Each business day HedgeCo.Net keeps you informed with the top hedge fund industry news, opinion and insight from around the globe. From the latest hedge fund launches, to the impact of regulation, competition, and investor activism - we track the topics and people that make a difference to you.
Telegraph.co.uk – The chatter was that Harbinger, a powerful US hedge fund run by Philip Falcone, has built a small stake in African Minerals and has been talking to London brokers in recent days about picking up more stock. Harbinger declined to comment.
If Harbinger has built a stake in the company, it is not clear what the hedge fund’s intentions are for African Minerals. The group runs a variety of strategies. Sometimes the investment fund acts as a passive, long-only investor. However, Harbinger also has a reputation for being activist and occasionally bids for companies. Last year, for example, Harbinger made a takeover approach for blue-chip satellite services group Inmarsat, which slipped 6.3 to 495.2p.
Mr Falcone is well known in City circles. The trader hit the headlines when it emerged that Harbinger was one of the main hedge funds to have shorted HBOS before the Government orchestrated the bank’s emergency merger with Lloyds, now Lloyds Banking Group.
Alibaba News Channel – European companies emerging from the credit crisis should start looking over their shoulders: activist investors are set to return from hibernation, working more closely than ever with institutions to effect change.
The activists, who favour methods such as changing balance sheet structures, ousting chairmen or selling off non-core units, had little to do during the crisis when buyers were scarce and there was little appetite for transformatory change. But now they are set to gain from a political will to drive large institutional investors towards more active investment and away from a mentality of simply selling stocks they don’t like, while a purge of more leveraged, short-termist funds has cleared the ground for activists to tap a wealth of new opportunities.
"Pushed and shoved by the regulators, mainstream institutions are beginning to countenance interaction with activist investors," said a senior figure at one activist firm.
Reuters – Activist hedge fund firm TCI, which launched an attack on ABN AMRO in 2007 that helped trigger the Dutch bank’s sale, has seen profits surge 73 percent but warned this year will be tougher.
The Children’s Investment Fund Management (UK) LLP reported profit available for sharing among members of 555.9 million pounds for the year to end-August 2008, up from 321.0 million pounds a year before.
Reuters – Activist hedge fund firm TCI, which launched an attack on ABN AMRO in 2007 that helped trigger the Dutch bank’s sale, has seen profits surge 73 percent but warned this year will be tougher.
The Children’s Investment Fund Management (UK) LLP reported profit available for sharing among members of 555.9 million pounds for the year to end-August 2008, up from 321.0 million pounds a year before.
The firm paid 484.3 million pounds to its charity CIFF (The Children’s Investment Fund Foundation), up from 271.4 million pounds a year before.
Times and Democrat – Activist shareholder William Ackman sought for months to replace four incumbents on the Minneapolis-based retailer’s board of directors with five of his own picks, including himself.
The head of Pershing Square Capital Management, which has a 7.8 percent stake in Target, has argued that the cheap chic discount retailer, which has stumbled as shoppers focus on basics, needed new perspective. He said it especially needed to beef up its board in the areas of retail and real estate to better compete with its chief rival, Wal-Mart Stores Inc., based in Bentonville, Ark.
Shareholders rejected those arguments at their meeting outside Milwaukee Thursday. They also sided with the company in approving a measure that sets the board’s size at the current 12 members, instead of the 13 that Ackman had wanted.
PerthNow – Mr Geffen tried to acquire a 19 per cent stake in the New York Times Company that was held by Harbinger Capital Partners, the activist hedge fund, but was rebuffed, it emerged overnight.
Since 1896, the newspaper has been controlled by the Ochs-Sulzberger family, whose members maintain their grip with a separate class of super-voting shares.
However, the dominance of the family, headed by Arthur Sulzberger, has come under pressure as advertising has collapsed and losses have mounted, which have led to speculation that The New York Times may be sold.
Daily Times – Less than three weeks ahead of what’s expected to be a heated proxy contest at Target’s annual shareholders’ meeting, activist shareholder William Ackman aims to strengthen his case to investors for a new slate of directors by personally introducing his roster at a town hall meeting here Monday.
According to documents filed Friday with the Securities and Exchange Commission, Ackman, who runs Pershing Square Capital Management, which owns a 7.8 percent stake in the discounter, intends to “improve Target’s board and consequently, help make Target a stronger, more profitable and more valuable company.”
Interactive Investor – Activist hedge fund Algebris has sold its stake in Italian insurer Assicurazione Generali SpA , a newspaper said on Tuesday, but a financial source said Algebris would attend the shareholder meeting this week.
Algebris head Davide Serra criticised Generali’s governance last year, a rare move among Italian shareholders, and lost his bid to appoint an auditor. He resumed his campaign last July by querying Generali investments.
Bloomberg – The Children’s Investment Fund Management UK LLP, a $9.5 billion London-based hedge fund, has about $1.2 billion of short positions in Japanese stocks including Toshiba Corp., according to exchange filings.
The fund, better known as TCI, has shorted 13 Japanese stocks, data based on exchange filings compiled by Bloomberg show. Mizuho Financial Group Inc., Japan’s second-biggest bank by revenue, and Sony Corp., the world’s second-biggest consumer- electronics maker, are also among the short positions.
The bets against Japanese stocks by activist fund TCI, which lost a proxy battle with Japanese utility Electric Power Development Co. last year, come as the Nikkei 225 Stock Average completed its worst fiscal year since March 2001, losing 35 percent. TCI’s fund fell 43 percent in 2008, as global hedge funds were battered by client withdrawals and the worst market losses since the 1930s.
Forbes – CSX Corp. said a New York Federal Court has approved a settlement in which the railroad operator will be paid $11 million by two activist shareholder hedge funds over alleged securities law violations.
CSX said late Friday it will receive $10 million from TCI, which manages The Children’s Master Investment Fund, and $1 million from 3G Capital Management, less $550,000 in attorney’s fees and other expenses.
Associated Press – Activist hedge fund manager William Ackman is in talks with Target Corp. about naming potential directors to the discount retailer’s board, according to a Securities and Exchange Commission filing on Thursday.
Target shares gained 61 cents, or 2.2 percent, to $28.43 in aftermarket electronic trading, after gaining 23 cents to close the regular session at $27.82. The stock has lost about half of its value since peaking at $59.55 in September before the market meltdown.
In recent months, Target Corp. has suffered from a drop in consumer spending, while other discount chains — particularly rival Wal-Mart Stores Inc. — have outperformed. While Wal-Mart concentrates on offering low-price essentials, Target has focused more on a cheap-chic variety of more discretionary items like clothing and home decor.
On Tuesday, Target reported that its fourth-quarter profit fell 41 percent.
Forbes – Patrick Degorce, a founder and partner at high-profile activist hedge fund firm The Children’s Investment Fund (TCI), has left the company, a spokeswoman told Reuters on Friday.
Degorce was in the public eye in early 2007 when he wrote a high-profile letter on behalf of shareholder TCI to Dutch bank ABN Amro criticising its ‘terrible shareholder return’ and calling on it to look at a break-up, spin-off, sale or merger of units or the business as a whole.
ABN was later sold to a consortium led by Royal Bank of Scotland for about 70 billion euros ($95.73 billion).
