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.
New York (HedgeCo.net) – In the Closing Plenary of the Clinton Global Initiative 2009, former President Bill Clinton featured LeapFrog Investments, which raised the world’s first microinsurance fund.
“LeapFrog’s team is widely recognized as having opened up a new frontier in microfinance and alternative investment.” The former President noted, “The fund has raised $44 million from both private and public investors, towards an ultimate target of $100 million.”
Before an audience of 1000 global leaders, President Clinton drew a direct link between the work of Nobel Laureate Muhammad Yunus to bring microcredit to millions of people, the ‘Banker to the Poor,’ and the work of LeapFrog as the global leader in microinsurance: “LeapFrog is quickly becoming the ‘Insurer to the Poor’. Just like Yunus, [LeapFrog] is the first out of the gate, the first microinsurance fund in the world.”
“For those 25 million clients, LeapFrog means the ability to leap out of poverty permanently.” Dr. Andrew Kuper, President and Founder of LeapFrog said. “For our portfolio companies, LeapFrog means leaping to the next stage of growth and impact. For our investors, LeapFrog does mean the next frontier of microfinance and alternative investment.”
Pierre Omidyar, Founder of EBay, immediately concurred with a post on Twitter, saying that it was “Great to see LeapFrog . . . recognized by President Clinton for work in microinsurance.” The Omidyar Network is a lead investor in the fund, together with the European Investment Bank, FMO, Triodos, and Accion International.
LeapFrog’s fund is now developing investment opportunities in key emerging markets such as India, Indonesia, the Philippines, South Africa, Ghana, and Kenya.
Alex Akesson
Editor for HedgeCo.net alex@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!
New York (HedgeCo.Net) – Five billionaire hedge fund managers stood up before Congress yesterday and shared their differing views on the hedge fund industry.
George Soros, Philip Falcone, John Paulson, James Simons and Ken Griffin all took turns defending hedge funds at the House hearing yesterday, though they clearly weren’t on the same page regarding opinions on regulation.
The hearing was called by democratic committee Chairman Henry Waxman of California, as part of a much larger attempt by Congress to delve deeper into the cause of the credit crisis and to see whether or not hedge funds have had a hand in driving down the values of certain markets.
While Harbinger Capital head Falcone was all about greater regulations, saying that investors "have a right to know what assets companies have an interest in," Soros disagreed. The founder of Soros Fund Management warned against "ill-considered" rules and guidelines if they were merely a product of the recent turmoil in the economy.
Griffin of Citadel Investments agreed saying, "We do not need greater regulation of hedge funds. We’ve not seen hedge funds as a focal point of the carnage."
The issue of taxes was also raised, with a slew democratic representatives firing accusations that the fund managers enjoy special tax breaks.
Paulson & Co. head John Paulson came to the defense saying, "If your constituents, whether a plumber or a teacher, bought a stock and if they held that stock for more than a year they would pay a long-term capital gains rate."
Waxman suggested the hedge fund industry faces increased regulation and transparency when President-elect Barack Obama, who has also been vocal on wanting to raise the capital gains tax, takes office in Janary.
All five hedge fund managers who testified have enjoyed extreme success in the hedge fund industry. George Soros, who is best known for his infamous bet against the British Pound in which he pocketed $1 billion overnight, manages over $19 billion through his company.
Phil Falcone and John Paulson both predicted the subprime crisis before it happened. Paulson took home an estimated $3 billion in 2007, the largest single-year profit by a fund manager to date.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
New York (HedgeCo.Net) – Activist hedge fund Harbinger Capital might be looking to make some strategic changes to another management team. They are expected to hold talks with Leap Wireless International, in which they hold a substantial 14.8 percent stake or just over 10 million shares. The hedge fund is looking to discuss both short-term and long-term management solutions while figuring out the best way to maximize shareholder returns.
“We respect and welcome the views and opinions of all Leap stockholders, said Leap spokesman Greg Lund while avoiding any specifics. “We look forward to continuing the open and productive dialogue we’ve had and expect to have with all of our stockholders.”
