What We're Reading ~ Hedge Fund Links 12/20/13

Are commercial mortgages the next big thing for hedge funds? [CNBC]

Hedge funds cut fees to win big investors [FT]

Jim Chanos, bad news bear, urges market prudence [Reuters]

Many hedge funds launching traditional long-only strategies [TheAsset]

Managed accounts take the hassle out of hedge funds [Financial Standard]

Bill Miller to start fund with son under family name [Bloomberg]

Glenview Capital Adds to EVERTEC & Tenet Healthcare Stakes

Larry Robbins' hedge fund Glenview Capital filed a 13G and a Form 4 with the SEC disclosing some of their latest portfolio activity.


Glenview Adds to EVERTEC

Their 13G reveals activity in shares of EVERTEC (EVTC).  Per the filing, Glenview now owns 5.64% of the company with over 4.4 million shares.

This means they've doubled their stake since the end of the third quarter, when they initially built their position.  EVTC IPO'd in Q2 of this year.

Glenview's filing was required due to portfolio activity on December 9th.

Apollo has been the largest institutional shareholder, but one of its affiliates recently announced it would be selling 15.2 million shares in a secondary.  Other hedge funds are involved such as Corvex Management, Marble Arch Investments, and Pine River Capital.

Per Google Finance, EVERTEC is "formerly Carib Latam Holdings, Inc., is a full service transaction processing business in Latin America and the Caribbean. The Company provides a range of merchant acquiring, payment processing and business process management services across 19 countries in the region. It processes over 1.8 billion transactions annually, and manages the electronic payment network for over 4,100 automated teller machines (ATM) and over 104,000 point-of-sale payment terminals. It is the merchant acquirer in the Caribbean and Central America and in Latin America. The Company owns and operates the ATH network, one of ATM and personal identification number debit networks in Latin America. In addition, it provides a suite of services for core bank processing, cash processing and technology outsourcing. It serves a diversified customer base of financial institutions, merchants, corporations and government agencies with technology solutions."


Glenview Buys More Tenet Healthcare

Robbins' fund also filed a Form 4 with the SEC and disclosed purchases in shares of Tenet Healthcare (THC) on December 17th & 18th.  In total, they bought 1 million shares at weighted average prices between $39.30 and $41.20.

After this purchase, they now own 12.9 million shares of THC.  This has been a longstanding (and highly profitable) investment for the hedge fund.

Robbins also recently made a rare media appearance to talk about healthcare and for-profit hospitals.

Marc Lasry Sees Opportunities in Europe: Interview

Yesterday, Avenue Capital's Marc Lasry appeared on CNBC to talk about markets and his latest positioning.

He noted they're still long J.C. Penney bonds and think things will work out as it's essentially a turnaround bet.  We've previously posted Lasry's presentation on JCP bonds.

They see opportunities in Europe due to the deleveraging and are also looking to do direct lending to take advantage.  He said you want to focus on equities in Southern Europe but bonds in Northern Europe.

Embedded below is the video of Marc Lasry's interview:



If you missed it, we also posted up Jamie Dinan's interview as well as Lee Cooperman's interview from the same segment.

Steven Drobny's New House of Money: Interview with Kyle Bass

Steven Drobny, previous author of The Invisible Hands: Hedge Funds Off the Record as well as Inside the House of Money, is coming out with a new book.  His new title, The New House of Money, continues his ongoing series of interviews with top hedge fund managers.

He'll be releasing a new chapter each month and the first chapter features Kyle Bass of Hayman Capital.  We've embedded the chapter below and you can access it at their website:




Be sure to check out Drobny's other great books as well interviewing notable hedge fund managers:

- The Invisible Hands: Hedge Funds Off the Record

- Inside the House of Money

Jamie Dinan Likes Airlines, Hertz & Sprint/T-Mobile: Interview

York Capital's James Dinan appeared on CNBC today and talked about his latest market views.

He said they own most of the major airlines and notes these companies are now being run like businesses and can make money even at $95 oil.

