Billionaire Bill Ackman Considered Investing in U.K.’s Tesco (Bloomberg)
Billionaire activist investor Bill Ackman considered investing in British retailer Tesco Plc (TSCO), which has announced a series of cost cuts to reverse a slide in profit. Ackman decided against investing in Britain’s largest grocer, citing “difficulties with retail” in the past and amid current “structural changes” in the business, he told Bloomberg TV’s Francine Lacqua and Guy Johnson in London today. Ackman’s investment in U.S. retailer JC Penney Co. (JCP) cost Pershing Square Capital Management $473 million in 2013.
Myriad, Dymon Hedge Funds Said to Return About 20% in 2014 (Bloomberg)
Alibaba, China yuan stocks and currency trades brought it home for Asian hedge funds in 2014. Trades related to the linkage of the Shanghai and Hong Kong stock exchanges drove a 35 percent gain in the $942 million Segantii Asia-Pacific Equity Multi-Strategy Fund, according to an investor newsletter. The $3.5 billion Dymon Asia Macro Fund returned an estimated 19 percent on currency trades including the yuan and yen, said a person with knowledge of the matter. The more than $3.5 billion Myriad Opportunities Master Fund was up 20 percent last year, gaining from a pre-initial public offering investment in Alibaba Group Holding Ltd. (BABA), said two people with knowledge of the matter who asked not to be identified as the information is private.
Rothschild Hires Arden’s Riaz, Marzigliano for Hedge Funds (Bloomberg)
Rothschild Group hired Shakil Riaz and his long-time colleague Anthony Marzigliano to help bolster hedge fund offerings to clients of its U.S. asset-management operation. Riaz, 62, will be head of U.S. alternative portfolio management and global chief investment officer, and Marzigliano, 46, will be a managing director, Rothschild said today in a statement. Both are joining in New York from Arden Asset Management, and their appointments are effective in April, according to the statement. Rothschild will count on the pair to expand in the business of alternative products for both institutional and retail clients. They worked together since 1995 and joined Arden from JPMorgan Chase & Co. (JPM) in 2009 when the bank turned to the firm to oversee $1.1 billion in hedge fund investments that it made with its own money. Riaz had run hedge-fund holdings for the bank since they were started in 1995.
This Investment Strategy Doesn’t Work in a Zero-rate World (CNBC)
Michael Elfers, founder of Irvington Capital, For the past several decades, the traditional 60 percent stock, 40 percent bond allocation has dominated the investment industry. But since 2000, interest rates have declined to historic lows at or near zero percent. While this has given bond returns an historic tailwind, it begs the question: Have bonds become an unproductive portfolio-allocation tool?
Shortly after I entered the investment industry in 1980, inflation had risen to double-digit levels. Fed Chairman Paul Volker made a decision to attack this problem by raising interest rates to record levels. From the 20-percent peak in 1982, the Fed-funds rate has declined to zero, creating the greatest bond bull market in history.
Former SAC Executive Raises About $1 Billion For New Hedge-Fund Firm (Wall Street Journal)
Former SAC Capital Advisors LP chief operating officer Solomon “Sol” Kumin is close to lift off with the launch of a roughly $1 billion hedge fund. Mr. Kumin’s Folger Hill Asset Management LLC has raised about $1 billion as it looks to start trading in March, a person familiar with the firm said. His new employees include Lisa Baroni, a former U.S. Attorney who helped prosecute the Bernard Madoff Ponzi scheme. Ms. Baroni will head compliance for the new firm. As The Wall Street Journal first reported last summer, Mr. Kumin’s new stock-focused firm secured a $400 million investment from Leucadia National Corp. in exchange for a near-50% ownership stake in the new firm. Folger Hill is named after a lookout point on the Massachusetts island of Nantucket, where Mr. Kumin’s family spends vacations.
Computer-Driven Hedge Funds End Three-Year Losing Streak (Wall Street Journal)
A little-known but long-established London hedge fund showed a clean pair of heels to peers last year, ratcheting up a gain of almost 70% as funds of its style staged a comeback in Europe. Mulvaney Capital Management’s Global Markets fund, which gained 67.4%, was the standout performer in Europe in a year when a tumbling oil price and sinking bond yields provided money-making trades for only a handful of star performers in broadly lackluster year for European hedge fund managers. Mulvaney, set up in 1999 by Paul Mulvaney, a former Merrill Lynch options trader with a background in computer science, belongs to the group of trend-following computer-driven hedge funds that gained more than 11% on average, ending a three-year losing streak.
Investors Cut Hedge Fund Bets in January (Reuters)
Investors’ interest in hedge funds fell in January as they pulled out more cash than they invested, data showed on Tuesday, part of an annual rejig of portfolios. The SS&C GlobeOp Capital Movement Index, which calculates monthly hedge fund subscriptions minus redemptions, fell 2.95 percent in January, the sharpest drop in a year. That compared with a rise of 0.39 percent in December. “In line with year-end portfolio rebalancing, January net capital flows were negative, with higher capital activity overall,” said Bill Stone, chairman and CEO of SS&C Technologies.
