Hedge Funds

What makeover show in hell?

What makeover show in hell?

Remember Aubrey Lee Price? Georgian banker who screwed investors out of millions, faked his own death, was on the lam for about 18 months, during which time he set up a grow house in Florida and transformed his look from southern banker to the love child of James Lipton and Dave Navarro? Got caught when some local cops pulled him over for having illegally tinted windows? Today he was sentenced to 30 years in prison and will also be ordered to pay approximately $46 million in restitution. How will he come up with the cash? Oh, he’s got a plan. Read more »

Dan LoebDow Chemical’s management team are “going to be great listeners” to ideas from shareholders on improving the company’s performance, its chief executive Andrew Liveris has promised. Speaking as the company reported better than expected earnings for the third quarter, Mr Liveris said on Wednesday that he had been continuing to speak with Dan Loeb of Third Point Capital and other shareholders about how to raise Dow’s share price…Third Point, an activist hedge fund, in January revealed it had taken a stake in Dow and called for the group to be broken up, saying it “woefully underperformed” over the past decade…On Wednesday Mr Liveris denied that he had an “adversarial” relationship with Mr Loeb or other investors, and promised to listen to their analysis, but said he sometimes had to point out to them where they were wrong. [FT]

  • 16 Oct 2014 at 2:36 PM

Steve Cohen Makes Money For Steve Cohen

Point72 Asset Management, AKA the hedge fund formerly known as SAC Capital, whose largest client by far is a guy who answers to the name Steve Cohen, has turned in some pretty decent performance so far this year, despite a series of events that have led it to do stuff like, among other things, monetarily compensate employees for staying on the right side of the law. Read more »

Over at the New Yorker today, you will find a long piece exploring the coming undone of the hedge fund formerly known as SAC Capital, now Point72 Asset Management, at the hands of a trader formerly known as Ajai Thomas, now Mathew Martoma. Although nearly a dozen ex-SAC employees have been charged with and convicted of securities fraud over the last several years, it was really the work of work of Martoma, accused in November 2012 of orchestrating “the largest insider trading scheme ever” and found guilty last spring, that was the straw that broke the embalmed shark’s back. Particular details to note:

* While SAC has a history as an extremely cutthroat place to work, where the “down and out” clause means traders are cut loose swiftly and without hesitation, and insults from on high are in no short supply, it was no match for the household of Martoma’s youth, headed by a guy who could teach Steve Cohen a thing or two.

When Martoma’s father first came to America, he was admitted to M.I.T., but he could not afford to attend. He retained a fascination with Cambridge, however, and prayed daily that his oldest son would go to Harvard. Martoma graduated from high school as co-valedictorian, but he ended up going to Duke. Shortly after Mathew’s eighteenth birthday, Bobby presented him with a plaque inscribed with the words “Son Who Shattered His Father’s Dream.”

* Steve Cohen has continued his long and storied tradition of displaying once-living things in boxes at the 72 Cummings Point Road headquarters.

S.A.C. was a notoriously intense place to work. Its headquarters, on a spit of land in Stamford, Connecticut, overlooking the Long Island Sound, are decorated with art from Cohen’s personal collection, including “Self,” a refrigerated glass cube, by Marc Quinn, containing a disembodied head sculpted from the artist’s frozen blood.

* That anecdote that circulating a while back about how Martoma had fainted on his front lawn when approached by the Feds? It wasn’t the mere sight of them, or some sort of line about how they knew he’d been trading on material non-public information that caused him to collapse, but rather this: Read more »

Hedge fund mogul Bill Ackman has raised a record $2.7 billion for his hedge fund IPO that will start trading on the Amsterdam stock exchange later this month. Ackman set out to raise $2 billion, but the deal’s underwriters told their clients Tuesday night that the IPO was oversubscribed and to expect the size of their orders to be scaled back. The offering is expected to hit $3.07 billion, once the “green shoe” overallotment of 10 percent is exercised. Pershing Square Holdings — the offshore fund that is going public on Oct. 13 — will start with $6.2 billion, the largest such IPO ever…The IPO will give him more firepower to take on activist campaigns because Pershing Square’s permanent capital will be equal to almost half its total. [NYP]

  • 29 Sep 2014 at 4:38 PM

David Einhorn Just Came Into Some Bagel Money

The Einstein Noah Restaurant Group, whose bagel shops include Einstein Brothers Bagels, Noah’s New York Bagels and Manhattan Bagel, said on Monday that it would sell itself to JAB Holding Company, a German conglomerate formerly called Joh. A. Benckiser, for about $374 million. The price of $20.25 a share in cash represents a 47 percent premium over Einstein Noah’s 30-day average trading price, the company said…David Einhorn, whose hedge fund is Einstein Noah’s largest shareholder, with a stake above 35 percent, said he supported the sale to JAB. He called the deal a “win-win for all parties.” “For more than a decade, we have worked closely with the Einstein Noah Restaurant Group to execute a turnaround plan, reducing debt and expanding its store footprint,” Mr. Einhorn said in a statement. “J.A.B. is an experienced firm that will lead Einstein Noah Restaurant Group into its next phase of growth.” [Dealbook]

Things Still Awkward Between CalPERS, Hedge Funds

Hedge funds might be feeling pretty down in the dumps about CalPERS’ decision to break it off with them. OK, so probably not, but the point is that CalPERS is afraid it might have hurt their feelings, and it’s been beating itself up about it. You see, hedge funds, it’s not you, it’s CalPERS. Sure, it’s an old cliché but it’s true! You’re great. It’s just that CalPERS has had some new experiences and just needs to make a change. You know how it goes. Read more »