This content is from: Portfolio

The Morning Brief: Andor Capital Finds January a Rude Awakening

Daniel Benton’s Andor Capital was down 9.4 percent in January, nearly double the 5 percent decline posted by the Standard & Poor’s 500 index. The Rye Brook, New York-based tech-heavy, concentrated hedge fund firm gained 1 percent last year.

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Another hedge fund is shutting down. Activist Orange Capital plans to return about $1 billion to clients, according to the Wall Street Journal. The firm, co-founded by Daniel Lewis and Russell Hoffman, lost 9 percent in 2015, a year that saw many activists finish in the red. However, since its July 2005 launch Orange compounded at 11.5 percent per year, according to the report. “We believe that credit investing through traditional, liquid hedge fund strategies will prove challenging for investors as the credit cycle turns,” Lewis reportedly wrote in an email to the WSJ. “This includes our own hedge fund structure.”

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Former hedge fund manager Doug Whitman will be getting out of prison early. The founder of Whitman Capital was granted bail and will not be required to spend the remaining four months of his two-year sentence for insider trading after a hearing with the 2nd U.S. Circuit Court of Appeals in New York, according to Reuters. The three-judge panel was skeptical whether the 2012 conviction should be upheld in light of a December 2014 ruling that experts say has now made it harder to get an insider-trading conviction. According to the report, Circuit Judge Barrington Parker said, “This court would have tossed the conviction” if the case were heard after the earlier court ruling. Whitman had been serving the remaining four months of his sentence in a halfway house. In December 2014, a federal appeals court vacated the insider-trading convictions of Todd Newman and Anthony Chiasson, asserting they were unaware of the sources of the insider trading information and that it was not apparent that these sources revealed the sensitive information for personal gain.

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Deutsche Bank raised its price target on hedge fund favorite Michael Kors Holdings from $50 to $56 and maintained its Buy recommendation, noting its valuation is “still very compelling.” The company reported better than expected fiscal third-quarter results. At the end of January, the women’s apparel maker was among Greenlight Capital’s top disclosed long positions.

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