Harbinger is no stranger for pushing for internal change within companies in which they invest. By acquiring board seats, the hedge fund gets a say in major decisions while giving them more control over the company. Harbinger won three seats on the board of Media General and two seats on the board of the New York Times after a nasty near proxy battle.
Shares of Leap closed at $27.90 yesterday and have fallen over 60 percent in the course of a year.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
Telegraph.co.uk – EU data shows that Philip Falcone, the US hedge fund baron who led the assault on HBOS, has sold short €138m (£108m) of Banco Popular’s shares, or 1.65pc of the total float, through his fund Harbinger Capital.
He has short bets of €208m on Santander and €185m on BBVA. Blue Ridge Capital has targeted Bankinter and Popular. Calypso Capital Management, High Side Capital, Landsdowne, and Belgium’s Fortelus have all joined the hunt.
The Madrid positions are a way for funds to continue shorting banks in Britain, where Santander is now a key player after taking over Abbey National, Alliance & Leicester and Bradford & Bingley.
Britain’s Financial Services Authority has suspended short selling of bank stocks, but Spain has not done so.
AP – Chinese steelmaker Sinosteel Corp. has taken control of 98 percent of Midwest Corp. and will proceed with compulsory acquisition of the Australian miner, Midwest said.
In a brief statement Wednesday, Midwest said Sinosteel would recommend de-listing the company from the Australian Securities Exchange. The conclusion of the deal marks the first successful hostile takeover of an Australian firm by a Chinese entity.
The exchange released a notice from Sinosteel to Midwest that said the Chinese company had gained a 98.52 interest on Monday, after U.S. hedge fund Harbinger Capital agreed to the Chinese firm’s offer for its 15.2 percent stake.
Also Monday, major shareholders Murchison Metals Ltd. and Armadale Offshore Inc. accepted Sinosteel’s takeover bid, giving up their 9 percent and 12 percent stakes in Midwest.
Sinosteel launched a $1.36 billion bid for Midwest in December last year, and gained a controlling stake in July.
New York (HedgeCo.Net) – Harbinger Capital has taken an 8 percent stake in Cablevision Systems Corp., according to a regulatory filing done yesterday with the Securities and Exchange Commission.
The activist hedge fund now owns nearly 19 million shares of the cable operator. The filing communicated Harbinger’s views that the stock is undervalued and also touched on the possibility of a strategic restructuring, saying they may “seek to influence or change the control” of the company.
It is not uncommon for hedge funds and other private equity firms to try to replace or enhance a company’s board of directors in order to give them more control or decision making privileges. Hedge funds generally seek high returns in a short time frame, and are more than prepared to try and replace management should the current slate fail to share their views.
Harbinger is no stranger to this practice. Already, the hedge fund has sought seats on two of the boards of companies in which they invest: The New York Times and Media General. Harbinger was awarded three seats on Media General’s board and two seats on the board of the Times after a much publicized near proxy battle.
Shares of Cablevision closed at $32.46 on Thursday, down 10 cents.
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
West Palm Beach (HedgeCo.net) - Harbinger Capital Management, an activist hedge fund, has accumulated a 4.9% stake in Cablevision Systems Corp, according to The Wall Street Journal.
In a regulatory filing, Harbinger said that it had bought 11.45 million of Cablevision’s Class A shares. Harbinger, now Cablevision’s fifth biggest shareholder, was not present at meetings with the company’s top executives and large investors this week, the Journal said, citing a person familiar with the meetings.
The move may have prompted CEO James Dolan to explore options. Cablevision shareholders rejected a $36.26-a-share buyout from the founding Dolan family last October. That bid was the family’s fourth attempt to take the company private.
The Dolan family owns 75% of the voting rights for Cablevision. It remains unclear what Harbinger intends to do with its holding. Harbinger isn’t currently planning a proxy fight with the company, said a person close to the company.
Cablevision last month acquired 97% of Newsday Media Group ("Newsday") through the formation of a new partnership with Tribune Company. For Cablevision, the completion of this transaction adds a complementary print and online media group with local content in the New York area.
