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Tuesday June 28, 2016

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Following , Clearbrook Plans to Add Funds INSIDE Alaska’s $53 billion wealth fund plans BY HEMA PARMAR Clearbrook Global Advisors is seeking to take advantage of market turmoil to exit all of its funds of funds and following last week’s Brexit vote by boosting allocations to hedge funds. will instead make investment decisions in- The -based firm, which has $2 billion of its $28 billion invested in hedge house: From the Minutes funds, is looking to bring on at least two new managers in the next few weeks whose strategies could benefit from the fallout of Britain’s unexpected decision to quit the Computer-driven funds led the winners European Union, according to Tim Ng, its chief investment officer. Clearbrook currently following Britain's decision to leave the EU: Returns in Brief has 30 managers on its platform of direct investments. Equity markets plunged and the pound fell to a three-decade low on Friday in the aftermath of the 52 percent to 48 percent vote to leave. Many hedge funds avoided Citadel hires Morgan Stanley's betting around the vote altogether, but several computer-driven funds that did profited Lieblich as chief technology officer. from the market turmoil. Mariner Investment's Co-CIO Williams Clearbrook is planning to add two distressed funds to its platform to take advantage of is leaving the firm: On the Move hit in the market rout, Ng said in an interview on Friday. The firm will also raise its existing long- equity fund allocation to 6 percent from 4 percent to benefit from New York Life 's Private equity valuation spreads, which "have blown out quite dramatically," said Ng. Advisors is closing its low-volatility It also plans to reduce exposure to Europe-focused managers to 10 percent from 14 hedge-fund strategy: Closure percent, and to start allocating about 4 percent to emerging markets, which have become "increasingly attractive" following the U.K. vote, Ng said. Brexit will make Bill Ackman plans to move his firm to central banks even more dovish, causing inflation and interest rates to remain low, he Hell's Kitchen next year. Steven said. "That means the U.S. dollar shouldn’t really appreciate that greatly long term. It will Cohen's Point72 will move to New stabilize at some point," Ng said. "And all of those conditions tend to favor emerging York's Hudson Yards: Over the Hedge markets." Clearbook's allocation increase comes as hedge funds have drawn criticism this year Platinum Partners is said to be raided from investors for weak returns and hefty fees. Investors pulled a net $15 billion from by the FBI: Regulatory/Compliance hedge funds in the first quarter, the most since the financial crisis, according to Hedge Fund Research Inc. BREXIT QUOTES Managing the Brexit Turmoil “Years of aggressive Central Bank policies suppressed volatility across markets and this is now changing as macro and political risk begin to rise.” — Nigol Koulajian, founder and chief investment officer of Quest Partners "Biggest risk from this outcome: The Pandora's Box it opens for the European project." — Troy Gayeski, partner at SkyBridge Capital "I do think that there are the very strong societal and political and geographic ramifications, but I have trouble viewing it as a financial catastrophe." — Howard Marks, co-founder of Oaktree Capital Computer-driven hedge funds made money on Friday amid a global market chaos. For more on how hedge funds fared after Britain's unexpected vote, click here.

RETURNS IN BRIEF: BREXIT June 28, 2016 Bloomberg Brief Hedge Funds 2

RETURNS IN BRIEF: BREXIT

As more details emerged on how hedge funds fared following Britain’s surprise decision to leave the European Union, computer- driven funds led the winners. Human traders appeared to have limited losses by reducing risk. Below is a look at some of those returns. Officials for the hedge funds declined to comment on performance.

