Hedge Fund News: John Paulson, Eddie Lampert, Tiger Global

PAULSON & COHedge Funds Led by Paulson Bet on Nexen Offer: Corporate Canada (SFGate)
Paulson & Co., the hedge fund run by billionaire John Paulson, and mutual fund firm Franklin Resources, Inc. (NYSE:BEN) are among foreign investors betting Canada will approve Cnooc Ltd.’s $15.1 billion acquisition of Nexen Inc. (NYSE:NXY). Paulson & Co., Franklin, Arrowgrass Capital Partners LLP, Mason Capital Management LLC and Eton Park Capital Management LP, all based outside Canada, bought shares in Calgary-based Nexen in the third quarter, regulatory filings show. Ontario Teachers’ Pension Plan tripled its stake while T. Rowe Price Group Inc. and Jarislowsky Fraser Ltd. sold.

Hedge Community Founder Arrested, Slapped With Fraud Charges (Finalternatives)
The owner of a series of websites that purport to either be hedge funds or raise capital for hedge funds has been arrested and charged with fraud. Stephen Colangelo, Jr. was arrested at his home in Congers, New York on Monday morning. He has been charged with engaging in two separate schemes that defrauded investors out of more than $2.7 million. According to the FBI, Colangelo’s first scheme involved a hedge fund he controlled called the Brickell Fund, and his second scheme involved three companies he created and controlled called Hedge Community, Start A Hedge Fund, and Under the Radar SEO.

News Corp and Porsche among top picks at hedge fund event (Reuters)
Top hedge fund managers picked stocks as diverse as News Corp, holding company Porsche, and cosmetics maker L’Oreal on Monday at a hedge fund event seen by investors as revealing the industry’s top stock picks. The Ira Sohn Conference, being held for the first time in London, attracted such speakers Chris Cooper-Hohn, the media-shy founder of The Children’s Investment Fund Management (TCI), Kynikos Associates founder Jim Chanos, Egerton Capital’s John Armitage, and Muddy Waters’ Carson Black.

Soros Buying Gold as Record Prices Seen on Stimulus (BusinessWeek)
Gold’s 12-year rally, the longest in at least nine decades, is poised to continue in 2013 as central bank stimulus spurs investors from John Paulson to George Soros to accumulate the highest combined bullion holdings ever. The metal will rise every quarter next year and average $1,925 an ounce in the final three months, or 11 percent more than now, according to the median of 16 analyst estimates compiled by Bloomberg. Paulson & Co. has a $3.67 billion bet through the SPDR Gold Trust (NYSEARCA:GLD), the biggest gold-backed exchange- traded product, and Soros Fund Management LLC increased its holdings by 49 percent in the third quarter, U.S. Securities and Exchange Commission filings show.

Tiger Global and Groupon, Icahn and Netflix: Hedge Funds are Making Major Moves (InsiderMonkey)
Filing season is here again, and investors get a sneak peek at what stocks the world’s most successful money managers are picking. We’ve gone through some extensive coverage of various 13F reports over the past few days, and while it’s tempting to ignore hedge fund sentiment, our empirical research shows that it would be foolhardy to do so. According to multiple bodies of research, investors who mimic hedge funds’ best ideas can beat the market by double-digit percentage points each year, assuming they know how to track these picks. Here’s a better look at this strategy, but today, we’re going to take a look at some notable amendments that have been filed with the SEC. Tiger Global loves Groupon. As we originally discussed last week, Tiger Global, the mega-hedge fund with Chase Coleman, Lee Fixel and Scott Shleifer at the helm, recently undertook a massive stake in Groupon Inc (NASDAQ:GRPN). In its latest 13F filing, Tiger Global reported that it had initiated a new position in the third quarter, despite the fact that the stock has lost nearly 85% of its value year to date. In a more recent schedule 13G filing with the SEC, Tiger Global disclosed the details on its position, i.e. that it holds a whopping 9.9% stake in the daily deal company’s common stock.

Milan Four Seasons €250m debt rejig by Carlton with UK fund (Pie-Mag)
Italian property company Gruppo Statuto, owner of the prestigious Four Seasons Milan hotel, has restructured €250m debt on the asset with a loan from UK-based hedge fund Children’s Investment Fund Foundation arranged by US-based Carlton Group. The new loan from CIFF will allow the Four Seasons owner to pay off its €250m in debt, owed to Bank of America’s Merrill Lynch unit, at a significant discount. CIFF confirmed that the new loan closed for less than €200m but gave no further details. The Four Seasons Milan, which has 118 rooms, is a converted 15th century convent, famous for its cloister garden and original frescoes in deluxe suites.

