David Einhorn’s Hedge Fund Resurgence Faces Mexican Tariff Test (Bloomberg)
David Einhorn’s recovery this year, spurred partly by his big bet on General Motors Co., has been jolted by President Donald Trump’s threat of a trade war with Mexico. Einhorn’s hedge fund, Greenlight Capital, counts GM as its largest U.S. publicly disclosed position. The automaker’s stock is among the hardest hit in the industry after Trump said he would slap tariffs of as much as 25% on goods from Mexico, the largest source of U.S. vehicle and auto-parts imports. GM dropped 4.5% at 11:10 a.m. and is down about 15% since the beginning of May amid a loss in U.S. market share.
Marathon Asset Management Closes New Aviation Fund (HedgeWeek.com)
Credit investment manager Marathon Asset Management (Marathon) has closed its first fund solely dedicated to aviation leasing, the Marathon Aviation Fund (MAF). The new strategy, which was oversubscribed, will focus on leasing the most in-demand early- to mid-life aircraft, and providing investors with returns that have low correlation to other asset classes. “Continuous rapid growth in global passenger air travel that is outpacing airlines’ order capabilities, along with the ageing of global fleets and airlines’ increasing preference for leasing new, fuel-efficient planes, is creating a compelling opportunity in the aircraft leasing sector,” says Andrew Springer, Partner and Head of Structured Credit at Marathon Asset Management.
Angelo Gordon Closes Latest Fund at $2.75bn, Exceeding its Target (Opalesque.com)
Angelo Gordon, a $33bn alternative investment firm focused on credit and real estate investing, announced that it has raised over $2.75bn in equity commitments for its most recent U.S. real estate fund, AG Realty Value Fund X, exceeding the fund’s $2.5bn target. AG Realty Value Fund X is 112% larger than the prior fund in the series of real estate funds, the $1.3bn AG Realty Fund IX that closed in December 2014. The New York-based firm will use AG Realty Value Fund X to invest in a broad spectrum of distressed and underperforming properties.
Elizabeth Warren and Alexandria Ocasio-Cortez to Eddie Lampert: Billionaire’s Effort to Avoid Paying $43 million in Worker Severance is a ‘Betrayal’ (CNBC)
Presidential candidate Sen. Elizabeth Warren and Rep. Alexandria Ocasio-Cortez sent a letter to Sears’ former Chairman and CEO Eddie Lampert lambasting him for efforts to avoid paying $43 million in severance to the department store’s employees. Lampert bought Sears out of bankruptcy last year through an affiliate of his hedge fund ESL Investments, Transform Holdco, after years of declines under his leadership as CEO and chairman. The deal, which saved the company from liquidation, also promised that Lampert would cover severance costs for workers who lost a job in bankruptcy.
Breakingviews – Hedge Funds See Honey in Japan’s Value Traps (Reuters)
HONG KONG (Reuters Breakingviews) – Hedge funds see honey in Japan’s value traps. Companies from the Land of the Rising Sun dominated pitches at Hong Kong’s Sohn Conference on Thursday. They pointed to signs of unjustified panic in the country’s equities slump, creating opportunities to buy low. But even optimists highlighted the persistent cash hoarding and slack governance that have long scared investors away.
Quant Hedge Fund Amplitude Is Returning Client Cash After Outflows (Bloomberg)
The shrinking hedge fund universe has claimed two more victims. Quantitative hedge fund Amplitude Capital AG, bruised by two years of losses in one of its main money pools, is returning client money after investor withdrawals sparked a plunge in assets, while Manuel Blanco, who previously managed money for the likes of Highbridge Capital Management and Balyasny Asset Management, is shutting down his hedge fund Sator Square Capital Management after failing to raise enough money.
OK, So Maybe Ray Dalio Was A Touch Optimistic About The Trade War (Deal Breaker)
Once again, radical transparency and radical truth have proven incapable of penetrating a rapidly deteriorating brain dedicated to radical opacity and even more radical dishonesty. Unfortunately for Ray Dalio, that increasingly smooth, liquid and incoherent grey matter belongs to the president of the United States. Time and again, Dalio has expressed confidence that Donald Trump can’t possibly be as stupid and dangerous as he appears. Time and again, he has been disappointed, although not in an economic way, of course. And so it goes: A year ago, he promised that the dick-swinging between Washington and Beijing could not possibly go too far.
Hedge Fund D.E. Shaw to Help Cover Fertility, Surrogacy Services as Part of New Benefits Plan (eFinancialCareers.com)
Famed quant fund D.E. Shaw is the latest big-name financial firm to up its benefits package for hopeful parents. Under its new “family building benefit” plan, the firm will reimburse eligible employees up to $40k for fertility, adoption and surrogacy services, according to a source familiar with the new rollout. Reimbursable expenses now include invitro fertilization (IVF), genetic screening as well as egg, sperm and embryo freezing. In terms of surrogacy and adoption services, employees can utilize the fund to cover medical expenses, legal and agency fees as well as travel costs, according to the source. The new plan reportedly does not require employees to first prove infertility or receive pre-authorization – one of the bigger hurdles women often face when trying to tap into similar benefits.