BY NISHANT KUMAR AND SAIJEL KISHAN said he was betting on Evening Standard newspaper on Lynx Asset Management, which uses a rising pound leading up to the vote. In Wednesday. A spokesman declined to mathematical models to decide which the days before, Soros had warned that disclose the results of the poll. Another of securities to buy and sell, posted a 5.1 the pound could slump more than 20 the $10.2 billion firm’s funds, Absolute percent gain on Friday in one of its funds, percent against the dollar as voters were Return Focus, was up about 6 percent according to its website. Capital Fund grossly underestimating the true cost of Friday, due to short positions in equities Management, a $7 billion firm in Paris, Brexit. Soros made money on other and long positions in the U.S. dollar and gained 4.2 percent that day in its Discus investments that were designed to profit gold, according to e-mailed comments fund, while Systematica Investments, from falling markets, a spokesman said seen by Bloomberg. Odey had spoken in the $10.2 billion fund run by Leda Braga, Monday. favor of Brexit before the vote. His flagship fund Odey European was down gained 1.35 percent in its main Stone Milliner Asset Management, 24.8 percent this year through June 15. BlueTrend fund, people with knowledge the macro fund run by Jens-Peter Stein — Will Wainewright and William Canny of the matter said. and Kornelius Klobucar, lost 0.2 New York-based Quest Partners, a percent in the Class A shares, Series I Aspect Capital’s flagship $797 million quantitative hedge fund firm that version of its fund this month through Diversified Fund was up almost 4 percent managers $650 million, gained 1.6 Friday, according to an investor update. on Friday as of mid-afternoon, the $2.5 percent on Friday and 3.6 percent on It has lost 1.2 percent this year. billion Cantab Capital Partners Quantitative Fund rose more than 3 Monday in its flagship fund, AlphaQuest Discovery Capital Management LLC, Original Fund, according to a person percent, and the $12.8 billion Winton the macro fund run by Robert Citrone, Futures Fund gained about 2 percent, familiar with the matter. “We are entering posted a 0.5 percent gain for the month a new regime of higher volatility where according to people with access to initial in its Global Opportunity Fund through return estimates for the funds. prices are vulnerable to sharp reversals Friday and a loss of 2.5 percent for the and breakout of new trends,” said Nigol Spokesmen for Cantab, Winton and year, according to an investor update. Aspect declined to comment. Koulajian, founder and chief investment The fund said the highest conviction officer of Quest Partners. “Years of short wagers in its portfolio are in the UK — Will Wainewright, Nishant Kumar and Saijel aggressive Central Bank policies and European equity markets. “With a Kishan suppressed volatility across markets and Remain vote, we had believed risk Welton Investment Partners' Global this is now changing as macro and assets in general would have had a Directional Portfolio Fund rose 2.1 political risk begin to rise.” sharp rally over the next 3-4 weeks, from percent on Friday, according to a Quantitative Investment which a meaningful correction would company statement. The gain boosted Management, the computer-driven firm have unfolded,” the Connecticut-based the fund's return for the month to 6.6 based in Charlottesville, Virginia, gained firm said. “This surprising turn of events percent and 9.6 percent for the year 3.6 percent on Friday and 12 percent this has accelerated our roadmap that we through June 24, the $599 million month before fees in an equity strategy had for the August-October timeframe.” company said in the statement. that manages about $500 million, — With assistance from Sabrina Willmer, Will A hedge fund overseen according to a person with knowledge of Wainewright, Hema Parmar, Simone Foxman by H2O Asset Management lost 14.4 its returns. The performance adds to a Crispin Odey, who had conducted a percent on Friday, according to data gain of almost 30 percent net of fees private poll ahead of the U.K.’s compiled by Bloomberg. The H2O Vivace during the first five months of this year. referendum, gained about 21 percent in fund, which bets across stocks, bonds, The firm’s main futures strategy, which his flagship hedge fund in the two days interest rates and currency markets, manages about $2.5 billion, also made after the vote, according to an e-mail to managed about 209 million euros ($232 money on Friday, bringing gross returns investors seen by . million) at the end of May, according to a for June to 4.2 percent. Before this Odey European Inc. rose 15.7 percent document on its website. A month, it had gained 7.7 percent, net of Friday and 5.3 percent on Monday, the e- spokeswoman for the London-based fees, in 2016. mail said. The fund rose on Friday firm, an affiliate of Natixis Global Asset Man Group Plc, the world’s largest because of short positions that have Management, declined to comment. H2O publicly traded hedge-fund firm, reported been in place since last year, said a Vivace’s loss leaves the fund down 24.5 a 1.3 percent gain in AHL Diversified person familiar with the situation. Odey, percent for the year, after gaining 30.7 Programme and 0.9 percent rise in AHL 57, did not answer an e-mail seeking percent in 2015, according to data Programme. Its AHL Evolution comment. The London-based hedge fund compiled by Bloomberg. H2O Asset Programme lost 0.5 percent, while the manager’s poll had shown that the vote Management was co-founded by Bruno AHL Dimension Programme declined 0.7 on membership of the political bloc would Crastes and Vincent Chailley in 2010, percent, according to the firm’s website. be much closer than markets according to its website. suggested, Odey told The — Nishant Kumar June 28, 2016 Bloomberg Brief Hedge Funds 3

FROM THE MINUTES: ALASKA June 28, 2016 Bloomberg Brief Hedge Funds 4

FROM THE MINUTES: ALASKA

Alaska’s $53 Billion Permanent Fund Exiting Funds of Hedge Funds BY HEMA PARMAR Hedge Fell About 3% on Average in Q1 Alaska’s $53 billion wealth fund plans to exit all of its funds of hedge funds and will instead make investment decisions in- house. Alaska Permanent Fund Corp. plans to pull all of the $2 billion it has invested in liquid assets across Crestline Investors, Mariner Investment Group and Lazard Asset Management, according to Marcus Frampton, its director of private markets. Alaska will instead rely on its own five-person alternatives team to select hedge funds. “We’ve decided to move to a 100 percent direct program,” Frampton said in an interview. “We now have the depth of staff and this is an area we want to have some focus on and we are set up to do it directly.” The change, which allows Alaska to cut Hedge fund of funds on average fell about 3 percent in the first quarter of the year, compared the layer of fees paid to funds of funds with a 0.5 percent drop for hedge funds on average in the quarter, according to data compiled for making investments, comes as such by Bloomberg, which looked at 1,000 hedge fund of funds and 3,200 hedge funds globally. The funds produce lackluster returns. Hedge returns are down from the previous quarter when hedge fund of funds rose 0.6 percent on Fund Research Inc.’s Fund of Funds average and hedge funds gained about 0.8 percent, the data show. Composite Index fell 0.3 percent last year and slid 3 percent in the first quarter. Alaska’s funds of funds did “a very multiyear period.” That’s up from its $150 million to Crestline’s multimanager good job” and “no worse than the current $5.4 billion hedge fund allocation, fund, called Summit, which launched last industry,” Frampton said. Crestline fell before the redemptions. year, Frampton said, and also has $400 1.6 percent in the first quarter, while The Alaska fund is keeping the $3 million in private equity style investments Mariner and Lazard declined 1.4 percent billion it has invested directly in hedge with the firm. Multimanager platforms and 1.2 percent, respectively, according funds including Clifford Asness’s AQR involve allocating money to internal to documents from the state fund. Capital Management and Jim Chanos’s teams using different strategies. Representatives for Lazard, Crestline Kynikos Associates, Frampton said. It The Alaska fund manages at least 25 and Mariner declined to comment. will invest the additional $2.9 billion in percent of all mineral lease rentals, The Alaska fund expects hedge funds managers to meet its target over time. royalty sales proceeds, federal mineral to make up 11 percent of its assets under Alaska isn’t cutting all ties with firms revenue-sharing payments and bonuses management, or $5.9 billion, over “a that run funds of funds. It plans to allocate received by the state, according to its website.

