Hedge Funds

Trendy new buyout clubs may let down eager patrons

7 Apr 2014

Blackstone is enlisting some of its fund investors to help buy auto-parts maker Gates for $5.4 bln. Such collectives are increasingly displacing teams of private equity firms in bigger deals. Disappointing returns from so-called co-investing, though, could make it a passing fad.

Dimon deputy epitomizes succession of all sorts

25 Mar 2014

Mike Cavanagh gave up a shot at following his mentor atop JPMorgan for one helping run Carlyle. Being CEO of a bank holds less appeal thanks to shrinking returns and growing regulation. The move shakes up leadership plans for two firms and underscores a bigger shift in finance.

Itaú schools investors on minority rights in Chile

12 Mar 2014

The Brazilian bank’s $3.7 bln deal to take control of CorpBanca shafted public shareholders, including the Bank of Chile and the World Bank’s IFC. A U.S. fund is making a stink. But the best it’s likely to come away with is a useful, if painful, lesson in governance.

Man starts to crawl out of the wilderness

27 Feb 2014

The hedge fund manager’s stock soared after it smashed forecasts. After years of falling assets and dependence on an ailing quant business, it is becoming a leaner, more profitable group. To close the share-price discount to peers, Man has to show it can sustain the performance.

BlackRock may fancy revisiting Blackstone heritage

23 Jan 2014

Larry Fink’s firm manages $4.3 trln while Steve Schwarzman’s, with only 6 pct of the assets, now earns just as much. For BlackRock, a chip off Blackstone 20 years ago, private equity must be tempting. It dumped a plan to build such a business but could buy one like, say, TPG.

Wealth Addicts Anonymous? It misses the point

20 Jan 2014

Ex-trader Sam Polk says that money-sucking finance types should meet up to get a grip on their bonus addiction. If such support groups are needed, meetings should start with a firm lecture on why greed is not good. But there’s a better way – common-sense pay regimes. 

Equity optimists may fast create a crowded trade

20 Nov 2013

Many large fund managers expect developed stock markets to rise next year. They reckon that companies will ramp up capital expenditure while fiscal policies become less restrictive. The reasoning may be sound. The risk is that there’s too much money chasing the same idea.

Wall Street watchdogs push luck in SAC trader case

18 Nov 2013

A manager at Steven Cohen’s hedge fund goes on trial for using dodgy fifth-hand tips to sell shares of Dell and Nvidia. That’s a legal stretch, even for NY’s esteemed federal prosecutors. The judge seems sympathetic, but their streak of insider trading convictions is in jeopardy.

Steve Cohen gives efficient market theory a boost

5 Nov 2013

For years, the tremendous performance of the hedge fund mogul appeared to discredit the hypothesis that stock markets digest all public information instantaneously. SAC has now admitted that its recipe included illegal insider knowledge. Legit investors find markets hard to fool.

Foreign exchange offers few trends to befriend

16 Oct 2013

Currency markets have grown in size but the usual strategies for making money in them aren’t working so well. A dearth of clear and persistent trends, low interest rates in developed countries, and declining volatility are to blame. The tough times aren’t yet over for FX funds.

UK fund king chooses good time to discover value

15 Oct 2013

Neil Woodford is one of the few fund managers with the brand and long-term record to set up solo. He also has enough career left to make something of it. His departure from Invesco is a reminder to financial firms of the need to be always prepared for the loss of talent.

Hedgies’ Greek bank trade sweet enough as it is

7 Oct 2013

Greece’s improving economy has prompted the likes of John Paulson to invest in the country’s banks. That should help return them to the private sector. But hedge funds don’t need an extra-sweet deal with lower strike prices on the warrants that came free with the banks’ recaps.

Ackman has Air Products catalyst, now for reaction

26 Sep 2013

The activist hedgie has dislodged the gas firm’s underperforming boss, John McGlade. That quick win brought him a sharp gain of about $100 mln on his 10 pct holding. For bigger, more lasting success, however, a painstaking transformation of the company is now needed.

Blackstone engineers an upgrade during Hilton stay

12 Sep 2013

The private equity firm is starting the checkout process with an IPO six years after its $27 bln buyout. At current industry values, Hilton would bring Blackstone an IRR of about 13.5 pct. That’s no five-star return but it’s quite a turnaround from how prospects once looked.

Carl Icahn won’t have the last tweet on Dell

9 Sep 2013

The billionaire has conceded defeat in his effort to block Michael Dell’s $24 bln buyout of the PC maker. Icahn may still profit, and his broader record is strong. But his Dell logic did not compute. And his recent punt on Apple is a better ad for his self-promoting parting shot.

Harbinger’s mea culpa vindicates judge’s chutzpah

19 Aug 2013

The hedge fund and its billionaire boss, Phil Falcone, admit wrongdoing in an $18 mln deal with the SEC. But credit goes to Jed Rakoff, the New York federal judge who has demanded harsher Wall Street penalties. The U.S. watchdog may have inflicted the bite, but he supplied the teeth.

Ivory tower barbarian now pounds at the gate

16 Aug 2013

A Harvard Law professor is ratcheting up his battle against corporate defenders such as Martin Lipton. Hedge fund bosses like Dan Loeb and Bill Ackman expose real management weaknesses. Even without their resources, academic activists like Lucian Bebchuk can still be on target.

Bill Ackman’s plate-spinning act gets dangerous

13 Aug 2013

The activist hedge fund boss is always ready for a fight – just maybe not so many at once. Ackman is embarking on a campaign at Air Products even amid high-profile tussles at P&G, Herbalife and beyond. Resigning from the J.C. Penney board is prudent for more reasons than one.

SAC’s Steve Cohen may be the A-Rod of Wall Street

6 Aug 2013

Like the Yankees slugger, the hedge fund boss faces sanctions for alleged use of an illegal “edge.” It’s unclear that either broke arguably fuzzy rules. And trying to level their respective playing fields may be futile. Ultimately, baseball and Wall Street are bigger than both.

EADS should play long game with Dassault stake

5 Aug 2013

Hedge fund TCI has done EADS a favour by calling on the aerospace group to sell its stake in French subsidiary Dassault Aviation - EADS already wants to exit non-strategic minority stakes. A market placing would be ideal. But if Paris meddles, no deal is better than a bad deal.