Sandell Debuts New Activist Fund with $100mn in Assets (InstitutionalInvestorsAlpha)
Thomas Sandell‘s New York-based firm Sandell Asset Management has officially launched its new activist hedge fund. The Castlerigg Active Investment Fund began operating in August with $100 million. Sandell hopes to eventually raise about $2 billion for the fund. It’s an ambitious goal that would effectively triple the total assets at his New York firm, from a current $1 billion. Sandell’s new fund will emphasize the middle market,…
Are hedge funds really such a great investment for Pa. pensions? (Pennlive)
The hedge fund business is a great deal for those who run hedge funds. Typically, the managers charge a fee of “2 and 20” – 2 percent of the value of the assets they’re managing, plus 20 percent of the profits they produce. The New York Times reports that one hedge fund baron, Barry Rosenstein, spent $147 million on an estate in the Hamptons, while another, Daniel Loeb, dropped $46 million on a painting by Mark Rothko. Whether hedge funds are a great deal for big institutional investors, like Pennsylvania’s two big public pension funds, is another question.
Two Major U.K. Schemes Join Hedge Fund Pullback (WSJ)
Two of the largest pension funds in the U.K. are cutting their exposure to hedge funds amid a growing backlash against high fees and lackluster performance. The £20 billion ($32.4 billion) Railways Pension Scheme currently has £1 billion invested in hedge funds but investment director Paul Bishop said it was looking to reduce this “significantly.” Mr. Bishop said: “We believe that hedge funds in aggregate offer a poor trade-off between expected returns and cost.” The £39.6 billion BT Pension Scheme has also been reassessing its position, according to several people familiar with its thinking.
David Einhorn Makes $92 Million From Bagels (BusinessInsider)
David Einhorn just made over $92 million on a bagel company. Einstein Noah Restaurant Group, Inc. (NASDAQ:BAGL) announced on Monday that it reached an agreement to be acquired for $20.25 per share in cash, or approximately $374 million. In afternoon trade on Monday, shares of Einstein were up more than 50% to about $20.15. David Einhorn‘s hedge fund, Greenlight Capital, is the largest stockholder of Einstein Noah Restaurant Group and owns more than 35% of its shares, according to the company.
Icahn Leads 60-Plus Alts. Honchos On Forbes 400 (Finalternatives)
Times may be tough for hedge fund managers, but you wouldn’t know if from a glance at Forbes magazine’s annual ranking of the richest Americans. More than one-sixth of the members of the Forbes 400 have ties to the alternative investments industry. And they are once again led by Carl Icahn, whose fortune grew by another 27% to $25.9 billion over the past year, good enough for 16th place on a list once again headlined by Microsoft Corporation (NASDAQ:MSFT) founder Bill Gates, with $81.2 billion.
Hedge Funds Must Ramp Up Infrastructure to Accommodate Liquid Alts (Forbes)
Pressures have been mounting on hedge fund managers to hedge their own businesses and diversify away from the hedge fund model itself. Lackluster performance, difficult markets, fees that are perceived as too high, scandals and conflicts of interests are just a few of the factors that are leading managers to set up in a new section of the market: Liquid Alternatives. “Liquid Alternatives” are investment vehicles that feature an alternative strategy but are packaged in a mutual fund, closed end fund or other exchange-traded product, such as an ETF, instead of the traditional hedge fund…
Russia Hedge Fund Verno Capital Said to Lose Two Managers (BusinessWeek)
Verno Capital LLC’s Tom Adshead left the Russian hedge fund, according to two people familiar with his departure, just months after another fund manager, Bruce Bower, quit the firm. Adshead, who joined as equity portfolio manager a year ago after working at Kazimir Partners and Sito Capital, left last week, said the people, who asked not to be identified because the information is private. Bower, a fund manager at the Moscow-based firm for four years, left to seek opportunities in London, one person said.
Moore Capital raids the ranks of defunct hedge fund Clive Capital (eFinancialCareers)
Christian Levett, the founder of commodities hedge fund Clive Capital which shuttered its doors last year, is now firmly back in the bosom of his former employer, Moore Capital, having officially taken back his place as a money manager earlier this month. Like many senior financial services professionals who look to lure their old team into their new employer, Levett appears to be persuading a flurry of former Clive Capital staff across to Moore.
A Path to Redemption? The Future of Steve Cohen’s Philanthropy (InsidePhilanthropy)
Hedge fund legend Steven Cohen is emerging from a long federal investigation of insider trading with his freedom and fortune intact, but his reputation in tatters. Cohen has not been indicted for any criminal offenses, but his hedge fund, SAC Capital Advisors, pled guilty last year to insider trading, and eight people who worked for Cohen have been convicted at trial or pled guilty to charges of insider trading.
KKR Backs York Vet’s Planned Asia Hedge Fund (Finalternatives)
For its first-ever hedge-fund seeding deal in Asia, Kohlberg Kravis Roberts is partnering with a York Capital Management and Citadel Investment Group veteran. Feng Hsiung has founded Acion Partners in Hong Kong. The firm will launch its maiden hedge fund in the first quarter—with capital provided by KKR. In addition to the seed capital, KKR & Co. L.P. (NYSE:KKR) will take a minority stake in Acion and assist the firm in building its team, Bloomberg News reports. It is unclear how much KKR will invest in the hedge fund or how much it is paying for its stake.