Hedge Fund Links ~ 10/16/15

Thoughts on hedge funds [A Wealth of Common Sense]

A profile of Al Gore's Generation Investment Management [The Atlantic]

Inside Steve Cohen's Point 72 academy program [Business Insider]

Why people invest in hedge funds [A Wealth of Common Sense]

Big name hedge funds hit by performance woes [Bloomberg]

A September to forget for many managers [ii alpha]

Fortress plans to close flagship macro fund [WSJ]

Renaissance Technologies to shut down small fund [Reuters]

The Stanford endowment experiment [ai cio]

Hedge funds hit by fall in management fees [EuroMoney]

Six funds fined by SEC on short selling rule violations [ii alpha]

Stockpickers fail to shine in downturn [FT]

Cargill to wind down hedge fund arm [FT]

CFA, MBA, CAIA, PhD or Masters: what do hedge funds want? [eFinancial Careers]

ION's Short Altice Presentation From Sohn Conference Tel Aviv

The Sohn Conference in Tel Aviv just took place and at it Stephen Levey and Jonathan Half's ION Asset Management laid out their case for shorting Altice.

We thought it'd be relevant to highlight given that numerous hedge funds had been involved on the long side in either Numericable/Altice or both over the past year in varying capacities.

The crux of ION's thesis is that Altice has overpaid for assets and its margin targets are skeptical.  Patrick Drahi's company recently announced the acquisition of Cablevision (CVC) in the US.

Embedded below is ION's short Altice presentation from the Tel Aviv Sohn Conference:



For more on hedge fund short positions, we've posted up recent short selling activity by hedge funds as well as a recent interview with Jim Chanos.

Meritage Group Increases Axalta Coating Systems Stake

Jim Simons, founder of quant Renaissance Technologies, also has a family investment vehicle called Meritage Group managed by his son Nathaniel.  Meritage has filed a 13G with the SEC regarding its position in Axalta Coating Systems (AXTA).  Per the filing, Meritage now owns 5% of AXTA with over 12 million shares.

This is an increase of over 3.22 million shares in their position size since the end of the second quarter when they owned 8.78 million shares.  The filing was made due to activity on October 2nd.

Warren Buffett's Berkshire Hathaway is also involved in AXTA and bought around $28, slightly below where the stock is trading now.  Our most recent Hedge Fund Wisdom newsletter highlighted the thesis on AXTA if you want to catch up quickly on the name.

Carlson Capital Ups Vitamin Shoppe Position

Clint Carlson's hedge fund firm Carlson Capital has filed an amended 13D with the SEC regarding its position in Vitamin Shoppe (VSI).  Per the filing, Carlson now owns 6.94% of the company with over 2 million shares.

This is an increase from the 1.86 million shares they owned at the end of the second quarter.  The filing shows they were out buying in late July, sporadically throughout August and September, and most recently on the first two days in October at $31.70-$32.48.

Their 13D also notes they intend to continue to have discussions with management and the board about reducing the company's expenses, altering the company's capital allocation and buyback policies and the composition of the board.

Per Google Finance, Vitamin Shoppe is "a multi-channel specialty retailer and contract manufacturer of vitamins, minerals, herbs, specialty supplements, sports nutrition and other health and wellness products (VMS). The Company operates through three segments: retail, which includes Vitamin Shoppe, Super Supplements and Vitapath retail store formats; direct, which consists of its e-commerce and catalog formats, and manufacturing, which consists of the Nutri-Force manufacturing operations. The Company operates through its wholly owned subsidiary, Vitamin Shoppe Industries Inc. and Vitamin Shoppe Industries Inc.s' wholly owned subsidiaries, VS Direct Inc., Vitamin Shoppe Mariner, Inc. (VSM), VS Hercules LLC (VSH), Vitamin Shoppe Global, Inc. (VSG) and Vitapath Canada Limited (VCL)."

