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Hedge Fund News: Jeffrey Smith, Julian Robertson & David Abrams

Starboard Value’s Latest Demand Is a Throwback to the ‘80s (InstitutionalInvestorsAlpha) When Jeffrey Smith of New York–based hedge fund firm Starboard Value detailed his case for significantly boosting the value of packaging company MeadWestvaco Corp. (NYSE:MWV), he identified several opportunities for management and the board. But one of those items made me sit up and take notice. In a 12-page letter sent to MeadWestvaco chairman and chief executive John Luke, the aggressive activist investor, whose firm owns 5.6 percent of the stock, said he thinks the combined value of MeadWestvaco’s assets far exceeds its current share price, and that this value is undermined by excessive corporate overhead and its conglomerate structure. Among the tactics Smith proposes are some pretty typical items in an activist’s…

Jeff Smith

Chicago Financial Communities raise over $670K for local charities at Hedge Funds Care Gala (HedgeCo) On May 8, the Midwest financial community gathered at the 12th Annual Midwest “Open Your Heart to the Children” Benefit organized by Hedge Funds Care/Help For Children (HFC). The event raised over $670,000, which will be distributed to local Midwest charities that work to prevent and treat child abuse through HFC’s rigorous granting process, which is widely recognized as the best in the field. A highlight of the Chicago social calendar, the Benefit brings together the hedge fund, proprietary trading, private equity, and venture capital communities to provide direct support for local Chicago charities that prevent and treat child abuse. Edward Haravon of Spot Trading and Benji Wolken of Ernst & Young LLP are this year’s Midwest Committee of Hearts Co-Chairs.

Morgan Stanley AIP Raises $500M For HF Secondaries Fund (Finalternatives) Morgan Stanley (NYSE:MS) Alternative Investment Partners has secured $500 million in commitments for a new fund which seeks to capitalize on medium-term opportunities in the hedge fund space. The AIP Strategic Opportunities Fund I, a closed-end investment fund, will focus on hedge fund secondaries, co-investments and other opportunistic strategies. Mark van der Zwan and Jarrod Quigley, managing directors, are SOF I’s primary portfolio managers. “We are pleased that we have achieved our fundraising goal for SOF I,” said Mustafa Jama, chief investment officer of the $20 billion Morgan Stanley AIP hedge fund group, in a statement.

That Time A Super Rich Hedge Fund Manager Wrestled His Middle-Class Brother Over A $50 Timex Watch (BusinessInsider) Writer Eric Spitznagel, the brother of hedge fund manager Mark Spitznagel, had a fascinating essay in the New York Times Magazine this weekend about what it’s like being middle class and having an ultra-wealthy brother. Mark Spitznagel, founder of hedge fund Universa Investments, is known for his negative predictions about the market. He made a killing betting things would go south in 2008. In the essay, Eric shared an anecdote about how he was wearing their late-father’s $50 Timex stainless-steel Timex watch and how Mark tried to buy it off him. Eric refused to sell the watch no matter what price was offered. Instead, the middle-aged men ended up wrestling for the sentimental timepiece.

In Boston, Secretive Hedge-Fund Billionaire Stays in Shadows (WSJ) As The Wall Street Journal reported today, one ultra-secretive hedge-fund manager has managed to stay hidden despite crossing into the billionaire’s club and earning untold more for his wealthy investors in recent years. David Abrams, 53, would be near the top of every list of highly-paid hedge-fund managers—if anyone had known his name, until now. The veteran of Seth Klarman’s Baupost Group has built an almost $8 billion firm with virtually no external marketing, nor public speaking. Between 2009 and 2013, one of Abrams’ main funds returned 19% on an annualized basis, after fees—a performance better than 97% of all America’s hedge-fund managers, and nearly unprecedented for a fund of its size, according to data provider HedgeFund Intelligence.

DMS Offshore Investment Services wins 2014 Hedgeweek US Award (HedgeWeek) DMS was awarded “Best Offshore Regulatory Advisory Firm” in the 2014 Hedgeweek US Awards at a ceremony held in New York City on 29 May. DMS received a similar honour on 28 February in London, when it was named Best Offshore Regulatory Advisory Firm in Hedgeweek’s Global 2014 awards. For both awards, DMS was selected through a poll of the magazine’s readers and the firm had no part in soliciting the award. More than 1,300 votes were cast by Hedgeweek’s US-based readers for this latest award, the highest number to do so, Hedgeweek noted.

