The Morning Brief: Chris Rokos, Herbalife, Dinakar Singh, and SAC Capital

Chris Rokos, one of the co-founders of Brevan Howard who left the firm last August, is planning to set up a family office to manage his own money. He is one among a number of high profile hedge fund managers who have recently chosen to just manage their own assets rather than other people’s money.

Rokos, the “R” in Brevan, earned at least $200 million in 2011, qualifying for Alpha’s Rich List for the second time.

Rokos graduated from the University of Oxford in 1992 with a BA in mathematics. He joined Goldman Sachs the following year, spending four years as a swaps trader before leaving in 1998 for Credit Suisse, where he worked as a fixed-income derivatives trader under Alan Howard, who was head of Credit Suisse Group’s interest-rate proprietary trading desk. Rokos, along with several other colleagues, joined Brevard Howard when Alan Howard left Credit Suisse Group to launch the hedge fund firm in 2002.

••• More assets left hedge funds than flowed in during December, resulting in net redemptions for the month, according to eVestment. For the full year, assets increased by 5.9 percent, to $2.6 billion. Various credit strategies were the biggest recipients while equity strategies and managed futures saw net outflows.

••• Another wild day for Herbalife. First of all, the company reported preliminary fourth quarter results that were higher than expectations. As a result, D.A. Davidson analyst Timothy Ramey lifted his 2013 earnings per share estimate to $4.85 from $4.55. This led him to raise his price target for the stock to $78 from $72. He also raised his five-year price target to $180 from $120. So, the stock soared on this news, right? Not so fast. Rather, they slumped 3.42 percent, to close at $43.52. It seems investors were disappointed they did not learn more about the company’s rumored stock buyback. In its earnings report, Herbalife simply stated: “The company expects to begin repurchasing shares of Herbalife stock, pursuant to its existing share repurchase authorization.”

••• Credit Suisse Securities on Thursday reiterated its outperform rating on Apple and its $750 price target. “Apple remains well positioned with a privileged advantage in the compute market and will be able to maintain momentum across key product lines driven by continued innovation in hardware, software and services,” it told clients in a note. It especially sees continued strength in the iPad. Even so, the stock fell $3.41, to $502.68 for the day.


••• Dinakar Singh, founder and CEO of New York-based hedge fund TPG-Axon Capital Management, is bullish on aerospace stocks. He told the audience at the Bloomberg Global Markets Summit in New York Thursday that after being neglected for several years following the financial crisis, the industry is going to benefit from a global modernization wave, which could last 10 to 15 years. He said Boeing – which is currently mired in the embarrassing grounding of its 787 Dreamliner – and Airbus will maintain their industry dominance.

••• Steve Cohen’s SAC Capital reported a 5.2 percent passive stake in Colony Financial, a commercial real estate finance company.

••• Remy Trafelet’s Trafelet Capital Management, L.P., reported a 5.2 percent passive stake in Prospect Global Resources, which is involved in the development of an Arizona potash mine. In late November, Apollo Global Management, LLC made a $100 million investment in Prospect Global.

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