VERBATIM: BREXIT COMPILED BY WILL WAINEWRIGHT, HEMA PARMAR, NISHANT KUMAR AND MELISSA KARSH June 28, 2016 Bloomberg Brief Hedge Funds 5

VERBATIM: BREXIT COMPILED BY WILL WAINEWRIGHT, HEMA PARMAR, NISHANT KUMAR AND MELISSA KARSH

equity, CTAs, direct lending, volatility integration. The single biggest loser here What the hedge fund industry is saying following , reinsurance and global macro. is the U.K. There will be less jobs. the U.K.'s decision to leave the European Union. These strategies will see an increase in Prepared investors have an opportunity Comments were edited and condensed. demand for both their perceived ability to to buy long-term assets unaffected by the generate alpha (returns unrelated to vote." market direction) and as a hedge against — Alberto Gallo, head of macro strategies and “Ordinary people have spoken and a potential market sell-off. This partner at Algebris Investments, in an telephone broken ranks with the experts and their uncertainty will increase both hedge fund interview on June 24 political leaders. [The U.K.’s decision] redemptions and re-allocations as money "Central banks will be more reflects proper disaffection in a world of is shifted throughout the hedge fund accommodative across the board. Expect low growth and almost no productivity industry." the declines in government yields growth, which can only get worse if — Don Steinbrugge, of consulting firm Agecroft to stick. In fact, the stimulatory effects of unanswered. People want honest Partners, in an e-mailed statement June 24 lower rates on global GDP may ultimately appraisals, they need structures that "I'd be surprised to learn that this is a be larger than the impact of Brexit. Don’t humanize them, leaders that they can long-term fundamental negative for these really see systematic risk via the financial know and communicate with.” countries. I just think that the reaction is sector, despite bank stocks lower. There — Odey Asset Management's Crispin Odey in an very strong in the markets, but the was a lot of Brexit prep. Of course a e-mailed statement on June 24 question is are people going to live European recession may cause some The news "has come as a surprise to differently? Are people going to produce stress. The transmission mechanism to the markets and will inevitably lead to a less? Are people going to buy less? systemic risk is via dollar strength and period of uncertainty and transition, as Other than psychological contagion, thereby excessive yuan strength … then the terms of Britain's exit and its future which should not be underestimated, I prospects of a China deval may cause relationship with the European Union are don't think that this is a fundamental trouble in EM. Watch the dollar and determined. Nonetheless, our industry is catastrophe. I do think that there are the watch China. Gold has been and remains in the business of analyzing and very strong societal and political and a buy for discretionary guys. We should responding to global political and geographic ramifications, but I have pick up a trend if one occurs. Credit may economic developments. It will take time trouble viewing it as a financial do better than expected. Low rates push to work out the consequences of the catastrophe." search for yield. Ongoing CB support helpful in wake of move down. U.K. will result, but we are committed to the U.K. — Howard Marks, co-founder of Oaktree Capital, have recession — business spending as part of our global business and to in an interview with Bloomberg TV on June 24 hiring the best talent from all over the and investment will decline in coming "Biggest risk from this outcome: The quarters until the outlook is more sorted." world. In the meantime, we continue to Pandora's Box it opens for the European focus on performance and serving our project. Not the end of the world for the — Douglas Greenig, who runs Florin Court clients through this time of change." US or global economies, but the Capital in London, in an e-mailed statement on — Manny Roman, CEO of Man Group, in an e- uncertainty around the future of the EU June 24 mailed statement on June 24 should keep volatility elevated for the "Brexit and the resulting volatility in "The impact from Brexit on the financial foreseeable future. Second biggest risk: markets has presented a number of markets and global growth will be long USD starts to strengthen meaningfully, opportunities for hedge funds. In lasting, primarily because the uncertainty which in turn forces China to do another particular, we are seeing strong results of its implications will take a long time to series of devaluations. The U.S. economy from macro and some credit oriented unfold. ... When uncertainty increases should be largely unaffected for now hedge funds. Many macro managers, investors require a higher return for their unless risk of EU fragmentation begins to especially the , systematic invested capital. This often leads to a impact EU growth. Feels good to be managers performed well as some of the widening of credit spreads and a decline focused on securities backed by U.S. key themes (long dollar, long rates, short in equity valuations. As a result, we assets almost completely fundamentally or neutral on equities) in their portfolios expect to see an accelerated increase in immune from this nonsense. Outcome proved to be a tailwind. Credit managers demand for hedge fund strategies with will dent sentiment for a while given the also seem to have weathered the low correlations to market benchmarks. potential negative ramifications on the volatility and produced additive results as The interest for these types of strategies EU, but offsetting this will be credit markets have not gone through as began to increase after the market expectations for the Fed to stay looser much of a repricing as equity markets. volatility last August and has continued longer." Going forward, and consistent with our view heading into the year, we believe through the first half of 2016. Higher — Troy Gayeski, partner at SkyBridge Capital, in macro hedge funds should be well strategies will likely be perceived as an e-mailed statement on June 24 higher (and unnecessary) risk. Some of positioned to capitalize on the elevated "For Europe, it's a defining moment volatility levels across different markets." the strategies that will see a significant and there is a policy plan, both from the increase in demand include: relative ECB and European government. I think — Scott Perry, partner in NEPC's endowment value fixed income, long- Europe could eventually come out and foundation consulting practice, in an e-mailed short stronger. The U.K. has always hindered statement June 28 European ON THE MOVE June 28, 2016 Bloomberg Brief Hedge Funds 6

