Hedge Fund and Insider Trading News: Howard Marks, Highland Capital Management, Putnam Investments, Samsung Hedge Asset Management, Darden Restaurants, Inc. (DRI), Salesforce.com, Inc. (CRM), and More

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Highland Capital Not Alone In Not Having To Pay Huge Judgments Against It (Deal Breaker)
As is true of many, from the president of the United States on down, who enjoy a good courtroom scrape, Highland Capital Management has won some and lost some. But the former hedge fund doesn’t sweat the latter, because it has an uncanny ability to avoid paying anything when it does lose. Unfortunately for James Dondero & co., two can play at that game, and its $351 million real-estate fraud payday from Credit Suisse just got a major trim by the Texas Supreme Court. Credit Suisse Securities USA won’t have to pay a unit of hedge fund Highland Capital Management LP $287.5 million for a bungled land appraisal ahead of a 2007 Las Vegas real estate deal, but it can’t shake a jury’s $40 million fraud verdict, the Texas Supreme Court ruled Friday. The high court wiped out the $211 million in damages and $75 million in prejudgment interest awarded to highland subsidiary Claymore Holdings LLC after a Dallas County District Court bench trial, finding the award overcompensated Claymore for the fraudulent appraisal.

Samsung Asset to Absorb Hedge Fund Arm (KoreaHerald)
Samsung Asset Management will absorb its hedge fund subsidiary Samsung Hedge Asset Management, seeking to enhance efficiency amid escalating market competition, the company said Friday. “The board of directors has approved the merger, upon judgment that there is little advantage in maintaining (the hedge fund firm) as the competitive private equity market has reduced the total value of trust deposits,” the asset manager said in a release. Since its establishment as a subsidiary of Samsung Asset Management in January 2017, Samsung Hedge Asset Management has operated nearly 590 billion won ($478 million) worth of trusts.

Hedge Fund Assets Dip Below $3 Trillion to Least in Six Years (Newsmax.com)
Global hedge fund assets dropped below $3 trillion for the first time since April 2014, hit by client withdrawals and investment losses amid the March market rout, eVestment data show. Investors pulled $24.1 billion more funds than they deposited last month, according to the data provider. Almost 80% of managed futures funds were hit by net redemptions, along with about 66% of macro hedge funds and 63% of multi-strategy hedge funds.

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Hedge Funds Are Ruled Ineligible for U.S. Small Business Rescue (Bloomberg)
Hedge funds aren’t eligible for a U.S. rescue loan program, the government made clear Friday, potentially quelling a barrage of outrage over the possibility that well-heeled traders might beat out struggling small businesses for emergency funding. The Small Business Administration, in consultation with the Treasury Department, determined that because hedge funds are primarily engaged in speculative investments, the firms shouldn’t be entitled to Paycheck Protection Program loans. The prohibition also applies to private-equity firms, according to guidance posted on Treasury’s website.

Manny Stotz is So Good at Allocating Capital that Billionaire Howard Marks was His Biggest Investor from the Get-Go. He Breaks Down a High-Upside Bet He’s Making on ‘Frontier’ Stocks in Nations Like Bangladesh and Egypt (Business Insider)
Early in his career, Manny Stotz – the founder of Kingsway Capital – learned a timeless lesson from one of the stock market’s most legendary investors. “The most important advice I got when I started Kingsway was from – I hope he doesn’t mind me saying this – our biggest day-one investor was Howard Marks, the founder of Oaktree Capital,” he said on the “Invest Like the Best,” podcast. “He told me: ‘Manny, if you want to win any game whether it’s sports or investing, you have to be a good athlete — and you’re a great athlete here but there’s so many others.

Blackstone’s Hedge Fund Investments Tumble 8 per cent During “Unprecedented” Q1 Sell-off (Hedge Week)
Blackstone saw its hedge fund performance fall more than 8 per cent during a torrid first quarter – but the world’s largest alternative investment manager has grown its overall assets over the past year, and now has USD150 billion in “dry powder” assets to put to work. The group, which runs a range of hedge fund, private equity, credit, real estate, and alternative products, saw overall assets under management grow to USD538 billion in the 12-month period to the end of March, a 5 per cent year-on-year increase. Hedge fund assets stood at USD73.7 billion in Q1 – having attracted some USD3.25 billion in inflows in the first three months of the year – though overall hedge fund AUM is down year-on-year from the USD80.1 billion in Q1 2019.

When Your Fund Beats the Market, Ask: Which Market? (The Wall Street Journal)
A Putnam Investments fund often earned extra fees for beating an index that consisted of 50% bonds -even though most of the fund’s assets were in stocks. Mutual-fund votes are usually pro-forma rituals in which investors do whatever the fund manager asks. An upcoming one at Putnam Investments should have investors asking what the manager has been doing. On Apr. 15, shareholders in Putnam Capital Spectrum Fund were scheduled to decide on a proposal to merge the mutual fund out of existence after years of dismal performance. The vote, stymied by the coronavirus shutdown, will likely be rescheduled for later this spring.

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