According to a new report from Intralinks and Cass Business School, M&A activity is a critical component in how successful companies innovate and enhance shareholder value. Actavis' latest coup, rescuing Allergan from the clutches of Valeant and Pershing Square, may make the report's authors' point more vividly than their dry numbers can.
Carter's decision allows Pershing Square to vote its equity in Allergan in ways favorable to Valeant's planned purchase thereof. More is going on here than just another incident in the consolidation of the biopharm world.
In what will be its last regular monthly report on such matters, GFIA tells us that a sharp correction hit markets in Asia ex Japan in September, and tells us of some of the funds that defied the outgoing tide.
GFIA shares some ruminations about the relationship between the abundant academic work on alternative investment and the insights of practitioners. Meanwhile, the Bank of Japan seems to be engaged in some ruminations of its own, and practitioners have to await the results.
Guest columnist Peter Urbani looks at emerging managers and why they may be re-emerging and bringing alpha with them.
Christopher Faille, inspired by Greg Richey, of California State University, San Bernardino, has a few words about socially irresponsible investing, that is, the creation of a portfolio built around destructive human vices.
Christopher Faille speaks to Matt Porzio, the VP of Strategy and Product Marketing at Intralinks, about the data behind Intralinks' DFI.
Judge Drain didn't actually accept the Momentive plan, but it now seems likely he will accept some very similar plan in due course. What is key is that the objections that he found had unconvincing represented until then the conventional wisdom among much of the bar devoted to the service of event-driven litigators.
Guest columnist Diane Harrison looks at what advisors think of hedge funds.
Guest columnist Andy Tully looks at the future of renewable energy investment and finds a future so bright, you might need to wear shades.
Guest columnist Andrew Smith, CAIA, looks at the complications involved in accessing private equity funds.
For an investor allocating slots in its portfolio to hedge funds, the draw of recent outsized performance can be powerful. Thus, the temptation to chase winners. But two members of the Hedge Fund Strategies Group at Commonfund caution against it.
Rickards' new book expands on some of the themes of his 2011 publication, Currency Wars. The new book is, specifically, about the end of a particular phase in the history of money, the reserve significance of the U.S. dollar.
The 2013 performance of the private equity industry, given any of several metrics, was quite strong. Why? In part because the exit environment has been very good.
Intuitively, the problem with valuing the debt issued by an private SPE in an illiquid infrastructure project is this: the free cash flows of the SPE aren't easily observed. So how does one go about deriving their present value?
For many fund managers working in Southeast Asia, and/or China, June 2014 was “listless,” with numbers that suggest a flat tire. The booms on the ASEAN bourses are concentrated where the fund managers aren’t, in “high beta cyclical sectors.”
The great thing about short sellers has always been that -- if they're good -- it's because they have a keen nose that can smell a boiler room. If they are open about what they're doing, they can also serve as a valuable red light for others in connection with overblown enthusiasms. Don't be the bag holder.
Guest columnist Doug Friedenberg reviews "Windfall," and looks at the potential for investing in a changing climate.
Private foundations have "regained solid financial footing" in terms of their investment returns over the last two years especially, after the shaky years that preceded. Their mission-related spending has accordingly increased.
The latest report from Eurekahedge mentions that though instability is "brewing again in the Middle East," things have settled down a bit in Eastern Europe. This report was written prior to the shoot down of a Malaysian jet over the Ukraine.
If such institutions as the ECB keep rewarding indebtedness, then over time they get their way. They'll get a lot of deal making, even if it amounts to a frenzy. Then investors will demand funds that play to that frenzy.
Jeff Malec, CAIA, looks at the role of alternative investments in the current market environment and why they are crucial to successful investing.,
Guest columnist Bob Swarup, CAIA, looks at good governance and best practices and what the alternative investment industry needs to do to "grow up."
GFIA says that most of the Asia Pacific managers it tracks generated substantial returns above the relevant index in May 2014. The long-biased firms did best there, their event-driven peers … not so much.
Guest columnist Andrew Beer looks at the consistency of hedge fund returns and finds them, well, lacking...
Starting with 350 available metrics of corporate governance and/or forensic accounting, GMI Ratings has boiled their model down to just 64, and from those they get three scores.