Retired hedge fund partner Robert Dugger tells Western Massachusetts business people about need to invest in early childhood education (MassLive)
A retired hedge fund partner and other speakers Monday told leaders of the local business and educational community about the need for early childhood education they said is critical for future success. They spoke before about 50 people at a session at the Basketball Hall of Fame sponsored by the Economic Development Council of Western Massachusetts; the Chicopee, Holyoke and Springfield chambers of commerce; and the Regional Employment Board of Hampden County. Robert H. Dugger, the retired hedge fund partner, explained how social impact bonds, an idea in development in this country, can pay investors a 4 percent to 5 percent annual return on putting money into programs that improve education.

Eddie Lampert Is All In on Retail (DailyFinance)
Hedge fund manager Eddie Lampert is best known for his investment and management of Sears Holdings (NYS: SHLD) . Though his investment in the company has yielded substantial gains for the fund manager, many other investors think the job wasn’t handled properly. Aside from Sears, Lampert’s fund, ESL Investments, has plenty of interesting positions, from retail to technology. Let’s take a look at the most recent reported holdings for the chairman of Sears and the value investing extraordinaire. …ESL Investments is the fund that took control of companies such as Sears and AutoNation (NYS: AN) in attempt to turn around their eroding fundamentals and dying businesses. Lampert enacted change by amassing large amounts of stock and eventually placing himself on the companies’ boards. Lampert is a value investor with some similar criteria to that of Warren Buffett.

New watchdog group aims to “reboot” Illinois government (DailyHerald)
A new government watchdog group aiming to inform and engage the state’s citizens officially launched Monday. Reboot Illinois, a for-profit digital media company started by hedge fund manager Anne Dias Griffin, has a staff of three that includes Chief Operating Officer Madeleine Doubek — former executive editor at the Daily Herald — and Executive Editor Matt Dietrich, a former editor at the State Journal-Register in Springfield. Reboot’s site will feature aggregated content from news organizations as well as editorials from government officials and regular citizens, who, Dietrich said, will be “getting their voice heard and airing their grievances about Illinois government.”

After gains in RMBS, Lippmann’s LibreMax looks to CMBS, CLOs in fourth-quarter (Reuters)
Greg Lippmann’s $2.3 billion hedge fund LibreMax Capital, which produced double-digit gains this year with big and successful bets on residential mortgage securities, is looking to the commercial real estate market to boost returns. The hedge fund, which gained more than 8 percent in the third quarter, when most funds rose about 5.8 percent, told investors in a quarterly letter reviewed by Reuters that it was “excited about the opportunities in the CMBS credit space” and had increased exposure to those securities in the three months through September 30.

AlternativeSoft Ranked Number 1 – Technology Provider for Risk Management 2012 (BobsGuide)
AlternativeSoft, the leading provider of world class analytics for manager research and portfolio construction in the alternative and long only markets, has been ranked number one in the ‘Technology Provider for Risk Management’ category by the readers of industry journal ‘Hedge Funds Review’. AlternativeSoft, who is renowned for portfolio construction software with funds, high quality customer service and customisable reporting, has again attracted great attention from the investment community. This is the second year in a row that AlternativeSoft is receiving a Hedge Fund Review Award. According to Laurent Favre, CEO and Founder at AlternativeSoft, “This Risk Management Provider Award marks a milestone in AlternativeSoft’s history.

Battenkill Capital, an energy and infrastructure fund, draws institutions early on (Opalesque)
Few funds that launched in 2007 made it out of the downturn alive, especially if they launched without significant seed capital. But for one firm– New Jersey-based Battenkill Capital Management, 2008 served as a means of establishing a solid track record by showing that the firm could weather all types of markets. Battenkill launched its Alpine Fund in 2007, and has already been able to attract the interest of institutional investors. Battenkill Capital’s flagship fund, the Alpine Fund, is a market-neutral equity hedge fund focused on investment in the energy and industrial sectors. The firm launched as a self-funded venture between principal Bruce Vinci and Rick Franzen.

Hedge funds find room to maneuver – BAML (Opalesque)
Hedge funds are taking fewer extreme positions according to new data from Bank of America Merrill Lynch. This means hedge funds should start having more room to trade going into year end although it still seems unlikely that asset inflows will achieve levels that would allow for significant shifts in equities exposure. In terms of individual investments, hedge funds are in a crowded long on wheat and crowded short on the Euro. The investable hedge fund composite index was down 0.46% last week ending November 14, compared to down 2.80% for the S&P 500. Hedge funds are down 0.98% quarter-to-date: Convertible Arbitrage & Market Neutral are the best performers for the period, up 0.08% and down 0.04%, respectively; CTA Advisors performed the worst and was down 3.02%. Overall, funds are buying the S&P 500, shoring the NASDAQ 100 and adding to their shorts of Russell 2000 futures.