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!
New York (HedgeCo.Net) – New York’s top 100 hedge funds are in trouble and can’t seem to get out of the red, according to performance reports obtained by the New York Post.
Prominent hedge funds are still trying to recover from the credit crunch and unless they see a turnaround soon, 2008 could be the first year that hedge funds as a whole lose money since 2000.
Big time fund Appaloosa, who manages about $4 billion, is down almost 18 percent this year, compared to returns of 8 percent and almost 25 percent in ‘07 and ‘06 respectively.
Cantillion Capital Management, another monster fund that has $2 billion tied up, is closing in on 20 percent when it comes to losses this year. And the $10 billion Tontine Associates isn’t faring so well either. The fund is down 17 percent after an amazing 2007 where it posted returns of 40 percent. QVT Financial was another fund that saw 40 percent returns in ’07, only to be down over 6 percent this year.
It’s not all bad news, however. Some fund managers are just destined for success. John Paulson’s fund, Paulson Advantage is up over 18 percent this year after a record breaking 2007. Phillip Falcone of Harbinger Capital is riding high with returns of over 40 percent so far.
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
Seeking Alpha- In a 13G filing after the close Friday on Sunoco, Inc. (SUN), Philip Falcone’s Harbinger Capital disclosed a 6.6% stake (7,732,600 shares) in the company. The hedge fund did not show a stake in Sunoco at the quarter ended 03/31/08.
A 13G indicates a ‘passive investment’, but Harbinger is a known activist investor. Most recently, Harbinger called on Cleveland-Cliffs (CLF) to cancel its merger with Alpha Natural Resources Inc. (ANR), saying it was not in the best interest of shareholders.
New York (HedgeCo.Net) – Inmarsat shares took a dive yesterday after hedge fund Harbinger Capital halted talks of a possible takeover. Harbinger has amassed a 28 percent stake in the U.K.-based mobile satellite communications group.
Harbinger, who has AUM upwards of $26 billion, decided to hold off after considering the lengthy process ahead in which they would have to gain clearance from the FCC.
“Harbinger remains interested in acquiring control of Inmarsat and is therefore actively considering whether to pursue the relevant regulatory and competition approvals in order to be able to make an offer for Inmarsat in the future,” the company said.
The hedge fund expressed interest in the company in hopes that Inmarsat might contribute to a U.S development of a satellite-based mobile phone network.
“Assuming there is an acceptable conclusion to the regulatory approval process, Harbinger would intend to re-enter into discussions with the board of Inmarsat regarding the terms of an offer and endeavour to seek a recommendation from the Inmarsat board at that time,” they added.
Harbinger isn’t the only hedge fund as of late to accumulate shares in Inmarsat. Landsdowne Partners and Lehman Brothers have also been tapping into this market in hopes of consolidation in the industry.
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
Times Online- Shares in Inmarsat, the mobile satellite communications group, plunged 12.2 per cent today after it emerged that Harbinger Capital, the activist American hedge fund investor, has suspended talks over a possible takeover.
While both parties left the door open to a future deal, Inmarsat’s stock lost 62.75p to fall to 449.75p in early trading.
Harbinger, which owns 28 per cent of Inmarsat, has put talks on hold to consider the lengthy regulation involved in such a deal, which could take up to 18 months.
The hedge fund would have to gain clearance from the Federal Communications Commission, the US industry watchdog that oversees the sector in a similar way to Ofcom in Britain.
Times Online- Philip Falcone is used to demanding change from underperforming company executives, but yesterday he took Harbinger Capital, his activist hedge fund, into new territory.
Complete with financial advisers and a big stake, Harbinger broke cover as a traditional prospective buyer of strategic assets, with a tentative approach to Inmarsat, the London-listed satellite operator.
Harbinger has a 29.9 per cent holding in Inmarsat, as well as stakes in several other satellite companies, including America’s SkyTerra and Terrestar.
Mr Falcone, a former Barclays Capital trader, appears to be intent on acting as an industry consolidator, a role more commonly played by trade buyers or private equity funds.