Justice Scalia's opinion has the support of Justices who aren’t, to say the least, reliable allies of Scalia’s in the kind of ideologically driven splits that draw so much MSM attention, Obama appointee Elena Kagan as well as Clinton appointee Stephen Breyer are on board. On Monday, June 16th, the U.S. Supreme Court delivered a stunningly complete victory for NML Capital, the holdout bondholder in the much-watched litigation arising out of Argentina’s 2001 bond defaults. On the one hand, SCOTUS refused to hear Argentina’s appeal from the Second Circuit’s decision on what the issuing documents meant by the pari passu language. A decision not to decide has no precedential significance itself, but this of course leaves the Second Circuit’s decision, issued in October 2012, intact. Both as a matter of the law as it applies to this case, and as a matter of precedential significance for many similarly worded documents, the Second Circuit is the circuit that counts. What is Left Standing? The Second Circuit left standing, and now the Supreme Court has also left standing, a district court injunction against any payments that in any way rank holders of the restructured debt over the hold-outs. What the Second Circuit said was that in the pari passu clause in the issuing documentation of these Fiscal Agency Agreement bonds (FAA), the sovereign “manifested an intention to protect bondholders from more than just formal subordination.” The language was there to protect them precisely from what Argentina has more recently tried to do, that is, to protect them from any arrangement by which “Argentina as payor [discriminates] against the FAA bonds in favor of other unsubordinated foreign bonds.” On the same day (a few minutes later) SCOTUS also delivered a full-dress opinion on a related issue. The New York district court has interpreted the Foreign Sovereign Immunities Act of 1976 narrowly, so as to allow for discovery orders that assist NML in its search for Argentina assets in third countries where they may not be immune. Since Argentina owes NML more than $1.5 billion, it has plenty of incentive to continue this search. The Supreme Court upheld that statutory construction. The opinion wasn’t closely split. There was one dissent (Justice Ginsburg) and one recusal (Sotomayor). Still, the opinion for the other seven Justices, written by Justice Scalia, had the support of Justices who aren’t, to say the least, reliable allies of Scalia’s in the kind of ideologically driven splits that draw so much MSM attention. The 7-justice majority included Obama appointee Elena Kagan as well as Clinton appointee Stephen Breyer. What Happens Next? Argentina’s immediate reaction was that it will fight on, apparently by continuing to pay the favored creditors [Exchange Bondholders] and by continuing to exclude from these payments the FAA hold-outs. “What I cannot do as President is submit the country to such extortion,” says President Cristina Fernandez. The legal fight is over, though. And I should add that part of what SCOTUS has let stand here is a district court order the copies of its pro-holdout injunction be provided to “all parties involved, directly or indirectly, in advising upon, preparing, processing, or facilitating any payment on the Exchange bond.” Argentina’s New York agents cannot now give out money to the Exchange bondholders without aiding and abetting the defiance of a court order. Argentina must now either pay $907 million to the plaintiffs by the end of this month, or lose the ability to use U.S. financial intermediaries of any kind to pay the holders it has favored. The only possible means by which Argentina can resist the “blackmail” now and continue to pursue the policy it has in recent years is if it can pay the favored creditors without the involvement of any financial intermediary subject to U.S. court orders. This would prove tricky, especially with a tight schedule. The Rest of the World And of course even success there leaves Argentine open to the second of SCOTUS’ two punches, discovery and perhaps successful seizure of assets in third countries. Leaving Argentine matters to the side: what will be the consequence of NML’s victory in this matter, and the now-regnant Second Circuit reading of the pari passu clause, on the market for EM nation bonds? If, as at least some authoritative sources have indicated through this long fight, the pari passu language used in Argentina in the FAA followed “standard language included in substantially the same form in numerous credit documents” and if this decision changes how that language has been understood, then the markets will have to develop work-arounds: because from time to time sovereigns will default, and some sort of restructuring will have to occur. How those work-arounds will work is beyond me. But then, given my poor record trying to predict the twists and turns of this saga that is perhaps for the best.
"Isn't there anything good to be said for the practice of historical cost accounting, especially when the cost figures are higher than the mark-to-market figures? Well ... no. It's reality avoidance."
