The Morning Brief: Former SAC Manager in Court; McGraw Hill to Sell Ed. Division
Former SAC Capital portfolio manager Mathew Martoma on Monday made his first appearance in a New York court since he faced charges in what U.S. prosecutors are calling “the most lucrative” insider-trading scheme ever. Martoma was released on $5 million bail. SAC founder Steven Cohen was not charged with any wrongdoing, although in court documents prosecutors have described the “owner” of the hedge fund as having some involvement in certain trades.
More than 15 months after hedge fund Jana Partners called on McGraw Hill to divest its McGraw-Hill Education unit, the publishing and financial data company Monday said it would sell the business to private equity firm Apollo Global Management for $2.5 billion. Shares of McGraw Hill—which plans to rename itself McGraw-Hill Financial—barely budged, however, closing under $52. The stock is up more than 26 percent since August 2011 when Jana disclosed that it owned nearly 8.9 million shares of the company and called on management to restructure. Jana boosted its stake to 10.2 million shares by September 30, 2011 and, combined with Ontario Teachers’ Pension Plan Board controlled 5.2 percent of McGraw Hill shares. After the publishing company said it would meet certain requests made by the activist investors, in February 2012 Jana and Ontario Teachers announced that they had sold off shares, bringing their combined stake below 5%. Jana owned just 2.6 million shares when the Apollo deal was struck.
Kevin Kwong, a partner at once highly touted Senrigan Capital, has left the Asia-focused event-driven hedge fund that was launched in 2009 with seed capital from Blackstone Group. According to a report, Kwong plans to start his own fund. Marketing could be a challenge: Kwong posted big losses over the past two years.
Starboard Value LP disclosed late Monday that it has been building a position in Tessera Technologies since at least June 2012. The activist hedge fund filed a pair of delayed 13F forms with the SEC. One of them disclosed it owned 450,000 shares of the technology company at the end of the second quarter while another filing said it owned 2.525 million shares at the end of September. The deadline for the June filing was mid-August while the deadline for the September filing was mid-November. However, investment firms are permitted to delay these filings under certain conditions. The company, which has a market cap of about $785 million, makes what are called miniaturization technologies and products for electronic devices.
Farallon Capital Management has lifted its stake in Trident Microsystems to 11.7 percent from the 5.6 percent holdimg that was reported on October 25. The hedge fund founded by Tom Steyer, who is stepping down at the end of the year, made the disclosure in a 13G, meaning it is meant to be a passive investment. Trident, which makes semiconductors for digital consumer electronics, has a $45 million market capitalization.