ON THE MOVE Citadel Hires Morgan Stanley’s Lieblich as Tech Chief CLOSURE Steve Lieblich, the three-decade Morgan Stanley technology veteran, is joining Citadel LLC as chief technology officer of the firm’s hedge-fund business. Lieblich will report to Chief Executive Officer Kenneth Griffin when he starts later this Private Advisors Shuts Low- year, according to a statement from the -based money manager and securities Volatility Hedge Funds firm. Morgan Stanley informed staff Monday that Lieblich is stepping down as its chief Private Advisors, an alternative asset information officer to join a client. manager with New York Life Insurance “Our ability to develop and leverage market-leading proprietary technology is Co., is closing a low-volatility hedge-fund fundamental to our strategy,” Griffin said in the statement. “We are very pleased to have strategy as senior members of the team a proven innovator of Steve’s caliber.” depart. Lieblich’s exit from the bank follows the January retirement of another Morgan Stanley The investment-management firm is tech veteran, Moira Kilcoyne, who was his co-head of global technology and data since returning capital from those funds to 2013. Lieblich, who began as a trainee in 1986, managed equity technology and cross- investors, and will manage similar asset electronic trading before becoming head of institutional securities technology and strategies through custom accounts eventually taking the CIO post, according to a biography for an April industry event. going forward, Jacqueline Meere, a — Hugh Son spokeswoman for the New York-based insurer, said Wednesday in an e-mail. Tim Berry, who led hedge-fund Mariner Investment's Co-CIO Williams to Leave Firm investments, Peter Lee and Sean McChesney have left the company, she Basil Williams, co-chief investment officer of Mariner Investment Group, is leaving confirmed. the $5.5 billion hedge-fund firm after negotiations to renew his contract failed. Private Advisors oversaw about $5.6 Williams will stay in his role until the end of the month, after which the firm’s founder billion of assets at the end of March, with and co-CIO William Michaelcheck will become sole CIO, the firm said in a statement. about half in hedge funds and the rest in Williams declined to comment. private equity. The firm works with clients "Mariner and Basil Williams have elected to part ways after being unable to including pensions, endowments and successfully renegotiate Basil’s contract," the firm said. Negotiations had been ongoing high-net worth individuals, according to for several months. its website. The firm has been bolstering Williams became deputy CIO in 2013, when Mariner acquired his alternative asset staff this year, hiring Scott Henkin and management firm Concordia Advisors. Concordia, which managed $1 billion at the time, Sam Goodyear. Reuters reported the focused on relative value trading in rates, credit and equity markets. New York-based closure and departures earlier. Mariner was founded in 1992 and runs hedge funds and funds of funds. “Private Advisors believes closing its — Hema Parmar and Nishant Kumar commingled low-volatility funds and returning capital to investors is in the best interests of clients and ensures equitable treatment across its investor base,” Meere said. “Private Advisors is committed to innovation within its hedge fund platform and is seeking to take advantage of opportunities in key areas such as credit.” — Katherine Chiglinsky

