Blackstone has agreed to buy the Cosmopolitan of Las Vegas, Deutsche Bank’s $4 billion dollar mistake. The private equity firm will pay $1.73 billion to acquire an establishment that Deutsche top executives have refused to be associated with; people go to not gamble; and in five years has never turned a profit. For those who think the deal represents a loss for DB, remember that they were just about ready to give the place away for free. Read more »
sighs of relief
You Can Take Away Steven A. Cohen’s Ability To Manage Outside Money But You’ll Never Take Away His Giant Balloon Inflation PartyBy Bess Levin
Earlier today, SAC Capital pleaded guilty to insider trading, agreeing to pay $1.8 billion, the largest fine ever, for such a crime. While the settlement presumably gave some level of comfort to Cohen, who it is unlikely will face jail time, uncertainty about the future still plagues the hedge fund and its founder.
In addition to legal issues that may still rear their heads, the changes that SAC will undergo as a result of the deal with the government has likely given rise to new anxieties for staff, clients, and the community. Employees are wondering just how safe their jobs are, now that the fund will go from managing $15 billion to a mere $9 billion. #1 Fan Ed Butowsky is scrambling to find a sister or a cousin of Cohen’s who he can marry as a means of becoming an investor in the family fund.
But for the greater SAC Family, the worries are much more urgent.
As those of you with a cursory knowledge of SAC Capital are aware, each year since at least 2009, the firm has sponsored an event called the Giant Balloon Inflation Party. Members of the Stamford community gather downtown the Saturday before Thanksgiving, and the night before the UBS Parade Spectacular, and watch with wonderment and delight as “giant helium balloons come to life.” It’s a spectacle so grand that Cohen himself not only foots the majority of the bill but has been known to attend, too, just awestruck as the children seeing it for the first time.
But with today’s settlement, and the changes afoot at SAC, the question was clearly on everyone’s mind: what would become of the giant balloons that needed inflating? Would SAC cancel its check, deciding it could no longer afford to fund such things? Would a representative from the firm be dispatched to blow them up manually? Would Cohen deem it simply too awkward to lend SAC’s name to the party, given the events of the prior weeks? Would the government include a clause in the settlement forbidding SAC from taking part in “celebratory gatherings of 26 or more people at which cotton candy is provided, without written permission from Preet Bharara”? It all seemed so frighteningly possible.
But those fears were alleviated late Monday afternoon, when it became clear that what could have been the biggest tragedy of the whole settlement – the worst-case scenario of the storm – never materialized. We reached out to inflation party organizers, and according to Stamford Downtown president, Sandy Goldstein: Read more »
Noted bank analyst Dick Bove is joining New York-based brokerage firm Rafferty Capital Markets LLC. Bove said Wednesday he will begin publishing research again in about a month…Bove said he moved to Rafferty because the firm doesn’t have an asset management or investment banking branch. “I really wanted to do pure research and nothing else. Rafferty gives me that opportunity,” he said. [WSJ, earlier, earlier]
Bill Gross’s Pimco Total Return Fund, the world’s biggest mutual fund, attracted $231 million in investor deposits in January as performance rebounded. The new money ended three straight months of redemptions from Pimco Total Return, according to data compiled by Chicago- based Morningstar Inc. Investors pulled about $3 billion from the fund in the three months ended Dec. 31, bringing withdrawals last year to $5 billion, the research firm said. The $250.5 billion Pimco Total Return has advanced 2.4 percent this year, beating 99 percent of similarly managed funds, according to data compiled by Bloomberg. [Bloomberg, related]
Back in February, the Wall Street Journal printed an article about a hedge fund “idea dinner,” more than insinuating that a bunch of representatives from Soros, SAC, Greenlight and Paulson and Co got together to enjoy a meal of food while scheming re: how they were going to take down the Euro. This was uncool for a few reasons, including by not limited to the fact that it’s unlikely the handful of managers assembled would even be capable of taking down the currency and the shoddy reporting that said they ate fish when in fact it was chicken (a tad undercooked, if you must know). Also, as a result of the story, the Justice Department’s antitrust division opened an investigation into possible violations of the Sherman Act. Read more »