Hedge Fund Manager Kyle Bass Bets on a J.C. Penney Stabilization (InstitutionalInvestor)
Expectations for outsize gains on the downtrodden shares of J.C. Penney Company, Inc. (NYSE:JCP) purchased by major hedge fund firms have deflated like a punctured balloon. In a September 19 interview with Institutional Investor , Kyle Bass, founder and principal of Dallas-based Hayman Capital Management, one of the hedge fund firms holding J.C. Penney equity, said, “We’re not investing in a turnaround. We’re investing in a stabilization.” Hayman has also taken a position in J.C. Penney’s debt, selling credit default swaps written against the company’s five-year bonds.
SAC’s Cohen faces $1.4B fine (NYPost)
Billionaire hedge-fund manager Steven Cohen could get off easy. The man who ran what prosecutors this summer called “a magnet for market cheaters’’ — allegedly the biggest insider-trading ring ever — could end up paying just 15 percent of his personal fortune to settle criminal charges against his SAC Capital hedge-fund firm. Cohen and the government have a tentative deal that would force his firm to pay a fine between $1.2 billion to $1.4 billion, according to the Wall Street Journal, which first reported on the tentative deal.
Hedge funders couldn’t be happier about this politician (CNBC)
A new senator is coming to Washington, and hedge fund managers couldn’t be more excited. Democrat Cory Booker beat Republican challenger Steve Lonegan in a special election this week to represent New Jersey in the U.S. Senate. Booker, now the mayor of Newark, has received financial support from some of the biggest names in investing. Backers include Seth Klarman of Baupost Group, Julian Robertson of Tiger Management, retired hedge fund pioneer Michael Steinhardt, Bill Ackman of Pershing Square Capital Management, John Griffin of Blue Ridge Capital, David Greenspan of Slate Path Capital and Rick Gerson of Falcon Edge Capital.
Rhode Island Public Pension Reform: Wall Street’s License to Steal (Forbes)
Two years ago, Rhode Island’s state pension fund fell victim to a Wall Street coup. It happened when Gina Raimondo, a venture capital manager with an uncertain investment track record of only a few years—a principal in a firm that had been hired by the state to manage a paltry $5 million in pension assets—got herself elected as the General Treasurer of the State of Rhode Island with the financial backing of out-of-state hedge fund managers. Raimondo’s new role endowed her with responsibility for overseeing the state’s entire $7 billion in pension assets.
Hedge Funds Seek to Trade in Comfort as Bankruptcy Inside (BusinessWeek)
Hedge funds that invest in bankrupt companies are demanding protection from insider-trading lawsuits before agreeing to take part in restructuring talks — a reaction by the industry’s top performers to an obscure court decision involving the 2008 collapse of Washington Mutual Inc. (WAMUQ:US) The ruling by a Delaware federal judge let shareholders pursue allegations that four hedge funds involved in the bankruptcy traded on inside information about talks between WaMu, JPMorgan Chase & Co (NYSE:JPM) and the Federal Deposit Insurance Corp.
Hedge fund Managers making significant investments to comply with regulatory changes, says survey (HedgeWeek)
A global survey of hedge fund managers reveals that they are making significant investments in their firms’ infrastructure to comply with new regulatory requirements. According to The Cost of Compliance , a new report produced by KPMG International, the Alternative Investment Management Association (AIMA) and the Managed Funds Association (MFA), the average spend on compliance was at least (US)USD700,000 for small fund managers, USD6 million for medium-size fund managers, and USD14 million for large fund managers.