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Seekingalpha.com - Moore, named after Bacon’s middle name, is a $10 billion global macro set of hedge funds. The next few funds we will be covering are global macro oriented funds, which is a switch from some of the more value oriented funds we’ve been covering, like the ‘Tiger Cub’ funds including Stephen Mandel’s Lone Pine Capital, Lee Ainslie’s Maverick Capital, John Griffin’s Blue Ridge Capital, and Andreas Halvorsen’s Viking Global.
Global macro funds seek to find investments in whatever market they can gain an edge, whether it be equities, bonds, currencies, debt, commodities, and more. So, keep in mind that these equity positions only represent a portion of the fund’s overall holdings. They are not required to disclose holdings outside of equities, notes, and stock options.
Reuters – A largely unnoticed ratings downgrade on a slate of Paramount Pictures movies backed by hedge-fund money offers rare proof that such innovative packages have proved to be wobbly investments.
The Melrose I fund, established in 2004, was cut six grades by Moody’s Investor Service from an investment grade "Baa2" to the speculative "B3" rating. The downgrade, announced October 21, could trigger higher interest payments to lenders, and will surely lower the value of debtholders’ bonds.
The fund is backed by a partial ownership stake in 26 Paramount films released during 2004-05. So, lead underwriter Merrill Lynch and other senior debtholders will maintain a minority hold on those assets until they can secure full repayment on their loans or Paramount buys out their equity positions.
Melrose I was crafted during the regime of Paramount chief Sherry Lansing, whose reign atop the Viacom Inc-owned studio ended in 2004 amid a lengthy commercial dry spell. That year, the studio released such iffy features as "The Stepford Wives," "Sky Captain and the World of Tomorrow" and "Alfie," though Paramount has never acknowledged publicly which of its pictures were funded by Melrose I.
Reuters – Leveraged loan prices fell on Wednesday as hedge funds facing redemptions and forced to cover short equity positions sold loans, traders told Reuters Loan Pricing Corp.
Leveraged loans have declined over the past week amid a rout in global markets that has led to the bankruptcy of Lehman Brothers and a $700 billion U.S. government plan to bail out the financial sector.
The loan credit default swap index, the Markit LCDX10, traded around 93.70-to-93.90 cents on the dollar on Wednesday, down about a point from Tuesday’s close. It hit a low of 93.60-to-93.80 cents on the dollar earlier in the day.
TXU Corp’s leveraged buyout loan was among several that traded down. Its term loan B2 fell to 86.75-to-87.25 cents on the dollar from 87-to-87.5 cents on the dollar on Tuesday afternoon.