REGULATORY/COMPLIANCE June 28, 2016 Bloomberg Brief Hedge Funds 7

REGULATORY/COMPLIANCE Puerto Rico Lawsuit Suggests Split Among Creditors Platinum Partners Said to A closer look at the hedge funds behind the lawsuit contesting Puerto Rico’s debt- Be Raided by FBI moratorium law may suggest a widening division among the holders of the island’s Platinum Partners’ offices were raided general-obligation bonds. While the suit was filed last week against the commonwealth by federal agents looking into the hedge by little known entities specifically set up to limit liabilities, the firms are Aurelius fund’s operations after a manager at the Capital Management, Autonomy Capital, Fundamental Advisors and Monarch firm was charged this month with bribing Alternative Capital, according to a person familiar with the parties involved in the legal a union chief, according to a person dispute. Representatives for the four hedge funds didn’t have any comments. familiar with the matter. “It’s not a monolithic investor class,” said Municipal Market Analytics's Matt Fabian. The raid is separate from the bribery “They all have different strategies and positions, so we’re seeing some of that diversity.” probe, the person said. It adds to the Aurelius, for example, is one of several hedge funds that rejected Argentina’s debt- woes at the firm, which is considering restructuring offers for years before finally agreeing in February to a deal. The shutting down its main hedge fund, moratorium law allows Governor Alejandro Garcia Padilla to suspend principal and another person said last week. A final interest payments on Puerto Rico’s $70 billion in debt through January. decision is still pending because the Some general-obligation holders have maintained that Puerto Rico’s constitution situation is in flux, that person said. requires they be paid in full even though Congress is moving to pass a law that would Agents from the Federal Bureau of allow the commonwealth to reorganize its finances under a control board. The suit was Investigation and the U.S. Postal announced last Tuesday, the same day Puerto Rico said that negotiations with creditors Inspection Service were at Platinum’s including general-obligation owners broke down after counter proposals were offices in midtown on exchanged. Other large general-obligation holders aren’t part of the lawsuit. The claim Wednesday morning, the person said. was filed by so-called special purpose vehicles identified in the filing as Jacana Kelly Langmesser, a spokeswoman for Holdings, Lex Claims, MPR Investors and RRW. the FBI in New York, said that agents The lawsuit claims that Puerto Rico is unable to impose its moratorium law against its conducted a "law enforcement action" at general obligations, including its most recent sale in 2014, because the island’s the hedge fund. She declined to constitution states that if the commonwealth’s resources are insufficient to meet all of its comment further. desired spending, then the public debt will be paid first, according to the complaint. The “Platinum Partners is in receipt of a firms are “substantial” holders of the 2014 general obligations, the complaint said. search warrant from law enforcement Puerto Rico and its agencies racked up its debt burden by borrowing for years to and are fully cooperating,” said Montieth paper over budget shortfalls as its economy shrunk. The commonwealth and its Illingworth, a spokesman for the firm. agencies owe $2 billion of principal and interest on July 1, including $805 million for “We look forward to resolving this on a general obligations that Garcia Padilla said Thursday the island couldn’t pay even if he timely basis.” Illingworth declined to shut down the government. comment on whether firm is considering — Michelle Kaske shutting down its main fund. “Platinum Partners is committed to managing the Bacon Loses Appeal in Bahamas Backyard Battle assets in the Value Arbitrage fund to maximize investor returns,” he said. Louis Bacon suffered another setback in his bitter, decade-long feud with Canadian On Wednesday morning, there were clothing manufacturer Peter Nygard over their neighboring properties in the Bahamas. two officers wearing Postal Inspection Bacon, who runs the Moore Capital Management hedge fund, sued in New York jackets in the lobby of the tower which state court last year, saying his neighbor forced him to flee the island nation because he houses Platinum’s offices. They declined feared for his family’s safety as the two fought over plans to expand Nygard’s property to comment. The investigation, which in the exclusive Lyford Cay. Nygard countersued, accusing Bacon of pursuing a also involves the U.S. Attorney’s office in vendetta to force him from his property. Brooklyn, focuses on the hedge fund’s A New York appeals court Thursday ruled against Bacon, upholding a trial judge’s business, the person said. dismissal of claims over most of 135 statements Bacon said were part of the In the bribery case, Murray Huberfeld, harassment campaign. Bacon took too long to file them, the appeals court ruled, saying a manager at Platinum Partners, and Bacon’s contention that he couldn’t discover Nygard’s identity because of fraud and Norman Seabrook, head of the New York misrepresentation was “utterly refuted” by two open letters he published. City corrections officers’ union, were Bacon “had sufficient knowledge to bring an action for more than a year” before he did charged earlier this month by federal so, the court said. prosecutors in Manhattan and accused of "This decision is yet another significant victory for Mr. Nygard as he defends himself taking part in a two-year scheme that against Mr. Bacon’s repeated and baseless lawsuits," Aaron Marks, a lawyer for began in November 2013. Seabrook’s Nygard, said in a statement. "We look forward to demonstrating that what remains of lawyer, Paul Shechtman, has previously Mr. Bacon’s case is similarly frivolous.” said the labor chief would fight the "The decision has no bearing on the overall merits of the case, which concerns over charges. He didn’t respond to a call for 60 defamatory articles," Bacon said in a statement. "The claim will be determined in comment Wednesday. Huberfeld’s court and we are confident in our position.” lawyer, Eliot Lauer, declined to comment. — Chris Dolmetsch and Bob Van Voris — Christie Smythe and Zeke Faux

OVER THE HEDGE: REAL ESTATE June 28, 2016 Bloomberg Brief Hedge Funds 8

OVER THE HEDGE: REAL ESTATE

Bill Ackman next year will move his firm, Pershing Square Capital Management, from the 42nd floor of a Plaza District tower overlooking Central Park to an auto-dealership building on 11th Avenue in Hell’s Kitchen, three blocks from Larry Flynt’s Hustler Club. The neighborhood has had to overcome a lingering image from its days of gangs, prostitutes and drug dealers. Hell's Kitchen — north of the skyscrapers rising at the Hudson Yards site to the south — is emerging as a viable office market, with high-profile companies looking at industrial hulks that not long ago were written off by respectable New Yorkers. It’s part of the trend that has given tenants alternatives to traditional office towers, in once-sketchy neighborhoods such as West Chelsea and the Meatpacking District. At 787 11th Ave., Pershing Square Source: Goldin Solutions is taking about 50,000 square feet on two new floors, to be built Rendering of the outside of 787 Eleventh Avenue. Below is a atop of the current eight, according to a person with knowledge rendering of the building's sixth and seventh floors. of the plans. There also will be a gym, outdoor terraces, space for the Pershing Square Foundation and a tennis court on the roof for use by all office tenants. The hedge-fund firm will pay about $88 a square foot, down from the $140 a square foot it’s paying currently, said the person. A partnership including Ackman bought the 464,000-square-foot building a year ago for $255.5 million from Ford Motor Co. Adam Flatto, president and chief executive officer of developer Georgetown Co., which leads the partnership, called the project a “counterpoint” to the skyscrapers being built to the south. — David M. Levitt

