Biotech Hedge Fund Bailed on Drugmaker Before Its Depression Treatment Scored (Bloomberg)
Baker Bros. Advisors LP, a hedge fund known for making big biotechnology bets, looks to have relinquished its stake in Sage Therapeutics Inc. leading up the drugmaker’s slam-dunk depression study. Baker Bros., which was among the top 20 holders of the biotech stock at the end of September, sold its final 567,497 shares by the end of 2018, according to a regulatory filing this week. Though it’s possible the fund bought back in during a narrow window in early January, the end of the most recent filing period came a week before Sage’s next-generation antidepressant succeeded in reducing women’s postpartum depression symptoms in a pivotal study, triggering a rally of more than 40 percent.
UPDATE 1-Manulife ‘Highly Confident’ About Outcome of Hedge Fund Court Case (Reuters)
TORONTO, Feb 14 (Reuters) – Manulife Financial Corp’s chief executive said on Thursday the company was “highly confident” of winning a case brought against it by hedge fund Mosten Investment LP, which says it has the right to put unlimited funds into universal life policies. The latest hearing in the case, which an expert witness for Manulife warned could be financially damaging for the company if the verdict goes against it, is taking place this week in the province of Saskatchewan.
Highland Global Allocation Fund Completes Conversion from Open-End to Closed-End Fund (HedgeWeek)
Highland Capital Management Fund Advisors has completed the conversion of the Highland Global Allocation Fund, a series of Highland Funds II, from an open-end fund to a closed-end fund. The conversion was approved by shareholders during the 8 November, 2018 special meeting. The Fund expects to list its shares for trading on the New York Stock Exchange (NYSE) on or about 19 February 2019.
Seth Klarman and Mohnish Pabrai’s Portfolio Movements in 4th-Quarter 2018 (GuruFocus)
Two of the world’s best value investors made some significant changes to their portfolios in the fourth quarter of last year. Yesterday, Seth Klarman (Trades, Portfolio)’s Baupost Group and Mohnish Pabrai (Trades, Portfolio)’s Pabrai Investments both filed their 13F documents with the SEC, detailing equity positions held at the end of 2018. The 13F is a document every hedge fund manager overseeing more than $100 million in assets is required to file every quarter, at least 45 business days after the end of each calendar quarter. They offer unrivaled insight into the portfolios of investment managers, but they are backward-facing and only limited to equity positions.
Elliott Tilts at a Chinese Windmill (Bloomberg)
To Iberia, the site of Elliott Management Corp.’s latest, and suitably quixotic, activist campaign. Armed with a 3 percent interest in Portuguese utility Energias de Portugal SA, the hedge fund has written to the board to oppose the 9.1 billion euro ($10.3 billion) takeover proposal from China Three Gorges Corp. Elliott has outlined a defense strategy that would have been better coming from EDP itself, and other shareholders can be grateful.
Hedge Fund Billionaire Invests in Swedish AI Startup Peltarion (Bloomberg)
Euclidean Capital, the family office of hedge fund billionaire James Simons, is leading a $20 million investment in Peltarion AB, a Swedish startup whose software platform helps companies use artificial intelligence. The new funding values Peltarion at $110 million, Luka Crnkovic-Friis, the company’s co-founder and chief executive officer, said in an interview. Also participating in the round are existing investors EQT Ventures and FAM, a holding company owned by three foundations established by Sweden’s prominent Wallenberg family.
Hedge Fund Investors are Facing ‘Existential Questions’ About the Kinds of Managers they Back (Business Insider)
Hedge funds suffered one of their worst years on record in 2018, and they underperformed the market for years before that. Managers, however, believe that part of the blame lies with big Wall Street investors that have cramped their strategies. Pensions and other large investors have helped grow hedge funds from a niche offering for wealthy families to a $3 trillion industry, but they have also brought with them stricter vetting processes. Over the past 15 years, hedge fund portfolios have become more conservative and more concentrated in the same trades and securities, according to the hedge fund researcher Novus.
Can Starboard Value Do for Papa John’s What It Did for Olive Garden? (The Motley Fool)
Shares of Papa John’s (NASDAQ:PZZA) continue to rise in the aftermath of activist investor Starboard Value injecting $200 million into the pizzeria and having the hedge fund’s founder Jeffrey Smith take on the role of chairman of the board. Many believe that Smith, who is credited with engineering the turnaround at Olive Garden following the ouster of the entire board of directors at Darden Restaurants (NYSE:DRI), has the skills to fashion a resurgence at Papa John’s.