Hedge Funds Pocket $1.7 billion as Wirecard Goes Bust (Reuters)
LONDON (Reuters) – Coatue Management and nine other hedge funds likely earned more than 1.5 billion euros ($1.7 billion) this week on bets against Wirecard after the German payments firm collapsed on Thursday. Wirecard shares crashed to 2.5 euros on Thursday from 104.5 euros a week ago, before the company revealed a $2.1 billion hole in its accounts. That has landed Coatue Management, the hedge fund with the largest short position, a 271 million euro profit on paper, according to Reuters calculations.
Why Make a Needless Enemy Out of Paul Singer’s Elliott? (Bloomberg)
Activist-in-chief Elliott Management Corp. sometimes nudges companies to agree with its strategic ideas in private. The target firm then announces a new plan or some stretching targets and gets an endorsement from the feared hedge fund at the same time, sparing itself a public battle. Think of recent shifts by enterprise software group SAP SE and life-sciences group Bayer AG that met with simultaneous applause from Elliott. Dutch insurer NN Group NV, with a fresh chief executive officer, has chosen confrontation.
Bill Miller is Still a Bull on Bitcoin (Seeking Alpha)
Bill Miller, the former Legg Mason star, is optimistic about bitcoin’s future, he said on a webcast sponsored by Digital Galaxy. Miller, who now runs Miller Value Partners, hasn’t sold any of his bitcoin; he first got into the digital currency when it was at ~$200 and after the Mt. Gox collapse, he snapped up more, buying it at levels up to $500 with his average cost for is bitcoin investment at ~$300. Bitcoin is recently trading ~$9,280. That’s not to say it’s without volatility; early this month it fell to ~$600M from over $10K for no apparent reason.
ValueAct Chairman Jeffrey Ubben Retires, Looks to Start New Firm (Pensions&Investments)
Jeffrey Ubben, co-founder of ValueAct Capital, retired as chairman to launch Inclusive Capital Partners, the company said in a news release. He will assume the role of chairman emeritus at ValueAct; the company has not yet disclosed who will replace him as chairman. “We started ValueAct Capital 20 years ago with an untested investment strategy — that a minority investor in the public markets could positively impact a company’s trajectory from inside the company board room,” Mr. Ubben said in the release. “All these many years later, it’s the right time to depart.”
Berkshire Hathaway Might Continue To Underperform For Longer Than You Think (Seeking Alpha)
I am saying “no” to investing in Berkshire Hathaway, Inc. (BRK.A) (BRK.B). In case you felt the author of this article is anti-Buffett by reading the title, let me clear your doubts by confirming that I believe Warren Buffett is the greatest investor the world has ever seen. What’s more, I believe he would remain the same even if Berkshire Hathaway, Inc. was to underperform the broad market in the next decade. But, at the same time, I am bold enough to believe that the presence of Buffett at the helm of Berkshire is not an investment thesis. There’s a lot of chatter about Buffett missing the rally, but I’m more worried about the conglomerate’s asset allocation strategy. In particular, I believe the high exposure to the banking sector will prove to be a drag on the performance of Berkshire Hathaway stock in the next few years for reasons discussed in this analysis. In addition, I will discuss a few other macro developments that could limit Berkshire’s ability to beat the market.
HF Capital is Moving Fast: In and Out (Hedge Nordic)
Stockholm (HedgeNordic) – After pulling $32.7 billion out of hedge funds in the first four months of 2020, investors added an estimated $1.7 billion to the global hedge fund industry in May, according to eVestment. The industry’s assets under management increased to $3.05 trillion due to performance gains. Although last month’s figure of net flows was insignificant relative to the industry’s assets under management, the overall volume of asset movement – the sum of the absolute values of both inflows and outflows divided by the prior month’s reported assets – remained elevated.