The Morning Brief: Despite Tough April, Activists Soar
April was a tough month to make money for a number of activists. Even so, many of them are still having pretty strong years. The top performer remains Christopher Hohn’s the Children’s Investment Fund Management. The London-based fund tacked on 0.6 percent in April, boosting its gain for the first four months to 13.68 percent. Scott Ferguson’s New York-based Sachem Head is up 9.25 percent for the first four months, despite losing 0.68 percent in April. William Ackman’s New York-based Pershing Square Holdings was up 6.3 percent through April and is roughly break-even this month through May 19. Mick McGuire III’s San Francisco-based Marcato International, meanwhile, lost 1.6 percent in April, cutting its gain for the year to about 3 percent while Nelson Peltz’s New York-based Trian Partners was flat last month, and remained up about 2.5 percent for the four months. In the first quarter, Eric Mandelblatt’s New York-based Soroban Fund rose 5.8 percent while Keith Meister’s New York-based Corvex Partners advanced 6.2 percent.
Much attention is being paid to the so-called “collapse” in the shares of Brooklyn-based online craft marketplace Etsy, which have halved since they went public several months ago. Even so, at its Friday closing price of $17.16, early investors are still comfortably in the black. For one thing, the stock is still above its initial public offering price of $16. They are also still 62 percent above the $10.60 price that Tiger Global Management paid for a little more than 3.3 million shares on April 1, 2014 when the Brooklyn-based online crafts marketplace was still private. This works out to a $22 million paper profit. This also does not include all of Tiger Global’s 7.1 million shares, or 7.3 percent of the total before the IPO, and 6.4 percent after the offering.
New York-based Brigade Capital Management increased its stake in The Bon-Ton Stores by more than 50 percent, to more than one million shares, or 5.6 percent of the total outstanding of the regional department store chain.
Redemptions from hedge funds rose in May compared to the prior month. The SS&C GlobeOp Forward Redemption Indicator registered 4.68 percent, up from 3.36 percent in April. According to Bill Stone, chairman and chief executive officer of SS&C Technologies, the monthly increase reflects “mainly seasonality,” noting that year-over-year increase is only 36 basis points from 4.32 percent in May 2014. The Forward Redemption Indicator represents the sum of forward redemption notices received from investors in hedge funds administered by SS&C GlobeOp on its SS&C GlobeOp platform, divided by the assets under administration at the beginning of the month for SS&C fund administration clients on its platform.