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Hedge Fund News: Carl Icahn, John Paulson & Paul Singer

Carl Icahn starts verbal fight club over PayPal—and Elon Musk is in (BizJournals)
At 78, Carl Icahn could have just rode off into retirement, his reputation as ruthless money-maker still golden, his billionaire status unsullied. Instead, he has put on his activist investor armor, grabbed his sword and is galloping full speed once again—this time at eBay Inc (NASDAQ:EBAY), which he wants to see spin off its fast-growing PayPal unit. Icahn, who has about a 2 percent share in eBay (Nasdaq: EBAY), last month nominated two of his employees for seats on the board. Why? On Monday, Icahn wrote an open letter to the company’s shareholders to enlighten them: “We have found ourselves in many troubling situations over the years, but the complete disregard for accountability at eBay is the most blatant we have ever seen,” he writes.

Carl Icahn as viking

Paulson’s Hedge Fund Plans Big Investment in Puerto Rico (MoneyNews)
Paulson & Co., the hedge-fund firm founded by billionaire John Paulson, is in talks to buy a resort complex in Puerto Rico. Paulson & Co. is seeking to acquire La Concha Resort and the Condado Vanderbilt, neighboring beachfront hotels in the capital city of San Juan, according to two people with knowledge of the transaction. The firm will pay about $200 million for the properties, in which the territory’s Government Development Bank owns a stake, said the people, who asked not to be named because the deal hasn’t been completed.

Elliott ‘doubling down’ on bid for Riverbed Technology (CNBC)
Elliott Management is getting more aggressive in its bid for Riverbed Technology. The $23 billion activist hedge fund firm led by Paul Singer offered to buy the enterprise technology company for $19 in January but was rejected. Still owning 10.5 percent of Riverbed’s stock, Elliott increased its offer to $21 a share Tuesday. Elliott portfolio manager Jesse Cohn said in a public letter to the Riverbed board that the new offer “demonstrates our commitment to the value-maximizing potential of Riverbed’s high-quality assets and its strategic positioning within its markets.”

The Buy-Apple Inc, Sell-BlackBerry Ltd trade has flipped (FinancialPost)
Sometimes the world turns on its head. This chart showing BlackBerry Ltd (NASDAQ:BBRY)’s stock performance relative to Apple Inc. (NASDAQ:AAPL)’s is one example of that. Blackberry shares have almost doubled out of their December lows climbing from $5.75 to today’s close of $9.14. The Street’s noticed, and hedge fund managers like Dan Loeb of Third Point have revealed stakes in the company. Meanwhile, money is flowing out of Apple, which is down 6% since the beginning of the year.

Hedge Fund Fail-Mates (ai-CIO)
Two hedge fund strategies failed to keep up with their booming industry last year: macro and managed futures. Both suffered weak overall performance in 2013, and not for the first time, according to eVestment data. Over the past five years, macro hedge funds have cumulative returns of roughly half the industry average. After fees, managed futures funds haven’t returned anything since October 2010. But the experts, and more granular data, give strikingly different prognoses for these hedge fund fail-mates.

BNY Mellon to Expand Hedge Fund Biz (Zacks)
The Bank of New York Mellon Corporation (NYSE:BK) recently entered into an agreement with HedgeMark International, LLC to acquire 65% ownership stake in the latter. The remaining 35% stake is already held by the company since 2011. The deal is expected to close in the second quarter of 2014. However, it is still subject to regulatory approval. Now, what prompted BNY Mellon to buy the additional stake? The market scenario is currently witnessing the shift of institutional clients’ preference from conventional modes of investment to alternative arenas. Investors are now willing to take calculated risk to maximize their return.

Hedge fund manager David Einhorn to keynote fundraiser (JSOnline)
New York hedge fund manager David Einhorn will be the keynote speaker at an annual fundraising event for Make A Difference Wisconsin, a group formed to help local high school students make sound financial decisions. Einhorn, best known for betting on a decline in Lehman Brothers Holdings Inc. before the bank collapsed in 2008, runs the hedge fund firm Greenlight Capital Inc. The fund has generated annual returns of nearly 20% since its inception in 1996, according to InsiderMonkey.com.