What We're Reading ~ 10/14/15

The psychology of risk and reward [Farnam Street]

The (non) velocity of money [Reformed Broker]

The CFA vs MBA decision [A Wealth of Common Sense]

Latest market commentary from Byron Wien [Blackstone]

The king of online gambling [Forbes]

Thoughts on Fastenal (FAST) [Base Hit Investing]

A look at Air Products & Chemicals (APD) [Bear of Burrard Street]

Stock picks from Marty Whitman's successor [Barrons]

Why interest rates could stay lower for longer than previously thought [Market Anthropology]

The social network illusion that tricks your mind [Technology Review]

Venture capital and the internet's impact [Stratechery]

Move over Louis Vuitton, here's LFX [Bloomberg]

Secrets to building a mighty network [Backchannel]

The Collected Wisdom of Seth Klarman ~ Compilation By Santangel's Review

Santangel's Review has recently compiled an excellent resource on Baupost Group's Seth Klarman.  They've gone through and compiled quotes from letters, articles, interviews, transcripts and more to highlight Klarman's views on various investing topics.

Given that Klarman is considered one of the best investors of our time, this is certainly well worth your time.

Embedded below is The Collected Wisdom of Seth Klarman:



You can download a copy here.

Thanks to Santangel's Review for compiling such an excellent resource.

New Graham & Doddsville Issue: Interviews With Alex Sacerdote & Ed Bosek

Columbia Business School's investment newsletter Graham & Doddsville is out with its latest edition.  It features interviews with Whale Rock Capital's Alex Sacerdote, BeaconLight Capital's Ed Bosek, Jane Siebels of Siebels Asset Management, as well as the gentlemen from Global Endowment Management.

Sacerdote talks about his focus on the technology sector and the 'S curve' of inflection points that is so critical to his process of finding successful tech investments.  He also lays out his thesis on Amazon (AMZN) and NetEase (NTES),

Bosek previously worked at Atticus Capital, a fund we highlighted on the site numerous times before it eventually closed. He talked about how deregulation and demutualization are big drivers of his idea generation and pitched China Resource Enterprises (SEHK:291) and Daqin Railway (SHSE:601006).

The issue also features two student pitches: a long of Tenneco (TEN) and a merger arbitrage/special situation pair of long RNF / short UAN.

Embedded below is the latest issue of Graham & Doddsville:



Be sure to also check out the previous issue of Graham & Doddsville.

Viking Global Starts Laboratory Corp Stake

Andreas Halvorsen's hedge fund firm Viking Global has filed a 13G with the SEC regarding shares of Laboratory Corp (LH).  Per the filing, Viking now owns 5.3% of LabCorp with over 5.39 million shares.

This is a newly disclosed stake for the firm and the filing was made due to activity on October 1st.

We also posted up other recent portfolio activity from Viking Global here.

Per Google Finance, LabCorp is "an independent clinical laboratory company in the United States. Through a national network of laboratories, the Company offers a range of clinical laboratory tests that are used by the medical profession in core testing, patient diagnosis, and in the monitoring and treatment of disease. The Company manages its operations through two segments: the Clinical diagnostics laboratory segment, which includes core testing, as well as genomic and esoteric testing; and the Other segment, which consists of the Company's non-United States clinical diagnostic laboratory operations in Ontario, Canada. It also provides specialty testing services in the areas of allergy, clinical trials, diagnostic genetics, women's health, cardiovascular disease, identity, forensics, infectious disease, endocrinology, oncology, coagulation, occupational testing and pain management."

Robin Hood Investors Conference 2015: Discount For Our Readers

Robin Hood invites you to the Third Annual Investors Conference.

Join us in New York City on November 16-17 for the 3rd Annual Robin Hood Investors Conference presented by J.P. Morgan and hosted by Hyatt.

Over the past two years, the Robin Hood Investors Conference has brought together the most influential policy experts, hedge fund managers, financial leaders, tech innovators, and real estate investors to share market insights and provide actionable, money-making ideas.  Their stock picks have collectively outpaced the S&P 2:1.


2015 Robin Hood Speakers List

Paul Tudor Jones, Tudor Investment Corp
John Griffin, Blue Ridge Capital
Dan Loeb, Third Point
Philippe Laffont, Coatue Management
Bill Ackman, Pershing Square
David Einhorn, Greenlight Capital
T. Boone Pickens, BP Capital
Larry Robbins, Glenview Capital
Anthony Bozza, Lakewood Capital
Jamie Dimon, J.P. Morgan
Mike Cagney, SoFi
Mary Erdoes, J.P. Morgan Asset Management
Barry Sternlicht, Starwood Capital Group
Whitney Tilson, Kase Capital
Tim Ferriss, Angel Investor/Author
Roland Fryer, Harvard University
Dave Giroud, UpStart
Sam Hodges, Funding Circle


Discount For Our Readers

As in years' past, the conference will sell out so we urge you to click here to purchase tickets now as seats are limited.