Apple: Still A Hedge Fund Haven, But Top Managers Pared Bets In Q3 (Forbes)
A number of top hedge fund managers dialed back their Apple holdings in Q3, just in time to avoid a slide that sent the stock tumbling from its all-time high. Looking at recently filed 13-F SEC filings, a new report from FactSet found that the 50 largest hedge funds cut their exposure to the stock in the three months ended September 30. The disclosures, which offer a snapshot of the portfolios of high-profile fund managers including John Paulson, David Einhorn and Daniel Loeb, show that while Apple remains the top holding of 12 of the hedge funds considered, in the aggregate funds’ cut their stake in the company.

Chicago Teachers mulls expulsion of hedge fund investments (PIOnline)
Chicago Public School Teachers’ Pension and Retirement Fund might drop two hedge fund-of-funds managers and could get out of the hedge fund asset class entirely because of liquidity concerns, according to Kevin R. Huber, executive director. Executives from K2 Advisors and Mesirow Advanced Strategies’ Mesirow Absolute Return Fund are scheduled to appear at Tuesday’s meeting of the board of the $9.7 billion pension fund before trustees make a decision, Mr. Huber said in an e-mail.

Carl Icahn’s contributions to Mt. Sinai Medical School top $200 million (Sage)
The Mount Sinai School of Medicine in New York will be renamed the Icahn School of Medicine at Mount Sinai to honor Carl Icahn’s latest gift, which pushes his lifetime giving to the school past $200 million. Additionally, the school is renaming another one of its departments in honor of Icahn’s generous giving and work on the Board of Trustees. The Institute for Genomics and Multiscale Biology will now be the Icahn Genomics Institute. “Carl’s support enables our scientists and clinicians to continue pursuing groundbreaking discoveries. We are honored to bear the Icahn School of Medicine name as we revolutionize healthcare for Mount Sinai patients and for patients around the world,” said Mount Sinai president and CEO Kenneth Davis.

SEC Charges Ring of High School Buddies with Insider Trading in Health Care Stocks (SEC)
The Securities and Exchange Commission today charged three health care company employees and four others in a New Jersey-based insider trading ring of various high school friends generating $1.7 million in illegal profits and kickbacks by trading in advance of 11 public announcements involving mergers, a drug approval application, and quarterly earnings of pharmaceutical companies and medical technology firms. The SEC alleges that Celgene Corporation’s director of financial reporting John Lazorchak, Sanofi S.A.’s director of accounting and reporting Mark S. Cupo, and Stryker Corporation’s marketing employee Mark D. Foldy each illegally tipped confidential information about their companies for the purpose of insider trading.

SEC Halts Prime Bank Scheme in Georgia (SEC)
The Securities and Exchange Commission today charged the operators of a long-running prime bank scheme with defrauding investors who were promised sky-high returns on loans to a secret European trust. It also is seeking an emergency court order to freeze the operators’ assets for the benefit of investors. The SEC alleges that Billy W. McClintock, who lives in Florida, and Dianne Alexander, a former Georgia resident who now lives in California and also is known as Linda Dianne Alexander, raised $15 million from at least 220 investors in more than 20 states, primarily Georgia.

$2 Billion Hedge Fund To Return Outside Capital (Finalternatives)
New York-based hedge fund Libra Advisors will close its doors to outside investors, the latest firm to choose life as a family office over dealing with new regulatory headaches and the vicissitudes of investors. Libra founder Ranjan Tandon told clients that the fund will return outside capital by the end of the year. Tandon, who founded Libra in 1990, said that new regulations, trading rules and expected higher taxes were behind his decision. He said the new environment “will take time away from what I enjoy most, investing.”

Russia’s Sberbank AM hires head of equities (InvestmentEurope)
Sberbank Asset Management has appointed Roman Filatov as managing director, head of equities portfolio management. He has taken the place of Andrey Kilin, who left his position at the firm this summer to start his own business. Filatov joins the firm from IXIA Asset Management where he was director and managed a portfolio for private clients. He was also previously director of Accent Investment Management, where he participated in the formation of the firm’s hedge fund business. In his new role Filatov will oversee all equity portfolios, in particular the company’s largest equity mutual funds. He brings nearly twenty years of experience in the financial industry.