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.
Bloomberg- When Blackstone Group LP, the world’s biggest buyout firm, was pursuing the takeover of the Weather Channel cable network earlier this month with General Electric Co. and Bain Capital LLC, Wall Street balked at providing financing.
So the New York-based company turned to GSO Capital Partners LP, the hedge-fund manager it acquired in March, to pull off the largest U.S. leveraged buyout this year.
Blackstone can’t wait for banks, stuck with almost $100 billion of debt from earlier LBOs, to start lending again. Instead, it’s pushing deeper into deal financing with GSO. The strategy may hurt the hedge-fund unit’s returns — some approaching 40 percent — if slowing economies lead companies taken private by Blackstone to default on their debt.
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
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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.
Bloomberg- When Blackstone Group LP, the world’s biggest buyout firm, was pursuing the takeover of the Weather Channel cable network earlier this month with General Electric Co. and Bain Capital LLC, Wall Street balked at providing financing.
So the New York-based company turned to GSO Capital Partners LP, the hedge-fund manager it acquired in March, to pull off the largest U.S. leveraged buyout this year.
Blackstone can’t wait for banks, stuck with almost $100 billion of debt from earlier LBOs, to start lending again. Instead, it’s pushing deeper into deal financing with GSO. The strategy may hurt the hedge-fund unit’s returns — some approaching 40 percent — if slowing economies lead companies taken private by Blackstone to default on their debt.
West Palm Beach (HedgeCo.net)- US hedge fund Harbinger has increased its stake in Australian iron ore miner Midwest Corp. Ltd. to 12.53%, an effort to block Chinese iron ore trader Sinosteel Corporation’s takeover of the latter.
Harbinger, a major shareholder of Murchison Metals Ltd., increased its stake in Midwest to 10.53% on July 14 and 12.53% later, compared to a 9.1% it owned earlier in the year.
Murchison Metals, which has a 9.98% stake in Midwest, said days ago that it would give up the proposal for a merger with Midwest. However, it would also refuse to sell it’s stake to Sinosteel.
Sinosteel had a 19.89% stake in Midwest when it filed an AUD 6.38-per-share bid for the latter. It had increased its stake in the Australian miner to 50.97% by July 10. In addition to a 4.1% stake four Midwest directors promised to sell to it, the company’s stake in Midwest has increased to 55.07% in total.
Harbinger is owned by the Harbert Managment Corporation, which has committed capital and assets under management which have grown from $1.5 billion in 2002 to $22.9 billion as of March 1, 2008.
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CNBC- Fortis NV. said it has sold its London-based hedge fund manager International Asset Management (IAM) to its management team, supported by third party investors, for an undisclosed sum.
The Belgian-Dutch bancassurer said the transaction will boost its solvency ratios, without specifying further, but will have no material impact on EPS.
The company was not immediately available for further comment.
IAM is one of the former units of ABN Amro Asset Management acquired by Fortis in the consortium takeover launched with RBS and Santander for the Dutch bank in 2007. On March 31, it had $4.3 billion of assets under management.
Bloomberg- A year after Andrew Rabinowitz yanked his hedge fund’s cash from Bear Stearns Cos. because of concern the Wall Street firm wouldn’t make good on its trades, he’s ready to return.
For Rabinowitz’s New York-based Marathon Asset Management LLC, the lure is a prime brokerage that’s now part of JPMorgan Chase & Co., whose $1.6 trillion balance sheet is more than four times the size of Bear Stearns’s. JPMorgan Chief Executive Officer Jamie Dimon is counting on customers like Rabinowitz, some of whom helped bring Bear Stearns to its knees in March, to make his $1.36 billion takeover worthwhile.
After a run on Bear Stearns prompted a bailout by the Federal Reserve and the sale to New York-based JPMorgan, Dimon said one of Bear Stearns’s biggest attractions was its prime brokerage, which provides loans and processes trades for hedge funds. Bear Stearns lost as much as 40 percent of its so-called prime brokerage volume in the month after the March 16 acquisition.
New York Post- Taxpayers are all but certain to take a hit on the securities the Federal Reserve accepted as part of JPMorgan Chase’s takeover of Bear Stearns, according to a report by a hedge fund that is an investor in JPMorgan.
The reports comes as the Fed said last week said it valued the bundle of assets it accepted as collateral for the $28.8 billion loan at $28.9 billion as of June 26.
That’s a drop of 3.7 percent from earlier this year.
JPMorgan is on the hook for just the first $1.15 billion of value below the loan amount – with the taxpayers having to make good for any additional deterioration in value of the collateral.
"We expect that the loss will exceed the $1 billion exposure for JPM," the hedge fund said in the report, a copy of which has been seen by The Post on the basis of not identifying the name of the fund.
Independent- The UK’s financial watchdog has targeted hedge funds for the second time this month, demanding more disclosure for those trying to build anonymous stakes in companies using a complex derivative, in a bid to combat market failure.
The move to force disclosure of contracts for difference (CfDs), which comes just weeks after the regulator brought in disclosure rules for short positions in certain circumstances, will leave some hedge funds "fuming", according to one market expert. CfDs and shorting are tactics predominantly used by hedge fund investors.
The Financial Services Authority outlined plans yesterday for investors to disclose their positions if they have built up more than 3 per cent in a company through CfDs. Under the new rules, investors must disclose a position, whether held through shares or CfDs or a combination. Previously there had been no requirement to disclose any CfDs positions other than when the target was in a takeover process.