Discount: Use code "market folly 15" to get 10% off your total ticket price.

As with all things Robin Hood, 100% of ticket sales go to helping our New York City neighbors living in poverty build better lives for themselves and their families.  We hope you will join us for this exciting event.
 



For more information and to register, head to Robin Hood's website.

Sohn Conference San Francisco: Excellence In Investing For Children's Causes

The 6th annual Sohn Conference San Francisco is coming up in two weeks.  It brings together some of the world's top investors to share their ideas in order to benefit the Excellence in Investing for Children's Causes Foundation.


Conference Details

When: Tuesday, October 27th, 2015 (Registration at 10 a.m.)
Where: Hyatt Regency San Francisco
Website: https://www.excellencesf.org


Sohn San Francisco Speakers List

Jeffrey Ubben, ValueAct Capital
Mick McGuire, Marcato
J. Kyle Bass, Hayman Capital
Kurt Billick, Bocage Capital
Gil Simon, Apex Capital
William Duhamel, Route One Investment Company
Mike Wilkins, Kingsford Capital
Malcolm Fairbairn, Ascend Capital
Carl Kawaja, Capital World Investors
Marc Schneidman, Aquilo Capital
Christopher Chabris, author of The Invisible Gorilla


Next Wave Sohn Speakers 

New this year, the event also features a 'Next Wave Sohn' event, held at 10:30 a.m. before the main conference.  It features emerging managers sharing their best ideas.  Speakers include:

David Brown, Hawk Ridge Management
Jonathan Goldberg, BBL Commodities
Steven Landry, Eastbay Asset Management
Richard Merage, MIG Capital
Moderator: George Fox, Titan Advisors



Event Flyer & Registration

You can register for the event by clicking here or you can call 415-728-4455

It should be a fantastic day full of investment ideas and also includes a buffet lunch and cocktail reception afterwards.

Remember, conference proceeds support Bay Area organizations focused on improving educational opportunities and life outcomes for underserved youth.  A portion of the proceeds also benefit their partner, The Sohn Conference Foundation to treat and cure pediatric cancer and childhood diseases.

For more information, head to https://www.excellencesf.org

 

Jim Chanos Interview: Glencore, Tesla, Volkswagen & More

Short seller Jim Chanos of Kynikos Associates appeared on Bloomberg TV and talked about some of his latest short positions.  Here are some of the highlights:

On Glencore:  "We're not going to comment on our position on Glencore. But I will say is we know the company pretty well.  Let's just say I'm a potential purchaser ... to close out a short you have to buy stock."

On Volkswagen:  "No, we don't want to be short.  If anything I think we'd be looking at Volkswagen on the long side. But we have not invested in Volkswagen.  I think they'll survive"

On Tesla:  "We haven't disclosed our position officially in Tesla. Let's just say I'm not very positive on the company and we'll leave it at that."

He also ended by saying his favorite short right now is US E&P companies.

Embedded below are the videos of Chanos' appearance on Bloomberg TV:

Video 1


Video 2


Video 3


Video 4


Video 5



We've also posted up Chanos' thoughts on some of his other shorts as well.

Baupost Group Discloses Orexigen Therapeutics Stake

Seth Klarman's investment firm Baupost Group has filed a 13G with the SEC regarding shares of Orexigen Therapeutics (OREX).  Per the filing, Baupost now owns 17.17% of the company with over 25.82 million shares.

This is a newly disclosed equity stake for the firm as they did not show one at the end of the second quarter.  The filing was made due to activity on September 30th.

Shares of OREX are down over 69% over the past six months, so this certainly fits Baupost's preference to buy beaten down names.

You can view other portfolio activity from Baupost Group here.