Given recent political news, it is perhaps unsurprising that, in the words of Eurekahedge, hedge fund managers "investing with an India focus and employing systematic trading strategies [posted] strong gains" in May 2014.
An aphorism of Warren Buffett's once again making the rounds can be understood in at least three distinct ways. Faille looks at the possible constructions and decides that, whatever exactly Buffett meant to say or do, his reasoning here does little harm to his target, modern finance theory.
Many of recent history¹s most significant market events have manifest in what was (previously) the extreme of the market. These"bubbles" and "crashes" follow power laws, meaning that (in theory) they could reach any size and fundamentally threaten the functionality of the entire financial system. Could random trading be the solution?
Some Japan-focused long/short equity funds did produce positive returns in April, swimming against the stream in a month when Topix, Nikkei, and TSE Mothers all fell.
Pershing Square owns 9.7% of Allergan's equity. Further, Valeant's proposal is structured so that Pershing Square is more of a co-bidder than a seller.
Investors continue to "crave for exposure" to Asia, and even to Japan. India is especially exciting to some, perhaps because of hopes for the near-term political success of the BJP.
The latest news from Eurekahedge shows a spotty performance for the global hedge fund industry in April, and generally in the year to date. The report also makes a casual remark about low inflation numbers that gives our Christopher Faille an opportunity to grouse about its Keynesian premises.
The Deputy Solicitor General for the U.S. took Argentina's side in a discovery dispute arising from the debt collection efforts of NML Capital, arguing for international reciprocity: that is, from the notion that sovereign nations must help each other keep some things secret.
Einhorn explained to his investors his view that the markets are engaged in a new tech bubble, an echo of the infamous dotcom bubble of the 1990s. Accordingly, he says, Greenlight has created a basket of bubble stocks worth shorting.
Some respondents told Intralinks that Germany is a less attractive M&A target for international investors than it might be, due to the impact of rising energy costs there, especially on manufacturing.
By Jeff Malec, CAIA CEO, Founding Partner Attain Capital Management, LLC The Twittersphere couldn’t get enough of the news last week that hedge fund legend Paul Tudor Jones was shutting down one of his eponymous funds, the Tudor Tensor Fund (try saying Tudor Tensor 10 times fast). And critics of hedge funds will jump to the […]
Vikas Shah interviews Dr. Bob Swarup, CAIA, founder of Camdor Global and author of Money Mania: Booms, Panics and Busts from Ancient Rome to the Great Meltdown.
The lesson for investors in the new Wachtell Lipton document may simply be that a corporation that is careless about compensation at the highest level, that cannot carefully document the reasons for payouts, is asking for trouble and that one must consider whether the market has fully discounted the trouble.
Spring and the opening of the baseball season bring fresh hope, so we thought it only appropriate to look at the U.S. stock market and its relationship to baseball with guest columnist Thomas Schneeweis.
I admire a new "direct alpha" approach to measuring the success of PE portfolios. So will anyone who has had to tell a friend or loved one, "just come out and ask me please!"
The way to keep growing is to keep changing. For the European ETF market, that means product innovation, from infrastructure funds to smart beta.
Global macro was the strategy of choice for many of the big managers early in their careers. Big-name brands including Soros, Tudor and Moore saw the value of the strategy in the 1990s. This oft-misunderstood strategy is returning to the forefront. Diane Harrison looks at why.
The separation of alpha and beta is becoming a matter of routine, and the result will (PwC suggests) eliminate the division between "alternatives" investing on the one hand and "traditional" investing on the other.
Deloitte's pie graphs emphasize the degree to which both hedge funds and PE vehicles have become dependent upon institutions in general, and detached from the retail market. But Deloitte says that 2014 "will likely see additional efforts by alternative fund managers to engage the retail investor base by taking their alternative investment strategies mainstream."
Managed futures are performing quite poorly. They also have a higher standard deviation than the HF industry aggregate, so it seems that if you're invested there your losses are at least buying you greater risk. [Wait. That can't be right.]
A new white paper from Debtwire and Bingham McCutchen finds some reason to be bullish about the distressed debt market in 2014. The long-awaited tapering of the Federal Reserve's easy-money policy may set off a wave of defaults, creating opportunities for the wary.
Corporations have cash in the till; and it is sitting up, begging to be put to work. Thus, M&A deals are on the way.