Archive for July 2007

Caxton Going Down?

brucekovnercaxtonassociates.gifWe’re hearing rumors that Caxton Associates is blowing up. Caxton is one of the largest hedge funds in the world with around $16 billion under multi-strategy management so this would be huge and, as they say, unlikely. Some are saying it’s because of the move SEPR has made of over the past few weeks (Caxton’s largest equity position had been SEPR), others that it’s the very fashionable credit situation. Right now, all just hearsay. Maybe funds this large don’t blow up. Maybe Caxton was already a red giant, and will contract into a white dwarf under a sea of redemption requests after some significant losses. Only then will it be ready for a supernova. Heard anything? You know where to find us.
Update: Caxton denies any such rumors. According a friend o’ DealBreaker, there was a “larger than normal liquidation in order to reduce risk,” the main fund is down 3-4% mtd and Caxton “made money today.” Make of that what you will.

Write-Offs: 07.31.07

$$$ Of Taxes and ‘Deals That Don’t Get Done’ [DealBook]
$$$ The Complicated, Modern Renaissance Man [Banker’s Ball]
$$$ How to Say All Their Money is Gone [LoSC]

Click Here
  • 31 Jul 2007 at 4:26 PM
  • Banks

Jeremy Grantham: RUN FOR YOUR LIVES

Are you presently working for a hedge fund or major bank? May Jeremey Grantham, chairman of Grantham, Mayo, Van Otterloo & Co. (via us) suggest that you get the hell out of there, because most of you are going to die anyway? That’s right, Dealbreakettes, according to Grantham, credit-market declines are going to force “as many as half”– half, 50%, 1 of every 2– of all hedge funds to close in the next five years. Last year 717 hedge funds closed, leaving 9,800 in business. Ergo, FOUR THOUSAND NINE HUNDRED of you are soon to be history (we did the math). Oh, and at least one global bank (gut instinct: Goldman Sachs) and “one or two” of the largest private equity firms, because those assholes have it coming. Grantham can make such apocalyptic forecasts for 2012 because he is 68, and may very well be dead by then. Grantham, Mayo, Van Otterloo & Co will survive, presumably.

  • 31 Jul 2007 at 4:01 PM
  • France

Malchance Pour Oddo & Cie

sarkozy thumbs up.jpgThe troublesome US asset-backed insecurities market is mauvaises nouvelles for the French too, apparently. Oddo & Cie, a Paris-based money manager is closing three hedge funds worth 1bn Euros ($1.37bn) after losses on collateralized debt obligations, Bloomberg reports. The funds, which held 15% of investments in US CDOs, will be close in “the shortest possible time frame.”
“Like many actors, we have tried to revitalize the performance of our funds by investing in CDOs. Like others, we noticed recent problems with short-term liquidity and were caught out by the subprime dilemma,” said Arnaud Ploix, a spokesman for Oddo.

Oddo to Shut Three Funds `Caught Out’ by Credit Rout
[Bloomberg]

chelsea.jpg Did anyone catch today’s New York Times lovefest fluff-piece about Chelsea Clinton? There’s nothing she can’t do, from working in finance to reading “Goodnight Moon” at a college level to dating Jews. And as any truly well-fluffed piece will tell you, merit carries the day throughout Ms. Clinton’s orgy of success.
For instance, how did Chelsea deal with 9/11? In a bold, career-defining moment, Chelsea shuns the materialistic ambitions of her post-collegiate peers and decides to devote herself to good works. From the Times:

Ms. Clinton shared her answer in an earnest essay a few months later in Talk magazine: “For most young Americans I know, ‘serving’ in the broadest sense now seems like the only thing to do,” she wrote. “Is banking what’s important right now?” Her words are reminiscent of the young Hillary Clinton, who, as the campaign frequently reminds voters, chose children’s advocacy over corporate work after law school.