Trader buys TBT (CNBC)

Chris Hansen still optimistic about Seattle basketball as Ballmer dreams big for Clippers (MyNorthWest) Chris Hansen refuses to be anything but optimistic. Despite the loss of a billionaire, the hedge fund manager is not giving up on the idea of bringing the NBA back to his hometown. “We’ll certainly miss him as part of our ownership group, there’s no questions about that, in addition to his financial wherewithal,” Hansen told KING 5 of former Microsoft Corporation (NASDAQ:MSFT) CEO Steve Ballmer’s withdrawal from his group of investors aiming to bring professional basketball back to Seattle.

The Taming of the Trading Monster (NYMag) “Even billionaires have feelings,” Alexandra Cohen had taken to saying. Her husband, Steve Cohen, is the billionaire in question. He’s one of the most successful hedge-fund managers in history—”the Michael Jordan of trading,” in the words of one Wall Street observer. He’d built SAC Capital Advisors into one of the most profitable hedge funds in the world while amassing a net worth estimated at $11 billion. Cohen was never known for his attention to feelings. He had a reputation for brusque, money-talks-bullshit-walks office interactions. He was the opposite of a -sentimentalist—if one of his traders missed his numbers, he was gone.

The key to hedge-fund riches: your retirement dollars (TheGuardian) It’s easy to be afraid of hedge funds. In the past 15 years, they have steadily progressed from near total anonymity to ably filling the role of pantomime villains, name-checked on Sex and the City, discussed by earnest writers in Rolling Stone and Vanity Fair. If we were to re-make the rom-com masterpiece, “Pretty Woman,” for contemporary audiences, our new Richard Gere would not be a corporate raider, breaking up family-owned companies and selling their pieces at a profit, but rather a hedge fund manager. What could be an easier, more efficient way to immediately cast our male lead as an unsympathetic, money-obsessed antagonist?

Schroders’ commodity hedge fund to shut (FT) A prominent backer of commodities hedge funds is shutting down after investors frustrated by market doldrums and high management fees took their money elsewhere. Schroders’ Opus commodities fund, which contained $2.3bn at its peak, is closing after assets dwindled to hundreds of millions of dollars, according to people familiar with the matter. David Mooney and Cédric Bellanger, co-portfolio managers, will leave London-based Schroders. Opus was part of NewFinance Capital, an alternative investment group that Schroders acquired in 2006. The business was one of a handful of niche funds of commodities hedge funds, which farm out investor cash to star traders in markets such as oil, copper or grain.

Robertson’s Stock Picker Singh Said to Become Newest Tiger Cub (Bloomberg) Manny Singh, one of billionaire hedge-fund manager Julian Robertson’s two stock pickers, is set to become the latest Tiger cub. Singh, a former Texas Instruments Incorporated (NASDAQ:TXN) engineer who joined Robertson’s Tiger Management LLC in 2009, is planning to start a global long-short equity fund in the third quarter, according to two people with knowledge of the matter, who asked not to be identified because the information is private. Singh, 36, will be joined by George Song, former investment officer at the University of California Regents, as chief operating officer, one of the people said.

The Children’s Investment Fund Partner Departs for Rival Hedge Fund (WSJ) Mark Derbyshire, a partner at high-profile activist hedge fund firm The Children’s Investment Fund Management (U.K.) LLP, has left to join a rival hedge fund. Mr. Derbyshire, a senior lawyer at TCI who had been at the London-based firm for almost seven years, left at the end of April, said Angus Milne, TCI’s head of compliance. He said Mr. Derbyshire planned to join hedge fund firm Duet Group. DUE.AU -0.41% Duet CEO Henry Gabay said Mr. Derbyshire will join the firm next week as head legal counsel for the firm’s hedge funds and private equity funds. Duet manages more than $5 billion in assets. Mr. Derbyshire couldn’t immediately be reached for comment.

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