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.
Forbes – Barneys New York Inc is eyeing a debt restructuring or bankruptcy filing under which its owner, Dubai’s Istithmar World Capital, may lose control of the high-end retailer, Bloomberg reported, citing people familiar with the matter.
Hedge fund Perry Capital LLC has been approached by Holt Renfrew, the Toronto-based department-store chain, about a joint offer for control of Barneys, according to the report.
Bloomberg – Regulating hedge funds is one thing. Shackling them is another.
It’s difficult to tell which one is the ultimate objective of authorities in the U.S. and Europe as they push for greater oversight of these alternative investment managers.
There are reasons to worry officials will opt for whips and chains.
President Barack Obama last week showed why. Speaking of Chrysler LLC’s bankruptcy filing, he heaped blame on “a group of investment firms and hedge funds.” The funds, the president said, had refused to put wider government and auto-industry interests ahead of their own.
Guardian.co.uk – Housebuilder Taylor Wimpey has slipped more than 8% on news that Toscafund, the hedge fund run by former bank analyst Martin Hughes, has sold a chunk of shares in the business.
Tosca, which is said to have lost about £300m in the collapse of US bank Washington Mutual, held a 10.2% stake in Taylor Wimpey. But in an official filing just out, Tosca has now reduced that to below the 3% disclosable threshold.
Taylor Wimpey is down 1.75p at 19p, but rival Redrow, where Tosca had a 27% stake, has climbed 6.75p to 163p. On Friday, Redrow said Bridgemere Securities had bought 14.4m shares to take its stake to 16.24%. Traders wondered whether some of these shares might have come from Tosca.
Bridgemere is a fund set up by the Redrow founder, Stephen Morgan, and the purchase has prompted talk of a possible takeover of Redrow.
BloggingStocks – MetLife, Inc., which is the largest life insurer in the U.S., got its start 140 years ago. But the recent couple weeks may have been the toughest as the stock price has plunged.
It seems MetLife’s woes have just started, though, as the company announced Tuesday it has withdrawn its 2008 earnings estimates. As for Q3, the company expects operating profits of $600 million to $675 million.
At the same time, the company wants to sell 75 million shares to bolster its capital (obviously, this is something that’s pretty dilutive in the current environment).
Interestingly enough, MetLife is feeling the pain from heavy investments in alternatives such as hedge funds and private equity. What’s more, MetLife holds positions in losers such as Washington Mutual and Lehman Brothers.
New York (HedgeCo.Net) – JPMorgan Chase & Co. has purchased Washington Mutual’s branch network for $1.9 billion, making them the largest U.S. bank by deposits. The deal was encouraged by the U.S. government after consumers withdrew over $16 billion from the nation’s largest savings and loan in the latter half of September.
WaMu was having trouble finding a buyer after the Treasury’s proposed $700 billion bailout package created reluctance among would-be investors. Others companies said to have been considering an offer included Citigroup and Wells Fargo.
Many believed that WaMu was next in line to sink thanks to over $180 billion in outstanding mortgage-related loans and the paranoia of a pending liquidity crunch. On top of that, Standard & Poors once again cut WaMu’s ratings to CCC from BB-, though the company was quick to quell any fears associated with the downgrade.
"Washington Mutual Bank’s deposit rating from Standard & Poor’s continues to be investment grade and it is important to note that Standard & Poor’s rating actions do not affect the safety of customer deposits, which are insured up to the limits allowed by the FDIC," said WaMu in a recent statement.
Washington Mutual continued to deny rumors of any problems. The bank recently stated they had over $50 billion in liquidity despite being hit hard by the subprime mortgage fallout.
It was just a few months ago that WaMu rejected a bid from JPMorgan for about $4 a share, even after JPMorgan urged the bank to consider a deal before the economy got worse.
JPMorgan, who also acquired Bear Stearns earlier this year, will not inherit WaMu’s liabilities, including claims by shareholders and subordinated and senior debt holders. By purchasing WaMu, Chase can now increase their presence on the West Coast and in Florida.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com
Here Is The City – Bloomberg reports that CEOs at Wall Street’s top five securities house earned a staggering $3bn between them from 2003 and 2007, during the time when the subprime and toxic securities timebomb was ticking away in the background. Goldman Sachs CEOs were paid the most in this period ($859m), followed by Bear Stearns ($609m).
And talking of Wall Street finest, former Merrill Lynch CEO Stan O’Neal (who bagged $172m in pay between 2003 – 2007), is said to be thinking of making a comeback. According to The Financial Times, O’Neal is considering joining Vision Capital Advisors, a small hedge fund and private equity firm.
Bloomberg also reports that JPMorgan Chase has acquired Washington Mutual’s branch network for $1.9bn, as the thrift was seized in what has been described as the largest bank failure in US history. JPMorgan will not acquire any of WaMu’s liabilities. CEO Jamie Dimon said: ‘This is a fabulous franchise. We think we got this at a price that protects us’.
Reuters – An activist British hedge fund has taken a 6 percent stake in Washington Mutual Inc as the largest U.S. savings and loan tries to rebound from billions of dollars of mortgage-related losses.
The London-based fund, Toscafund Asset Management, also reported a 5.1 percent stake in Sovereign Bancorp Inc, the second-largest U.S. thrift.
Toscafund revealed the passive stakes in separate filings Thursday with the U.S. Securities and Exchange Commission.
New York (HedgeCo.Net) – A $7.2 billion bailout package was approved Tuesday by 94% of Washington Mutual Shareholders in a move that gives private equity firm TPG control of over 50% of the company, says the Seattle Times.
Not that there was much of an alternative. The other option would come in the form of a $792 million dividend that WaMu would have to pay the company, with increasing payments ahead. Though that didn’t stop protesters led by the Service Employees International Union to emphasize that this was a “toxic deal.”
The Union also stated that the private equity firm would seek high profits in the short term and “squeeze these returns from troubled banks through higher fees for bank customers, unfair lending practices and exorbitant interest rates on credit cards and other consumer products.”
In April, TPG bought 176 million shares of WaMu at $8.75 each, a 33% discount at the time.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com
