Editor’s Note: Related tickers: Smithfield Foods, Inc. (NYSE:SFD), Dell Inc. (NASDAQ:DELL)
Billionaire investor Carl Icahn is likely going to walk away from the proxy battle that he started at PC manufacturing company, Dell Inc. (NASDAQ:DELL). Carl Icahn is going to drop his bid for Dell Inc. (NASDAQ:DELL) due to funding issues, according to CNBC. Apparently Icahn and Southeastern Asset Management is having a hard time putting together $5.2 billion that is needed for making an offer for Dell Inc. (NASDAQ:DELL). Icahn’s deal rivals a $24.4 billion leveraged buyout deal that Michael Dell and Silver Lake Partners put together. Icahn allegedly told investors that part of the delay for his bid is the $3.9 billion funding gap that was called out on June 5th by the special committee of Dell Inc. (NASDAQ:DELL)’s board that is overseeing the process to go private. Last month, Carl Icahn and Southeastern offered to recapitalize Dell Inc. (NASDAQ:DELL) and shareholders a $12 special dividend and leave a publicly held stub.
Activist Investor Calls for Breakup of Smithfield Foods (NYTimes)
An activist hedge fund took aim at Smithfield Foods, Inc. (NYSE:SFD) on Monday, arguing that the pork producer should consider splitting itself up despite its proposed $4.7 billion sale to a major Chinese meat processor. The fund, Starboard Value, wrote in a letter to Smithfield Foods, Inc. (NYSE:SFD)’s board that it believed the company was worth much more separately. Starboard says it owns a 5.7 percent stake, making it one of the largest shareholders in the company. Shares of Smithfield Foods, Inc. (NYSE:SFD) were up more than 2 percent in premarket trading on Monday, although they remained below the offer price from Shuanghui International.
Hedge funds receive meagre USD430m in April (HedgeWeek)
Hedge funds took in a net USD430m (0.02 per cent of assets) in April, building on an inflow of USD817m in March, according to BarclayHedge and TrimTabs. The results are based on data from 3,393 funds. The industry delivered a return of 0.6 per cent in April, one-third of the S&P 500’s 1.8 per cent rise. The trend was similar over the past 12 months, when hedge funds earned 8.1 per cent and the S&P 500 rose 14.3 per cent.
Black River Commodity Trading Fund: Black River Asset Management (Risk)
Commodities are rarely out of the news. Headlines appear daily in newspapers, online and in broadcasts. Generally the news is not good and speculators are constantly blamed for high prices, food shortages and a host of other problems. As an asset class, commodities have proved a fickle friend for investors. Many struggle to achieve positive returns, battling against oscillating markets and wayward weather. Black River is an exception to the rule. Formed in 2003 as an independently managed subsidiary of Cargill, it manages more than $5.9 billion in commodity-related hedge fund and private equity products.
Now’s Best Time to Buy Art, Hedge Fund Founder Rachofsky Says (BusinessWeek)
Now is a good time to buy contemporary art, even though prices have never been higher, the Dallas-based collector Howard Rachofsky says as he digests his bratwurst. The former hedge fund manager and his wife Cindy are grabbing lunch at Art Basel, the world’s biggest fair devoted to 21st- and 20th-century works. Dealers did plenty of business at this year’s 44th edition, following the $1.1 billion achieved at the New York contemporary sales in May. The Montreal-based dealer Landau Fine Art sold Rene Magritte’s 1960 canvas, “Un peu de l’ame des bandits” (A Little of the Spirit of Bandits), priced at $12.5 million.
RPMI signals new line for hedge fund strategy (eFinancialNews)
RPMI is shifting half its £2bn hedge fund portfolio away from using funds of hedge funds, to investing directly with single managers, according to chief investment officer Keith Shepherd. Shepherd declined to say which of its three funds of funds, namely Blackstone Alternative Asset Management, Grosvenor Capital or the Rock Creek Group, had been let go. Shepherd also said the scheme’s “growth pool” – a sub fund whose asset mix is tactically adjusted by RPMI’s team – now accounts for more than half the scheme’s assets, up from 35% at the end of 2011. The portfolio returned 8.4% last year, marginally ahead of its target, thanks to emerging-markets debt and reinsurance investments, as well as a tilt towards Japan in the equity portfolio.
Hedge Funds Cut Gold Bets as Paulson’s Loss Widens (SFGate)
Hedge funds cut wagers on a gold rally for the first time in three weeks on mounting speculation central banks will curb record stimulus and as this year’s slump in bullion spurred losses for billionaire John Paulson. The funds and other large speculators lowered their net- long position by 4.1 percent to 54,779 futures and options by June 11, U.S. Commodity Futures Trading Commission data show. Net-bullish wagers across 18 U.S.-traded commodities rose 0.1 percent. Bearish copper bets more than doubled as the metal had its longest slump since November. Cocoa holdings advanced to the highest since 2008 before the biggest weekly slide since January.
