Hedge Fund News: Jeffrey Ubben, George Soros & Marc Faber
Jeffrey Ubben’s Hedge Fund Is The Big Microsoft Winner (Forbes)
Nearly one year ago, Jeffrey Ubben showed up at a New York investment conference with news: His San Francisco-based ValueAct Capital Management hedge fund had taken a $2 billion position in Microsoft Corporation (NASDAQ:MSFT) -0.23%. The investment was an exceptionally contrarian bet. Microsoft’s stock had essentially gone nowhere for years. The big software company and its longtime CEO, Steve Ballmer, appeared to be plodding their way from one failed strategy to the next. The investment also seemed audacious because ValueAct is an activist investor that likes to agitate for change at companies, a strategy that had rarely worked at tech companies, particularly a huge one like Microsoft. ValueAct’s $2 billion position barely added up to a 1% stake in Microsoft.
Ackman’s Pershing Square Hedge Fund Fell 0.6% in March (WSJ)
Hedge-fund manager Bill Ackman’s flagship Pershing Square L.P. fell 0.6% last month, according to an investor update sent Wednesday. Constraining performance were declines in the shares of government-controlled mortgage companies Fannie MaeFNMA -0.38% and Freddie MacFMCC -0.25%, while negative developments at nutritional-supplement maker Herbalife Ltd. (NYSE:HLF) +0.33% helped his high-profile bet that Herbalife shares will decline. Across its various investment strategies, Pershing Square Capital Management, L.P. now manages $13.1 billion, the letter said.
Bank Vets Ready European Event-Driven Hedge Fund (Finalternatives)
A quartet of former bankers is set to launch an event-driven hedge fund to take advantage of Europe’s economic recovery. Andrea Angelone, Amit Jain, Guido Miani and Simone Russo have founded Amagis Capital in London. The strategy, which will debut on May 1, seeks to benefit from increasing corporate activity in Europe and opportunities created by banks’ exit from proprietary trading. “There is an opportunity right now in the European market to deliver superior returns because of recovering activity,” Angelone, a JPMorgan Chase & Co (NYSE:JPM) veteran and CEO of the new firm, told Bloomberg News. “After many years on the sell-side, we have the experience and knowledge to be able to deploy a slightly different approach in the event-driven space.”
Duke University wins Atlanta Hedge Fund Challenge (BizJournals)
In a near tie, students from Duke University edged over a team from The Georgia Institute of Technology to win the 2014 Atlanta Hedge Fund Challenge. The winning team, three students from Duke, Timothy Evans, Dylan Gamret and Wesley Koorbusch, presented as Stonehenge Capital Partners on the idea of buying out student loans in exchange for a percentage of their future earnings. …Adrian Cronje, chief investment officer of Balentine and a judge for the competition said he chose Stonehenge because “they articulated a very creative and inherently repeatable investment idea that tackles a massive inefficiency in our credit markets today.”
Lewis Likens Einhorn to ‘Dumb Tourist’ in Fixed Card Game (Bloomberg)
In today’s “rigged” U.S. stock market, large investors such as Greenlight Capital Re, Ltd. (NASDAQ:GLRE)’s David Einhorn are like “dumb tourists” led to a casino where the card games are fixed, according to Michael Lewis, whose book “Flash Boys” has touched off a national debate about high-frequency trading. “It’s very clear people are being front-run,” Lewis, whose book paints a portrait of markets rigged by insiders with advanced computers, said in a Bloomberg Television interview today with Erik Schatzker and Stephanie Ruhle. Einhorn, whose Greenlight Capital hedge fund manages billions of dollars, didn’t initially understand what was going on, Lewis said. Einhorn’s reaction when he learned: “Oh my God. This I did not know,” Lewis said. Einhorn declined to comment on Lewis’s analogy.
How to end high frequency trading: Make fast traders pay for each bid or order, says Leigh Drogen (Yahoo)
Is the stock market rigged in favor of those who exploit computerized, fast trading? Is it leaving the average investor behind? Michael Lewis, author of the new book, Flash Boys: A Wall Street Revolt, thinks so. And the CFTC and New York Attorney General are investigating high-frequency trading, which now accounts for about half U.S. stock trades on any given day. Former hedge fund manager Leigh Drogen, CEO of Estimize, a financial research firm, tells The Daily Ticker that while it isn’t fair to call the market rigged, he’s no fan of high frequency trading. “They’re extracting a tax every single time you have to trade. That’s not rigged. That’s just unfair.”