This content is from: Portfolio

The Morning Brief: Hedge Funds Report Gains in July

Hedge funds posted gains for the fifth straight month, according to Chicago-based industry tracker HFR. Its HFRI Fund Weighted Composite Index gained 1.7 percent in July and is now up 3 percent for the year. Equity hedge strategies notched the biggest gains, at 2.4 percent, their biggest gain since March. Emerging markets funds added 2.7 percent in July, while event driven funds returned 2.1 percent for the month. Commodity funds fell 1.7 percent, the biggest losers for the month.

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Paul Singer’s Elliott Management Corp. is getting litigious again. The multistrategy firm best known for its activist campaigns — and itswillingness to use the courts to get what it wants — has sued drugmaker AbbVie over its failed attempt at a tax inversion deal in 2014, accusing the company of misleading investors as to whether tax savings were the real reason it wanted to buy drug giant Shire, according to a Wall Street Journalreport. In the lawsuit, filed in June and disclosed in a regulatory filing on Friday, Elliott said AbbVie’s management mentioned "strategically compelling" reasons for the merger but downplayed the tax advantages, then abandoned the deal when the Obama administration announced new rules cracking down on such deals, which allowed U.S. companies to move their tax addresses to more economically favorable destinations outside the country. The deal break led to large losses for Shire shareholders, including Elliott, which held $1.28 billion worth on the day AbbVie announced the proposed deal. Elliott is seeking unspecified damages.

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Daniel Loeb’s New York-based Third Point reported a 17 percent stake in Kadmon, the biotechnology founded by Sam Waksal. The stake was disclosed in a 13G filing, indicating it is passive. Waksal famously spent five years in prison on insider trading charges related to his previous company, ImClone. Third Point had previously taken a 13.6 stake in the company, which recently went public, through the firm’s Third Point Ventures arm.

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