This content is from: Portfolio
The Morning Brief: Bacon’s Foundation Falls victim to Caspersen Fraud
Louis Bacon is apparently a victim of the audacious fraud committed by Andrew Caspersen. The Moore Charitable Foundation, an environment-oriented charitable foundation created by Moore Capital Management founder Bacon, reportedly lost $25 million from the scheme, according to a New York Times report.
In a statement, the Foundation reportedly said it was “lied to by Andrew Caspersen, a managing director at investment bank PJT Partners, regarding a potential investment related to the publicly announced restructuring of a private equity fund.”
According to the report, the Foundation also said that it “detected irregularities in a proposed follow-on deal” and then “swiftly notified PJT Partners’ general counsel’s office and cooperated with PJT in their investigation of the issue.”
Caspersen is accused of creating a fake credit facility using fake e-mails to promise high returns. He wound up defrauding investors of more than $95 million, including, apparently, Bacon’s foundation. Initially the government only said Caspersen duped a hedge fund manager into wiring him millions of dollars without naming the firm. The well connected Caspersen was a son of Finn M.W. Caspersen, a one-time Wall Street luminary who committed suicide in 2009.
Wall Street analysts on Tuesday raised their price targets on several high-flying stocks that have been favorites among hedge fund managers, especially the Tiger Cub set.
For example, investment bank Stifel Nicolaus raised its price target on Amazon.com to $775 from $750, saying the move is supported by the bank’s discounted cash flow analysis. Partly in response, the so-called FANG stock (Facebook, Amazon, Netflix and Google) surged 2.4 percent, to close at $593.86.
“Recently there have been a series of announcements regarding Amazon’s activity in the transportation and logistics arena which has caused investors to contemplate the company’s ultimate ambitions and the potential for another investment cycle,” the bank tells clients in a note. “Though visibility is limited at this point, we believe costs associated with Amazon’s logistics initiatives could potentially limit the margin expansion thesis in the near to intermediate term. Long term, we expect an enhanced logistics network could benefit margins as the company drives down unit delivery costs and potentially (in a dream scenario) offers logistic services to third parties.”
At year-end, the stock was the largest holding of New York-based Tiger Global Management; the second-largest holding of Greenwich, Connecticut-based Lone Pine Capital; and the third-largest position of Greenwich, Connecticut-based Viking Global Investors.
UBS raised its price target on hedge fund favorite Charter Communications, which is trying to merge with Time Warner Cable, noting it expects the deal to close in May “with relatively benign conditions.” The bank also raised its price target on Time Warner Cable from $219 to $235 “based on the terms of Charter’s offer.”
UBS tells clients in a note that New Charter “provides an attractive investment opportunity, supported by strong underlying fundamentals, synergies and both operational and financial leverage.”
Shares of Charter jumped about 2.5 percent, to close at $203.03. Among the top-ten holders are Tiger Cubs Lone Pine Capital and New York-based Coatue Management. Time Warner Cable rose 1 percent to $205.28. Top holders include London-based The Children’s Investment Fund Management UK, New York-based Soroban Capital Partners and New York-based Paulson & Company.
Yikes! SunEdison’s stock plummeted nearly 55 percent, to a new low of $0.57, after the Wall Street Journal reported that the Securities and Exchange Commission is investigating the renewable energy company’s regulatory filings related to its disclosures about its cash position. Specifically, the SEC is said to be trying to determine whether SunEdison overstated its position when it said it had more than $1 billion in cash last fall.
Former hedge fund manager Stanley Kowalewski was sentenced to 18 years in prison for wire fraud and obstructing an SEC investigation. In November 2015, he was found guilty by a jury after facing 24 criminal charges, including falsely testifying in a related SEC investigation about the use of investors’ funds. According to the indictment, beginning in 2009, Kowalewski solicited money from various institutions and other investors, which he placed in various hedge funds that he controlled. According to the government, Kowalewski use much of the proceeds to pay for personal and business overhead expenses. The SEC filed a related civil injunctive action against Kowalewski in January 2011. In August 2012, the SEC ordered Kowalewski to pay $8.6 million in disgorgement and interest and about $8.4 million in civil penalties. In September 2011, the SEC barred Kowalewski from associating with any broker-dealer or investment adviser.
Kowalewski was the CEO of Greensboro, North Carolina-based SJK Investment Management. The SEC says he raised a total of $65 million for two hedge funds, the SJK Absolute Return Fund, LLC, and the SJK Absolute Return Fund, Ltd.
Elliott Management Corp. raised its stake in Qlik Technologies to 10.8 percent. This includes derivative agreements that represent economic exposure comparable to 5.8 percent of the shares, according to a new regulatory filing. Earlier this month, the New York hedge fund firm initially disclosed an 8.88 percent stake in the business analytics company.