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Hedge Fund News: John Burbank, Phil Falcone & Jim Rogers

Hedge fund moguls put money on Asian Internet, low-volume stocks (Reuters)
From Asian Internet stocks, which have boomed over the last year, to food and paper products companies, prominent hedge fund investors listed their favorite stocks on Thursday at an industry meeting dominated by talk of where markets will move. John Burbank stuck with the Chinese Internet stocks that helped boost returns at his $3.8 billion Passport Capital last year. Real estate Internet portal SouFun Holdings Ltd (NYSE:SFUN), which climbed 121 percent in the last year, and discount online retailer Vipshop Holdings, which climbed 417 percent in the last year, made the list as his favorites.

John Burbank PASSPORT CAPITAL

Hedge fund billionaires sleepless over deflation: SkyBridge’s Scaramucci (MarketWatch)
Wall Street’s hedge fund billionaires are sounding increasingly worried about deflation. MarketWatch sat down with Anthony Scaramucci, SkyBridge Capital’s founder and co-managing partner, to see if he could distill the mood at the big hedge fund conference that took place in Las Vegas this week. Scaramucci, the architect of the SALT conference, says the confab should be looked at as a gathering of contrarians. As a result, the tone emanating out of the luxurious Bellagio in past years has often been at odds with overall market sentiment.

Hedge funds work and play hard in Vegas (CNN)
Fully stocked poolside cabanas, a private Lenny Kravitz concert, and oh yeah, access to some of the top investors in the world. That was the scene at the Skybridge Alternative Investments conference at the Bellagio hotel and casino in Las Vegas this week, where some of the world’s biggest hedge fund moguls, political figures and entertainers came to network, party and share ideas. “This is speed dating for hedge fund managers,” said Mitch Ackles, president of the Hedge Fund Association.

Billionaires are smarter, study says (CNBC)
Economist Paul Krugman recently wrote that the multibillion-dollar salaries of top hedge fund managers proved that education plays little role in the growing wealth gap. The rich get rich, he said, because of the “runaway financial system” and investors making money from money. “Modern inequality isn’t about graduates,” Krugman wrote. “It’s about oligarchs.” But a new study offers a different view. Jonathan Wai, a research scientist at Duke University and part of the school’s Talent Identification Program, looked at the world’s billionaires and global elite. He found that billionaires are, as a group, very highly educated and have high cognitive abilities. About a third of the world’s billionaires attended elite schools worldwide.

LightSquared Keeps Burning Cash (WSJ)
Philip Falcone‘s LightSquared blew through another $55.4 million last month, bringing the company’s total losses to $1.3 billion since it filed for bankruptcy two years ago. In a monthly operating report filed Thursday with U.S. Bankruptcy Court in Manhattan, LightSquared again attributed a bulk of the losses to interest payments on its debt. In April, those payments totaled $36.9 million, bringing the amount of interest paid to $788.2 million since the wireless venture’s May 2012 Chapter 11 filing. LightSquared’s case had another major glitch last week when Judge Shelley Chapman threw out its restructuring plan, calling it a “sophisticated shell game” engineered by Mr. Falcone to be too unfair to DISH Network Corp. (NASDAQ:DISH) -0.33% Chairman Charlie Ergen, the largest holder of LightSquared bank debt.

Darden books $2.1 billion price for Red Lobster seafood chain (GlobalPost)
Darden Restaurants, Inc. (NYSE:DRI) said it would sell Red Lobster to private equity firm Golden Gate Capital for $2.1 billion in cash, defying activist investors who opposed plans to shed the struggling seafood chain. Darden said the sale was not subject to shareholder approval and should close in the quarter ending in August. Its shares were down 4.1 percent at $48.62 in midday trading on the New York Stock Exchange. Hedge fund Starboard Value LP, which owns about 5.5 percent of Darden’s outstanding shares, opposed a sale or spinoff of Red Lobster, saying it could destroy as much as $800 million of shareholder value.

Next week’s earnings could buck negative trend: Cramer (CNBC)

Hedge Funds Shed 0.21% In April (Finalternatives)
Hedge funds fell for the second month in a row in April, as long/short equity strategies failed once again to keep up with the broader markets. The Credit Suisse Hedge Fund Index fell 0.21% last month, cutting its year-to-date gain to 0.73%. By contrast, the Standard & Poor’s 500 Index rose 0.62% on the month and is up 1.93% on the year. Long/short equity funds suffered the heaviest losses in April, dropping 1.03% (up 0.54% year-to-date). Equity market neutral funds fell 0.7% (down 0.95% YTD), emerging markets funds 0.58% (down 2.59% YTD), multi-strategy funds 0.43% (up 1.52% YTD) and event-driven multi-strategy funds 0.14% (up 2.69% YTD).

Stock market response to election results was disappointing: Samir Arora (LiveMint)
After an initial surge, when the benchmark Sensex crossed 25,000 points, the Indian markets closed marginally higher despite the National Democratic Alliance (NDA)-led by the Bharatiya Janata Party (BJP) returning to power after 10 years with a massive majority. Narendra Modi, who is set to be India’s next Prime Minister, is widely perceived to be business-friendly. Samir Arora, founder and fund manager of Singapore-based hedge fund firm Helios Capital, said in an interview that this showed the short-term nature of the Indian market, which should nevertheless gain as foreign allocations to the country increase in the next 9-12 months.

U.S. prosecutors drop two more charges against Rajaratnam’s brother (Reuters)
U.S. prosecutors have dropped two insider trading-related charges against former Galleon Group hedge fund portfolio manager Rengan Rajaratnam, the second time in two weeks the government has whittled down its case against him. In a new indictment made public on Friday, prosecutors eliminated two securities fraud charges against Rajaratnam, but he is expected to go to trial on other criminal charges. Rajaratnam is the younger brother of Galleon founder Raj Rajaratnam, who is serving an 11-year prison sentence for his 2011 conviction for insider trading.

Jim Rogers: Gold Below $1,000 Would Represent Buying Opportunity (MoneyNews)
Star investor Jim Rogers, chairman of Rogers Holdings, says gold will present a buying opportunity sometime in the next two years. The precious metal has advanced 8 percent so far this year. But it has stalled around $1,300 an ounce since early April. June gold futures settled at $1,293.60 Thursday, down $12.30 from Wednesday. “I’m not buying gold at the moment,” Rogers tells Yahoo. “But if the opportunity comes along, and it will in the next year or two, I will buy more.”

Investor Carl Icahn Buys Another 2.8 Million Apple Shares (iPhoneFAQ)
Billionaire hedge fund trader Carl Icahn has increased his holdings in Apple Inc. (NASDAQ:AAPL) by 2.8 million shares – about $1.65 billion, according to a Security and Exchanges Commission filing. The move brings his stake in the company up to a total of 7.5 million shares which, as of this writing, is worth just under $4.5 billion. Icahn has been quite vocal recently about what Apple should be doing, namely buying back shares. In January he purchased $500 million worth of shares and tweeted, “Just bought $500 mln more AAPL shares.

Aurigen Capital Reduces Share Price Range for its Canadian IPO (BusinessWeek)
Aurigen Capital Ltd., the reinsurer backed by billionaire George Soros, reduced the share price range for its Canadian initial public offering. The Hamilton, Bermuda-based reinsurer aims to sell shares for C$9.50 to C$10.50 each in its offering, according to an amended filing to Canadian regulators today. That’s down from its initial plan to offer stock for C$13 to C$15 each. Aurigen now plans to raise C$200 million ($184 million) from the sale and certain existing investors will buy about C$50 million of the offering. The company’s initial plan last month was to raise C$250 million through the Toronto IPO.

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