Perhaps, you thought, that the day Vikram Pandit was abruptly and unceremoniously fired from Citigroup was the end. That we’d lost him for good. That he’d retreat to the his Upper West Side manse and spend his days beefing up his Odd Couple memorabilia collection, or work on that novel about a love that dare not speak its name between a bank CEO and the analyst who only acted like she hated him, or build that Zen garden he’d always wanted that the fucks at Citi never let him have. That he was finished with Wall Street. Well fret not. Uncle Vik wouldn’t never do that to you. Read more »
David Einhorn is suing Apple to make them give shareholders a separate vote over whether shareholders should have a vote over whether Apple can issue preferred stock. I guess that requires some unpacking. Let’s start at the end, with the preferred stock. Here is Einhorn’s plan:
For example, Apple could initially distribute to existing shareholders $50 billion of perpetual preferred stock, with a 4% annual cash dividend paid quarterly at preferential tax rates. … Assuming Apple retains its price to earnings multiple of 10x and the preferred stock yields 4%, our calculations show that every $50 billion of perpetual preferred stock that Apple distributes would unlock about $30 billion, or $32 per share in value. Greenlight believes that Apple has the capacity to ultimately distribute several hundred billion dollars of preferred, which would unlock hundreds of dollars of value per share. Further, Greenlight believes additional value may be realized when Apple’s price to earnings multiple expands, as the market appreciates a more shareholder friendly capital allocation policy.
What do you think? I vote yes. (I mean, I think it’s a good idea. The voting is more complicated.) My math is here and ties closely to Einhorn’s:
The math is super straightforward though it can and should boggle you conceptually if you think about it. Read more »
Did you know the name of the guy who discovered the logarithm? Someone at Citigroup did, and he or she decided to rename its soon-to-be-given-away hedge fund unit after him. Read more »
Bridgewater Ensures Packs Of Wildebeest-Hunting, Risk-Parity-Achieving, Truth-Spreading Hyenas Will Roam Connecticut For Years To ComeBy Bess Levin
Bridgewater Associates told its investors that it will launch a new hedge fund this year, and had sold another minority equity stake in the firm to an unidentified buyer to help ensure its long-term viability. Bridgewater described its new fund, All Weather Major Markets, as a variation of its All Weather strategy that seeks to perform in any economic environment. In a Jan. 24 year-end report to investors, the hedge-fund firm said All Weather Major Markets would help ensure that its $65 billion All Weather fund doesn’t grow too large, potentially hurting its returns. All Weather returned 15.3% in 2012, gross of fees, Bridgewater wrote. In the same 304-page report, Bridgewater said it had completed a deal at the end of last year to sell a nonvoting stake in the firm to an outside investor, marking the fourth time the firm made such a transaction. The firm didn’t identify the investor or the size of the stake. “The proceeds of these transactions have allowed us to create a sustainable capital base that is independent of Ray, while remaining entirely employee-controlled,” the Jan. 24 report said, referring to Bridgewater founder Ray Dalio. [WSJ]
George Soros Hearkens Back To A Time When Men Were Men, Women Were Women, And Hedge Funds Were A Good IdeaBy Bess Levin
Speaking to Bloomberg Television at the World Economic Forum in Davos, Switzerland, George Soros cast doubt on hedge funds’ future ability to do better than the broader markets. “Since hedge funds are now a dominant force in the market, they can’t, as a group, outperform the market,” Soros said. The 82-year old added that managers’ and investors’ risk aversion will only make things worse. “Outperforming the market with low volatility on a consistent basis is an impossibility,” Soros said. “I outperformed the market for 30-odd years, but not with low volatility.” [FINalternatives, Bloomberg]
It’s true, according to a county official, two hedge fund service providers based there and the New York Post.
An increasing number of financial firms, especially private equity and hedge funds, are fed up with New York’s sky-high city and state tax rates and are relocating to the business-friendly climate in Florida’s Palm Beach County.
And they’re being welcomed with open arms — officials in Palm Beach recently opened an entire office dedicated to luring finance hot shots down south.
But wait, you say: Didn’t another Rupert Murdoch newspaper recently tell me that all of the hot young hedge funds want to be in New York because lazy institutional investors aren’t interested in driving to Connecticut (or, presumably, flying to Florida) to meet with them? And wasn’t that story backed up with statistics and interviews with several actual hedge fund managers? Read more »