Per Google Finance, Orexigen Therapeutics is "a biopharmaceutical company. The Company is focused on the development of pharmaceutical product candidates for the treatment of obesity. The Company's product is Contrave, a fixed dose combination of bupropion hydrochloride (HCl) extended release (ER) and naltrexone HCl ER. The Company's product Contrave, is approved in the United States by the United States Food and Drug Administration (FDA) as an adjunct to a reduced-calorie diet and increased physical activity for chronic weight management in adults with an initial body mass index (BMI), of around 30 kilograms per square meter (kg/m2) or greater (obese), or around 27 kilograms per square meter or greater (overweight) in the presence of at least one weight-related comorbid condition. The Company also submitted an application for marketing authorization with the European Medicines Agency (EMA) for Contrave under the name Mysimba.."

What We're Reading ~ 10/7/15

Superforecasting: The Art and Science of Prediction [Philip Tetlock & Dan Gardner]

Fat tails, thin ice [Jason Zweig]

Are you prepared for the next bear market? [Fortune]

Most CFOs think the US market is overvalued [Alpha Architect]

Putting a price tag on the Volkswagen scandal [Aswath Damodaran]

A pitch on beaten down Sun Edison [Bronte Capital]

Case study on capital allocation and Rockwood Holdings [Before Losing My Sanity]

Do as they do: a guide to insider activity [Dead Companies Walking]

A look at Cable One [Punch Card Blog]

Some stock picks from François Rochon [Montreal Gazette]

How the Bloomberg terminal made history and stays relevant [FastCompany]

Sneaker wars: inside the battle between Nike and Adidas [GQ]

The decline of 'big soda' [NYTimes]

China's middle class dreams in peril [WSJ]

Can Comscore/Rentrak go toe-to-toe with Nielsen? [Variety]

Google Fiber's real innovation [Beyond Devices]

Why we fall for bogus research [Bloomberg View]

Alcoa and the painful business of making aluminum [Reuters]

The frustrating life of a McDonald's franchisee [Bloomberg]

Bill Ackman's Talk at Bloomberg Markets Most Influential Summit

Pershing Square's Bill Ackman sat down with Stephanie Ruhle for an interview at Bloomberg Markets Most Influential Summit yesterday.

It's around a 30-minute talk but here's the broad takeaways from the interview:

- Still owns Valeant Pharmaceuticals (VRX), but hasn't added to the position or sold any shares

- Looked at General Electric (GE) but passed because it wasn't cheap enough; thinks Nelson Peltz will do well with it

- More to come with his Herbalife (HLF) saga

- Notes Burger King (part of Restaurant Brands (QSR)) has cut costs, improved stores/experience and same store sales are doing well

- Thinks Bloomberg should run for President

Embedded below is the video of Ackman's Bloomberg talk:



For more from this manager, head to Pershing Square's semi-annual report.

Paul Tudor Jones Interview on Bloomberg: "Choppier Market" Ahead

Paul Tudor Jones of macro hedge fund Tudor Investment Corp recently sat down with Bloomberg to talk about the macro picture, the Federal Reserve, and more.

Jones said that, "But I think the reality is it's clear low interest rates hurts savers and help borrowers. I think what the Fed is doing and the reason why they won't raise interest rates now, I think it's kind of acknowledging to me a much larger macro issue, which is if you think about the last 50, 60 years, there's is a perfect negative correlation between the interest income paid by the Federal government and interest rates. So the higher the share of GDP that's paid in interest income by the Federal government, typically that correlates high interest rates also. So what the Fed is doing is recognizing there is a tail risk with low interest rates. There's a tail risk with zero. We seem to run perpetual deficits at minus two, minus percent."

When asked what QE4 would do, he replied, "Again, I think it's a really interesting time in the market. It's if you kind of just look at financial conditions index, if you look at where global growth is going, this is typically historically associated, been associated with the Fed lowering interest rates, some type of interest rate relief. And that's always typically been good for stock markets. And yet now we have a central bank that I think for the first time is actually -- is managing towards the credit side of the equation, as opposed to the economic side of the equation.     And by that I mean they're looking at the balance sheet. They're uncomfortable with the size of it. That's why they want to get rates away from zero. I think they're concerned about the expanding global debt-to-GDP. And I think they're trying to probably insert back into the equation the fact that interest rates can rise and that people need to manage their balance sheets accordingly, particularly the federal government."

Jones was then questioned as to why they haven't already raised rates.  He said:

"I think they had their opportunity last spring. They probably missed it. They're trying to catch up. And again, all you have got to do think about at zero rates it encourages this nonstop borrowing from the federal governments because of the fact that interest income as a percentage of GDP is at one of the lowest levels in the past 34 years because rates are at zero. It encourages bad behavior by a variety of different stakeholders, not the least of which is our federal government.

