Hedge Fund News: Kyle Bass, Steven Cohen, Thomas Wagner

Paulson Gets More Time From IRS for Reinsurance Tax Savings (Bloomberg)
Hedge fund managers including billionaire John Paulson won’t immediately face new limits on their use of insurance in offshore tax havens, after the IRS proposed rules and chose not to make them effective now. The Internal Revenue Service rules, released on Thursday, will take effect only after the agency takes comments and considers how several important terms will be defined.

The Surprising Market Response to Activist Hedge Funds (The Wall Street Journal)
Is hedge-fund activism good or bad? This question has dominated financial debate this year, as hedge funds besiege on average nearly one company a day seeking to shake up managements. This month’s battle over the future of Vivendi follows recent activist campaigns at Dow Chemical, DuPont, PepsiCo, Sotheby’s, Yahoo and many others. Martin Lipton—a prominent lawyer who has defended companies against agitating shareholders since the 1980s—labels the new efforts a “war” and warns that “activist hedge funds are winning.”

Citadel’s Weisberg Said to Join Alibaba’s Family Office (Bloomberg)
Oliver Weisberg, a Hong Kong-based managing director of Citadel, has quit his employer of almost nine years to help run a family office for Alibaba Group Holding Ltd. executives, said two people with knowledge of the matter. Weisberg will leave Citadel at the end of June, Katie Spring, a Chicago-based spokeswoman for the hedge fund firm led by Ken Griffin, said by e-mail. Weisberg did not reply to two e-mail messages seeking comment.

Proxy Adviser ISS Blesses Pay for Activist’s Directors at Dow (The Wall Street Journal)
An influential proxy adviser blessed a pay setup for directors that investor Third Point LLC placed on the board of Dow Chemical Co., a stamp of approval that could help guide activists trying to navigate the controversial arrangement. Institutional Shareholder Services Inc. gave “cautious support” to two sitting directors who have a contract to get what amounts to a bonus from Third Point if Dow stock does well. Shareholders are scheduled to vote on the directors at next month’s Dow annual meeting.