Hedge funds changing the way they communicate (CNBC)

Hedge Fund Jargon Decoded In New Glossary (Finalternatives)
The Managed Funds Association and Latham & Watkins are working together to demystify hedge funds—or at least the words associated with them. The MFA has set up a new website and smartphone application giving free access to Latham’s Book of Jargon–Hedge Funds. The glossary includes more than 900 terms common—and not-so-common—to the industry. “Covering deal terms from ‘A/B Exchange’ to ‘VWAP’ and more than 900 terms in between, we’re pleased to provide MFA’s members and the wider financial community with this interactive library of the A’s – Z’s of hedge fund jargon,” Latham hedge-fund task force co-chairman Christopher Clark said.

Hedge Fund Association announces 2014/2015 board election results (HedgeWeek)
HFA members in the US, Europe, Asia, Australia, Latin America and the Cayman Islands elected 15 leaders to work on behalf of the global hedge fund industry, including over 10,000 hedge funds in the US and abroad which collectively manage in excess of USD2.8trn in assets, institutional and high-net worth investors, and industry service providers. “I am honoured to continue to serve alongside Ron Geffner, David Friedland and all of the HFA’s new and returning board members,” says HFA president Mitch Ackles (pictured). “In the years ahead we will work together to produce frequent member networking programmes, advance our advocacy efforts with the media, lawmakers and regulators, and develop new initiatives to prepare future generations of industry professionals.”

Hedge fund managers cite cost and quality for moves (AssetServicingTimes)
Hedge fund managers are changing their service providers, particularly administrators and prime brokers, because of low-quality service and cost, a survey has found. Research and consultancy firm Preqin surveyed more than 100 fund managers at the end of 2013 to find out more about whether they had changed service providers and what had prompted the change. A third of all fund managers have changed a service provider in the past year, with European and North American fund managers being the most active in switching service providers in 2013.

Friedland: Hedge fund managers still confident of a bright 2014 (Opalesque)
The Bahamas-based Magnum BGM Select Opportunities Fund outperformed the S&P 500 despite posting a “moderate loss” in January but managers are still confident of a bright 2014. In its latest monthly report to investors, BGM Select portfolio manager Dion Friedland said the fund was down 0.44% in January. This compares favorably with the S&P which lost 3.56% and the Hedge Fund composite index which lost 0.77%. …BGM ended 2013 on a high note with 19.41% gains. The fund consistently generated positive results from September to December last year with 2.01%, 1.09%, 0.44%, and 1.26% profits in the last four months of last year.

Jim Rogers: Want to make money? Drive a tractor (MarketWatch)
Commodities guru Jim Rogers has a tip for the opportunity-hunters out there: Get back to the land. For the first time in a long time, the world has “very low inventories” of food products, Rogers told the BBC’s Simon Jack. Plus, there’s a shortage of farmers — and those we do have are getting older, with an average age in the U.S. of 58. Added together, that means there are good prospects in the field. …While the dapper money man may have been pulling Jack’s leg somewhat, his underlying message came through: There’s cash in crops.

‘Dr. Doom’ sees correction risk, not crash for Canadian housing (Yahoo)
Canada’s housing market is at risk of a meaningful correction, Nouriel Roubini said on Monday, though the economist known as “Dr. Doom” for his often gloomy forecasts said he was not predicting a crash. Roubini also said the value of the Canadian dollar is too strong, noting the challenge that poses to the manufacturing sector, and suggested the Bank of Canada should use more aggressive monetary policy to weaken the loonie.

Recommended Reading:

Elliott Management Nominates Directors to Juniper Networks (JNPR)’s Board

Tiger Global Management Cuts Its Exposure To TAL Education Group (XRS)

Barry Rosenstein’s Jana Partners Trims Stake In QEP Resources (QEP)

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