Eisman of ‘The Big Short’ Fame Recommends Shorting Deutsche Bank (Bloomberg)
Steve Eisman, the Neuberger Berman Group money manager who famously predicted the collapse of subprime mortgages before the 2008 financial crisis, recommended shorting Deutsche Bank AG shares. “Deutsche Bank is a problem bank,” Eisman said in a Bloomberg Television interview in Hong Kong. The German lender has “profitability issues,” and will probably have to raise capital next year, he said, without disclosing his position on the shares. A Deutsche Bank representative declined to comment on the remarks.
Sears Pulls Together Special Committee to Review Asset Sales, Including Kenmore (CNBC)
Sears Holdings said Monday it has formed a special committee to independently review a proposal from CEO Eddie Lampert‘s hedge fund, ESL Investments, to buy some assets from the department store chain. The company said it’s initiating a “formal process” to explore the sale of the Kenmore brand, its Parts Direct business and portions of Sears’ Home Improvement division. Sears’ stock was up about 6 percent Monday, trading around $3.60 a share, after jumping more than 14 percent on the news. The company added that it’s considering “other alternatives … that may maximize value” for Sears.
Steve Cohen’s Point72 Hires Macro Team From Balyasny (Bloomberg)
Steve Cohen’s Point72 Asset Management is beefing up macro investing by poaching a five-person team from Balyasny Asset Management. Portfolio managers Zorin Finkelsen, Dudley Hoskin, Jamie Pullen and two analysts recently joined Point72, said people familiar with the moves. They jumped after starting at Dmitry Balyasny’s firm late last year. Before that, they worked together at Paul Tudor Jones’s shop. Peter Williams, another Balyasny portfolio manager, also left for Point72 earlier this year.
Hedge Funds’ Favorite Charity Is Funding Their Opponents (The Wall Street Journal)
Managers Paul Tudor Jones and Daniel Loeb donated millions to the Robin Hood Foundation, which sent some of it to groups backing protesters picketing the donors. The 250-person protest group that showed up outside billionaire Daniel Loeb’s Hamptons estate arrived in chartered buses, carried professionally printed signs and marched under two airplanes with banners. Several signs read: “Hedge funds = inequality.” Mr. Loeb, in a roundabout way, inadvertently backed certain organizations that supported that July 2015 demonstration, and continue to savage hedge funds to this day.
George Soros Gets Most of His $2 Billion Back From Scott Bessent (Bloomberg)
Very few hedge fund managers start with $2 billion from investor George Soros. One who did, Scott Bessent, has already given much of it back. As Bessent has gathered capital since his firm’s 2016 launch, he has returned Soros’s money as part of an arrangement between the two, according to a person familiar with Soros’s family office who requested anonymity. Soros had $853 million remaining in a managed account at Key Square Group at the end of 2017, according to a March regulatory filing.
Commentary: Hedge Funds Cut Gloomy Dollar Bets vs Emerging FX, Swiss Franc (Reuters)
LONDON (Reuters) – Hedge funds and speculators continue to revise their bearish view on the dollar, making historic cuts to their short positions at both ends of the risk spectrum. They have now reduced their short dollar bets against a range of emerging market currencies for five weeks in a row, something they haven’t done since 2014. That’s now the smallest net short position in almost a year, according to the latest Commodity Futures Trading Commission figures for the week ending May 8. They are also now holding their biggest net short Swiss franc position in six years. The move over the last fortnight marks the biggest two-week build-up of bets against the traditional safe-haven currency since 2009.