Breakup: Activist Fund Looking to Split Lear (CNBC)
Nearly three years after taking a substantial stake in the auto supplier Lear, the activist hedge fund Marcato Capital Management is agitating for a breakup. In a letter to Lear management dated Tuesday, Marcato founder Mick McGuire argues that the company should separate its two key business units—its electrical division and its seating division—into two independently traded public entities.
Paul Singer: Europe, US Are Dysfunctional (CNBC)
Paul Singer is deeply pessimistic on the state of the developed world. The conservative, cantankerous hedge fund manager thinks economic stimulus in Europe isn’t likely to work and that the U.S. political system will remain dysfunctional, even with Republican midterm gains. “With euro interest rates at record lows, we cannot imagine that the ECB’s recently announced QE [quantitative easing] program will improve Europe’s serious economic situation,” Singer said of the European situation in a private letter to investors. “On the other hand, QE might have unpredictable and large negative repercussions if it triggers a generalized loss of confidence.”
Warren Buffett: Know When To Hold ’em (CNBC)
Investors awaiting Warren Buffett’s annual letter will get three for the price of one this year. The founder of Berkshire Hathaway is planning a special “golden anniversary” publication, marking 50 years since he took a controlling stake in the company. Mr Buffett and his business partner, Charlie Munger, are independently writing their views of Berkshire’s extraordinary journey during the past five decades—and what they expect for the next five. Neither is changing a word of the other’s commentary. Readers will be able to compare the two sets of reflections and predictions, in addition to the regular annual letter.
Ex-White House Economist Sperling Will Advise Pine River (Bloomberg)
Pine River Capital Management, the $15.6 billion hedge fund firm that profited from bets on mortgage-backed securities after the financial crisis, is enlisting former White House adviser Gene Sperling as a consultant. Sperling, a former adviser to presidents Bill Clinton and Barack Obama, will provide the Minnetonka, Minnesota-based multistrategy firm with economic and strategic guidance through his newly formed consultancy, Sperling Economic Strategies, he said in a telephone interview. He also advises Pacific Investment Management Co., the world’s biggest bond manager, and startups including payments company Ripple Labs.