He specifically mentioned American Airlines (AAL) and thinks there's great optionality here as they've merged with US Air and will have a great management team.  While some of these mergers can be rocky at the start, he thinks the value will be realized.  This has been a big hedge fund trade as of late with the likes of David Tepper and Julian Robertson also being involved in many of these names.

Dinan's biggest position is Hertz (HTZ) and he says it's a consolidation play as they'll see cost savings and revenue synergies from the Dollar Thrifty merger as well as fleet rationalization.  A few quarters ago, our Hedge Fund Wisdom newsletter flagged this popular trade and posted a write-up on Avis Budget (CAR), another beneficiary of the consolidation.

York thinks that this environment is great for event-driven investing, especially due to low interest rates.  Dinan also sees earnings going up next year and thinks companies will continue to do buybacks.  He also said he likes Sprint (S) and T-Mobile (TMUS).


Here are the videos of Dinan's appearance:

Video 1


Video 2


Video 3


Video 4

Lee Cooperman Likes SunEdison & Sandridge, Sees Market as Fairly Valued

Lee Cooperman, founder of Omega Advisors, appeared on CNBC today to talk about some of his favorite positions and market thoughts.

He continues to feel the market is fairly valued, around 16x earnings.  He pointed out that bull markets end from excesses.  That said, he also notes that investors are "underinvested" in equities, mainly due to fallout from the beatdown they received in 2008 as they've been reticent to get back in stocks.  He thinks the S&P will trade in a range of 1,600 to 2,000.

Some of his favorite picks include SandRidge Energy (SD), Sprint (S), Monitise (MONI.L), Qualicorp.  A new name for them is Sunedison (SUNE), a solar energy play that's spinning off its money-losing semiconductor business.  Cooperman feels it can see $20.  He also thinks SD has the potential to double and points out that TPG-Axon has been involved in this one pushing for change.

Lee Cooperman Video 1:



Lee Cooperman Video 2:



We've highlighted some other portfolio activity from Cooperman here.

What We're Reading ~ Analytical Links 12/18/13

Six investment errors you are making right now [Bloomberg]

Barclay's 2014 stock picks in each sector [StreetInsider]

Lakewood Capital on Opko Health: the placebo effect [Seeking Alpha]

Samsung: uneasy in the lead [NYTimes]

Underdog against Amazon, Best Buy charges ahead [NYTimes]

BlackRock 2014 outlook [BlackRock]

Want to invest like Buffett?  Here's how [Marketwatch]

A look at the Anadarko / Tronox situation [Distressed Debt Investing]

8 money managers share their top picks for next year [Bloomberg]

Sell Icahn Enterprises [Barrons]

They hate the Fed [Roger Lowenstein]

How to use the media to sell a company [Buzzfeed]

50 unfortunate truths about investing [Business Insider]

Where to find the biggest ideas for your business [Forbes]

The habits of the world's smartest people [Entrepreneur]

Why a for-profit college set up a man with a fake job (on purpose) [Huffington Post]

A video explaining Bitcoin [AVC]

New York Times Business Best Sellers List

As 2013 draws to a close, we wanted to check in on and highlight The New York Times list of business best sellers this year.  While many investors focus on investment books (and rightly so), business books can also help you refine your approach in how you think about businesses.  Numbers 2, 5, 8, and 9 in particular will benefit investors.


New York Times Business Best Sellers List

1. Lean In by Sheryl Sandberg with Nell Scovell.  One of the top sellers for quite some time.  "The chief operating officer of Facebook urges women to pursue their careers without ambivalence."

2. Outliers by Malcolm Gladwell.  This has been read by many in the investment community.  "Why some people succeed - it has to do with luck and opportunities as well as talent."

3.  Extortion by Peter Schweizer. "A Hoover Institution fellow argues that politicians shape legislation in order to extract donations." 

4. The Everything Store by Brad Stone. "The story of Jeff Bezos and Amazon." 

5. Focus by Daniel Goleman. "The author of “Emotional Intelligence” relies on research on attention to argue that high achievement requires three kinds of focus." 

6. Hundred Percenters by Mark Murphy. "Challenging employees to perform at their highest level."

7. Do You Speak Shoe Lover? by Linda Meadow and Kelly Cook. "Stories from customers and employees of the shoe retailer DSW."

