Sears may separate Lands’ End, Auto Center businesses (Reuters)
Sears Holdings Corporation (NASDAQ:SHLD) is considering separating its Lands’ End clothing and Sears Auto Center businesses into independently managed operations as part of its turnaround plan, after another quarter of declining same-store sales. The company, headed by hedge fund manager Eddie Lampert, said on Tuesday same-store sales for the 12-weeks ended Oct. 26 fell 3.7 percent. Sears said it expects to post a net loss of between $532 million and $582 million for the third quarter ending Nov. 2. Sears’ sales have declined since 2005 as the company battles intense competition from Target Corporation (NYSE:TGT), Wal-Mart Stores, Inc. (NYSE:WMT) and Amazon.com, Inc. (NASDAQ:AMZN).
High Five for Largest Hedge Fund Start-ups (WSJ)
Only 86 European offshore hedge funds launched in 2012, according to trade magazine EuroHedge, the lowest number of new funds since the data provider began tracking the industry in 2000. Barriers to entry have risen, and on top of this, last year managers also had the euro-zone sovereign debt crisis to grapple with, making investors uncertain and risk-averse. Despite the record low number of launches, those that did take off were bigger. The average size of new funds was more than $100 million, compared with less than $50 million 10 years ago, according to EuroHedge.
Signia Wealth Names New Hedge Fund Head (Finalternatives)
Signia Wealth has snagged an Amundi Asset Management executive to lead its hedge fund effort. Michael Rosenthal was named head of hedge fund investment at the London-based firm. He joins from Amundi, where he spent 10 years, most recently as co-head of hedge fund investment and head of the French firm’s London office. “Michael is widely recognized as a leading expert in his field and we are extremely pleased to welcome him on board,” Signia CEO Nathalie Dauriac-Stoebe said.
Fleckenstein Says Last Stand Will Be ‘Shooting Fish In A Barrel’ (Finalternatives)
William Fleckenstein’s upcoming return to short-selling will be his swan song. The Fleckenstein Capital manager elaborated on his plans for his RTM 2.0 fund, which is set to debut early next year, five years after he shuttered his last short-only hedge fund, in an interview with The Wall Street Journal. And he made clear that there would be no RTM 3.0. “This is going to be my last, quote-unquote, campaign,” the 60-year-old said, noting that his wife was “remarkably subdued” when he told her he planned to go back into shorting. And since its his final battle, so to speak, he’s hoping to amass a lot of firepower before launching his attack.
Anthony Scaramucci Went On Such An Epic Rant Defending Steve Cohen That CNBC Delayed Its Commercial Break (Businessinsider)
Skybridge Capital’s Anthony “Mooch” Scaramucci went on an epic rant this afternoon on CNBC’s “Fast Money” after the news broke that SAC Capital and U.S. prosecutors could reach a settlement deal in the coming days. Scaramucci has been a vocal supporter of embattled billionaire hedge fund manager Steve Cohen. Cohen’s Stamford, Connecticut-based SAC Capital has been criminally charged for insider trading. SAC was charged with four counts of securities fraud and one count of wire fraud. SAC could face a possible fine north of $1 billion and have to admit guilt.
Cerberus Starts Commercial Mortgage-Backed Securities Hedge Fund (BusinessWeek)
Cerberus Capital Management LP, the $20 billion New York-based firm focused on distressed assets, started a fund to invest in commercial mortgage debt, according to a letter to investors obtained by Bloomberg News. The Cerberus CMBS Opportunities Fund, which began Oct. 7, can bet on and against senior and subordinated commercial mortgage-backed securities, interest-only securities, commercial real estate collateralized-debt obligations and mezzanine loans, according to the letter. The “new issue market has grown steadily since 2009 with 2013 issuance ahead of last year’s pace,” the firm wrote.