Well, again, I think the Federal Reserve Board is managing for the balance sheet, as opposed to local economic conditions. Every time we've had this kind of set of macro variables, a huge bear market in commodities, slowing global growth, you have typically seen the Fed respond with an easing. I think of '98 in particular. And normally it would be a great time to own stocks.     Now I think for the first time since Volcker, probably, you see the Fed managing, in my mind, they're managing for the balance sheet to take out the tail risk associated, and associated with expanding debt virtually globally, and not to mention our federal debt. And I don't know if they necessarily say that avowedly, but to me it makes the most sense."

When asked if he thinks this points to a bear market, Jones said it points to a choppier market. He went on to add, "Again, the BOJ seems to be a reluctant easer, their balance sheet constrained, ECB, everyone expects them to go, but it will be an incremental step because I think they're, to a certain extent, balance sheet constrained and uncomfortable with it. So normally where you would be seeing a lot of interest rate relief globally, it's different this time. And I think that's one reason why the markets are going to be much choppier going forward."

Tudor Jones then ended the interview by noting that, "I think it's challenging times. There are a lot of crosscurrents. Again, it would be really easy to be super bullish on equities, given what the response function should be, but it's not going to happen."

Embedded below is the video of Jones' appearance on Bloomberg:

Viking Global Increases Kite Pharma Position

Andreas Halvorsen's hedge fund firm Viking Global has filed a 13G with the SEC regarding Kite Pharma (KITE).  Per the filing, Viking now owns 6.1% of the company with over 2.68 million shares.

This is up from the 677,334 shares they owned at the end of the second quarter.  The filing was made due to activity on September 25th.

You can view other recent portfolio activity from Viking here.

Per Google Finance, Kite Pharma is "a clinical-stage biopharmaceutical company. The Company is focused on the development and commercialization of cancer immunotherapy products to eradicate cancer cells. The Company does this using its engineered autologous cell therapy (eACT), which is an approach to the treatment of cancer. eACT involves the genetic engineering of T cells to express either chimeric antigen receptors (CARs) or T cell receptors (TCRs). It is conducting a Phase II clinical trial of a TCR-based therapy and multiple Phase I-IIa clinical trials of CAR- and TCR-based therapies. The Company's lead product candidate KTE-C19, is a CAR-based therapy, for the treatment of refractory diffuse large B cell lymphoma (DLBCL), primary mediastinal B cell lymphoma (PMBCL) and transformed follicular lymphoma (TFL). It is developing a pipeline of eACT-based product candidates for the treatment of advanced solid and hematological malignancies: CD19CAR, KTE-C19CAR and EGFRvlll CAR, among others."

Bridger Capital Raises TG Therapeutics Stake

Roberto Mignone's hedge fund firm Bridger Capital has filed a 13G with the SEC regarding shares of TG Therapeutics (TGTX).  Per the filing, Bridger now owns 6% of the company with over 3.15 million shares.

This is basically double the 1.53 million shares they owned at the end of the second quarter. The filing was required due to activity on September 25th.  TGTX shares are down over 27% over the past three months and Bridger has taken advantage of that dip.

Per Google Finance, TG Therapeutics is "a biopharmaceutical company focused on the acquisition, development and commercialization of treatments for b-cell malignancies and autoimmune diseases. As of December 31, 2014, TG had two therapies targeting hematological malignancies. TG-1101 (ublituximab) is a glycoengineered monoclonal antibody that targets a specific epitope on the CD20 antigen found on mature B-lymphocytes. The Company is also developing TGR-1202, an orally available PI3K delta inhibitor. As of December 31, 2014, both TG-1101 and TGR-1202 were in clinical development for patients with hematologic malignancies. The Company also has a pre-clinical program to develop inhibitors of IRAK4 (interleukin-1 receptor-associated kinase 4), as well as an antibody research program to develop anti-PD-L1 and anti- glucocorticoid-induced tumor necrosis factor receptor (GITR) antibodies, which were in pre-clinical development as of December 31, 2014."

