Hedge Funds

Jeff Ubben gives Wall Street its Fukuyama moment

24 Jun 2020

ValueAct’s founder declared “finance is, like, done” as he left to start an ESG fund. True, it’s harder for traditional activists to make money. But like the academic who claimed that history had ended, Ubben’s off the mark – as his new climate and social gig is likely to prove.

Elliott tests activist limits with insurance foray

17 Jun 2020

Paul Singer’s fund is calling for change at $11 bln Dutch life group NN. Some of its demands, such as selling non-core assets, make sense. Others, like cutting costs and piling into riskier debt will be a harder sell. The Covid-19 crisis makes insurers an even trickier target.

Corona Capital: SPAC reversal, Italy, Toilet paper

8 May 2020

Concise views on the pandemic’s corporate and financial fallout: Dan Loeb’s blank-check company tries to nix a deal; Italians warily get back to work; Australian TP panic subsides.

Corona Capital: GE, Oaktree, M&A back doors

1 Apr 2020

Concise views on the pandemic’s corporate and financial fallout. GE delivers its own form of cash injection, hedge fund boss Howard Marks praises heavy-handed Covid-19 responses, and a car-parts maker flirts with bailing on a deal.

It’s time for hedge funds to put up or shut up

31 Mar 2020

Some big-time money managers are now looking to raise cash to take advantage of volatility’s epic return. The asset class hasn’t impressed over the past decade. So this could be many firms’ last opportunity to show they’re worth their high fees. But they may have to act fast.

Hedge funds’ German M&A pleasure flips to pain

31 Mar 2020

Covid-19 has turned the tables on speculators buzzing round AMS’ 4.6 bln euro takeover of Munich-based Osram. The Austrian group may struggle to buy out minority investors. That leaves funds using a well-worn legal loophole to squeeze out a premium facing hefty losses instead.

Selloff forces merger arbs to pass up free money

24 Mar 2020

Funds which bet on M&A deals have suffered hefty losses. Gyrating markets triggered risk limits, forcing some to sell out of deals that are very likely to go ahead, like luxury group LVMH’s $16 bln takeover of Tiffany. Arbitrageurs will lose much more than they stood to gain.

It takes a plague to make Paul Singer fold

18 Mar 2020

Elliott dropped its resistance to French IT firm Capgemini’s $4.1 bln bid for Altran. Tendering shares is an awkward U-turn after complaining the offer undervalued its target. But cash talks. In walking away, the activist U.S. fund crystallises a rare gain in a crashing market.

Prudential’s U.S. listing throws spotlight on Asia

11 Mar 2020

CEO Mike Wells plans to sell a slab of the UK insurer’s Jackson unit. It’s the second stage of a breakup, and partly satisfies activist Dan Loeb’s call for a full split. But any meaningful boost in the $37 bln company’s value depends on investors reassessing its Asian business.

War with Bank of East Asia may be short on spoils

4 Mar 2020

The $6 bln Hong Kong lender has hired Goldman to conduct a strategic review. It’s a small victory for Elliott Management, which has been agitating there for five years. Selling assets now could be difficult, though, which calls into question the campaign’s return on investment.

SoftBank hedge fund would suit Son, not investors

17 Feb 2020

Rajeev Misra, head of the conglomerate’s Vision Fund, may raise $4 bln from the likes of Abu Dhabi to bet on listed companies. There’s little downside for his boss, CEO Masayoshi Son. Those who plough money into the fund may regret backing a manager with a limited track record.

China fortune hard to read in Luckin Coffee beans

5 Feb 2020

Short-seller Muddy Waters targeted the $9 bln Starbucks wannabe, briefly stinging the shares. Erstwhile China bear Citron is defending the unprofitable company. Luckin has focused U.S. exuberance, and suspicion, over mainland consumer tech. The verdict remains oddly optimistic.

Elliott’s friendly tech bet faces tough second act

28 Jan 2020

Shares in SAP are up 19% since the activist unveiled a stake. Investors seem to believe the $160 billion company will hit ambitious targets endorsed by Paul Singer’s fund. But tough competition and increasingly muddy governance mean there is limited scope for further quick wins.

Inequality extends to hedge fund elite

20 Jan 2020

The top 20 managers like Ray Dalio and George Soros have made over $550 bln for investors over time. In part that’s longevity, but the group also raked in a third of industry gains in 2019 on under a fifth of assets. Most hedgies are still struggling to outrun cheap index funds.

Osram M&A traps hedge funds in prisoner’s dilemma

3 Dec 2019

Speculators now own up to 45% of the German lighting group. If they can be enlightened enough to work together, there’s a way to make would-be acquirer AMS pay more than $5 bln. But if they revert to self-interested type, the deal will fall through and they will all lose money.

TCI plays outrider to Mark Carney’s climate drive

2 Dec 2019

Chris Hohn’s hedge fund plans to penalise directors at companies who don’t publish climate change data. If others follow suit, it could boost the Bank of England governor’s push for transparency. What’s less clear is whether greater disclosure delivers investment rewards.

Review: Math steals the show in quant legend’s bio

22 Nov 2019

Jim Simons of Renaissance Technologies is one of the most successful investors of all time, yet most people know little about the cagey mathematician. Gregory Zuckerman tries to change this in “The Man Who Solved the Market”. But algorithms are the real stars of this story.

Bacon exit offers veiled short on hedgie revival

21 Nov 2019

Louis Bacon is returning investors’ money in his firm Moore Capital. He’s the latest big hedge fund manager to step back, but the decision jars with a good year for traders who make bets on economic shifts. Bacon has his reasons, but it’s hardly a signal that recovery will last.

Emerson settlement with Shaw would be win for both

30 Oct 2019

The clock is ticking for the hedge fund to start a proxy battle at the $44 bln conglomerate. Emerson needs a makeover, and D.E. Shaw wants to burnish its activist cred. A deal that shakes up the board and slashes fat without an immediate bust-up would be a victory for everyone.

Emerson Electric is only half as bad as Shaw says

16 Oct 2019

The $42 bln conglomerate sports crummy governance, excess fat and a retro penchant for private jets. But there are good reasons the market hasn’t bought into relative newcomer to activism D.E. Shaw’s argument that a breakup would unlock $20 bln of value.