The Morning Brief: New Funds From New Firms Do Best, Study Finds

A new study published by London data collector Preqin found that long-short hedge funds launched by brand-new firms — which Prequin calls emerging manager funds — outperformed new funds created by established managers during the same period. The analysis found that the average emerging manager fund launched since 2007 has posted an annualized net return of 8.80 percent in its first three years, compared with an annual gain of 5.38 percent from new funds launched by already existing firms. However, the new funds from new firms seem to come with more volatility. And even though 22 percent of emerging manager funds launched since 2007 lost money in their first year of trading compared with 26 percent of funds launched by established managers, the emerging managers that suffered a loss in the first year tended to experience larger declines.

Preqin also found that 2012 was a record year for new hedge fund managers setting up shop, with 274 recorded firm launches. However, 2013 could beat that record, as 231 managers recorded launches as of November 15. However, just 44 percent of fund management groups established in 2013 have actually launched their first vehicle.

Like teacher, like student. Keith Meister’s New York-based firm, Corvex Management, sold 10.24 million shares of ADT to the company for $44.01 a share. This leaves the hedge fund manager with just 361,585 shares. However, in a regulatory filing, Meister signaled that he anticipates building back the stake to one million shares. Meister previously worked for legendary investor Carl Icahn. Last week, Take-Two Interactive Software bought out Icahn’s 12 million or so share position for $16.93 per share, or a total of $203.5 million. In addition, three of Icahn’s people resigned from the company’s board of directors.

Speaking of Icahn: UBS on Wednesday downgraded its rating on Nuance Communications to Neutral from Buy and slashed its price target to $14 from $22 after the voice and language technology company forecasted earnings and revenues for 2014 that were below Wall Street expectations. Although the stock has rebounded more than 3 percent over the past two trading days after plunging 18 percent last Tuesday, it is down more than 40 percent in less than seven months.

Adage Capital Partners disclosed it owns 5.30 percent of semiconductor maker Silicon Laboratories. The Boston-based hedge fund firm, founded in 2001 by former Harvard Management colleagues Phil Gross and Robert Atchinson, indicated in a regulatory filing that the investment is passive.

Steve Cohen’s Stamford, Connecticut-based SAC Capital Advisors disclosed an 8.78 percent passive position in Clearwater Paper, a pulp and paper spinoff of Potlatch.

John Burbank’s San Francisco-based Passport Capital disclosed a 14.4 percent passive investment in Sungy Mobile, a Chinese mobile company.