The Morning Brief: Adage Takes Stake in InfraREIT
Boston-based Adage Capital Management has acquired 3.5 million shares of InfraREIT, a real estate investment trust that owns electricity transmission and distribution infrastructure assets in Texas, according to a Securities and Exchange Commission filing. That amounts to an 8 percent stake in the company. The stake was revealed in a 13G filing, indicating the investment is passive.
Equity hedge funds rallied sharply in July, thanks to easing concerns about the impact of Brexit and the strength of the U.S. economy, according to the latest weekly brief from Lyxor Asset Management. Value-oriented stocks performed particuarly well, while momentum stocks lagged. The firm’s index of long-biased long-short equity funds returned 3.8 percent in July, while special situations netted 4.1 percent. CTAs, the big winners post-Brexit, fell back to earth, returning a modest 0.7 percent. Lyxor’s analysts have not changed their outlook on hedge funds overall, despite the bump last month, citing weak second quarter growth for the U.S. economy and a decline in oil prices as indicators that the market rebound “is running out of steam.” The firm says it maintains “an overall cautious stance” on hedge funds, with an overweight position on long-short equity market neutral, merger arb and CTA strategies.
Platinum Partners, the scandal-plagued New York hedge fund firm at the center of a bribery scandal and a fraud investigation over how it values its esoteric and illiquid investments, used the same firm as Alphonse “Buddy” Fletcher to price those assets, the New York Post reported today. If that name sounds familiar, it’s because Fletcher ran Fletcher Asset Management, the New York hedge fund that collapsed in 2012. Fletcher’s bankruptcy trustee once said that firm was run like a Ponzi scheme owing in part to “the extensive use of wildly inflated valuations.”
A Platinum employee, Murray Huberfeld, was charged last month with wire fraud after he allegedly paid $60,000 to Norman Seabrook, president of the Correction Officers’ Benevolent Association, to secure an investment from the union in Platinum’s funds. Platinum, which reportedly managed $1.35 billion when the story broke, is also being investigated for fraud, along with founder and CIO Mark Nordlicht, according to a Wall Street Journal report. One major issue under investigation is whether the firm inflated the value of some of its hard-to-price assets, according to the report. The firm is in the process of liquidating its funds. It recently switched to a new firm for valuations, telling the New York Post that the move was “entirely unrelated to the investigation” and that its previous firm, Sterling Valuation Group, “provided an industry standard valuation within the standards and practices of its profession.”
New York-based D.E. Shaw said in a regulatory filing that it now owns approximately 5 million shares, or 5 percent, of Exact Sciences Corporation, a molecular diagnostics company. The investment is passive.