Warren Buffett Explains How He Used to Short Stocks (GuruFocus)
Warren Buffett is possibly the financial world’s most vocal critic of hedge funds. He has long claimed that hedge funds do not justify the fees they charge and put his money where his mouth is in 2008, making a bet with Ted Seides, a former asset manager at Protégé Partners, that a basket of hedge funds would not outperform the S&P 500 over the next decade. Buffett’s bet: Buffett won this $1 million bet easily. Over the course of the bet, the S&P 500 index fund returned 7.1% compounded annually, compared to a return of just 2.2% per annum for the basket of hedge funds selected by Protégé. The proceeds of the bet were donated to charity, and Buffett used his investment prowess to increase the sum returned to Girls Inc. — his charity of choice.
Alan Howard’s Elwood Targets Big Investors for Digital Assets (Bloomberg)
Elwood Asset Management, owned by hedge-fund billionaire Alan Howard, plans a range of products to lure big institutional investors into digital assets. The company said the new regulated products will cover the full spectrum of crypto-assets, Chief Executive Officer Bin Ren said in a phone interview. Elwood and Invesco Ltd. have already launched an exchange-traded fund tied to companies that are developing blockchain technology, the ledger tool first created to facilitate Bitcoin transactions.
Nelson Peltz’s Trian Fund Management Sells $51.3 Million in Wendy’s Stock (Barron’s)
Nelson Peltz’s hedge fund has trimmed its position in fast-food chain Wendy’s (ticker: WEN), on whose board Peltz serves as chairman. Trian Fund Management subsidiaries sold a total of 3 million Wendy’s shares on March 6 for a total of $51.3 million, or $17.11 per share on average. According to a form Trian filed with the Securities and Exchange Commission, it now has total ownership of 28.6 million Wendy’s shares, a 12.4% stake.
Starboard “Looking Into” Hedge Fund Tactic to Tip Vote in Favor of Bristol-Myers/Celgene Tie-up (Seeking Alpha)
Activist investor Starboard Value, an opponent of Bristol-Myers Squibb’s (BMY -0.5%) $74B takeout of Celgene (CELG -0.1%), is investigating whether hedge funds are using a controversial stock-trading tactic to sway the vote in favor of the deal, turning their long positions in Celgene into big winners. The tactic, called “empty voting,” involves buying shares strictly for voting purposes, then selling them afterward. Dan Loeb‘s Third Point and D.E. Shaw are mentioned as possible participants but this is unconfirmed.
U.S. Hedge Fund to Offer Its Own Slate of Directors for Toshiba (The Wall Street Journal)
New York-based hedge fund King Street Capital Management LP said it intends to nominate a slate of independent directors to replace a majority of Toshiba Corp.’s board. The Wall Street Journal reported last year that King Street, one of Toshiba’s largest shareholders, intended to shake up the Japanese industrial conglomerate’s board.
Hedge Fund Firm City Financial Transfers $332 million to Fund Manager Garraway (Reuters)
LONDON (Reuters) – Hedge fund firm City Financial has agreed to transfer two funds, which run a total of $332 million in assets, to Garraway Capital Management, a source familiar with the matter told Reuters on Monday. City Financial had completed a restructuring of its business in December, including closing its New York office. Reuters had reported in December that City Financial and the chief investment officer of its Decca Fund had decided to wind down its credit-focused strategy.
Hedge Fund Hands £40m Lifeline to Four Seasons (BT.com)
A US hedge fund has handed Britain’s biggest care homes operator Four Seasons a £40 million lifeline as it readies the group for a sale. The Press Association has learnt that Four Seasons secured the funding this week from H/2 Capital Partners, which effectively controls the group. H/2 is increasing previous financing of £70 million to £110 million, providing Four Seasons with vital money that allows it to continue to operate.