8. The Caterpillar Way by Craig T. Bouchard and James V. Koch. "A biography of Caterpillar Inc. as a tale of successful business management."

9. Thinking, Fast and Slow by Daniel Kahneman. Another widely read book in investment circles.  "The winner of the Nobel in economic science discusses how we make choices in business and personal life." 

10. Steve Jobs by Walter Isaacson. After reading this book, hedge fund legend Julian Robertson decided to sell his Apple shares.  "A biography of the entrepreneur, based on 40 interviews with him conducted over two years."


And if you want more investment-specific reading, head to our recommended reading lists.

Corvex Management & Soroban Capital Go Activist on Williams Companies (WMB)

Keith Meister's activist hedge fund Corvex Management and Eric Mandelblatt's Soroban Capital Partners have entered into an agreement and jointly filed a 13D on shares of Williams Companies (WMB). 

Per the filing, they've disclosed a 5.28% stake in WMB with Corvex owning 13.6 million shares and another 5 million shares underlying call options. Soroban has revealed ownership of 17.4 million shares.

This excludes cash-settled swaps and options which represent an additional 24,213,599 shares.  If these were aggregated together, Corvex and Soroban would have an aggregate economic interest of 8.82% of the company with over 60.3 million shares.

It looks like Corvex was buying call options and selling puts in Late October and throughout November while Soroban was buying shares in late October.


Activist Investment Thesis

The hedge funds have met with management and the Board to discuss the company's operations, finances, strategy and governance.  The filing indicates,

"(Williams) has a strong competitive position in an attractive industry with tremendous growth opportunities but recent operational and financial missteps have prevented the Issuer’s Shares from reflecting full value. The Reporting Persons intend to discuss the following with one or more of the persons referenced above (among other topics): enhancing the structure and value of the Issuer’s investments and assets; evaluating and financing of capital projects; optimizing the Issuer’s capital structure and dividend policy; improving the Issuer’s operational and financial execution; and the potential for participating in strategic combinations given the rapid pace of consolidation in the midstream energy industry."

Meister and Mandelblatt are also looking to join the Board.


See other recent activity from Corvex here.

Joho Capital Discloses 58.com (WUBA) Stake

Robert Karr's hedge fund firm Joho Capital has filed a 13G with the SEC and disclosed a new position in 58.com (WUBA).  Per the filing, Joho owns 7.7% of the company with 920,000 shares.

The 13G was just filed but indicates the disclosure was made due to activity way back on October 31st.

Joho isn't the only major hedge fund to own WUBA shares, as we previously detailed that John Burbank's Passport Capital owns 58.com as well.  Chinese internet companies in general have been a big theme for Burbank and he notes that China is determined not to lose to the US there.

Per Google Finance, "Beijing 58 Information and Technology Co., Ltd. owns and operates an on-line classified advertisement services Web Site under the name 58.com. The Web Site helps individuals and SMEs to broadcast and search information relating to job opportunities, housing, dating, community events, services, and trading of second hand products. Beijing 58 Information and Technology Co., Ltd. was founded in 2005 and is based in Beijing, China."

You can view other recent portfolio activity from Joho Capital here.

Barington Capital's Presentation on Darden: Perspectives on Value Creation

Below is Barington Capital Group's presentation on shares of Darden (DRI).  Their slideshow, entitled "Perspectives on Value Creation" highlights the company's underperformance and their thoughts on how DRI can create two focused restaurant companies, unlock their real estate asset value, and reduce operating expenses.

Embedded below is the .pdf of the presentation:

What We're Reading ~ Hedge Fund Links 12/13/13

Hedge fund managers optimistic about markets but concerned about tapering [P&I]

John Burbank's investment alchemy [Institutional Investor]

Pennant Capital returns some money to investors [II Alpha]

LibreMax launching student loan fund [FINalternatives]

Hedge fund managers seek to set themselves apart through branding [P&I]

Odey short Manchester United [Dealbook]

Coatue invests $50 million in Snapchat [FINalternatives]

3 big hedge fund predictions for 2014 [CNBC]

Hedgies trail stocks by the widest margin since 2005 [Bloomberg]

The hedge fund problem - and the solution [Bloomberg]

Corvex Management Exercises Calls on Fidelity National Financial, Applauds Management's Moves

Keith Meister's hedge fund firm Corvex Management filed an amended 13D with the SEC regarding its activist position in Fidelity National Financial (FNF).  Per the filing, Corvex now owns 7.3% of the company with over 18.2 million shares.

