Nelson Peltz’s Trian Warns State Street (Businessweek)
Billionaire investor Nelson Peltz admonished the board of State Street Corp. over poor performance and urged it to adopt a multi-step plan for raising the custody bank’s profit. The recommendations, outlined in a statement yesterday, included a call for a clearer commitment to cost-cutting, prioritizing the return of capital to shareholders over acquisitions, and considering selling off the bank’s asset- management unit. Peltz’s Trian Fund Management LP owns about 3.3 percent of State Street shares, the firm said.
Hedge Fund ISAM Looks to Middle East for Growth (BusinessRecorder)
ISAM, the hedge fund founded by former Man Group chief executive Stanley Fink, is targeting cash-rich sovereign wealth funds and institutional investors in the Middle East to grow its assets under management at least seven-fold in the short-term. ISAM, which has just over $700 million of assets under management, is in talks with sovereign wealth funds, pension funds, banks, family businesses and high net worth individuals in the region, Stanley Fink, ISAM chief executive, told Reuters on Thursday.
BHP Billiton Tipped as Possible Buyer of Ferrous (TheAustralian)
TWO days after being touted as a possible $6 billion bidder for US coal producer Walter Energy, BHP Billiton is now being tipped in London as a possible buyer of Brazilian iron ore hopeful Ferrous Resources. The Sunday Times yesterday reported that BHP was close to launching a E2bn ($3.1bn) bid for Ferrous, which it said tried and failed to list in London last year. The report said Ferrous was controlled by a number of international hedge funds headed by Philip Falcone’s Harbinger Capital.
Hedge Funds Raise Bullish Oil Bets by 7.8% Last Week (Bloomberg)
Hedge funds raised bullish oil bets by 7.8 percent in the week ended Oct. 11, according to the Commodity Futures Trading Commission’s Commitments of Traders report on Oct. 14. Net-long positions betting on rising prices in West Texas Intermediate oil held by hedge funds, commodity pools and commodity-trading advisers, in futures and options combined increased 11,389 to 157,693.
Fund Manager George Soros Recommends Greece Restructure Debt by 50% (Ekathimerini)
Influential US investor George Soros has told Kathimerini that the Greek debt ought to be restructured by 50 percent, provided that Greece remains in the eurozone and that the restructuring is voluntary. In an interview with Sunday’s Kathimerini, Soros warned that “if there is a Greek default it could bring down the credit system and create a global recession.”
Average Hedge Fund Returns Positive for Pension Funds (Pensions&Investments)
Hedge fund returns of large U.S. public pension plans were strongly positive in the year ended June 30, but, on average, were lower than a year earlier. Plus, fewer outperformed industry benchmarks. The average return for the 12 months ended June 30 was 10.3% for the 13 hedge fund portfolios analyzed in Pensions & Investments’ second annual review of large public plan hedge fund investors. By comparison, the average hedge fund return as of June 30, 2010, was 11% for the eight large public plan investors analyzed in P&I’s first review (Sept. 20, 2010).
Proposed Volcker Rule Would Ban Bank Investment in Hedge Funds (InvestmentNews)
One unintended consequence of the long-awaited Volcker rule, which was mandated by Dodd-Frank and finally issued by U.S. regulators last week, may be increased pressure on the retail-wealth-management businesses of wirehouses to contribute more to overall profitability. Focused on reducing risk in the banking system, the 298-page rule would prohibit federally insured banks from principal trading in securities, derivatives and other financial instruments and would ban them from “owning, sponsoring or having certain relationships with a hedge fund or private-equity fund,” according to a fact sheet from the Securities and Exchange Commission.