Editor’s Note: Related tickers: Sony Corporation (ADR) (NYSE:SNE), Dell Inc. (NASDAQ:DELL), CF Industries Holdings, Inc. (NYSE:CF), Yahoo! Inc. (NASDAQ:YHOO), The Blackstone Group L.P. (NYSE:BX), Goldman Sachs Group, Inc. (NYSE:GS)
Third Point Takes Aim at Sony in Investor Letter (NYTimes)
The activist investor Daniel S. Loeb is turning up the heat on Sony Corporation (ADR) (NYSE:SNE). Mr. Loeb, who runs the hedge fund Third Point, initially took a deferential approach when he disclosed a roughly 6.5 percent stake in Sony Corporation (ADR) (NYSE:SNE) and called for a breakup of the company in May. …A spokesman for Sony Corporation (ADR) (NYSE:SNE) said: “Sony Corporation (ADR) (NYSE:SNE) is focused on creating shareholder value by executing on our plan to revitalize and grow the electronics business, while further strengthening the entertainment and financial service businesses, which generate stable profit. The Sony Corporation (ADR) (NYSE:SNE) board of directors, as previously noted, is reviewing its proposals. Sony Corporation (ADR) (NYSE:SNE) looks forward to continuing a constructive dialogue with our shareholders as we pursue our strategy.”
Icahn contests condition in latest Dell offer (Yahoo)
Billionaire investor Carl Icahn is renewing his attack on Michael Dell’s leadership and warning that the latest offer from Dell Inc. (NASDAQ:DELL) to buy the struggling PC maker he founded bypasses an important shareholder safeguard. Icahn and the investment firm Southeastern Asset Management said Monday in a letter to a special committee of Dell Inc. (NASDAQ:DELL) board members that Michael Dell wants to circumvent the voting process behind a deal by preventing stockholders from passively rejecting his offer. Icahn and Southeastern are major Dell Inc. (NASDAQ:DELL) shareholders who have been leading a push to defeat Michael Dell’s takeover plan. They also want Michael Dell ousted as the company’s leader.
Third Point Re increases IPO offering to $345m (Artemis)
Third Point Re, the Bermuda domiciled reinsurer backed by Third Point LLC hedge fund owner Dan Loeb, has increased the offering size of its long-awaited IPO to a maximum of $345m. When Third Point Re initially filed its IPO documentation it was hoping for an offering of $250m but it seems demand has allowed it to increase the target. An updated S-1 registration statement document which was filed with the U.S. Securities and Exchange Commission yesterday, shows the proposed maximum aggregate offering price as $345m, up by 38% from the initial $250m target, according to Bloomberg news and the Royal Gazette Bermuda.
Innovative funds can hedge fixed -income volatility (TheGlobeAndMail)
As you watch your bond investments stumble against rising interest rates, you’re probably on the lookout for fixed income options that aren’t so interest sensitive. As it happens, two of Canada’s best-known hedge fund providers offer innovative fixed income funds that afford some protection in just this situation. Picton Mahoney Asset Management’s Income Opportunities Fund and Gluskin Sheff + Associates Inc.’s Credit Arbitrage Fund are designed to try to generate moderate and relatively steady returns similar to traditional bond funds, but without the traditional bond fund’s notorious vulnerability to rising rates.
Einhorn’s reinsurer cut gold exposure in Q2 as prices plunged (MSN)
Hedge fund manager David Einhorn‘s reinsurer Greenlight Capital Re, Ltd. cut its gold holdings in the second quarter as prices of the precious metal plummeted, a regulatory filing showed on Monday. The reinsurer, for which Einhorn serves as chairman, cut its commodities holdings to $50.5 million in the quarter ended June 30, down from $90.3 million in the first quarter ended March 31.
CF Industries’ Shares Jump on Stake by Activist Hedge Fund (WSJ)
Shares of CF Industries Holdings, Inc. (NYSE:CF) +10.53% jumped nearly 12% on Monday after Third Point LLC, the hedge fund run by activist investor Daniel Loeb, said it held an unspecified stake in the Illinois supplier of nitrogen and phosphate fertilizers. …Mr. Loeb, long known for agitating for change at public companies, played a big role in shaking up Internet technology company Yahoo! Inc. (NASDAQ:YHOO) -0.64% . as an activist shareholder and board member. He pushed for the ouster of former Yahoo! Inc. (NASDAQ:YHOO) Chief Executive Scott Thompson, and for reorganizing the board and hiring new CEO Marissa Mayer. Mr. Loeb said last week that he was leaving Yahoo! Inc. (NASDAQ:YHOO)’s board and unloading the bulk of Third Point’s shares in the company.
