Knighthead Capital Plans $750 Million Distressed-Debt Fund (Bloomberg)
Knighthead Capital Management, the $3 billion distressed-debt hedge fund firm, is planning on raising its first drawdown fund, according to people with knowledge of the matter. The New York-based company, which was founded a decade ago by Ara Cohen and Tom Wagner, will begin fundraising in the second quarter of this year and is aiming to raise as much as $750 million, said the people, who asked not to be named because the matter is private. The Knighthead Distressed Opportunities Fund will focus on global stressed and distressed credits.
Singer Wins Telecom Italia Round as Bollore’s Chairman Resigns (Bloomberg)
Activist investor Paul Singer won a round in his battle for influence at Telecom Italia SpA, with Chairman Arnaud de Puyfontaine and six directors backed by Vincent Bollore quitting the board. The move gives Vivendi SA, the French media company chaired by Bollore, some time in its attempt to fend off Singer’s Elliott Management Corp. in a contest that’s likely to come to a head at a Telecom Italia shareholder meeting in May, when investors will vote on a new board of directors.
Baupost, GLG, Highbridge Outed As Weinstein Investors (DealBreaker)
Maverick Capital, run by Lee Ainslie, and Highbridge Capital Management, founded by Glenn Dubin, bought a small share of the firm. Both men sat on the board of anti-poverty charity Robin Hood Foundation with Harvey Weinstein. London-based GLG Partners also purchased shares. Eton Park, a hedge fund run by Goldman alum Eric Mindich, bought more than 4 percent of the company. In all, Goldman raised $490 million, more than expected. Seth Klarman’s Baupost ended up with a 1.4 percent stake in the Weinstein firm in 2011 when it bought a portfolio of private investments that included the production company, according to a person familiar with the firm.
Many of Warren Buffett’s Employees Can’t Practice What He Preaches in Their 401(k)s (The Washington Post)
Warren Buffett, the most successful investor of our time, is a huge fan of low-cost index funds – funds that replicate a market index rather than try to outperform it – as the way for the average investor to succeed in the stock market. “By periodically investing in an index fund. . . the know-nothing investor can actually outperform most investment professionals,” he wrote in his 1993 letter to shareholders of his Berkshire Hathaway conglomerate. “Paradoxically, when ‘dumb’ money acknowledges its limitations, it ceases to be dumb.”
Activist Investor Elliott Urges Fellow GKN Shareholders to Accept Melrose’s £8.1bn Hostile Takeover (CityAM.com)
Activist hedge fund Elliott Advisors has announced it will support Melrose’s hostile £8.1bn bid for engineering giant GKN. Elliott, which has a 3.4 per cent stake in GKN, urged fellow shareholders to accept Melrose’s controversial offer. The investor also sent a letter to GKN’s board, saying it was “sceptical of the company’s ability to deliver on Project Boost for its aerospace business”.
More Hedge Funds Closed Than Opened in ’17 as Returns Lagged (Bloomberg)
(Bloomberg) — More hedge funds closed than opened in 2017 amid lackluster performance. Yet it wasn’t all bad news for the industry. A total of 784 funds were liquidated while 735 launched, according to data from Hedge Fund Research Friday. Liquidations, however, declined 25 percent last year compared with 2016 as the industry collected more assets. In the fourth quarter, launches exceeded liquidations for the second straight quarter. An estimated 190 funds were started in the final quarter of 2017, up from 176 in the third quarter.