Hedge Fund News: Steven Cohen, John Paulson & Dan Loeb

Hedge fund big furious that his $98M penthouse isn’t selling (Page Six)
Embattled hedge fund titan Steven A. Cohen is freaking out that his Manhattan apartment, on the market at a bank-busting $98 million, just isn’t selling. Sources tell Page Six that Cohen is furious that his luxe four-bedroom duplex at 151 E. 58th St. hasn’t had a buyer after more than a year on the market, and he’s blaming his brokers. After putting it up for sale in April 2013 for $115 million, billionaire Cohen last December generously slashed $17 million off the pricey penthouse atop the Bloomberg Tower.

SAC CAPITAL ADVISORS

Hedge fund titans are testing the quality of US democracy (Financial Times)
John Paulson made his fortune by taking a massive short position against the US housing bubble. Today the hedge fund billionaire is betting that the US political system will fail. This time he has company. Other billionaires have launched a lawsuit to force the US Treasury to pay shareholders vast sums from the government-sponsored housing enterprises that it bailed out in 2008. Betting on Washington’s largesse has become a routine investment strategy. Whether this one works, aspiring billionaires should take note: if you want to strike it lucky, try shorting American democracy. The risk is small and the rewards are spectacular.

Third Point’s Loeb Says Harder to Gain on Mortgages (Bloomberg)
Billionaire hedge-fund manager Dan Loeb said he’s targeting junior debt of financial firms and assets being divested by banks as he scales back securities such as mortgage bonds. “It’s gotten much more difficult to make money in mortgages, and asset-backed securities generally,” Loeb said today on a conference call for Third Point Reinsurance Ltd (NYSE:TPRE) “We have largely taken profits in our re-remic portfolio and we’ve mostly redeployed that capital elsewhere.” Re-remics are securities, created from other mortgage bonds, that divide the debt into safer and riskier pieces.

Ackman Gains 38% on Valeant Deal To Buy Allergan (Wall Street Journal)
Hedge-fund manager William Ackman is already up about 38% on his unconventional bid to back Valeant Pharmaceuticals Intl Inc (NYSE:VRX) ‘s takeover bid for Botox maker Allergan, Inc. (NYSE:AGN). Mr. Ackman, founder of $13.7 billion Pershing Square Capital Management LP, said at a private event earlier this week that he was up that sum on the Allergan wager less than one month after the unusual deal became public, according to people familiar with his remarks. The gains add up to almost $1 billion in paper profits, a person familiar with the firm said.

LightSquared Bankruptcy Plan Rejected, Ergen’s Debt To Be Subordinated (FINalternatives)
A federal bankruptcy judge dealt a blow to Harbinger Capital Partners’ effort to hold on to its wireless Internet venture, ordering it to the negotiating table with a bitter rival. U.S. Bankruptcy Judge Shelley Chapman rejected LightSquared’s reorganization plan, a $2.65 billion proposal, backed by Fortress Investment Group, that would have allowed the company to exit bankruptcy after two years. Chapman found that the plan violated bankruptcy law by treating LightSquared’s biggest creditor, DISH Network Corp (NASDAQ:DISH) Chairman Charles Ergen, unfairly.

M&A frenzy hits the Street (CNBC.com)


Court Upholds CDO Lawsuit Against Citi (FINalternatives)
Citigroup Inc (NYSE:C) can’t escape the fallout from the implosion of a group of collateralized debt obligations which Magnetar Capital allegedly had a hand in creating. A New York appeals court yesterday allowed Loreley Financing to proceed with its fraud lawsuit against the bank, although it did throw out a claim of unjust enrichment. Loreley alleges that Citi allowed Magnetar to secretly choose the securities underlying the CDOs, which happened to be the riskiest available, while the bank protected itself with credit default swaps.

Temasek Invests in Dymon Asia to Start Hedge-Fund Platform (Bloomberg)
Temasek Holdings Pte, the Singapore state-owned investment company, will start a venture with Dymon Asia Capital (Singapore) Pte to back new hedge fund managers and strategies as it becomes a minority stakeholder in the firm. Temasek committed $500 million initially that will be managed by Dymon, a hedge-fund manager based in the island-state, according to Dymon President Jay Luo. Luo and Dymon Managing Director Ben Freischmidt will be leading the new venture for Dymon, according to an e-mailed statement.

Asian Hedge Fund Capital Hits Record In Q1, Report Says (Law360)
The amount of money invested in Asian hedge funds hit a new record in the first quarter, with more than $2 billion in new capital flowing into funds, according to a Hedge Fund Research Inc. report Friday. Total capital invested in hedge funds in Asia climbed to $114 billion through the end of March, marking the second consecutive quarterly record for the region, the report said.

Standard General Takes 9.8% Passive Stake in RadioShack (Wall Street Journal)
New York hedge fund Standard General L.P. on Friday disclosed a 9.8% passive stake in struggling consumer-electronics chain RadioShack Corporation (NYSE:RSH), according to filing with the Securities and Exchange Commission. Standard General didn’t disclose a reason for its investment in the filing, but RadioShack’s stock has wallowed near all-time lows. The company’s shares have tumbled 49% since the start of the year and closed Friday at $1.33.

What goes on inside Wall Street’s secret backrooms (CNBC.com)
For every headline-grabbing foray by billionaire investors Carl Icahn or William Ackman, there are dozens more so-called activist investors the public never hears about. And this army of agitators is growing rapidly—and has a bulging arsenal of cash. When activist investors show up in a stock, they often make headlines. Assets get sold, or in the high-profile case of Apple Inc. (NASDAQ:AAPL) —there was a stock split, dividend hike and increased buyback. But most of the time, they don’t make headlines, and by some estimates, only about a third of the companies that are approached by activists ever make the overtures public.