Blackstone’s New Hedge Fund Mutual Fund: A Winning Alternative (InvestorPlace)
The mysterious and lucrative world of hedge fund investing could be coming to a brokerage near you … and sooner than you think. Recent changes to federal and SEC oversight removed the marketing ban for hedge funds that has been in place for decades. Hedge funds are supposed to be targeted toward accredited (read: high net worth) investors as well as institutional and pension funds. But because of changes in the rules, the retail investing set can now access these funds. And private-equity kingpin The Blackstone Group L.P. (NYSE:BX) is here to help.
Hedge Fund’s Suit on Fannie and Freddie May Spell Trouble for U.S. (NYTimes)
The lawsuit brought by the hedge fund Perry Capital against the federal government over the Fannie Mae and Freddie Mac bailout may be the case that finally subjects the government’s bailout practices to closer outside scrutiny. The Fannie Mae and Freddie Mac bailouts were two of the biggest and earliest of the financial crisis. In September 2008, a government team led by the Treasury secretary at the time, Henry M. Paulson Jr., placed the companies into a conservatorship and provided them with hundreds of billions of dollars in backstop financing.
Marc Faber on How the Economic Chess Game Might End (TradeTheNewsRoom)
Marc Faber was his normal cheery self when he sat down for an interview with the Prospect Group. Filmed in Chiang Mai, Thailand, the author of the Gloom Boom and Doom Report went into detail on how he sees the current global financial situation shaking out. Obviously when given a bit more airtime, Faber can expand on his thoughts on where he thinks this is all heading. Spoiler alert. Nowhere pleasant. His thought is that eventually we will have to adjust to the downside. Marc Faber’s issue is that growth in global financialization has far exceeded that of real economies. This has cause the inflating of multiple asset bubbles, be they housing, financial, student loans etc.
Hey Gold Bugs, Did You Hear Dr. Doom? (YCharts)
Economist Nouriel Roubini, who in 2005 warned of the US housing collapse, said Monday gold prices could fall toward $1,000 an ounce by 2015. The cofounder and chairman of Roubini Global Economics, also known as Dr. Doom, told Index Universe the recent rebound in gold is only transitory. He estimates that from current levels, bullion prices may see another 25% to 30% correction. Among the reasons Roubini quotes for saying the gold bubble has burst is the way they tend to spike when there are serious economic, financial and geopolitical risks in the global economy. He also believes gold performs best when there is a risk of high inflation, as its popularity as a store of value increases.
Paulson will not testify in Tourre trial (Reuters)
Hedge fund billionaire John Paulson will not testify in the high-profile civil case against former Goldman Sachs Group, Inc. (NYSE:GS) bond trader Fabrice Tourre, who is on trial in federal court in New York. The U.S. Securities and Exchange Commission accuses Tourre of failing to tell investors that 57-year-old Paulson’s hedge fund firm intended to bet against Goldman Sachs Group, Inc. (NYSE:GS)’ Abacus 2007-AC1. The $2 billion offering was tied to subprime mortgage bonds and known as a synthetic collateralized debt obligation.
Keeping SAC Alive Is in Banks’ Interest (WSJ)
As SAC Capital Advisors LP battles the fallout from criminal charges, it is receiving help from two unlikely quarters: Wall Street banks and the U.S. government. When Manhattan U.S. Attorney Preet Bharara leveled criminal insider-trading charges against SAC last week, the received wisdom was that the firm likely was on its way out. SAC pleaded not guilty and denied the allegations and its founder, Steven A. Cohen, hasn’t been charged criminally with any wrongdoing. But no major financial firm has survived a federal criminal indictment. And SAC’s legal troubles already had prompted several investors to ask for their money back. The severity of the charges—and the language used by Mr. Bharara to describe them—only added to the sense of gloom.
Unhedged Commentary: Marketing and Branding in the Post-JOBS Act Era (InstitutionalInvestorsAlpha)
Even though the Securities and Exchange Commission recently lifted the 80-year-old ban on general solicitation for hedge funds, don’t expect to see late-night infomercials or billboards at sporting events advertising the industry’s latest investment opportunity anytime soon. The impact of the new rules is likely to manifest itself in a less sensational, yet more meaningful way for investors. By lifting the ban on general solicitation, Congress and the SEC have opened the door to greater transparency and information sharing between funds and those qualified to invest with them.
Convexity Closes to New Money Amid Disappointing Performance (InstitutionalInvestorsAlpha)
Convexity Capital Management, the secretive Boston-based hedge fund firm co-founded by Jack Meyer, expressed frustration to clients over what it describes as subpar performance and said it is closing to new investments until its performance improves. The firm’s main fund lagged its benchmarks by 132 basis points, or 1.32 percentage points, in the second quarter as well as for the first half. The fund also is behind its self-imposed benchmarks by 167 basis points for the 12 months ended June 30, according to Convexity’s second-quarter letter to clients.