Evergreen Capital Plans Global REIT, Infrastructure Hedge Fund (BusinessWeek)
Evergreen Capital Partners Ltd., which returned 36 percent in its Australian real estate and infrastructure fund in the year to April, plans a hedge fund to invest in the assets globally amid demand for higher yields. The Australian asset manager aims to start the Global REIT and Infrastructure Absolute Return Fund on July 1 with more than A$10 million ($9.6 million) and hopes to manage A$50 million within 12 months, the fund’s managers, Andrew Smith and Jonathan Collett, said in a telephone interview on June 14. They will cap the fund at A$500 million.
Some macro hedge funds are using the recent sell-off in the Mexican peso as an opportunity to buy into the currency. Macro funds – which bet on stocks, bonds and currencies and which were made famous by the likes of George Soros – piled into the peso in recent months, hungry for profits after a tough two years in which they struggled to cope with markets dominated by political and central bank actions. Until recently, the trade was one of the successes in a year that otherwise has seen macro funds down 1.09 percent, according to the HFRX index. It returned as much as 18 percent as it went to below 12 to the US dollar a month ago from more than 14 last June. But since then it has quickly lost about a quarter of those gains.
‘Hedge Hogs’ is a fresh look at Wall Street trades (Chron)
The abuse of investors and American taxpayers by “Wall Street” is an oft-told tale, especially since the financial collapse of 2008. But Barbara T. Dreyfuss has found a fresh way to tell the story, and one of her protagonists is Houston’s billionaire philanthropist and former hedge fund luminary John Arnold. Although there are no heroes in the saga of macho trading and financial immorality, Arnold is clearly the “good guy,” relatively speaking. The bad guy, operating far away from Houston in the northern reaches of Alberta, Canada, is Brian Hunter.
E-mails reveal Prichard’s role in Ontario gas-plant talks (TheGlobeAndMail)
A trusted adviser to the Ontario government played a prominent role in crafting a $275-million settlement to scuttle an unpopular power plant in the Toronto suburb of Mississauga. Robert Prichard, a politically connected Bay Street lawyer, led talks to compensate the company building the plant and also negotiated an accord with a group of hedge-fund lenders to the project, according to internal government e-mails obtained by The Globe and Mail and interviews with sources close to the situation. The e-mails show that then-premier Dalton McGuinty’s office, along with his energy and finance ministers, signed off on the deal with the company.
Paul Soros | Shipping magnate, 87 (Philly)
Paul Soros, 87, an innovator in shipping, philanthropist, and the brother of billionaire financier George Soros, died in New York on Saturday after a long bout with a host of illnesses, said his son Peter. Mr. Soros, an engineer and businessman, founded Soros Associates, a world leader in the design and development of bulk handling and port facilities. The company has operations in 91 countries. Mr. Soros also held a number of patents and wrote more than 100 technical articles on the transportation of materials and related shipping design issues.
Buy Chinese yuan: Jim Rogers throws us another investment bone (Mining)
The Chinese yuan is an excellent long-term investment, potentially appreciating 500% and becoming the global reserve currency in the coming decades, legendary investor Jim Rogers claimed last week. Despite legitimate concerns in the US over China manipulating its currency to remain artificially low, the yuan has recently been on the move – upwards. Just over a week ago, the yuan hit its all-time high against the US dollar. Since January of this year, the yuan is up 1.6% overall (or 30% against the US dollar). Since January 2009, when President Obama first took office, the overall appreciation figure is more like 10%.
Hedge Funds Cut Brent Crude Net-Longs From Three-Month High (Bloomberg)
Hedge funds and other money managers cut bullish bets on Brent crude from a three-month high, the first reduction in seven weeks, according to data from ICE Futures Europe. Speculative bets that prices will rise, in futures and options combined, outnumbered short positions by 160,033 lots in the week ended June 11, the London-based exchange said today in its weekly Commitments of Traders report. The reduction of 4,871 contracts is the first since April 23.
Toscafund Makes Hay in Financial Stocks (InstitutionalInvestorsAlpha)
One of this year’s best performing Tiger Cubs – or best-performing hedge funds, period – is a London-based fund that many investors had left for dead after it lost more than half its value in 2008. Managed out of the London-based hedge fund firm Toscafund Asset Management, the Toscafund is up 16.2 percent this year through May, net of its 1.5 percent management fee and 15 percent performance fee, after posting a strong 5.2 percent gain in May alone. The fund’s performance this year is a continuation of an impressive rebound that started when former Tiger Management financials specialist Johnny de la Hey took over as the fund’s portfolio manager in December of 2008.