Awaiting SAC Capital’s settlement (CNBC)
The $24 Million Winners of the Ackman-Herbalife Fight: Lawyers (WSJ)
Hedge fund manager Bill Ackman’s high-profile bet against Herbalife Ltd. (NYSE:HLF) attracted plenty of attention when he first accused the nutritional products maker of being an elaborate pyramid scheme. But since then, the company’s investors seem to have shrugged off the allegation — its stock is up 106% this year — and the company has kept reporting solid profits. Today it announced results that beat expectations, for the 19th consecutive quarter. In early October Mr. Ackman told investors his fund had trimmed back the structure of its bet against Herbalife, reducing the risk facing the fund if his thesis — that Herbalife is bound to eventually fail or be shut down by regulators — doesn’t pan out.
Rush to Hedge Funds Seen Courting Lame Returns: Credit Markets (BusinessWeek)
Debt investors are funneling 17 times more cash into hedge funds than into junk-bond funds that returned more in each year since the crisis, heralding a shift from chasing yields to preserving cash as interest rates rise. Hedge funds that seek to profit without making large bets on the direction of debt prices received $20.6 billion in the first nine months of 2013, compared with a net $1.2 billion put into junk-bond mutual funds, according to data from Hedge Fund Research Inc. and EPFR Global. The flows are a reversal from 2012, when $72.1 billion deposited into the mutual funds was almost twice the $41.4 billion allocated to hedge funds.
Hedge fund gains 93% on Spanish recovery play (eFinancialNews)
Madrid-based Armada Capital’s Armada Lynx fund, a roughly €10 million long/short equity fund, is up 93% this year through October 28 on the back of a concentrated portfolio of stock picks. This year’s gains reverse the losses of 32% it suffered between its launch in September 2010 and the end of last year. Armada founder Fernando Primo de Rivera told Financial News: “We held onto our positions on the belief that Germany wouldn’t let the euro collapse because it was the main beneficiary of the single currency. A euro breakup was unthinkable because of the havoc it would wreak on global financial markets and the blow-out of a political project that had been a success for 50 years.” On top of this, European Central Bank president Mario Draghi pledged in July 2012 that he would do “whatever it takes” to save the eurozone.
Soros and Hillary Take on America (FrontPageMag)
Radical anti-American billionaire George Soros is going all-in for Hillary Clinton’s yet to be officially declared run for the presidency in 2016. And because Soros’s wealthy leftist friends often follow his lead, a tsunami of early money may be poised to swamp the former U.S. secretary of state’s zygotic campaign. Soros is lending his name to the “Ready for Hillary” super PAC, giving $25,000 to snag a co-chair post on the organization’s National Finance Committee. Soros’s political director Michael Vachon confirmed Soros’s involvement with the super PAC.
Marc Faber’s Surprising Gold Forecast (GoldAndSilverBlog)
In an interview with Barron’s, Marc Faber, editor of The Gloom, Boom & Doom report gives his take on where the gold market is headed and why certain investments related to gold might be very risky. Marc Faber, never at a loss for a good soundbite, says gold is “in a correction mode” but seemed at a loss to explain why gold has dropped by over $400 per ounce over the past two years. Faber talks about the paradox of weak physical gold prices even as demand for physical gold remains robust. Although gold has declined in price and commentary on the gold market is extremely bearish, Faber notes that countries such as China is buying 2,600 tons of gold per year “which exceeds annual production.”
Foreign Hedge Funds Warm to China (WSJ)
More foreign hedge funds are devoting resources to China, attracted by strong returns, the potential for growth and signs that the country will continue to develop its financial markets. China-focused hedge funds managed $12.9 billion in assets as of the end of September, exceeding levels before the global financial crisis, according to Eurekahedge, which tracks the industry. In the nine months ended Sept. 30, average returns from China-focused hedge funds eclipsed those in neighboring countries, with the exception of Japan. “A lot of [China-focused] offshore funds are looking towards global equity markets as a way to play out China-focused investment themes,” said Michelle Lim, vice president at Deutsche Bank AG (USA) (NYSE:DB)’s Hedge Fund Capital Group, which helps Asian hedge funds raise money.
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