Three Starboard Nominees to Newell Board Agree to Buy Stake if Elected (Reuters)
(Reuters) – Starboard Value LP, which is looking to replace the entire board of Newell Brands Inc (NWL.N), said on Wednesday three of its nominees would buy about $25 million in Newell stock with their own money if the hedge fund gained full board control. The activist hedge fund has nominated a 12-member slate to Newell’s board and wants to oust Newell Chief Executive Michael Polk, saying the company has underperformed peers and mismanaged the integration of Jarden Corp since its acquisition in 2016.
The Algos at $52 Billion Two Sigma Are Struggling to Make Money (Bloomberg)
Two Sigma, the $52 billion quantitative firm, is struggling to make money this year in some of its biggest hedge funds. Its Compass fund, which trades futures across markets from commodities to currencies, dropped 5.7 percent in the first two months of this year, losing money in both January and February, according to investors. Its Absolute Return fund, which trades stocks, is up just 50 basis points in the same period, after losing 1.8 percent in February. David Siegel, co-founder of New York-based Two Sigma, said in an interview with Bloomberg News last month that volatility rises whenever the markets go through a change. “We’ve had easy money for a long time; that cannot go forever and I think we are in a period of adjustment,” Siegel said. “We’re in the middle of it right now, so it’s hard to say how this unfolds. But fundamentally the world is pretty good.”
Ackman’s Pershing Square Trims ADP Stake as Bet Grew in Value: Filing (Reuters)
BOSTON (Reuters) – Billionaire investor William Ackman’s hedge fund sold a stake in Automatic Data Processing, the firm’s biggest holding, as the value of the investment grew over the last months, a regulatory filing released on Tuesday shows. Pershing Square Holdings now has a 7.2 percent economic stake in the human resources outsourcing company, down from 8.3 percent previously. The $8.5 billion hedge fund now owns 7.9 million shares of common stock and 23.9 million shares underlying listed and over-the-counter American-style call options, the filing shows.
Hedge Funds Seek Fixes to Credit Default Swaps After Being Stung by Loopholes (Bloomberg Big Law Business)
A group of powerful hedge funds is banding together to repair the credit-default swaps market after a spate of manufactured defaults has threatened the usefulness of the product. Elliott Capital Management and Apollo Global Management are among firms working on closing loopholes that have allowed investors to profit from engineering defaults on a company’s debt, according to people with knowledge of the matter. CQS and Anchorage Capital are also part of the group, the people said. Companies’ failures to make payments on their borrowings can trigger CDS payouts.