Hedge Funds

Watchdogs finally detect scent of hedge-fund risk

18 Dec 2024

The Financial Stability Board proposed ideas including leverage caps that may affect Ken Griffin’s Citadel and Israel Englander’s Millennium. The new US administration will balk. Yet with hedge fund borrowing surging to $5 trln, it’s worth fleshing out rules ahead of any blowup.

Activist hitches long ride on Nissan’s turnaround

12 Nov 2024

Fund Effissimo bought a stake in the sickly Japanese carmaker, sending shares up 13%. The $9 bln marque already unveiled bold cost-cutting plans, and there is limited scope to push for more. It’s a risky bet CEO Makoto Uchida can pull it off amid an increasingly tough market.

George Soros’ 1980s US debt warning echoes today

8 Nov 2024

The hedgie said in 1986 that booming stocks belied shaky government finances. That’s true now, and not just in the United States. Britain and France are also battling a fiscal trilemma, where states can’t simultaneously have high spending, low taxes and financial stability.

UK financial watchdog’s H2O thwack has a downside

8 Aug 2024

The fund group will repay 250 mln euros after the FCA said it bought esoteric bonds and didn’t declare conflicts. The deal gets money to investors quicker than if a fine had been levied. But, at just a fraction of what some clients are claiming, the settlement risks looking soft.

MicroStrategy is hedge funds’ favorite meme stock

2 Jul 2024

The $26 bln firm’s shares have leapt on a bitcoin buying binge, funded by bonds that can turn into stock. Unlike GameStop’s ragtag punters, MicroStrategy depends on hedge funds such as Citadel piling in. Thing is, they rely less on a rising share price than a wildly volatile one.

Oaktree can still score a skilful goal with Inter

6 Jun 2024

The US fund ended up owning the loss-making Italian club after the previous owner missed a payment. Fetching valuations similar to what Elliott secured for rival AC Milan looks tricky. Yet American interest in soccer and on-field success point to a sale price exceeding $1 bln.

British M&A refuseniks are playing a risky game

25 Mar 2024

Insurer Direct Line and retailer Currys both rebuffed offers that came with 40% premiums. One possible rationalisation is that a huge UK stock-market discount invites cheeky bids that require knocking back. But certain British stocks may also not merit greater generosity.

AI hype will be hard to puncture

20 Mar 2024

Short-seller Hindenburg is attacking $80 bln Equinix, whose data-center investments have been pumped up by artificial-intelligence exuberance. US regulators are also starting to target some of the hot air. Even so, the valuation bubble is more likely to deflate slowly than pop.

Elliott has limited ammo in UK retail bidding war

4 Mar 2024

The US investment group’s latest $951 mln offer for retailer Currys could have yielded an adequate return. But the target has rejected it. Hiking the offer looks tricky given the ropey UK economy, reduced scope for leverage, and potential rival bidder JD.com’s deep pockets.

JD is logical winner of odd UK retail bidding war

19 Feb 2024

The $37 bln Chinese e-tailer is mulling an offer for Britain’s Currys, also the subject of interest from Elliott Advisors. A feeding frenzy for a sub-$1 bln UK asset with an unproven turnaround story sounds weird. But JD.com’s need to expand overseas is a strong motivation.

Blackstone partly cracks new private equity code

9 Jan 2024

Buyouts have been a drag on big asset managers whose investors now prize steadier income. The firm led by Steve Schwarzman wants to square the circle by raising capital with no expiry date from rich individuals. A risky outcome is that it perversely incentivizes a spending spree.

Muddy Waters sticks a pin in Blackstone’s rump

8 Dec 2023

The short-seller says a mortgage fund run by Steve Schwarzman’s firm is doomed by struggling office properties. The reality may be more nuanced. But Muddy Waters is challenging a fundamental Blackstone selling-point: its ability to outrun the market, in real estate or elsewhere.

Sculptor board moves deal goalposts too far

20 Oct 2023

The hedge fund’s founder Daniel Och is suing to stop a $680 mln sale to Rithm Capital, alleging that a higher offer led by Boaz Weinstein has not been given a fair shake. Some of the choices behind the deal decision are defensible. Stacking the shareholder vote, however, is not.

Flights to safety in a dangerous world are on sale

20 Oct 2023

Fears of war, pestilence or financial collapse usually drive demand for safe assets like US treasuries or gold, making them a gauge of unease. Yet amid spiraling global threats, that isn’t happening. Whether from calm or complacency, the price of geopolitical insurance is cheap.

Capital Calls: Deliveroo

14 Sep 2023

Concise views on global finance: The UK food delivery company’s shares rose 5% amid hopes of a potential deal, but a rich takeout looks unlikely.

Beware the hedge fund deal that’s not about money

23 Aug 2023

Bill Ackman, Marc Lasry and Boaz Weinstein want to buy Sculptor, which manages $34 bln. Instead, Daniel Och’s former shop accepted a lower bid from real estate investor Rithm. Sculptor’s doubts about the moguls’ funding sounds fishy, as does the idea they couldn’t work it out.

Capital Calls: JetBlue’s Spirit sacrifice

6 Jul 2023

Concise views on global finance: The budget airline says it won’t fight a court order nixing a partnership with a larger rival to allay concerns about its $4 bln deal for peer Spirit. It’s unlikely to satisfy antitrust enforcers.

Austrian bank short attack is watchdog’s nightmare

30 Jun 2023

BAWAG shares fell 8% after hedge fund Petrus said the lender had a shoddy business model and poor governance. Sector-beating returns make it a tough target. But following this year’s bank runs, regulators will fret that such campaigns could become a self-fulfilling prophecy.

Man United sale heads into messy added time

15 Jun 2023

The Premier League soccer club is in the final stages of a tense bidding war. In this Viewsroom podcast, Breakingviews columnists debate the merits of offers from a Qatari suitor and chemicals tycoon Jim Ratcliffe, and what options minority investors face if they are shut out.

Odey brokers’ belated rethink is a cautionary tale

12 Jun 2023

JPMorgan, Morgan Stanley and others are reviewing links to the fund manager. Odey’s 2021 firing of his executive team should have been a red flag to do so even before further sexual assault allegations emerged. Brokers’ tardy responses just raise questions about their processes.