Tag Archives: investment portfolio

Top GFI staff seek exit clause if rival BGC bid succeeds

More than 100 senior employees at GFI Group, the US interdealer broker, are seeking changes to their contracts that would allow them to leave the company if a hostile takeover bid by rival BGC Partners is successful.

Dozens of the GFI’s top desk heads and producers have expressed their concern to management in recent months about a BGC purchase, said two people familiar with the situation.

Howard Lutnick, BGC chief executive

Many are worried about working within BGC’s corporate culture, which incentivises employees via a partnership structure unique in the industry and could lead to bonus cuts.

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Caesars Entertainment And Caesars Acquisition Soar Amid Merger News

Shares of both companies soared in pre-market trading amid the news, with Caesars Acquisition Company up over 10 percent and Caesars Entertainment up over 26 percent.

According to the joint press release, “upon completion of the merger and the proposed restructuring of Caesars Entertainment Operating Company, Inc. (CEOC), the merged company will be well capitalized and positioned for sustainable long-term growth and value creation.”

The merger will also support the proposed restructuring of CEOC, a subsidiary of Caesars Entertainment, announced on Friday, to reduce debt and lower interest payments.

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Mergermarket in FTSE Global Markets

Lack of mega deals weighs on UK M&A figures M&A activity targeting the United Kingdom stood at £37.5bn in the first half of 2014, the lowest half-year value since 2010 (£37bn) and a 12.5% drop from the first six months of last year.

M&A activity targeting the United Kingdom stood at £37.5bn in the first half of 2014, the lowest half-year value since 2010 (£37bn) and a 12.5% drop from the first six months of last year.

A lack of large transactions in the country pulled the UK M&A value down this semester, according to MergerMarket, with only one mega-deal (valued above US$5bn) announced in the region so far this year – the £8.6bn acquisition of the Oncology division of GlaxoSmithKline by its German peer Novartis.

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QE Raises Risk of Loss With Political Cost Leads to Fed Anxiety Rises

Fed Anxiety Rises as QE Raises Risk of Loss With Political Cost (Bloomberg)

Fed Anxiety Rises as QE Raises Risk of Loss With Political Cost (Bloomberg)

According to Bloomberg,

The longer the Federal Reserve continues its bond-buying stimulus, the higher the odds it will face a year without any money to give the U.S. Treasury after taxpayers received a record $88.4 billion profit in 2012.

The Fed’s financial-crisis actions — from acquiring debt in the 2008 rescues of Bear Stearns Cos. and American International Group Inc. to three rounds of quantitative easing — have led so far to the record payments. Now, the prospect of a stronger economy and rising interest rates means the value of the Fed’s bond holdings will fall at the same time its funding costs climb because the central bank pays interest on the excess reserves it holds for banks.

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Hedge Funds See Further Profit From Glencore-Xstrata

Hedge funds are betting that commodities trader Glencore will succeed in its battle for miner Xstrata, in a long-running deal that has been profitable for arbitrageurs and is still attracting funds looking to make money.

Arbs, hungry for action after a lean period for M&A, have been buzzing around the deal for months, attracted by its size, liquidity and complexity, and many profited from last week’s move by Glencore(GLEN.L) to sweeten its now 23 billion pound all-share bid.

Reported by Laurence Fletcher and Sophie Sassard, Reuters, Xstrata (XTA.L) was expected to recommend the offer as early as next week, although Qatar Holding – its second-biggest investor after Glencore – has yet to make its decision public.

However, after a breakthrough in talks last week, brokered by former British prime minister Tony Blair, many funds believe it is only a matter of time before the deal gets the Qataris’ stamp of approval.


Hedge Fund to Appeal Telus Court Victory

A New York-based hedge fund says it will appeal a court decision blocking it from holding a shareholders meeting for investors with voting stock in Telus Corp., a move that rivals the company’s own plans for a meeting.

Telus Corp. said earlier that it will go ahead with its plans for a meeting of all voting and non-voting shareholders on Oct. 17, following a B.C. court ruling that said Mason Capital Management LLC isn’t entitled to call a separate meeting.

Telus and Mason are in a bitter, public battle over converting the Canadian telecom company’s dual-class share structure of common shares, which have voting rights, and non-voting stock.

Reported by The Vancouver Sun, Telus wants just one class of common shares but Mason argues the Vancouver-based company’s approach doesn’t properly compensate holders of voting shares, including Mason. “While we are disappointed by the court’s decision, on a review of the reasons, we have concluded that there are strong grounds of appeal,” the hedge fund said Wednesday.

“Mason will be pursuing an appeal on an expedited basis to ensure that this important matter is decided before the Oct. 17 meeting of Telus shareholders.”


Are Hedge Funds Beginning to Right Size Themselves?

There are some signs that the hedge fund industry is moving towards a more appropriate capital base. Leo Kolivakis, who covers hedge funds and other classes of investment for Canadian pension funds, noted that outflows from hedge funds have picked up recently. Mediocre returns delivered at great expense for several years may be starting to focus attention on the $2TN size of the industry and perhaps cause investors to question their previously held return expectations. The Alternative Investment Managers Association (AIMA) in London, the lobbying group for the industry, must be surprised. They keep issuing reports and analyses telling everybody how good hedge funds have been, although this view seems at odds with the actions of departing investors.

Reported by Simon Lack, some hedge fund managers are taking the initiative and returning capital to clients, such as Louis Bacon. The industry could use more managers who recognize the prevailing limits on their own strategies. But overall, the article finds that assets are s23% lower than their peak just prior to the financial crisis four years ago.