Rumors were flying Tuesday morning when the New York Stock Exchange delayed the opening of supplements supplier Herbalife’s stock due to “pending news.” It turned out that that auditor KPMG announced it was dropping Herbalife and another company, footwear maker Skechers USA, as clients after the firm learned that one of its senior partners provided insider information to a third party. There was no indication that Herbalife did anything wrong. However, its stock closed down 3.75 percent Tuesday, to $36.95, possibly on concerns that a new auditor may uncover something the KPMG auditors failed to find. There was also a question as to whether the inside information passed along was positive to the company or negative to the company.
On Tuesday this column reported that Steven Cohen’s SAC Capital Advisors disclosed a 5.1 percent stake in Skechers. Shares of Skechers, however, surged 1.86 percent, to $21.91 on Tuesday.
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A former analyst who worked for Carl Icahn is starting his own hedge fund. Alex Denner, who specialized in healthcare stocks, is launching his own activist firm, Sarissa Capital Management, with a seed investment from Meritage Group. Mayu Sris, who worked as an analyst at Icahn Associates Corp. from 2005 to 2010, will also be joining the firm as managing director along with Richard Mulligan, a professor of genetics at Harvard Medical School..
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Jana Partners doth speak too soon. A day after the hedge fund firm claimed two of its nominees won election to Agrium’s board of directors, the Canadian fertilizer company announced that shareholders reelected all 12 incumbent directors nominated by Agrium. “Approximately 80 percent of our top 50 actively managed institutional shareholders voted for Agrium’s nominees,” said Victor Zaleschuk, Agrium’s chairman, in a statement. “This vote shows the overwhelming support for Agrium and its integrated strategy,” said Mike Wilson, Agrium president and CEO.
In response, Jana cried foul and promised an investigation into the vote. In a statement, the hedge fund’s founder, Barry Rosenstein, said 59 million votes were cast for one or more of his nominees, and that it appeared there were enough votes for David Bullock, a member of his slate, and Rosenstein to be elected to the board of directors. “We have learned however that after the vote deadline, enough votes for us were apparently revoked to change the outcome,” Rosenstein said. “We intend to investigate the vote changes after the voting deadline and of course the vote buying, and to pursue all appropriate remedies.”
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Michael Platt’s BlueCrest Capital Management continues its poaching spree. The London-based hedge fund firm with $35 billion under management has lured away Shaun Heelan from DW Investment Management to join its securitized-debt team. Heelan will focus on asset-backed securities and commercial-mortgage bonds. BlueCrest recently hired William Yearick, an interest-rate options trader from Deutsche Bank. He joins two other ex-DeutscheBank employees hired this year: John Roach, a mortgage-debt trader, and Matt Siravo, a distressed-debt trader. In the past two years BlueCrest also hired at least four other debt traders from Morgan Stanley and Bank of America Corp.
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Hennessee Group said its Hedge Fund Index rose 1.74 percent and 4.80 percent for the first three months, or less than half the 10.61 percent return posted by the S&P 500. It said equity long/short funds rose 5.88 percent for the first quarter, led by healthcare, which was up 6.24 percent, and utilities, up 5.13 percent. The Hennessee Arbitrage/Event Driven Index advanced rose 3.62 percent for the quarter.