Source: Goldin Solutions

Cohen’s Point72 Plans Move to Skyscraper in NYC’s Hudson Yards

BY DAVID M. LEVITT Steven A. Cohen’s agreed to move its New York offices to 55 Hudson Yards, the third skyscraper planned for Related Cos.’s $25 billion development on Manhattan’s far west side. Point72, the $11 billion firm that oversees Cohen’s wealth, plans to lease more than 175,000 square feet (16,000 square meters) across six floors in the tower, according to a statement Monday by Related and Point72. The deal would increase the Stamford, Connecticut-based firm’s New York office space by 20 percent. It currently has offices at 330 and 510 Madison Ave., which are about a mile apart. “Uniting the two locations is an opportunity for us to improve collaboration and work efficiencies,” Gregory McGee, Point72’s global head of facilities, said in the Source: Hudson Yards statement. “We want to encourage communication among Rendering of a the completed 55 Hudson Yards. employees and high levels of productivity.” The statement didn’t disclose how much Cohen’s firm will Cohen’s firm is the third tenant to commit to taking space pay to rent its space in the building, which is scheduled to be at the 1.3 million square-foot, 51-story skyscraper, joining completed in 2018. law firms Milbank Tweed Hadley & McCloy LLP and Boies The firm is also building its presence in London after Schiller & Flexner LLP. The project, stretching from 10th shutting SAC’s U.K. offices in 2013. Point72 is seeking to Avenue to close to the Hudson River, is being built mostly boost employee numbers there to 70. The company said last over a rail yard used by trains that run through Pennsylvania week that its plans are still on track despite Britain’s decision Station to the east. to leave the European Union.

ACTIVIST SITUATIONS COMPILED BY PATRICK BROWN AND MICHAEL THIEME, BLOOMBERG DATA June 28, 2016 Bloomberg Brief Hedge Funds 9

ACTIVIST SITUATIONS COMPILED BY PATRICK BROWN AND MICHAEL THIEME, BLOOMBERG DATA

Significant Actions at Companies Targeted by Activist Investors

COMPANY ACTIVIST WHAT HAPPENED Activist firm led by Bill Ackman released on June 27 the sixth in a series of videos on the global nutrition company aiming to show Pershing Square its "false and misleading claims" to "entice new recruits into its pyramid scheme." The company, which has denied Ackman's Herbalife Ltd. Capital allegations, is up about 41 percent since December 2012 when Ackman first placed a $1 billion bet against the company's stock, Management according to data compiled by Bloomberg. Tourbillon Capital Canadian supplier of organic and specialty foods said in a statement June 27 that it has hired Rothschild to review its operations SunOpta Inc. Partners after the with a 9.9 percent stake urged the company to explore a sale. Elliott Management Activist hedge fund increased its stake in the London-based takeover target by an additional 6.7 million shares, according to a June Premier Farnell Plc Corp. 27 filing. Electoral-equipment company said in a June 24 statement that it ousted its CEO after a disagreement with the Rexel SA Cevian Capital AB over a plan to split the chairman and CEO roles, a move that comes months after the activist shareholder said in February that it owned more than 5 percent of the French company. Glaucus Research Activist short seller said it's planning to target companies in Japan, which has been calling for more engaged investors, and has Japan Group investigated a couple of corporations with plans to publish reports on them in four to five weeks, Bloomberg News reported June 23. Activist with a 7.6 percent stake said in a June 22 statement that the San Jose, California-based firm has been unresponsive to its Ultratech Inc. Neuberger Berman efforts to refresh the board and revamp the company's business and management succession plans. The third-largest shareholder urged other shareholders to vote for its nominees as dissident director candidates for the company's board. German generic drugmaker facing pressure from activist with a 7 percent stake hired to help advise on strategy, Stada Arzneimittel Active Ownership including on relations with its top shareholders and defense against a possible takeover bid, Bloomberg News reported June 22, AG Capital Sarl citing people familiar with the matter. Activist hedge fund with a 9.8 percent stake has initiated a dialogue with the cyber security-software company's board to discuss Elliott Management Imperva Inc. opportunities that would increase value to shareholders, describing it as undervalued in a June 20 filing. This the activist's twenty- Corp. ninth campaign since 2010, and its nineteenth targeting the technology sector, according to data compiled by Bloomberg. Federal-Mogul Auto-parts maker's largest stockholder raised its bid to $8 a share for the remaining 18 percent of the Southfield, Michigan-based Carl Icahn Holdings Corp. company from the $7 a share offered in February, according to a June 20 filing. The company's shares climbed. Source: Bloomberg News, NI SHRHOLDACT

DEAL ARBITRAGE June 28, 2016 Bloomberg Brief Hedge Funds 10

DEAL ARBITRAGE

The table below tracks pending corporate mergers in North America and the deal spreads — the difference between the offer price and the target's stock price. The table shows the week-over-week change in those spreads through yesterday. Spreads that have moved by 2 percent or more are flagged in the far right "major move" column by an arrow indicating the direction of movement. Projected annualized returns are based on the spread and the deal's expected completion date.

