Billionaire Paulson’s Merger Hedge Fund Said to Gain 10% in 2015 (Bloomberg)
Billionaire John Paulson’s merger strategy has gained 10 percent this year, lifted by consolidation among drugmakers. The $19.3 billion New York-based firm posted a 0.7 percent gain last month in a merger fund that uses leverage to amplify gains, according to three people familiar with the matter, who asked not to be identified because the information is private. An unlevered version rose 0.3 in March and is up 4.5 percent this year. Valeant Pharmaceuticals International Inc.’s takeover of Salix Pharmaceuticals Ltd., of which Paulson & Co. was the largest shareholder as of Dec. 31, helped drive performance. Other strategies had mixed performance.
Hedge Fund Kamunting Capital Shutting Down (The Wall Street Journal)
A once-$1 billion hedge-fund firm founded by former Citigroup Inc. proprietary trading star Allan Teh is shutting down partly because of losses related to oil’s historic plunge. Mr. Teh said he is returning external capital provided to his Kamunting Capital Management L.P., which suffered over the past nine months from junk bond bets jostled by hard-hit energy companies. The hedge fund lost 4% last year, and was down an additional 2% in 2015. Since inception, the fund returned an average of more than 8% per year, after fees.
Canadian Designer Nygård links NY Billionaire Bacon to Bahamas Fire (Reuters)
Canadian fashion designer Peter Nygård escalated his acrimonious U.S. legal battle with Louis Bacon, saying the billionaire hedge fund manager may have driven a groundskeeper to set a fire that heavily damaged Nygård’s neighboring Bahamas beachfront estate. Nygård made the accusation in a countersuit filed Wednesday in a New York state court in Manhattan, where he sought $50 million to punish Bacon for an alleged years-long “vendetta” that he said included harassment and frivolous litigation.
Investor Activism May be Hard on Corporate Creditors – Moody’s (Reuters)
Tactics that activist investors say will benefit a company’s shareholders may also raise the risk for the firm’s creditors, a leading credit rating agency warned on Thursday. “Often these changes are aimed at carving out value for shareholders and this may come at bondholders’ expense,” Chris Plath, vice president and senior analyst at Moody’s, said in an interview. For example if activist investors win a seat on the board of a company, as Third Point’s Daniel Loeb did last year at auction house Sotheby’s, there is often increased uncertainty about a company’s strategic direction, Plath said. “If Bill Ackman or Dan Loeb get a seat on the board, there is an entirely new board room dynamic,” he said.