Hedge Fund News: Nelson Peltz, George Soros, Jim Rogers

TRIAN PARTNERSNelson Peltz Is Still Scaring Companies (BusinessWeek)
Mark Fetting, chief executive officer of Legg Mason, Inc. (NYSE:LM), was out of time. His biggest investor, Nelson Peltz, had watched for three years as Fetting struggled to increase profit at the Baltimore-based money manager—home to onetime star manager Bill Miller—and halt $135 billion in fund redemptions. At Peltz’s behest, Fetting cut costs by as much as $150 million a year and bought back at least $1 billion in stock. Still, Legg Mason shares hadn’t gained much since Peltz’s hedge fund bought its stake in mid-2009. With a standstill agreement set to end in November, allowing Peltz to raise his holdings from 11 percent or propose a slate of directors, Fetting quit on Sept. 11. “Patience was clearly running out,” says Jeff Hopson, an analyst at Stifel Nicolaus. “The odds of a dramatic corporate change have increased at Legg Mason.”

Soros to Donate $1 Million to Super-PAC Backing Obama (Bloomberg)
Investor George Soros, a long-time donor to Democratic candidates and causes, has agreed to contribute $1 million to the super-political action committee run by former aides to President Barack Obama. Two officials of Priorities USA Action, the super-PAC supporting Obama’s bid for re-election, confirmed the donation today. A Soros spokesman, Michael Vachon, did not immediately respond to requests for comment.

Hedge fund Mason says Telus shareholders need compensation (TimesColonist)
Mason Capital is making its case again in favour of compensation for holders of Telus’s voting shares under a plan to have a single class of common shares for the telecom company. Telus and Mason are locked in battle over the Canadian telecom company’s plan to convert its dual-class share structure of common shares that have voting rights and non-voting A shares.

Young money managers launch hedge fund focused on macro global events (HedgeWeek)
Lumina Investments, founded and managed by three North Carolina college students, has opened its first hedge fund that seeks to capitalise on the growing influence of “macro events” on the behaviour of global financial markets. “Globalisation has increased correlation and volatility among international financial markets. We believe there is upside investment opportunity through a strategy founded on understanding international developments and their global impact,” says Elliot Carol, chairman and principal managing partner of Lumina Investments.

Focus on industry M&A: fund of hedge funds under pressure to merge (InvestmentEurope)
Pressure for consolidation in the $600bn fund of hedge funds industry is mounting, leaving managers who run less than about $3bn to face a struggle for survival amid shrinking assets and rising costs. At a time when many are still recovering from clients’ redemptions after the global financial crisis, fund of hedge funds also face mounting criticisms over their fee structures and their poor performance, as well as difficulties in reaching high watermarks.

Brencourt Advisors to Return Capital to Outside Investors (Bloomberg)
Brencourt Advisors LLC, a New York- based multistrategy hedge fund, plans to wind down its funds by year-end, return money to outside clients and become a family office, the firm said in a letter to investors. The $300 million firm decided to liquidate its funds after struggling to raise capital, according to a person familiar with the matter, who asked not to be identified because the information isn’t public. The firm hopes to liquidate all or most of the Brencourt Multi-Strategy Funds, the Credit Opportunities Funds and the Merger Arbitrage Fund by the end of the year, William Collins, Brencourt’s chief investment officer and chief executive officer, said in the Sept. 14 letter, a copy of which was obtained by Bloomberg News.

Axiom Mining Limited : Axiom Mining Secures $1 Million Funding (4-Traders)
Axiom Mining Limited (“Axiom” or “the Company”) is pleased to announce that it has secured $1,000,000 via a private placement issued solely to US-domiciled, sophisticated investors at $0.013 a share, representing a significant premium to the Company’s most recent capital raising and a strong vote of confidence in the Company’s prospects. The majority of the funding was provided by Drake Private Investments LLC, a prominent NY hedge fund.

Former SAC manager joins CQS (eFinancialNews)
A former portfolio manager at the London office of US hedge fund SAC Capital, who was re-hired by the firm the year after he was let go, has emerged at London manager CQS. David Morant, who has been out of the market since last September, has resurfaced at CQS, where he is trading long/short equities, according to a person familiar with the situation. A spokesman for CQS confirmed the hire.

Brevan Howard Hires Deutsche Bank’s Pande for New U.S. Group (SFGate)
Vinay Pande, chief investment adviser at Deutsche Bank AG, is set to join Brevan Howard Asset Management LLP, the hedge fund co-founded by Alan Howard. Pande, 55, will start Oct. 1 as head of a team including Gerald Lucas and two other researchers, he said today in a telephone interview. The group will be managing money for Brevan Howard U.S. Investment Management LP, which was set up in June, Pande said.

LI’s James Simons biggest donor to Democratic super PACs (NewsDay)
James Simons, the founder of hedge fund Renaissance Technologies and a former Stony Brook University professor, has contributed $4 million to Democratic super PACs during the 2012 donation cycle, according to the website OpenSecrets.org. The figure makes Simons, who lives in Setauket, the largest individual donor to Democratic super PACs in the nation. OpenSecrets.org uses Federal Election…

Hutchin Hill Profits Off HTZ & DTG Merger, Grabs Another Eton Park PM (ValueWalk)
Hutchin Hill Capital is a well known, hedge fund, primarily famous for profiting off JPMorgan Chase & Co. (NYSE:JPM) London Whale and Libor scandal. The Hutchin Hill Capital Master Fund is up 2.44% in August 2012. The fund was up 0.73 percent in July, and now, the year-to-date returns are +3.85%. …Hutchin Hill Capital invests in a few defined strategies that include, Long/Short Equity, Events, Credit, Systematic and Quantitative, Macro, Managed Futures, and Opportunistic strategies. The Master fund increased capital allocation in Quantitative strategy from 21 percent to 26 percent of total. The Quantitative approach focuses on missed pricing in exchange-traded funds, options, futures, bonds, swaps, and currencies. Another increase in exposure was in the Macro strategy, up from 4 percent of capital to 8 percent. Capital allocation was reduced in Credit, from 23 percent to 18 percent.

