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Seth Klarman's Baupost Hedge Fund Loses More Than $150 Million On Gold Miners (Forbes) In October, Marcel “Mac” DeGuire became president and chief operating officer of Guyana Goldfields, an exploration-stage company listed on the Toronto Stock Exchange that has been losing money trying to develop gold mines in South America for years. Within a few weeks DeGuire was helping to convince investors to buy into a Guyana Goldfields financing for C$3.40 a share, a significant fund raise for the company of some $100 million that closed in February. Eleven days later, however, DeGuire resigned from Guyana Goldfields, citing “personal reasons.” The stock has plunged by more than 60% in 2013 and is now changing hands for C$1.24. It might be surprising for some market watchers to learn that Guyana Goldfields’ biggest shareholder is the Baupost Group, the massive Boston hedge fund firm run by Seth Klarman. Baupost owns 19.7% of Guyana Goldfields, a stake recently worth about $30 million.
Apple to Cisco Lead Record Dividends as Google Holds Out (Bloomberg) Technology companies are paying out dividends at the fastest pace in more than a decade, boosting cash returns to appease investors dismayed by slowing growth. Led by Apple Inc. (NASDAQ:AAPL) and Cisco Systems, Inc. (NASDAQ:CSCO), technology companies in the Standard & Poor’s 500 Index distributed $10.8 billion in dividends in the most recent quarter, up from $5.1 billion in the same period in 2010. They paid a record $11.9 billion in dividends in the previous quarter, according to data compiled by Bloomberg. ...That wasn’t enough for some investors, as the Cupertino, California-based company continued to rake in money, boosting its cash hoard to $137.1 billion at the end of last year. Investors, led by hedge-fund manager David Einhorn of Greenlight Capital Inc., lobbied Cook to return more money as Apple Inc. (NASDAQ:AAPL)’s stock price languished.
SEC lifts ban on hedge fund ads (USAToday) Hedge funds and other firms that seek private investments will be allowed to advertise publicly for the first time under a rule adopted Wednesday by the Securities and Exchange Commission. Adopted by a 4-1 vote, the rule eliminates an 80-year regime of advertising restrictions intended to safeguard small investors from taking on potentially dangerous risk. The rule covers the way issuers raise funds through private offerings, a process that is exempt from requirements to report public financial statements. While the rule would authorize firms to raise unlimited amounts via mass advertising of private offerings, it would require reasonable steps to ensure that buyers are so-called accredited investors — who are wealthier and deemed better able to gauge investment risks.
Why Hedge Funds' Glory Days May Be Gone for Good (BusinessWeek) At the height of the financial crisis in 2008, a group of famous hedge fund managers was made to stand before Congress like thieves in a stockade and defend their existence to an angry public. The gilded five included George Soros, co-founder of the Quantum Fund; James Simons of Renaissance Technologies; John Paulson of Paulson & Co.; Philip Falcone of Harbinger Capital; and Kenneth Griffin of Citadel. Each man had made hundreds of millions, or billions, of dollars in the preceding years through his own form of glorified gambling, and in some cases, the investors who had poured money into their hedge funds had done OK, too. They were brought to Washington to stand up for their industry and their paychecks, and to address the question of whether their business should be more tightly regulated.
Andy Kessler, Former Hedge Fund Manager, Says Shelter Volunteers Cause Homelessness (HuffingtonPost) If only volunteers would just stop serving soup to the homeless then maybe, just maybe, the issue of people not having a place to live would cease to exist. At least that’s what Andy Kessler, a wildly successful former hedge-fund manager, thinks. In his frank Wall Street Journal op-ed on Monday, Kessler neatly sums up what advocates, philosophers and lawmakers have been struggling to conclude for decades. Shelter workers and volunteers, like his own teenage son, are to blame for perpetuating this country’s homelessness problem.