The Morning Brief: Paul Singer, James Simons Rip Trump

Several prominent hedge fund managers have come out swinging at Donald Trump. On Thursday Elliott Management Corp.’s Paul Singer warned that the presumptive Republican nominee for president would cause a global economic disaster if he took office. “The most impactful of the economic policies that I recall him coming out for are these anti-trade policies,” Singer reportedly said while sitting on a panel at the Aspen Ideas Festival in Colorado. “And I think if he actually stuck to those policies and gets elected president, it’s close to a guarantee of a global depression, widespread global depression.”

Trump has threatened a trade war and levying tariffs on goods imported from China, Mexico and other countries. Singer, who earlier supported Marco Rubio, has given $1 million to Our Principles PAC, which has been trying to prevent Trump from becoming president. The New York-based hedge fund manager also said he does not plan to support presumptive Democratic nominee Hillary Clinton.

Meanwhile, Renaissance Technologies’ James Simons told CNBC on Thursday that Trump is “not a good investment” if you compare him to Clinton using the Sharpe ratio.

“Now even if those two candidates had the same expected return — which I doubt — but even if Trump’s was as good as Hillary’s, his volatility is so enormous that his Sharpe ratio is terrible,” Simons said. (The Sharpe ratio is used by many investors to measure risk-adjusted return.) “So as an investment, Trump is not a good investment, no matter what you might think of his potential return,” added Simons, a major donor to Clinton and the Democratic party. “He’s just a wild man.”

Simons added that Trump “wouldn’t be good for the country.” Simons’ sentiment does not reflect the views of all of his key people, however. Renaissance co–chief executive officer Robert Mercer was a major supporter of Ted Cruz and earlier was said to be considering backing a super PAC that supports Trump. CNN last week reported that Keep the Promise I, a super PAC that supported Cruz and was heavily backed by Mercer, is now known as Make America Number I, and is mostly focusing on opposing Clinton rather than supporting Trump.



One day after Energy Transfer Equity officially called off its planned merger with Williams Companies, six of Williams’ 13 directors resigned from the board amid a boardroom coup attempt. They include chairman Frank MacInnis and activist hedge fund manager Keith Meister of New York-based Corvex Management, according to published reports.

Apparently they tried to kick out chief executive officer Alan Armstrong. It seems that Meister and Eric Mandelblatt of hedge fund Soroban Capital Partners — who both joined the board in 2014 — played major roles in galvanizing support for the Energy Transfer deal. Last week, a Delaware judge ruled that ETE can terminate the deal, agreeing that the energy company was unable to get a determination from its law firm, Latham & Watkins, that the transaction would be tax free, a critical provision of the original deal.

In a press release, Williams said it filed an appeal with the Delaware Supreme Court. “Williams has concluded that it is in the best interests of its stockholders to seek, among other remedies, monetary damages from ETE for its breaches,” it added in the statement.


A disgraced former hedge fund manager, New York Islanders part-owner and deluxe teddy bear enthusiast just got a big break. Paul Greenwood will now only be required to serve five years, or half the original sentence, for committing a massive financial fraud. In December 2014, Greenwood, who along with Stephen Walsh was a principal of WG Trading Company and WG Trading Investors, was sentenced to ten years in prison for running a fraudulent commodities trading and investment advisory scheme with Walsh and misappropriating hundreds of millions of client dollars for their personal benefit, according to federal prosecutors.

Greenwood, for example, was accused of using the money to purchase horses and “expensive collectible items,” including a large teddy bear collection, and for other personal expenditures. Walsh pleaded guilty in 2014 and was sentenced to 20 years. Greenwood pleaded guilty under a cooperation agreement.

From 1996 through February 2009 the pair solicited $7.6 billion from investors, promising to invest it in a conservative strategy called “equity index arbitrage,” according to the government. Instead, they used hundreds of millions of dollars for their personal use and “to satisfy obligations on investments that were unrelated” to the promised trading strategy. They were also accused of executing promissory notes that misstated the financial condition of WG Trading and misled investors. Walsh was also ordered to forfeit more than $50.7 million and Greenwood to forfeit $83.5 million. The pair also used $2.6 million of client money to buy a stake in the New York Islanders professional hockey team in 1992, according to the government. They sold the team in 1996.


Boston-based Adage Capital Management disclosed it owns 2.1 million shares of Medgenics, or 5.7 percent of the clinical stage medical technology company. Medgenics has a $204 million market capitalization.