Coatue Management & Maverick Capital Short Ashtead Group

Philippe Laffont's hedge fund firm Coatue Management has recently filed a disclosure with the UK's regulatory body regarding a short position.  They are now short 1.02% of Ashtead Group's (LON:AHT) shares as of September 30th.  This is up from the 0.91% of shares they were short just two days prior.  This is also an increase from the 0.52% they were short back on August 6th.

Lee Ainslie's hedge fund Maverick Capital has also filed similar disclosures.  Per their filing, Maverick now is short 0.74% of Ashtead Group as of September 24th.  However, Maverick's position has decreased in size recently from the 0.85% of shares they were short on September 23rd.


Given the volatility in markets as of late, we're providing updates on various hedge fund short positions.  You can scroll through them all by clicking here: hedge fund short positions.

The UK regulatory rules for short position disclosures state that hedge funds must file when their net short position eclipses 0.2% of the issued share capital of a company.  Notification is also required again at each 0.1% increment after that.  This applies to both increases and decreases in the position.  Public disclosure is required when net short positions reach 0.5% of issued share capital.  Additionally, disclosure is required when the position subsequently falls below 0.5%.

Per Google Finance, Ashtead Group is "a United Kingdom-based equipment rental company with networks in the United States and the United Kingdom. The Company operates through two business units: Sunbelt, which provides pump and power, climate control and scaffolding service, and A-Plant business, which operates through Eve Trakway Limited (Eve), which constructs temporary roadways and barriers; PSS, which offers trenchless technology and fusion services, and FLG (lifting) services. Both the units are also engaged in general equipment and related businesses. The Company rents a range of construction and industrial equipment across a range of applications. Its equipment can be used to lift, power, generate, move, dig, compact, drill, support, scrub, pump, direct, heat and ventilate. Its subsidiaries include Ashtead Holdings PLC, Sunbelt Rentals, Inc., Sunbelt Rentals Industrial Services LLC, Ashtead Plant Hire Company Limited, Ashtead Capital, Inc. and Ashtead Financing Limited."

Third Point Ups Short in Peugeot

Dan Loeb's hedge fund firm Third Point has recently filed disclosures with the French regulatory body regarding a short position.  Per the filing, Third Point is now short 1.01% of Peugeot's shares in France as of September 24th.

This is up from the 0.98% of shares they were short on September 23rd.  As we've previously highlighted, Viking Global is also short Peugeot (though they've been trading around the position as of late).  Viking's last disclosure shows them short 0.99% of shares as of the end of September, down from as high as 1.52% of shares in the middle of the month.

Given the volatility in markets as of late, we're providing updates on various hedge fund short positions.  You can scroll through them all by clicking here: hedge fund short positions.

 You can view additional portfolio activity from Third Point here.

Hound Partners Boosts Short in Admiral Group

Jonathan Auerbach's hedge fund firm Hound Partners recently filed updated short position disclosures in the UK regarding their short of Admiral Group (LON:ADM).

Per the filings, Hound has disclosed they are now short 1.71% of shares as of October 1st.  This is up from the 1.6% of shares they were short back on June 17th.

Given the volatility in markets as of late, we're providing updates on various hedge fund short positions.  You can scroll through them all by clicking here: hedge fund short positions.

The UK regulatory rules for short position disclosures state that hedge funds must privately file when their net short position eclipses 0.2% of the issued share capital of a company.  Notification is also required again at each 0.1% increment after that.  This applies to both increases and decreases in the position.  Public disclosure is required when net short positions reach 0.5% of issued share capital.  Additionally, disclosure is required when the position subsequently falls below 0.5%.

Per Google Finance, Admiral Group is "a United Kingdom-based company engaged in the provision of car insurance. The Company has four operational segments, which include UK Car Insurance, International Car Insurance, Price Comparison and Other. The UK Car Insurance segment consists of the underwriting of car insurance and other products that supplement the car insurance policy. The International Car Insurance segment consists of the underwriting of car insurance and the generation of revenue from additional products and fees, from underwriting car insurance outside of the United Kingdom. The Price Comparison segment relates to the Company's price comparison Websites; Confused.com in the United Kingdom, Rastreator in Spain, LeLynx in France and compare.com in the United States. The Other segment comprises of the United Kingdom household insurance, the Company's commercial van insurance broker, Gladiator and commercial van insurance. It operates approximately 14 brands in seven countries."