Berkshire Hathaway Rebounds From the Pandemic [DealBook]
In announcing Berkshire’s nearly $90 billion profit for 2021 on Saturday, the billionaire stressed in his annual letter to shareholders the outsize role that the company — whose businesses run from the BNSF railroad to Geico insurance to See’s Candies — plays in the United States economy…. Mr. Buffett is set to resume another Berkshire tradition — an in-person annual meeting of the company’s shareholders — in late April, after having staged the event virtually since the onset of the pandemic. The annual meeting, long known as “Woodstock for Capitalists,” has usually drawn tens of thousands of Berkshire shareholders to Omaha for the chance to hear directly from Mr. Buffett for hours. To attend the 2022 meeting, Berkshire is requiring proof of Covid-19 vaccination.
Jane Fraser Makes Her Big Pitch to Citi Investors [WSJ]
After several years of underperformance, shares are down more than 5% since she took over on March 1, 2021, lagging behind the KBW Nasdaq Bank Index, which is up 20%, and the S&P 500, which is up 15%. The stock is trading below its book value, a measure of its net worth, the only big U.S. bank with that distinction…. Wells Fargo analyst Mike Mayo figured the cost of the transformation at $10 billion over three years, dampening his enthusiasm for Ms. Fraser’s plans. He said Citigroup directors should be held accountable.
SEC Asks Companies for Rationales Behind Disclosures of Climate Risks [WSJ]
The SEC last year sent at least 43 letters to U.S. public companies on the matter, compared with none the previous four years, according to data through Thursday from research firm Audit Analytics…. The SEC requested information from the companies about significant risks related to climate change. The risks ranged from physical effects such as severe weather to litigation and regulatory compliance costs….
In some cases, the SEC told companies their answers fell short. “Your response appears to be conclusory and does not adequately address the specific items from our prior comment,” the SEC wrote to Charles Schwab Corp. , referring to the financial-services company’s determination that indirect consequences of climate-related regulation on its business were immaterial.
Investors Plan To Boost Their Hedge Fund Allocations, But Not Because They Expect Strong Returns [Forbes]
Only 13% of foundations and endowments and 20% of corporate pensions cited expectations of strong returns as one of their top reasons for increasing their hedge fund allocations. That revelation says a lot about what investors expect from fund managers from a performance standpoint, which is not much…. Most hedge funds are providing beta because alpha is so hard to come by due to soaring stock valuations. Rabener also states that investors are benefitting from improved analytics and data, which have enabled them to realize that the majority of hedge fund strategies are "mere beta plays."
TD to Buy First Horizon in a $13.4 Billion U.S. Expansion [Bloomberg]
The deal, which continues the bank’s pattern of growing in the U.S. through acquisitions, would be Toronto-Dominion’s largest takeover ever and Chief Executive Officer Bharat Masrani’s boldest move since taking the reins in 2014…. First Horizon has 412 branches and more than 1.1 million individual and business customers across 12 states. It has leading positions in Tennessee and Louisiana; a presence in Florida, the Carolinas and Virginia; and “important footholds” in Atlanta, Dallas and Houston, Toronto-Dominion said.
Zendesk Scraps Takeover of SurveyMonkey Parent Company Momentive [Bloomberg]
“While we were excited by the potential of this transaction to transform the customer experience and create stockholder value, we respect and appreciate the perspectives of our stockholders,” said Mikkel Svane, Zendesk’s chief executive officer. “Our board and management team remain laser-focused on our strategy and execution….”
The deal has come up against stiff opposition from activist investors in both Zendesk and Momentive. Legion Partners Asset Management is prepared to nominate three directors to the board of Momentive because it believes the company’s board breached its fiduciary duties by agreeing to the terms….