Anthony Scaramucci’s SkyBridge Capital anticipates it will complete the sale of its fund of funds business to HNA Capital, a subsidiary of Chinese conglomerate HNA Group and investment firm RON Transatlantic by the end of this month, according to a video provided to the media. “It is hard to put a date specific on,” said Ray Nolte, SkyBridge chief investment officer, in the video. “We’re looking at something in September as a targeted closing.”
Don’t exactly trade on this information. At the SkyBridge Alternatives Conference (SALT) conference in Las Vegas in mid-May, Nolte told me he expected the $180 million deal to close by June. Oh well. Scaramucci agreed to sell his 45 percent stake in January as a pre-condition for obtaining a job in the Trump Administration. Earlier this summer he famously spent 10 days as communications chief but was fired after a profanity–laced interview was published.
More bad news for David Einhorn’s Greenlight Capital. Shares of Caterpillar — one of the firm’s disclosed short positions — jumped 2 percent on Monday, to close at $123.83, after UBS raised its rating on the heavy equipment maker from neutral to buy and lifted its price target from $116 to $140. The stock is now up about 33 percent for the year. The investment bank says the two actions “reflect our new evidence that a continuation of the earnings upcycle is ahead and that CAT’s growing cash position will drive upside to earnings and returns as it gets deployed. We think the cash story is particularly underappreciated, and will become more of a visible part of the investor dialogue going forward.”
In its fourth-quarter letter, Greenlight said it was short Caterpillar and a few other similar industrial cyclicals that it noted at the time had moved up sharply in price after the election. It said the stock surged on talk about infrastructure spending even though its machines used for this “represents only a small part of its business.” Mining and energy are Cat’s biggest segments.
This is what passes for good news in the hedge fund industry. HFR reports that in the second quarter, 222 hedge funds liquidated. While this sounds like a lot for a three-month period, it is notably fewer than the 259 that shut down in the previous quarter and the 239 that closed the same quarter in the previous year. During the same period, 180 new funds launched in the second quarter. However, this was fewer than the 189 new launches the prior quarter and 200 in the second quarter of 2016.
These openings and closures came at the same time that total hedge fund assets rose to a record $3.1 trillion at the end of the second quarter. Of course, one major reason is positive performance. Hedge funds have posted gains in each of the past nine months. As a result, The HFRI Fund Weighted Composite Index was up 5.4 percent for the year through August.
Adage Capital Partners disclosed it owns 2.175 million shares of Abeona Therapeutics, or 5.4 percent of the clinical-stage biopharmaceutical company focused on developing therapies for life-threatening rare genetic diseases. The Boston hedge fund owned 1.95 million shares at the end of June.