Editor’s Note: Related tickers: UBS AG (NYSE:UBS), Dell Inc. (NASDAQ:DELL), JPMorgan Chase & Co. (NYSE:JPM), Canadian Pacific Railway Limited (NYSE:CP), Sony Corporation (ADR) (NYSE:SNE), RHJ International SA (EBR:RHJI)
Investor Ackman to Cut Canadian Pacific Stake (WSJ)
New York hedge-fund manager Bill Ackman is selling up to 29% of his stake in Canadian Pacific Railway Limited (NYSE:CP) -1.70% a year after winning a high-profile proxy fight to install a new chief executive at the railroad. The planned sale comes after large gains in Canadian Pacific Railway Limited (NYSE:CP)’s stock price but also as the railroad grapples with cost cutting and a series of accidents. Mr. Ackman’s Pershing Square Capital Management LP said Monday it plans to sell up to seven million shares of Canada’s second-largest railroad, a sale that would reap about $923 million at Monday’s closing price. The activist investor is currently Canadian Pacific Railway Limited (NYSE:CP)’s largest shareholder with about 24.2 million shares, or a 14% stake.
UBS unit to pay $5.3 mln to settle SEC charge (Reuters)
A UBS AG (NYSE:UBS) hedge fund agreed to pay a fine of $5.3 million to settle a charge that one of its units bought stocks in public offerings that an affiliated unit was shorting, the U.S. securities regulator said on Monday. The U.S. Securities and Exchange Commission (SEC) said UBS AG (NYSE:UBS)’s $6 billion hedge fund, UBS AG (NYSE:UBS) O’Connor LLC, violated a rule governing short sales 16 times between January 2009 and March 2011. The rule prevents an entity from buying stocks in a public offering if it has shorted those same stocks. “The settlement pertains to certain transactions for which O’Connor believed that an exception to an SEC rule applied,” UBS AG (NYSE:UBS) spokeswoman Karina Byrne told Reuters.
Former trader offers sordid peek at world of hedge funds (NDTV)
Turney Duff, former stock trader, recovering cocaine user and first-time author, stepped out the front door of his new home, the ground floor of a modest split-level house in a sleepy Long Island neighborhood. “You want the grand tour?” Duff said, flashing a smile. “It’ll take 30 seconds.” The humble environs stand in stark contrast to his digs a decade ago, when he lived in a $9,300-a-month triplex in Manhattan and earned nearly $2 million a year as a hedge fund player.
Book Explores Downfall Of An Indian-American Business Icon (Krcu)
Rajat Gupta was one of the wealthiest and most successful men in America and an icon of the Indian-American community. Today, he faces two years in prison for insider trading, convicted of passing corporate secrets to his billionaire friend and Galleon Group founder Raj Rajaratnam. Gupta was already a wealthy man; what was the motive for his crime? In The Billionaire’s Apprentice:The Rise of the Indian-American Elite and the Fall of the Galleon Hedge Fund, journalist Anita Raghavan tries to answer that question.
Former JPMorgan Trader Gulati Said to Get $300 Million for Fund (SFGate)
Deepak Gulati, a former head of global equity proprietary trading at JPMorgan Chase & Co. (NYSE:JPM), started investing at his own hedge fund after raising about $300 million, two people with knowledge of the matter said. Argentiere Capital AG, run by Gulati, 35, and a team of former colleagues from JPMorgan Chase & Co. (NYSE:JPM), started trading yesterday from its base in Zug, Switzerland, said the people, who asked not to be identified because the move hasn’t been made public. The fund will focus on volatility trades, betting on the rate at which stocks rise or fall. Gulati declined to comment on the fundraising or his backers yesterday.
Kleinwort Benson owner slams rebel hedge fund break-up calls (CityWire)
The group of investors calling for a break-up of Kleinwort owner RHJ International SA (EBR:RHJI) has reiterated its stance after the firm wrote to shareholders urging them to block the rebels’ proposals. Fabio Lopez Ceron of Geneva-based Equilibria Capital, which is leading the disgruntled group, said in a statement this afternoon: ‘We are pleased that shareholders finally have the opportunity to determine the future direction of their company by exercising their votes. ‘In our view, the board of RHJ International SA (EBR:RHJI) has presided over an erratic strategy, which has resulted in consistent and substantial value destruction…
As if hedge fund titan Steve Cohen didn’t have enough legal woes. The billionaire founder of SAC Capital — who is busy dealing with a federal insider-trading investigation and a bitter court battle with his ex-wife — has been hit with an appeal in a $6 billion racketeering case brought by insurer Fairfax Financial Holdings. On Friday, Fairfax asked New Jersey’s state appeals court to revive the case, which alleges a conspiracy by SAC and other hedge funds to drive down the insurer’s stock price a decade ago. Toronto-based Fairfax claims that SAC and other hedge funds traded on illegal inside information, including advance notice of a Wall Street research report that was expected to drive down Fairfax ’s stock.
Tiger Global raises Eventbrite stake through secondary deal (Reuters)
Tiger Global Management, a large private-equity and hedge-fund firm, has increased its investment in online ticketing start-up Eventbrite through a secondary transaction. Tiger Global’s private-equity and venture capital business, co-headed by Lee Fixel and Scott Shleifer, invested more than $30 million in the secondary deal, which closed in late May, according to a person familiar with the situation. The person did not want to be identified because the transaction was private. Tiger Global made the secondary investment in Eventbrite just over a month after the firm led a full $60 million financing round for the start-up, headed by Silicon Valley entrepreneur Kevin Hartz.