Lincoln Fire and Police dole out $9.6 million to Invesco fund (PIOnline)
Lincoln (Neb.) Fire and Police Retirement System committed $9.6 million to the Invesco Ltd. (NYSE:IVZ) Balanced-Risk Allocation Fund, confirmed Paul Lutomski, pension officer. The commitment is the result of the $168 million pension fund’s termination of J.P. Morgan Asset Management (JPM) from a hedge fund-of-funds portfolio. Mr. Lutomski said the termination was the result of the pension fund’s decision to get out of hedge funds. Investment consultant Smith Hayes Advisers assisted.

5 Stocks Hedge Funds Hate—Should You? (CNBC)
As a coattail investor, it pays to follow the stocks that some of the world’s most successful investors love. But what about the stocks they hate? Retail investors are programmed to focus on buying. More often than not, professional investors don’t suffer from that same bias. Instead, the uncommon wisdom in the money management business reminds us that the key to longevity in these markets isn’t finding big gains; it’s avoiding big losses. That’s exactly why taking a closer look at the names that hedge fund managers hate can help you escape the stocks that look the least attractive right now. To find them, we’ll break out a new set of 13F filings.

Hedge funds forced to play catch-up (FierceFinance)
It’s getting to that time of the year when it’s easy to panic if you’re an underperforming hedge fund. Credit Suisse, as noted by Reuters, says there are plenty of signs that hedge funds are ramping up risk in an effort to reverse their lagging returns. Through the end of August, hedge funds were up about 4.5 percent, compared with a 13.5 percent total return for the S&P 500 and 8.2 percent for the MSCI World Index. Hedge funds focused on credit strategies have been the best performers, with returns of more than 7 percent this year, thanks perhaps in part to a surge from European sovereign debt just recently.

Deutsche Bank’s Lehr Plans Hedge Fund (Finalternatives)
A top Deutsche Bank commodity-trading executive has left the bank to set up a hedge fund. Details about Hal Lehr’s planned New York-based hedge fund are sketchy, other than the fact that it will include three members of his Deutsche Bank team he identified as “core investor professionals.”

George Soros “Panicked…That Romney Could Win This” (MotherJones)
A few months ago, George Soros, the billionaire financier and prolific donor to Democratic causes, picked up the phone and called an old friend. Soros was nervous, he told his friend. Nervous from watching Mitt Romney pull even with the president in national polls and in polls of battleground states like Ohio and Florida. Nervous from seeing Republican super-PACs amass tens of millions of dollars with which to pound Obama on the airwaves. Soros was slowly coming around to the fact that Romney could win. Soros had unexpected news for his friend. Until that point he’d conspicuously remained on the sidelines in the super-PAC bonanza. Now he wanted in.

Rogers: N.C.’s metros must work together (BizJournals)
North Carolina’s metro areas will have to cooperate extensively as economic competition becomes more global, Duke Energy Corp. Chairman and CEO Jim Rogers told about 250 business and community leaders on Sept. 27 at his first public appearance in the Triangle since the merger with Progress Energy was completed. That means new partnerships between traditional utilities and alternative-energy companies and a beefed-up focus on economic development, Rogers said. He also pointed to cost savings that Charlotte-based Duke has promised as it continues to integrate with Progress after the companies’ July 2 merger and to an enriched talent pool …

SEC Charges Goldman Sachs and Former Vice President in Pay-to-Play Probe Involving Contributions to Former Massachusetts State Treasurer (SEC)
The Securities and Exchange Commission today charged Goldman, Sachs & Co. and one of its former investment bankers with “pay-to-play” violations involving undisclosed campaign contributions to then-Massachusetts state treasurer Timothy P. Cahill while he was a candidate for governor. Pay-to-play schemes involve campaign contributions or other payments made in an attempt to influence the awarding of lucrative public contracts for securities underwriting business. This marks the first SEC enforcement action for pay-to-play violations involving “in-kind” non-cash contributions to a political campaign.

SEC Charges Investment Bank Analyst with Illegally Tipping College Friend About Nonpublic Merger Deals (SEC)
The Securities and Exchange Commission today charged a former analyst at a Boston-based investment bank with illegally tipping a close friend with confidential information about clients involved in impending mergers and acquisitions. The SEC alleges that Jauyo “Jason” Lee, who worked in the San Francisco office of Leerink Swann LLC, gleaned sensitive nonpublic information about the deals from unsuspecting co-workers involved with those clients and by reviewing various internal documents about the transactions, which involved medical device companies.

SEC Issues Report on Brokerage Firms’ Handling of Confidential Information (SEC)
The Securities and Exchange Commission today issued a staff report intended to help broker-dealers safeguard confidential information from misuse, such as insider trading. The report by the Office of Compliance Inspections and Examinations (OCIE) describes strengths and weaknesses identified in examinations into how broker-dealers keep material nonpublic information from being misused. This report should help broker-dealers assess the effectiveness of their controls over sensitive information,” said OCIE Director Carlo di Florio.

Prudential to acquire Hartford’s life insurance unit (Reuters)
Prudential Financial Inc (PRU.N) will buy the individual life insurance business of Hartford Financial Services Group Inc (HIG.N) for $615 million in cash, the companies said on Thursday. Prudential said the deal would add scale to its own individual life business, while for The Hartford the sale lets it complete an asset disposal program months ahead of schedule.

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