Berkowitz Loses Again On Sears Slump (Bloomberg)
Bruce Berkowitz, whose $8 billion Fairholme Fund is suffering its second-worst year on record because of wrong-way bets on financial firms, may have lost about $190 million today on Sears Holdings Corp., the third- largest investment of his flagship fund. Sears, the retailer controlled by hedge-fund manager Edward Lampert, fell as much as 26 percent after saying it will close as many as 120 stores because sales of consumer electronics declined in the holiday shopping period. Berkowitz’s funds owned 16.3 million shares, or 15 percent of the company, as of Sept. 30, data compiled by Bloomberg show.
Hedge Funds Cut Bets As Raw Materials Rally Most In 10 Weeks: Commodities (Bloomberg)
Hedge funds reduced bets on higher commodity prices to the lowest level since 2009 just as raw materials headed for their biggest weekly rally in two months. Money managers cut their combined net-long position across 18 U.S. futures and options by 15 percent to 454,512 contracts in the week ended Dec. 20, the lowest since March 2009, data from the Commodity Futures Trading Commission show. The Standard & Poor’s GSCI gauge of 24 commodities climbed 4.5 percent last week, erasing this year’s declines and pushing the index toward its third consecutive annual advance.
Firms Give U.S. Plans To Rent Seized Homes (Bloomberg)
Fortress Investment Group LLC (FIG) and Deutsche Bank AG (DB), whose executives played roles in the housing bubble, are among the hundreds of firms that responded to a U.S. government request for proposals to rent out foreclosed homes. The Federal Housing Finance Agency asked for ideas as Fannie Mae and Freddie Mac, the mortgage companies seized by the government in 2008, seek to reduce losses, stabilize neighborhoods and support housing values by turning into rentals a portion of the more than 180,000 repossessed homes in their inventory. The submissions were due by Sept. 15.
Growing Political Organization Shows Hedge Fund Influence (HFN)
Americans Elect has caught the attention of the media for its efforts to draft a third candidate for the 2012 presidential election. And it is doing so with some hedge fund help. The political group, which formed in March of last year to select an alternate presidential ticket via an online nominating process, claims on its website to have already gathered 2.3 million signatures, or more than half of what is required to gain a spot on the ballots in all 50 states.
Once Lofty Owl Creek Falls 13% (NYTimes)
Jeffrey Altman, the wealthy founder of Owl Creek Asset Management, belongs to an elite circle of hedge fund managers who survived the financial crisis relatively unscathed. As he told investors in 2008, “We feel very fortunate to have dodged a significant number of bullets, landmines and other incendiary devices during this dramatic year.” Now, Mr. Altman’s fortunes have changed. His flagship fund is down roughly 13 percent through November, compared with a roughly flat S.&P. 500-stock index. Assets have fallen from roughly $6.5 billion to start the year, to just about $5 billion. In his third-quarter letter this year, Mr. Altman begins with the bad news, itemizing the 10 positions “that hurt us most in the quarter.”
Trey Reik’s Bristol Investment Partners Raised Serious Concerns About Jaguar Mining Inc. (Insider Monkey)
Trey Reik’s Bristol Investment Partners changed its previous passive stake ownership in Jaguar Mining Inc. (JAG) into activist on December 20th. According to a SEC filing, Bristol Investment Partners now has 7.13 million shares in JAG, corresponding to an 8.5% activist stake in the company. Bristol Investment Partners reveals in the filing that it has serious concerns regarding the company’s recent events. Bristol Investment Partners believes the board lacks open communication with shareholders regarding an acquisition proposal offer of $9.30 per share in cash from Shandong Gold, and doubts “whether the Board’s interests are fully aligned with shareholders in reviewing and negotiating a potential transaction with Shandong.” Bristol Investment Partners reported 3.87 million shares in JAG at the end of June, and 4.93 million shares at the end of the third quarter.