Soros fund to rival Qatar for Myanmar telco licence (ArabianBusiness)
A consortium led by billionaire investor George Soros is to rival Qatar’s Ooredoo in bidding for a mobile network licence in Myanmar. The CEO of Ooredoo, formerly known as Qatar Telecom, has previously described the South-East Asian nation’s telecommunications sector as “one of the last untapped markets”. Mobile penetration in Myanmar, which transitioned to a civilian government after decades of military rule two years ago, stands at about 5 percent. The Soros consortium, which includes Digicel Group and local property firm YSH Finance, said it would invest $9bn in the country’s mobile phone network if it is granted a licence.
Icahn to dot i’s on Dell plan (NYPost)
Carl Icahn and partner Southeastern Asset Management are laying out the nuts and bolts of a proposal for Dell Inc. (NASDAQ:DELL) to pay shareholders a one-time dividend at a cost of $21 billion, The Post has learned. The activist investors plan to file a proxy statement with the details of their $12-a-share leveraged recapitalization proposal as early as next week, according to sources. The partners hope to persuade Dell Inc. (NASDAQ:DELL) stockholders that they have a fully funded alternative to the $13.65-a-share buyout offer from founder Michael Dell and private-equity firm Silver Lake Partners.
Long-term bull market in commodities is not yet over: Jim Rogers (Business-Standard)
Global equity markets have been rattled by the comments of the US Federal Reserve that it might wind down the $85-billion-a-month bond-buying programme. On the other hand, investors in the commodity space, especially in gold and crude oil, have seen the value erode with the prices of these two commodities on a downward spiral. Jim Rogers, chairman of Rogers Holdings and author of Street Smarts: Adventures on the Road and in the Markets tells Puneet Wadhwa in an interview most central banks have injected too much liquidity, which is not sustainable. All this will end badly for investors, he says.
For any hedge fund manager bold enough to try, taking activist positions in Japanese companies in the hope of coaxing value from underperforming businesses has long been a minefield. Japan’s corporate culture is famous for its adherence to protocol and respect for senior executives, who don’t like it when foreign investors tell them what to do. Daniel Loeb, founder and CIO of $13 billion, New York-based hedge fund firm Third Point, made a name for himself in the early 2000s as a brash activist whose provocative 13D filings told the leaders of lackluster companies just what he thought of them. So when news broke last month that Third Point, which rarely engages in activism these days, had taken a position in Tokyo-based Sony Corporation (ADR) (NYSE:SNE) – and that Loeb was personally delivering a letter to CEO Kazuo (Kaz) Hirai – some expected fireworks.
‘Dr. Boom’? Roubini sees two years of stock gains (MoneyControl)
Stock market prices will continue to rise for the next two years until the wealth gap between Wall Street and Main Street gets too high and reality sets in, economist Nouriel Roubini told CNBC. Worry about the Federal Reserve backing off its historically unprecedented monetary easing is premature, Roubini said, as economic growth is too tenuous and the market too dependent on the USD 85 billion in monthly asset purchases from the central bank. “Growth is not going to pick up and inflation actually is falling,” the head of Roubini Global Economics and noted “Dr. Doom” told ” Closing Bell .” “So the markets are worried about tapering off sooner, but I think tapering off is going to occur later and therefore the market is going to rally.”
Should Doctors Be Paid Like Hedge Fund Managers? (Forbes)
I seldom disagree with Uwe Reinhardt [much as I seldom agree with Robert Raich], however Reinhardt’s post linked above on physician compensation prompts a rebuttal. Reinhardt argues that the best standard for judging the level of doctors’s pay is the pay available in other U.S. occupations that compete for the same talent pool, and he suggests a comparison to financial market professionals: “The relevant comparison should not be doctors in other countries, but the incomes earned in the United States by members of the talent pool from which American physicians are recruited, a group that includes many who end up in the superbly well-remunerated financial markets, where they are well paid almost independently of their actual net contribution to society.”
One Of Billionaire Hedge Funder Marc Lasry’s Daughters Got Married (BusinessInsider)
One of the daughters of billionaire Marc Lasry, who runs distressed debt hedge fund Avenue Capital, was married this weekend. Samantha Lasry was married to John Fleisher on Saturday at the Beach Club in Sea Island, Georgia during a black tie ceremony. The weekend kicked off with a “southern casual” BBQ dinner and drinks and then an afternoon of leisure and lunch before the ceremony on Saturday. The wedding gift registry included silver from Tiffany’s and various household items from Bloomingdales, Barney’s and Michael C. Fina.
Gibraltar Campaigns To Attract Hedge Funds (HedgeCo)
Gibraltar has launched a campaign to bring London hedge funds to “the Rock,” the Guardian reports. Gibraltar Chief Minister Fabian Picardo has made attracting hedge funds one of the main goals of his administration, last week he invited a group of UK hedge fund managers to Gibraltar for a look at his sunny peninsula. In Gibraltar the income tax is limited to 30,000 pounds ($48,000) per year. The number of funds in the peninsula of 6 square kilometers has risen from 20 in 2006 to 150 today. The hedge funds manage around 3,000 million pounds ($4.5 million) in assets.
