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Bloomberg – Elliott Management Corp., the $12.8 billion hedge-fund firm founded by Paul Singer 32 years ago, told clients that it bought securities from Marc Dreier, the New York lawyer jailed for alleged fraud.
Elliott lost money on promissory notes purchased in October from Dreier, who had previously done work for the company, it said in an undated quarterly letter to clients. The firm’s Elliott Associates LP fund declined 9.2 percent in the fourth quarter, its worst quarterly loss.
“There are many reasons why funds lose money, but being defrauded is among the most embarrassing and annoying,” New York-based Elliott said in the letter, a copy of which was obtained by Bloomberg News. “We continue to adapt our processes to keep several steps ahead of fraudsters, and we maintain an attitude of probing skepticism. But sometimes we get hooked, as in the Dreier case.”
Pittsburgh Tribune-Review- Activist shareholder Highfields Capital Management LP has alerted Alcoa Inc. it may increase its stake in the aluminum maker to as much as 8 percent, a move that would make the Boston-based hedge fund the company’s largest shareholder.
Highfields notified Alcoa last week that it intends to raise its stake, Alcoa said Monday in a statement. Highfields, which oversees $11 billion in investments, owned 1.9 percent of Alcoa, or 15.4 million shares, as of July 23, according to data compiled by CNBC.
Highfields already is familiar with Pittsburgh companies. In 2005, the company leaned heavily on Mellon Financial Corp. to take action to increase its stock price by buying an investment unit from Merrill Lynch and selling off Mellon’s processing businesses — even if it meant moving its headquarters from Pittsburgh. At the time, Highfields was one of Mellon’s largest institutional shareholders.
Financial Times- Several of London’s largest hedge funds are backing Barclays’ £4.5bn ($8.9bn) capital increase, underscoring the complex roles they are playing in the recapitalisation of the UK banking sector.
GLG Partners, Lansdowne, CQS and Och-Ziff have all agreed to take up a large chunk of Barclays shares as part of its £1.7bn placing with institutional shareholders, according to the prospectus issued by the bank on Thursday.
The news comes after hedge funds have been under intense scrutiny for their actions in selling short the shares of banks attempting to raise capital through rights issues. The Financial Services Authority unexpectedly tightened its rules on the disclosure of short-selling in an attempt to stamp out what the regulator believes were attempts by hedge funds to force down banks’ share prices artificially.
