Boaz Weinstein Fund Spars with BlackRock and Neuberger Berman (FNLondon.com)
New York hedge fund Saba Capital Management is embroiled in separate fights with two large Wall Street asset managers and a well-known law firm over the obscure mechanics of closed-end fund boards. In one dispute, Boaz Weinstein’s Saba Capital sued BlackRock, arguing that the world’s largest asset manager tried to block outsiders from gaining board seats at three of its funds and effecting change. The Delaware Chancery Court ruled in Saba’s favour in June on two of the funds. A Maryland court ruled in favour of BlackRock on a third fund, a BlackRock spokesman said. The two firms have ongoing litigation.
‘Big Short’ Seer Spies New Bubble: Index Funds (AI-CIO.com)
Back during the housing boom, contrarian hedge fund manager Michael Burry detected trouble in subprime mortgages. So he shorted these low-end home loans via credit default swaps and reaped a bonanza when the housing bubble popped in 2008. These days, his Scion Asset Management ($343 million in assets) has found a new set of popular assets to disdain: index funds. He thinks they have grown too large and are obscuring great bargains in small and value stocks. Moody’s projects that passive investments will overtake active ones in two years.
Ray Dalio’s Flagship Hedge Fund Has Fallen 6% This Year (Bloomberg)
The flagship fund at Bridgewater Associates is missing out on the rebound that some macro managers are enjoying this year. The Pure Alpha fund at Ray Dalio’s firm has tumbled about 6% through Aug. 23. The losses were fueled by bearish wagers on global interest rates, according to a person familiar with the matter. The fund, which bets on macroeconomic trends, is trailing the 13% return for the MSCI World Index. A more levered version of the flagship fund, Pure Alpha II, was down about 9% in that time.
Tom Steyer’s Mega-millions Debate Gambit Flops (Politico.com)
Tom Steyer just lost a $16 million bet. The Democratic hedge fund billionaire leapt into the presidential campaign late with a clear plan: use his mega-wealth to buy his way into the televised party debates, and then use that platform, and his unelected outsider persona, to challenge the front-runners. Steyer spent millions of dollars on TV ads to boost his poll numbers in early caucus and primary states and on digital ads to meet the donor requirements set by the Democratic National Committee.
Icahn Opposes New Directors Chosen by Occidental CEO (Reuters)
HOUSTON (Reuters) – Activist investor Carl Icahn, who has launched a proxy fight to win seats on Occidental Petroleum’s (OXY.N) board, said on Wednesday he opposed efforts by the Houston-based company to name new directors without picking from his slate. Icahn cited a Bank of America Merrill Lynch analyst’s report published on Monday that quoted CEO Vicki Hollub as saying the oil producer’s board planned to make governance changes, including the appointment of two “qualified” directors.
Sony in $760 million Olympus Stake Sale After Investor Loeb’s Prodding (Reuters)
TOKYO (Reuters) – Sony Corp (6758.T) is selling its 5% stake in Olympus Corp (7733.T) back to the Japanese medical equipment maker for 80.4 billion yen ($762.88 million), a move that Daniel Loeb’s activist hedge fund Third Point LLC had called for. This is the first strategic move Sony has made that is in line with U.S.-based Third Point’s proposals since Loeb, one of the world’s highest-profile activist investors, revealed earlier this year he was building a stake again in the company. A Sony spokeswoman said the sale was not in response to demand by specific shareholders, adding that the company is still reviewing Third Point’s proposals.
Steadview Capital Leads Chargebee’s Series D Funding Round (VCCircle.com)
Subscription management platform Chargebee has raised $14 million (Rs 100 crore) in its Series D round of funding led by London-based hedge fund Steadview Capital. Chargebee co-founder and chief executive officer Krish Subramanian said the latest funding takes its total fundraising to $40 million. “Steadview’s focus on long-term investments aligned beautifully with our goal of building Chargebee as the essential infrastructure for every SaaS and subscription business,” he added. Existing investors Accel Partners and Tiger Global had also participated in the funding round.
Investor Confidence Down by 8.7 Points in August (HedgeWeek.com)
The State Street Global Investor Confidence Index decreased to 75.9 in August, down 8.7 points from July’s revised reading of 84.6. Investor confidence across all regions weakened, with the North American ICI decreasing from 80.3 to 72.5, the European ICI dropped from 98.6 to 89.0, and the Asian ICI fell from 91.8 to 89.2. The Investor Confidence Index was developed by Kenneth Froot (pictured) and Paul O’Connell at State Street Associates, State Street Global Markets’ research and advisory services business. It measures investor confidence or risk appetite quantitatively by analysing the actual buying and selling patterns of institutional investors. The index assigns a precise meaning to changes in investor risk appetite: the greater the percentage allocation to equities, the higher risk appetite or confidence.