U.S. Federal Pension Insurer Backs Eddie Lampert’s Bid to Buy Sears (The Wall Street Journal)
Sears Holdings Corp. Chairman Eddie Lampert won the support of the U.S. government’s pension insurer for his $5 billion buyout proposal, a critical vote in his favor as he vies with other creditors who want Sears liquidated. Sears lawyer Ray Schrock told a bankruptcy judge Thursday that the Pension Benefit Guaranty Corp. had resolved its $1.7 billion claim against the company and would back Mr. Lampert’s proposal to buy hundreds of stores out of bankruptcy.
AQR: Returns Are Gonna Suck For The Next Decade, Unless We Are Wrong, In Which Case They Are Gonna Really, Really Suck (DealBreaker)
Last year, the whiz-kids at AQR Capital Management ran their new streams of big data and everything else through the As-Bot and got an unpleasant surprise: Nothing was gonna return even 5% over the next five to 10 years. For masochism or science or whatever, they decided to do it again this year. And while stocks outside of the U.S. broke the 5% barrier, it wasn’t exactly something to celebrate, least of all for AQR.
Pernod Hits Back at Activist Elliott as Stock Hits Record High (The Wall Street Journal)
PARIS—Pernod Ricard SA chief Alexandre Ricard defended against criticism from activist investor Elliott Management Corp., setting out his own plan to boost profit at the maker of Chivas Regal whisky and Absolut vodka. The French drinks giant has been under pressure since Elliott took a 2.5% stake in December, saying Pernod had “significant room for improvement” and calling for better profit margins and governance. Mr. Ricard says Pernod is making progress on both fronts.
CEOs are Ppening Their Boardrooms to Hedge Fund ‘White Squires’ to Keep Other Activists Out (CNBC)
When it comes to defending a company against an agitated investor, the devil you know may be better than the devil you don’t. That’s the recent mindset among corporations and investors alike when it comes to fending off potential intruders – and it’s increasingly blurring the lines of how management views the role of activist investors. Case-in-point is Papa John’s International. On Monday, the pizza maker announced that Starboard Value, led by Jeffrey Smith, would be investing as much as $250 million, and named Smith as chairman.
Hedge-fund Manager Doug Kass Says Stock-market Bulls Need to Wake Up (MarketWatch)
Just keep swimming. That’s been the message for investors these days. Stay afloat because we’ve had the best start for stocks since 1987. A mixed bag of earnings, another potential government shutdown and questions over a trade deal haven’t triggered an “everyone-out-of-the-pool” moment. Yet. But welcome to Thursday, where things are looking more jittery than they have in awhile, a day after the S&P 500 parted ways with a 5-day winning run. Worry lines are all over our call of the day, from Doug Kass, president of hedge fund Seabreeze Partners Management, who warns that “bull market complacency is back.” Blogging at Real Investment Advice, Kass says investors are ignoring a “diminished outlook for economic and profit growth in 2019-2020,” noting that “there was nothing in the recent high-frequency data or earnings reports that changes this outlook.”
It’s a Billionaire Bounce Back as Einhorn, Ackman, and Edelman All Post Good January Returns, After a Brutal 2018 (Business Insider)
For several well-known funds, the start of 2019 has helped wash off the stink of last year, as big-name managers like David Einhorn, Bill Ackman, Joseph Edelman and Dmitry Balyasny all finished January with positive returns. The overall hedge fund industry had one of the best months in its history, returning 4% on average, after declining 2.2% in December, according to data tracker eVestment. With calls to increase taxes on the wealthiest and outrage at former Starbucks CEO Howard Schultz’s presidential aspirations, 2019 has not been kind to billionaires so far.