They exercised calls on December 10th and acquired 15,451,900 shares in aggregate. 

The filing also indicates that Corvex continues to engage with management:

"The Reporting Persons applaud the Issuer’s decision to explore strategic alternatives with regards to its non-core assets in order to unlock value not reflected in the current share price.  In addition, the Reporting Persons are pleased with the Issuer’s decision to focus capital allocation going forward towards the new core business and away from non-core businesses.  The Reporting Persons look forward to a continued, constructive dialogue with the Board and Management of the Issuer."

You can view the details of Corvex's initial position here.

Trian Discloses Allegion Stake, Spin Off From Ingersoll-Rand

Nelson Peltz's activist investment firm Trian Fund has disclosed a new stake in Allegion (ALLE) via a 13G filed with the SEC.  Per the filing, Trian now owns 5.9% of the company with over 5.7 million shares.

Allegion is a spinoff of securities businesses from Ingersoll-Rand (IR) and shares started trading at the beginning of December.  Shareholders of IR stock received 1 ALLE share per every 3 IR shares owned.

As of November, Trian owned also over 18.7 million shares of IR.

For more on this investor, head to Nelson Peltz's presentation at Invest For Kids Chicago.

Pennant Capital Discloses BFC Financial Position

Alan Fournier's hedge fund firm Pennant Capital has filed a 13G with the SEC regarding shares of BFC Financial Corp (BFCF).  Per the filing, Pennant now owns 3.94% of the company with 2,985,600 shares. 

This is the first time they've disclosed a position in this security.  The filing was required due to portfolio activity on December 4th.

Pennant also recently has decided to return some investor capital.  They join the likes of Baupost Group and Appaloosa Management (where Fournier previously worked) in the ranks of hedge funds that have sent capital back to investors.

Per Google Finance, BFC Financial is "a holding company whose principal holdings include controlling interests in Bluegreen Corporation and BBX Capital Corporation. The Company’s objective is to create long-term value for its shareholders through profitable growth of its portfolio companies and appreciation in the value of its investments. The Company has invested in or acquired businesses in a variety of industries. BBX Capital Corporation is a diversified investment and asset management company. In April 2013, Bluegreen Corporation completes merger with subsidiary of the Company, Woodbridge Holdings, LLC (Woodbridge)."

You can see some of Pennant's other recent trades here.

Blue Ridge Capital Discloses Zulily Stake

John Griffin's hedge fund Blue Ridge Capital recently filed a 13G with the SEC and disclosed a new stake in Zulily (ZU).  Per the filing, Blue Ridge now owns 6.05% of the company with 799,811 shares.

The company recently completed its initial public offering (IPO) on November 14th.  It priced at $22 per share, above the expected range, and now trades around $38.

Per Google Finance, Zulily is "an e-commerce company. The Company, through its desktop and mobile Websites and mobile applications, which it refers to as its sites, helps its customers discover new and unique products. The Company provides moms with a selection of over 4,500 product styles offered on a typical day through various flash sales events, which are limited-time curated online sales of selected products launched each day on its sites. The Company offers merchandise primarily targeted at moms purchasing for their children, themselves and their homes. Its merchandise includes children’s apparel, women’s apparel, and other product categories, such as toys, infant gear, kitchen accessories and home decor The Company sources its merchandise from thousands of vendors, including emerging brands and smaller boutique vendors, as well as larger national brands.The Company offers merchandise primarily targeted at moms purchasing for their children, themselves and their homes."

We've posted additional recent portfolio activity from Blue Ridge here.

Lee Cooperman Shows Increased Atlas Resource Partners Stake

Lee Cooperman's investment firm Omega Advisors recently filed an amended 13G with the SEC regarding their position in Atlas Resource Partners (ARP).  Per the filing, Cooperman now owns 11.1% of the company with 6,753,919 shares.

