Hedge Fund Offers Truce to Save Sears Swaps Wager (The Wall Street Journal)
One of Sears Holdings Corp.’s largest creditors is offering a settlement to dissuade the bankrupt retailer from launching an unusual bidding war that could upend a credit-derivative bet. Cyrus Capital Partners, a hedge fund hoping to salvage a bad bet that it made on Sears, is offering to pay for hundreds of millions of dollars of internal loans to different Sears affiliates to keep them from being put up for auction, according to people familiar with the matter.
Hedge Fund Solus Looks to Raise $750 mln Fund -Source (Reuters)
NEW YORK, Nov 19 (Reuters) – Solus Alternative Asset Management LP is launching a $750 million fund focused on distressed and stressed investment opportunities, according to a person familiar with the matter and a letter to investors Reuters reviewed. The firm, which has $5.8 billion in assets under management, has already won commitments for $190 million and plans to continue fundraising through 2019, the person said. With low interest rates, a booming economy and few defaults, there are scarce opportunities now for distressed investing.
Ray Dalio Sees Parallels to 1930s in Today’s Markets (Bloomberg)
The world today looks most analogous to the late 1930s, Ray Dalio, the founder of Bridgewater Associates, told my Bloomberg Opinion colleague Barry Ritholtz on Monday. That’s a bit foreboding, to say the least. Like 80 years ago, financial markets are in the late stages of this short-term business cycle, given that the Federal Reserve is tightening monetary policy as U.S. equity prices reach record highs, Dalio said during a live taping of the “Masters in Business” podcast. He also sees rising “political polarity” in the form of populist candidates.
US Billionaire Hedge Fund Guru Eyes Australia with New Venture (BrisbaneTimes)
Billionaire hedge fund guru Steven Cohen, the inspiration for Bobby “Axe” Axelrod in the Showtime series Billions, is back from the black books and eyeing off the local market. Having forked out $US1.8 billion to settle a Securities and Exchange Commission insider trading investigation, his old fund SAC Capital Advisors is gone. But now he can raise outside money again. After a two-year ban lapsed, one of the richest men on Wall Street has lured former Mallesons banking guru Martin James to sit on the local board of his new venture, the $US12.4 billion hedge fund Point 72 Asset Management.
Hedge Fund Follows U.S. Playbook With U.K. Newspapers Takeover (Bloomberg)
The collapse of Johnston Press Plc into the arms of a New York hedge fund marks an unusual twist in the long decline of the U.K.’s local newspaper industry. In fact, it fits a pattern that has played out for years in the U.S., where hedge funds have become the new newspaper barons, acquiring hundreds of local titles and slashing costs as circulation falls.
Arconic Buyout Deal Could be Announced by Mid-December, Sources Say (CNBC)
Arconic could announce a deal on a leveraged buyout by mid-December, sources tell CNBC. The aluminum products maker has been mulling offers, and the sources tell CNBC a deal is likely in a few weeks. Apollo Global Management reportedly offered $11 billion last month, while another bidding group including the buyout giants Blackstone, Carlyle and Onex have also been exploring a bid. Arconic was spun out of Alcoa in 2016 and said earlier this year that it would begin a strategy and portfolio review. Activist hedge fund Elliott Management has been pushing the company to explore a sale. Elliott is expected to roll its equity in the company into the buyout, the sources told CNBC.
Hedge Funds Appear Headed Back on Defense (Bloomberg)
(Bloomberg Opinion) — Hedge funds are sending signals that they are getting cold feet about the economy. In the third quarter, they showed less love to big-name technology and industrial stocks and more affection to consumer staple and utility stocks, two sectors that investors usually lean on in hard times for the economy or markets. RBC Capital Markets, which put out a report on hedge funds’ recent moves late last week, found that of the 12 stocks that those funds loaded up on the most in the third quarter, four were in consumer staples. That was the most of any one sector. Among what RBC calls submarine stocks — shares of companies that hedge funds were selling the most of — were four companies in technology and three industrials.