1W EXPECTED OFFER PROJECTED DEAL TARGET PAYMENT CHANGE MAJOR TARGET ACQUIRER COMPLETION PER SPREAD ANNUALIZED SIZE (M) PRICE TYPE IN MOVE DATE SHARE RETURN SPREAD AGL Resources Inc Southern Co/The 11,937 12/31/16 66.00 66.01 Cash 0.0% 0.0% -0.2% Alere Inc Abbott Laboratories 8,040 - 56.00 40.47 Cash 38.4% - 3.8% ▲ Consortium Led By David Amaya Inc 6,487 - 21.00 18.38 Cash 14.3% - 8.0% ▲ Baazov Cigna Corp Anthem Inc 50,382 12/31/16 167.72 122.09 C&S 37.4% 73.0% 1.4% NorthStar Asset Colony Capital Inc Management Group Inc/New 6,024 03/31/17 14.72 15.46 Stk -4.8% -6.3% -0.4% York Columbia Pipeline Group Inc TransCanada Corp 12,026 07/01/16 25.50 25.48 Cash 0.1% 7.2% -0.1% EI du Pont de Nemours & Co Dow Chemical Co/The 65,591 12/31/16 64.06 64.08 Stk 0.0% -0.1% -0.8% EMC Corp/MA Dell Inc 63,491 10/31/16 30.19 27.04 Cash 11.6% 33.8% 0.3% Envision Healthcare Amsurg Corp 7,520 12/31/16 25.45 25.12 Stk 1.3% 2.6% -0.4% Holdings Inc Humana Inc Aetna Inc 28,906 12/31/16 221.78 176.94 C&S 25.3% 49.5% 4.3% ▲ IHS Inc Markit Ltd 9,774 12/31/16 108.12 107.85 Stk 0.3% 0.5% 0.0% Quintiles Transnational IMS Health Holdings Inc 12,559 12/31/16 23.55 23.72 Stk -0.7% -1.4% 0.6% Holdings Inc Tianjin Tianhai Investment Ingram Micro Inc 6,133 12/31/16 38.90 34.36 Cash 13.2% 25.8% 1.7% Co Ltd ITC Holdings Corp Fortis Inc/Canada 11,150 12/31/16 47.22 45.94 C&S 2.8% 5.4% -0.5% Johnson Controls Inc Tyco International Plc 28,667 09/30/16 38.50 41.33 C/S -6.8% -26.3% 3.9% ▲ KLA-Tencor Corp Lam Research Corp 10,955 06/30/16 71.98 71.27 C&S 1.0% 121.2% 0.3% LinkedIn Corp Microsoft Corp 24,380 12/31/16 196.00 189.44 Cash 3.5% 6.8% 0.7% Medivation Inc Sanofi 8,766 - 52.50 56.61 Cash -7.3% - 5.3% ▲ Monsanto Co Bayer AG 61,698 - 122.00 99.98 Cash 22.0% - 9.6% ▲ NorthStar Asset NorthStar Realty Finance Management Group Inc/New 10,055 03/31/17 11.04 10.92 Stk 1.1% 1.5% 0.5% Corp York Piedmont Natural Gas Co Inc Duke Energy Corp 6,536 12/31/16 60.00 59.65 Cash 0.6% 1.2% 0.3% Questar Corp Dominion Resources Inc/VA 5,965 12/31/16 25.00 25.21 Cash -0.8% -1.6% -0.8% Rite Aid Corp Walgreens Boots Alliance Inc 16,708 12/31/16 9.00 7.55 Cash 19.2% 37.5% 2.6% ▲ SolarCity Corp Tesla Motors Inc 5,739 - 26.01 22.62 Stk 15.0% - 17.6% ▲ St Jude Medical Inc Abbott Laboratories 30,108 12/31/16 78.93 76.12 C&S 3.7% 7.2% 0.1% Talen Energy Corp Riverstone Holdings LLC 5,045 12/31/16 14.00 13.19 Cash 6.1% 12.0% 3.0% ▲ TECO Energy Inc Emera Inc 10,361 07/01/16 27.55 27.65 Cash -0.4% -33.0% 0.1% Valspar Corp/The Sherwin-Williams Co/The 11,206 03/31/17 113.00 107.06 Cash 5.5% 7.3% 1.1% Westar Energy Inc Great Plains Energy Inc 12,117 12/31/17 60.00 55.79 C&S 7.5% 5.0% 0.0% Williams Cos Inc/The Energy Transfer Equity LP 58,093 06/30/16 28.87 20.00 C/S 44.4% 5398.5% 28.6% ▲ MARB North American deals *Spread moved by more than 2% of price target: ▲ = up, ▼= down C/S=cash or stock

CALENDAR TO SUBMIT AN EVENT E-MAIL [email protected] June 28, 2016 Bloomberg Brief Hedge Funds 11

CALENDAR TO SUBMIT AN EVENT E-MAIL [email protected]

The "event" column links to websites. "Attendees of note" links to individual's BIO page, where available, on the Bloomberg terminal.

