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.
HedgeCo.net (West Palm Beach) – Hedge fund law firm Conyers Dill & Pearman was named Offshore Law Firm of the Year at 2009 The Lawyer Awards. According to the judges’ criteria, the award is presented to the firm which demonstrates superior strategic clarity, growth of market share, technical legal excellence and quality of service. Conyers fulfilled each of those categories and the firm was commended for an “outstanding year”.
Christopher Johnson-Gilbert, managing partner of Conyers’ London office, collected the award at the ceremony which was held at Grosvenor House and attended by over 1000 lawyers. Johnson-Gilbert commented: “We are delighted to receive this award, which reflects the hard work of everyone across the firm over the past year in providing the highest quality legal advice on the leading offshore jurisdictions of the Cayman Islands, British Virgin Islands, Bermuda and Mauritius. Our strategic purpose and our balanced business model have seen continued success even in times of global difficulties.”
The past year has been one of significant expansion for Conyers during which it has advised on a number of high profile deals, consolidated its position in relation to the BRIC markets with new offices in Moscow and São Paolo, and the addition of a Mauritius office and a global Mauritius practice. Conyers has also gained market share in the Cayman Islands and British Virgin Islands, and maintained its dominance in the Bermuda market. Conyers continues to expand with new hires, and now numbers nearly 600 staff with over 150 lawyers located in 11 offices worldwide.
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FierceFinance – Not too long ago we were lamenting the trend by top investment banks to move into hedge funds and alternative investments in general. Buying hedge fund firms and launching them internally didn’t work out so well for Citigroup. It also wasn’t a home run for other firms, notably Bear Stearns.
Has JPMorgan Chase found a way to buck the trend? It has announced it will buy the portion of Highbridge that it doesn’t already own, and has shut down its proprietary hedge fund and private equity businesses. As of now, it looks like the Highbridge gambit has paid off-and then some. It remains among the biggest of the hedge fund firms, and has tripled its assets under management since JPMorgan invested in December of 2004, reports TheStreet.com. My sense is that Highbridge is one of the mega fund firms that is really well positioned to steal market share.
Markets Media News – The New Year is likely to see several important shifts in alternative investing, according to Don Steinbrugge, managing partner of Agecroft Partners, a global consulting and third-party marketing firm for hedge funds.
Steinbrugge said during the fourth quarter of 2008, investor demand started to shift toward market neutral strategies, as well as toward strategies that used little leverage and provided investors with transparency and liquidity. That shift will likely continue throughout 2009, he said.
Short-biased funds, which have always been a small percentage of the marketplace, surged ahead in 2008, delivering double-digit returns and capturing a larger market share of alternative investments. Steinbrugge said investors are likely to continue to invest in short-biased funds, but their growth will be at a slower pace than last year.
Commodity Trading Advisors (CTAs) are likely to see a lot of demand as well, as they also delivered double-digit returns last year and proved they are not correlated with other hedge fund strategies. Steinbrugge said, however, that does not mean traditional long-short equity funds are on their way out.
"Long-short equity funds have actually done pretty well in comparison to the S&P 500," Steinbrugge said. "I don’t think you’ll see a huge shift out of long-short equity."
CNNMoney.com - Railroad CSX Corp. said Wednesday it has settled a case of alleged securities law violations with two activist shareholder hedge funds.
If the settlement is approved by a federal court, CSX will receive $10 million from TCI, which manages The Children’s Master Investment Fund, and $1 million from 3G Capital Management.
The case, brought by a CSX shareholder, accused the hedge funds of collecting "short-swing" profits, or using insider information to nab a short-term gain. But under the settlement, the hedge funds deny any wrongdoing.
Reuters – Two activist hedge funds of Dillard’s Inc are demanding access to inspect the retailer’s books and records, seeking greater transparency from the department store chain’s executives and family members.
Dillard’s shares jumped 18 percent in Monday morning trading.
Barington Capital has been calling on the Little Rock, Arkansas retailer to take steps to improve financial results and governance practices since at least June 2007.
