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Hedge Fund News: Martin Whitman, Michael Platt & Lansdowne Partners

Hedge Fund Manager Blasts Nobel Prize Winner’s Work Calling It ‘Utter Nonsense’ And ‘Unscholarly’ (Business Insider)
ValueWalk obtained a letter where Third Avenue Management’s chairman/founder Martin Whitman blasts Nobel Prize Laureate Eugene Fama. “I am disappointed that a Nobel Prize was awarded to Eugene Fama, who studies only markets and prices; and whom, I daresay, does not focus on Form 10-Ks or the footnotes to a corporation’s audited financial statements,” Whitman said in the opening of the letter to shareholders. Fama, a professor at Chicago Booth, won the Nobel Prize in Economic Science last year with Lars Peter Hansen and Robert Shiller.

BlueCrest Builds a Hedge Fund Empire (Businessweek)
When hedge fund managers venture into new areas, they typically move gradually. Not Michael Platt, co-founder of BlueCrest Capital Management. To expand from fixed-income investing into stocks, he negotiated a $750 million loan from 16 banks in July, allowing his firm to hire at least 25 money managers and provide them with capital to start trading immediately, according to two people with knowledge of the loan who asked not to be identified because it isn’t public. “I can’t think of any other examples like this,” says Daniel Celeghin, a partner at Casey Quirk & Associates, which advises hedge funds on fundraising. “It’s just the nature of finance, where if you are big and successful, people want to do business with you.”

Paul Ruddock

Lansdowne Rides Airline Bet to Top Europe Hedge-Fund List (Bloomberg)
On Oct. 11, the U.K. government sold a majority stake in Royal Mail Plc, the British postal service, in an initial public offering. Interest from both retail and institutional investors was strong. When the trading frenzy died down, two names emerged with large positions: Lansdowne Partners Ltd. and The Children’s Investment Fund Management UK LLP. Royal Mail was a good investment for the two London-based hedge-fund managers, as shares soared 38 percent on the first day of trading and were up 70 percent as of Jan. 9.

Lesser-known Greenwich hedge funds make top performers’ index (The Advocate)
They’re not investors most people have heard of, but three Greenwich-based hedge funds cracked the world’s top 30 in terms of performance last year. Bloomberg’s “Top-Performing Large Hedge Fund” list for 2013, which will be published in the February issue of Bloomberg Markets magazine, will feature near the top portfolios managed by JAT Capital, AQR Capital and Blue Harbour Group — three firms headquartered within about a mile of each other, from Greenwich Avenue down to Greenwich Harbor. “We are thrilled that three area firms have performed well enough to make the list,” said Bruce McGuire, founder and president of the Connecticut Hedge Fund Association, in an email Thursday.

Former hedge fund trader Julian Rifat set to be charged in insider trading case (Telegraph.co.uk)
British regulators are set to charge a former hedge fund trader over allegations he was involved in an insider trading ring. Julian Rifat, a former trader at US hedge fund Moore Capital, was arrested in March 2010 as part of Operation Tabernula, which the authorities described at the time as the largest ever operations against alleged insider trading. He was due to appear in court to tomorrow, but the hearing has been scrapped as the Financial Conduct Authority prepares to charge him, according to one source with knowledge of the process. Unnamed sources cited by Bloomberg said that Mr Rifat’s lawyers had been told today he would be charged no later than early February.

The hedge fund polar-fleece love affair (CNBC.com)


Credit Hedge Fund Eagle River Closes (FINalternatives)
Last year has claimed its last hedge-fund casualty. New York-based Eagle River Asset Management closed at the end of 2013, The Wall Street Journal reports. The credit specialist was done in by its primary backer’s decision to redeem from the firm—and its lackluster prospects for replacing the lost money. FRM, which was acquired by the Man Group after seeding Eagle River, invested with the hedge fund just months after its founding in 2011, taking a stake in the management company. The “significant investment” gave Eagle River more than $100 million to work with, but the firm never grew much from their, topping out at $150 million before FRM elected to redeem.

Compuware reaches deal with hedge fund, looks to replace board members (Detroit Free Press)
Compuware Corporation (NASDAQ:CPWR) announced today that it has reached an accord with its largest shareholder and one-time suitor, a New York hedge fund that agitated for cost cuts and other changes at the Detroit-based tech company. The company proposes to replace two more longtime members of its board of directors with selections to please the Elliott Management hedge fund, which had expressed concerns about a lack of tech expertise and heavy metro Detroit makeup of Compuware’s board. The agreement avoids a hedge fund-led proxy battle for control of Compuware, but does not rule out the possibility that the 41-year-old firm could get bought by another hedge fund or private equity firm.

Sandy Weill Named Chairman of Ex-Steven Cohen Reinsurer (San Francisco Chronicle)
Sanford “Sandy” Weill, the former head of Citigroup Inc (NYSE:C), was named chairman of the board at Hamilton Insurance Group Ltd., which runs the reinsurer that hedge fund manager Steven A. Cohen exited. “Sandy Weill is an icon in the financial services sector,” Hamilton Chief Executive Officer Brian Duperreault said today in a statement. “I have no doubt that our goal of establishing a leading insurance and reinsurance business will be realized.” Cohen, the billionaire founder of SAC Capital Advisors LP, sold the reinsurer last month after his hedge fund reached a $1.8 billion deal to end a criminal investigation into insider trading. Duperreault, the former CEO of insurance broker Marsh & McLennan Cos., is partnering with quantitative hedge fund firm Two Sigma Investments LLC at the Bermuda-based reinsurer.

West Face Capital launches $600-million special situations fund (Financial Post)
West Face Capital Inc., the hedge-fund firm that accelerated the overhaul of Maple Leaf Foods Inc., opened a credit fund to provide alternative debt financing to companies that don’t access traditional markets. West Face, led by Chief Executive Officer Greg Boland, formed the Alternative Credit Fund in December 2013 and plans to raise $600-million for the offering, according to an e-mailed statement from the Toronto-based company. The fund currently has $400-million in commitments.

John Taylor Vows Return to Currency Management After Bankruptcy (San Francisco Chronicle)
John Taylor, the founder of what was once the world’s biggest currency hedge fund, said he plans re- enter the foreign-exchange asset-management business again one day in the wake of the bankruptcy of FX Concepts LLC. “We are writing our weekly newsletter and have lots of prospects,” Taylor said in a telephone interview today from New York. “We expect in the future to be bigger and better. I’m very glad to be back to doing research and writing. I suspect in the future we’ll be managing money again.”

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