The Morning Brief: Investors Ask to Pull $800m from Fortress Fund
Fortress Investment Group said on its fourth quarter earnings call that investors have requested to yank nearly $800 million from its main global macro hedge fund, according to a Wall Street Journal report. This works out to roughly one-quarter of the fund’s $3.2 billion under management at the beginning of the year, according to the report. The Fortress Macro Fund fell 1.6 percent in 2014 in a difficult year for macro funds in general. Fortress wrongly bet against U.S. government bonds and the Japanese yen, according to the report, although it did make money betting on the rising U.S. dollar.
Snitching certainly paid off for Thomas Hardin, who at one time ran Lanexa Management. Hardin, who pleaded guilty in 2010 to conspiracy and securities fraud charges, was able to avoid prison at his sentencing hearing Wednesday thanks to the fact that he provided information and key evidence for dozens of insider trading convictions, including that of Galleon Group’s Raj Rajaratnam, according to Reuters.
“It is very clear to me that Mr. Hardin indeed provided exceptionally substantial and effective assistance in the investigation and prosecution of other persons,” U.S. District Judge Laura Taylor Swain said in imposing sentence, according to the report. Hardin reportedly provided various forms of assistance to the government, even agreeing to wear a wire when he met with friends and colleagues.
UBS raised its price target on Dollar Tree, which is acquiring Family Dollar Stores, from $79 to $89, and maintained its Buy rating, noting that the discount retailer’s fourth-quarter results “reinforced that the company has a strong, multi-year story.”
Deutsche Bank also raised its price target on Dollar Tree, from $73 to $83, but maintained its Hold recommendation. The bank says the company is “well positioned to capitalize on strong fundamental trends” and that it was “impressed with management’s detailed synergy outline.”
On the other hand, Stifel Nicolaus downgraded the stock from Buy to Hold but retained its $80 price target, noting that the stock is entering a period of heightened risk with a full valuation. At year-end, O. Andreas Halvorsen’s Greenwich, Connecticut-based Viking Global Investors was the retailer’s fourth-largest shareholder, while Jonathon Jacobson’s Boston-based Highfields Capital Management was the sixth-largest holder.
Shares of Sears fell nearly 5 percent on Thursday, even though the crumbling retailer narrowed its quarterly loss by nearly $200 million from the previous quarter. The stock is by far the largest holding of Edward Lampert’s ESL Investments.