Breakup: Activist Fund Looking to Split Lear (CNBC)
Nearly three years after taking a substantial stake in the auto supplier Lear, the activist hedge fund Marcato Capital Management is agitating for a breakup. In a letter to Lear management dated Tuesday, Marcato founder Mick McGuire argues that the company should separate its two key business units—its electrical division and its seating division—into two independently traded public entities.
Paul Singer: Europe, US Are Dysfunctional (CNBC)
Paul Singer is deeply pessimistic on the state of the developed world. The conservative, cantankerous hedge fund manager thinks economic stimulus in Europe isn’t likely to work and that the U.S. political system will remain dysfunctional, even with Republican midterm gains. “With euro interest rates at record lows, we cannot imagine that the ECB’s recently announced QE [quantitative easing] program will improve Europe’s serious economic situation,” Singer said of the European situation in a private letter to investors. “On the other hand, QE might have unpredictable and large negative repercussions if it triggers a generalized loss of confidence.”
Warren Buffett: Know When To Hold ’em (CNBC)
Investors awaiting Warren Buffett’s annual letter will get three for the price of one this year. The founder of Berkshire Hathaway is planning a special “golden anniversary” publication, marking 50 years since he took a controlling stake in the company. Mr Buffett and his business partner, Charlie Munger, are independently writing their views of Berkshire’s extraordinary journey during the past five decades—and what they expect for the next five. Neither is changing a word of the other’s commentary. Readers will be able to compare the two sets of reflections and predictions, in addition to the regular annual letter.
Ex-White House Economist Sperling Will Advise Pine River (Bloomberg)
Pine River Capital Management, the $15.6 billion hedge fund firm that profited from bets on mortgage-backed securities after the financial crisis, is enlisting former White House adviser Gene Sperling as a consultant. Sperling, a former adviser to presidents Bill Clinton and Barack Obama, will provide the Minnetonka, Minnesota-based multistrategy firm with economic and strategic guidance through his newly formed consultancy, Sperling Economic Strategies, he said in a telephone interview. He also advises Pacific Investment Management Co., the world’s biggest bond manager, and startups including payments company Ripple Labs.
Avenue Capital Said to Join BlueMountain in TP Ferro Debt Talks (Bloomberg)
Avenue Capital Group LLC and BlueMountain Capital Management LLC are leading a group of hedge funds in talks about restructuring TP Ferro Concesionaria SA’s debt, according to two people familiar with the situation. Owners of the high-speed rail link between Spain and France are seeking to reorganize 445 million euros ($505 million) of debt before it matures on March 31, said the people, who asked not to be identified because the information is private.
Former RBC Capital Markets Boss Standish Joins Hedge Fund (Reuters)
Mark Standish, the former co-chief executive of of RBC Capital Markets, has joined Deimos Asset Management as a managing partner. The Canadian bank announced that Standish was leaving the bank last week, leaving his co-head Doug McGregor in sole charge of the investment bank. Deimos Asset Management is the new name of Guggenheim Global Trading, a hedge fund previously owned by Guggenheim Partners that has been bought out by management. Deimos will retain the previous senior management team of GGT, led by Loren Katzovitz and Patrick Hughes.
Lone Pine Alum Scott Phillips Said to Start Hedge Fund Latimer (Bloomberg)
Scott Phillips, who spent almost a decade working at Stephen Mandel’s Lone Pine Capital, is joining a small group of managers who have recently left the industry’s most successful hedge funds to run their own firms. Phillips, 35, a former managing director at Lone Pine, is starting Latimer Light Capital to make bets on and against stocks of primarily U.S. companies, according to two people with knowledge of his plans who asked not to be named because the information is private. The firm will begin trading in the second half of this year.
West Midlands Pension Fund Joins Hedge Funds Exodus (Reuters)
The UK’s West Midlands Pension Fund is in the process of withdrawing its hedge fund allocations of just over 200 million pounds ($300 million), becoming the latest institution to end the use of these relatively expensive and complex products. The local government pension scheme fund, which manages more than 10 billion pounds ($15 billion), gave no reason for the move. The near $3 trillion global hedge fund industry has seen large pension funds such as the California Public Employees’ Retirement System and the PFZW in the Netherlands pull out in the last year, citing high costs, complexity and poor performance.
