Kenneth Griffin’s Kensington and Wellington funds were mostly flat last month, gaining 0.1 percent in October. As a result, the multistrategy funds are up 15.05 percent for the year, making Griffin’s Chicago-based Citadel one of the better-performing hedge fund firms this year. Its Global Equities fund gained 0.38 percent in October and is up 17.3 percent for the year.
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San Francisco-based activist Marcato Capital Management is turning up the heat on Intercontinental Hotels Group, which owns Holiday Inn and Crowne Plaza, among other brands. The hedge fund, which has about 4 percent of the hotel chain, called on the company to “conduct a full and formal review of strategic alternatives” to boost long-term value. In a letter to fellow shareholders, Marcato founder Richard “Mick” McGuire III asserted that IHG could fetch nearly double its current price in a merger with another hotel operator, drawing on analysis from Houlihan Lokey.
“This is a unique and ideal time for IHG to consider strategic alternatives,” McGuire said in the letter. “The hospitality industry and M&A environment are both strong, interest rates are at record lows, there are substantial revenue and expense synergy opportunities, and we believe there is likely to be interest from several potential strategic partners.” In response, IHG said it met with Marcato on September 22 and October 29 and reviewed its analysis. “The board has concluded that it remains in the best interests of all its shareholders to continue to pursue its current strategy for high-quality growth and delivering strong operational and financial performance,” IHG said in a press release.
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A hedge fund manager failed in his attempt to get insider trading charges dismissed. U.S. Magistrate Judge Janet King in Atlanta disagreed with Steven Slawson, co-founder of Titan Capital Management. A Reuters report said that Slawson’s lawyers argued that the indictment for trading in the stock of children’s apparel maker Carter’s should be tossed out because it failed to say that he knew the insider disclosed the confidential information for personal gain. Reuters reported that King ruled there was no “binding or persuasive legal authority” requiring that anyone charged with trading with insider information know their source enjoyed some sort of benefit. Slawson was charged with 25 counts of securities fraud, 10 counts of wire fraud and one count of conspiracy for engaging in insider trading from 2005 to 2010. Reuters said that the same issue is currently before a New York federal appeals court in a case brought against Todd Newman, a former Diamondback Capital Management portfolio manager, and Anthony Chiasson, co-founder of Level Global Investors. They are appealing insider trading convictions from 2012.
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UBS raised its price target on hedge fund favorite Apple to $125 from $115, noting that one of its recent research studies found strong interest in the new Applie iPhone 6. UBS pointed out that about 40 percent of those surveyed “are likely to buy an iPhone 6 in the next year.” What’s more, over half of those purchases figure to be the 6 Plus. UBS also found strong demand in China.
