lost 0.65 percent, according to an investor.
Hedge Funds Profit from Trade Claims Against Bankrupt Firms (InstitutionalInvestor)
Chicago-based commodities broker-dealer Refco went bankrupt in late 2005 after it emerged that CEO Phillip Bennett had hidden $430 million in bad debt, a move that earned him a 16-year jail sentence. The bankruptcy also took down a small hedge fund manager named PlusFunds Group and its SPhinX funds. Founded by Refco alumnus Christopher Sugrue, New York-based PlusFunds was an early effort to develop an investable hedge fund index; Refco was the $2.5 billion SPhinX funds’ brokerage.