Chelsea’s true desire to “serve” and shun banking led her straight into a career in finance when she got back from Oxford. Nothing fulfills that desire to serve more than firing a few people from a struggling company in a management consultant role. More from the Times:

after Oxford, Chelsea Clinton signed up with McKinsey, a consulting company known as an elite business training corps. She was the youngest in her class, hired at the same rank as those with M.B.A. degrees. Her interview was more like a conversation, said D. Ronald Daniel, a senior partner. “That’s why she was a good consultant, because we are professional question-askers and professional listeners,” Mr. Daniel said.

Let me get this straight fluff-piece, Chelsea Clinton’s rare and unique business acumen resulted in her catapulting the entire McKinsey class?
Word on the Street (and from a couple tipsters) is that Chelsea was job shopping and resume padding like any other post-grad. McKinsey wanted a Clinton so badly that they were willing to give her a post-M.B.A. job. Other consulting firms laughed at the idea, even though word has it that Chelsea tried to play some hardball.
Chelsea was interviewing with BCG and a couple other places only prepared to throw her in with people of the same skill level who didn’t live in the White House. Apparently consultants at other firms didn’t have the right “conversations” with her, namely the ones deferred to her parents. The nerve.
Like her father, Chelsea is as drawn to integrity and character in her personal life as her professional life. This is why her boyfriend, Marc Mezvinsky is that rare combination of a Jew working at Goldman Sachs and the son of criminals. Mezvinsky’s father pleaded guilty in 2002 to swindling a bunch of investors out of $10 million, using his son’s bank account to transfer money undetected and often bragging about his Clinton connection. Papa M gets out of jail in November 2008.
Primed for a Second Stint as First Daughter [New York Times]

  • 31 Jul 2007 at 2:04 PM
  • Dow

NewsCorp-Dow Jones Deal Imminent

Rupert Murdoch New York Times Wall Street Journal.jpgIt’s finally pretty much almost over. Rupert Murdoch has secured enough Bancroft family shareholder votes to move forward with his $60-a-share, $5bn bid, one future News Corp holding reports.
One day after a Murdoch spokesperson said the deal was “highly unlikely,” the Denver branch of the Bancroft family, previously holding out for a higher offer, capitulated, giving News Corp at least 32% of the family vote. Nonetheless, one Bancroft family spokesperson said today, “Any suggestion that the process has been completed and/or that a particular level of support has been established is at this point premature.”
Both companies have board meetings this evening to formulate the take-over procedure. Dow Jones is trading up 7.04% to $57.50 today.
News Corp. Appears to Have Enough Votes to Clinch Deal [Wall Street Journal]
Murdoch Seen to Win Control of Dow Jones [NY Times]

Blind Item: We Have To Be Able To Laugh About This Stuff

mr burns.jpgWhich New York short-seller, Simpsons fan and Yale graduate had this to say about the recent adversity faced by Sowood Capital?
“Let Harvard have its academic and athletic excellence…Yale will always be known for the finest in gentlemanly club life…”
Earlier: Sowood Is So Sowwy

Sowood Makes Citadel Look Good

  • 31 Jul 2007 at 12:13 PM
  • ABN Amro

ABN Amro Playing Horrible Game of Hard-To-Get With Barclays

barclayseagle.gifABN Amro’s board decided over the weekend to withdraw its formal recommendation for a bid by Barclays, but it was only half-serious, and they were winking at the time (though that may have just been an involuntary spasm resulting from getting grapefruit in their eyes, which stings quite badly). ABN’s chief executive Rijkman Groenink said today that he supports the offer by the British bank and may formally recommend it to shareholders later, just not now, even though he sort of just did.
Groenick commented that “We continue to support the Barclays offer because we believe overall it is to the benefit of shareholders and stakeholders,” and the ABN-A board “still believes in the strategic rationale of the Barclays bid,” but they’re still “neutral.” So “neutral,” in fact, that they “acknowledged”—yes “acknowledged” numbers—that the 38.40 euros/ABN Amro share being offered by rival bidder Royal Bank of Scotland-Fortis Group of Belgium-Banco Santander Central Hispano is “higher” than Barclay’s proposed 35.73 euros/share. Because they’re “neutral.”
ABN’s Chief Expresses Support for Barclays’s Bid [WSJ]
Board to Remain Neutral in Bids for Dutch Bank [NYT]