DATE ORGANIZER EVENT SPEAKERS/ATTENDEES OF NOTE/DETAILS LOCATION Mitigating Risks Caused by Rogue Paul Neale, DOAR; Mark S. Sidoti, Gibbons; R. Scott June 28 Hedge Fund Association Harvard Club, New York Employees Garley, Gibbons. Annual Benjamin Graham Jason Karp, Tourbillon Capital; Leon Cooperman, June 29 NYSSA New York Conference Omega Advisors; John Bader, Halcyon Capital. June 30 NYHFR, Bloomberg June Roundtable Maureen Sherry, author of "Opening Belle." New York July 11-14 Risk.net Quant Summit 2016 USA Maurizio Ferconi, BlackRock; Attilio Meucci, KKR. New York Private Investment Fund, Operations Topics include how are investors assessing fund July 18-19 FRA LLC New York & Compliance Forum East operations, tax outlook and key valuation issues. & Private Wealth Gregory A. Coleman, FBI (retired); Norm Champ, Hyatt Regency Newport, July 18-20 Opal Group Management Forum 2016 Kirkland & Ellis; Mitzi Perdue, Perdue Farms. Rhode Island 10th Annual Josh Zweig, Cambridge Associates; Karen K. Chandor, Hyatt Regency Greenwich, July 21 Institute, HFA Consultants Summit Mercer; Todor Todorov, Willis Towers Watson. Connecticut Katherine Nixon, Northern Trust; Kevin Rochford, Aug. 17 Markets Group Private Wealth Midwest Forum Chicago Bessemer Group; Katherine Lintz, Matter Family Office. Private Investment Fund, Operations Michael Maestas, Charles Schwab & Co.; Adam L. Aug. 25-26 FRA LLC San Francisco and Compliance Forum West Menkes, Credit Suisse. 2nd Annual Texas Credit & Hedge Joseph Quinlan, Bank of America PWM; Lisa Needle, Sept. 7 Markets Group Austin, Texas Fund Investor Forum Albourne; James Perry, Dallas Fire and Police. World Alternative Investment Dennis Mitchell, Sprott Asset Management; Matthew Fallsview Casino Resort, Sept. 7-9 Radius Summit Canada Barnes, Centurion Asset Management. Niagara Falls Bruce Richards, Marathon; Stuart Fiertz, Cheyne; Sept. 8-9 IMN 22nd Annual Alpha Hedge West San Francisco Guillermo Osses, Man GLG; Mark Okada, Highland. Sept. 13 CNBC, Delivering Alpha 2016 To be released. New York Cap Intro: L/S Equity/Event Driven Sept. 19 Catalyst One-on-one meetings. New York Alternative Investing Select Hedge Funds Conference & Sept. 19-21 BHA Jim Chanos, Kynikos Associates. Boston Private Markets Connector Lars Nielsen, AQR; Max Roberts, Highbridge; Paul Sept. 20 Risk.net Risk Hedge USA 2016 New York Richardson, Pine River; Ronan Cosgrave, Paamco. Sept. 20-23 TABOR Family Office Conference Includes 50 family offices and 25-30 managers. Beaver Creek, Colorado Sept. 25-27 Context Summits Context Summits West 2016 One-on-One meetings with investors. Dana Point, California Sept. 28-30 Radius World Alternative Investment Summit Lawrence McDonald, ACGA; Peter Hughes, Apex. Bermuda Oct. 5 Sohn Conference Foundation Sohn San Francisco To be released. San Francisco Oct. 5-6 AIMA Canada Hedge Fund Conference To be released. Quebec Michael Neus, Perry Capital; George Chang, D.E. Oct. 6-7 American Conference Institute Hedge Fund Compliance Park Lane Hotel, New York Shaw; Jennifer Duggins, SEC; David Chaves, FBI. Cap Intro: Credit/Fixed Income Oct. 17 Catalyst One-on-one meetings. New York Alternative Investing Great Investors' Best Ideas Caroline Cooley, Crestline; David Einhorn, Greenlight; Oct. 18 10th Annual Investment Symposium Dallas, Texas Foundation T. Boone Pickens, BP Capital. Oct. 18 High Water Women Investing for Impact Symposium To be released. New York Oct. 18 Funds Society, Open Door Fund Selector Forum New York To be released. Waldorf Astoria, New York Tri-State Credit & Hedge Fund Oct. 19 Markets Group To be released. New York Investor Forum Oct. 20-21 Managed Funds Association Outlook 2016 To be released. The Pierre, New York Dan Loeb, Third Point; Ed Garden, Trian; Jeffrey Smith, Oct. 26-27 Capitalize for Kids Investors Conference Arcadian Court, Toronto Starboard; Bruce Richards, Marathon. DISCLAIMER: The information on this page was compiled by Bloomberg from multiple sources, public and private, and is deemed to be accurate, but not definitive or exhaustive. Questions about events should be addressed to the event organizer. June 28, 2016 Bloomberg Brief Hedge Funds 12

Bloomberg Brief: Hedge Funds

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