The hedge funds own around 5 percent of Dillard’s class A stock. The Dillard family own most of the company’s class B stock, which allows them to nominate eight of the company’s 12 directors.
FT Alphaville – Centaurus Capital is running down its flagship hedge fund after investors with the London activist failed to back an emergency restructuring. Centaurus, founded by former BNP Paribas traders Bernard Oppetit and Randy Freeman, will now repay the bulk of investors in the $1.2bn Centaurus Alpha fund, with only a handful expected to remain.
The failure to persuade half the investors to lock up their money until June, in return for lower fees, is a surprise as others – including the flagship funds of RAB Capital and Henderson – have won investor backing for similar proposals.
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
Forbes - U.S. activist hedge fund Atticus Capital has lost more than $5 billion this year, a source familiar with the matter told Reuters, after its funds were hit by heavy falls in financial stocks. Atticus, a high-profile player in deals such as Barclays‘ unsuccessful bid for ABN Amro last year, saw total assets under management fall to around $14 billion at end-July from more than $20 billion last year, the source said.
The losses were mainly due to a 32.9 percent loss in the $7 billion Atticus European fund from the start of the year to the end of August and a 25 percent fall in the Atticus Global fund.
The firm, which employs a variety of investor lock-ups, saw few investor redemptions. Atticus declined to comment. The firm, which views itself as a long-term investor, has nevertheless delivered strong performance in recent years.
In 2006 founder Tim Barakett earned $675 million, according to hedge fund industry publication Alpha Magazine.
Times Online- Hedge fund RAB Capital, one of the largest shareholders in Northern Rock when the bank was nationalised in February, this morning announced that its first half pre-tax profit had almost halved and assets under management had shrunk by more than $1 billion in six months.
RAB’s $1.4 billion Special Situations Fund, managed by its chief executive Philip Richards and among the best performers for some years, plunged 23.1 per cent.
The fund had an 8.18 per cent holding in Northern Rock and major positions in African Minerals, a London-based diamond miner, and Falklands Oil and Gas.
The news comes as many of the world’s activist hedge funds are suffering this year, with some posting losses of more than 20 per cent of their funds.
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.
Guardian Unlimited- The struggling internet company Yahoo has struck a pact with its billionaire critic Carl Icahn by giving the hedge fund activist a minority presence on its board to avoid a potentially tempestuous showdown at a shareholder meeting next month.
Facing crumbling support among Yahoo investors, Icahn yesterday abandoned his efforts to overthrow the leadership of the embattled Silicon Valley company and force its sale to Microsoft.
Instead, the 72-year-old Icahn & Co hedge fund manager is settling for an offer of three seats on Yahoo’s board. One director will stand down and the board will expand from nine to 11 members. Wall Street analysts greeted it as a qualified victory for Yahoo’s founder, Jerry Yang, who has pressed hard to maintain its independence and who waged an energetic campaign to discredit Icahn.
CNNMoney.com- Hedge funds hate to see their names in the headlines, but lately, they’ve been the ones breaking the news about companies they invest in.
Daniel Loeb’s Third Point LLC disclosed in a Monday regulatory filing that Maguire Properties Inc. (MPG) had received a buyout offer for about $20 a share, a level the stock hasn’t traded at since March. Third Point’s disclosure sent shares of Maguire, a real-estate investment trust, up more than 15% early in the day to above $14, before it fell back with the rest of the market. The bid turned out to be for $20.25 a share by a private company, Pacific Office Properties, The Wall Street Journal reported later Monday.
The filing by Third Point, which owns 8.8% of Maguire shares, wasn’t the first of its kind. In late May, 24% Calpine Corp. (CPN) holder Harbinger Capital Partners disclosed in an open letter that NRG Energy Group Inc. (NRG) had made an $11 billion offer to Calpine, an offer that Calpine later rejected. At a time when activist investors are trudging through a bear market along with the rest of the investment community, hedge-fund activists are getting more involved in trying to fetch buyout offers, and in many cases they appear to be communicating with the would-be buyers.