This marks an increase of over 1.9 million shares since the end of the third quarter.  The filing was made due to portfolio activity on November 12th.

Per Google Finance, Atlas Resource Partners is "an independent developer and producer of natural gas, crude oil and natural gas liquids (NGL), with operations in basins across the United States. The Company is a sponsor and manager of investment partnerships, in which it co-invests, to finance a portion of its natural gas and oil production activities."

You can view other activity from Cooperman here.

Kyle Bass Long General Motors, Exits J.C. Penney Equity: Interview

In an interview with Bloomberg Television, Hayman Capital's Kyle Bass reveals that he's long General Motors (GM) and has exited his equity stake in J.C. Penney (JCP) but retains his debt position. 

The hedge fund manager also talked about Herbalife (HLF), noting that it generates significant cashflows and no debt.

He originally thought JCP could move higher with a turnaround from new management, but what he got wrong, he said, was the vendors and perception changing so quickly.  He's still long credit but doesn't own equity in the company.

Bass thinks GM can trade 40% higher in the next 18 months.  He says it's a catalytic time to be investing as the Treasury finally exits its stake and the company can initiate shareholder friendly actions.

The Hayman founder also said he didn't see anything interesting in US banks, but he would be betting against European banks, especially as a hedge against other European bets.  Bass mentioned he likes Vodafone (VOD).

Embedded below is Bass' interview with Bloomberg:



For more from this hedgie, head to Kyle Bass' macro debate with John Burbank.

What We're Reading ~ Hedge Fund Links 12/6/13

Hedge fund ideas from the InvestPitch competition [Institutional Investor]

Baupost Group to return $4 billion to investors [II Alpha]

Biggest trends that hedge funds encountered this year? [ValueWalk]

Jim Chanos betting against CGI Group [Newsweek]

Chanos also shorting US coal sector [Reuters]

Passport Capital gains with Asian internet stocks [HedgeWorld]

Study shows women beat men as hedge fund managers [FINalternatives]

Investors pull back from Lampert's fund [Dealbook]

Tepper's Appaloosa to return some investor money [II Alpha]

Hugh Hendry capitulates, turns bullish [Zerohedge]

Short sellers see once in a lifetime opportunity [CNBC]

Short sellers have had a miserable year [WSJ]

Tiger Global invests in Glassdoor [HedgeWorld]

White House rejects Fairholme's Fannie/Freddie plan [FINalternatives]

Hedge funds get 'too cosy' with prime brokers [FT]

Taconic's co-founder to retire [CNBC]

From hedge fund to family office [Forbes]

A second act for a top Wall Street strategist [Dealbook]

Peter Lynch's Interview With Charlie Rose

Legendary investor Peter Lynch (formerly of Fidelity's Magellan Fund) sat down for a rare interview with Charlie Rose.  In it, he talks about philanthropy, what makes good management, and more.

Lynch notes that he's now working with some young analysts but the only investing he's doing now is for himself and for charity. 

He joked that he was a "bottom down" investor.  He likes to invest in the second or third inning of a story, noting that you could have bought Walmart (WMT) ten years after it went public and still done extremely well on that investment.

He identified the three C's in investing: complacency, concern, and capitulation.  He said complacency is the worst one.

On knowing what you're investing in: "If you don't understand it, you're probably gonna do the wrong thing."

On what's different in investing between then and now:  He said there's a lot of computer driven trading, which he says is a waste of time.  But the other main difference is the freedom of information.  He says, "Investing now is much clearer, they (retail investors) know the same things I do."

On advice he'd give to young investors: Invest in a retirement fund and watch the money compound tax free.  For individual stock investing: run a paper portfolio, check back with it and see how it performed and why.

On today's market: "I think the market's fairly priced in what's happening right now ... The stock market's the best place to be for the next 10, 20 years ... the next two years, who knows."


Embedded below is the video of Charlie Rose's interview with Peter Lynch:



For more wisdom from this great investor, be sure to read Peter Lynch's book: One Up On Wall Street as well as our past post on Lynch's principles and golden rules of investing.